Human behavior and the broad social trends driving the global financial crisis, globalization and the economy in 2010, Part I

For greater insight into the philosophy behind Tedbits, have a look at the Tedbits Overview. To help understand our mission in serving you, the Tedbits Overview gives a broad description of what's unfolding globally and what you can expect from Tedbits as a regular reader.

In order to fully grasp the enormity of what is unfolding and to understand the upcoming Tedbits 2010 Outlook, I have penned two essays which will be presented over the next two weeks. Beginning in January, I am going to be doing a tour-de-force 2010 Outlook, spanning what you can expect in 2010 both fundamentally and technically.

Part One is entitled "The Something-for-Nothing Personality", which appears in the final decades of the demise of EMPIRES and is the catalyst and driving force behind the collapse of the economies in which they reside. They vote for a living and ask public servants to confiscate wealth from others and transfer it to themselves. This group is fully in control of the G7 and are crony capitalists, elites, public servants, trade unionists and welfare recipients, just to name a few. Locusts, which strip economies BARE and eat the roots of wealth generation until the empire collapses under the weight of inextinguishable debt, unpayable entitlements and sovereign defaults through various means.

Conversely, Part Two next week is entitled the "I Will Work 60 hours a Week for a Better Life for Myself and My Family." this personality is diametrically opposed to the "something for nothing" personality. They take nothing for granted, they are rugged individualists and have the work and savings habits upon which wealthy societies and economies are built. Wealth creation, rising middle classes and REAL incomes explode higher in the same manner the United States and Europe once did.

In order to understand that there is no escape from the final debacles in the G7 or triumphs in the emerging world you must understand HUMAN behavior and motivation. Large opportunities reside amidst the destruction or rising empires that these people create; in fact, the largest fortunes in history count these periods when the seeds where planted. By using Mal-investments created during the credit bubbles and buying them for pennies on the dollar as they fall into insolvency or by investing in societies in which rising middles classes present untold opportunities as these emerging economies ascend into developed societies.

Take a look at a recent comment from Bill Buckler at www.the-privateer.com (I urge you to subscribe):

"According to the US Debt Clock (http://www.usdebtclock.org take a look, its ugly), the current US population is 308 million. Of that total population, just over 35 percent (108.7 million) are taxpayers. The rest are those who pay no net tax, government employees, dependents and those who are unemployed and/or on welfare. These percentages would be similar in any nation with a mature welfare state.

If you subtract Americans under the age of 18 from the almost 200 million Americans who do not pay tax, the US is in a situation where many more people vote for a living than work for one. This too is an inevitable end result of any mature welfare state. The fact remains that in the US, 108 million productive people are supporting almost 200 million drones. Those same 108 million people are paying the ever increasing interest bill on the so-called "public debt". And finally, those same 108 million people are the only REAL source of the wherewithal to eventually repay the debts...As long as more people vote for a living than work for one in the US, that simply is NOT going to happen. A productive minority CANNOT support a non productive majority."

Thank you, Bill, for summation of the enormity of the something for nothings in the land of the world's RESERVE currency. The demise of the G7 financial and monetary systems looms as the wealth-creating sectors endure slavery under the whip of their masters and wealth creation expires to be replaced by the printing press. Take the math a little further as the top ten percent of taxpayers pay over 90% of the taxes, so in actuality 10.8 million people of 308 million are pulling the tax wagon. Just 3 % of the population is paying the majority of taxes. What's going to happen when the beltway raises taxes on these people to 50 or 60% and they decide it's not worth it to work hard anymore? Can you say disaster? California income tax receipts have collapsed under the same recipe.

Buy and hold is dead except for a few asset classes, but opportunities will abound during the next several years, the MISPRICINGS of virtually every asset class WILL BE RESOLVED higher or lower and provide unbelievable opportunities for PREPARED investors. I believe the greatest stock buying opportunity in history lies on the near horizon, and will be from levels (LOWER) you won't believe.

Selling opportunities abound in stocks and especially bonds (IOU's payable in IOU's, how obscene) of all types. Currency markets will zoom higher and lower depending on the fiscal and monetary responsibility or irresponsibility of the various central banks and public servants in charge of their respective countries. Economic decoupling has been on plain display during the last two years and the financial markets are often NOT the face of the economies in which they reside. You must learn to fix your paper currencies and make money in rising and falling markets. To learn more click here.

This goes hand in hand with currency debasement and credit-based monetary systems. During the latter stages of the demise of empires wealth creation fails as the "something for nothing" personality ATTACKS the last vestiges of the productive elements of their economies and societies, thus creating falling incomes which the financial authorities attempt to fill through MONEY printing and what is currently called Quantitative Easing (central bank monetization of government spending).

During these periods NO ONE knows the purchasing power of the currency in which ANY asset is PRICED as the US Dollars, Euros, Swiss Francs and UK Pounds are printed almost limitlessly to RESCUE the system in question -- the purchasing power is always undergoing discovery up or down. You can see this in the demise of every credit-based monetary system in history, including but not limited to the Weimar Republic, Argentina and Zimbabwe. Never in history has this type of financial and monetary system been able to avoid its demise in the manner which is unfolding at this time.

Now click here for the commentary on the "Something for Nothing" personality, it is lengthy and detailed but ESSENTIAL for understanding the 2010 Outlook and beyond.

In conclusion: The most recent Health Care REFORM is a perfect example of the "Something for Nothing" personality at work; thousands of earmarks and quid pro quo to bribe one special interest or another to agree, always with the cost of the agreement sent to someone else who is not at the political banquet table -- they are the main course of the something for nothings.

Public servant, elites, crony capitalists, big-trade unions, and special interests (the people described by the privateer quote) are legislating benefits for themselves of one sort or another at the expense of small business, non politically-connected entities, such as the millions of members of the Chamber of Commerce and National Federation of Independent Businesses as well as the public (the public that supports this does not understand they are the patsies and the ones that oppose it do!)

HEALTHCARE reform (in name only, it is a criminal enterprise being born): Legislating 17% of the US economy to flow through their sticky little fingers and allow them to SELL regulatory relief through campaign support of one type or another. Rent seekers and shakedown artists who produce nothing and legislate for their interest rather then the public at large. Obscene, immoral and corrupt is the proper description of these people. Of course they and the main stream media say they are doing this to SAVE you!

Please notice that The President has just conducted two summits, one on the economy and the other on jobs. In attendance were the Senate and House public serpents, big banks and brokers, big trade unions, the largest corporations in the world (who work offshore with the blessings of the public servants and big trade unions) and predators on the private sector. Conspicuously absent was the backbone of the private sector such as the Chamber of Commerce (3 million plus small businesses) and the NFIB (National Federation Independent Businesses.) These are the prey of the aforementioned group and it includes you, your neighbors and everyone who actually produces more then they consume. Public serpents call them the "RICH". This is outrageous; summits on jobs and economics and the REAL private sector WAS NOT INVITED! Ob@manation.

This is not doom and gloom; it is reality that is packed with opportunities as volatility.

in all markets expands to price in this unfolding global financial crisis. And, volatility is opportunity for the prepared investor. In today's world you must take advantage of these situations as they unfold. Currencies, stocks, bonds, commodities, natural resources and more will rise or fall to reflect the economic maelstrom as it continues to unfold. Learn how to do so.

I will be appearing at the Freedom Fest World Economic Summit on January 31 through Feb. 2, 2010 at Atlantis Paradise Island Resort, Bahamas (www.freedomfest.com/wes/).

I urge you to attend as I will be doing two break-out sessions on the unfolding economics of the global financial crisis and how to assemble investments to meet its challenges.

Thank you for reading Tedbits. If you enjoyed it...

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