Years ago we were more
entertained by our government's actions because we were younger then and not
threatened so much by their policy decisions. But now as we approach
retirement age, we are becoming simply enraged and disgusted by the decisions
made in Washington.
First, there is no question
that older Americans on fixed income are having a hard time finding the money
to buy steak or live, as they say, "high on the hog", where you
find the better cuts of meat. Now it turns out that the US Department of
Agriculture has approved a 'pink slime' additive to ground beef. Pink slime
which is a major ingredient of dog food is not beef but a salvage product rendered
from fat waste trimmings and intestines still full of you know what. This
rendered slime is treated with ammonia to kill the bacteria one finds in
fecal matter, and 70 percent of ground beef at supermarkets contain it. It's
the new hamburger helper direct from the US Department of Agriculture. We
checked some cookbooks including those of Julia Child, Emeril Lagasse, Martha
Stewart, Lydia, Rachael Ray, etc., and have yet to find one recipe calling
for "pouring in a cup of ammonia while adding two cups of pink
slime"........
The purpose of using this
ingredient is to make big bucks for meat processors and to lower the cost of
hamburger. The government is delighted because it puts a lid on the price of
hamburger and helps to keep the consumer price index down. Keeping the
consumer price index suppressed is, of course, viewed as critical to the
national interest. Pink slime is big business and there is just no way to
police its use at restaurants where local operators are just out to sell a
burger and make a buck. Indeed, selling "yuck for bucks" just seems
to epitomize the American ethic today.
In addition to helping to keep
the supply of red meat up and the prices down, Congress recently lifted a ban
on funding horse meat inspectors, so now the USDA can help turn race horses
and ponies into horse burgers and sausage for gramps. While it may sound
disgusting to Americans, horse meat is sold as a delicacy and devoured in
foreign countries along with cats, dogs, chickens, ducks, grasshoppers and
lizards, which are all grilled and gobbled down. In Arab countries, dogs are
particularly scarce as they are on the menu. So, as America becomes more
international and less developed, in order to feed our poor people and
retirees, it may only be a matter of time before you need to keep an eye on
Rover, or he will end up as skewered shish-kabob on your neighbor's grill.
When it comes to securities
and investing, our government can be just as uncaring. "The Jumpstart
Our Business Startups ACT (the JOBS Act), which proponents says will make it
easier for small businesses to launch initial public offerings, solicit new
investors, and, eventually, hire more workers is likely to pass the Senate,
and will probably be signed by the President as early as the end of March.
This new law is designed to gut accounting oversight on mid-sized IPOs and
relax restrictions and allow both the sale and advertising of unregistered
securities so that new firms can raise capital. The idea is that sales of Reg
D securities, now limited to $5 million dollars, should be lifted to $50
million dollars before requiring SEC registration. Skipping SEC registration
means that the nuisance of having corporations report honest audited
financial results can be dispensed with. The talking heads on TV keep telling
us that we need to unleash capitalism's energy and animal spirits as the
economy has been held back by too much regulation and the horrible burden of
reporting fair and accurate financial data. But if this investment plan goes
through, we know what's going to happen.
Based on history, particularly
the dot com disaster, and the mortgage and housing bust, investors are about
to be legally robbed. Securities sales organizations will spring up hiring
used car salesmen, recent sub-prime mortgage salesmen, and new college grads
that know nothing and will promise anything in order to sell unregistered
securities. Why? These offering will pay the salesmen fat commissions of 10
to 15 percent of the money raised. Having grown up in Wisconsin dairy country
we know horse hockey when we smell it, and slime when we see it. Having spent
30 years on Wall Street, we know how this story plays out. Indeed, if Goldman
Sachs and Citibank creating bad mortgage securities to profit from by selling
them to suckers is still fresh in your memory you should know how this story
ends: Pay a salesman a big fat commission and they'll say and sell anything
to make a fast buck.
Those targeted by these
investment scammers selling slimy securities will certainly be the older
Americans who survived the last two bubbles, but are getting zero interest at
the bank. Retirees can't live on zero interest so they are ripe to be sold
hope and Ponzi-style investments that pay them interest with their own money
until the principal is gone. They should consider renaming the JOBS Act to
"The Jokingly Obscene BS Securities ACT" which I think describes it
better.
The coming flood of horse
hockey investments sold by boiler rooms would make Bernie Madoff proud
because now they will be perfectly legal. Meanwhile, we have decided not to
get suckered in. We will keep some cash in the bank for a rainy day and most
of our real money in physical gold and silver. Gold remains the one
investment immune to pink slime disease. We would rather have gold coins or a
pile of silver than be faced with the sudden death of wealth the greedy can
suffer by buying heavily touted but hollow investments. It's a sad day when
the American Congress sanctions securities that are designed to rob investors
and line the pockets of the promoters in an effort to create the illusion of
jobs to win an election.