THE GREED IS GOOD FOR YOU, BUT…

Have you ever noticed, during certain economic times, the stock market goes up a few hundred points one day and goes down a few hundred points the very next day? Certainly, economic conditions of the country do not change that quickly and every body knows that. The explanation given by stock market experts assume that the trade is influenced by the market psychology. I respectfully differ.

Those wild gyrations of the market, in my opinion, are the indications of a heavily manipulated stock market by large institutional investors. Controlling billions of investment dollars, they can buy and sell stocks in order to turn a quick profit. Unfortunately, this practice victimizes the small investors and drove them out of the market. Now, ours is a free country and the government can not tell the investors whether or not they can buy or sell to please the small investors, but amount of money controlled by small investors is absolutely crucial to the economic well being of this country.  Those few dollars you invest in a company sponsored 401k plan or the few bucks you struggle to deposit in your savings account every now and then are the backbones of our economy. When those dollars begin to dry up, the large institutional investors begin looking for other sources of large money supplies. Incidentally, that is exactly why some members of the U.S.  Congress have been trying to privatize the Social Security, the most lucrative source of large amounts of money, so the large investors can get their hands on it.

But, is there a solution to prevent manipulations in free stock market? I believe there is a way to do just that in form of a small sales tax. Every time securities change hands, the government implements a small sales tax on the amount exchanged and that will discourage whimsical and arbitrary sales of securities while introducing long term stability into the markets. In fact such a tax should include all forms of securities such as stocks, bonds, commodities, foreign currencies, options, derivatives and numismatics. With such a tax in place, markets will calm down opening new opportunities for investments of all types, including foreign capital, in turn benefiting our economy and creating new employment opportunities for all.