Online Businesses Subject to Local Laws...Everywhere
Ben Worthen
Oct 21, 2008
http://blogs.wsj.com/biztech/2008/10/21/
online-businesses-subject-to-local-lawseverywhere/
A judge in Kentucky seized the Web addresses of more than 140 Internet-gambling sites last week, the latest example of how local governments can affect online businesses with physical operations beyond their jurisdictions.
It is common to think of the Internet as a global network that transcends geography. But online entities are often forced to adhere to laws in the places where they do business. One iconic example is a ruling by a French court in 2000, where the court said a French law banning the sale of Nazi paraphernalia applied to U.S.-based Web site Yahoo.
In the Kentucky case, Circuit Court Judge Thomas Wingate concluded that gambling Web sites were “virtual keys” that provided access to places where one could play online versions of gambling devices such as slot machines and roulette tables, which are illegal in the state.
None of the online businesses—such as GoldenPalace.com, PokerStars.com and UltimateBet.com—are based in Kentucky or rely on technical equipment located in the state. Still, the sites readily accept bets placed by users in Kentucky and process payments from banks based there. That is what triggered Judge Wingate to seize control of the Web addresses.
“Seizing,” it should be noted, sounds more ominous than it is when applied to the Internet realm. It prevents an Internet registrar that issues Web site names from transferring a Web address to a different registrar, even if the owner of the address, such as a gambling site, requests it. The gambling sites will remain operational until the judge issues a forfeiture order, at which point they will become state property.
The court said it will lift its seizure order for online casinos if they implement technology that would block Kentucky residents from accessing their sites.
Groups affiliated with the online casinos are worried about the precedent the ruling sets. “If you’re a business operator, you should be subject to the laws where you do and pursue business, and not have to worry about a state halfway around the world taking away your storefront,” says Jeremiah Johnston, president of the Internet Commerce Association, which monitors legal matters for online businesses. He adds that there is no reason that other governments couldn’t use the same technique to challenge online businesses for whatever reason they choose.
Todd Greene, an attorney for Oversee.net, which has a subsidiary called Moniker Online Services that is the registrar for two of the gambling sites, says he doesn’t believe that the Kentucky court has the jurisdiction to order the seizure. While Moniker has frozen the domain names for now — effectively following the court order — it is doing so as a matter of policy.
J. Michael Brown, secretary of justice and public safety for Kentucky, who brought the lawsuit, says he only wants to stop what he considers an illegal activity.
A final hearing is set for November.
Update: We want to make it clear that the Web sites and registrars aren’t just sitting by, but intend to challenge both the Kentucky courts ruling and its jurisdiction in the matter.
Saturday, October 25, 2008
Friday, October 24, 2008
Panics and Politics
Panics and Politics
John Steele Gordon
Oct 22, 2008
http://www.american.com/archive/2008/
october-10-08/panics-and-politics
How often have U.S. financial crises been followed by major political realignments?
Will the current financial crisis spur a major political realignment? If history is any guide, the answer is probably no. America has experienced recurrent financial meltdowns since its birth in the late 18th century. Indeed, there were severe credit crunches and Wall Street collapses in 1792, 1819, 1837, 1857, 1873, 1893, 1907, 1929, 1987, and now 2008. Most of these panics have not been followed by seismic political shifts. To be sure, President Martin Van Buren, who took office a month before the stock market crash of 1837, lost badly when he ran for reelection in the depression year of 1840. But Van Buren was an unpopular and ineffective president, and his defeat did not signal a realignment.
Two post-crisis elections, however, in 1896 and 1932, were focused overwhelmingly on economic issues stemming from a depression. In each case, the victorious party became the dominant force in American politics for a generation.
In the post-Civil War era, there were a number of close elections. The 1876 election wasn’t settled until shortly before inauguration day in 1877. In 1888, Democrat Grover Cleveland won the popular vote but lost in the Electoral College to Republican Benjamin Harrison. Four years later, Cleveland defeated Harrison, becoming the only president to serve two non-contiguous terms.
The 1896 election ended the era of evenly balanced parties. It followed the Panic of 1893, which had triggered a deep and painful depression. The urban working class that had been expanding rapidly as the country industrialized was dependent on wages and was bearing the brunt of high unemployment. GDP had declined by 12 percent in the year after the market crash. Unemployment had increased from 3 percent in 1892 to 18.4 percent two years later. Fifteen thousand companies had failed, as had 491 banks.
Two post-crisis elections, in 1896 and 1932, were focused overwhelmingly on economic issues stemming from a depression. In each case, the victorious party became the dominant force in American politics for a generation.
With the 1896 election, the Republicans became the majority party; they would win every presidential election from 1896 to 1932, with the exceptions of 1912 and 1916. In 1912, Theodore Roosevelt split the GOP and Democrat Woodrow Wilson was elected with only 41.8 percent of the popular vote. In 1916, Wilson barely won reelection despite having the advantage of incumbency and a very dangerous foreign situation.
By the early 1930s, America was experiencing its most profound crisis since the Civil War. The economy had begun slowing in the spring of 1929, and the stock market had crashed that October. Then a series of disastrous policy mistakes turned an ordinary economic downturn into the unique calamity of the Great Depression. The Federal Reserve kept interest rates high when it should have lowered them dramatically. The Smoot-Hawley Tariff Act raised tariffs to their highest level in U.S. history and sparked a trade war that crippled global commerce. In the summer of 1932, as the depression worsened, Congress passed an enormous tax hike in hopes of balancing the budget.
Although President Herbert Hoover, a Republican, tried his best to quell the crisis and did more than any previous president to relieve economic suffering, he failed miserably in his 1932 reelection bid. Democrat Franklin Delano Roosevelt won a landslide and went on to become one of the most consequential presidents in U.S. history. FDR remade American politics, forging an alliance between Southern whites and Northern blue-collar workers that guaranteed Democratic dominance for nearly 40 years. Only when his equal as a politician, Ronald Reagan, rose to power did the Republicans return to being the dominant party.
Will the Panic of 2008 bring about a new shift? If the financial markets calm down and prudent reforms are enacted, probably not. American politics has always been the politics of the center. It’s a good bet that it will remain that way for the foreseeable future.
John Steele Gordon is the author of An Empire of Wealth: The Epic History of American Economic Power (HarperCollins).
John Steele Gordon
Oct 22, 2008
http://www.american.com/archive/2008/
october-10-08/panics-and-politics
How often have U.S. financial crises been followed by major political realignments?
Will the current financial crisis spur a major political realignment? If history is any guide, the answer is probably no. America has experienced recurrent financial meltdowns since its birth in the late 18th century. Indeed, there were severe credit crunches and Wall Street collapses in 1792, 1819, 1837, 1857, 1873, 1893, 1907, 1929, 1987, and now 2008. Most of these panics have not been followed by seismic political shifts. To be sure, President Martin Van Buren, who took office a month before the stock market crash of 1837, lost badly when he ran for reelection in the depression year of 1840. But Van Buren was an unpopular and ineffective president, and his defeat did not signal a realignment.
Two post-crisis elections, however, in 1896 and 1932, were focused overwhelmingly on economic issues stemming from a depression. In each case, the victorious party became the dominant force in American politics for a generation.
In the post-Civil War era, there were a number of close elections. The 1876 election wasn’t settled until shortly before inauguration day in 1877. In 1888, Democrat Grover Cleveland won the popular vote but lost in the Electoral College to Republican Benjamin Harrison. Four years later, Cleveland defeated Harrison, becoming the only president to serve two non-contiguous terms.
The 1896 election ended the era of evenly balanced parties. It followed the Panic of 1893, which had triggered a deep and painful depression. The urban working class that had been expanding rapidly as the country industrialized was dependent on wages and was bearing the brunt of high unemployment. GDP had declined by 12 percent in the year after the market crash. Unemployment had increased from 3 percent in 1892 to 18.4 percent two years later. Fifteen thousand companies had failed, as had 491 banks.
Two post-crisis elections, in 1896 and 1932, were focused overwhelmingly on economic issues stemming from a depression. In each case, the victorious party became the dominant force in American politics for a generation.
With the 1896 election, the Republicans became the majority party; they would win every presidential election from 1896 to 1932, with the exceptions of 1912 and 1916. In 1912, Theodore Roosevelt split the GOP and Democrat Woodrow Wilson was elected with only 41.8 percent of the popular vote. In 1916, Wilson barely won reelection despite having the advantage of incumbency and a very dangerous foreign situation.
By the early 1930s, America was experiencing its most profound crisis since the Civil War. The economy had begun slowing in the spring of 1929, and the stock market had crashed that October. Then a series of disastrous policy mistakes turned an ordinary economic downturn into the unique calamity of the Great Depression. The Federal Reserve kept interest rates high when it should have lowered them dramatically. The Smoot-Hawley Tariff Act raised tariffs to their highest level in U.S. history and sparked a trade war that crippled global commerce. In the summer of 1932, as the depression worsened, Congress passed an enormous tax hike in hopes of balancing the budget.
Although President Herbert Hoover, a Republican, tried his best to quell the crisis and did more than any previous president to relieve economic suffering, he failed miserably in his 1932 reelection bid. Democrat Franklin Delano Roosevelt won a landslide and went on to become one of the most consequential presidents in U.S. history. FDR remade American politics, forging an alliance between Southern whites and Northern blue-collar workers that guaranteed Democratic dominance for nearly 40 years. Only when his equal as a politician, Ronald Reagan, rose to power did the Republicans return to being the dominant party.
Will the Panic of 2008 bring about a new shift? If the financial markets calm down and prudent reforms are enacted, probably not. American politics has always been the politics of the center. It’s a good bet that it will remain that way for the foreseeable future.
John Steele Gordon is the author of An Empire of Wealth: The Epic History of American Economic Power (HarperCollins).
Thursday, October 23, 2008
The Future of Gold & Silver 2008 and Beyond
The Future of Gold & Silver 2008 and Beyond
David Bradshaw, Editor, Real Money Perspectives
Bill Murphy, Co-founder GATA.org, Lemetropolecafe.com
Sep 2008
https://secure.swissamerica.com/offer/FutureGold08.php
Gold climbed over 30 percent in 2007 to $833/oz. then shot up over 20% in 2008 to over $1,000/oz., then pulled back near $800/oz! Why the sudden volatility? Find out what's really driving gold prices.
THIS 25-MINUTE CD WILL EXPLAIN ...
* Why it is still not too late to join the gold bull market - even though prices have already tripled since 2001.
* Why demand for both gold and silver far exceeds supply
* Why Gold should be $1,500 today and may rise to $3,000!
* Why Silver should be $25 today and may rise to $100!
* Why GATA alleges that U.S. gold reserves at Fort Knox and West Point may have been secretly depleted
* How gold price manipulation conceals mismanagement of the U.S. dollar to maintain its reserve currency status
* Why the dollar may lose its global reserve currency status
* How "Murphy's Law" will expose big money manipulators
Precious metals are outperforming virtually every other non-leveraged asset as U.S. international demand for alternative investments continues to rise amid growing market uncertainty in 2008.
Best of all, gold still offers a major buying opportunity in 2008! Today geopolitical uncertainty, rising inflation, the falling dollar, a credit implosion, ETF buying, mining and banking de-hedging and host of other strong fundamentals are fueling gold's steady march toward astounding new heights.
WHY LISTEN TO US? ...
* In 2001, we published "Rediscovering Gold in the 21st Century"...which announced the beginning of a new bull market in U.S. gold and silver coins based on market trends, diversification principles and common sense.
* In 2002, we published "The New Gold Rush" ...which documented the paradigm shift from financials to tangibles.
* In 2003, we released "Gold: The Color of Hope" ...which exposed why 39 economists finally agreed that gold and silver are the buy of a generation.
* In 2005, we offered "Economic Solutions in the 21st Century"... Addressing the growing problems of debt, deficits, the falling dollar and retirement/pension fund crisis.
* In 2006, we offered "The Rule of Gold"... covering... 2006 Economic Trends, Why $500 Gold is Still Cheap, 2006 Investment Scorecard (2000-2005)
* In 2007, we offered "The Future of Gold" and "Gold 101" ... a brand new 25-minute DVD and magazine covering everything you need to know about gold investing.
Disclaimer: I am not affiliated with swissamerica.com in any manner.
David Bradshaw, Editor, Real Money Perspectives
Bill Murphy, Co-founder GATA.org, Lemetropolecafe.com
Sep 2008
https://secure.swissamerica.com/offer/FutureGold08.php
Gold climbed over 30 percent in 2007 to $833/oz. then shot up over 20% in 2008 to over $1,000/oz., then pulled back near $800/oz! Why the sudden volatility? Find out what's really driving gold prices.
THIS 25-MINUTE CD WILL EXPLAIN ...
* Why it is still not too late to join the gold bull market - even though prices have already tripled since 2001.
* Why demand for both gold and silver far exceeds supply
* Why Gold should be $1,500 today and may rise to $3,000!
* Why Silver should be $25 today and may rise to $100!
* Why GATA alleges that U.S. gold reserves at Fort Knox and West Point may have been secretly depleted
* How gold price manipulation conceals mismanagement of the U.S. dollar to maintain its reserve currency status
* Why the dollar may lose its global reserve currency status
* How "Murphy's Law" will expose big money manipulators
Precious metals are outperforming virtually every other non-leveraged asset as U.S. international demand for alternative investments continues to rise amid growing market uncertainty in 2008.
Best of all, gold still offers a major buying opportunity in 2008! Today geopolitical uncertainty, rising inflation, the falling dollar, a credit implosion, ETF buying, mining and banking de-hedging and host of other strong fundamentals are fueling gold's steady march toward astounding new heights.
WHY LISTEN TO US? ...
* In 2001, we published "Rediscovering Gold in the 21st Century"...which announced the beginning of a new bull market in U.S. gold and silver coins based on market trends, diversification principles and common sense.
* In 2002, we published "The New Gold Rush" ...which documented the paradigm shift from financials to tangibles.
* In 2003, we released "Gold: The Color of Hope" ...which exposed why 39 economists finally agreed that gold and silver are the buy of a generation.
* In 2005, we offered "Economic Solutions in the 21st Century"... Addressing the growing problems of debt, deficits, the falling dollar and retirement/pension fund crisis.
* In 2006, we offered "The Rule of Gold"... covering... 2006 Economic Trends, Why $500 Gold is Still Cheap, 2006 Investment Scorecard (2000-2005)
* In 2007, we offered "The Future of Gold" and "Gold 101" ... a brand new 25-minute DVD and magazine covering everything you need to know about gold investing.
Disclaimer: I am not affiliated with swissamerica.com in any manner.
Wednesday, October 22, 2008
ECB's Nowotny Sees Global `Tri-Polar' Currency System Evolving
ECB's Nowotny Sees Global `Tri-Polar' Currency System Evolving
By Jonathan Tirone
Oct 19, 2008
http://www.bloomberg.com/apps/
news?pid=20601087&sid=apjqJKKQvfDc
European Central Bank council member Ewald Nowotny said a ``tri-polar'' global currency system is developing between Asia, Europe and the U.S. and that he's skeptical the U.S. dollar's centrality can be revived.
``What I see is a system where we have more centers of gravity'' Nowotny said today in an interview with Austrian state broadcaster ORF-TV. ``I see for the future a tri-polar development, and I don't think that there will be fixed exchange rates between these poles.''
The leaders of the U.S., France and the European Commission will ask other world leaders to join in a series of summits on the global financial crisis beginning in the U.S. soon after the Nov. 4 presidential election, President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Barroso said in a joint statement yesterday.
Nowotny said he was ``skeptical'' when asked whether the Bretton Woods System of monetary policy, set up after World War II and revised in 1971, could be revived to aid global currency stability. The U.S. meeting should aim to strengthen financial regulation, define bank capital ratios and review the role of debt-rating agencies.
Bush, 62, has cautioned that any revamping must not restrict the flow of trade and investment or set a path toward protectionism.
Sarkozy wants the G8 to consider re-anchoring their currencies, the hallmark of the 1944 Bretton Woods agreement that also gave birth to the International Monetary Fund and World Bank.
The current financial crisis, in which European governments have pledged at least 1.3 trillion euros ($1.7 trillion) to guarantee loans and take stakes in lenders, should be ``under control'' by mid-2009, Nowotny said. The economy will suffer longer.
``What comes then, unfortunately in parallel, will be the problems for the real economy,'' Nowotny said. ``The growth rate in 2009 will be significantly below what we have in 2008.''
He predicted gross domestic product growth around 1 percent in Austria next year.
By Jonathan Tirone
Oct 19, 2008
http://www.bloomberg.com/apps/
news?pid=20601087&sid=apjqJKKQvfDc
European Central Bank council member Ewald Nowotny said a ``tri-polar'' global currency system is developing between Asia, Europe and the U.S. and that he's skeptical the U.S. dollar's centrality can be revived.
``What I see is a system where we have more centers of gravity'' Nowotny said today in an interview with Austrian state broadcaster ORF-TV. ``I see for the future a tri-polar development, and I don't think that there will be fixed exchange rates between these poles.''
The leaders of the U.S., France and the European Commission will ask other world leaders to join in a series of summits on the global financial crisis beginning in the U.S. soon after the Nov. 4 presidential election, President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Barroso said in a joint statement yesterday.
Nowotny said he was ``skeptical'' when asked whether the Bretton Woods System of monetary policy, set up after World War II and revised in 1971, could be revived to aid global currency stability. The U.S. meeting should aim to strengthen financial regulation, define bank capital ratios and review the role of debt-rating agencies.
Bush, 62, has cautioned that any revamping must not restrict the flow of trade and investment or set a path toward protectionism.
Sarkozy wants the G8 to consider re-anchoring their currencies, the hallmark of the 1944 Bretton Woods agreement that also gave birth to the International Monetary Fund and World Bank.
The current financial crisis, in which European governments have pledged at least 1.3 trillion euros ($1.7 trillion) to guarantee loans and take stakes in lenders, should be ``under control'' by mid-2009, Nowotny said. The economy will suffer longer.
``What comes then, unfortunately in parallel, will be the problems for the real economy,'' Nowotny said. ``The growth rate in 2009 will be significantly below what we have in 2008.''
He predicted gross domestic product growth around 1 percent in Austria next year.
Tuesday, October 21, 2008
The End of the Middle Class?
The End of the Middle Class?
Al Martin
Oct 20, 2008
http://www.conspiracyplanet.com/
channel.cfm?channelid=49&contentid=5485&page=1
One Step Away from the Brink: Financial Collapse Has Been Postponed, But the Damage Is Done
The global economy has stepped away from the brink of economic collapse… but the damage has been done. The brink was approached last week when the planet’s economy was perilously close to collapse, but thanks to unusually speedy government action by the G-7, including the United States, the planet’s economic system was flooded with money along with far-reaching guarantees for banks etc., regarding interbank lending and government purchasing equity directly, which was able to ease credit liquidity sufficiently to avoid a complete meltdown.
We saw that subsequently reflected in rallies in equities and the sell-off both in US Treasuries and other government bonds which is what should have happened to deal with what has become in essence a Global Bailout. So does Joe Six Pack Investor live to fight (or invest) another day?
So does Joe Six Pack Investor live to fight (or invest) another day?
In the last 3 weeks, we have seen a severe depletion of the traditional Joe Six Pack assets. We have seen the Great American Lie has been unraveling, especially the lie that your house is your greatest asset.
In other words, the so-called Great American Dream turns out to be the Great American Lie, which has been thoroughly exposed in recent weeks by global economic events.
The response by Joe Six Pack investors has been to aggravate the financial problem by panic liquidation of domestic common stock mutual funds, which we have seen over the last 20 sessions or so.
This has made the problem much more difficult for governments to manage because of the enormous cash demands to pay for these securities that Joe Six Pack with his knee jerk panic reaction is creating.
Joe Six Pack Investors began the panic selling because they didn't know what else to do. Every great depression in the United States has been caused by knee-jerk reactions from Joe Six Pack – who then become the greatest victims of the depressions that they create. They simply don’t know what to do. They have their IRAs and 401 Ks invested. The debacle of 1991-92 is still fresh in their minds and they don’t want to see IRAs and 401Ks end up to be half of what they were 6 months ago.
Their knee jerk reaction is simply to sell because they don't know any better. Since most of them invest automatically in these funds, they will be buyers of the same stocks that they sold at higher levels. But that's the way it's supposed to be. The unwashed are supposed to be the victims.
The market is like a self-feeding mechanism. What I mean when I say that the damage has been done, is that financial institutions have been socialized. This socialization will weigh on the future performance of financial sector stocks for decades to come, just as it has done in Japan.
The entire planet, not only the United States that has been practicing capitalism is effectively moving to socialism out of necessity. What Joe Six Pack needs to understand is that this would have happened ultimately anyway, i.e. that capitalism would not survive over the long term as the world has became a 'smaller' place. What we are seeing now is simply an acceleration by market events of what would have happened anyway.
The long term damage to the planet's economy has been done. What is occurring now is a knee jerk reaction by governments to over-regulate. And this has already begun to occur even in the United States there is a movement afoot, even among Republicans, to dramatically reduce leverage. And therein is the key.
If you reduce economic leverage that is employed by the banks and financial houses, you are reducing future profitability, as you are reducing future risk. You are also reducing future liquidity and reducing the value of asset classes in the future. That's what socialism is really all about when it comes to economics. Socialism is a stratifying of assets and asset classes and furthermore expanding the gap between the super-wealthy and the super-poor. And that's what socialism leads to.
The concept of having a middle class in a socialist state is artificial. To a large extent, the United States has avoided socialism by maintaining the Big Lie principle. This means that you telling the people that they are middle class, that they can work all their lives, invest in their IRAs and 401Ks, and then retire and everything will be OK.
And you never have to learn anything about economics and you never have to know anything. You just have to trust in your government -- and its stability will be maintained. And of course that's all a Big Lie.
For the rest of this exclusive column by independent political, economic and market analyst Al Martin, subscribe to Al Martin Raw.com (Political, Economic and Financial Intelligence)
http://www.almartinraw.com/subscription/column380.html
Al Martin
Oct 20, 2008
http://www.conspiracyplanet.com/
channel.cfm?channelid=49&contentid=5485&page=1
One Step Away from the Brink: Financial Collapse Has Been Postponed, But the Damage Is Done
The global economy has stepped away from the brink of economic collapse… but the damage has been done. The brink was approached last week when the planet’s economy was perilously close to collapse, but thanks to unusually speedy government action by the G-7, including the United States, the planet’s economic system was flooded with money along with far-reaching guarantees for banks etc., regarding interbank lending and government purchasing equity directly, which was able to ease credit liquidity sufficiently to avoid a complete meltdown.
We saw that subsequently reflected in rallies in equities and the sell-off both in US Treasuries and other government bonds which is what should have happened to deal with what has become in essence a Global Bailout. So does Joe Six Pack Investor live to fight (or invest) another day?
So does Joe Six Pack Investor live to fight (or invest) another day?
In the last 3 weeks, we have seen a severe depletion of the traditional Joe Six Pack assets. We have seen the Great American Lie has been unraveling, especially the lie that your house is your greatest asset.
In other words, the so-called Great American Dream turns out to be the Great American Lie, which has been thoroughly exposed in recent weeks by global economic events.
The response by Joe Six Pack investors has been to aggravate the financial problem by panic liquidation of domestic common stock mutual funds, which we have seen over the last 20 sessions or so.
This has made the problem much more difficult for governments to manage because of the enormous cash demands to pay for these securities that Joe Six Pack with his knee jerk panic reaction is creating.
Joe Six Pack Investors began the panic selling because they didn't know what else to do. Every great depression in the United States has been caused by knee-jerk reactions from Joe Six Pack – who then become the greatest victims of the depressions that they create. They simply don’t know what to do. They have their IRAs and 401 Ks invested. The debacle of 1991-92 is still fresh in their minds and they don’t want to see IRAs and 401Ks end up to be half of what they were 6 months ago.
Their knee jerk reaction is simply to sell because they don't know any better. Since most of them invest automatically in these funds, they will be buyers of the same stocks that they sold at higher levels. But that's the way it's supposed to be. The unwashed are supposed to be the victims.
The market is like a self-feeding mechanism. What I mean when I say that the damage has been done, is that financial institutions have been socialized. This socialization will weigh on the future performance of financial sector stocks for decades to come, just as it has done in Japan.
The entire planet, not only the United States that has been practicing capitalism is effectively moving to socialism out of necessity. What Joe Six Pack needs to understand is that this would have happened ultimately anyway, i.e. that capitalism would not survive over the long term as the world has became a 'smaller' place. What we are seeing now is simply an acceleration by market events of what would have happened anyway.
The long term damage to the planet's economy has been done. What is occurring now is a knee jerk reaction by governments to over-regulate. And this has already begun to occur even in the United States there is a movement afoot, even among Republicans, to dramatically reduce leverage. And therein is the key.
If you reduce economic leverage that is employed by the banks and financial houses, you are reducing future profitability, as you are reducing future risk. You are also reducing future liquidity and reducing the value of asset classes in the future. That's what socialism is really all about when it comes to economics. Socialism is a stratifying of assets and asset classes and furthermore expanding the gap between the super-wealthy and the super-poor. And that's what socialism leads to.
The concept of having a middle class in a socialist state is artificial. To a large extent, the United States has avoided socialism by maintaining the Big Lie principle. This means that you telling the people that they are middle class, that they can work all their lives, invest in their IRAs and 401Ks, and then retire and everything will be OK.
And you never have to learn anything about economics and you never have to know anything. You just have to trust in your government -- and its stability will be maintained. And of course that's all a Big Lie.
For the rest of this exclusive column by independent political, economic and market analyst Al Martin, subscribe to Al Martin Raw.com (Political, Economic and Financial Intelligence)
http://www.almartinraw.com/subscription/column380.html
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