An Inner Workings Heads Up ~ The Risk Averse Alert

Sunday, January 03, 2010

An Inner Workings Heads Up

I recently added a link (over to the left) to David P. Goldman's "Inner Workings." The site is billed, "The blog for advanced financial analysis." You should check it out.

David Goldman and I go way back...

Reading his "Spengler" autobiography on Asia Times online (another place where Goldman's work appears), there's just passing reference to the place where we met "in the fever-swamps of left-wing politics." Goldman once was Senior Economics Editor at Executive Intelligence Review magazine. Back in the early '80s I was weaned on what is now that more developed economics intelligence conceived by such modern-day adherents to the American System of Political Economy as exist among the associates of Lyndon H. LaRouche Jr., the likes of which David Goldman once was.

Some American System ideology still influences Goldman's thinking today. Yet, too, some of his perspective is tainted with sophistry...
"Every sort of idiotic explanation is offered by academic economists for the financial crisis. Explaining the crisis has become a major industry. The academics by and large haven’t a clue. Grass might as well grow where their classrooms now stand. Wall Street greed and absence of risk management was the usual answer. That’s silly. The investors who bought subprime assets in 2006 weren’t any greedier than when they bought prime assets in 2004. The difference is that monstrous demand crushed the returns on prime assets."
—"The Global Surfeit of Savings Cause the Financial Crisis" (Inner Workings, 10/21/2009)

All one need consider is how in the build-out of Wal Mart "Wall Street greed," indeed, became the determining factor producing "monstrous demand [that] crushed returns on prime assets." Given a physically-driven phenomenon insensitive to the posterity-related needs of the nation such as provide a wealth of stable investment avenues capable of generating returns necessary to sustain an aging population, substantive basis forms my opposition to globalization, as well as condemns some of Goldman's thinking as representing so much sophistry.

Yet having read Goldman's Inner Workings blog postings going back to August '09 and finding several interesting topics and discussions, I wanted to direct your attention to his work because you might gain greater clarity about the state of contemporary finance.

For example, when you read...
"...Americans, at the cusp of the biggest retirement wave in their history, must save as they never have before, particularly after the wealth destruction of the past two years."
—"How to Save the World Economy: A Dollar Peg With China" (Inner Workings, 11/15/2009)
... you might begin to fathom the critical necessity for global investment in state-of-the-art infrastructure, first, to stem any further wealth destruction by expanding the economic foundation upon which existing financial claims secure sound legitimacy, and second, to ensure that future savings might find stable investments capable of delivering needed returns.

Realize too, though, when you read...
"...[U.S.-China] destinies are joined by a very simple economic fact: The old tend to have savings, while the young tend to have energy. To fund their retirements, old people must find young people to whom they can lend. And to start families and businesses, young people must find old people from whom they can borrow."
—"How to Save the World Economy: A Dollar Peg With China" (Inner Workings, 11/15/2009)
...fairly limiting thinking is being conveyed. Indeed, in addition to "old people" nations likewise "save." Trade surplus reserves in fact present assets well-suited for securing investment credit.

FYI: David Goldman also is Senior Editor at First Things Magazine.

Back in the day he co-authored with Lyndon H. LaRouche Jr., "The ugly truth about Milton Friedman" on whose back cover Arthur Laffer is quoted to say, "You want to prove that Milton Friedman is a fascist? It's easy. Quote him." (Hilarious.)

* * * * *

© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

There's an easy way to boost your investment discipline...

Get Real-Time Trade Notification!