Libertarian Investments and Government Interference

As long as governments tax, spend and regulate and the Fed controls the money supply and manipulates interest rates, there will continue to be misallocations in the economy.  As long as this is going on, I can keep writing about the things I write about.

Most investment advisors will focus on individual stocks and make them fit into their clients’ portfolios.  I don’t spend a lot of time analyzing individual companies.  There is certainly nothing wrong with this and some money can be made with this strategy (look at Warren Buffett), but I prefer to look at the overall economy and the investment implications.  In order to understand the economy in our world today, it is impossible to avoid politics.

Government policies and central bank manipulation of money (which is granted this power by government) drive the performance of the economy as a whole.  The central bank causes boom and bust cycles by creating money out of thin air and by artificially influencing interest rates.  Government spending also distorts the economy by redistributing wealth and by misallocating resources that do not satisfy consumer demand.  If a product were desired by the public enough for them to spend money on, then the government should not need to subsidize it or protect it from competition or to favor it in some other way.

Since the government plays such a significant role in our everyday lives with its taxing, spending, and regulating, it has a huge negative effect on the economy.  This has a huge effect on investments.  This is why it is important to understand the consequences of these government policies as it can and will determine how your various investments perform.

Virtually all government spending and regulation causes some kind of a misallocation of resources.  The challenge is to figure out the most likely possibility of how humans will react to these policies and how it will direct money and resources.

As long as these dislocations are taking place, I will always have something to write about.  If we ever achieve a fully libertarian society, then I can write about the brutal history of government and all of the unnecessary misery that it caused people in the past.  This will be to make sure that it never happens again, so that free human beings can prosper.