What do we know?

We would all seem to be better off; just sitting in a dark room, with earmuffs and under a cliff with 100 tonnes of rock set to fall at the least trimmer; than to continue to have the present Congress & Administration who put our lives into more grief and danger almost everyday...

Follow the overview below parts from The Daily Reckoning:


It's a delight to be back in Buenos Aires. It's springtime. The sun is shining. The birds are singing in the trees. What more can you ask for?

Another national emergency! Terrorism...the banking crisis...now Swine Flu.

Why it is an emergency, we don't know. Our sister, living in Virginia tells us that several of her grandchildren have come down with the Swine Flu. It doesn't seem to bother them anymore than any other flu. HUH! Just maybe this is another false alarm?

Then there is the recovery:

The Wall Street Journal reports that even bankruptcy can be a good thing. "Household Debt Can Hasten Recovery...when it goes unpaid," says a headline. HUH! How is that going to happen?

The whole idea of a correction is to wash out mistakes. If people can pay their debts down, the mistakes are corrected. The system is strengthened. If they can't, the process of correction can happen faster. Bad debts are written off quickly. Then, a real recovery can begin. Either way, the system comes back in better shape.

Too bad the feds are getting in the way!

A decent correction should carry off those who made the biggest mistakes - in the present case, the firms on Wall Street that wagered billions on a bigger and bigger bubble. But instead of letting them go broke, the feds rewarded them.

Wall Street profits are a 'gift' from the state, says George Soros.

But wait, what kind of gift is this? If you give $100 to your neighbor, that's a gift. But what if you tax your neighbor on the left $100 in order to give the money to your neighbor on the right? That's a gift too...but of a special kind. You're 'redistributing the wealth,' you might say. You know robbing or taking from one who has, then giving to another who does not know how to get off their rear ends and get a job!

Then what if you do a quantitative easing? You know, you print up a $100 bill and give it to your neighbor? That's a gift too. Yeah, thanks a lot.

Meanwhile, the recession is said to have come to an end in the US. GDP growth is positive, say the papers. But if this is a recovery, let's hope it comes to an end soon.

Existing house prices continued to fall in September.

Unemployment continued to worsen. "Signs of recovery don't extend to jobs," says the WSJ.

But wait...hold on...not so fast...we haven’t reached the end of the private sector crisis yet! Bank lending is still falling. House prices are still falling. Unemployment is still falling. Soon, stock prices will be falling again too...

Yes, the financiers are paid outrageous amounts of money – far beyond anything they are worth. In fact, if you studied it carefully, you’d probably discover that their net contribution to the betterment of mankind is now negative.

The bankers are betting that the money they were given by the feds will be worth less next year than it is this year. So they exchange it for everything and anything, confident that when it comes time to pay it back it will be even easier to come by than it is now.

So far the bet has gone their way. Copper has doubled. Gold is up 20%. Stocks markets all over the world are up 60%. Foreign currencies, too, have beaten the dollar.

Will the wager against the dollar continue to pay off? Well, that’s the big question. If in doubt you should move to cash.

But you can’t really blame the bankers. They’re performing a very valuable service. They are helping to separate fools from their money. Too bad we taxpayers are the fools....

What to do now?

Those of us who still think today have come to know that it is personal gumption that makes or breaks us. There are those who started out with less than we did (hard to imagine but true) and made a lot more. And there are those who started out with far more and made less. But there are very few who are happier than either of us. Or luckier. Thank God!

Our kids? It is not the times which dictate the man (or woman), but the response of the man which dictates his own time. Today has a brighter future for someone young than any other time in history, whether they are in the US or Brazil or China. They just have to seize it.

Now as our kids do just that, and as will the millions of kids of those who read us will do so, and the billions of kids who are just now getting ready to bust loose all work to achieve their dreams, the world is going to be a far more fantastic place. Smooth ride? Not a chance. We didn't get one, and in thinking through history, there have not been many smooth rides. Why should we think we will get any better? Our kids will just have to live with our generational (and individual) iniquities, government debt and all, and figure out how to master their own fates. But if I had a choice to take the '70s or today? In less than a heart's beat I choose today. And I bet you would too!

Regards,

John Mauldin
for The Daily Reckoning

Most is part of excerpts from The Daily Reckoning: