Politics

Back after a long vacation...and into the world of presidential politics and "bailout" schemes. O'Neil made the case in his books that gridlock was best for the markets (usually caused by having different political parties controlling either branch of the government). My first lesson in economics was when my Econ 101 professor made the case that the President has very little to do with the economy and that the Chairman of the Fed (Greenspan at the time) was the most powerful figure in the country with regarding to the economy.

I recently finished reading Peter Schiff's book about the coming economic collapse. While there are a few things in the book that are not well explained or a bit of a stretch, for the most part Schiff makes a strong case for his predictions. It could happen and a lot of it has already happened. Well worth the price tag and I highly recommend it.

When I vote for the President, I vote for national security, leadership, and who I want to be Commander-in-Chief. I don't vote based on the economy. The president never does anything significant in that area (yes, even Clinton for you liberals who think he saved the economy. He (and Gore) had nothing to do with the Internet boom). For an excellent commentary on the irrelevance of this year's election when it comes to the economy, see the blog "Austrian School" that I mentioned in a previous post.

If this "bailout" plan passes, massive inflation could be right around the corner. Nobody seems to realize how the price of oil and the status of the dollar are tied completely together. The dollar drops, oil goes up. The dollar strengthens, oil drops. The problem is that there is no logical reason for the dollar to be strengthening at this point. (Again, read Peter Schiff.) Oil and commodities are due for another run sometime in the near future (I believe Jim Rogers has predicted this). I'd be ready.