China matters in world trade, and their shift from world trade to domestic balance will have an effect. In the meantime, in USA we have:
Slow growth, high unemployment and high stock market valuations are all the result of capitalism in action. That has failed (since it it now big govt/big biz) we are now the fascist version of capitalism.
SMEs need no bank credit, let alone bank credit. In a free market, of which we still saw vestiges a mere 30 years ago, vendor financing was still huge. Every business along the line extending time to pay to the next in line, that value of the goods, at no interest (usury). It was asset backed finance, not a loan, and in any event not at usury.
Coming off the semi-gold standard in '71 gave bankers a decade to experiment and between bank bailouts and a gaping loophole in accounting for standby letters of credit, banks learned a new trick: lending their credit instead of their money.
Since there is no rational limit to lending credit, the price of credit fell, its acceptance widened, and cheap and easy credit replaced the responsibility based vendor finance system.
This destruction of what is good was accepted for two reasons: the federal policy is get big or get out (fascism). Since such credit must necessarily go through banks, taxing and tracking got easier, so we got more of it.
Now we do not need the political capital either. We need to be left alone. Rolling back stupid rules does not take our participation, just do it. That 99% of political capital is devoted to making the rich richer and killing off small business in USA.
Another reason we do not need finance is it does not cost much to start-up a business, anyone can save that much themselves with a part time job, but these new crowdfunding sites are a re-emergence of what once was. Of course the Feds are effectively destroying this, and there is a time-bomb in every successful effort: income tax. Few people realize that they must give 1/3rd of what they raise to Uncle Sam. Surprise! We've seen this before, when in the dot com boom people whose stock options rose and fell found out they had a debilitating tax bill.
What does this relentless scorched earth federal policy toward small business mean? There is a woeful shortage of small business in USA, a huge detriment to our economy to have it thus. On the other hand, what happens to the value of that which there is so little?
It goes up.
If you have a nice 401K or whatever, it will be perhaps 1/2 its value by the end of this year. Now, I am not a financial advisor, and no one would take this advice if I was, but here goes -
Take out 1/2 of your IRA, 401K or whatever, take the tax hits, and use it to start a small business. What you left in, invest in Rydex double short mutual funds. By the end of the year, your 401K will be where it is today when everyone else has lost 1/2 value, and you will also have a very valuable small business you own.
I actually took this advice myself, back before 2008, when i could see at some point our banking system would fail. I got the bet right, but right before the pay off, Chris Cox, head of the SEC outlawed shorting financial stocks. That's what I get for thinking the Feds play fair. And fair warning, my good advice on investments, even when right, have proven wrong. but let's see by year's end, what this advice may yield.
Of course, more to the point, those with nothing, leveraging what little you have is best where what you create will be of exponential value: a small business in a regime that is ordered to the destruction of small business.
Feel free to forward this by email to three of your friends.
The Bermuda Triangle of Economics is still in place: Slow growth, high unemployment and high stock market valuations kept in place by a policy where the 20% of the economy which is the listed companies and banks gets 95% of all credit and access to subsidies while the 80%, which creates 100% of all jobs, the SME’s [Small and Medium Enterprises] get less than 5% of credit and less than 1% of the political capital.Let's break this down -
Slow growth, high unemployment and high stock market valuations are all the result of capitalism in action. That has failed (since it it now big govt/big biz) we are now the fascist version of capitalism.
SMEs need no bank credit, let alone bank credit. In a free market, of which we still saw vestiges a mere 30 years ago, vendor financing was still huge. Every business along the line extending time to pay to the next in line, that value of the goods, at no interest (usury). It was asset backed finance, not a loan, and in any event not at usury.
Coming off the semi-gold standard in '71 gave bankers a decade to experiment and between bank bailouts and a gaping loophole in accounting for standby letters of credit, banks learned a new trick: lending their credit instead of their money.
Since there is no rational limit to lending credit, the price of credit fell, its acceptance widened, and cheap and easy credit replaced the responsibility based vendor finance system.
This destruction of what is good was accepted for two reasons: the federal policy is get big or get out (fascism). Since such credit must necessarily go through banks, taxing and tracking got easier, so we got more of it.
Now we do not need the political capital either. We need to be left alone. Rolling back stupid rules does not take our participation, just do it. That 99% of political capital is devoted to making the rich richer and killing off small business in USA.
Another reason we do not need finance is it does not cost much to start-up a business, anyone can save that much themselves with a part time job, but these new crowdfunding sites are a re-emergence of what once was. Of course the Feds are effectively destroying this, and there is a time-bomb in every successful effort: income tax. Few people realize that they must give 1/3rd of what they raise to Uncle Sam. Surprise! We've seen this before, when in the dot com boom people whose stock options rose and fell found out they had a debilitating tax bill.
What does this relentless scorched earth federal policy toward small business mean? There is a woeful shortage of small business in USA, a huge detriment to our economy to have it thus. On the other hand, what happens to the value of that which there is so little?
It goes up.
If you have a nice 401K or whatever, it will be perhaps 1/2 its value by the end of this year. Now, I am not a financial advisor, and no one would take this advice if I was, but here goes -
Take out 1/2 of your IRA, 401K or whatever, take the tax hits, and use it to start a small business. What you left in, invest in Rydex double short mutual funds. By the end of the year, your 401K will be where it is today when everyone else has lost 1/2 value, and you will also have a very valuable small business you own.
I actually took this advice myself, back before 2008, when i could see at some point our banking system would fail. I got the bet right, but right before the pay off, Chris Cox, head of the SEC outlawed shorting financial stocks. That's what I get for thinking the Feds play fair. And fair warning, my good advice on investments, even when right, have proven wrong. but let's see by year's end, what this advice may yield.
Of course, more to the point, those with nothing, leveraging what little you have is best where what you create will be of exponential value: a small business in a regime that is ordered to the destruction of small business.
Feel free to forward this by email to three of your friends.
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