Pie in the Sky – John Browne Commentary January 27, 2011Posted by Admin in Market Commentary.
Tags: debt, deficit, economy, federal spending, Fox Business, freeze, john browne, mangru, obama, president, report, state of the union, white house
Pie in the Sky
By John Browne
Following the huge gains made by Republicans in the midterm elections, it was widely expected that President Obama would use the State of the Union address to signal a major policy shift toward the center of the political spectrum. On the surface, at least, he appeared to do just that, hinting that he took budget management very seriously and that Americans should be prepared for shared sacrifice. However, as the final applause still echoed in the House chamber, many astute pundits were left trying to make sense of the many contradictory policy prescriptions the President proffered.
Classical political maneuvering dictates that when clouds are grey, politicians must offer good news, tell jokes, and remind us warmly of our childhood (or in Obama’s version, America’s triumph over Russia in the Space Race). Disclosure of specific measures should be avoided at all costs. President Obama followed these tactics closely.
While he did address plans to cut non-defence, discretionary federal spending – a small fraction of the overall budget – the President also announced his intention to increase spending on several existing and new initiatives. The scope of the new initiatives will surely eclipse the modest cuts pledged.
The President was careful to refer to all his spending plans as “investments.” The word is used in order to illicit a pleasant feeling among voters who instinctively favor capitalism over socialism, not because any thinking person expects these resources to be better allocated than they would have been by the market. Governments don’t make investments because they aren’t subject to profit-and-loss feedback. Governments provide public goods for which no profit can be measured or expected – or else we would just have the private sector take care of it. This disingenuous use of the word investment disguises the fact that the President simply intends to borrow even more money to spend on public-sector jobs.
The essential point is that while jobs in the private sector create wealth, public sector jobs actually consume wealth. When I was a Member of the British Parliament, I represented a county that spent the least amount per pupil on education of anywhere in the entire country. Yet, the achievement level of the students was by far the highest. It was vivid proof that it is not the amount of money that is crucial to success, but the quality of the spending. If the President were to lower taxation, cut the number of government regulations, and replace a political atmosphere of uncertainty with one of certainty, he might stand a chance of reviving wealth creation.
More seriously, the President made no mention of the massive debt problems facing US state governments, such as California and Illinois. The potential eruption of these debt and currency problems could well dominate investment strategies for 2011.
Yesterday, the Congressional Budget Office issued a highly embarrassing assessment that the federal deficit for 2011 would rise from the previously projected $1.1 trillion to $1.48 trillion. At a stroke, this nullified the President’s debt reduction plans. The CBO also pointed out that Social Security posted a $45 billion deficit in 2010 and will bleed more than $600 billion over the next ten years. I assume these estimates to be conservative. It is clear that the President, and the rest of Congress for that matter (with the possible exception of Congressman Paul Ryan whose austere recommendations have been ignored by most of his fellow Republicans), are dancing around the bonfire of our sovereign credit and hoping that their twirls will distract us from the conflagration.
Also yesterday, the Federal Reserve’s policy statement claimed that its massive stimulus plans are working, and that it will maintain both QE II and near-zero rates well into 2011. If the economy were indeed improving, as Messrs. Bernanke and Obama claim, why would the Fed and the Treasury need to keep administering life support? Clearly the White House and the Fed have little confidence in their own assertions; so, how should average investors react to more promises which are highly unlikely to be kept?
Rather than buying into Washington’s scripted recovery propaganda, investors should focus on the bottom line. Low interest rates are distorting the value of money and the key investment relationship between risk and reward. One side effect is that investors are being incentivized to favor equities over fixed income. A lack of viable alternatives has likely played an unsung role in supporting the current stock market rally.
Investors would be well-advised to retain a jaundiced view of all political statements, especially those of central bankers and politicians positioning themselves for the next election. In 2011, investors should focus their eyes not on the sky, but at the brick wall our Union is fast approaching.
John Browne is a Senior Market Strategist at Euro-Pacific Capital. He’s been a member of English Parliament, an advisor to Prime Minister Margaret Thatcher, and currently serves as Lead Panelist for The Mangru Report. You can view all of his commentaries by CLICKING HERE NOW.
Running a Small Business in a Recession – Duffy’s Sports Grill CEO Paul Emmett interview with Dan Mangru – The Mangru Report October 20, 2010Posted by Admin in Interviews.
Tags: acquisitions, airlines, dan mangru, duffy's, emmett, industry, interview, lending, liquidity, mangru, paul, recession, restaurant, roadhouse grill, Small Business, sports grill, success, The Mangru Report
The United States is a scary economic place. We have unemployment hovering around 10 percent, government deficit spending at all time highs, and a U.S. dollar that is a struggling currency.
Even in spite of all of this economic turmoil, small business owner Paul Emmett of Duffy’s Sports Grill has managed to take a small Florida restaurant chain with only 4 locations to a 22 location $75 million a year business. During this interview Emmett discusses with Dan Mangru what mistakes he’s made in the business, what industries he’s modelled his business after, and whether it is time to start acquiring distressed assets.
Jim Kaufman Interview – Mangru One-on-One – The Mangru Report October 16, 2010Posted by Admin in Interviews.
Tags: acquisition, comcast, Fox, fox news, Jim Kaufman, mangru, merger, msnbc, nbc, The Mangru Report
Watch Media & Political Expert Jim Kaufman talk with Dan Mangru about the Comcast-NBC merger, whether the media has become too political, what politicians are really looking at for extending the Bush Tax Cuts, and how he’s achieved his own success.
Tags: alternative investing, business, Commodities, currencies, dan mangru, david mcalvany, Dollar, finance, Fox, Fox Business, gold, investing, ira, jack reed, john t. reed, management, mangru, mangru report, mcalvany, news, real estate, silver, talk, terry coxon, tv, U.S., van simmons, wealth
Watch extended coverage from Freedom Fest 2010 with Dan Mangru moderating a special panel on Alternative Investing. While so many investors are confused as to what that actually is, for the purposes of this panel alternative investing is any type of investment outside of stocks, bonds, options and mutual funds.
The panel features David McAlvany of McAlvany Wealth Management, Van Simmons of David Hall Rare Coins, Jack T. Reed author of How to Protect Your Life Savings, and Terry Coxon of Passport IRA. They will provide key insights on topics such as gold investing, the currencies most likely to beat the U.S. dollar and why the U.S. dollar might be good to hold in the short run, whether investors should pay down debt as opposed to making new investments, how to buy real estate during hyperinflation, and the importance of liquidity.
Don King 9/11 Interview with Dan Mangru – The Mangru Report on Fox Business September 14, 2010Posted by Admin in Dan Mangru, Interviews.
Tags: 11, 9/11, bernard hopkins, boxing, business, city, dan mangru, department, don king, evander holyfield, FDNY, felix trinidad, finance, fire, fire truck, Fox, Fox Business, freedom, george foreman, israel, mangru, mangru report, middle east, mike tyson, mma, muhammad ali, New york, nyc, NYPD, only in america, palestine, peace, police, september, shimon peres, talk, tv, Twin Towers, U.S.
While you may know him as the man behind boxing biggest champions such as Muhammad Ali, Mike Tyson, and Evander Holyfield, Don King is more than just boxing. For instance, Don King is an Ambassador of the State of Israel appointed by Shimon Peres. That’s just one of the things that you’ll find out in this video.
In this exclusive interview with Dan Mangru, Boxing Promoter Don King tells how 9/11 has personally impacted him, and how he helped New York by organizing the first event in New York after September 11. King shares how he was moved to donate a new fire truck to New York City and the Fire Department (FDNY), and why he and Felix “Tito” Trinidad went to feed the firefighters, policiemen, and volunteers working in Ground Zero.
Don King discusses with Mangru why America is the greatest nation of the world, why we should not take freedom for granted, why it’s important to understand other cultures, lessons to be learned from 9/11, and how we can have peace in the Middle East.
Tags: aegis award, Anthony Pulieri, award, bert dohmen, best tv news program, carly fiorina, dan mangru, Euro-Pacific, finance, john browne, mangru, news, report, steve forbes, The Mangru Report, tv, wellington, wellington letter
We are proud to announce that The Mangru Report has won the 2010 Aegis Award for Best TV News Program. It is truly an honor, and want to thank our fans first, because without them we would not have a show.
We’d also like to thank all of our production staff, directors, producers, interns, and everyone who makes the show possible. Special thanks go to John Browne, Anthony Pulieri, Al Zucaro, Nicholas Brack, and all of our wonderful panelists who have made the show a great program to watch.
Also a big thanks to our guests such as Carly Fiorina, Steve Forbes, Bert Dohmen, Ron Paul, Jim Rogers, Robert Kiyosaki, Marc Faber, John Bogle, and everyone else who has contributed to the show.
For the complete list of 2010 Aegis Award winners click here.
Watch Steve Forbes, Peter Schiff, & More This Saturday And Sunday On Our Special Freedom Fest 2010 Episode July 26, 2010Posted by Admin in Interviews, Panel Discussion.
Tags: Adrian Day, bank, candidate, Connecticut, crisis, currency, dan mangru, economics, Everbank, finance, Forbes, Frank Trotter, global world, investing, investment, Jack Dzierwa, Lou Petrossi, mangru, peter schiff, report, senate, steve forbes, stocks, strategy, talk, Trading, tv, U.S., wealth
The wait is over. This weekend, The Mangru Report will be airing its highly anticipated Freedom Fest 2010 episode.
You’ll be able to watch Dan Mangru’s exclusive one-on-one interviews with Steve Forbes, Chairman and CEO of Forbes Inc., and Peter Schiff, President of Euro-Pacific Capital and current U.S. Senate Candidate from Connecticut.
We will also feature expert panel commentary from: