|
|
[CaRP] Redirection loop detected. Giving up.
Newsfeed display by CaRP
[CaRP] This appears to be an HTML webpage, not a feed.
Greed - It makes the World go Round
Is money the root of all evil or is the love of money the root of all evil?
What makes one person richer than another?
There is definitely a great divide between the world's wealthiest people and the world's poorest. In western countries the working classes enjoy lifestyles that were beyond the imagination of kings and emperors a few hundred years ago. It's not that they're richer than those kings and emperors but that science, technology and manufacturing have brought us a plethora of new gadgets, foods and sensory experiences. We are also more educated and able to see the world around us in different ways.
But the poor of developing and undeveloped countries still live peasant lives, victims of the elements, unscrupulous landlords and corrupt officials. They are no better than the poor of any era going back to before the Romans and ancient Egyptians. And even though western workers live comparative lives of luxury they still struggle under the burdens of debt and inflationary pressures on the cost of living.
A great number of people desire wealth and the benefits of no longer having to worry about money. But what is it that makes a person wealthy or rich? Is it purely having a lot of money? Is it the cars, mansions and private jets that the mega rich own?
What makes one person richer than his peers is simply having more of something everyone around him wants. If you gave everyone a huge pot of money you wouldn't get a lot of rich people. Instead you'd get hyper-inflation as they have in countries like Zimbabwe. The modern economy is built around supply and demand. Money itself is just a commodity that is bought and sold based on its perceived value. The Federal Reserve has been stimulating America's economy by over supplying money and in the process devaluing the US Dollar. This makes US products and services cheaper relative to its international competitors. Conversely Chinese demand for the Australian coal and metals is driving the Aussie dollar up.
China has a cheap resource—human labor. There are other countries that may be able to match it for price but China has the authoritarian resources that enable it to mobilise its workforce in ways no other developing country can. Its grand structures from ancient times such as the Great Wall and the buried army tell us that with cheap or slave labour humans can achieve anything. Even many of America's greatest construction achievements like the Hoover dam and Golden Gate bridge were built during the Great Depression when many Americans would work for any price. These days many western countries struggle to budget for new infrastructure while China builds dams, bridges and modern buildings that defy belief.
But China's rise has also allowed westerners to buy most of their material needs at prices we couldn't imagine 10 or 20 years ago. Yet it has a negative impact on the lives of poorer people. Cheap commodities frees up money of wealthier middle class for other pursuits such as investing. And property is an important portfolio asset. So the houses that cost $100,000 when toasters cost $100 now cost around a million in the age of the $10 toaster. More and more people are becoming enslaved to their mortgage.
The huge amounts of funds being channeled into the financial markets through noble schemes like superannuation and 401K has caused rampant inflation in the sharemarkets over the last 30 years. It has allowed speculation and greed free reign. Fund managers are given billions of dollars to play poker with. They pour it into rapidly rising equities focused only on their bonus and commissions and not on the future ramifications of the over inflated bubbles they help create. The only share purchase that actually helps the economy is the IPO. Its the only time the company represented by those shares actually gets a payout which in turn allows it to invest in research and development and jobs. If you aren't getting a reasonable return from dividends for your share purchases then you are speculating, hoping your supply will be outstripped by someone else's demand.
As Bob Katter the Australian politician puts it free markets are greedy people doing what they want. And he has a point. Too much government control stifles innovation. But too little allows money to be concentrated in too few hands. There are the arguments for socialism and there are the arguments for free market economies. Each side argues that its position is the right one. But like the world's weather system which tries to balance heat and cold through El Ninos and La Ninas the movement of money should also be rebalanced by moves from socialism to capitalism and back again. It was socialism that pulled England out of the mire of post WWII. It was Thatcherism that allowed it to emerge from the stagflation of the 70s and 80s. But the greed is good mentality has lead to the Global Financial Crisis and brought the west to its knees.
When the free markets are powering the economy upwards governments need to increase its tax revenues and put funds into paying down debt and into building future funds. When the inevitable crash comes the government needs to use that money to build new roads and infrastructure to keep the economy ticking over. Governments needs to identify the shortages and develop policies to increase supply. The housing shortage in Australia's main centres is a prime example. Australian builders are among the best paid trades people in the world, it is almost impossible to find Sydney property for under half a million and rents are soaring. Everybody needs a place to stay. So Australians are working longer and harder to give more money to landlords and banks. We are slaves—but not our bosses.
Who is the real Market Maker?
This is a site run by traders with years of successful trading who want to share their love of trading and successful strategies with you.
Plenty of sites on the Web exist only to sell you some secret trading method that is more huff and puff than the real stuff they would want you to believe.
More sites offer up general information about the basics that is found on thousands of other sites. Some offer so much information about every commodity and every indicator and every technique that a novice is overwhelmed or bored out of the whole idea of trading for extra cash.
RSITrading.com is different. We're about real commentary and opinion about the markets and the market influences. We keep it honest and sometimes humorous and we don't pretend to be a hundred percent accurate because in trading nobody is. We may offer on some pages to sell you products but we'll also offer a lot more for free on others. And we'll keep it simple and straight forward.
Trading or Investing you'll find something on this site to help you. There are millions of equities and millions of ways to make money from them but we've found that simplicity is the best policy and we want to show you simple ways to make money from the markets and what makes the markets move the way they do.
-You Are!
