 Your Gold Mining Stocks and The Election
Kenneth J. Gerbino
Archives
Kenneth J.
Gerbino & Company
Investment
Management
October 29, 2004
A few years back, the Reason Foundation published a study of
the previous eight administrations (Truman through Bush Sr.),
which consisted of four Republican and four Democratic presidents.
The budget numbers were analyzed
and compared as a percentage of GDP and revealed the following:
The four Republican administrations lowered the defense
budget and increased social welfare spending.
The four Democratic administrations increased the defense
budget and decreased social welfare spending.
These amazing facts show just how stupid we all are and how blind
we are to our political passions no matter if we are a liberal
or a conservative. The White House led by and sometimes pushed
around by the established vested interests both corporate, labor,
government workers, environmentalists and all the other groups
have somehow managed to make sure we all get what we are not
expecting.
The Opposites
History shows us some dramatic
opposites in politics.
John Kennedy (D) promoted lower
income taxes.
Ronald Reagan (R), who the
"left" feared would bomb Moscow, agreed with Russia
to dismantle 1700 short range atomic missiles if they would dismantle
860... and he ended the oil equipment embargo to Russia.
He also granted 1.4 million illegal aliens amnesty for citizenship.
He delivered on his promise and lowered taxes dramatically. But
he also presided over the largest budget deficits in history
and the largest peacetime increases in money supply (95%) in
our history.
Jimmy Carter (D) oversees the
largest corporate bail out in history (Chrysler in 1979).
Almost every southern democratic
congressman (101 to be exact) in 1956 opposed the Supreme Courts
desegregation ruling.
Truman (D) sent armed troops
and seized the nations railroads in 1950 for two years against
labor unions. He also did the same thing to the steel mills in
1952.
Bill Clinton (D) presides over
the largest tariff reductions (free trade) in history with GATT
(General Agreement of Tariffs and Trade).
It goes on and on. What these
candidates do in office and what they say they will do are very
different. What's the bottom line? Here it is in a nutshell.
There is a huge con game going on. But we always get mostly warfare
or welfare from our government.
You may ask yourself how can
this happen? The answer is actually very simple. When politicians
do the opposite of what is expected, they have less opposition.
Here is an example. A liberal can take his country to war much
easier than a conservative. He will have little opposition. His
backers and supporters and believers will be confident
that this man of peace must have a good reason to do so.
It must be absolutely necessary etc. His opponents (hawks) would
feel he finally woke up and is doing the right thing. Politicians
and Presidents many times do the opposite of what you expect.
A seasoned old lobbyist told
me at dinner in D.C. many years ago when I was lobbying for the
Gold Coin Act that when big business had a major bill they wanted
to pass they always went to the populist liberal democrat Hubert
Humphrey to co-sponsor it or at least endorse it. Hubert Humphrey
and his aides were not selling out their ideals. They knew that
good business is good business for everyone. If it made sense
and wasn't a blatant hand out, he would go along. At the same
time he would preach to his voting public against corporate vested
interests.
In the last century there were
18 major tax programs. The Republicans lowered taxes 6 out 7
times and the Democrats lowered taxes 5 times and raised them
6 times. Therefore it's fair to say that Republicans usually
lower taxes and Democrats can go both ways. But for the broad
issues of welfare or warfare they do the opposite of what
voters expect, but always plenty of either welfare or warfare.
War and Peace
The peace candidate usually
brings war and the so-called war candidate usually brings peace
- unless we are attacked, the exceptions would be Roosevelt (dove)
in WWII and Bush (hawk) with 9/11. Woodrow Wilson (D) was the
peace candidate in 1916 against the hawk Charles Hughes and Wilson
took us into WW1. Kennedy (D) took us into Viet Nam and Johnson
(D) escalated the war to over 500,000 troops. Nixon (R) the right
wing arch-conservative and "commie hater", ended the
war, opened up diplomatic relations with Communist China and
ended the draft. A liberal attempting to accomplish all this
would have had the conservatives claiming tyranny. Menachem Begin,
hawk and ultra conservative Prime Minister of Israel brought
peace to Israel and Egypt.
Liberal and Conservative Confusions
If you are a liberal, you will
support candidates that sound like they are for peace,
racial and religious tolerance, humanitarianism and human rights.
These are all commendable and sane ideals. Unfortunately liberals
will buy into economic policies that promise to deliver
these ideals but most of these economic policies have been failures
and are based on unworkable and factually false premises. Help
the poor by printing money actually creates more poverty but
it actually helps big business - the exact opposite of what a
modern day liberal has in mind. A clever trick by the charlatans
of the left who could care less about humanitarianism. The great
liberal ideals mentioned earlier are shared by most conservatives
but not the policies to implement them.
It is here where the great
divide of modern politics is most pronounced. The economic policies
of the left don't work. The modern day liberal, who should be
proud of his humanitarian beliefs, has been hoodwinked by the
economic charlatans of the left.
If you are a conservative you
will most likely support candidates that promise you liberty,
protection of our shores, private property and less government
meddling in your life. These are also commendable and sane ideals
and many liberals share these views. I remember years ago being
shocked when I heard Jane Fonda in an interview say if we were
being invaded she would grab a gun and head down to the beach
and fight.
Socialists are not liberals
but 16th century monarchists and feudalists and are not part
of this discussion. Every socialistic state is a failure. If
they claim otherwise it is because they have a private sector
that is really pulling all the weight.
The modern day conservative
has also been hoodwinked by the charlatans of the right. A
good example is the U.S. backing and protecting many of the moderate
dictators of the world. We also backed the Taliban and the warlords
of Somalia in years past. Also conservatives that want the government
off their back can't really turn around and ask the government
to get on other people's back for what they think is
abnormal social behavior.
Both the liberals and conservatives
have been sold out by the power structure that runs this country.
This structure is diverse and sometimes disguised. There is corruption,
greed, stupidity and insanity and confusion within the various
groups that comprise this power structure. These groups are conservative
and liberal, democratic and republican. The policies promoted
by these groups are insuring that the majority of the population,
liberals and conservatives will lose. I have yet to meet a liberal
or a conservative who didn't think it a good idea to throw out
all the thousands of pages of tax laws and make it easy and simple,
yet the tax codes get worse every year.
What we are getting is the
worst from the charlatans of both sides. They are the bad liberals
and bad conservatives and they are the enemy. Ferret out these
phonies and you will see a much better world. For example let's
take the environmental issue. Chemical companies should be nailed
to the wall for dumping toxic wastes into rivers - but requiring
200,000 pages of forms to fill out and 15 years to build a new
chemical plant is pathetic. Take 20 honest and sane liberals
and 20 honest and sane conservatives as an executive group with
full authority and you will see a chemical plant with zero discharges
and one that will be built for $300 million instead of $3 billion.
Put these same people in charge of any national problem and I
am sure they will come up with some solutions.
The Election Outcome
Here is what could happen with
the outcome of this election. Either candidate in office will
have to print a lot of money and run deficits. The ship of state
is not going to turn around quickly. Interest rates will go up
but this will be out of either candidate's control.
Kerry will try and raise taxes
and if successful this will bring on a substantial recession.
He will most likely increase the war on terrorism.
He will subsidize and promote with Kennedy the continued drugging
of 7 million children in our schools with the psychiatric block
(shrinks and the drug companies - 700 lobbyists strong in Washington).
He may invade Iran and will certainly allow Israel to take out
the Iranian reactor sites. Kerry will devalue the dollar to save
manufacturing jobs from going overseas.
Bush may spend lots of time
and money on establishing a Palestinian state. He will strong
arm Jordan and Egypt to give up territory to do so. He will not
exit Iraq until Iran backs down from nuclear development. He
will also devalue the dollar significantly to save manufacturing
jobs.
America the Beautiful
The United States is still
a beacon for liberty and freedom in a very unsafe world. If voters
would do more than vote and really fight any obviously destructive
policies that are being implemented by either party or either
side, we, and the world would be better off.
The Gold Stocks
Your gold stock portfolio should
go up regardless of who gets elected. Both candidates have no
choice but to keep the debt and paper money machine going as
long as possible. The dollar is already being officially being
talked down. The candidates, of course cannot talk about a weak
dollar because it sounds bad... "I am for a weak dollar"
has a bad ring to it.
Donald Coxe from BMO Nesbitt
Burns/Harris Bank, acknowledged by many as one of the smartest
political/economic commentators of our time feels at least a
25% devaluation of the dollar is in the cards and he hopes it
will occur gradually so adjustments can take place internationally.
He mentioned that at the recent IMF meeting in Washington, there
was a lot of unofficial talk about a lower dollar as a policy
option. If the dollar is going down then gold will go up. A 25%
devaluation of the dollar would mean a $500 gold price.
Please visit our website
for more articles on gold, the economy and the stock market.
October 28, 2004
Kenneth J. Gerbino
Archives
Kenneth
J. Gerbino & Company
Investment
Management
9595 Wilshire Boulevard, Suite 303
Beverly Hills, California 90212
Telephone (310) 550-6304
Fax (310) 550-0814
E-Mail: kjgco@att.net
Website: www.kengerbino.com
321gold Inc
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