Stick To Trading, Paul Tudor Jones: The Problem Is Government Not Capitalism

[The following post is by TDV Chief-Editor, Jeff Berwick]

Renowned trader, Paul Tudor Jones, recently gave a TED speech where he said, correctly, that income inequality in the US is at an all-time high.  He went on to state, correctly again, that this trajectory will eventually end in “revolution, higher taxes or war”.

He even went on to, again, correctly state that, “Capitalism has driven just about every great innovation that has made our world a more prosperous, comfortable and inspiring place to live.”

He then completely lost the plot.

According to his thesis the whole problem is that companies are too greedy.  He stated, “Capitalism has to be based on justice and morality”.

Here is where he got confused.  He believes that the US economy today is capitalism!

Capitalism is defined as “an economic system in which trade, industries, and the means of production are largely or entirely privately owned and operated for profit”.  In other words, a system without any government control.  A free market.

Certainly capitalism tries to exist in the US but it is massively constrained, regulated, inflated and taxed to the point where it bears no semblance to a free market.  In a true free market there isn’t a group with guns who steals large amounts of everyone’s income every year (taxes) and “re-distributes” it.  In a free market there aren’t a bunch of bureaucrats using coercing people into doing things they wouldn’t otherwise do (regulation) and making it nearly impossible for the “little guy” to compete.  In a free market people aren’t forced, again by the threat of force, to use a money that can be inflated at will (Federal Reserve) to throw off price signals throughout the economy and destroy capital.  And, in a free market there isn’t a communist style central banking cabal manipulating and giving edicts as to what the interest rates should be.

Yet, Tudor Jones seems to not even notice any of these massive weights on the market and their effects on creating enormous income equality and instead thinks it has more to do with companies not behaving responsibly!!

In the UK, the wealth disparity is just as noticable because the UK has all the same fasco-communist systems as the US.

As pointed out in the above graphic from The Independent, in just the last ten years the poor have lost 57% of their financial wealth while the rich have gained 64%.

The main reason for this is so blatantly obvious that it is shocking that Tudor Jones totally missed it.  The reason is central bank money printing.  And central banks only exist because of government edict.

Poor people have very few assets and survive mostly off of their income.  Rich people usually have a large amount of their net worth in assets and their annual income is usually a small component of that.

When central banks print trillions of dollars in new money, which the Federal Reserve has done since 2008, most of that money goes towards assets as anyone with any brains what-so-ever looks to invest in hard assets to protect themselves from the avalanche of inflation that is baked in the cake to come.  This dramatically improves the net worth of the already rich.  

The poor, on the other hand, see no increase in their net worth as they own no assets and as prices rise they find their paycheck buys less and less each month.

Then, to make matters worse, small businesses are run out of business by government regulations that protect the big players and those same bureaucrats destroy more jobs by raising the minimum wage, to show how they “care” about the poor and how they can barely survive at their current wages, resulting in massive job losses as companies shut down as they are no longer profitable.

Yet, Tudor Jones waltzes around on stage like a fairy, not noticing ANY of that and stating that we need to put “justness on par with profits” and that companies should be monitored for “job creation, inventing healthy products or being eco-friendly” as though this will fix the problem caused solely by government and central banks.

I’m sure Tudor Jones is a highly skilled trader or he wouldn’t be where he is.  Although having a permanent bull market in stocks and bonds caused by the central banks surely was a large help.

But when it comes to understanding why the lower and middle classes are getting taken to the cleaners he is a fucking moron.

John Maynard Keynes, the father of the current fasco-communist system used in the US today, once said, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

Clearly Paul Tudor Jones is not that one man.

[Editor's Note: To protect yourself from the war or revolution to come caused by central banks and government subscribe to The Dollar Vigilante for specific insights, analysis and a network of freedom loving entrepreneurs and expats from around the world]

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