American Socialism is not an option

World markets are generally cautious but positive today. Last night “Mad Money” said it is time to take profits. But don’t let that fool you because I looked at their recommendations and they are still down on average by more than 20%. So “Mad Money” is sending a coded message to get ready for a 20% or more advance in the market.

The wild hedge fund dumping has ended and panic covering of shorts has begun on every opportunity when the market declines. Just as investors continue to have buying opportunities even though the market in general seems to have bottomed, hedge funds will have opportunities to cover their shorts. But once the public is aware that the selling panic is over get ready for a buying panic.

So we expect strength and consolidation for a short period and then a buying frenzy with an intermediate peaking in three to six months.

If your stocks get back to October 2007 levels then do as “Mad Money” says and Ka-Khing! You will be very happy. And for those of you who avoided the panic by getting out in advance, you should try to defer profits to next year when they will be much higher. But do not tell anyone because you will be called a braggart.

Here is why the world will descend into a dark age if America allows the indigent and illegal to grow to the point that they constitute an electoral majority and they decide to redistribute the wealth to themselves.

If America ever adopted socialism the world would lose its economic engine and would become like the movie, “The Plant of the Apes.” When taxpaying Americans become the minority we will know the end of the American era has come. Freedom will then be freely voted out in favor of tyranny.

In East Germany under Communism the sad joke that everyone knew was,

“People pretend to work while the government pretends to pay them.”

Here is the equation for computing the pain of unemployment in socialist/communist states where the government redistributes the unemployment by cutting the work week and adding vacation time.

(Unemployment under socialism) = (unemployment under capitalism) plus 100 times (hr/year reduced worker employment under socialism) / (hr/year worker employment under capitalism)

Socialist countries have shorter work weeks and more vacation to share the pain of higher unemployment, and lower productivity and lower real income. It takes away the sting when everyone suffers together.

Capitalism rewards people who create national wealth and jobs and trickles down the wealth. Under capitalism the indigent live better than most people under socialism and communism but they are unhappy and complain because they a jealous of the more wealthy who they see living a better life.

The socialists wait for patents to expire or modify the capitalist's product designs to circumvent patents so that they do not need to be as creative and productive and can still keep within 20 years to 50 yrs of the American economy. America is the engine of the world not because it has the greatest manufacturing capacity but because it has the fastest and greatest engine of innovation. America needs to be able to produce new technology faster than socialist and communist countries can steal it and produce it with their low paid subsistence and slave labor forces.

The world economies now co-exist in three levels.
1) Capitalism/competition/ liberty is the engine driving innovation/ product superiority/ high productivity/ and then sharing the wealth
2) Socialism/copying/ conformity /redistribution of wealth /product redesign/ mediocrity/ share the pain.
3) Communism/overt patent violation/product and commercial piracy/ group think / envy / punish and kill non-conforming.

Socialism in America is not an option! If the free market capitalist engine of the world economy becomes a socialist state under the new administration then the world will decline to the level of the world in the movie, “Planet of the Apes” with the Socialists the sympathetic Chimpanzees and the Communists the tyrant Gorillas (no free men).

The Roman Empire was once the world’s greatest economic engine. The Roman’s blamed their decline and fall on an illegal tribe of indigent immigrants which they referred to as the “Invasion of the Vandals.” Rome permitted it because initially the barbarians reinforced their army. But eventually the barbarians wanted to share, then to take, and finally to overthrow and vandalize. The actions of the Vandal tribe now define the word vandalism. When the Roman Empire fell the world’s economic engine was destroyed and the world went into the dark ages.