Saturday is for art, and why not. The rest of the week many of you work to put food on your table and a roof over your head. This past week we have had a lot of good discussion of some of the issues we discuss on MONEYTHOUGHTS. Those that are followers, and read the posts and comments this past week, know what I mean.
Today I am going to post more paintings dealing with the "Level Playing Field" because much of the conversation this past week dealt with this simple issue. If we are going to have fiscal policy that creates deficits, and a monetary policy that is aimed at growing the economy through low interest rates and an expansion of the money supply, and if inflation is going to eat up the purchasing power of our money, and savings accounts are only paying .25% interest, then should not it be the responsibility of the Federal Government to see to it that the investment game is on the level? What choice do we have to save for our retirement or our children's education, if interest rates are so low that they can not possibly give us a total rate of return, less the loss of purchasing power of our money from inflation, if we do not invest our money in the stock or bond markets? So, it falls to the Federal Government to protect the individual and institutional investors from being made marks and being the victims of fraud. Unfortunately some of our leaders are as corrupt as some of the people on Wall Street that create the frauds in the first place. Millions of people and families have been hurt financially as a result of the wide spread frauds that leaked their poison into almost every part of the investment field. The People must make their feeling known to the politicians, if there is any hope that change for the better will take place. The little guy on Main Street is pushing the boulder up hill. It is going to take a lot more than pushing to bring the kind of change that is needed. The people on Wall Street are not going to give up their life style without a fight. The time to knock a few heads is here. It is time to get past Left, Right or Center and protest for real change.
Stay Tuned.
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1 comment:
I guess it would help if government stepped in more and leveled the playing field a bit to reduce risk for small investors. At the same time, it would most likely mean lower return.
Higher risk, higher return. Lower risk, lower return. That is a mantra I keep hearing since childhood.
We do have a lot of corporate leaders that are criminals, for sure. Also just benignly bad at planning.
At the same time, ordinary people bear much of the blame for this situation. Expectations for return on investment seems to be higher in the last, say 20 years.
Lower interest rates have practically removed the option for saving at the ordinary bank except for holding the principle; like putting money in a mattress.
At the same time, the low rates made borrowing more desirable and started flooding the housing market with money. Eventually, as house values in many areas stared going up around 10% per year, people started thinking these high returns were normal.
Stock portfolios that paid highly were thought of as normal also. High return investments have always met higher risk.
One factor is, we seem to have been flooded with cheap money from China and other places thus distorting the situation.
For quite a while, many average folks made quite a bit of money if they sold their house at the right time or got out of stocks at the right time. Enough wealth was made that this precarious situation remained politically viable. Enough ordinary people voted for what can loosely be called "Republican" type thinking.
Now we are seeing the downside as these returns are hard to maintain. Hard to maintain especially as we need to reduce wasteful consumption for environmental reasons.
Maybe we can get to an era of lower materialistic expectations and more stability. Lower risk, but lower gain.
At the same time, higher gain, if quality of life is counted.
Also we still are benefiting from new technology such as all the free things on the Internet that we can learn to count as "gain."
It's just that bean counters don't know how to tally these things yet. For instance how does an online newspaper pay it's way?
Corporate executives at the top of the game will have to get used to a new game if the people stop buying their old game.
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