The American economy is broken

The American economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations.

Something cannot be effortlessly created from nothing.

When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.

The importance of things like enterprise, hard work and self-reliance

America was a place where opportunity and risk were both much higher than on early 21st-century.

The bold and enterprising could succeed big, or fail big,without fear of confiscatory taxes or hope of government bailouts.

Getting ahead called for a keen mind, a strong back, and a willingness to work hard and take chances; opportunities to succeed by manipulating laws and regulations were harder to come by.

The importance of things like enterprise, hard work and self-reliance was America.

The Federal Reserve

The Federal Reserve is in the business of central planning instead of central banking.

The Fed's assets have grown much faster than its capital.

The Federal Reserve is itself a highly leveraged financial institution.

The flagship branch of the 12-bank system, the Federal Reserve Bank of New York, shows assets of $1.3 trillion and capital of just $12.2 billion.

Its leverage ratio, a mere 0.9%, is less than one-third of that prescribed for banks in the private sector.

The freedom of the marketplace

The federal government is proliferating in the economy at a logarithmic rate.

The freedom of the marketplace is still the only effective mechanism for eliminating poor business practices, identifying productive investment, and providing long-term growth.

The difference between a Ponzi scheme and the Social Security

What is the difference between a Ponzi scheme and the Social Security?

The firts one is illegal and the second one is legal.

Central banks

Central banks can create infinite quantities of money, at no cost.
So they can reduce its value to nothing without difficulty.

As Robert Mugabe has shown, anybody can run a printing press successfully.

Financial markets are perfect

Financial markets are perfect.

In particular when they are susceptible to boom-and-bust cycles.

Cycles of this sort have been, are and will be perennial with markets.

For addressing the results of these cycles all you need is free enterprise and free market.

To solve economic problems

To solve economic problems you have only two tools: personal responsability and market forces.

Government involvement in economic management is always the origin of an economic crisis.

More government action

More government action is more recession duration.

Let the market solve the problem.

The crisis is due to bad lending and investment decisions.

Commercial failures were compounded by a reliance on excessive leverage, or borrowed money.

That leverage was made even worse by the banks' use of off-balance-sheet vehicles.

Let the market solve the problem.

The only way of wealth creation

Individualism working for good is the only way of wealth creation.

Government is taking my money

Government is taking my money in order to spend it "better" than I can.

The best excuse ever invented to expand government.

It is both frightening and discouraging to hear politicians offering more Keynes at a time when what is most needed is a way of restoring the appetite of the private sector for risk.


The Keynesian theory, calling for government spending as a way to boost aggregate demand during economic downturns, is the best excuse ever invented to expand government.

Row capitalism will always be alive

I believe in markets.

I also believe that there is not a role for government.

Row capitalism will always be alive no matter who will always be trying to kill it.

Government-sponsored institutions kill competition

History shows that a nation can not have competition without trust and confidence.

Government-sponsored institutions kill competition because they deliver no trust no confidence.

Government is a wasteful institution

Government is a wasteful institution.

Government is unable to understand the meaning of innovation, efficiency and flexibility.

Adding debt to debt.

Once short-term interest rates get to near zero, a key focus in such an environment will be to bring down long-term interest rates, which help determine the rates of mortgages and other debt instruments.

This would likely involve in practice the Fed buying longer-term Treasury bonds.

Such actions will not solve the problem but will merely compound it, by adding debt to debt.

Unintended, adverse, long-term consequences.

The efforts to prevent the market from disciplining excesses will have unintended, adverse, long-term consequences.

One legacy will be the existence of a large number of uncompetitive companies which will cause profit margins to fall for their more productive competitors.

Another consequence will be a long-term deflationary malaise, which will keep interest rates ridiculously low to the detriment of savers.

Bank disinterest in lending the money

The aggregate reserves of U.S. depository institutions have surged nearly 14-fold in the past two months.

The growth of excess reserves reflects bank disinterest in lending the money. This suggests the banks only want to finance existing positions.

The Fed can only control the supply of money

In the U.S., the Fed can only control the supply of money; it cannot control the velocity of money or the rate at which it turns over.

The dramatic collapse in securitization over the past 18 months reflects the continuing collapse in velocity as financial engineering goes into reverse.

The modern economy and the real world

Confusion, uncertainty, doubt, distrust, distrustfulness, incertitude, misgiving, mistrust, mistrustfulness, skepticism and suspicion,

That is the modern economy and the real world.

The system is dysfunctional

There's something very strange about issuing debt to solve a problem caused by too much debt.

If something cannot go on forever, it won't.

The system is dysfunctional.

Where does government get the money?

Every dollar government injects into the economy must first be taxed or borrowed out of the economy.

No new spending power is created.

It's merely redistributed from one group of people to another.

Economic growth -- the act of producing more goods and services -- can be accomplished only by making people more productive.

The current crisis

The current crisis resulted primarily from anticapitalists forcing banks and mortgage companies to lend money to people with little or no means to pay it back.

Market-suffocating policies

Market-suffocating policies will put the country in Great Depression.

What the government gives with one hand

What the government gives with one hand, through increase spending,
it take away with the other, through increase taxation.

Cheap and easy money

Cheap and easy money fueled by the FED generated speculation which involves buying for resale rather than use in the case of commodities, and for resale rather than income in the case of financial assets.

Fed gets itself and the economy in trouble

In 2003 the Fed cut the fed funds rate to 1% and kept it there for a full year through June 2004.

Growth in the third quarter of 2003 was 7.5%, yet the Fed kept its foot on the monetary accelerator for many more months.

Fed's main obligation is price stability.

Fed gets itself and the economy in trouble when it attempts to use monetary policy to manage growth.

When markets are free

When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses.

Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.

Destroying confidance

The government doesn't create anything; it just redistributes.

Destroying confidance is what the government do best

Whenever the government bails someone out of trouble

Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll.

Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.

A big political event

Last month's $700 billion bailout amounts to more than 5% of U.S.
gross domestic product.

Compare that to Germany's $400 billion to $536 billion rescue package (between 12% and 16% of its GDP),or Britain's $835 billion plan (30%).

The ratio of government debt to GDP in the U.S. runs to
about 62%. For the eurozone, it's 75%; for Japan, 180%.

The U.S. continues to have the world's largest inflows of foreign direct
investment.

Recessions are periodic facts of economic life that tend to last anywhere
between six and 16 months.

Severe recessions or depressions are fundamentally political events that
can last a decade or longer.

Last month's $700 billion bailout was a big political event.

The only way to deal with economic crisis

The only way to deal with economic crisis is to force players to bear the cost of their mistakes.

Risky behavior

Any bailout of the financial system will encourage more risky behavior by banks.

Level playing field

You only have a level playing field when you leave the market heal by itself.

Regulators

Regulators try to prevent risk in the market.

Thy start reducing risk then reducing benefits and then reducing the market.

Central Banks

In a prosperous society Central Banks should be small and powerless institutions
owned by stockholders not by Government.

The ability of self-healing

The market system has the ability of self-healing and put your fate in your own hands.

A regulated market is a sick market without self-healing ability.

Money given by the Government

Money given by the Government is money taken from one part of the economy
and redistributed it to other who either save or spend it.

Neither one change incentives to invest or take risk.

It is wise to let adults exercise their own judgment

Markets are places of trial and, very frequently, error. Their genius is not perfect efficiency, but the rewarding of success and the weeding out of failure. No better alternative has ever presented itself.

This is a difficult time to defend free markets. Nevertheless they must be defended, not only on their matchless record when it comes to raising living standards, but on the maxim that it is wise to let adults exercise their own judgment.

Market freedom is not a “fundamentalist religion”. It is a mechanism, not an ideology, and one that has proved its value again and again over the past 200 years.

Bailouts

Bailouts are the best source of inflation.

And inflation is the best poverty machine.

Recession

The crueler an economic recession is the sooner it will be over.

Let the markets solve the problem.

The best recipe for poverty

Government never know where jobs will come from.

Jobs depend not on government but upon satisfying customers.

Aversion to competition and international trade is the best recipe for poverty.

Market is the best teacher

Market is the best teacher and governments should let market discipline reign free.

The dangers of financial deregulation end up when foolish investors play
attention to returns.

No matter how smart is the regulator he will be always unable to prevent
financial crisis.

Let the market clean the mess.

Inflation in August 2008 in Europe and USA

Unions are more powerful in the 15-nation euro zone than in the U.S., and many laws and practices there are more worker-friendly. That's part of the reason why many European workers are keeping up with inflation better than their U.S. counterparts

Wages and salaries in the euro zone were 3.4% higher in the first quarter than in the year-earlier period, matching the first-quarter annual inflation rate.

In the U.S., where unions are weaker and wages aren't often indexed to inflation, workers fell behind. Consumer prices were 4.1% higher in the first quarter than in the year-earlier period, but workers' wages and benefits increased 3.3% over the same period.

What's good for Europe's workers, however, could prove costly to its economy. As European wages rise, employers come under pressure to increase prices to cover labor costs. The added danger in countries where wages are formally indexed to inflation is an inflationary spiral that's hard to tamp down. Sharp wage increases could prompt European companies to lay off workers or move more jobs to countries where labor is cheaper.

Every time the government touches an industry

Every time the government touches an industry you know that industry is going to collapse .

You have a clear example with the real estate industry .

The government created two companies Fannie Mae and Freddie Mac to "help" the poor.

You know the end. These two companies plus property taxes destroyed the industry.

Inequality is the natural motor of wealth creation

Taxes are the natural enemy of wealth creation.

Inequality is the natural motor of wealth creation.

Only wealth creation destroy poverty.

These guys don't want a friend. They want to win

Innovation creates wealth because it really prevents goverment regulation.

When you work around the clock, holidays mean very little to you since
you work just about all the time.

It is importante to grow up in a family that doesn't know what glass ceiling are.

These guys don't want a friend. They want to win.

Marketing and innovation

Marketing and innovation are the basics steps to get rich

If you are not richer the poor would be poorer.

Idea are everywhere

Ideas are everywhere.

It's execution of good ideas -not the ideas themselves- that makes for successful businesses.

To be in command of your destiny

There is no way to predict how innovative markets will develop.

Every body wants to be in command of their career and destiny.

Basic investment rules

Basic investment rules

If a stock got above about its pie share in your portfolio, you suould cut it back so it wouldn't overly dominate.

You may lose some money by trimming winners

If a stock doesn't grow, you should cut your losses and sell.

You must remain hypercompetitive and self-confident.

You should track a stock's performance for weeks before buying, and then build a stake gradually

You should keeps charts comparing your holdings with the overall market and classifying your stocks by category -- growth stocks, aggressive growth, foreign and so on.

Stocks move most heavily at the open and the close

You should buy preferably with a high dividend yield and low price-to-earnings ratio.