Best of the Week
Most Popular
1.UK General Election 2015 - Forecasting Seats for SNP, LIb-Dems, UKIP and Others - Nadeem_Walayat
2.UK General Election 2015 Seats Forecast - Who Will Win? - - Nadeem_Walayat
3.Gold Price Downtrend Looks Set to Continue - Clive_Maund
4.Commodity Prices Set To Plunge Below 2008 Lows - Austin_Galt
5.New Greece Drachma Revealed Amid Bank Runs - Greeks Buy Gold Sovereigns - GoldCore
6.Gold and Silver Stocks or General Stock Market Indices? - Rambus_Chartology
7.“Forgive Us Our Debts” – Only Way To Prevent Economic Meltdown - GoldCore
8.UK House Prices Trend 2015 and the May General Election - Nadeem_Walayat
9.12 Reasons Why Barry Ritholtz and Many UK Experts Are Mistaken On Gold - GoldCore
10.Recession is On The Way; Beat The Stock Market Crowd, Panic Now! - Mike_Shedlock
Last 5 days
UK Election 2015 - Cameron Housing Bribe - 200,000 Discounted Homes for 400,000 Voters - 6th Mar 15
The Anthropology of Finance - 6th Mar 15
Portfolios, Insurance, and Gold - 6th Mar 15
Gold and Silver Justice For Some - Currency Wars - ECB Deposit Rates To -3% - 5th Mar 15
How to Play the Big Broker Stocks When Interest Rates Rise - 5th Mar 15
Here's What Stock Market Bulls Might Be Overlooking - 5th Mar 15
U.S. Soaring Crude Oil Stocks - Cushing and Gulf Coast Storage Filling Up Fast - 5th Mar 15
Japan's Intelligence Reform Inches Forward - 5th Mar 15
Gold Miner Index Breadth Oscillator, Forward Reckoning® - 5th Mar 15
Gold Price Set To Plunge Below $600 - 5th Mar 15
UK General Election Forecast 2015 - Immigration Crisis, SNP Insurgency and Housing Mini-Boom - 5th Mar 15
Spock, Debt and the Kingdom of Denmark - 5th Mar 15
The Psychology of a Sideways Stock Market Trend - 5th Mar 15
Freedom from America - Getting Out Of Dodge - 5th Mar 15
What Top Hedge Fund Managers Really Think About Gold - 4th Mar 15
U.S. Dollar Strategic Backfire On U.S. Government Policy - 4th Mar 15
Canada’s Central Banks Orders End to ‘Spocking’ Of Canadian Dollar - Defacing Debasing Currencies - 4th Mar 15
Chicago's Only Possible Salvation: A Detroit-Like Bankruptcy - 4th Mar 15
Gold Price and Mining Stocks Decline Together - 3rd Mar 15
Financial Slaughter - The Silence of the Lambs - 3rd Mar 15
Bondholders “Bailed In” In Austria – New Banking Crisis? - 3rd Mar 15
How to Profit from the Coming Oil Price Crunch - 3rd Mar 15
Is Japan Zimbabwe? Could Japan go Hyperinflation? - 3rd Mar 15
Bill Gross Says Fed May Raise Rates 25 Basis Points in June - 3rd Mar 15
The Secret Behind My Hedge Fund Trade on U.S. Housing Market - 3rd Mar 15
BLS CPI Lie - How's That Dsflation Working Out for You? - 3rd Mar 15
Tesla Bonfire of the Money Printers’ Vanities - 3rd Mar 15
Gold Demand in UK, Europe and U.S. – Reuters Interview GoldCore - 2nd Mar 15
Watch the Skies... for Investor Profits - 2nd Mar 15
How Investors Can Identify the Best Small-Cap Stocks - 2nd Mar 15
Gold and Silver - What If the Precious Metal Stocks Bulls are Back - 2nd Mar 15
Students Getting a PhD in Subprime Debt - U.S. Debt Breaking Bad Part 3 - 2nd Mar 15
The Stock Market is in The Process of Major Top! - 2nd Mar 15
Stock Market Weakening Trend - 2nd Mar 15
Gold Price Glimmer of Hope - 1st Mar 15
Stock Markets Are Riding High on Thin Air - 1st Mar 15
Varoufakis vs. the Troika - Showdown in Athens - 1st Mar 15
Subprime Rising - U.S. Debt Breaking Bad Part 2 - 1st Mar 15
Gold CoT Improving, But ... - 1st Mar 15
UK General Election 2015 Seats Forecast - Who Will Win? - 28th Feb 15
UK General Election 2015 - Forecasting Seats for SNP, LIb-Dems, UKIP and Others - 28th Feb 15
Stocks Bull Market Continues - 28th Feb 15
U.S. Debt Breaking Bad - 28th Feb 15
NATO Frankenstein - When Centralization Scales Beyond Our Control - 28th Feb 15
Gold And Silver Insanity Prevails; Precious Metals Without Direction - 28th Feb 15
Fed Raising U.S. Interest Rates - Shovelin’ Schmitt Against the Tide - 28th Feb 15
Don't Let This Stock Market Myth Cost You Your Gains - 28th Feb 15
Recession is On The Way; Beat The Stock Market Crowd, Panic Now! - 28th Feb 15
Stock Market Indexes Creeping Towards the Edge - 28th Feb 15
GGD Going for Mexican Gold - 27th Feb 15
Foreign Real Estate Is the New Swiss Bank Account - 27th Feb 15
10 Reasons Washington Has War Fever - 27th Feb 15
Gold and the Euro Tragedy, Iraq 3.0, Ukraine Conflict Three Ring Circus - 27th Feb 15
Deepak Chopra - New Age Genius or Bullshit Expert? - Video - 27th Feb 15 - Videos
New Greece Drachma Revealed Amid Bank Runs - Greeks Buy Gold Sovereigns - 27th Feb 15
Will Month Long Stocks Rally Continue? - 27th Feb 15
The Only Public Hedge Fund You Should Own - 27th Feb 15
UK House Prices Trend 2015 and the May General Election - 27th Feb 15
Why America is Ungovernable - The Republicans’ Civil War - 27th Feb 15
Gold vs Gold Stocks: Bullish Anomaly Developing? - 27th Feb 15
I Heart Capitalism, Nasdaq Stocks, Then And Now - 27th Feb 15
The Fed’s History of Assassination - 27th Feb 15 i
Gold Bull Market Forecast - Money Will Rotate Into These Dead Investments - 27th Feb 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The State of the Global Markets 2015

The Educated Socialism of Obama

Politics / US Politics Feb 16, 2013 - 06:37 PM GMT

By: DailyWealth

Politics

Porter Stansberry writes: In Wednesday's essay, I laid out the "great lie" that is bankrupting America.

At the heart of this lie – told by so many of our political leaders and believed by so many of my fellow citizens – is a horrifying turn of events. As I mentioned, the drive for freedom and a better life through hard work, saving, and independence has been replaced by a craven need for the illusion of security.



Rather than trying to leave our children in possession of a better world – with more financial security – political leaders around the world now bicker about how to change the rules so that still more debt can be stacked upon their grandchildren.

For an idea on how things will turn out, a few lessons from history are instructive...

The Spanish Empire destroyed itself by "finding" money, rather than by building industries. And the key to its temporary wealth was a single mountain in Bolivia, "Cerro Rico" – the Mountain of Riches.

At least, that's what the Conquistadors named it. In Bolivia, they call it "the mountain that eats people." Thousands of slaves died trying to satisfy Spain's lust for treasure.

In Cerro Rico today, silver is still mined by people making a few dollars a day using pickaxes in dust-filled shafts with no ventilation, no light, and no safety features of any kind. The 10,000 miners who work there every day toil under the constant fear that the entire mountain could collapse on them. After 400 years of unregulated mining, it's like Swiss cheese.

Bolivia's politicians use these conditions to demand more power and implement more socialism. Of course, it's the poverty caused by decades of socialism that actually prevents modern mines from being built.

Last month, Bolivia's current socialist strongman, Evo Morales, published his Ten Commandments Against Capitalism. He starts out broadly with No. 10...

Economic development must not be oriented to the market, to capital and to profit; development must be comprehensive and be oriented to human happiness, harmony and equilibrium with Mother Earth.

Then he gets to the real point...

We must free ourselves from that colonial bond called the External Debt, which serves only to blackmail us, to oblige us to hand over our assets and privatize our natural resources, and to destroy the sovereignty of peoples and states.

The colonial External Debt is the mechanism of exaction and impoverishment that afflicts the developing countries and limits their access to development. We call for canceling this unjust External Debt. No more inequality. No more poverty. It is time to distribute the wealth.

These aren't just empty words, either. In June 2011, Morales nationalized the Toronto-listed South American Silver exploration firm, promising only compensation "later." Six weeks later, Bolivia decided that the compensation paid to the Canadians would be zero. Nada, zilch, nothing. Apparently, it was time to seize their wealth.

The people of Bolivia cheered this madness. As their reward... Bolivians will continue to work in some of the most dangerous and least-efficient mines in the world. Their real wages will continue to fall. That's because without capital investment, without savings, without property rights... without the responsibilities of capitalism... there will be no increase in wealth.

Bolivia's socialist policies will have the same economic effect as similar activities in Venezuela and Argentina... The black market rate for dollars in Venezuela is three to four times higher than the official exchange rate. In Argentina, the "blue" dollar rate is 50% more than the official rate.

The looming crisis in these countries interests us in two ways... First, because so much of the world's raw materials (including food and hard commodities, like metals) come from countries like these, a return to socialism will undoubtedly cause shortages and price spikes around the world.

But on a more important and deeper level, ask yourself, what's the real difference between Evo Morales and our current American political leaders?

President Obama and his puppet at the central bank, Federal Reserve Chief Ben Bernanke, are also calling for us to cancel our external debt. They're just saying it in a smarter way, calling it "quantitative easing."

And what's the real difference between what Morales advocates in his Ten Commandments Against Capitalism and what's happened in the U.S. over the past decade? First, President Bush granted free medicine to every retired American. Then, Obama pushed through "free" health care for everyone. In his State of the Union address, he labeled these benefits, plus Social Security payments, "civil rights."

That's pure madness. Rights are something you're born with as a human being. They describe what people can't do to you or take from you.

The government cannot guarantee you any benefit or service without first taking it from someone else. That's why the promise of socialism is merely the promise of plunder. Whether it will benefit you depends on where you stand. However, the nation as a whole cannot become wealthy through the plunder of its own citizens. This one fact explains why Argentina – which was the fifth-wealthiest nation in the world 100 years ago – now ranks 50th.

That's where we're headed. Make no mistake. By 2020, the costs of Social Security and Medicare alone will reach $2.5 trillion a year. That's more than the U.S. federal government collects in all forms of tax ($2.4 trillion) today.

The only things funding these programs are lies and taxes. We've been paying for these programs out of current revenues all along – just like convicted hedge-fund scammer Bernie Madoff used new money to create the illusion of returns for existing clients. There is no way we can afford these obligations without making them far more redistributive and increasing payroll taxes enormously. Obama says "of course" we need more taxes. And he's going to do everything in his power to levy them.

It's time to distribute the wealth, all around the world.

The true costs of the world's return to socialism will strike the mining industry first. That's because mining requires immense capital investments over long periods of time. These mines are sitting ducks for politicians, who can tax them or nationalize them easily... all while the public cheers them on...

But that greatly reduces existing supply and makes new supplies incredibly difficult to procure. In short, you can print money, but you can't print metals. And this explains the price spike in gold and silver over the last four years.

Still, all these precious metals do come from somewhere...

While we don't believe that mining companies are a good investment in the long run, they can be incredibly lucrative as short-term speculations. Politically driven market disruptions make mining stocks soar. That's why gold- and silver-mining companies have also long been thought of as crisis hedges – just like refined metal. And we're about to enter an extended – perhaps decades-long – period of unprecedented, politically caused market disruption.

That's why I'm encouraging my readers to buy precious metals like gold, silver, and platinum. Although these metals have appreciated in value over the past 12 years, they have much further to run.

Good investing,

Porter Stansberry

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014