American Dream Has Changed. Have You?
by Bill Sardi: Modern
Medicine Needs To Abandon Many Ineffective Therapies; Example†Ė
$25†Billion of Heart Drugs Donít Prevent Cardiovascular Death!
If this sounds
like Iím re-beating a drum Iíve already played, it is. Iíve learned
Americans need to hear a message a few times over before it begins
to sink in.
The dream of
coming to America Ė the land of freedom Ė to live in your own home,
to send your kids to school to get a college education, to have
opportunity that does not exist elsewhere, for kids to live better
than their parents Ė that WAS the American dream. The American dream
is now living in the past tense.
buying a home in the suburbs is purchasing a depreciating asset.
Yes, the interest rate on home loans is lower than ever, but if
you need to move any time in the first 15 years after buying a home
and prices continue to decline, which they will, you will surely
be left holding a half-empty bag.
There is a
shadow inventory of 4 million homes that will be dumped onto the
market as foreclosures in the next four years. Greater supply and
stagnant demand = lower home values. Better to buy agricultural
property that is rising in value. Farms are rising
in value on land that was once planned for housing tracts. The
estate market isnít going to return to normalcy till 2023.
young person taking out a student
loan is not likely to find a job to pay it back. Today a college
education may not be worth the money and effort put into obtaining
a paper diploma. You didnít notice that billionaires like Larry
Ellison, Bill Gates and Steve Jobs never finished college?
are especially lost in a time lag, still believing the American
dream exists. That is the very reason they came to America.
continues to outsource its labor overseas and automates many other
jobs out of existence (look at what email did to the post office),
the conclusion is that jobs may not be more than low-paying and
part-time in the service industry as manufacturing jobs are in decline.
Your children can look forward to a career as a part-time massage
therapist, big-box store greeter or street sandwich-board advertiser.
we learn from the wealthy?
So how do Americans
escape serfdom? Surveys show wealthy
Americans made most of their money by starting companies that
sold or by having investments that produced capital gains or stock
dividends. If you want to escape the inevitable serfdom that most
Americans face today, you had better find a way to enter the "investment
Now that does
not mean day-trading on Wall Street. That is gambling. Nor does
it mean investing in Wall Street at all as the stock markets are
so manipulated today that it is nearly impossible for an individual
investor to profiteer in a rigged market.
Are you holding
a small nest egg in the bank? It is eroding in value by ~10% a year
(the real rate of inflation according to ShadowStats.com). Recall
that banks are offering less than 1% interest on your banked money.
So in five years your $50,000 savings account will have the purchasing
power of ~$25,000.
it? Go to Tomís
Inflation Calculator, click on options and select the ShadowStats.com
estimated rate of inflation, then type in the amount you had in
the bank in letís say 2007 versus today (2012). Using that calculator,
you lost ~$30,000 in the past 5 years. In the next five years you
will lose even more.
Maybe you intend
to tap into your tax-free 401k account when you retire. But did
you read where the agents for these 401k plans have swiped about
of your money in management fees. Add that to the 35% decline
in their value over the past five years. Yes, some of those losses
were regained, but you are back where you started five years ago
and that 10% inflation calculator is running.
Do you even
think your 401k plan will be there when you retire? Itís likely
to be confiscated in some manner and merged with the Social Security
fund to make up for shortfalls in that government retirement plan.
plan you have, it must make 7-10% earnings annually to keep up with
inflation. The nationís largest pension plan, CALPERS, just announced
it could only
achieve a 1% return on its investment. It needs a 7% return
to make good on its promise to provide pension checks to its contributors.
You should plan on pension checks that are ~25% less than promised.
gained and lost wealth in real estate
bought your home decades ago, and havenít taken out a second mortgage,
you have likely lost a great deal of wealth in the past five years.
It was author
and real estate entrepreneur Robert Kiyosaki who over a decade ago
wrote a best-selling book entitled RICH DAD, POOR DAD, which essentially
said Americans will just make just enough money from their primary
job to pay their bills and gain wealth by buying homes with a down
payment and letting renters make the monthly mortgage payments.
Unfortunately, those days are over. Americans have lost
about 40% of their wealth with the collapse of the real estate
So now what?
So have I led
you to a dead end? Real estate, stocks, 401k plans, even savings
plans are all off the table.
So Iím exasperated
when I present the idea of entering "the investment class"
to my financially struggling friends and associates by suggesting
they save a few thousand dollars and buy stock in a private venture,
for example, like a company that is just now beginning to produce
and deliver a revolutionary type of power cable, or another private
company that is looking to raise money for a new and novel prescription
look at me like they are in a complete state of paralysis, like
they have tetanus toxin. They are hemorrhaging money from their
savings accounts, watching their home values tumble further than
they already have and canít imagine their 401k plan is being pilfered
by fund managers, but elect to stand on the proverbial railroad
tracks and wait for the next train to run them over.
Some guy once
said: tell you the first time how someone is defrauding you and
"shame on them" (the defrauder). Tell you a second time,
and "shame on you."
Most of my
friends and associates are so un-savvy about investing their own
money they canít see an opportunity when it is presented to them.
That is just the way the elitist bankers want it Ė a naïve
consumer class that has plenty of ideas on how to spend money but
no idea how to multiply it. Enter modern serfdom.
bank robber of all time: inflation
chairman of the Federal Reserve Board, is intentionally destroying
the savings class via inflation while allowing banks to offer dividends
to their stock holders. This is unconscionable. Any real President
would have taken bold action to put an immediate stop to this.
is making it difficult for the little guy to hold onto his money
and forcing savers to put their money at risk on the stock market
to help his buddies prop up their casinos on Wall Street. If Americans
elect to leave their saved money in the bank and not buy stocks,
they are capitalizing the banks at a personal loss.
hold about $10 trillion in savings accounts that lose about 9% of
their purchasing power annually, or aggregately about -$900 billion
a year, and Americans stand and take this loss without a whimper
of protest. If I told Americans they face a $900 billion tax increase
they would rebel. Inflation is the politically acceptable way of
fleecing the public of even the small amount of wealth they have
This is because
the real rate of inflation (~10%) is not publicized and the numerical
value of your savings account appears about the same. You canít
easily visualize inflation as the greatest bank robber of all time.
be working for a living in the future?
what to do, many Americans find ways to qualify for the public dole.
There are now more
Americans joining disability than the number of Americans finding
jobs. However, donít count on a work-related backache making
for your early retirement. The Social Security Disability Insurance
program is set to soon become
the first big federal benefit program to run out of cash.
dream has morphed into a future where your family will likely receive
Food Stamps, you will live in government-subsidized housing, you
will be forced to use public transportation, your kids will be fed
a government-approved breakfast and lunch at a school cafeteria
and largely raised by surrogate parents, and you will be working
for the government part time. About 50% of American families are
already on the public dole.
James H. "Smokey"
Shott, writing in the Bluefield (WV) Daily Telegraph, in an article
Country Tis Of Thee; Land Of Dependency," cites an April
CNN Money report that more than 148 million Americans lived in a
household that received a government check. How did early Americans
traveling in prairie schooners ever make it across the country without
a government subsidy?
What is the
alternative? I am trying to inform my friends maybe there will not
be near-full employment in the future. Look how the wealthy escaped
serfdom. Maybe in the future Americans wonít work for a living,
they will have to do what the wealthy did, which was build and sell
a company or invest and derive dividends and capital gains by holding
or selling stock. In my mind it is the only way out of the mess
that the American economy has become.
difference between a gamble and an investment
I keep emphasizing
that any investment opportunity must demonstrate a value-added proposition,
otherwise it is a gamble, not an investment. For example, if you
take resin and carbon and process it through a machine that turns
it into a power cable, that is value added. If you fabricate a spectacle
lens in a novel way, that is value added. We have become so used
to the chicanery of speculative profits on Wall Street that we canít
discern gambling from an investment any more.
the right venture
a private venture that is not in its early start-up phase and is
ready to go to market, where financial returns will be sooner than
later. If it has already sold a few widgets, all the better. Search
for private ventures that others canít copy easily. Patents may
or may not be required (example: McDonaldís doesnít own any patents,
it just makes hamburgers, fast.) Try not to enter a flooded market
where there are already too many brands or choices. Look for an
inventor with management skills who doesnít expect a company car,
where chandeliers arenít hung in the offices, where the income taken
by founders of the company is limited, and where a handsome profit
margin makes up for the level of risk.
If any of this
made sense to you, you are ahead of the game. Choose serfdom or
freedom. Pool the money of your extended family together if you
have to and learn to invest it, outside of the poisoned stock markets
and pretend pension plans.
him mail] is a frequent writer on health and political
topics. His health writings can be found at www.naturalhealthlibrarian.com.
latest book is Downsizing
© 2012 Bill Sardi Word of Knowledge Agency, San Dimas, California.
This article has been written exclusively for www.LewRockwell.com
and other parties who wish to refer to it should link rather than
post at other URLs.†
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