The politicians are all useless individuals. Nobody is reducing the problems in the U.S. or Europe, just putting on a Band-Aid and postponing the problems endlessly.
When people talk about people who are optimistic about gold, they call them 'gold bugs.' A bug is an insect. I don't call equity bugs 'cockroaches.' Do you understand? There is already a negative connotation with the expression of 'gold bug.'
Buy a $100 U.S. bond and frame it to teach your children about inflation by watching the U.S. bond value diminish to almost nothing over the next 20 years.
The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols... Very happy. Very good for the Fed. Congratulations, Mr. Bernanke.
Credit expansion and money printing hasn't filtered much to ordinary people. It's boosted asset markets, real estate and stocks. So well-to-do-people have done very well.
The reason I am so negative about the Federal Reserve's policies is that they only target core inflation and argue that they can't identify bubbles, but when each bubble bursts, they flood the system with liquidity that brings about unintended consequences.
It was easy for the Democrats to attack the wealthy fat cats of Wall Street, the elite, and the privileged people - to portray them as a profiteer of the system, which to some extent, they are. Not because they wanted to, but because Mr. Bernanke enabled them to be profiteers.
What I object to the current government intervention in so-called 'solving the crisis', they haven't solved anything. They've just postponed it.
If you really believe that every three years the market will double, then go and buy shares. I don't believe that.
If you print money like in Zimbabwe... the purchasing power of money goes down, and the standards of living go down, and eventually, you have a civil war.
If you're in any field, you should own a farm because one day you will be grateful that you are able to grow your own agricultural produce.
I am surprised with the reelection of Mr. Obama. The S&P is only down, like, 30 points. I would have thought that the market on his reelection should be down at least 50%.
In the 40 years I've been working as an economist and investor, I have never seen such a disconnect between the asset market and the economic reality... Asset markets are in the sky, and the economy of the ordinary people is in the dumps, where their real incomes adjusted for inflation are going down and asset markets are going up.
When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker.
Nobody at CNBC owns gold. Nobody at Bloomberg owns gold. Gold is being constantly talked down by the media, and Fed officials, and economists, who also don't own any gold. They're all stocked up in equities.
If the U.S. Government was a company, the deficit would be $5 trillion because they would have to account by general accepted accounting principles. But actually they encourage government spending, reckless government spending, because the government can issue Treasury bills at extremely low interest rates.
The positive aspect of my negative view is essentially that you shouldn't own cash and government bonds, but you should be in assets like real estate or equities or precious metals or in commodities.
I'd rather buy something that is relatively depressed than something that is relatively high.
My view is that the U.S. market will eventually join the emerging markets on the downside because if you take a bearish view about emerging economies, you cannot be too optimistic about the U.S. because for many U.S. corporations, 50 percent or more of their profits come from emerging economies.
I don't think Canada is very inexpensive anymore. I travel there all the time; it's rather on the expensive side. I think there's significant risk to the Canadian economy.
