The Obama Hammer

By: Bob Hoye | Tue, Feb 3, 2009
Print Email

Said quickly with a drawl it comes our as "The Obama Hamma", which seems appropriate. His attacks upon free trade and upon free speech (with the rant against Rush Limbaugh) have been quick off the mark.

The Administration, with Pelosi's Congress seem to be bullying operators who will push the political fabric to the limit.

The damage being done during a relentless post-bubble contraction is bad enough, but to have it made worse by political bullies intent to impose socialism, under any guise, is going to add even greater distress to financial markets. Until the groundswell for another benign American Revolution builds up, perhaps the only constraint upon the full implementation of brutal ambition will be financial dislocation, made worse by political folly.

Socialists are a study. Feral socialists who have been out of office for awhile seem even angrier and more ambitious to impose policy than those naively new to power. Eventually, they realize their mistakes and much like a cat clawing the furniture - they can't help it and always look guilty when reprimanded. Such full reprimand by market forces could be some time off, and, in the meantime, no one's furniture is safe.

Some observations:

The classic fall crash completed on November 20, which was also the day that concluded the similar crash that ended the South Sea Bubble.

In our case, the rebound out to the first week of January amounted to 25% for the Dow, 22% for the Toronto index and 24.5% for the Nikkei. Retrospectively, this was too much - too soon, making markets vulnerable to the discovery of Obama's true ambition.

Ironically and eventually, protectionism has been one of the features of every post-bubble contraction. After exaggerating speculation on the upside, politicians are programmed to make things worse on the contraction. Comparing well with cats and furniture, one following the 1825 mania was called, in real time, "The Tariff of Abominations".

Link to the Friday, January 30 "Bob & Phil Show": http://www.howestreet.com/index.php?pl=/goldradio/index.php/mediaplayer/1100

 


 

Bob Hoye

Author: Bob Hoye

Bob Hoye
Institutional Advisors

Bob Hoye

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.

Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

Copyright © 2003-2014 Bob Hoye

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/