Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Most Predictable Financial Crisis in America's History

Stock-Markets / Credit Crisis 2013 May 10, 2013 - 06:31 PM GMT

By: Investment_U


Alexander Green writes: There’s a great tug-o-war going on in the stock market right now. And the stakes are huge. How it turns out will determine not only the future prosperity of the country but whether you have an opportunity to achieve your financial dreams.

Every investor has a stake in this contest. And the outcome will be critical: the difference between comfortably reaching your investment goals and spending your golden years counting nickels. So let me describe this dangerous game and suggest how you should play it… and why.

A Necessary Evil
The tug-o-war I’m talking about is not the daily battle between the bulls and the bears. I’m referring to the epic clash going on between the public sector (government) and the private one (business).

We need both, of course. Government, as our Founding Fathers well understood, is a necessary evil. As James Madison said, “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”

Uncle Sam exercises a legal monopoly on force. The federal government exists to defend the shores, enforce contracts, protect your rights and provide for the general welfare. In any advanced economy, regulation is essential too. Government is as necessary to businesses and consumers as an umpire is to ballplayers and their fans.

The problem, however, is that government has now inserted itself into every aspect of modern life. In an unending quest to please constituents and special-interest groups, our elected mis-representatives have run up not only a $16.8 trillion deficit (equal to more than $148,300 per taxpayer) but another $123.9 trillion in unfunded liabilities for Medicare and Social Security (equal to approximately $1.1 million per taxpayer). And it’s only getting worse.

This isn’t just improvident. It’s nuts.

We are barreling toward the most predictable financial crisis in the nation’s history. Will something be done about it? Not anytime soon, for two reasons. The first is that the crisis won’t land on our doorstep next month or next year. This gives legislators the chance – once again – to kick the can beyond the next election. They pay no price for this.

Second, despite all the grumbling about dysfunction in Washington, polls show that voters don’t want to pay more in taxes and don’t want to see their federal benefits cuts. On the contrary, they want them either maintained or increased. (Let’s see you solve the fiscal crisis while granting these contradictory wishes.)

Carp all you want about the record-low approval ratings for Congress. The only thing that matters to legislators – who value incumbency more than life itself – is elections.

In 2012, for instance, all 435 House seats were contested. But, thanks to gerrymandering and voter apathy, 91% of incumbents were re-elected, only slightly less than the 93% historical average since 1954. Voters may be angry at Congress as an institution, but they believe their particular representative is doing a swell job. You could argue that Americans are getting exactly the kind of government they deserve.

Smothering the Goose
But back to our tug-o-war…

In addition to setting up a debt crisis of epic proportions, Congress passes thousands of pages of new legislation each year, piling on new mandates and regulations. It’s not just that complying with all this is expensive (and passed on to consumers). Even grappling with how to comply is expensive and time-consuming, especially for small businesses.

In short, our ever-metastasizing federal government – largely oblivious to the unintended consequences of all its do-goodery and the burden it places on future generations – is smothering the goose that lays the golden eggs.

After all, it is business not government that provides us with food, clothing, shelter and health care. It is business that meets our wants and needs as consumers. Every day businessmen and businesswomen are knocking themselves out to deliver products and services that are better, cheaper and longer lasting. It is business that innovates, creating new technologies and medicines. It is business that grows the economy, provides employment opportunities and pays billions in taxes. Government, if anything, should be aiding and abetting this process, not hindering it.

An Epic Clash
If you want to see how excessive regulation affects an economy, look at Europe. For years, left-leaning economists like Paul Krugman have argued in favor of “the European model.” But economic growth on the continent is anemic. Innovation is almost entirely absent. (It’s no coincidence that transformative companies like Apple, Google and Facebook are not headquartered in France or Sweden.)

Debt-to-GDP ratios are climbing… and so is unemployment. Indeed, Greece and Spain have unemployment rates that top 25%. That’s worse than the United States during the Great Depression. And increasing government burdens threaten our prosperity here at home, too.

These facts may be unpleasant, but they are not debatable. The question is, how does an investor with important long-term goals deal with this unprecedented tug-o-war between business and government? How do you invest when no one can say with certainty how this epic clash will unfold?

The good news is that there is an answer, one that not only is low risk but will allow you to reach all your important financial goals. It grants you unlimited upside potential with strictly limited downside risk. And it works.

So stay tuned. In Monday’s column, I’ll explain exactly what you need to do in your portfolio and why.

Good investing,


Editor’s Note: Alex and his team at The Oxford Club recently completed research on a historic event that will completely transform not only the markets and your money… but also human civilization. You’ll see the effects of this event at the grocery store… the gas station… your favorite restaurant… and when you buy and sell investments.

To learn more about how this $663 trillion event will affect almost all aspects of your life, click here.


Copyright © 1999 - 2011 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email:

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 - 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

6 Critical Money Making Rules