Dear Mr. Berko:
My broker has been telling me to sell all my stocks and buy gold. He believes the U.S. is on the path to anarchy, and my only protection is to move my $400,000 portfolio into gold ingots, coins or bars – not gold shares or gold stocks. He cites two economists (Cloward and Piven) who predict the downfall of capitalism as we know it and, therefore, the stock market. He is passionate about this and believes these economists are brilliant thinkers. I’ve sent you our income portfolio and hope you will look at it and give us your thoughts. I know six of this broker’s clients who own nothing but gold, and they are doing very well. My wife and I are frightened the economy is in a rut, and we need your help in deciding.
G.K., Destin, Fla.
Dear G.K.:
Richard Cloward and Frances Piven are not economists; they’re Marxist sociologists, though there’s not much difference between the two disciplines, both of which observe human behavior in groups.
In my opinion, neither discipline is worth a wooden nickel. I don’t know of a single sociologist who has won a Noble Prize. And while many economists have won the prize, one must wonder if a Nobel in economics is worth a damn, considering the state of the world economy. “The purpose of economics” someone once said, “is to make astrologers look good.” And they’re certainly doing a yeoman’s job of that.
Cloward and Piven are academic yahoos from Columbia University (where else?), who years ago, when the radical liberalism movement was popular, espoused a strategy to collapse capitalism in the U.S. by bankrupting the economy. They concluded that the number of Americans receiving welfare assistance (food stamps, Aid to Dependent Children, housing assistance, etc.) only represents between 6 percent and 8 percent of all those who are eligible.
They reasoned that if large numbers of people overloaded the system by demanding their entitlements that government would collapse, creating a severe social, financial and political crisis.
This thesis is currently having an oblique effect on the performance of the stock market, as well as the decisions of millions of investors ... though I doubt that one in 100,000 have ever heard of those two clowns.
Their long-term goal involves numerous Trojan horse movements (like ACORN) whose public faces ostensibly provides numerous sources of assistance to the poor, the uneducated and unskilled. But the hidden purpose is to mobilize these folks “en masse” and make aggressive demands on our government agencies way beyond their capacities to function.
According to Cloward and Piven, this tsunami of demands will consume public budgets and force the bureaucracy into gridlock. Eventually, the ensuing turmoil would collapse our government and provide ideal conditions for radical change.
Yes, we are in a rut, but while the worst is over, that doesn’t mean the good times are coming back. You have many good stocks (I’ve suggested a few changes) and don’t have much to worry about. Yes, the market may fall to the 8,500 level in the next 12 months, but I will give you my solemn oath that your 28 dividend issues will maintain their payouts. So even if the market falls another 2,000 points, you will be sitting pretty as a picture with a good income stream. But get rid of that donkey broker and find a money manager who has common sense instead of common stupidity.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate Web site at www.creators.com.
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