The Folly of Long Term Investing
October 5, 2011
Long Term Investing
How's that working out for you?
We're entering a deflationary period where the bankers will call in their loans and expropriate our property. If there are riots, they'll take our freedom and independence too.
by Henry Makow, Ph.D.
Being a "long term" investor these days requires steady nerves. Since July 22, your gains for the year have been wiped out and you are down at least 10%. You could be down 25-40% if you are in commodities.
But you're not about to panic because you've invested for the long term. Your mantra is "buy and hold." You're not going to "time the market." You are investing for retirement.
That's why I have another investment strategy for you. I suggest you take your savings out of the bank in $1000 wads. Then put a few wads of cash on the curb in front of your house.
You may wish to "diversify" and put the cash on different streets or street corners. Within minutes or at most hours, you will find that your money is gone.
But don't panic. That's short-term thinking. You're in it for the "long haul." With the passage of time, the people who took your money no doubt will have pangs of conscience and return it, with a little extra.
Be patient and have faith.
"BUSINESS CYCLES"
We all have fantasies of buying a promising stock, then checking the price ten years later and finding we're rich!But this doesn't take "business cycles" into account. Even people who preach the gospel of long-term investing admit business cycles exist.
Business cycles are alternating periods of price inflation and deflation.
Say you are a banker and lend out money you created out of the ether.
If your customer pays it back with interest, the principal returns to the ether and you keep only the interest.
But if he fails to pay, you get to acquire whatever property he bought with the loan. And if he doesn't have any property, well then you own him!
So the first part of the business cycle is "inflating" the debt balloon. That's when credit is free and easy and everyone takes out loans.
Then you burst the debt bubble. That's when people don't have money to pay for the things they bought. That's the stage we're entering now. In 2008, the bankers burst the housing bubble. They deliberately crashed the banking system to administer a deflationary shock, a "credit crunch."
Then they loaded the US up with trillions more "debt" to "save the financial system." Now they are bursting the sovereign debt bubble. They are creating another banking crisis and a far greater credit contraction.
We're entering a deflationary period where the bankers will call in their loans and expropriate our property. If there are riots, they'll take our freedom and independence too.
But long term investors will suffer most. Short term investors will have sold at the first sign of trouble and have cash to weather the storm.
Someone said, "A long-term investment is a short-term investment that went bad."
(Below - Copper, the metal with a Ph.D, in Economics)
CONCLUSIONIn a perfect world, we could plant our seeds, watch the plants grow and harvest our fruit. Unfortunately, the economic system is far from perfect. It is controlled by bankers who want to own everything, including your children and your soul. Thus they have a vested interest in crashing the economy and causing a depression.
Take a look at this list of banking crises. There is one at least every ten years and we've had two in the last decade. As long as bankers use their printing presses to acquire tangible wealth, we will have credit bubbles and contractions. And, as long as we have these "business cycles," investing in the stock market long term is folly.
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P.S. Gold behaves like other commodities. However, if the focus of attention moves back from Europe to the US deficit, possibly gold will rise like the phoenix out of the ashes.
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P.S.2 STEVE JOBS RIP Steve would have given his billions for health. Health is priceless. Everything else pales. Let's not forget that.
Related - A Short History of Banking
Steve said (October 6, 2011):
A crazy thought about Steve Jobs, he proves that being intelligent and having billions doesn't make one immune to the brain washing of the doctor gods pharma. Here is a man that can hire hundreds of research teams to investigate all alternative medicinal routes for beating cancer and interviewing thousands how they beat cancer. Plus spend billions on the latest research labs to accelerate cancer cures that have worked in the past like Royal rife.
Or maybe his death is set up like many others in power to disappear into a new life here on this planet or off world. It would not be hard to fast or take drugs to look sick. I can't imagine being so rich and smart that he would just give up exploring and die and not at least be frozen.