I come from a long line of Swiss descendants. Among my ancestors are also bankers. However, I have never been a friend of numbers. For me, money is simply a necessity. Fortunately, I have always had just enough of it, so that I never really had to worry about paying my bills nor how to invest.
Nevertheless, now that I am retired with little income, once in a while I ask myself, how much longer I can survive on the money in my bank account. Occasionally, my banker calls me up suggesting a better way of investing than just having it sit in a savings account. But each time I meet with him and listen to his proposals, we end up with the same solution: keep it where it is. Whenever I inquire more deeply into his advice, as to where exactly my money would go or how it would be used, he has to admit that he does not know. The “good” assets, which supposedly provide income, are always a mix of different stocks and bonds with a big portion containing papers from the war, drug or food industry, insurance companies or banks. None of which I want to support.
One day I happened to read an article on the Internet by Dr. Ron Paul, an author, physician, and former politician. He highly recommended reading a book written by Porter Stansberry entitled, America 2020, The Survival Blueprint. Porter Stansberry is the founder of Stansberry Research, one of the largest research organizations in the financial sector in America.
As a member of this world family, I figure I can no longer look away and pretend all is good. Even though finance is not my favorite topic, I decided to get more informed and therefore, bought Stansberry’s book.
Stansberry paints a pretty dark picture about America’s future and uses straightforward words. I would like to quote a few parts of it.
“We’ve reached the point where we must fix what lies at the heart of America’s decline. Our political leaders, our business leaders, and our cultural leaders have made a series of catastrophic choices… We cannot rely on them to fix what has been broken.”
He goes on:
“We have lost our sense of honor, humility, and the dedication to personal responsibility that, for more than 200 years, made our country the greatest hope for mankind. We have become a country of people who believe their well-being is someone else’s responsibility…
…The corruption of America isn’t happening in one part of our country or in one type of institution. It is happening across the landscape of our society, in almost every institution. …It’s a kind of moral decay…a kind of greed…a kind of desperate grasp for power…And it’s destroying our nation.”
He continues:
“…The ethos of my fellow Americans seems to have changed from one of personal integrity and responsibility to “getting yours” – the all-out attempt, by any means possible, to get the most amount of benefits with the least amount of work.
You can see this in everything from the lowering of school standards to the widespread use of performance-enhancing drugs in professional, college, and high school sports. Cheating has become a way of life in America.”
It looks to me like this “way of life” is spreading to the rest of the world. I see the same symptoms appear in Switzerland as well!
Porter Stansberry then goes on to explain why he thinks this all happened. In the majority of his book, he offers strategies on how to protect you from a personal financial breakdown in this corrupt world with an inevitable collapse of the monetary system.
With the purchase of the book, he includes a monthly newsletter with tips on how to invest money with a lot of financial background information. Since the time I attended my economic classes in college, I have hardly read this type of material. I have to admit that while reading such matter, my head spins.
I have not finished reading his book. Not because it isn’t worth it, as I think it is well worth reading, but because it can become too complicated for someone like me who does not have the knowledge of an investment banker. Also, the book is about the American market and system, which being Swiss, I am not familiar with.
It’s a whole other story with a terminology more foreign to me than the usual New Age literature I indulge in. My banker ancestors would be proud of me, though. It is indeed a challenge, even if I have only read parts of it. I keep telling myself that maybe I can learn something. It keeps me informed with a frequency of this world I usually try to avoid even though I know that it exists.
When I began to read the latest Issue of the newsletter, it started like a thriller.
“Joan Clark jerked awake… The phone was ringing in the middle of the night. Again…”
With this, he starts to describe the true story of how an insurance company was deliberately attacked by a gang of hedge-fund managers and other financial people in order to manipulate the stock market to make profits for themselves. It described how they wrote negative and misleading articles. Then they spread false rumors and hired henchmen to deploy a range of dirty tricks, like calling the owner’s cancer-stricken assistant in the middle of the night.
This episode began in 2002 and apparently went on for several years. The company survived its harassment but had to file suit. The lawsuit had mixed results. The judges dismissed many of the defendants due to technicalities. None of the hedge fund-managers were punished for the attack or had to surrender any gains made from their profits. But they got the message, and they left the people and the company alone from then on. Only the guy who wrote the 64 negative reports was held accountable for the assault and consequently was fired. After all, it turned out to be a true thriller!
The article goes on to give advice on how to invest your money. The story about the insurance company, which touched me deeply, was just used as a good example on how to survive a “Bear Raid,” which is what he called it.
I have heard of goings-on like this. To read it so bluntly by a financial advisor made me stop and think. The level people in the money business are operating on, became so obvious. I went back to the book to look for more information and for what solutions Porter comes up with. He does admit, “It’s a lot to take in. It can all be very confusing.”
He then sums it up, “…what’s truly important for growing wealth in stocks is the accumulation of elite, dividend-paying businesses purchased at reasonable prices.”
He goes on to explain what the traits of elite businesses are, “…and here’s something you don’t often hear: Most of the truly elite businesses sell habit-forming, or even addictive, products.”
He names the corporations that sell cigarettes, alcohol, sodas (sugar-and caffeine-deliverers), sweets in general (“…people love a little sugar rush. It’s habit-forming, even addictive”, he says.) He continues with naming drug and fast food companies since these foods are loaded with “…fat, sugar and chemicals that make people want more.”
Porter goes on explaining why these companies could sustain huge annual gains for decades. “When people form a habit around a product, it goes a long way toward ensuring repeat business. People get used to certain brands, and they grow resistant to switching.”
Stansberry makes it also clear why these companies have an interest in investing in China and India and says, “They (people of these countries) will want to consume more brand sodas, cigarettes, beer, liquor and processed foods…”
And he states, “Owning elite global businesses that serve those growing markets makes a lot of sense.”
I have read enough. I knew it all along. Again, I end up with the solution to leave things as they are. And so, my money will sit a little while longer in my local bank account.
I will close with a proverb from the Native American People:
‘Only when the last tree has been cut down, the last river poisoned and the last fish been caught will we realize we cannot eat money.’
P.S: I would like to write a footnote in the form of a question to Mr. Porter Stansberry.
If it makes a lot of sense to own elite global businesses (even if it is only a small fraction of one) to serve those growing markets, whom do you really serve?
The “personal integrity and sense of honor, humility, and the dedication to personal responsibility?”
Or, the “corruption, moral decay, the greed, grasp for power and the “getting yours” – the all-out attempt, by any means possible, to get the most amount of benefits with the least amount of work?”
The choice is yours!