Bailout Schmailout

It's been awhile since I blogged on financial matters and the markets. Too much has been going on in my life and on Wall Street to make sense of the insanity. And it truly is insane: people are actually taking negative yields on treasury bills. They are paying to have their money invested, more willing to take a small sure loss than a chance at an even bigger possible loss.

And it is all insane according to one popular definition of insanity: doing the same thing over and over and expecting different results. The government continues to try to provide more credit to huge failing companies and cheaper credit to the market, when credit is what got us in trouble in the first place. Our entire economy has become based on credit and derivatives, and this is where it has led us.

I enjoyed reading Robert Kiyosaki's brief article on the bailouts, as well as this blog equating it not with socialism (as many have said) but with fascism. If you want to read whole lot of interesting perspectives on this stuff, from balanced critique to conspiracy theory craziness, go here. Some of it will make you roll your eyes, but some will make you think.

While I understand why the government has taken the steps it has taken because of the general market panic, the fiscal conservative in me is appalled at the amount of national debt we have just taken on. Being much happier as a debt free person, the fact that my government is in debt up to its eyeballs scares the bejeebies out of me. And when we can't pay our teachers what they are worth, can't provide adequate social security funding, and have two presidential candidates spouting about how they will make our lives so much better with their competing tax plans, I shudder to think what will happen when the bill for all of Paulson and Bernanke's efforts shows up in next year's budget. Make no mistake my friends: whomever gets elected, taxes are going up, or inflation is going up, or both. Most likely both.

I don't have much to add to the discussion except this: awhile back I laughed at one columnist who said that the way to beat the market and inflation was to invest in commodities: not silver or gold, but toilet paper and canned goods. That's a pretty extreme position, but with the wild markets, the panicked calls I keep getting from clients, and the nonsense coming out of politician's mouths, it makes me want to go invest in a couple of cases of Charmin.