finance

As many of you (well, the 14 or so of you who read regularly, anyway) know, I've been writing about the dollar bubble for several months. My theory is that the value of the dollar itself is a bubble like the housing bubble and the tech bubble. Like all bubbles, this one will pop or be deflated, and it will be ugly indeed. Imagine a world where everything cost a lot more.

Oil and gold surge, greenback loses punch

China cuts off USA's line of credit.

Treasury yields skyrocket.

The Greater Depression™ has not even begun yet, but it will -- soon.

Don't say you weren't warned about the inevitable bursting of the dollar bubble. I've been shouting it from the rooftops for a couple of years now: The value of the U.S. dollar has been based on nothing more than smoke and mirrors. If you thought the bursting of the tech bubble was bad, if you lost a bundle in the real estate bubble, well, let me just tell you that you ain't seen shit.

Are bankers complete morons?

You may have heard that President Obama will let 14 honchos from the credit card industry know that there is a new sheriff in town. Good. The credit card industry is nothing but a huge scam preying on people's lack of self-control or -- worse -- their lack of money. That's why I have always paid my balance in full every month; never borrowed a dime from the Plastic Loan Sharks, despite their incessant entreaties. They're scum.

"Toxic Asset?" Is that like a healthy cigarette?

An asexual prostitute? A welcome bullet in the gut? WTF?

If it's toxic, it's a liability, OK? Isn't that completely obvious to everyone, or am I the only one who sees this absurd meme for what it is? An asset that is "toxic" belongs on the "Liability" side of the "T," and nobody should be paying anything for it, least of all taxpayers.

[This is going to be a little rushed because I have to bang it out on my lunch break. Forgive typos, poor syntax and the like...]

Not to beat a dead horse, but it's like I told you: the economic stimulus thing is dead in the water because it can't be funded. It can't be funded because nobody wants to face the underlying problems of fraud, waste, and piss-poor accounting that have led us here.

The ship may have already sailed, but the ongoing credit crisis could have been very easily solved. Overly complicated financial transactions got us into this mess, and a simple one might have gotten us out. This is so simple that there must be something wrong with it.

*sigh*

Before expounding upon the current dollar bubble, let me wax philosophical on herds of monkeys...

When will people evolve? Biologists classify us as monkeys, and we are monkey-like, but you'd think we would have evolved beyond "Monkey see, monkey do," by now, especially where money and investments are concerned.

Bubbles are caused by herd-like behavior, and apparently monkeys move in herds. Everybody buys tulips, tech stocks, houses, or whatever, and the prices of those things skyrocket until people look down and get scared (or see the opportunity to take profits), shortly after which point a mad rush for the exits ensues. At that point, the bubble pops.

People ask me all the time, "Charlie,

do good investments exist in this time of economic collapse?"

The most honest answer might be, "Guns and ammo," but that's not usually what they want to hear. There are actually a few decent equities out there -- and equities are the only investment vehicle that makes any sense whatsoever right now since real assets (equipment, real estate, patents, logistical systems) underlie them. When you buy stock, you're buying a stake in the company. If the company survives -- it doesn't even have to thrive in this environment -- it it outlasts the bad times, you'll do OK. That's the basic premise.

As I have been so incredibly prescient in my financial and economic predictions, it would be ethically repugnant for me to withhold advice on the long-term opportunities that will soon be available in our glorious free markets. Bear in mind that I am not a certified expert of any kind, just a dude who is more often than not (by no means always) right. If you take this advice and lose money, it's on you; do your own research. The following is just one opinion.

David Leonhardt of The New York Times disappointed me tremendously this week.

I'm not sure why he would make such a clumsy attempt to defend one of the most odious pieces of legislation in the past ten years (and that's saying a lot), but he did. It's hard to believe that an erudite fellow like Mr. Leonhardt could be so glaringly ignorant, but I don't look good in tinfoil so I'll just give him the benefit of the doubt and say he's not willfully ignorant in defending the Gramm-Leach-Bliley Act.

Leonhardt backs up his claim that the Gramm-Leach-Bliley is not culpable in this mess by making an egregious sin of omission, to wit: