Poor Richards Report
Chapter 7
What are your shoes made of?
A female hummingbird is like a graceful ballerina without the fear of gravity. Hedge fund operators and their ilk wear lead boots!
Since the beginning of the 21st century people are judged by how much money they have, not how they made it. Warren Buffett is revered and idolized because of his investment acumen. He took over a soon-to-be bankrupt company, called Berkshire Hathaway, at $17 in 1967. In August 2014 it has traded over $200,000 a share. Bill Gates pioneered Microsoft Corporation, a worldwide operating system for personal computers (Windows), into a billions dollar corporation. All the single women employees wore t-shirts that read “Marry me BILL”. He did and formed the Bill and Melinda Gates Foundation.
These individuals are icons of the business world and have a million “wannabees” trying to copy them. Most will do anything to acquire their wealth. We have become a society where wealth is admired. It is not important how you made it, only how much you have.
I believe everything goes into cycles. President Herbert Hoover, was the “guru” in the early part of the 20th century along with Thomas Edison and Henry Ford and John D Rockefeller. During THE depression Rockefeller would stand on street corners giving away dimes in order to improve his public interest. When the economy grows too fast certain greedy individuals ignore the teachings found in the Holy Bible. The Old and New Testament is full of stories about greed.
Once wealth has been acquired one wants more. Eventually too much wealth topples the unwary who begin to use devious and illegal means to maintain it.
The same is true for nations. Here in the United States we try to maintain entitlement programs that we cannot afford by taxing the ones who earn it. When an individual senses his tax will increase and his earnings or “take home pay” will decrease; his productivity will come to a grinding halt.
The Federal Reserve has maintained a margin rate of 50% for over a decade. This means you only have to put up $5 to buy a $10 stock. If the stock goes to $5 you lose everything. If the stock goes to $15; you have doubled your money.
The margin rates for commodities are even lower.
Hedge Fund heaven.
I believe the low interest rate policy of the Federal Reserve and the quantitative easing (QE’s) being done is to shore up the financial institutions. The “Fed” then places orders for various indexes to buttress the financial markets legally and illegally. It provides a false picture of the economy that other nations try to copy. I fear the result will be disastrous for everyone. When this happens we will have chaos because we have no bullets left.
Because the hedge fund operators know this they support the persons in power to maintain the status quo because they know everyone cannot shake off their lead boots.
I wonder if there any hummingbirds in New Zealand? Nope…