The Freedom Factory

HUD program turns out to benefit contractors and not the poor…go figure! China cranks up its printing presses-expect global inflation, Peter Schiff (“Dr. Doom”) discusses his book “Crash Proof”, Goldman Sachs plans to sell billions in stock to pay off government aid ASAP, gas prices up 5% in 3 weeks…inflation? Top U.S. general says we’ll be out of Iraq by 2011, and 75% of Americans want to lift Cuba embargo… Continue Reading

We are moving closer towards a political economy every day. Every dollar borrowed, taxed, printed, and spent by government really comes from the private sector.  Trillions of dollars of national resources are being allocated by politicians and bureaucrats towards things they claim will benefit our economy. Congress just passed a $3.6 trillion budget ($1.2 trillion in deficit), and combined the Federal Reserve and Treasury have dumped $13 trillion into the economy in the last 16 months. What we must all ask ourselves right now is whether or not we trust government with our money? Continue Reading

With all the speculation on a government takeover of the banking industry, including Alan Greenspan’s statement that “the U.S. may have to temporarily nationalize some banks until the industry is restructured,” we should do some serious soul searching. America has a long tradition of respecting property rights and restricting government power from the private domain. Overt nationalization would be unconstitutional, but change is in the air… Continue Reading

If you want spectacular gains, like Buffett used to make back in the day, you may be out of luck using Buffett methods.  I believe that back in the day, markets were less efficient and more stocks were incorrectly valued.  Finding stocks that catapult 100′s of percent in value in a year or two is very hard to do.  It is hard to find stocks that will grow 50% in 3 yrs.  And that isn’t even crazy growth.  That was normal 20 yrs ago.  Maybe it is just the last decade which has me pessimistic?  (It’s the only one I’ve invested in though.)

Anyways, if you think you know which way the market is going to move there are ways to boost your returns besides options (and probably less expensive than options).  My friend who trades options (his closest friends know him as “The Horse”) told me that “right now options are selling at a very high premium because we are in a market of never before seen levels of volatility.”  Continue Reading

To fully appreciate what is occurring in the financial markets, I recommend reading two articles: Deleveraging: A Fate Worse than Debt from The Economist and The Question of Our Age by Tony Crescenzi.

The theme of both articles is the same- cheap credit for the past 20 years has fueled economic growth. Now that credit has dried up, can the system deleverage without causing economic contraction? The coordinated effort of the U.S and other governments is meant to prevent (or at least slow) this deleveraging process. So far the governments have added liquidity to credit markets and injected capital to expand lending and revive economic growth. Continue Reading