Friday's Views on the News

Immigrants find opportunity in ruined New Orleans. While New Orleans residents are slow to return, the immigrants, most of them illegally in the United States, have swarmed in to do the hard work of cleaning up and rebuilding that others so far have shunned.

==> This is the kind of thing that makes me say “Hmm?” Many of the people affected by the damage in New Orleans were poor and unemployed people. People who are on Federal assistance. Why aren’t they working and helping New Orleans recover? I understand that some may have some disabilities, but certainly some of those folks who were complaining the loudest should be able to find employment down there.

Gold continues strong demand. Analysts remain bullish on the metal, which has gained about 12% this year amid physical demand from India and China, central-bank buying and inflation fears.

==> Gold has remained a poor “buy and hold” investment. In the early 1980’s gold was over $800 an ounce, and now it’s just over $500 an ounce. It didn’t pay any dividends along the way, either. No growth. No dividends. No thanks. The catalyst for gold would be rampant inflation. The core rate of inflation is around .2% in the most recent report, or under 3% annually. Energy and food prices are volatile, and are excluded from the core rate. If folks are expecting a 2006 recession, that wouldn’t be a catalyst for inflation, either. Again, no thanks! It’s worked out as a trade, so congratulations to those who got in near the bottom. That was exactly the opposite folks were doing, though. Remember countries trying to unload their gold reserves a few years ago with the metal in the $200s? File another one under “Crowd mentality!”

Why doesn’t the public realize how strong the economy is? How do we know the media has poisoned the public's view of the economy? It's really very simple. Opinion polls show basically that people believe overwhelming that they're doing well financially but the country isn't. And they know for sure their own economic condition. They experience it personally on a daily basis. On the other hand, what they know about the broader national economy comes largely from the media.

==> Surprised? Me neither. I often hear some of my left-leaning friends claim how bad the economy is. Oh, not for them. They’re doing fine. Just bought a new SUV and upgraded to a larger home. But everybody else is doing bad. Sure. File this under “Can’t see the forest through the trees.” I’m not saying that there aren’t folks who are struggling. There always have been. My friends will often say how great things were before George Bush took over, but remember Al Gore campaigning about folks who are making decisions between eating and prescriptions back in 2000? I think there are always poor people who are struggling, and we do have programs available to help them. But the vast majority of folks are doing not only fine, but better than fine.