Monday, January 09, 2006

A Devil's Advocate Argument

The News is full of the fact that the DOW rose above 11,000, the price of Gold has risen over $9 per ounce, and that the Dollar has stabilized somewhat. Most would ascertain that this is good news, and shows the strength of the American economy. There are equal reports, though, that Oil Crude has dropped to slightly over $63 per barrel. This Author imagines the turnaround comes from Speculators' group decision that Oil has become a poor speculative Product in the face of warm winter weather in the United States, alongside some indications that Oil Refining capacity will be on the increase.

Here is the Quandary:

Is it possible that Speculator funds are of such magnitude that concerted switch of Speculative Product mix could alter the Markets to this degree? The Answer is Yes! Accumulation of funds by foreign government, Corporate structure, and Private Investor has been intense since the investiture of the Bush administrations with their Tax Cuts. Speculators today swing a very heavy stick, and they acquired this Stick by the current levels of real taxation placed upon the Individual, Business, and Corporation in this Country.

Could it really be time to raise real taxation in the United States?

A horrid statement as it is stated. The Bush administrations, though, have not cut Spending to make up for the lost Tax revenues. Actual (real) opportunities for Investment are limited in a developed Economy, and often require levels of Investment which few Investors feel a desire to dedicate such largese of Funds, whether their own or borrowed. The above Statement accounts for the rapid rise of Speculators among the total ranks of Investors, while real Investment has been far less than the amounts accumulated. This Author will not advocate raising Tax rates which conform basically to G7 nations. It is really Time, though, to close the Tax loopholes which are so freely granted by Our legislators. lgl

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