Feed The Beast (written January 2008)

Posted by Eric Solis on October 20, 2009 under Stock Market |

Long standing monetary and fiscal policy are the catalyst for the current commodity inflation and the bubble cycle that has been hop scotching from one market to the next since the mid 1990’s.  And the “recovery” that market pundits will be promulgating will be the result of a financial bubble that will serve as a vacuum of wealth from Middle America into the pockets of the rich.  This will not be a capitalistic bull market, but rather a hyper-inflationary re-pricing of financial assets.  It will look and smell like a Bull, for a short time and then the devastating impact will be felt by working families all across the country.  In fact we are in the early stages of it now. 

This is why we MUST get every American into the market and out of fixed stored savings.  ING has opened 6.6 million accounts on the promise of high interest rates.  Bank of America 5.5 million accounts into Keep the Change on the same promise.  People want to save; they are feeling the need and these institutions have figured that out.  But, the supposed “high interest” they pay on these stored savings vehicles and the principal itself is becoming worth less and less with each passing day. 

The media, MUST let go of the distraction about “costs” and the inefficiency of mutual funds and other means that make equity investing possible to the mass consumer.  This is harming people not helping them.  The cost is nothing compared to the harm of economic segregation.  The message we should be telling Americans is that they CAN NOT afford to be out of the market.  They MUST be in at all costs!!!  The equity markets are by nature the only beast blood thirsty and wicked enough to combat the glutton minded fiscal and monetary policies of the past decades. 

“Smart money” wants to keep the dumb money in stored savings vehicles, because this is non dilutive to the pyramid scheme that is being funded by our own Federal Reserve and government.  Trillions of dollars are being pumped into the system in order to feed the beast.  The beast begs to be fed in order to live (Fed and fed…interesting).  So, Middle America MUST feed the beast too in order to fend off purchasing power poverty.   

It is not a perfect solution and it is a “high cost” system using rich mans math.  But when we compare what is happening to the purchasing power of stored savings, it is a MUST.