Why Our Country is in Trouble

Some things should be obvious — even in today’s society.  We have argued over abortion in this country for decades.  Is it a black and white issue?  In my opinion, no.  But reason and common sense should prevail at some point!!?  I mean really, have we really needed to kill over 60 million infants in the U.S. via abortion since the 70’s.??  Using such an alternative such as abortion could be arguable in extreme cases, but 60M?

So now we’re selling baby parts for experimentation and ‘chop-shops’ are selling those parts for profit.  ‘Shut the front door’!!  Now you’d think we could all get together on this issue, right?  Noop.  Well, at least the ‘conservatives’ would agree right?  Noop.  Hard to believe?  Read the following article on this subject and ask yourself, “Why is our country going to hell?”  This should explain a LOT.

Two GOP Senators Oppose Bill to Defund Planned Parenthood

Do you think that perhaps money is an issue here?  Maybe helps some people make up their minds?  I’m not sure what’s going to turn this ship around, but my guess is it won’t be pretty..?

 

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Tocqueville Predicted Our Future

About 200 years ago Alexis Tocqueville visited America to learn what was different about our country.  We were of course, the leading and growing country of the world at the time.  A success story to be told for others to learn from.

The following article relates his findings as they relate to our modern time here in America.  Back then he saw us as a template for success.  One must ask what he would think now..?  Are we truly a republic or a democracy like Greece — a pack of fools looking for their next handout.  People wanting what is ‘free’ — unlike themselves today.  Americans are slow learners.  My guess at this point is it will take a sharp rap on the knuckles before the public wakes up to their imminent demise.


Back in 1831, Alexis de Tocqueville accurately foresaw both much of what ails us and our remarkable uniqueness and strengths. Tocqueville’s deservedly famous book, “Democracy in America,” was the product of his nine-month excursion throughout Jacksonian America. The purpose of this trip was to study our country’s political institution and the habits of mind of its citizens.

America’s Place in the World

Tocqueville correctly thought the then-developing America was the way of the future. As such, he foresaw that Europe would never be restored to its former greatness—though he hoped it could serve as the cultural repository of the West.

He also predicted Russian despotism, thinking that Russia was not yet morally exhausted like Europe and would bring about a new, massive tyranny. In fact, he conjectured that America and Russia would each “hold the destinies of half the world in its hands one day.”

The majority’s moral power makes individuals internally ashamed to contradict it, which in effect silences them, and this silencing culminates in a cessation of thinking.

He therefore hoped America would serve as an example to the world—a successful combination of equality and liberty. And an example of this was needed, since equality can go along with freedom, but it can even more easily go along with despotism. In fact, much of the world did go in the direction of democratic despotism—wherein the great mass of citizens is indeed equal, save for a ruling elite, which governs them. In a strange sense, Tocqueville would think that North Korea is egalitarian.

Despite his hopes for America, Tocqueville thought grave obstacles would diminish our freedom—though he didn’t think them insurmountable.

The Power of the Majority

Most alarming to him was the power of the majority, which he thought would distort every sphere of human life.

Despots of the past tyrannized through blood and iron. But the new breed of democratic despotism “does not proceed in this way; it leaves the body and goes straight for the soul.”

That is, the majority reaches into citizens’ minds and hearts. It breaks citizens’ will to resist, to question its authority, and to think for themselves. The majority’s moral power makes individuals internally ashamed to contradict it, which in effect silences them, and this silencing culminates in a cessation of thinking. We see this happen almost daily: to stand against the majority is to ruin yourself.

Moreover, Tocqueville feared that the majority’s tastes and opinions would occupy every sphere of sentiment and thought. One among many illuminating examples is his commentary on democratic art. He foresaw that the majority would have no taste for portraying great human beings doing great deeds. Art used to be the pictorial representation of man’s connection to the natural or divine order to which he belongs. But in modern democracies, art would go in the direction of the majority’s tastes: it would be abstract, focused on color and shape.

Why? Because to experience this kind of art, one needs to only have senses, whereas to experience the art of the past, one needs an education in the classics—the Bible and ancient literature especially. It’s easy to pontificate about Jackson Pollock, while it’s difficult to understand Michelangelo. But most revealing is that abstract art is an expression of democracy’s hatred for human greatness, the very theme of art.

Tocqueville’s Predictions About the Modern State

The influence on the mind of democracy and the majority weakens and isolates individuals. This creates fertile ground for a new kind of oppression that “will resemble nothing that has preceded it in the world.”

Tocqueville foresaw an “immense tutelary power”—the modern state—which would degrade men rather than destroy their bodies. Over time, he feared, the state would take away citizens’ free will, their capacity to think and act, reducing them to “a herd of timid and industrious animals of which the government is the shepherd.” Are contemporary China and Russia substantially different?

But Tocqueville did prescribe some solutions. He hoped that those having read his prescient book would come to understand that the defects of modern democracy require great attention and careful management. Specifically, he hoped, we would strive “to preserve for the individual the little independence, force, and originality” that remains to him.

In other words, when looking at any given policy, our lawmakers might look not at the benefits for their home district, or vainly calculate attention from the next media hit, but rather look at what any given policy proposal’s long-term effect will be on securing freedom and rights. Making individuals stronger, more independent, more able to resist the tyranny of the majority and of a constantly growing administrative state is the goal.

Tocqueville’s critiques are given in the spirit of friendship. He wanted us to “remember constantly that a nation cannot long remain strong when each man in it is individually weak, and that neither social forms nor political schemes have yet been found that can make a people energetic by composing it of pusillanimous and soft citizens.”

On the 210th anniversary of Tocqueville’s birth, asking contemporary Americans to pick up “Democracy in America” is perhaps too great a request. Nonetheless, we may at the least recall his clarity of vision and take seriously that America requires statesmanship and intelligent guidance to fight off the natural propensities that diminish our freedom.

America’s Got Talent — Veteran Singer

The subject TV show is one that fits in my list of ‘look the other way’ shows.  (Don’t pay attention to what’s going on around you.)  But from time to time, there are some pretty neat things that come out of this show — worth seeing and remembering.  The following video is of a younger man who was wounded in the middle-east while ‘signed up’ to protect this country.  The story itself is worth watching — the song is impressive.

Singer/War Veteran

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The Wall Street Titanic and You

So, as Dirty Harry once said, “Do you feel lucky punk?”  Which I believe pretty much sums up our investing in the stock market at this point.  Volatility has been substantial over recent years, but I don’t think we’re done yet with that problem in investing.  Receiving several financial alerts, the drums seem to be telling me that we are headed into choppy waters.  The following is just one example — which is one of the milder ones.  My point being, we should all be cautious with investing currently.

The following article was particularly of interest as the author created some somewhat eye-popping charts worth viewing.


The Wall Street Titanic and You

I would highlight that equity market valuations at this point generally are quite high.

—Janet Yellen

Are you worried about the stock market? If you are, you’re in the minority of investors.

Greece… China… don’t worry about it!

At least that seems to be Wall Street’s reaction to what could have been a catastrophic fall of dominoes if the European and Chinese governments hadn’t come to the rescue with another massive monetary intervention.

If you think you’ve heard the last about Greece or a Chinese stock market meltdown, you’re in the majority. Investors are pretty darn confident about the stock market.

The John Hancock Investor Sentiment Index hit +29 in the second quarter, the highest reading since the inception of the index in January of 2011.

However, overconfidence is dangerous and often accompanies market tops.

If you listen to the hear-no-evil cheerleaders on Wall Street and CNBC, you might be inclined to think the bull market will last a couple more decades, but we haven’t had a major correction since 2011, and the Nasdaq hit an all-time high last week.

Investors are so enthusiastic that the exuberance is spilling beyond stock certificates to the high-brow world of collectible art.

Investment gamblers are shopping up art in record droves. In the last major art auction, prices for collectible art reached all-time highs, and somebody with more money than brains paid $32.8 million for an Andy Warhol painting of a $1 bill.

Who says a dollar doesn’t buy what it used to?

I’m not saying that a new bear market will start tomorrow morning, but I’m suggesting that bear markets hurt more and last longer than most investors realize.

The reality is that bear markets historically occur about every four and a half to five years, which means we are overdue. And the average loss during a bear market is a whopping 38%. Ouch!

On average, a bear market lasts about two and a half years… but averages can be misleading.

In the 1973-74 bear market, investors had to wait seven and a half years to get back to even. In the 2000-02 bear market, investors didn’t break even until 2007.

Unless you, too, have drunk the Wall Street Kool Aid, you should have some type of emergency back-up plan for the next bear market. There are three basic options:

Option #1: Do nothing, get clobbered, and wait between two and a half and 10 years to get your money back. Most people think they can ride out bear markets, but the reality is that most investors—professional and individual alike—panic and sell when the pain gets too severe.

Option #2: Have some sort of defensive selling strategy in place to avoid the big downturns. That could be some type of simple moving-average selling discipline or a more complex technical analysis. At minimum, I highly recommend the use of stop losses.

Option #3: Buy some portfolio insurance with put options or inverse ETFs. That’s exactly what my Rational Bear subscribers are doing, and I expect those bear market bets to pay off in a big, big way.

Whether it is next week, next month, or next year—a bear market for US stocks is coming, and I hope you’ll have a strategy in place to protect yourself.

If you’d like to hear what worries me most about the stock market, here is a link to an interview I did last week with old friend and market watchdog Gary Halbert.