Tim Staermose hit the nail on the head with his most recent column about the Occupy Wall Street protests in New York. Capitalism isn’t to blame for the current mess that we have gotten into. There is no free market for currency, none for interest rates, there is limited competition for the rating agencies. The banking industry, war industry, energy industry, farming industry and many others are all in bed with the government.
Let’s be honest, the anger is understandable. But it’s infuriating to so many of these protesters railing on YouTube against the free market, moaning how capitalism has pillaged the poor for the benefit of the rich.
Nothing could be further from the truth. There hasn’t been a free market in money and banking for a century. The central bank / fractional reserve system is the biggest cartel in the history of economics. It’s nothing but big government price-rigging.
How can anyone argue we have free markets when the price of money is set by decree? An unelected board of governors at the Federal Reserve simply decides the price of money, and that’s that.
Nearly EVERYTHING in our credit economy is driven from this number– mortgages, business purchases, trade finance, government spending… and it affects almost everyone on the planet. This is not a free market, it’s an economic dictatorship.
Secondly, more than seventy percent of all mortgages in the US are either owned or guaranteed by the government! Today, between 90% and 95% of all new mortgages are guaranteed by the government. Not exactly a free market in housing.
Meanwhile, an endless array of government rules and regulations in the economy creates formidable barriers and distorts the playing field to such an extent that it’s a wonder anyone is able to get a business off the ground in the developed world anymore.
THESE are the problems that are largely responsible for the mess and have given rise to brewing class warfare. The Occupy Wall Street movement is rooted in appropriate anger… but blaming the “free market” is comically ignorant.
Tim, I couldn’t have said it better myself. SovereignMan.com has a great outlook on the current situations, and encourages individuals to diversify their assets internationally and through different channels. Much like the way I suggested in my Octopus Investing article.
While Simon Black (of Sovereign Man) will tend to get a little pessimistic about America and where we are going, his advice for diversification is solid. I encourage y’all to check out his blog and even join the eNewsletter.