Following up on my blog of July 15, 2010 entitled “Why Reshaping the Federal Reserve is today an Absolute Must” I thought I’d share these thoughts with you, demonstrating the Federal Reserve’s true agenda in the economy today, and why reshaping the Fed is again needed more than ever at this juncture of our country’s economic history.
In fact, contrary to popular belief, I frankly believe that the Fed has spent the last two decades creating the illusory “wealth effect” in people’s minds; knowing very well that what they do has no direct effect on the economy. If you can drive the market up 50 percent, people feel richer…and happier.
The Fed basically wants us to go out there and buy stocks, which are overpriced because bonds they have manipulated into being even less attractive. So, we’re being forced to choose between two overpriced assets. Plain and simple.
For More: The Federal Reserve’s True Agenda and how to deal with it
Some people criticize the injection of politics into economic discussions.
But economic historians tell us that economists used to understand and accept that economics is wholly interrelated with politics, and that politics affects our economy.
They note that modern economists have artificially tried to somehow separate the two, like Descartes tried to separate the mind from the body.
Indeed, the father of modern economics – Adam Smith – talked a lot about politics in relation to economics.
For More: Can we separate Economics and Politics?
I am afraid America makes less sense every day.
Little children are randomly slaughtered in their schoolrooms. Predator drones roam the skies over foreign countries exterminating bad guys, along with innocent women and children (collateral damage when it occurs in a foreign country). Drugged up mentally ill kids with no hope and no future live lives of secluded quiet desperation until they snap. Ignorant, government educated, welfare dependent drones with no self respect or respect for others, assault, kill and rob within their government created urban ghettoes.
Sociopaths who committed the largest financial crime in world history walk free and continue to occupy executive suites in luxury office towers in downtown NYC, collecting millions in bonuses as compensation for crushing the American middle class. Academics, whose theories have been thoroughly disproven, continue to steer our economy into an iceberg while accelerating the money printing and debt issuance that will sink our ship of state. Corrupt, bought off politicians pander to the lowest common denominator as their votes are only dependent upon who contributed the most to their election campaigns, which never end. Delusional, materialistic, narcissistic, math challenged consumers (formerly known as citizens – live for today, enslave themselves in debt, vote themselves more entitlements, and care not for future generations.
For More: America Tear down the wall before it’s too late
I am often asked what is it to be wealthy that most people don’t know much about.
Well here are some facts that may surprise you and that you may or may not have imagined along with some tips as to how to best deal with it.
1. Being wealthy is an incredibly isolating experience. What I mean by that is you can’t really complain about your problems except within your small circle of rich friends. Otherwise, you will sound like an asshole. Even if you do, non-rich people can’t really empathize with you.
There are a few other problems associated with being rich such as family/friends asking for money, unexpected jealous reaction from friends/family, pressure to deal with more complex tax, estate planning and investment planning, etc… The joy of “set for life” doesn’t seem to offset the anxiety from hoarding the huge sum of money. In addition, when you don’t work because you are rich but can’t hang out with your friends who have to work during the week, you feel like an outcast of society. Best way to deal with it? Stay focused, keep working at what you do best – Work is healthy – and enjoy what you have with people you carefully selected and feel comfortable with.
For More: Things about being wealthy
I talk to and meet close to 500 entrepreneurs a year – from the true maverick game changers to the guys as arrogant and dumb as can be –
I believe what differentiates a killer serial entrepreneur from the rest of the crowd is frankly how they operate – no matter what product they are offering.
With around 30 year experience on Wall Street backing over 125 companies worth in aggregate over 10 billion dollars during the time period, I thought I’d share with you some of my thoughts in this regard.
For More: How Killer Serial Entrepreneurs Operate
In just a matter of years, we’ve seen the digital revolution transform business, politics, media and society right across the world.
The Davos fest early this year only confirms the trend where this revolution is clearly driving a shift from ‘old’ to ‘new’ power in the world.
A new power’ world characterized by a shift away from unthinking consumption to people being ever more involved in creating, sharing, funding and owning products, services and ideas.
Where old power business models are defined by what one company has that others haven’t, new power models are renewable because they are driven by the passions and energies of the many.
Take a close look at Bitpay and Blockchain, both shaking up the banking industry by giving more people access to a new currency in a secure way, without the permission of governments and institutions…. Along with Sidecar with their true marketplace experience challenging Uber and Lyft to get people moving.
For More: My Personal Reflections on Davos 2015
Fiscal year 2015 is upon us, and is fast becoming the year of historic monetary policy changes in light of an appreciating US currency and, in turn, a blanket decrease in European and Asian economic growth. Since late 2014 and in full swing 2015, the Danish central bank, the Swiss National Bank, and the Bank of Russia cut key interest rates, with probable Turkish Central Bank short term rate cuts to follow.
The Bank of China has recently reduced its requirement ratio as well to encourage growth. In the US it is expected that the Federal Reserve raise short term rates by mid-year 2015, a policy change that has not been effectuated for over three years. It is apparent that governments are depending heavily on central banking to modify economic growth patterns as a short term solution.
While the spotlight is fixed firmly on central bank monetary policy to control the global economy, should central banks be fully responsible for financial stability? From a governance perspective, central banks act first and foremost as an independent or fully state-run agency to ensure adequate capital liquidity.
The gist of central banking is to control the effects of growth expansion or decline, and not necessarily to be the institution to structure economic growth itself. In addition, one of the tenets of central banking is to oversee a sovereign’s commercial banking system, and be thus supported simultaneously by government legislature.
For More: Central Banks: A Question of Governance
I get a lot of questions about how to get rich, and my answer is very simple.
Don’t spend too much. Mostly save. Always invest.
Yet so many people do the exact opposite—invest poorly, spend way too much, save almost nothing, and remain willfully ignorant about their finances.
Why? Because they don’t understand their relationship to money.
So how do you develop the good habit of turning you situation around, get out of your hole, get on the right track and stay on it?
The first step in changing money habits is taking a cold hard look at your financial input and output by adding up all your earnings and subtracting all your expenditures over three months. If your number is positive you’re one of the few people taking in more money than you spend. If your number is negative, and like the majority of men and women, you spend more than you make.
For More: So you wanna get and stay rich?
Suspicions among white-collar professionals that the recovery is an illusion, or at least has left them behind, are validated by official government data buried in the monthly employment reports, based on household surveys, which few bother to actually read.
Even more worrisome is the continuation of a decade-long decline in the number of self-employed, a category which includes many of these same professionals.
While even the seasonally-adjusted employment data show an uptick in five of the six unemployment measures (Table A-15 of the January 2015 jobs report, available at http://www.bls.gov/news.release/empsit.t15.htm), the unadjusted numbers in the same table show a measurable increase in unemployment.
However, that is not news to the white-collar workforce which has not fully recovered and which may never recover. Remember that the official data, if anything, paints a rosier picture than reality, because it is based on methodologies which strain to overstate employment and understate unemployment.
For More: Long Trend Of Jobs Data Shows Zombie Recovery for Professionals
I have often asked myself this question and I am sure the same applies to you.
My view on this is that you should go with your gut feeling when you have a threshold level of relevant experience.
In my opinion, gut calls are usually very little if any helpful when it comes to looking at deals or similar investment opportunities requiring quantitative analysis and much more important but still not enough when it comes to picking or relying on people.
It is a fact that when I am looking at deals, I always look at the hard cold numbers. I rarely rely on gut feelings. Why? Let’s say for example you don’t know much about investing, and you’re debating whether to buy shares in Google or Amazon at the current stock price, your gut reaction whether to pull the trigger is almost certainly meaningless.
For More: Going for your gut feeling – Yes or No?