"The Alchemy of Deceit"

The Alchemy of Deceit
by Teeka Tiwari
Chief Investment Officer, Point and Profit
Source: The Tycoon Report, 17 January 2009

You know who’s been rubbing me the wrong way lately? George Soros.

I give George all the professional respect in the world for what he has accomplished, it is truly remarkable. I have no problem with the way the guy makes his money, but I hate the way he has consistently called the imminent collapse of the US economy every time we stumble.

Beware the Hungarian billionaire offering you the shirt off his back ...

To hear George Soros speak, you would imagine that he is the living embodiment of munificence and all around good guy purity. For a guy with a reputed net worth north of 9 billion dollars, he sure makes it a habit of spreading around wild predictions that don’t come true.

Back in the 1980’s, 1990’s and now in the double 0’s George Soros is once again sounding the clarion call for the economic death of the United States. According to Soros we are at the end of a 60-year super bubble fueled by a supply of easy credit that has now disappeared forever.

So it’s different this time, right George?

Bah! How many times have we heard that it's different this time? Come on!

If we are to believe Mr. Soros, it would seem that all of the massive technological and industrial improvements of the last 60 years should be discounted to zero. As if industrial progress and technology-driven efficiencies had nothing to do with the global expansion of wealth. Right George, all that industrial production was fake and just engineered off an expanding money supply!

Puuulease! Give me a break George; come on ... what’s your hidden agenda? This whole altruistic "let's warn the world" act just doesn’t wash with me.

So what is the Big Man's agenda? Could he be playing the whole world false? People this wealthy don’t get that way by putting their fellow man first. (If they did, Oprah would be worth a trillion dollars!)

What I think we are seeing is masterful misdirection.

Could he be trying to drive liquidity away (or towards) certain areas of the market?

Maybe it's pure ego ... the man does suffer from self-professed messianic fantasies. For people like Soros real life is not real, it's a game. This guy looks at the world and everybody in it as a chess piece. Living, breathing, feeling human beings don’t factor into his mental abstractions.

All of the above doesn’t bother me. What bothers me is his whole altruism act. To me it smells of nothing more than advanced game theory. My point is that too many people place too much stock in the public utterances of these so-called "masters of the universe." To assume that these public figures are not above engaging in massive manipulation of public sentiment for their own ends is naive.

This is the third time that Soros has called the end of the American economy. Maybe the third time's a charm! I don’t think so, but what I do know is that typically people who believe in such bleak outcomes usually grew up under bleak circumstances.

Remember that Soros is a Hungarian Jew who grew up under Nazi and then communist occupation. His early childhood could very well have been imprinted with experiences of violence, racism and senseless death. Look, I’m no shrink, but I can imagine it's pretty tough to have faith in a better and brighter future after witnessing the horrors of both Nazi and communist rule.

Fortunately for most of us, we didn’t grow up under such conditions. Our belief in ourselves is an article of unquestioned faith. It is our faith in ourselves, in our country and in our ingenuity that will see us through the dark economic days ahead.

New credit will be sparingly given out over the next several years, but it won’t grind to a halt. In my opinion, all we are seeing is the low end of a credit cycle bust.

But the print and TV media will be singing a different tune. Don’t buy into it. The best practical advice I can give you today is to tune out the media's sensationalism.

The media’s there to gather eyeballs so they can sell more advertising. They are not an altruistic font of stock market wisdom. Your own common sense will take you far further than any sound bite from some talking head on the tube.

To say that the cycle is now permanently broken is as ridiculous as saying that stocks can’t come down when experiencing a rampant bull market. Remember the “New Era” freaks from the 1990’s? These people believed that we had entered a new era of permanent stock market growth.

Prepare yourself for the other side of that coin as the doom-and-gloomers preach a “New Era” of permanent economic under-performance. It’s coming, watch out, and when you see it I want you to laugh and laugh and laugh.

Summer doesn’t last forever, and neither does Winter. We will overcome our current economic malaise, because it is not different this time.