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Urgent Stock Market Message

United States Abandoning Capitalism for Socialism

Economics / Government Intervention Jul 30, 2008 - 07:15 PM GMT

By: John_Browne

Economics Best Financial Markets Analysis ArticleOver the past few decades, the United States has steadily evolved from a nation of ‘producers' to one of ‘consumers'.  The change has been celebrated by politicians and economists as proof of America's arrival at the top of the global economic food chain.  In reality, the development has depleted the nation of its hard-earned wealth, and has led us to the brink of ruin.

But rather than encouraging a return of America's productive energy, our government is responding to the growing economic crisis by simply trying to boost consumerism at all costs.  Their strategy involves socializing losses among all citizens so that the depletion can't be easily discerned.

Now that the nation has chosen socialism as its economic salvation, it is worthwhile to examine some historic precedents.  They are not encouraging.  Europe, the former Soviet block and much of Africa and Asia, show vividly that socialism curbs individual freedom and enterprise, and leads inevitably toward economic decline.

America was blessed both with abundant natural resources and individual freedom, the backbone of enterprise.  The combination rendered American productivity the envy of the world.  Based on the strength of our industry and productivity, the American Treasury became the world's largest.

Why would America swap a history of successful capitalism for a murky future of socialism? The Answer is politics.

When the vast majority of the country's private sector working population is employed in the service sector, then votes tip in favor of consumerism.  This is happening in America.  Consumer spending now accounts for 72 percent of Gross Domestic Product (GDP), and is viewed as the engine of our continued prosperity.

Over the past decade, when recession threatened to curtail spending, the government pumped hundreds of billions of dollars into the economy.  This led to two massive liquidity-driven booms; first in technology, then in housing.  During these booms, greed knew few bounds and leverage became a way of life.

But when the merry-go-round stalled, politicians did not, and will not, allow the normally corrective mechanism of a recession to operate.  It is trying to take the pain out of capitalism, while leaving only the pleasure.  This is impossible.

In the current attempt at a market correction, the government has decided that our bloated financial companies are “too big to fail”.  As a result, the government has lent billions of taxpayers' dollars to bail out Wall Street and the mortgage industry.  Some investment banks were given privileged access to the ‘Fed Window' to borrow unlimited amounts of money, secured by ‘junk' securities and at the lowest (negative) interest rates, well below the level of inflation.  In addition, the shares of the larger financial companies were also given special ‘short-selling' trading protections.

It is important to note that these protections were not given to other industries, and were not even extended to the entire financial industry.  Those receiving the public largesse are precisely the large institutions most responsible for the mess.  It was the financial and corporate fat cats who made the private profits gleaned from massive, irresponsible lending and borrowing.  Yet, when it comes to rescue, the ordinary citizen pays.

Declining corporate earnings, increased government intervention and higher taxes are tell-tale symptoms of socialism.  They can now be expected in America, bringing downward pressure on U.S. government paper and equities.  Recession in America will likely reverberate around the world, bringing worldwide strain to economies and equities.

Let us hope that the rest of the world will not follow America's example and head down the road toward socialism.  Economies adopting a free market approach are likely to far outperform those embracing the discarded doctrines of financial failure.

For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read my new book “Crash Proof: How to Profit from the Coming Economic Collapse.” Click here to order a copy today.

By John Browne
Euro Pacific Capital

More importantly make sure to protect your wealth and preserve your purchasing power before it's too late. Discover the best way to buy gold at , download my free research report on the powerful case for investing in foreign equities available at , and subscribe to my free, on-line investment newsletter at

John Browne is the Senior Market Strategist for Euro Pacific Capital, Inc.  Mr. Brown is a distinguished former member of Britain's Parliament who served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee, and as a close associate of then-Prime Minister Margaret Thatcher. Among his many notable assignments, John served as a principal advisor to Mrs. Thatcher's government on issues related to the Soviet Union, and was the first to convince Thatcher of the growing stature of then Agriculture Minister Mikhail Gorbachev. As a partial result of Brown's advocacy, Thatcher famously pronounced that Gorbachev was a man the West "could do business with."  A graduate of the Royal Military Academy Sandhurst, Britain's version of West Point and retired British army major, John served as a pilot, parachutist, and communications specialist in the elite Grenadiers of the Royal Guard.

John_Browne Archive

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01 Aug 08, 06:50
Monopolistic Capitalism

Dear Author ;

This is not socialism this is monopolistic capitalism ,your free enterprise capitalism had been died so long ago . Please read paul sweezy
11 Feb 09, 14:02
Agree, sort of

It is monopolistic capitalism...

But you DO realize, monopolistic capitalism, where the monopoly is the government itself...IS socialism.

Communism is capitalism, where the government is the only business.

But nothing works...socialism or capitalism, no one can predict in this consumer society, what will or wont sell and why.

You can guess at the weather, but you can never truely predict something that complex.

07 Jul 09, 19:16


Switzerland, Norway, France, Denmark, etc are all countries BOUNDING with economic prosperity and high standards of living. If you use bad examples of COMMUNISM(WTF?) and socialism to represent all socialists institutions of course they will look ugly.

The soviets were not socialists they were COMMUNISTS!

15 Oct 09, 18:16

We have to STOP SOCIALISM\COMMUNISM now, before it is too late. It has gone too far already and people have no clue what the country is in for. They just think Obama is black and he is cool. They have no idea what it is to live in a socialist communist society where the gov tells you what to do, say, eat, think, and talk about. Just like Obama does not want people to disagree with him. His staff & media labels people racist, angry mobs, and worse when they disagree. THIS IS SO WRONG and everyone is just going along with it. When they start rationing your food and taking away your homes and big cars then you will protest and it will be too late.

Eric Pearson
19 Oct 09, 22:03
Democratic Party - Democratic Reform Party

As Democrats of the Democratic Party, we join together in seeking reform within the Democratic Party.

Many Democrats already know their elected representatives within the Democratic Party are no longer following in the time-honored footsteps laid down by the founding fathers of our great Nation. More importantly, we as democrats see our elected representatives within the Democratic Party abandoning the values and principles as set forth within the Declaration of Independence and the Constitution of the United States.

At the very least, many of our elected representatives within the Democratic Party are no longer abiding to the sole reason the Democratic-Republican Party was founded by Thomas Jefferson - "Strong state governments with a weaker federal government."

This is only the beginning of our problems as Democrats, for many of our elected representatives within the Democratic Party have clearly set their own agendas over the members of the Democratic Party, our Nation, and the American people. Overall, many of them no longer think of themselves as being our elected representatives, and now refer to themselves as leaders in the true form of tyrants.

Most Democrats already know their pleas are only being answered by repeated insult and injury by their elected representatives within the Democratic Party. Despite this, we as Democrats can restore control of the Democratic Party back to the party members. All we need to do is cut off donations to the local, state, and national headquarters of the Democratic Party, and to make sure the donations are made directly to worthy and honorable Democratic Party candidates.

So spread the message to everyone of our fellow Democrats, for the Democrat members are taking back control of the Democratic Party. Also, please don't forget to contact and request the Unions and other outside contributors to follow our lead as patriotic Americans. Thank you!

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