America’s New Robber Barons

“Permit me to issue and control the money of a nation, and I care not who makes its laws.” ­- Meyer Amschel Rothschild.

To make money in the stock market, you need to use the same tools which the big operators use; that is, capital, and information. The amount of capital which you can lay your hands on may be limited. It is for most people. But the amount of information you can obtain, may be limited only by your desire to get the facts, and your willingness to reject previous misconceptions or misinformation. Then you may begin to understand what is going on in the market.
 
You must first recognize that fundamental changes have been taking place in our capital structure, and in money-ma! king properties. For more than a century, the American tradition had it that to achieve great wealth, you must have the good fortune to strike it rich with a gold mine, to strike oil, or to own your own bank. In the past decade, we have witnessed the amazing phenomena of millionaires, and even billionaires, who owned vast wealth in the form of gold mines, oil wells, or banks, and who suddenly were declaring bankruptcy.

What was happening to the American dream? The answer is that capitalization, or debt structure, was now overcoming capital assets. The cash flow, even from a gold mine, an oil well or bank, was no longer sufficient to pay interest charges, much less to handle the payment of the principal of the debt structure.

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2010-02-15