More Feedback Than Hendrix At Woodstock
Wow! The last two newsletters set off an avalanche of emails – a few were negative, but most were positive, and many were charged with emotion. I know it's hard to be objective about political issues, especially in the heat of a battle as intense as this one, but I think that most of you understand that I'm trying to shed light, not heat, on the subject. In a political world where the lines are so starkly drawn, where too often positions are based on ideology instead of fact, there are too few non-partisan voices being heard. These days, the truth, along with common sense, is often lost somewhere in the middle. As a person who is concerned with markets and economics, I want to view the candidates not in terms of partisanship, but economic reality. I'm much more concerned with bulls and bears than I am with elephants and donkeys.
Here are some of the highlights from the emails I've received from you:
Q) Hi Ed, this is from your article: "What this country needs is a return to fiscal sanity, and a determination that we will spend no more than we take in, yet I haven't heard any of the remaining contenders address this issue in a convincing manner."
There is one contender that would fix the problem, but unfortunately he will probably not be elected because not enough people know about him. Congressman Ron Paul works tirelessly for limited constitutional government, low taxes, free markets and a return to sound monetary policies.
Ed Ponsi) Personally, I think you're right, but unfortunately, Dr. Paul has about as much chance of winning the Presidency as Ralph Nader, and therefore I didn't include him among the contenders. I'd love to see him as the Treasury Secretary, or better yet the Fed Chairman. Here's a great quote from Dr. Paul:
In the House of Representatives, September 10, 2002
"Mr. Speaker, I rise to introduce legislation to restore financial stability to America's economy by abolishing the Federal Reserve. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial "boom" followed by a recession or depression when the Fed-created bubble bursts."
Imagine that, a Fed Chairman who favors abolishing the Fed - now that would be interesting!
Q) Ed, I would be interested in your opinion on how this country might be able to reduce the deficit and strengthen the dollar. To me - it would seem that we need a leader who will help the country move in the direction to drastically reduce the costs of the war, reduce subsidies to companies, close tax loopholes, and start raising interest rates in this nation.
Ed Ponsi) Thank you for your question, and for your perceptive comments. Perhaps the best single thing that could be done to save the U.S. Dollar would be to prevent the Fed from constantly adding to the money supply (see the response to the question above). All of the things you mentioned would ease the damage to the currency and improve the bottom line, but it would be difficult to convince voters to embrace this platform. Voters aren't going to support a candidate who preaches that interest rates should be higher – even if it is the right thing to do in the long run, it would cause too much pain in the short term. Elections are won by making constituents happy in the short term, despite the long-term ramifications, which will be somebody else's set of problems by the time the candidate leaves office. So even though you may be right on target, it would be difficult, if not impossible, to sell this "No Pain, No Gain" plan to the public.
Q) Hey Ed, thanks for all the wonderful instruction. After reading the newsletter I need to point out a correction. Obama's plan does not hire government employees to build bridges; that work is contracted out to the private sector.
Ed Ponsi) Thanks for your feedback, I appreciate your opinion. You are probably right about the hiring process, though it was not specified in the plan. But even if you are correct, the contracts are still funded by taxpayer dollars, so those jobs are not truly created by the private sector.
Q) Ed, thanks for continuously addressing financial concerns we often are not consciously aware of. Could you please give us some grasp of the national debt?
Ed Ponsi) Thank you for your kind comment. Here are some quick facts about the national debt, courtesy of the U.S. National Debt Clock website:
"The National Debt is the total amount of money owed by the government; the federal budget deficit is the yearly amount by which spending exceeds revenue. Add up all the deficits (and subtract those few budget surpluses we've had) for the past 200+ years and you'll get the current National Debt."
"The Outstanding Public Debt as of 09 March 2008 at 12:00 PM GMT is: $9,400,242,136,815.The estimated population of the United States is 303,593,289, so each citizen's share of this debt is $30,963.27. The National Debt has continued to increase an average of $1.70 billion per day since September 29, 2006." (Source: http://brillig.com/debt_clock/).
Q) Hi Ed, Good article and look forward to many more. This situation isn't new but maybe it's getting close to crunch time. If the crunch is delayed too long, it may be even worse than the Great Depression. What is needed is for a highly charismatic politician to stand head and shoulders above the rest and tell the truth. Are Americans so selfish they won't band together, become fiscally responsible and be an example to the rest of the world? From where I look at things from Australia, the US has the best and the worst to offer. Let's hope the best comes to the surface very quickly like cream on the milk.
Ed Ponsi) Thank you for your comments, I hope so too.
Q) Another Fox review? Please, we have enough trash flooding the media with conservative bias. Why don't you add to the information supply instead of the heap of hatred we're swimming in. I may not be in accord with any of the candidates, but I would like to hear about all of the candidate's important plans including the Republican economic blueprints. Start a revolution in spreading useful information instead of brainless bias.
Ed Ponsi) It's funny, my comments would've been exactly the same if I had appeared on CNN or CNBC...or NPR for that matter. It seems that some people just lose it when they hear the word Fox. I guess there are those among us who feel that everyone has a partisan agenda - either because they do or because the media draws it that way - and that nobody is really interested in facts. What a shame.
So, when I blamed the deficit on the current Republican administration, and when I quoted Alan Greenspan as saying that the Republicans had sacrificed principle for power and ended up with neither - that is your idea of conservative bias? Please read my article again, and then read the email you wrote to me, and then tell me - which one of us is spreading useful information, and which one of us is suffering from what you refer to as "brainless bias"?
Q1) When talking about fixing Obama's economic plan, please also refer to how it compares to McCain's plan of continuing the war in Iraq for many years to come. I would rather have my taxes spent on improving the American work force than on continuing the war.
Q2) My question to you is: What does Barack Obama offer to the financial world? Be fair; give your opinion on this candidate since he may be our next president.
Ed Ponsi) Thank you both for your emails, I appreciate your opinions. Please note that I did review both plans, and didn't cut any slack to either side. Why would I? The point is not to convince anyone to vote for a particular candidate, but to better understand how the main contenders plan to fix the U.S. economy. I hope that together we've accomplished this in some small way. Next week, back to the charts!
Thank You Washington DC! I'd like to thank to Chris Koomey, Scott Trello, and the rest of the gang at Online Trading Academy Washington DC for last week's awesome book signing event. Thanks for making it great!
Have a question about Forex trading? Send an email to eponsi@tradingacademy.com and we may use your question in an upcoming newsletter. Until next time, best of luck to you in trading.
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Ed Ponsi is a globally recognized name as a lecturer and teacher and is the former Chief Trading Instructor for Forex Capital Markets. An experienced professional trader and money manager, Ed has advised hedge funds, institutional traders, and individuals of all levels of skill and experience. Ed has appeared on CNBC, CNN International and TheStreet.com, and has recently written his first book for Wiley Finance, "Forex Patterns and Probabilities" (which you can purchase through 