Friday, December 25, 2009

Merry Christmas & The Level Playing Field

Here in the United States, today is a holiday, Christmas Day. Hopefully, for many, it is a time of family and friends, joy and warmth of the season. Enjoy the day, the weekend, the next week, if you don't have to go to work.

But for me, I will take the day off from writing about the Level Playing Field for only a short time. There is still work to be done. The process of educating the masses is never finished. While the lesson is not difficult to comprehend, repetition is the key. There is a balance I am trying to get across to those that read this blog.

The balance is: 1.) reduce inflation and make saving money in a savings account a viable alternative to investing in the capital markets; or, 2.) regulate the capital markets with enough regulations to make an investor's portfolio reasonably safe from fraud. In that, it is reasonable to expect that there will be those that will battle against both points #1 and #2, with huge piles of money, the masses will have to learn what they don't know to survive. This is the balance I put forth.

There will be no meaningful change to protect the financial welfare of the masses until the masses understand their choices. While the Level Playing Field may only be an abstract idea, for millions of families, their financial security is no abstract question.

Stay tuned.


Butch said...

Amen and never better said.

Julie Schuler said...

Your posts are always educational for me.
Have a Merry Christmas!

Robin said...

Enjoy your day off.

Chinese food and a movie today, or was that more of a NY thing?

moneythoughts said...

Butch, Moneythoughts is going to turn it up a bit next week. Nothing will be written that most can't understand. But, we are going to build a structure and fill in the gaps.

Stay tuned.

moneythoughts said...

Yes Robin, Chinese food is the plan. No movie though. What kind of economics,( specialty), does your husband get into. Does he teach at a university?

Jientje said...

So true.

Enjoy your day off! Merry Christmas Fred !!

Naomi said...

I hate to sound Grinch-like, but knowing it will be years before legislation is put into place to regulate the market and the major banks, are banks a safe place to keep your savings? So many banks had to be given money to stay afloat that its a little scary to trust them. Or am I misunderstanding how banks operate, or the federal reserve? I grew up in a time when the safest investment seemed to be real estate, but that certainly isn't so today. I'm just... confused.

moneythoughts said...


Your savings and checking account money is insured by the F.D.I.C. (Federal Deposit Insurance Corporation) a governmental regulated body. The new limit I believe is $250,000. If you want to be really safe, and you have more than 250K, open another account at a different bank. Deposits are insured, IF, the bank is a member of the FDIC. (I think they have to be now.)

Real estate is still a good investment over the long term. Why? Because of the way monetary policy is run in this country. To understand what I am talking about, you have to go into understanding how the Federal Reserve Bank influences the growth of the money supply.

My biggest complaint with the way monetary policy is conducted in the USA, is that it is conducted for those that can borrow big time, also known as leverage, and not for the little guy who saves a percentage of his earnings for that rainy day. As a result of inflation, people are forced to hedge by investing in the capital markets. Unfortunately, the capital markets are not regulated enough to protect the investor, big or small.

Wall Street owns Capital Hill (misspelling intended).