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Friday, August 17, 2012

CONGRESS ARE YOU LISTENING?

Well, it's that time again. Every two years our senses are assaulted as politicians spew an endless stream of nonsense in the attempt to garner votes from a mostly unsophisticated American population. This year the major topic, not surprisingly, is jobs. Each and every politician would like you to believe that he or she has the cure for the persistent unemployment problem.

Of course it's all completely ridiculous. You would think these people could read a history book. Never in history has government been able to legislate productivity. Governments just misallocate capital. They tax one group of people and give the money to another group of people to dig holes. Of course, once the hole is dug or the road built, that job expires. It's not a sustainable productive use of capital.

Real productivity is entrepreneurs creating sustainable companies that satisfy a human need. AAPL is a sustainable business satisfying a human need. GOOG is a sustainable productive business. XOM is a productive business. None of these companies were legislated into being by government.

Almost without exception, real progress involves creative destruction. For example, when oil was discovered the whaling industry collapsed. When the automobile was invented it destroyed equine powered transportation, and so on. The emergence of each new major technological advance, throughout the history of mankind, has caused creative destruction obsolete industries.

This is part of the normal and healthy sequence of human progress. Progress is a result of replacing inefficient technologies with ones that are not only new, but more efficient. Likewise, nations that refuse to allow this process of creative destruction are exactly the economies that stagnate and ultimately fail.

There is one way, and one way only, to cure our employment problem (and debt problem). It is the same cure that ultimately ended the Great Depression and serviced the gigantic debts that were incurred during World War II. A new technological advance that changed the world. 

The cure for the Depression and massive debt built up during WWII was the advent of two brand-new industries: plastics and electronics. These two industries created millions of jobs worldwide and spawned an economic boom from 1945 until 1966.

Now the world is back in the same position it was in 1930, and where Japan found themselves in the early 1990s. The world has created another debt bubble and we've chosen to kick the can down the road just like Roosevelt did in the ‘30s, and Japan has been doing for the last 20 years. And just like in the ‘30s, we are going to get the same result which is persistently high unemployment and generally declining global economic conditions.

What we need to do is allow human ingenuity and creative destruction to actually cure our problems. And the biggest problem the US faces today is the triple threat of Social Security, Medicare, and Medicaid. These three entitlement programs have bankrupted the country, and let's be honest, there is no way any politician can possibly reform these programs, or even attempt to do so, and have a prayer of getting elected.

The cure to our problem is staring us right in the face. We don't need to reform Social Security, or government health programs. We need to make them obsolete.

Rather than plowing taxpayer dollars into an insolvent banking system (as the Japanese have been doing for 20 years), we need to allow capitalism to work and insolvent companies to go bankrupt. The taxpayer dollars that are now flowing into an endless black holes which are the financial system and government stimulus programs, need to be funneled into the biotech industry. Rather than fund expensive surgeries or endless treatments that only manage symptoms, we need to discover real cures for disease, injuries and aging.

Imagine if a person with an arthritic knee, instead of a $20,000 knee replacement surgery, could simply walk into the doctor's office and receive a stem cell shot that would repair and permanently cure the disease. Or, how about a permanent cure for diabetes, heart disease, and obesity?

Yes, what I'm talking about is a complete overhaul of the global healthcare system. Yes, this is going to be creative destruction on a massive scale. Many doctors that studied for years are going to be put out of business. Health insurance will become mostly a thing of the past as the modern healthcare of the future will become easily affordable by all. No different than buying an iPhone today.

Yes, some industries are going to suffer and go bankrupt, like health insurance, and a big part of the pharmaceutical industry.

But millions and millions of jobs will be created, the same as they were in the 50' & 60's with the new plastics and electronic industries, and in the 80's and 90's with the personal computer and internet. When we reach the stage when we actually cure diseases, especially as related to aging, we will eliminate the gigantic burden of the three big government entitlement programs. If people can remain healthy and active for their entire life there will be no need for Social Security benefits or Medicare and Medicaid. These programs will become a thing of the past, as most diseases, and injuries will be quickly and easily reversed or permanently repaired.

So instead of the same old nonsense drivel we get during every election, it would be refreshing if politicians understood the real problems, and the real cures, and put in place policies that would actually have long-term benefits and accelerate the transition through these dark times and into the next Golden age.

Congress, are you listening?

43 comments:

  1. In an ideal world, sure...but will never happen

    plus creating millions of jobs only to eliminate millions of jobs makes no sense...other than if the only goal is to eliminate medicare debtload

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  2. Hi Gary....an interesting post - thank you for that.

    Hey.....Im curious - as you have referenced on several occasions - "medical advance/prolonged human life" etc....as perhaps being humanities next "boom/progression".

    How do you envision/see this against a backdrop of (in my view) completely irreversable environmental damage and factors moving forward (ie......fresh water shortages, ocean sea levels rising...huge displacement of populations to suffer drought/famine, viruses , increased weather volatility - and the list goes on) with (even as of todays 7 billion) not being a sustainable population - let alone the 3 billion more expected in coming years?

    Ive heard talk (Bill Gates even on population control - please google it) of a time where we will soon hit the wall on what earth is able to provide.

    And now "prolonged life"? Its an interesting debate - as I sit on the other side of the fence with beliefs that if/when these advances occur...they will be kept for the elite...or dolled out (much like new software..or the latest gadget from apple) - I cant really say if they will spawn new industry and growth.

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  3. Oh but it will happen. This is how the world progresses. The question isn't if, it's how long will we fight it.

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  4. You sure nailed that one Gary. If only we weren't on the road to the NWO, I'd have some faith in us making the hard choices. Unfortunately, I'm beginning to think that an economic collapse is being engineered.

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  5. Populations will shrink just like they always do in times of famine. The human population is no different than any other species on earth.

    We asked ourselves this same question during the 70's and yet the world kept turning. population growth slowed and crime abated.

    Sure all new technological advances go to the rich first but all of them eventually become commoditized because the real money isn't in selling to a few rich people but to the huge masses of the world's population.

    When computers first came out only the wealthy could afford them. Now everyone has one and most people have two or three.

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  6. Some serious "house cleaning" going on currency wise.

    Dollar up against everything under the sun while markets are up as well.

    Something large is most certainly in the works here.

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  7. Heck it's already happening. There is a doctor in San Franscico doing biologic knee replacements. More and more doctors are experimenting with stem cell therapy.

    I myself have had PRP treatments on my arthritic knee and back with absolutely amazing results. And instead of a $20,000 knee surgery it cost me $400 and was done in the doctors office in 20 minutes.

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  8. Gary,
    Couple things,,,
    First, Regulations stacked against new businesses must be thrown out! Government over-site needs curtailing, associated agencies abolished.
    Secondly, that PRP treatment, how painful were all the shots you received???

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  9. Dear Gary;

    Thank you for your letter today. We have taken note of your concerns and some of the solutions you outlined. While we applaud anyone who can come up with real ideas, unfortunately those ideas will have to be forced upon us. You see, first and foremost, we, Congress, are beholden to our big money donors, which as you are aware, you are not. You have to understand that we in Congress are about money first and people second. So unless you can show us how each of us in Congress can become millionaires and/or profit from any new technologies, we will have to pass on your suggestions.

    Thank you for taking the time to write us.

    Regards,

    The Den of Thieves. ( er... Congress)

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  10. Natanarchist,
    Very appropriate, except that Congress would never write anything that concise :)

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  11. Thank you Gary for such a refreshing breath of fresh air....aahhhhhhh!

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  12. This comment has been removed by the author.

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  13. SILVER



    http://traderjoed.blogspot.com/

    ReplyDelete
  14. spx diamond formation
    http://humblestudent777.blogspot.com/

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  15. If anyone here thinks or has had a fleeting thought about governments caring, please snap back to reality.
    Actually, they do care; about their equally or richer friends.

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  16. Gary,

    Whatever happened to Beanie? He said solar was the next big bull.

    LOL!

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  17. Politicians have been politicians for eternity. That still hasn't stopped humanity from progressing.

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  18. Gary, If you are waiting on govt to solve our problems, forget it!
    I just want them out of the way and stop stealing from the coffers we pay into to take care of the programs as they were intended. Let free enterprise work without having govt controls and subsidizing. Anytime the govt gets involved they slow progress. We need to have them working less not more. Term limits would resolve a lot of issues we encounter with these elected officials. Everyone needs to check the voting records and actions of their local officials and hold them accountable. We have to start at the local level to affect the higher level. It's not trickle down, but pulling your boot straps up and start with yourself. When each individual finds the best solution for themselves that feeds the market which in turns affects the whole. Let a free society work as it was intended, small govt with less intrusion and taxes.

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  19. Catbird

    You can follow him @chrisbeanie1

    ReplyDelete
  20. * Politicians are the same all over. They promise to build a bridge even where there is no river. - Nikita Khrushchev

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  21. Major indexes crash feasibility analysis
    http://humblestudent777.blogspot.com/

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  22. Political now...oh gee..brave move beyond the realms of cycles, sentiment and smart money. I almost wet my pants reading this (you stepped outside ur comfort zone ... commendable job btw too).

    I see you wanted to clear the air on a topic which was raised a few weeks ago (here on SMT). Creative destruction indeed is a plausible solution. History demonstrates numerous examples of how "we" progress, and moreover rid ourselves of past indiscretions. But this time may be different.

    Comments made by other bloggers here I think are relevant for today....
    "population growth", "engineered economic collapse", "impeded judicial system" , "govt bureaucracy".
    They certainly arent solutions to our ever increasing problems.

    One perhaps has merit...less govt.

    Ayn Rand would be proud of you "at ease".
    Laissez-faire is what she promoted ....a complete separation of Economics and State. Her model Student....Alan Greenspan....
    attempted to promote her theories into practise. With his 1/4 decade long involvement in politics / economics/ banking "regulation"....he was a firm believer in free markets and self regulation.We know how well that ended up dont we...banks became a law unto themselves. The mess we are in today stems from a multitude of bad/poor/non-existant government. In the sense that it wasnt working for protection of the economy or the population. Its existence was obvious otherwise.
    If anyone cares to notice who the ecomomic advisers to the last several incumbants (presidents) were, take note of their backgrounds. Also the treasury secretaries (even the Fed Reserve Chairmen/Presidents). These people and their association are absolutely jaw dropping.

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  23. Whats the connection with this to your blog entry you might ask?

    Hmmm...
    How can we have productivity when the government is creating a totalitarian regime. They have proved that "productivity" is not part of their vocabulary (unless you count printing money out of thin air as productive). Just look at the alphabet soup of government that exists today on the taxpayers payroll. They want to control everything but without a fair judicial system and they allow criminals to live with impunity whilst removing every last skerrick of freedom for the masses. If you cant see whats happening around you - from the government interference on all levels of economic (mis)-management to the crony capitalism to the dependence of 50 million people (and growing)on the government for their existence....to programs that make no justifiable sense. The system does not work in favor of new industry without the government having their slice of the action. If you dont comply then you will be regulated to death/non-existence.

    Some common misconceptions for todays drugs/ medicines/ cures and diseases.

    Where is the cure for cancer ?
    The Cancer Foundation doesnt look for cures..they provide management of the disease. Cancer prevalence is not diminishing ITS increasing.

    Everything we consume (except for some organics) is contaminated with disease causing molecules either from pesticides/plastics.
    Dont get me started on GM foods.

    Someone said it earlier...treatment of symptoms ...is not the solution.

    The solution perhaps is to try to stop the world's population growth. Path we are on is not sustainable. Then eliminate government...sounds impossible...but I firmly believe that as each day passes we enter the realm of serfdom. They are edging closer to that reality in Europe. The US is knocking on the door.

    If you accept and understand politics/government/big business...then you will appreciate unless TPTB have their own at the pinnacle of the ruling class, ruling/managing by their rules, then success my dear friend will be fleeting. Dont try to change the course of the engineered economy. Don't interfere.

    I can assure you Congress is not listening. Without sounding crass...your voice has as much strength as a fart in the wind.

    One question I would like answered ...Can we be programmed for extended life..if so then that creates other problems for sustainability. Although improving life via advanced technology doesnt necessarily imply longevity. Does it ? We all have use by dates.

    I'm all for improvements and advances but a state controlled economy implies more reliance on government and more government control. You cannot expect that they deal with the real problems and offer real solutions. They know full well the "real" problems... just they chose not to pursue the solutions that are beneficial to all mankind. If the past 40 years is to be used as the governments score card...then it fails. The next 40 years of the same government(if not more ) then we are in serious trouble.

    BTW...Paul Ryan (MR's sidekick)..will have to renounce his support of Ayn Rand's philosophies. This is how government shuts down new thinking...to ensure conformity.

    You raise a topical issue which has many appendages. The world we exist in today is vastly different to that of the past. Progress is no doubt part of our future but it will be borne through inefficient government and more of the same "regulation". You can be asured that the wizzards of money will be ever present to line the pockets of the few whilst ensuring the enslavement of the masses.

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  24. Casey Research just recognised the importance of Basel III and its effect on Gold. Geeeeeeeeeeeeeezzzzzzzzz...!!!

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  25. Apple’s shares are up 71% in the last year, 60% in 2012, and 18% in the last three months.

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  26. for those that may be interested ...PBS Frontline ran a story recently ..."The Warning". Very insightful and alarming. Watch it...to get a real perspective of what the masses are up against when TPTB want to close ranks.

    I will make it clear that I dont give into these criminals/ psychopaths/sociopaths who work tirelessly to strip us of our freedoms and liberties. I am cynical but I dont profess to be a realist hiding behind a pseudonym. I am a dissenter and I want to bring a greater awareness of the truths that are obscured or obfuscated. If I can succeed in bringing some rationality to the sleeping masses..then I have achieved. You can only fight government with the thing that they are so terrified of....mass dissention and non-conformity. "They" are the problem and 99% of the population dont know it...or dont care...clueless.

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  27. I'm certainly not in the NWO conspiracy camp. Anyone who thinks these fruitcakes are smart enough to pull some thing like that off, haven't been paying attention for the last 12 years.

    No I think we are just going through a normal bear cycle, the same as we did when the last credit bubble burst in the 30's. This has happened countless times throughout history, and every time it seems like this time is different, and the end of the world is upon us.

    As you can see the world is still here :)

    We are just witnessing the very normal pattern that almost all humans are slave to. Avoidance of immediate pain.

    Constituents are screaming for relief and politicians grasp at the first straw available. This is how people like a Hitler come to power. They promise change and desperate people are willing to try anything to end their suffering.

    The problem is that it takes time for the market to cleanse the system. That cleansing is painful.

    So when it comes time to re-elect the politicians that started the cleansing process with long term goals, by that time the pain as become unbearable and the electorate boots them out of office before they can finish the job.

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  28. There is an excellent interview of Ron Paul by Jay Taylor of miningstocks.com . He flat out says we are headed towards a total economic meltdown due to debt. And while you are at it listen to Ed Griffen's interview about how the FED was created in total secrecy.
    I hate to say it Gary but IMO you are very naive on a couple of subjects. Please don't just dismiss before you even consider facts.

    http://www.webeatthestreet.com/media/radio

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  29. Hey gary, is it possible to get the name and number of the doctor who did your knee in san francisco? Thanks greg

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  30. GL,
    I'm not sure what you are talking about.

    I absolutely know we are headed for a much worse mess than what we suffered in 2008. Why? Because we printed more money and doubled our debt.

    I just think the timing of it isn't tomorrow. The market is still going up for goodness sake. Can't you perma bears see that?

    My cycles techniques have spotted almost all these turns perfectly.

    So far the only one I missed was an early entry into miners. Gold just threw me too many curve balls during the bottoming process and at one point I realized it wasn't worth whipsawing my portfolio to death and just held my position.

    Ultimately gold did form it's intermediate bottom just like it always does and now we are back on the right side of the trade and well on the way to recovering from the draw down we suffered from the early entry.

    It is a bull market after all. And the reason I trade bull markets is because timing mistakes get corrected.

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  31. hooloo1957,
    I had PRP on my knee here in Vegas. The doctor in San Fran does biologic knee replacements if you are a candidate.

    Google the "Stone clinic".

    ReplyDelete
  32. "The market is still going up for goodness sake. Can't you perma bears see that?"


    It's not really being perma bear. Essentially, it is being perma clueless


    They are essential for to feed the few who actually trade or swing prices regardless of the blah-blah crap of headlines and pundits, etc, etc

    ReplyDelete
  33. MikeS,

    Creating jobs by eliminating others makes perfect sense when the new jobs are more productive. Just as Gary points out, one industry like autos replaces another like raising horses. Do you think that transition made no sense?

    This post has been duly tweeted...

    ReplyDelete
  34. Gary.....Ive been back over it several times....and still see us on day 21 of the daily cycle...and cant quite grab how you saw the last daily cycle "end" and a new one here already on day 7.

    Seven days back I see a swing low...but what does that say of the previous daily cycle?...only like 12 days or so? No need to justify etc...just observations on my end....and continued work on my own cycle counts.

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  35. That is one way to count it. However when I look at the chart from a wider perspective it looks like a new cycle started on Aug. 7th that may have topped on day 7.

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  36. Check out this article and its implications for Gold moving forward.

    http://www.marketoracle.co.uk/Article36108.html

    I find it interesting but perhaps isnt anything new - as I dont (until now) follow gold so closely.

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  37. RNM,
    I have a FX kind of question for you. If someone was bullish on the Brazilian economy, what would the currency trade be?

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  38. Fair enough Gary...but when the smart money stacks Gold and sells financials you gotta take note.

    Also pay attention to what they say..."Soros, who has written extensively of a coming global paradigm shift in his book The Crash of 2008 and What It Means, calling the current economic and political model ”an end of an era,” has recently suggested that the financial and economic situation across the world is so serious that Europe could soon descend into chaos and conflict. He also notes that the world is entering “one of the most dangerous periods in modern history”, and foresees violent riots in America and a brutal clamp-down by the government that will ....dramatically curtail civil liberties".
    INterestingly he liquidated all of his holdings in US bank stocks (GS,JPM & Citi) most at risk.
    According to the man ..there is only one asset class to be left standing when all is said and done.
    He did btw predict the 2008 collapse.

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  39. The only trouble with trading the Brazilan Real (BRL) is finding a broker who offers it. As it stands Im not aware of any retail shops that do.

    Over the years Ive been in and out of the ETF "EWZ" as well - caught the majority of the 2009-11 move in the Colombia ETF "GXG" - having lived in Bogota for several years as well.

    In my opinion Colombia will literally "fly off the charts" in coming years and looks to offer considerable upside as it is positioned as the "gateway to South America".

    ReplyDelete
  40. 2 different business..

    http://finance.yahoo.com/q/bc?s=OCLR&t=5y&l=off&z=l&q=l&c=ng

    ReplyDelete

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