Mapping The Real Deal: A Letter to My Stockbroker

A Letter to My Stockbroker
February 2008

Dear John:

I sent you the article on Bill Gross of PIMCO because I was interested in someone who feels as I do -- that the U.S. and the dollar are moving in the wrong direction for the long term. There may be short-term ups and downs, but when a country is more focused on military solutions and the support of companies who mostly traffic in destruction rather than construction, then in the long run, no matter how much of that country’s currency one accumulates, it will eventually be more than compensated with a decline in value. Cities are going bankrupt; states are cutting costs and building more prisons and fewer schools. I don’t have any special knowledge, I just read the newspapers every day.

As a result, I am interested in investing or just holding the currency of countries that have created and support decent health care and education systems, that look at environmental and energy issues as more than an excuse for green-wash exploitation of the fearfulness of their citizens, and that are working on productivity to solve local problems, rather than merely as a means of accumulating more currency.

At this point, countries such as New Zealand, Australia, Canada, Singapore, Sweden, and Finland have more going for them than countries that are picking fights with the Muslims. I hope that will change, and I’m actively working to make it so, but I’d be foolish to assume that anything I do is going to have an impact that can counteract the results of several generations of foolish U.S. governments that, using the mentality of The Tapeworm, do all they can to exploit their own citizens -- not to mention the corporations that aid and abet them in this practice.

Sadly, I don’t see the current candidates moving in a significantly different direction. We continue to subsidize tobacco and underfund education. We spent a billion dollars on the covert defeat of Afghanistan, and not a penny to provide schools for all the fourteen-year-olds remaining there. Like the children in the U.S., they discovered the drug business and seem to have no option but to exploit that. The U.S. government is continuing to provide them with guns, not schools.

We cannot seem to balance our technology expertise with human expertise, and inevitably go to extremes like genetically modified seeds, with limited exploration of the negative consequences. A few -- but only a few -- who live in Silicon Valley have begun to recognize that this is unsustainable, but their thoughts are relatively recent and their actions not yet really begun.

Food prices will be rising, and the value of the dollar in absolute terms falling; the value of gold will likely remain stable, but only as measured in equally stable terms.

So, I feel comfortable putting my money in sovereign bonds of saner governments, including some that were willing to confess their sins regarding treatment of their own indigenous people; and in a basket of food; and in a bullion trust that has already gone up a great deal this year and -- if my analysis is correct -- will continue to rise as the value of the dollar in real terms moves in the other direction. I prefer not to invest in any financial tools that don’t have a direct connect to “stuff,” e.g., metal, food, and sane economies that value their own citizens as assets, rather than cheap labor, as in the developing countries (as we euphemistically call them).

Even China and Russia seem to have figured this out. Putin is not respected as a great champion of democracy but as one who got the trains to run, bread on the table, and the crooks out of the banks and the halls of government. China may be a bit further behind, but the U.S. economy is currently moving from a good place to a worse one.

I have one financial adviser who suggests to invest only in things that benefit from continuous war. So far, the candidates seem to support his conclusions. I’m not ready to go that far, but since that seems to be the direction of the U.S. economy and the thinking of the electorate, I’d like to be in something that at least does not decline with continued destructiveness and has the potential for increased human and technology based productivity.

Now, as truly sustainable investments occur -- and there will be some -- I can see moving money out of the “safe havens” and into the people who will support the ideas that can return the U.S. economy to productive endeavors. We should all keep an eye open for these. It is not likely, however, that the financial wizards of Wall Street will recognize them, so we are going to have to look in our local communities and support them there. We are fortunate to live in Silicon Valley, a hotbed of good ideas. One can hope that we will eventually see more than our fair share of local opportunities. Meanwhile, let’s keep the money safely stored in things that have real value.

Best Regards,

A Silicon Valley Resident
A Letter to My Broker (Feb 2008)

Mapping The Real Deal is a column on Scoop supervised by Catherine Austin Fitts. Ms Fitts is the President of Solari, Inc. http://www.solari.com/. Ms. Fitts is the former Assistant Secretary of Housing-Federal Housing Commissioner during the first Bush Administration, a former managing director and member of the board of directors of Dillon Read & Co. Inc. and President of The Hamilton Securities Group, Inc.

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