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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: orkrious who wrote (60690)12/16/2006 11:29:21 AM
From: Haim R. Branisteanu  Read Replies (1) of 116555
 
Would like to add my 2 cents to remarks made by Heinz, Joel, and TJ and to their musing about the impeding evaporation of perceived value of assets.

First of all the financial assets already got a severe haircut without inflicting to much pain because J6P did not noticed it even the stealth confiscation of their assets. House prices appreciated 30% to 50% and commodities appreciated from 50% to 100% - all those gains are taxable.

Renewable commodities like sugar corn, wheat etc. went up 50% or more non renewable like coal, oil or metals around 100% or more. They call it a long term commodity rally but actually it is a fiat money devaluation as it take the same amount of work and fertilizers to grow grains and the same amount of work and energy to extract oil or to mine coal or copper etc..

(If I recall correctly several years ago TJ bought PHELPS DODGE and wrote puts on the stock, he made nice financial gains at the time and paid taxes on his gains – but PD stock price did not cover the devaluation of the fiat money v. the price of copper – so he got rich in paper and lost in real buying power. )

Officialdom was successful in hiding the governments run on our savings. It started long ago at a time Rubin was at the treasury and the change in the way they calculate inflation which was adopted by most countries around the world. This hideous officialdom scheme resulted that a substantial portion of pensions and social security saved by the working people over their lifetime was already confiscated in real values, even that those plans may payout the same amount of fiat currency.

Even that I agree with every point they make there is one omission that should be taken into account – the success in convincing the working people to save for retirement if by social security or pension funds or all other schemes like IRA, Roth and the likes. Those flows of funds denominated in fiat money which represent something like 15% to 20% of the earning power of the working people will continue to sustain the financial assets bubble, whose nominal buying power will shrink over time, even that in fiat currency denomination will show appreciation. There is no one financial asset including inflation adjusted bonds, that will keep it’s buying power over time and this is the ponzi scheme that started under the Clinton administration and adopted worldwide.

It is all about perception and the confiscation of our wealth which was done over the last 12-15 years went without a hitch and there is no reason that the scheme should not perpetuate further. Officialdom achieved it long sought goal – slow stealth confiscation of peoples wealth to support the state and it’s activities and pay the expenses of every state politicians and its administration.
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