Preservation of Capital is Your Duty, Not the Government’s

Wednesday, 18 Jul 2012 12:27 PM

By Ashish Advani

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I have tried to stay awake listening to the testimony given by Federal Reserve Chairman Ben Bernanke in his semiannual monetary policy report to Congress, but I am struggling. The coded central banker parlance will put most of us to sleep. I sometimes wonder what qualification is required to become a central banker — boring, deadpan face, devoid of any emotions, etc.

While the markets (read fickle-minded equity and foreign exchange traders) were getting lathered up Monday hoping for the announcement of the third round of quantitative easing (QE3), they started panicking Tuesday morning and then again later that day as Bernanke spoke. They started reading into his words again as QE3 was now imminent. So all in all, much ado about nothing.

Bernanke’s testimony so far has been reasonably candid, but we did not need the head of the Federal Reserve to state the obvious. He is, of course, short on specifics of how he will solve the problems.

Therein lies the biggest fallacy of the market and people’s expectations. They are all expecting for a rescue package to be announced and orchestrated by the government. When was the last time the government actually came to the rescue of the people and did it successfully?

If we are to listen to the so-called financial advisers scattered around the country, we would have lost about 10 to 20 percent of our capital in the past 10 years using their buy-and-hold strategy, as well as their diversification techniques of U.S. stocks and bonds.

If we were to depend on our central bankers, we would be in financial ruins as well. The rampant debt creation, the printing of money that the central banks around the world have indulged in, is really flawed examples of how they can “help.”

I would go as far as saying the whole economic system we live in today is flawed. We are following and rewarding the wrong economic minds of today’s times. Let’s take the example of Nobel Laureate Joseph Stiglitz’s new book, The Price of Inequality.

“[T]he success of [Apple Inc. and Google Inc.], and indeed the viability of our entire economy, depends heavily on a well-performing public sector. There are creative entrepreneurs all over the world. What makes a difference … is the government.”

What??

The entrepreneurs of the world must be in shock. The true business leaders like Steve Jobs, Sam Walton, Walt Disney, Bill Gates, Mukesh Ambani of India and Carlos Slim of Mexico, to name a few, are all worthless. Their brilliant ideas and good execution mean nothing. It is the effort of the governments where they live that is making all the difference.

In fact, Stiglitz’s entire book is an impassioned argument for even more government control and redistribution of wealth. I am not sure if he has written his book in all earnest or as a parody of what not to do.

Dear readers, these are the “brilliant” minds of our times. I have been quaking in my boots and working hard to try and nullify their effects on my personal wealth.

If you do not take the necessary action to protect your capital through true and real diversification out of the U.S. dollar, you will be losing your hard-earned capital due to the dumb ideas that are being espoused and implemented today under the guise of reforms by these mental dolts.

Diversify into foreign investments, commodities and foreign exchange, but not with a buy-and-hold strategy even in those places. Get a good and truly knowledgeable adviser, and get started before your capital is all gone.




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