Posted January 29, 2021
By Byron King
Fair and Equitable Pay
We received a number of well-reasoned (and courteous) responses on the issue of maximum wage.
Our first reader says: I like the idea of a National Maximum Wage of $1 million per year. Another consideration would be a maximum pay ratio of highest to lowest pay.
Top pay to bottom pay can't be more than 30:1 which it used to be post-WWII and up until Reagan's failed supply-side economics tax cuts, coupled with overturned financial regulations, instigated the largest transfer of wealth in history.
We currently have pay ratios of 500:1, even 1,000+ :1. This destroys a country, leading to over-consumption and excessive exploitation of resources (human and otherwise). Apply a maximum pay ratio, and we might be able to attain a more fair and equitable society.
Another contributor offers this counter-argument: Market price discovery means that the market for that good or service needs a minimum and a maximum, and that is set by the market. Artificially setting maximum earnings for anybody decreases efficiency and initiative.
A perfect example? A friend from Canada told me there is a limit to what certain doctors can earn there. So what do they do? They work like crazy until they hit the maximum they can earn, then take the rest of the year off.
Also, whos to say what the maximum for any particular job is? Does a brain surgeon get the same maximum as, say, a dumpster driver?
The day that we start setting maximums is the day our descent into woke socialism is finalized and woe betide this country if that ever happens.
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Your Rundown for Friday, Jan. 29, 2021
A speculative frenzy has entered precious metals
Silver miners shares spiked and the largest silver exchange-traded fund, iShares Silver Trust [SLV], saw a frenzy of option buying after the market emerged as a target on the Reddit forum r/wallstreetbets, Bloomberg says.
Daniel Pavilonis of RJO Futures notes: "There's an uptick on Reddit's WSB when it comes to SLV. It is a short-covering rally type of play to try to front-run it and push it higher. SLV needs to buy futures to balance the rising interest as well, pushing prices higher.
And on a Reddit page, we find this heading: THE BIGGEST SHORT SQUEEZE IN THE WORLD $SLV SILVER $25 to $1000.
But regardless of the Reddit scheme, its critical investors know theres a distinct difference between whats happened with GameStop this week and silver
Silver has good fundamentals and a very supportive macro environment, Kitco says. Silver's primary drivers this year are inflation, stimulus, economic recovery and supply shortages.
Mr. Pavilonis says: "If we see a period of inflation as we did in 1970-80, silver will do well If we break out of the $29 level, there is open air space all the way back up to $50.
At the time of writing, silver is up almost 6% to $27.42.
Market Rundown for Friday, Jan. 29, 2021
The S&P 500 is down 15 points to 3,765.
Oils up about 1.4% to $53.06 for a barrel of West Texas crude.
Gold is up about 2% to $1,873.60 per ounce.
Bitcoin is flying: up more than 10% to $37,850.
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Have a relaxing weekend -- take time to unplug and recharge.
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