Socialism Is What I'm Worried About
February 26, 2009
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I read Matt Koppenheffer's article and this is my response. Unlike Matt, I am worried about Socialism and strongly believe whether you are liberal or conservative you should be too.
I am not advocating 100% Capitalism free of regulations. I am not even that concerned about regulations. The concern here is about my portfolio of various companys whose share prices have gotten obliterated last year and this year. That is the concern and perspective here that all investors need in order to understand IF and HOW and WHEN Socialism will impact negatively any of your investments.
Right now President Jimmy Carter II has just announced a more than half a trillion dollar increase in the Federal Budget. This elevates the national debt even further than the Porkulus bill. It basically takes the supposed, inherited, Deficit and doubles it (not counting interest on all of the borrowing).
This in turn could jeopardize borrowing and lending from the federal government in the future. It can jeopardize Pell Grants and Federal College Work programs. It can impact every kind of federal lending imaginable to include the FHA. Because, the Federal Government is left with a situation where it needs to lose that debt at some point.
And when the debt is so ginormously high, the Federal Government is left with no choice but to Hike Taxes, issue Fees, close Tax Loopholes, and basically punish every Man, Woman, and Child that works for a living. The punishment will send Small Businesses, Mid-Caps, and Large Caps into either bankruptcy or into the decision to ship out to another country.
Our nation already has the highest or at least 2nd highest corporate tax rate. President Jimmy Carter will eventually remove President Bush's tax cuts in 2010 to pay down this debt. But given how many "RICH" people will do whatever it takes to avoid these taxes, I do not see why President Carter would stop at that. Cause, I don't think removing President Bush's tax cuts is going to miraculously nullfiy an almost 2 Trillion Dollar Deficit.
But, that's no big deal. CAP and TRADE is coming.... EPA Regulations on Carbon is coming.
All sorts of things that make businesses struggle further to make a profit is coming because of all of the Socialist Style Spending Spree.
These environmental regulations will be used to fix the deficit and will make the things you buy much more expensive. The price of Corn went up because in part due to Ethynol. The price of a CAR in California costs much more than anywhere else due to a special tailpipe and other required, parts for reducing pollution.
Are we all prepared to see President Clinton bring back the Off-Shore Drilling Ban? How many Jobs will that create?
Matt can tell you how much he doesn't care because perhaps he buys "SKF" or shorts "XLF," or buys GOLD "GLD." Matt hedges his investments enough to be nonchallant about Socialism.
So, this is your opportunity to Hedge your own portfolio against Socialism while you still have money left to do so.
Because in this market.... You can't sleep well at night like MATT under a Socialist Regime unless you have a really good hedge against a further deteriorating economy.
In the long term Socialism leads to Double Digit Unemployment, just like France.
Matt should be so lucky that he still has a job.
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