Tags: investor | Fed | Democrats | Republicans

Congress Doesn't Understand How to Play Marbles

By
Monday, 15 Dec 2014 01:14 PM Current | Bio | Archive

It's 9:00 in the morning and I've finished my bike ride and am sitting in a deli with my buddies having a bagel.

The sun is shining, temperature around 72 here in Miami, and all should be well with the world.

But it isn't.

Each in the group has made their money in different ways and the sees the world through different prisms of experience. Diverse opinions on nearly every subject makes for lively, and sometimes loud, conversation.

This morning the conversation takes on a serious tone of concern as the consensus seems to be that things — the investment markets in particular — are not looking good.

And what bothers us most is that the greatest danger to the value of our retirement plans and our financial security is our own government.

We were hoping that with the startling results of the mid-term elections, that both Republicans and Democrats would realize that American voters want some adult leadership in Washington. Even a small step by the political leaders in the House and Senate toward solving some of the issues and problems that were so contentious in this last election would have been a welcome sign.

But now we know that is not going to be the case.

With the passage of a $1.1 trillion budget late Saturday night, the political leadership in Congress let us all know that it will be business as usual.

Spending will be going up. The debt will rise some more — billions or trillions of dollars. Investors will be paying more tax and incurring more costs trying to comply with filing tax returns. The borders are not secure, Jerusalem is not officially recognized as the capital of Israel, the Federal Reserve is not going to have a real audit, government giveaways and handouts continue and pork — in all its forms — remains the political meat of choice.

The deck chairs on the Titanic were slightly rearranged at a cost of $1.1 trillion, but the boat is still sinking. At least it seems that way to me and the rest of the Sunday morning breakfast club.

What I found most fascinating about the budget exercise this last weekend was the blatant cronyism of the Republicans and Wall Street. I'm talking about the handing of derivative trading back to the so-called banks.

Elizabeth Warren jumped all over this putting herself way out front in a political power position. Without feeling embarrassed about it at all, I can say quite honestly that as to this issue she is right.

It is the American investor's best interests that a super Glass-Steagall Act is enacted to replace Dodd-Frank and that the too-big-to-fail banks are broken up just like AT&T was not that many years ago.

It seems both the Republicans and the president are focused on effectively nationalizing the entire financial system of the United States under the auspices of the central planning authority known as the Federal Reserve. The Democrats, to their credit, have never said otherwise.

What to do about it? That's the question raised as we finish our last cup of coffee before continuing on with the rest of our day.

Clearly there is something very wrong going on. To be more accurate, there is a lot of wrong going on and it is so vast it is hard to contemplate.

My suggestion, which seemed to be well received by the rest of the breakfast group, is to get on the sidelines. I think that when investors, like we are, start feeling we are being suckers or, even worse, set up to be swindled, then it's time to stop playing the investment game.

If we are wrong, then it will cost a bit of a premium to get back into the markets. If we are right, then we'll still have money to invest when more opportune times come around.

It's like when I was a kid playing marbles after school. When it popped into my head that it was time to stop playing, I would pick up my remaining marbles and head home for dinner. That way, I still had some marbles left to play with tomorrow.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Kleinfeld
It's like when I was a kid playing marbles after school. When it popped into my head that it was time to stop playing, I would pick up my remaining marbles and head home for dinner. That way, I still had some marbles left to play with tomorrow.
investor, Fed, Democrats, Republicans
687
2014-14-15
Monday, 15 Dec 2014 01:14 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved