Monday, May 7, 2012

More On Gold And The Economy...

"These paper money addicts, who remain trapped in the fallacies of Keynesianism, are revealed as a vast intellectual Sahara. Won’t somebody inform them that overprinting caused this mess. More overprinting is obviously the wrong remedy. If a little arsenic is bad for you, then maybe a lot more is not good either.

Meanwhile, gold and silver are in long-term ‘Super Major Uptrends.’ That’s one way to protect yourself, and that’s for survival purposes, not for capital gains. Whatever happens next, sooner or later the world must return to wealth in the ground. So, I think that mining stocks deserve a place in all farsighted portfolios.”

That's a quote from James Dines in his latest interview at King World News:  LINK
So I guess myself and the other countless bloggers who shredded Charlie Munger over the weekend, and have previously disemboweled Warren Buffet's and Bernanke's comments about gold, are not the only ones understand the fundamental flaw in looking at gold as strictly an "investment."
And one has to wonder why the Becky Quicks of the bubblevision media world do not ask Munger or Buffet why China, India, Russia et al - plus many Central Banks - feel compelled to load up on physical gold and silver.  How do these investment gurus explain that?  Here's a good article not published by mainstream media that reviews the latest move by China to commence silver futures trading on the Shanghai Futures exchange:  LINK
Perhaps the Truth about Buffet's hatred of gold is best expressed in graph which shows the long term performance of Berkshire Hathaway stock priced in terms of gold - this is the market expressing it's view:

(Click on chart to enlarge)
(source:  link)

Priced in terms of gold, Buffet's wealth as represented by the price of his Berkshire Hathaway stock has declined 30.5% in the last three years and a staggering 77% since late 1999.  Did Warren or Charlie happen to bring up this little factoid at their annual shareholder soiree this past weekend?  Buffet's cult-like mush-brained followers slavishly follow him around lapping up any crumbs he might drop for them like the pied-piper, thus it wouldn't have mattered anyway...

On to the economy.  As a follow-up to Friday's employment report and it's immediate evisceration by the blog world, a lot of people are left wondering how all of the for-real unemployed people not counted as part of the labor force are feeding their families.  The answer lies in the welfare statistics.

As it turns out so far this year, nearly 1 million workers have applied to get on the Government's disability program.  More than 1/3 will eventually be enrolled, including 90,000 in April alone.  If you include spouses and children, the number of new people on welfare "disability" for 2012 is 539,000.  If you net that amount against the number of people dropped from the labor force so far this year, it represents a substantial portion of that manipulation metric.  All of a sudden the 1 million people who have applied for disability decided they were too "injured" to work?

In fact, since Obama took office over 5 million workers and their families have been enrolled in the disability program since Obama took office.  Here's the source for these numbers:  LINK  That's a lot of votes Obama has bought and paid for with Taxpayer money that Romney won't have a shot at unless he gets elected and opens the disability floodgates even more...

Who said there's no such thing as a free lunch?  Obama has been handing them out by the millions.  It's too bad most of the remaining taxpayers - those still healthy enough to hold down a job - are not aware of this fact...


  1. All true, all positive signs that the strawberry fields of America cannot sustain us with fiat jobs, fiat food and fiat morality. Denial is just a river in Afrika.

    The lure of wealth by decree (fiat) is overwhelming to humanity. All predictions hinge upon this irrefutable fact.

    Like a child affecting a temper tantrum, Munger got way too much attention for his outrageously innapropriate remark (as hoped for) and WB is loaded to the gills with that fiat stuff he considers a horribly bad investment to sit on.

    Yes, by all means follow the Oracle and invest in "productive businesses" all totally dependent upon peak oil! Do this now, as China accumulates Iranian crude with Renminbi and trades all dollar denominated paper for gold.

    Hard money is finding it's well deserved destination among hard working Barbarians, while the elite side with a trillion flies hoarding shit as their life's pursuit.


  2. Great Post Dave...

    The Munger Games

    The man is a tool of epic proportions.

  3. i guess fed head richard fisher is a low life too

  4. Yo, all Gold Bugs and anti-Gold bugs.

    Keynes DID NOT remark that Gold was a Barbaric relic.
    His remark was in reference to the Gold Standard (I don't know if that's the classical Gold standard or that short term post-WW1 abortion termed the "Gold exchange Standard").

    Get your facts straight.

    1. LOL. Thanks for pointing that out. I knew that Keynes has been wrongly attributed with that quote, but I can't remember who the original source was.

    2. P T Barnum may Not have said "there's a sucker born every minute" but the quote is attributed to him, whether we like it or not. Mark Twain may not have said "there are three kinds of lies, there are lies, damned lies and then there are statistics" but again, it is attributed to him.
      Keynes may not have called gold a barbarous relic, but did Keynes ever try to distance himself from that quote?
      Once a saying is attributed to someone famous it is diifficult to persuade the masses to stop associating the quote with the person, or put another way, it is easier to persuade the masses to give up on paper and buy gold than it is to get the masses to stop misquoting famous people.

  5. A quote from an oracle Not from Omaha

    Americans Are Losing Trust In All U. S. Institutions

    The atricle is worth a read and is one more reason to own gold and silver-no trust in the system, investors will go on strike and invest in alternatives to Wall Street/fiat.