What makes someone a ‘crank’ or a ‘crazy’?
Is it that they’re a fool? Maybe they’re a clown.
No, those are fools and clowns.
They’re different from cranks and crazies.
Cranks and crazies are people on the fringe of debates. They tend to have views and opinions that are different to most people.
And — brace yourself for this — as a reader of Money Morning, that probably makes you a crank and crazy too.
But before you panic, delete this email and rush off for a shower, read on. In today’s Money Morning we’ll show you that the cranks and crazies like you have more knowledge, insight and understanding of economics and financial markets than any of the goons running the global economy today.
Including Australia’s own Treasurer, Wayne Swan…
At a speech in Sydney today, Wayne Swan said:
‘Let’s be blunt and acknowledge the biggest threat to the world’s biggest economy are the cranks and crazies that have taken over the Republican Party.’
He also said:
‘Despite President Obama’s goodwill and strong efforts, the national interest was held hostage by the rise of the extreme right Tea Party wing of the Republican Party. The consequences were grave.’
We’ll admit we have sympathy with some of the original ideals of the Tea Party — limited government, sound money, the right to self-determination, and low taxes.
Of course, we’d take things a step further and say ‘no taxes’. Simply because taxation is just a cute and cuddly word governments use to disguise what taxation really is — the theft by government of private property.
But, as with all organised political movements, it doesn’t take long before someone infiltrates it. And it doesn’t take long before even the purest of activists abandon their principles as they strive for power and higher office.
That’s why democracy can never preserve individual freedoms. There is always the temptation for elected officials to steal from one group of people in order to win favour with another group of people…especially when taxation is a coercive rather than voluntary action.
Try Managing a Corner Store Before Tackling a National Economy
In a true private business (as opposed to the rent seeking businesses that profit by working with government to force you to deal with them, for example private healthcare) you can’t force consumers to deal with you. Consumers have choices. They can either do business with you or go to a competitor.
For instance, we can’t force you to read this email, or buy our paid newsletters. All we can do is show you the benefit of both. If you agree with us, then you may buy.
Because of that, real private businesses have to give the consumer what they want. If they don’t, they’re in danger of losing the business to a firm that can meet the consumer’s needs.
We know what our customers want: ideas on how to achieve financial wealth and independence.
Running a private business takes a certain type of person. We call them market entrepreneurs. These people think of new ideas. They’re also not afraid of risks and failure, because they believe the reward outweighs the risk.
Compare that to the type of people who get to the top in the public sector. These people aren’t entrepreneurial. And although they may give some consumers what they want, they only get it because the government has taken money from others to pay for it. (It would be the equivalent of forcing someone else to pay for your Australian Small-Cap Investigator subscription.)
The driving force for success in the public service or in politics isn’t about meeting consumer demands. It’s about convincing half the population that they can get what they want if they take it from the other half.
You only have to look at the employment history of the main players who are supposedly trying to solve the current economic mess.
Based on our five-minutes of research, we couldn’t find a single instance of private sector employment by Aussie Treasurer Wayne Swan, Reserve Bank of Australia governor Glenn Stevens, US Treasury Secretary Tim Geithner, US Federal Reserve chairman Dr Ben S. Bernanke, UK Chancellor of the Exchequer George Osborne, and Bank of England Governor Mervyn King.
Instead you’ve got a list of academics, career politicians and career central bankers.
Apparently, that makes these people qualified to micro-manage the economies of entire nations. That’s despite the fact that they’ve never so much as managed the economy of a corner store.
Wealth Destroying Criminals
So you can perhaps understand why we’re not convinced when the supposedly sane central bankers and politicians tell us that the path to prosperity lies in the government spending more than it can steal from taxpayers.
And then when it can’t steal any more, it boosts its coffers by going further into debt. And when no-one will buy the debt it just prints more money so that it can buy its own debt.
That’s while in the cranks and crazies corner, there are people like you who think that going further into debt probably isn’t the best solution for a debt problem.
And we certainly don’t believe the solution is to print money from thin air.
So as far as working out who’s sane and who’s crazy, it’s pretty easy. You can choose between the psycho money printers who are out of ideas apart from the belief that destroying wealth is the answer to prosperity.
Or you can choose the sound money advocates who want central bankers to stop destroying wealth.
We’re 100% certain we know who are the real cranks and crazies.
But if all that just sounds like thinly analysed rubbish, perhaps we can best show how the supposed sane brains trusts are destroying wealth.
Consider this quote from the UK Daily Mail:
‘QE [money printing] has the effect of lowering annuity rates, which dictate how much a newly-retired person receives from their pension, to an all-time low.
‘Some 20 years ago, a £100,000 pension pot bought in £15,650 a year for life — today it’s just £5,800.’
Thanks to central bank money printing (the Bank of England has printed more than the EU and the US as a percentage of GDP) newly retired UK pensioners get 62.9% less in annuity payments than someone who retired 20 years ago.
That’s even though the cost of living has risen 69% over the same time.
In our view, the actions of central banks are nothing short of criminal.
In short, if it’s a choice between the ‘sanity’ of central bankers and politicians or the ‘cranks and crazies’ like you who understand the value of money and the virtue of working, investing and creating to build wealth…
…then you can give us the cranks and crazies any day of the week.
PS. There’s no doubt that central bank money printing destroys wealth. That’s proven by the lower returns faced by retirees. That means whether you like it or not, the central bankers are forcing you to take more risks with your money. The key is to make sure you only take calculated risks and weigh those risks against the reward. To find out how we investors can make big rewards without taking unnecessary risks, click here…
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Written by Kris Sayce
Kris Sayce is Editor in Chief of Australia’s biggest circulation daily financial email — Money Morning. (You can subscribe to Money Morning for free here).
Kris is also editor of Australian Small-Cap Investigator, his small-cap stock research service, where he provides detailed analysis on some the brightest, smallest listed companies on the ASX.
If you’re already a subscriber to these publications, or want to follow his financial world view more closely, then we recommend you join Kris on Google+. It’s where he shares investment insight, commentary and ideas that he can’t always fit into his regular Money Morning essays.