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Stock Ideas Investors Daily Edge China will do what benefits China. Russia will do what benefits Russia
Stock Ideas Investors Daily Edge China will do what benefits China. Russia will do what benefits Russia 
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| I don’t mind if Wall Street is grumbling about the market’s wild swings, as long as it just doesn’t act surprised. It had to know this was coming. | |
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| China will do what benefits China. Russia will do what benefits Russia |
| Friday, 12 September 2008 | ||||||||
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So far, September has been one hell of a month. Finally, the market realizes that there won’t be a second half recovery. On top of that, the dollar has rallied to the stars, China is coming unglued, and the money supply is shrinking. Talk about a full 180 from what was happening last year. It reminds me of when I was young. Maybe you’ve gone through this too (or have kids who are going through it now). Considering I had played violin for 11 years and guitar for three, I wanted to further my music career by being a rock star. As you can imagine, the parents weren’t too happy about that. After all, how would you feel if your teenage son or daughter told you that they wanted to be a rock star? Still, I soldiered on, starting a band and making some music. But right around 16, everything changed. Suddenly, I wanted to be involved in the financial markets and make money that way. It was a sudden change that took my whole life in a different direction. Without it, we wouldn’t be having this dialogue right now. I’m sure you’ve experienced changes like that before, which brings us to the point of this little story. Change happens. Sometimes it’s not expected. And sometimes it’s not change you necessarily want, but change happens regardless if you’re ready or not. To be a successful investor, you have to be able to see changes and anticipate the effects they might have. You can’t stay stuck believing ideology that may not be true any longer. In other words, if you see a bull running straight towards you, you better get the heck out of the way. Don’t think about how you’re not wearing red, so statistically, the bull shouldn’t go for you. And so right now most of the market is thinking these few things…
* The commodity bull run * Rampant inflation * Global growth The way it looks from the cheap seats, all three of these things are coming unglued (at least for a little bit). When I originally talked about them a few weeks ago, I expected a lot of comments. After all, everyone thinks inflation will get worse, but what isn’t being talked about is how a contraction in M3 money supply (due to a scale back in credit) is reducing the likelihood of inflation getting much worse. China will do what benefits China. Russia will do what benefits Russia. And the US will do what they think benefits the US. Oftentimes these major powers will attack each other’s interests to further their own (case and point, Georgia and Iraq). That’s all there is to it. Now, power is certainly concentrated. But it’s not nearly as concentrated as some conspiracy theorists believe. Everyone’s been predicting the end of the US Empire ever since it started in 1776. First it was Britain, and then it was the Spanish. Let’s not forget about Germany, Russia, and even people in the US itself. To say the US Empire will never lose power is silly, indeed. But to say that there is a mass conspiracy from the ‘powers-that-be’ to destroy the US so that it unifies with Canada and Mexico is just as silly. After all, think of the implications of an overthrown US and it becomes clear what the outcome would be. The US dollar would plummet. Nations around the world would panic because their reserve currencies are now worthless. Some of the largest businesses around the globe would go bankrupt. China and Russia are liable to try to take control in the power vacuum that would be left. The US army would turn to shambles. The US economy would no longer exist in its current form. Poverty would be everywhere and so would riots. America has a GDP of about $13 trillion. That’s about 25 percent of the total global GDP. If America becomes unstable, the world is likely to see the worst depression on record. This depression would make the 1930’s look like the RNC convention after Sarah Palin spoke. How does this fit into a plot to form an American union? Last time I checked, if America is unstable, an American union would (not to mention the globe) be unstable. You see, there’s a conspiracy theory for everything. Some have merit while many simply don’t. You have to do your own research and come to your own conclusions. Because blindly believing what conspiracy theorists suggest means believing that… * 9/11 was created by the U.S. government * We never landed on the moon * Elvis is alive * So is rapper Tupac I’m pretty sure Elvis and Tupac died. I seriously doubt the US government orchestrated 9/11. And we did land on the moon. Let’s add this American Union thing to the conspiracy theory pile too. With that said, it’s time for… Stay free, Charles P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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