Episode-217- Alternative Investments for the Survivalist — 10 Comments

  1. Jack,

    Did I hear you imply anyone invested in a hedge fund is a vampire? If I understood your statement correctly, then this is a ridiculous assertion. Hedge funds are just another part of the financial markets that helps create efficiency. If I heard incorrectly I apologize.

    Hedge fund managers were the first people to discover the balance sheet weakness and lies that were put out by businesses like Enron and our broke investment banks like Lehman. They were also some of the only people betting against subprime and telling people these mortgages were worthless.

    Are some hedge funds corrupt? Sure. Are there crooks in that area of finance, as in any business? Yes.

    But the statement that hedge funds are inherently bad is ridiculous. They are just another piece of market efficiency and frequently do the job our regulators such as the SEC are supposed to be doing.

  2. @Adam

    Spoken like a person that has no understanding of the derivatives time bomb. Should a good portion of the hedgers move against the market (even now at this point) they could literally burn it to ashes.

    When you invest with a hedge fund individually you are doing very little harm but you are empowering a machine that equates to creating enough power to wage economic warfare should those with the power choose to act.

    I understand why some invest in hedge funds, I don’t have anything against those individuals but as a man who fully understands the end to end system I can’t support it with my personal resources.

  3. Jack,

    I happen to understand the derivatives markets quite well. I understand its a $700 trillion dollar market and that 100-1 leveraged hedge funds are quite likely to cause major economic damage when these “assets” are marked to market.

    My point was not the damage that will be inflicted by MBS’s and CDO’s aren’t substantial, but that you cannot blame a genre of businsses and an entire asset class for these problems.

    One, this would be a mass generalization as not all hedge funds are at fault and many bet against these loans, helping to point out the flaws in lending.

    Two, this was a mania participated in by every commercial bank, investment bank, lender, asset manager, and mutual fund (which you just said you had money in) as well. You are laying the blame on hedge funds rather than on the real culprit which is the fed, terrible monetary policy, and fractional reserve banking, as you should know as a lewrockwell reader.

    You are demonizing an asset class as did Obama when some of the hedge funds holding Chrysler debt demanded payment.

  4. Either way Jack, I appreciate the show. When I was younger I thought my arm-chair survivalist/pseudo libertarian father was way out there. I’ve since rediscovered libertarianism, and thanks to you I’m starting to rediscover survivalism.

  5. @Adam,

    1 Thank you.

    2. Don’t think for a second that the Fed has gotten a pass from me. We are close to 220 episodes now, listen to them all and in many you will hear me totally rip the Fed to shreds. They may be the root of monetary evil but that doesn’t mean that a lot of short sellers haven’t bellied up to the bar along side them.