| October 18, 2014 | | | | | | | |  | | | A Conversation With
Steve Forbes | | | | | - A recap of the week's theme… and sneak peek at next week's...
- This week's top five essay's from our friend, Steve Forbes. We paid him a visit recently in New York City… his featured insights this week are curated for you below...
- Then, a three question conversation between your editor and Steve Forbes on stable money...
| | | | | | | | | | | | "Ultra-Wealth" -- Hidden Inside This Simple Photo?
Only a handful of people in the entire world (about 33) know what this picture represents: And those 33 people also know that what's shown in the simple photo could easily lead to incredibly fast wealth for anyone on the "inside"... Click here to see the details on the "Ultra-Wealth" phenomenon hidden inside this picture. | | | | | | | | | | | Baltimore, Maryland
October 18, 2014 Dear Reader, If you've suffered through this week of reckoning, you're no doubt aware we recently visited our friend, Steve Forbes. We had a few pertinent questions for him after reading his newest book: Money: How the Destruction of the Dollar Threatens the Global Economy -- and What We Can Do About It. Our mission was simple -- get his take money's current impact on mankind. A tall order, but one we think we accomplished. If you're impatient the main point was simple -- money, as it exists today, is weighing investors, savers and consumers down. The details of why and what you should do about it, however, were more nuanced than that. We served you a steady stream of those nuggets, too. Like Forbes' ideal portfolio: - 5-10% in Treasury inflation-protected securities (TIPS)
- 5-10% in cash
- 5-10% in gold coins or bullion
- 70-85% in stocks.
If, however, you missed our reckonings this week, you can catch up below in this weekend's must read section.
In addition, we'd like to share three more questions with you from of our conversation together. Below, you'll also find the questions I've cherry picked for your weekend consumption. Read on…
[Ed. Note: We'll be back monday with our sights on helping you navigate one thing: The increasing likelihood of the Fed launching QE4. Stay tuned, more to come…]
Unless you buy organic, there's a 99% chance this particular food is contaminated with pesticides… toxins that have been linked to birth defects, nerve damage, cancer, Parkinson's disease, autism, and diabetes.
This Week's 5 Must-Reads Featured on Dailyreckoning.com... 1) "Currency wars" are a point of interest in these pages. First, because our newest colleague, Jim Rickards, has written a book by the title. And second, because they're political weapons used to improve exports at the expense of consumers and investors like you -- who have to maneuver around the fluctuating fortunes of whole industries and bouncing value of your money. The latest friend of ours to weigh in on the topic, is Steve Forbes. As you've been reading this week, we paid a visit to Mr. Forbes recently, to discuss his latest book, Money. Click here to read his view on currency devaluations today… their impact of economic growth and your investments… and what you can do about it... 2) Why is the global economy such a mess? Why can't the world's foremost economists and financial thinkers seem to get it right? Simple... They don't understand the most basic element that makes up an economy: money. And as Mr. Forbes explains, it all stems from the incorrect assumptions of a general theory of money. Click here to read more... 3) The markets were on a roller coaster this week. On Tuesday, Steve Forbes outlined 5 reasons he believes stocks were in a slump mid-week... and how the political climate could make stocks head much higher as 2016 approaches. Click here for his list and outlook. 4) What causes individual investors to underperform the market year after year? Volatility? The Fed? In wednesday's latest Daily Reckoning short, Steve Forbes reveals what's sabotaging your investment strategy – and the simple steps you can take to see consistent gains...  5) Then, after you've finished watching Steve's clip, scroll down for this week's final must-read -- a three question snippet of our conversation in New York City. Read on... | | | | | | | | | | | | EXPOSED: Gaping hole found in the tax code... You might be shocked to learn that there's a gaping hole hidden deep in the tax code. And it turns out that just by tucking into that legal blind spot... you can "hide" a potentially huge amount of income, tax-free. The IRS simply can't touch it. CLICK HERE to see how it works -- it's shockingly simple. | | | | | | | | | | | | | | A (Three Question) Conversation Between
Your Editor and Steve Forbes | | | | by Peter Coyne | | | | | | Me: Hi Steve… thanks for sitting down with me. We're here to discuss your new book, Money: How the Destruction of the Dollar Threatens the Global Economy, and What We Can Do About It. Let's start at the beginning -- Money. What is money? You give a three-part definition in your book...
Steve Forbes: Well, money facilitates commerce, buying and selling, which is how we get a higher standard of living, makes investing easier. Money in and of itself is not wealth; it makes it possible to do transactions. It's a claim on products and services, the way a coat check is a claim on a coat in a restaurant. And so it's created ultimately by people in the marketplace, and not by governments. Governments validate, if they do it right, what people do in the marketplace. | "Governments validate, if they do it right, what people do in the marketplace." | Money also, through prices, conveys information about what we value, what consumers don't value, and it also makes it, in that sense, vesting easier. If you know what you're gonna get back in the future, at least in terms of if the investment works out. It's one thing if – vesting, as we know, is risky enough, but if you don't know if you're gonna get a 100 cent dollar, ten cent dollar, 50 cent dollar, you're gonna get less investing in the things that are unseen.
So prices convey information, but money works, because it's not wealth in and of itself, any more than a coat check is wealth in and of itself. It's a claim. Money is based on trust, and so if we undermine trust, it not only undermines commerce, but also what we call social trust. People – when people don't trust money, they cease trusting each other.
Me: What, then, is the best way for money to measure value, incubate trust and augment communication?
Steve Forbes: Keeping money stable. Stable money simply means that money keeps its value. Just like you have 60 minutes in an hour, 12 inches in a foot, imagine what life would be like if our central banks did to clocks what the Federal Reserve does to the dollar. You have 60 minutes an hour one day, 83 minutes the next day, 30 minutes the day after. Life would be chaotic.
Let's say you're baking a cake. It says bake the batter 40 minutes. Now you have to figure out, is that nominal minutes, inflation adjusted minutes? Is it a New York minute, a Baltimore minute, a Mexico minute? It just makes things difficult. So stable money facilitates trade, because when you make a contract, you each get – you know what you're gonna get in return. | "Money is a facilitator of commerce and investing, and also it breaks down barriers between people." | John Locke, whose philosophy undergirded our Constitution and our Declaration of Independence, natural philosophy, noted that when governments arbitrarily change values of money, that means somebody gets cheated. Somebody gets an unjustified windfall. You see it in society as a whole. Keynes – John Maynard Keynes got one thing right when he quoted Lennon as saying that the best way to undermine the social order is to debauch the currency, because it brings all the laws of economics on the side of destruction. Not one person in a million will understand what is going on.
So when you see it, we cite in the book, history shows that societies that have unstable money over time have more crime, have less trust in each other. Workers do poorer – have a poorer chance of getting ahead in countries with weak money, than in countries with stable money. So money is a facilitator of commerce and investing, and also it breaks down barriers between people.
Because I don't have to know you or anyone else, if we have money that we both trust, we can do business with one another. And while you may not love your neighbor, you sure wanna sell to your neighbor, and money makes that easier.
Me: Could you simply explain the relationship between stable money and prices to someone doesn't know about monetary economics? Does stable money mean prices for things don't change?
Forbes: Well, in terms of prices... prices convey information about what we want and what we don't want. So if something goes up in price, with stable money, all that means is we desire more of it. We're willing to part more resources for it. Same thing if prices go down. | "Prices should tend down for existing products, because we learn how to make it better." | And in a normal economy, if anything, prices should tend down for existing products, because we learn how to make it better, we learn how to do better in the learning curve. You see it most dramatically in high technology. If you tried to make a smartphone today, what you could get for a matter of a few dollars, you try to make that 20 years ago, it would probably cost you about three million dollars. That's not deflation, that's productivity and extraordinary innovation. You go to McDonalds, you get a hamburger much cheaper than you will per ounce, than you will, say, at a nice restaurant in New York City, the 21 Club, famous for its hamburger. So when you go to McDonalds, that's not deflation, when you go to the 21 Club, that's not inflation. Prices, again, are supposed to convey information about what we want and what we might not want. So you're gonna get prices presumably going all over the place, and people bring on new products, and so you get improvements, so that's nothing to with inflation or deflation, it just means that our preferences change. Me: Great thanks, Steve... [Back to your editor writing, present day] We highly recommend reading Forbes' book, Money: How the Destruction of the Dollar Threatens the Global Economy -- and What We Can Do About It. It clocks in at an accessible 272 pages. And we've made it available to you at the Laissez Faire bookstore, right here. You'll not only learn how unstable money distorts today's market, but you'll get solutions for positioning your investments. He outlines where he thinks you should place your funds and then lets you decide for yourself by explaining the pros and cons of commodities, currencies, real estate, life insurance, physical gold, gold mining stocks, bonds, international stocks and more. You'll also learn what metrics to evaluate stocks and the general market by. The book is well worth the low price tag. Click here to claim your copy now. Regards, Peter Coyne for The Daily Reckoning P.S. Here's a photo our videographer, Kate Incontrera, snapped of Steve signing my marked up copy of Money. A few minutes later, he gave us all a "Capitalist Tool Bag" with another signed copy. Now I have one for DR headquarters… and one for my home library...  Our friend Steve Forbes signing your editor's copy of Money | | | | | | |  Peter Coyne is the managing editor of The Daily Reckoning. He received his degree in economics and political science from Loyola University Maryland where he studied under the Austrian economist, Tom DiLorenzo. Before joining Agora Financial, he worked in Congress for Dr. Ron Paul until he retired in 2012. | | | | | | | BE SURE TO ADD dr@dailyreckoning.com to your address book.
| | | | | | | | | Additional Articles & Commentary:
Join the conversation! Follow us on social media:
| | | | | | | | | |
© 2014 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. A lthough our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. 
No comments:
Post a Comment
Keep a civil tongue.