Monday, October 11, 2010

Vote for Burr. Make me rich .. er.

I'm not a big fan of Republican Senator Richard Burr. He's been in Congress for 15 years. His philosophies of deregulation and lassiez-faire were primary contributors to our economic crash. This economic mess is squarely on the shoulders of Senator Richard Burr. The man needs to be punished. He needs to have his sorry tail run out of Washington DC. It's simply a shameful situation if we were to reward this sorry Senator for his failures by re-electing him to the US Senate.

But on the other hand, if he's re-elected, and Republicans come back into power in Congress, and re-gain control of the purse strings, I'm going to be significantly more wealthy. Why is that? I won't bore you with tons of details. But this is the 20,000 foot overview explanation of what will unfold:
  1. There are only two approaches to fixing our economy: fiscal policy and monetary policy.
  2. Fiscal policy is a Congressional tool - borrow and spend.
  3. Monetary policy is controlled by the independent Federal Reserve Board (FED) - lower the interest rates and print more money.
  4. The benefits of fiscal policy fall largely to the lower and middle class Americans via money to create jobs.
  5. Short sighted Republicans will put a halt to all fiscal policy alternatives - there will be no fiscal policy fixes coming out Congress when Republicans take control. They are going to clamp down on borrowing and spending. In fact, fiscal policy will start working in reverse under Republican control.
  6. That will leave only Monetary policy as an alternative to get our economy growing again.
  7. On the monetary policy front - having already lowered interest rates to near zero - the FED will then embark on a massive program of printing money and flooding our economy with liquidity.
  8. The benefits of printing more money largely accrue to the wealthy in our country, the holders of investment assets that appreciate in value with the increased liquidity. And this is THE reason our stock market recently pushed over 11 K and continues higher.
See the irony? Lower and middle class Americans are pissed off about the spending. They're going to vote Democrats out of office and re-install Republicans. That will shut down fiscal policy. That, in turn, will choke off the best immediate alternative for creating jobs for lower and middle class Americans. That forces the FED to embark on massive money printing, primarily benefiting the wealthy through rising values of investment assets.

Monetary policy will eventually trickle down to middle and lower class Americans. In theory, the rising asset values will cause wealthy people to go out and buy more and more useless shit, like BMWs, lake homes, nice vacations, private school educations, gold plated toilets, and diamond studed nose hair clippers. Eventually, jobs will flow to the lower and middle class. Eventually. Someone has to make and sell all this useless stuff. And the wealthy will be even more wealthy, and have many more useless comfort toys.

Gotta love the ignorance of lower and middle class Americans. A vote for Republicans is like opening the window and throwing all your money out to Bill Gates and Warren Buffett. I'll be standing outside that window though, and I'll get more than my fair share of wealth that ignorant Americans will be throwing my direction.

Do understand, I think money printing will only be a temporary fix. Being unable to execute on further fiscal policy fixes after Republicans take control will eventually cause our economy to fall off a cliff. I plan on being short the markets before that happens. But in the mean time, I'll gladly take the increased value of my investment portfolio coming from more printing of money. So please, go ahead, vote for Richard Burr. Make me even more wealthy.

North Carolina deserves better than Republican Senator Richard Burr.

Addendum 10/13 -
I'm not the only one who recognizes that Republicans coming back into control will eventually lead to the wealthy getting substantially more wealthy, leading to an even bigger gap between the haves and have nots, and eventually leading to class warfare. Apparently, the IMF (International Monetary Fund) is now warning against this outcome as well.

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