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My friend Bill Southard was at West Point in 1974 and heard novelist Ayn Rand give a commencement speech titled, "Philosophy, Who Needs It?"

He sent me a copy of her speech, which basically said we all need a personal philosophy, and that without one, we will be slapped around by events. My late mother-in-law described the condition (and all of California, for that matter) as having "no roots." Most of us like to think we have what we would call an investment philosophy, so in the light of the current turmoil, let's see how we're holding up.

To try to make sense of our current mess, I considered reading Alan Greenspan's autobiography. But first, I thought it might be worth it to summon up my old Evelyn Wood speed-reading skills and skim through Ayn Rand's 1,100-page novel, "Atlas Shrugged."

It's my second reading in 40 years. Why? Because Greenspan, in his early years, was an acolyte of Rand's, and deep down inside he harbors a basic distrust of government intervention.

The Rand books, "Atlas Shrugged" and "The Fountainhead," convey the message that lone individualists (today's entrepreneurs) bucking the system have to struggle against near-impossible odds. To the extent they succeed, there can be no greater hero.

Coupled with this is the notion that no bureaucratic organization can possibly function effectively, because they are all riddled with greed and the collective self-interests of individual bureaucrats. Rand isn't limiting her venom to government agencies. Today she would find large companies in collusion with the government, such as drug companies and the military-industrial complex, to be equally complicit in limiting our freedoms and success as a society.

So, where does Greenspan fit into all this? We know that the economy is like a spider web and that touching one strand shakes the whole web.

The Greenspan impression was that there was no problem with subprime loans, even though he had been warned that lending standards were being widely violated. Even our new, more cerebral Fed chairman, Ben Bernanke, was initially quoted as saying he thought the subprime situation would have minimal effects.

Both probably felt that a few banks and investors getting singed would set in motion a natural process that would self-correct the problem. That, plus a lot of litigation maybe, but nothing would require the "boogie man" of government intervention.

Well, both gurus have turned out to be wrong, so what does this all mean for us "little people"?

The effort right now is to reduce interest rates to stimulate the economy, and this is exactly what President Roosevelt directed the Fed to do to finance World War II.

Then, of course, we had inflation, but it was seen as the lesser of evils. If I had to guess, I would say that we will once again be paying off our massive current debt, sooner or later, with a big dose of inflation. Inflation makes government debt cheaper to pay back, and like mutual fund expense ratios, few people ever receive a bill or have to write a check for the debt that inflation reduces; only people on fixed incomes will get hit, such as retired baby boomers.

Philosophically, I believe that individual investors have to fend for themselves. I don't have much confidence in any moves that the Federal Reserve or Congress might make to stimulate the domestic economy. The fact that huge amounts of money have been pouring into international and emerging markets mutual funds indicates to me that many of my fellow Americans are voting with their feet.

At the moment, I think there's a sense that other governments and their economies are better run than ours. If that's true, it would seem reasonable to have a little more money invested overseas.

On the other hand, General Electric is predicting 10 percent growth in profit for 2008 based on worldwide sales. The emergence of so-called "mega-cap" mutual funds investing solely in our largest companies is confirming that companies large enough to have substantial overseas markets will benefit from inflation and a falling dollar.

Meanwhile, the dividend at Citicorp, assuming it doesn't get cut, amounts to a 5.2 percent return right now. Its new preferred stock is yielding 8 percent. In short, there's still plenty of opportunity for us junior Warren Buffetts.

My basic investment philosophy involves staying diversified and nudging a little money here and there where I think there might be opportunity in an inevitable inflationary environment.

Having lived 30 years ago through the days of "stagflation," (inflation coupled with recession) and having saved my "WIN" button (Whip Inflation Now), I have no illusions of any successful outcome resulting from the Fed or congressional action.

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