Minimum Wage In A Stacked System

Though I once had a conservative NFTRH subscriber cancel because I made fun of Sarah Palin in a blog post, and later had some clown with a blog portray me as a right wing gold bug lunatic, I am happily apolitical.  I am, and always have been, independent with not a whole lot of respect for either major US political party.

I get (opted in) emails from the White House, one of which announced that Senate Republicans blocked a vote to raise the minimum wage.  Last weekend NFTRH 288 paused for an interlude among its 33 pages of analysis as follows.  The parts relevant to the Minimum Wage debate are in bold…

Inflationary ‘Zero Interest Rate Policy’ (ZIRP) remains firm and certain assets and services are rising in price/cost and regular people do not stand much of a chance. Savers do not stand a chance. Asset speculators stand a chance, and those directly benefiting from policy, like higher ups at major financial institutions have it in the bag.

What do regular people have? Among other official initiatives, they may have much needed government policy to increase the minimum wage. After all, people depending on minimum wages are not part of the investor class. It is only right that they somehow be adjusted back into bare minimum living standards, if you can call it that.

But this is a good example of how political people fight over the symptoms as opposed to the causes. ZIRP took aim at the middle and lower classes and took away something that had always been prudent and valued; namely, saving. The inflation gun has been pointed at those least able to cope in a system geared toward asset appreciation and theoretically at least, economic stimulation. For everyone to potentially benefit, we need a real as opposed to monetarily warmed-over economy that is growing as a result of savings and productive investment of capital.

So you can see why people think with their hearts. Gold bugs are honest (when they are not bullshitting themselves by chasing too much faulty analysis) people galled by dishonesty in the system. So too I believe, are many of those bearish on stock markets that have been propped by policy as opposed to relatively organic productivity.

It is no secret that your letter writer holds both of the above noted biases and it has not been a good time to be that guy over the last year or three. Yet the thing I work hardest on is to keep my honest views in a box while managing the markets as needed. If valuations are propped by immoral policy (my bias) they are still the valuations that most people working within a conventional structure use to analytically gauge.

A bearish view of the big structure within which stocks exist does not mean a bearish view of stocks or more to the point, many of the companies those stocks reflect. There are also great things going on within the economy and some great companies promoting those things. As for monetary policy, my bias is my bias and is not likely to change until policy changes for the better. But with the majority still arguing over symptoms rather than causes, change does not appear likely any time soon.

So the White House email asks that recipients share the graphics below with family and friends.  I’ll do the White House one better and share it with you, my eFriends on the internet.  The Minimum Wage debate is a symptom, not a cause and it should not even have to be.  But there are much bigger fish to fry than people trying to make ends meet in a system stacked for the have’s or should I say the most strategically well positioned have’s?

Click graphic for full view