Tuesday, January 20, 2009

Another Prediction Come To Pass

In the last year, I have made 18 predictions on this and my other blogs. So far, 17 have come to pass - the last one we will not know about until 2012.

But prediction #17 stated that the stock market would seriously tank from election day to inauguration day if Obama were elected.

Since November 4th, the market has dropped a whopping 1700 points - roughly 20% of its entire value.

The reason, of course, is simple to understand, and was just as easy to predict. There are two factions in America - those who understand money and finance, and those that do not have a clue. As a rule, liberals are the latter. But they are now in power.

The stock market is where investors ply their trade. They generally understand money, even though they often make bad calls themselves. But at least they understand it. And from that understanding, they know what most Americans - those behind Obama - do not know.

They know that Obama's "financial economic plan" is unsound, and does not make sense. It looks good on paper, but in practice it simply will make things worse. Liberals tend to be superficial in their thinking - they rarely figure things out to their eventual conclusion. If it looks like it will produce a positive result tomorrow, they do not bother to look at the devastation it will cause a year from now.

They also know that Obama and the Democrat Congress will triple the national debt - because they have said as much. And they know that unless the the cap gains taxes are lowered, which Obama has refused to consider, there will be little profit to be made on Wall Street - why invest if there will be no profit?

What most of Obama's supporters simply do not comprehend is this:

Those investors determine the health of the economy. If they do not invest, companies do not have capital to work with. Without capital, companies do not hire - they lay off. And they do not expand or modernize - they cut production. And everyone suffers.

Obama supporters think it wise to penalize the well-to-do. The investors, and the companies they invest in. They do not realize that by penalizing the very folks who CREATE the wealth, they are killing the goose that lays the golden eggs. For some reason that sane people cannot fathom, they believe you can kill the goose and still expect the eggs to get produced.

Investors know better. So investors pull out their money, before Obama's wrong-headed ideas strip it of more of its value.

And the proof is in the pudding - the market has lost 20% of its value in just the few short weeks since election day.

After the inauguration, it's anyone's guess how things will play. This is where we find out what Obama and the liberal congress is actually going to do. If Obama follows through on his wrong-headed economic plan, the future does not look good. But if he sees the light, and and realizes we must care for the goose, things could slowly get better. At this moment, we just do not know for sure which way he will run.

And that is why the market dropped 333 points on inauguration day.


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