Dividend-Paying Stocks, Subsidies vs Tax Credits/Breaks and the Aussie Dollar

Listeners’ Questions – May 5, 2011

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Gillad from Tel Aviv
Why do you recommend investing in dividend-paying stocks if dividends per se don’t increase the value of the company? In fact couldn’t you argue that a company that can no longer generate superior return with its earnings is possible a mature, uninteresting business?

Gianni from Salt Lake, Utah
Regarding subsidies vs tax credits/breaks, I agree with Dr. Paul that any and all tax relief should be welcomed because, after all, it’s our own money. However I do not believe in the theory of subsidies, and I’m having a  hard time explaining to myself and others the difference between granting some person or group a specific tax credit/break and a certain person/group getting a subsidy. Could you please clear this up for me?

Mike from Sydney, New South Wales
I’m an Australian student and there’s a lot of talk over here at the moment that the strong $AUD is a negative because it is hurting our farmers. Is a strong Aussie dollar still a good thing if the strength is only a function of U.S. monetary policy? Isn’t it possible that Bernanke is causing imbalances in Australia and that Australians too have a stake in the matter of US inflationist policies?

Dennis from Sydney, New South Wales
You mentioned on CNBC that you liked Australian Goldies. I have 5 or 6 in my portfolio. Do you have any specific that you like? Do you prefer gold stock mining in a specific region or continent?