ladelfina said:
I keep getting confused inside of Apocalypse's theorizing. It kinda makes sense when I read it, but then I think:
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Why all the emphasis on what the gov't. does or doesn't do? If you have global assets as well as US ones, this should concern you less..
Why have US stocks not suffered despite weaknesses in the US economy? Maybe because many of them, too, are effectively global, with paying clients all over the world. Are Exxon and Citibank US companies, or global ones? If their profits flag in the States, they have other sources of profit.
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I don't see how having followed the tech bubble and lost turns one into an anti-indexer. One would think just the opposite.
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The talk of Ponzi schemes is also a head-scratcher.. Are we talking "Zero-Sum Society"? Wealth creation is an illusion? If so, why are we not all back in the afore-mentioned field schlepping rocks? Will we soon be back to that.. is that your proposition?
ladelfina: I'm sorry for not responding to you before this. You've posed some wonderful questions and I've thought about them quite a bit. Part of my problem is that I'm still thinking about pity, trenchant, and germain correct and thoughtful answers. You and others create the most important learning environment possible, and I appreciate it. But I'm still thinking about things but now DW has decided I need a larger and more active "honey-doo" to occupy my mind and body. So, balance is required.
The gov't is important because they set up the playing field of business and personal behavior. They make ALL the rules or manage them in certain directions. For a simple example, at the start of the war, Haliburton knew what was coming way before we did, plus they had Dick C. guiding them thru too. Another less recent example is the Minnesota "homestead tax" reduction put in place by the Minn legislature years ago. This benefit broadly changed and nurtured a home ownership culture. One only has to look a little distance, Wisconsin, to see the differences of nurturing stakeholders or not. Everything money- related traces back to gov't policy to shape our behaviors. Don't let the little idea of 'freedom' that some politicians tout every time they're on TV fool you. It's the 'incentives' baby. Follow the money, watch the lobbyists.
If you believe some bears, we are now starting on the path of overt empire. The bulls are already in the thick of it, many without knowing it; they are just trying to make money off the future spoils. The gov't may be trying to extend their rules to the entire world. (JG
, Obewon, help me here: "Pax Romanus" or something like that?).
Again, my statistics and numbers may be wrong here (and please correct me if so). The gov't says that we are currently running a 3%+ GDP; separately, they state that inflation is NOW running near 4% (I think they are lieing). 3%-4%=-1%. Therefore, the economy is NOT growing because all the expansion is eaten up by inflation. S&P 500: Estimated growth this year 7%+%. 7%-4%=3%. You may only be making 3% on your money-- before taxes and of which you pay on the 7% apparent gain not the real gain. Do I see hidden inflation anywhere? Yes. And I think part of that hidden inflation creeps into the markets thru indexers putting new money in there, distorting values.
Ben Burnanke said that the reason interest rates are so low is that Asian savers have so much savings that they were investing in our wonderful country and driving rates down. It seemed to solve the Greenspan conundrum. That's one possibility. Another is that the world is so flooded with paper and digital money looking for good, safe investments, and not finding them even in their own equities, that they settled on US bonds. Same results, different theory. The second theory sees a macro-misallocation. You be the judge. Our current gov't chose Burnanke's idea. These people are the custodians of our future.
Back to the doo list--right now--and for at least one more day. Thanks for being persistant. It's my little world (but not all of it is in my head).
