TAKING STOCK: The more things change ...

Dear Mr. Berko:

Our pastor believes that the stock market and the economy is going to crash this year and quotes Scripture that he says told him four years ago exactly what is happening today. He's telling us and the other members of the church that problems with the national debt, our banks, high unemployment, and the problems in Europe and the Middle East will cause our financial system to collapse. He says that we should sell our stocks and assets and put the money in gold.

My wife is a strong believer in our pastor, and she's very frightened. I've been out of work for 19 months, and I'm disgusted with our government, our politics, Wall Street big shots, high gas prices, lousy schools and crooked banks. And I see things getting worse too, and I don't see much in the future for our children and me.

Our home and cars are paid for; we have very little debt, and though I will soon lose my unemployment, we're better off than most because I got a good inheritance of stocks from my father in October 2009. But my wife wants to sell everything because our pastor is so convincing and because she also doesn't see any good future for us, our kids or our country.

I'm beginning to agree. Please advise, and please tell me what your preacher tells you.

DS, Durham, N.C.

Dear DS:

I think I'm qualified to be my own preacher for matters both spiritual and corporeal. And while it works for me, it may not work for lots of other good folks. I have a problem with a preacher telling me to give money to God but to first send it to his address.

I do, however, have a preacher to whom I defer. His name is Leotis Elkton, and I met him in the early 1960s when he was a preacher at the Loon Lake, Mississippi, Missionary Baptist Church. He became a Buddhist in September 2001 and is one of the financial advisers to a Hollywood celebrity who is also of the Buddhist persuasion. Leotis claims to be a linear descendant of the Maid of Orleans, a French heroine who was burned at the stake in 1431, and the great-granddaughter (many generations removed) of Noah.

I always benefit from our infrequent discussions (infrequent because he gets too "ooey-gooey"). The wonderful fusion of his Christian and Buddhist teachings gives him a clear, uncluttered view of reality that easily cuts through all the tommyrot. After we talked about your concerns and other topics, he emailed a Time magazine article, written by Harvard Economist Richard Woodbury and others, and suggested that I send it to you.

According to the article: "If America's economic landscape seems suddenly alien and hostile to many citizens, there is good reason: they have never seen anything like it. Nothing in memory has prepared consumers for such turbulent, epochal change, the sort of upheaval that happens once in 50 years. That may explain why so many voter polls, taken as the economy shudders toward the November election, reveal such ragged emotional edges, so much fear and misgiving. Even the economists do not have a name for the present condition, though one has described it as 'suspended animation' and 'never-never land.'"

Woodbury goes on to point out that in a normal rebound, we'd witness a flurry of hiring, new investment and buoyant growth. Instead, the economy remains comatose a year and a half after the recession officially ended. Unemployment is high, real wages are declining and GDP growth will remain below 2 percent this year. The current slump ranks as the longest period of sustained weakness since the Great Depression.

The structural faults and one-time dislocations, Woodbury continues, will take years to work out. Among them are: job draught, the debt hangover, the savings and loan collapse, the real depression, health care costs, the runaway federal deficit and the national debt.

Our economy is sick and won't respond to traditional remedies. And the crisis sweeping Europe and the Middle East is a profound symptom of the West's stagnation, Woodbury concludes.

DS, please show this to your wife. I just quoted an article published in Time Magazine on Sept. 28, 1992. That was 19 years ago, when you were in knickers and the Dow was trading at 3,300. Today the Dow is 12,000, give or take 500 points, which now has become an accepted daily trading range. Finally, be mindful of what French entertainer Marcel Marceau often said: "The more things change, the more they stay the same!"

----------

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate website at www.creators.com.

© 2012 Creators Syndicate Inc.

Published: Fri, Mar 9, 2012

Comments

  1. No comments
Sign in to post a comment »