Taking on the Big Boys

Any bastion of money and power can get out of hand quickly. The saying “Power corrupts and absolute power corrupts absolutely” has been proven continually throughout history. Power and money also go hand in hand, so those in power have or get money and those with money often seek and get power.

The difference in today’s environment is that much of what happens on Wall Street and in Washington, our two American strongholds of power, are being held up to public scrutiny. If there is any hope to change that status quo, the public scrutiny must continue until the price of breaking the law is more than giving back a tiny bit of the illegal gains.

Wall Street crooks are prolific and when Wall Street crooks can buy influence from politicians the problems get even stickier. Arrests for insider trading a few weeks back, some 50 individuals, carry the message that in fact the Wall Street law breakers are not above the law. The problem is that if the consequences turn out to be fines, it can amount to a slap on the wrist and be simply the cost of doing business. The gains from insider trading have been (and continue to be) obscene.

Now Obama is taking on the really big boys. His State of the Union speech announced an agency that would take the big banks to task on their high stakes game that precipitated the housing meltdown. Continual scrutiny by the media needs to continue to ensure that this is not just a way to divert political heat. The as yet unnamed housing agency has a daunting task taking on the really big boys, who have likely also bought significant influence in Washington and at other government agencies. Those in power do not relinquish it easily and they play the game well using all of the resources that money can buy.

The clear message is that yes, you can make money investing in the stock market, if you happen to get on the same side of the trade as those who are influencing the game. You can also lose in a heartbeat, which is why many people have chosen to find other investments that are not as highly manipulated. Until Wall Street cleans up its act and makes it reasonably safe for the individual to invest in promising companies, expect that the ordinary investor will look for other ways to invest their hard earned money.

When you are looking for an investment that is less controlled by the big boys, look to gold and other precious metals as a way to preserve your wealth. Gold is a popular investment during turbulent economic times and we certainly qualify in that regard.  When you buy gold bullion coins make sure that you pay no more than 5%-20% over the spot price of gold and as with any investment know what you are buying.

468 ad