The opening segment of NFTRH 212 did what an unbiased financial writer probably should not do and discussed politics. Then 24 pages of straight analysis followed.
Financial writers far and wide are weighing in on the US Presidential election result and its implications. So jumping into the ring, here are mine.
For the third cycle in a row I cast a protest vote. After voting for George Bush in 2000 (actually it was more a vote against Al Gore) I wrote in Ron Paul in 2004 and 2008. This year I voted for Gary Johnson, although I do not consider myself a Libertarian. I consider myself an independent who has long since been alienated from a two party system that looks a lot like dangerously competitive cartoons from opposite ends of a narrowly constructed ideological spectrum.
When you write a newsletter, you learn about being a newsletter writer; just like when you become a plumber, you learn a lot about plumbing. I once made an unfavorable public blog post about what I considered to be a cartoon that went by the name of Sarah Palin and was summarily served with an indignant email and subscription cancelation from an otherwise satisfied NFTRH subscriber. Lesson learned: There is little place for political commentary in financial analysis. Besides, political ideologues make really biased financial commentators; and in the markets bias just kills you.
Disregarding this for a moment, my view is that the 16 years under Bill Clinton and George Bush resulted in a rigged system that did indeed help the rich get richer, the poor get poorer and the middle class get positioned right over a trap door.
If you depersonalize it, you may see that Barack Obama was simply the agent of redistribution that was always fated to come to power in the wake of a stacked game that just kept right on giving to certain well-placed interests that used, abused and benefited from the fruits of the system of 'Inflation on Demand'. My public writing has been very consistent since 2004 with regard to this dynamic.
A system took hold that depended on outsourcing real and productive industries (and thus, jobs) in favor of the much easier path of leveraging the world's reserve currency and the Treasury bond market to in essence print our way to perceived prosperity. Privileged entities in the financial world got to use the money - compliments of bogus interest rate policies of the Greenspan and later, Bernanke Federal Reserves - before it was sliced, diced, marked up and sold to the public.
A personal frustration throughout the 2003 to 2007 timeframe was that I felt nearly alone (along with a relative few other crazies) in my negative view of what the inflationary regime would bring to this society. My commentaries were filled with references to 'McMansions' and '60" Plasmas' bought on credit. My harshest commentary was reserved for a hubris-addled society that refused to wake up to its oncoming plight, not for the stooges they elected to political office. You get the government you deserve.
Now we are here. People are waking up and getting pissed, but where was their indignation when they were blissfully living on a precipice in the pre-2008 crash inflationary bull market that seemed to lift all boats? Fat, dumb and happy is where many people were.
We are down the Rabbit Hole and the world has not ended my friends. It is changing. A rotten system is morphing, but is likely to use the same inflationary mechanics as its previous version. The would-be beneficiaries have changed to be sure. But it is the same system and frankly and speaking personally, I decided to play this system for all it is worth a long time ago. If you can't beat 'em...
There is no place for belly aching and ideology in financial market management. This newsletter is all about coldly managing what is, not what we want it to be. So with that said, we happily move on to our usual programming with the political environment only to be mentioned when it is relevant to the analysis from here on.