No-Fail, American Capitalism

That's what I call the current brand of policies with regards to big investment banks, plus Fannie Mae and Freddie Mac. They can reap all the rewards they want, but the government will protect them from the consequences of their bad decisions.

Bill Fleckenstein has a good article on MSN Money, where he calls this situation "Crybaby Capitalism."

Unfortunately, this new kind of capitalism will lead us into old problems our country has seen before. At best, we'll just see a repeat of the economy of the 1970s. At worst, we'll see the economy look like it did in the 1930s - and I'm not exaggerating or saying this for shock effect.

The reason I say this is because there was just too much borrowing and spending that went on in residential real estate. Good old-fashioned savings and investment are the real drivers of true economic growth. Not the financial steroids of easy credit and the increased supply of money.

Peter Schiff (one of the best American economic/financial analysts) echoes these sentiments in his latest column.

Again, I may sound like a broken record (or a skipping CD), but I still like physical gold and silver as medium to longer-term investments - even though both spot prices took a beating this past week.