I bet at this point in time, everyone reading this wishes they had supported Ron Paul's candidacy for President in 2008. Be that as it may, Congressman Paul was on Fox Business today to chat about the coming currency crisis that will hit this country. Congressman Paul states that we'll be lucky if we can go 2 or 3 more years without a currency crisis, which means we're going to have a lot of inflation. He says he's been buying gold since 1971 (Nixon closed the gold window) at $35/oz and he's still buying gold. And he explains that gold is a good insurance policy to protect your family. Here's the video:
Got gold?
Wednesday, March 3, 2010
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I woke up thinking there are two things with a lot in common. The US Dollar and the USS Titanic.
ReplyDeleteJoe M.
LOL. For sure a very accurate, appropriate metaphor.
ReplyDeleteRon is the man, I've been a big fan for years.
ReplyDeleteA bit off-topic, but it was slow in the office this morning, so for fun I read the wikipedia on FDR. It reads like a "how-to" manual
for scumbag politicians. For example, during his first campaign he ran on a "sound money" and "small government" platform, but at the same time he made grandios promises to the poor and minorities. He religiously capitalized on various "crises" like the depression and dustbowl, using them as leverage for his agenda. He created the FDIC to manufacture "trust" in bankers, was in bed with the labor unions, and controlled the media by making back-room deals with moguls like Hearst. Of course, we all know about executive order 6102.
It's no wonder Obama studied this guy.
LOL - thanks for the feedback! Appreciate it.
ReplyDeleteGreat comment re: Obama/FDR. FDR's "mystique" has been badly misrepresented by the kind history books. The real separation of the U.S. dollar from gold occurred under FDR. People have no idea what a bastard son of a bitch he was behind the scenes. AND he was for sure controlled by the bankers who propped him up.
If he had just let market forces prevail during the 1930's, we probably would not be facing collapse now.
The country will be begging Ron Paul to lead in 2012.
ReplyDeleteI completely agree Celeste. I briefly worked for his grassroots movement here in Denver until he bombed in New Hampshire (I was suprised cuz I thought he'd get about 20% of the primary vote there). I suspect by 2011, people will be really behind RP. I hope he decides to run.
ReplyDeleteHey Dave, not to stir the pot here, I'm an avid reader and fan of your blog, but I'm curious as to your thoughts on this piece from TPC: http://pragcap.com/reflections-on-gold-as-an-asset-class
ReplyDeleteCheers!
Stir it up baby!!! LOL. I don't mind controversy. Let me start by saying that I read TPC from time to time. He usually has some good data sources. Quite frankly, I'm not sure how much training in economics he has or if he has taken economics course, if the dept was any good. I find his analysis to be very "pop-culturish" and superficial.
ReplyDeleteHaving said all that, he makes some egregious errors in his analysis. To begin with, there has not BEEN any "deleveraging" of the system. The private sector has "deleveraged" somewhat because the Govt has bailed out the banks of their worst - so far - liabilities. HOWEVER, all this has done is effect a TRANSFER of debt from the banking sector to the public sector (Govt). If you look at the overall debt/GDP in our system, it continues to climb. He's just plain wrong there.
His second, and egregiously fundamental error, is mistaking perceived price action as the signal of inflation or deflation. VERY bourgeios and amateurish. The fact of the matter is that if you go by Govt CPI, we haven't had price inflation for years. Try telling that someone paying for college right now. Try telling that to a senior citizen on a fixed income. Hard sell. For fuck's sake, I just bought ground beef the other day and the price was up about 30% from 4 or 5 months ago.
The money supply is NOT contracting. The Fed is hiding the growth in subtle, devious ways. Please read James Turk's latest piece on the hidden money supply. www.fgmr.com And if think the money supply is contracting, explain this:
http://research.stlouisfed.org/fred2/series/BASE?cid=124 Turk covers the implications of THAT ^ in his latest.
Eventually, THAT ^ will be unleashed and create price inflation that will cause many to jump out windows.
That's in a nutshell why I think TPC is a lightweight analyst. I may work up a much more in-depth post on this. Please continue to stir it up!!!
One more point about the TPC piece. He starts off by saying that gold is hotter than ever and references the tv ads imploring people to SELL their gold. Wouldn't that imply that gold is NOT "hot?"
ReplyDeleteAren't all contrarian market theories based around the idea that the "masses are wrong" with regard to investing?
And by that idea, wouldn't the masses SELLING their gold imply that smart investors should be BUYING?
And some hedge funds are putting gold into their portfolios, but Paulson has the only pure gold/mining stock fund and by last count, he was having a very hard time raising money for it. (Aside from the fund that I co-manage - and we are having a BRUTAL time raising money despite that fact that we put up a 38% ROR after all fees and expenses for 2009 and our fund is over 50% in physical bullion that investors can take delivery of when they cash out. Paulson's fund is mostly derivatives and bad stock picks.
And finally, if you survey any of the large coin dealers, try Andy Schectman at Miles Franklin and tell him I referred you, they will tell you they believe that way less than 5% of the population is buying gold and silver.
Would that be considered "hot?"
TPC guy has his head in the sand and his analysis is sophomoric at best (and that's being diplomatic).
Thanks for the considered response, excellent read links and your willingness to be 'stirred up'!
ReplyDeleteI would love to see you take this on in a more thorough posting as he seems, to an amateur like myself, to make a decent case against Ron's very strong stance, as stated so well in "End the Fed", on a return to the gold standard.
Your efforts and insight are much appreciated!
Thanks Bobby. Anyone who doesn't understand why the world needs some kind of currency "anchor," and why gold/silver function the best for this purpose, also has no understanding of what is truly going on in the system and why the U.S. will eventually collapse. We've collapsed partially already because the banking system would be completely dead if it weren't for the trillions in Govt/Fed support. Nothing is being done that will work to enable that life support system to be removed.
ReplyDeleteAlan Greenspan explains gold as a currency anchor in the context of money theory really clearly in his 1966 essay "Gold and Economic Freedom:"
http://www.321gold.com/fed/greenspan/1966.html
If you read that, you'll be shocked that Greenspan wrote it, given what he did to our system as Fed head.
I do have to make the clarification that I see his (TPC's) point breaking down with what I believe is the biggest and inherently least solvable problem with a fiat system; the people that are in control will never be capable of the selflessness required for their positions to benefit the populace as a whole.
ReplyDeleteYup. It's part of the human condition all throughout history and that's why a gold standard, if strictly enforced, keeps human character defects in "check"
ReplyDeleteIt's also human condition - for the majority - to want to believe that those in control and who are implementing devisive policies ultimately have good intentions. Nietzche did some great work explaining this phenomenon. People want to believe that their leaders are working in everyone's best interest. Look up the definition of "Stockholm Syndrome" on wikipedia. It's a variation on that theme and most financial analysts are guilty of that syndrome.
ReplyDeleteYup. I'm just an 'everyman' myself, but I try to stay informed enough to remain out of the ranks of the sheeple. It's an easy pill to swallow!
ReplyDeleteThanks again Dave.
Hey Dave-
ReplyDeleteI see Dr. Paul having as much chance getting elected as this nation abolishing the Federal Reserve Bank scum, unfortunately. The dirty bank owned media won't let it happened. Sad state of affairs. One of his better interviews by the way.
Agree on all counts, anonymous
ReplyDelete