we are all speculators now

By Self Hating Trader
1/23/2010
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n·vest

v. in·vest·ed, in·vest·ing, in·vests

v.tr.1. To commit (money or capital) in order to gain a financial return

When the Keynesian fractional reserve fiat banking model was sold to the public, the idea was that the citizens would accumulate wealth and prosper, furthering wealth and prosperity among the many and building the nation from the ground up. Using hindsight, we now know it was all a fraud.


The American Dream was sold on the idea that a citizen could work hard and save. You could “invest” your savings and earn a rate of return greater than the increase in the cost of living, thus increasing your real wealth over time with the magic of compound interest. That was the incentive to save. That was the basis for retirement. This could be easily accomplished by investing in government bonds which would yield a rate of return greater than the rate of inflation, plus a risk premium, plus a real return. The return could be calculated in advance at purchase time, and the only risk associated with the investment was a US default, which would have been called “impossible”. A retirement saver or a pension fund could calculate exactly how much the current investment capital would be worth at maturity. This provided certainty, stability and a sound basis for real economic growth, upward mobility and wealth accumulation by the citizens. This was called investing.

When we fast forward to 2010, we having a banking system that penalizes savings and provides incentives to borrow (from them at up to 30% interest) and to accumulate debt. We have a stock market that is artificially and covertly managed by the Government and the Federal Reserve. This sentiment used to be the bastion of “fringe bloggers” until recently when the CEO of Trim Tabs concluded that all data leads to Government manipulation of the stock market, something serious independent market watchers have all known for a long time. This revelation was met with a yawn by the corrupt, complicit corporate media.

We have short term interest rates held effectively at zero and we have a benchmark Inflation rate that is a contrived figure published by the Government to keep their costs down and artificially inflate the GDP. The officially stated rate of inflation, an important number that is used for all sorts of government payouts, does not correspond at all with the real increase in cost of living for ordinary Americans. Everyone who pays bills and lives in the real world knows this, and yet FED shill after FED shill are trotted out by the corporate media to take that number as fact without question. This is called fraud.

Furthermore, we have long term interest rates being artificially suppressed by so called “quantitative easing” program….selling debt out of one window and buying it from the other window…a classic ponzi scheme which always guarantees a buyer. Beyond that we have the banking system covertly and surreptitiously dabbling in any free market that dares to violate their policy goals. Various markets are regularly attacked by the few remaining large trading houses who have the deepest of pockets, and are backed by the taxpayers. These are not free markets, not in any sense, and not by any recognized definition. This is a financial attack on the American people by criminals who aspire for ever more wealth, ever more control, and ever more power at the expense of citizens and the nation.

We are told by the corporate media Wall Street cheerleaders including media personalities and pundits calling themselves economists and professors, that the FED is saving the economy, when in reality what they are doing is saving themselves and their friends on Wall Street. At the same time they are slowly, steadily and methodically bankrupting the citizens. This statement is reflected by the documented, increased concentration of wealth in America by a select few, and by the decreasing wealth and net worth of the many.

In the United States today there is no way to earn a guaranteed rate of return greater than the real increase in the cost of living. Today the opposite is true. As a saver, as an investor in US government bonds or other “safe” securities, the only thing that you are guaranteed is that you will slowly go bankrupt because the return on your money is less than the real rate of increase in the cost of living. This has the effect of being a wealth confiscation mechanism. It is a continuous wealth transfer from the people to the banking system and as that continues you would expect the middle class to disappear, which is exactly what is happening.

So what can a saver do?

  • Invest in an artificially inflated, manipulated, overpriced stock market and hope it will go even higher? (the greater fool theory)
  • Park your savings in a money market and have your wealth slowly confiscated as the return does not even keep up with the increase in the cost of living? (a certain road to serfdom)
  • Invest in corporate bonds that yield a higher return but put the investor at greater risk of a default?
  • Invest in long term government bonds at artificially suppressed yields and watch your live savings be transferred to the government and banking system through a continuous loss of purchasing power?
  • Speculate in commodities, currencies or other risky and speculative derivative instruments that most people have no business speculating in?

None of these are viable alternatives for an “investor”. “Investors” are forced to speculate and we are all speculators now. We are forced to speculate that a manipulated stock market will move even higher . We are forced to speculate that the FED will continue to be successful in manipulating interest rates lower through the quantitative easing program. We are forced to speculate that one asset or another will move higher or lower amid imperfect knowledge about the future and manipulated markets corrupted by insider trading at the very highest levels.It’s like playing cards at a casino where the only thing you know is that the house is cheating. Why would anyone do that?

The law of large numbers and the laws of probability ensure one thing. The wealth of the citizens of the nation will be slowly, continuously confiscated by a criminal, privately controlled banking syndicate and cheerled by a corrupt, complicit corporate media. Say goodbye to the country you once knew. It’s time to be realistic. There will be no reform because the system has been corrupted, and the highly concentrated wealth now runs the show. It has the politicians dancing like puppets. It has the media in it’s pocket. Say goodbye to freedom and economic prosperity. We have something different now. Something dangerous.

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  1. Marko
    January 23, 2010 at 3:12 pm

    Hey Mr. Oliver Wendell Douglass:I agree as to the few options available to folks right now, assuming they actually have savings…however, their are alternatives, such as paying down a mortgage or credit cards or car loans which carry various interest rates…..that me be the best choice for people…..

  2. Craig Harris
    January 23, 2010 at 5:18 pm

    Hi Marko.Good points, thanks for the comment !

  3. Anonymous
    January 24, 2010 at 7:35 am

    You might be a good trader but I think you have a career as a writer. I really like reading your essays.

  4. Anonymous
    January 24, 2010 at 7:41 am

    The guy who really rubs me the wrong way is larry kudlow. He always talks about grass roots and tea party people but he is the kind of guy this article is talking about when it comes to the media. I wish somebody would put that banker hack in his place.

  5. Anonymous
    January 24, 2010 at 12:49 pm

    You are making a good point here that is not being made anywhere else. What is a retired person to do?

  6. Anonymous
    January 24, 2010 at 2:38 pm

    Well put. I am one of those people who is being forced to speculate with my retirement savings.

  7. Anonymous
    January 25, 2010 at 4:25 pm

    I am a retired pension consultant and administrator. You are absolutely correct. Those of us who were in the pension business thought we were on the right track, with tax deferred pensions. Now that has been shown to be nothing but an excuse for the govt. to defraud the public of it's invested wealth. Even my land holdings have become a losing proposition. A couple of years ago, I had an interested land developer interested in buying (a $10M deal). It was killed when the local county changed all the existing zoning and made the deal unprofitable for the developer. Now I have a lot of land which I cannot sell, but still must pay taxes on. I also have only one stock position left; a small mining company with promising gold, platinum and base metals projects. Yes, we are all speculators now. Where else to go?

  8. Anonymous
    January 25, 2010 at 4:38 pm

    Seams we're all examning the situation, knowing it's a giant con, but feeling hopless as what to do. Hard as it might be, we need to finger the conmen, the sociopaths that are at the heart of the problem. Follow the money, strike the root.. this is survival.

  9. Anonymous
    January 25, 2010 at 7:27 pm

    True, we all have to speculate to preserve our wealth and the Federal Reserve is at the heart of the problem. However, I don't believe you can lay the blame at the feet of John M. Keynes. The FED was formed in 1913 and Keynes didn't start promulgating his ideas until the 1930's

  10. Dan
    January 26, 2010 at 2:39 am

    so true all we can do is observe what is happening, become the best observer we can be. trading what is happening right now. putting any thought into long term or even overnight "investments" has proven to be foolish time and time again recently. oh well i still love the game.

  11. Fred
    March 2, 2012 at 5:45 pm

    can anyone substantiate the claim of 96%

  1. February 23, 2010 at 1:19 am

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