I just saw another one of those TV ads for gold. It was so ridiculous that
I was laughing by the end. But then I stopped laughing, because a couple of
Libertarians came to mind who I'm pretty sure would have taken that ad
seriously. In short, I'm worried about my Libertarian friends who are
letting fear take hold of them.
The reality is that most people are no worse or better off in terms of real
wealth than they were before the financial meltdown -- all that changed in
the past two years was perception. If today you cannot afford to own your
own home, odds are that you probably couldn't afford to own one before the
meltdown, but may have on paper "owned" a home back then. That doesn't mean
you ever really could afford it. It just means that someone was dumb enough
to let you take out a mortgage that you had no chance of being able to pay.
I know that I had the capacity five years ago to run up over two times my
annual salary in credit card debt had I wanted to, just by adding up all of
the various lines of credit that had been extended to me (most of which have
since gone away, leaving me with the ability to charge about 50% of my
annual income if I wanted to -- still a bit ridiculous, IMHO, but I play the
game to keep my FICO score high). Had I been willing to go into debt as
much as the lenders were allowing me, I could have had a much higher
standard of living for the past decade, then faced a serious hit these past
two years, giving me the perception that I was "poorer" when all that had
changed was my standard of living due to no longer being able to live beyond
my means.
It's not like there was a natural disaster affecting most Americans that
literally destroyed wealth (the Japanese have cause for feeling poorer as a
nation -- we don't). There's just as much "stuff" per person as there was
before the financial meltdown -- it's just that people used to think that
they had more than they really did, and the adjustment was more about making
perception match reality than destroying actual wealth.
I had one friend from the LP predicting two years ago that all of the major
US banks were going to shut down, and he was actively encouraging me to get
my money out of Citibank before they closed their doors. I told him then
that there was no way such a thing was ever going to happen and that all of
the dire calls to invest in gold, canned food, and shotguns was a gross
overreaction since no real wealth had actually been destroyed (well, yes,
this senseless foreign military intervention destroys wealth, but that's
been going on at a pretty steady clip ever since WWII, so nothing new
there). Just as there was irrational exuberance before the meltdown, there
is irrational pessimism now. Investing in a diversified portfolio has been
and will continue to be a much better idea than investing in gold. In other
words...
STOP PAYING ATTENTION TO GLENN BECK AND OTHER RIGHT-WING TALKING HEADS.
He's a scare-monger with his own agenda. He trots out paranoid conspiracy
theories about the anti-tyrannical revolts in the Middle East being a threat
to our liberty at home, and as soon as there's a commercial break, there's
his stupid self again trying to sell gold to people who he just spent the
last ten minutes trying to scare out of their wits. Folks, that's a pretty
clear conflict of interest, if you ask me. Please see through it. And it's
not just him. In the bubble of conservative talk radio, there are all sorts
of Glenn Beck wannabes who spend their entire show trying to scare people,
interrupted by commercial breaks where they sell gold, survivalist gear,
bomb shelters, and friggin backpacks full of freeze dried and canned food.
It amazes me that the LP can have so many people with such high IQs and yet
have so many people who fall for this nonsense.
Okay, rant over. I had just heard one too many conspiracy theories this
week, I guess.
Rob