The Very Rich are Hurting

The economy is tanking from the top down.  We may be headed to a “ZIRP” similar to what japan did, the stock market gains aren’t holding at all.  Google ZIRP (zero interest rate policy) for more info and the debate.  I think many average people haven’t really felt the effects of this downturn but you can bet that people at the top are getting nervous.  Here are a couple of stories and they all have one thing in common…the very rich are losing millions. 

  • The Carlyle group created a hedge fund that is collapsing…now the Carlyle Group itself is not in trouble with the likes of Jim Baker, Bush SR. and a number of Saudi’s but at least one arm of this group is hurting. 
  • A new football league was ready to begin up until a few weeks ago…until one of the guys bank rolling it lost millions.  Now, they are pulling the league this year.
  • Joseph Lewis wants some of his money back that he lost with Bear Stearns collapse.  This huge company collapsed basically overnight. 
  • More on Bear Stearns:  this is a personal story but a friend of mine actually bought 100K worth about 2 weeks ago…saw it’s worth drop to 80K.  At that time their CEO was on TV saying they were fine and had plenty of money…my friend decided to take the loss and sell immediately and 24 hours that same CEO was telling everyone they were bankrupt.  so instead of losing basically everything my friend salvaged the 80K.  What is interesting or scary is that everyone in his office was telling him not to sell. 
  • This next one is pure speculation by me.  The Denver Broncos are making budget cuts and letting people go.  Now, the NFL itself is very popular and they have a salary cap so why would a team need to do this?  Could it possibly be because Pat Bowlen (Denver’s owner) has lost millions in investments over the past month? 

 Somewhat related…I ran across an article by Ron Paul back in 2006.  It’s pretty long and talks a lot about Gold..which many are turning to.  He has a lot of interesting points (rather you agree or not) but a few of them:

  • the buying of gold is really a bet against the currency…not really an investment
  • inflation hurts the poor and the only way to pay for many social programs is to print more money…leading to inflation
  • there should have been a “war tax” to pay for Iraq…by doing this you really make it clear to the people that you have to actually pay for the war…instead they just printed more money so the emotion of a war tax is gone.  If we had been paying a war tax the last 5 years, I’m sure this thing would be over by now. 

Anyways, I think it’s interesting whether you agree or not.  It’s not often we see a congressman go into this much detail on the economy. 

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2 responses to “The Very Rich are Hurting

  1. Boom times are like old houses – last one out gets hurt.

  2. The wealthy ones at the top are not going to lose much if any they are ripping off all those below them.

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