Politics and History

Our editors look back to previous periods in politics and history to discover the parallels with today’s market and how this can help your investing.

History doesn’t repeat, as writer Mark Twain once wrote, but it rhymes. For an entertaining and informative romp through financial disasters and bull markets of yesteryear, plus the legendary investors who made a fortune and the foolish knaves who lost their shirts, read on…

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How Government 'Works'
There are many theories to explain government. Most are nothing but scams, justifications, and puffery. One tries to put something over on the common man...the other claims it was for his own good...and the third pretends that he'd be lost without it.
Why Romney Can't Save the Lumbering US Empire
What about Romney? He claims to have real business experience...to understand how the economy works. He says his success in the private sector guarantees that he will have success in the public sector too. Is it so?
Riots Brewing in the Slowly Simmering Pot Called The System
Over time people find ways to game the system. They get little privileges... special favours... and elevated status. They connive to land government contracts... food stamps... special deals. Not all are lazy. Not all are dishonest. But they are all beneficiaries of a corrupt system.
The Tyranny of Gold
Today we want to give you Benjamin Anderson’s thoughts on gold. He wasn’t a gold bug. He simply saw gold as money with a definitive role to play in the monetary system. Despite the best attempts of governments and ignoramuses to discredit it, it still does.
A good rally to sell into?
The global monetary system, which is just a mechanism to create debt, is breaking down. Credit growth around the world is anaemic. In the US, the household sector continues to pay down debt. Only the government's tremendous borrowing program keeps the system from shrinking...
Reckoning over Raki
While we were stuffing our face with delicious Turkish food and drinking Raki (pronounced Rak-eh), we came back to our apartment to find stock markets around the world had woken up to themselves. In one session they had fallen by around two per cent. The Aussie market spent last week ‘recovering’. The ASX200 rallied all the way back to the technically important 4,700 level, which also happens to be where the 200-day moving average is.
The Decline of Everything
The big story over the weekend was the arrest of IMF head Dominique Strauss-Khan for allegedly attempting to rape a New York hotel housemaid. Classy. We don’t know what really happened, but DSK has form on the board. In 2008 the IMF reprimanded him for having an affair with a colleague.
Our Other ANZAC Day
Today is ANZAC Day, Australia’s true national holiday. It’s always been one of my favourite days of the year. Beer, two-up and football…does it get any better? But of course it is much more than that. I grew up fascinated by war…not in a nut-job, shaved head, gun-loving kind of way.
Fatal Error or Fatal Conceit?
To me the gold price takes the form of a very uncomplicated formula, and all you have to do is divide one by ‘n.’ And ‘n’, I’m glad you ask, ‘n’ is the world’s trust in the institution of paper money and in the capacity of people like Ben Bernanke to manage it. So the smaller ‘n’, the bigger the price. One divided by a receding number is the definition of a bull market.
Get Rid of Central Banks
Does anyone, really, understand this carbon tax thing? Superficially it makes sense. Put a price on carbon to incentivise a move to a ‘low carbon economy’ and voila, pollution drops. That’s the plan. But how will it unfold in reality?
64 Million Empty Nests
Are things so bad in the global economy that they're good? Are the markets simply dismissing all the risks in the world because they think Ben Bernanke will launch into QE3 before QE2 officially ends?
The Hole Truth
Another day, another advance in the Dow… Other global markets follow… It all seems so monotonous. This investing game seems pretty easy after all. Especially when you have the Fed at the wheel…and Obama in the passenger seat. Fed minutes out last night indicated Bernanke has no intention of halting his US$600 billion debt monetisation program this year, despite a few whimpers of dissent.