Gold and the Dow - Technical Musings




Great day for Gold - back above $1000/oz (chart courtesy of kitco.com):



Here's a 3 year daily chart of Gold thru today's close:



If we go higher tomorrow, it is an easy trade to go long with minimal risk by placing a stop loss a few bucks below $1000. I'm currently long RGLD, TRE and RIC and remain a long-term holder of physical Gold.

The Dow, unlike Gold, looks sick and toppy. It has broken down out of its terminal wedge, a very bearish sign after the type of bear market rally we have had and the economic conditions. Here's a 1 year 60 minute intraday candlestick chart:



The U.S. Dollar was MIA today. Man, this is a sick looking currency - and I am a [current] deflationist! The U.S. Dollar rally looks like it may have to wait a while for its intermediate term rally to get going. This, of course, is bullish for Gold but I am again looking for both currencies (Gold is money) to rise together later this fall.

By the way: ALL-TIME NOMINAL NEW HIGHS ON A MONTHLY CLOSING BASIS FOR GOLD WHEN PRICED IN U.S. DOLLARS.

Fool Me Sixty-Three Times, Shame on Me

Gareth Porter has a good article on the Obama administration's handling of the Qom nuclear facility. Sample:

A major question surrounding the official story is why the Barack Obama administration had not done anything – and apparently had no plans to do anything - with its intelligence on the Iranian facility at Qom prior to the Iranian letter to the IAEA. When asked whether the administration had intended to keep the information in its intelligence briefing secret even after the meeting with the Iranians on Oct. 1, the senior official answered obliquely but revealingly, "I think it's impossible to turn back the clock and say what might have been otherwise."

In effect, the answer was no, there had been no plan for briefing the IAEA or anyone.

What this means is that it was the Obama administration that was withholding information, not the Iranians, who notified the IAEA first. Our President sinks lower in my estimation daily.

Fool Me Sixty-Three Times, Shame on Me

Gareth Porter has a good article on the Obama administration's handling of the Qom nuclear facility. Sample:

A major question surrounding the official story is why the Barack Obama administration had not done anything – and apparently had no plans to do anything - with its intelligence on the Iranian facility at Qom prior to the Iranian letter to the IAEA. When asked whether the administration had intended to keep the information in its intelligence briefing secret even after the meeting with the Iranians on Oct. 1, the senior official answered obliquely but revealingly, "I think it's impossible to turn back the clock and say what might have been otherwise."

In effect, the answer was no, there had been no plan for briefing the IAEA or anyone.

What this means is that it was the Obama administration that was withholding information, not the Iranians, who notified the IAEA first. Our President sinks lower in my estimation daily.

WRONG FROM THE START.

Regardless of how the next three months play out, Erik Hassle's "Hurtful" is going to go down as one of our absolute favorite singles of the year and Penguin Prison as one of our most exciting new prospects for 2010. Thus, we can barely contain our excitement at the beautiful union of the two on this here remix supporting the upcoming UK single release of "Hurtful". As usual, Penguin takes the blueprint laid down on the original and drops a choice groove over it, taking it from the pop charts to indie discos with athletic ease. He's a special guy, that Penguin Prison.

MP3: "Hurtful" (Penguin Prison Remix) - Erik Hassle [exclusive]

In other news, the wonderful Huw Stephens will be premiering "Under The Sheets", the massive debut single from Ellie Goulding (out on Neon Gold in November) on Radio 1 tonight. EXCITED MUCH? Tune in here from 9pm GMT for all the glory.

A nod from the President...I'll take it!

While I was in synagogue yesterday for Yom Kippur, the President proclaimed the day "Family Day 2009." Amid the platitudes on the importance of strong families in keeping adolescents from substance abuse and electronic device overdose came a nod to us...same-sex couples raising children. Here's the quote:

American families from every walk of life have taught us time and again that children raised in loving, caring homes have the ability to reject negative behaviors and reach their highest potential. Whether children are raised by two parents, a single parent, grandparents, a same-sex couple, or a guardian, families encourage us to do our best and enable us to accomplish great things.

We've heard Presidential rhetoric before. When Bill Clinton accepted the Democratic nomination for president in 1992, it was the middle of a family values war. Clinton's contribution in his acceptance speech was the following:

I want an America where "family values" live in our actions, not just in our speeches. An America that includes every family. Every traditional family and every extended family. Every two-parent family, every single-parent family, and every foster family. Every family.

At the time I was thrilled. He didn't mention us by name, but he didn't exclude us either. He said every family. I believed him. That was before the Newt Gingrich Congress of 1994 and a Congress that handed him the Defense of Marriage Act just before the 2006 election.

Obama is three years from reelection. It looks unlikely that he will get DOMA repealed before then. But he's willing to include us in the list of families. And when his administration defends the constitutionality of DOMA, it now makes clear that we make good parents.

It's not enough, but it's progress.

Titans Unite!

This isn't my vid, but I'm in it, so I have to promote it! This guy is awesome!

Titans Unite!

This isn't my vid, but I'm in it, so I have to promote it! This guy is awesome!

Spheres of Influence

Returning to The Pure Society -- Pichot touched on a question that has been on my mind for some time now, ever since I read Stephen Jay Gould's Rocks of Ages: Science and Religion in the Fullness of Life (Ballantine, 1999). I've read most of his other books, and Rocks of Ages was the first I couldn't finish. Gould argued for a division of spheres of influence between science and religion, for what he called "non-overlapping magisteria" or NOMA. He actually drew a parallel between this proposed division and the infamous division of the New World into Spanish and Portuguese spheres by the Treaty of Tordesillas, which overrode Pope Alexander VI's bull granting most of the land to Spain. In both cases, there are other claimants to the territories involved, not least the people who are living in them to begin with.

Gould first declared that moral and social questions were the proper sphere of religion, and explanation of the universe was the proper sphere of science. As long as each magisterium kept to its knitting, all would be well. But then he backtracked, admitting that religion hadn't done such a good job with moral questions, and dropped the matter. The author of The Mismeasure of Man might have done better to point out just how badly science had done when it ventured into the moral and social arena.

Richard Dawkins attacked Gould in his normal manner, what Pichot calls the "idiotic hawker" (70) style, in The God Delusion (Houghton Mifflin, 2006). To some extent I agree with Dawkins, as when he asks why religion should be consulted at all:
I suspect that both astronomers were, yet again, bending over backwards to be polite: theologians have nothing worthwhile to say about anything else; let's throw them a sop and let them worry away at a couple of questions that nobody can answer and maybe never will. Unlike my astronomer friends, I don't think we should even throw them a sop, I have yet to see any good reason that theology (as opposed to biblical history, literature, etc.) is a subject at all.
Similarly, we can all agree that science's entitlement to advise us on moral values is problematic, to say the least. But does Gould really want to cede to religion the right to tell us what is good and what is bad? The fact that it has nothing else to contribute to human wisdom is no reason to hand religion a free license to tell us what to do. Which religion, anyway? The one in which we happen to have been brought up?
As I already pointed out, Gould had backtracked on the advisability of letting religion pronounce on moral and social questions. One might also ask, though, why anyone would ask Dawkins's advice on morality or any other matter. (Of course "theology" is a subject, if an eminently dismissible one; the idiotic hawker is letting his rhetoric run away with him, as usual.) His discourse on social matters, which has been abundant, is no better than that of "religion" (as though religion were a coherent body of discourse), notable for its incoherence when it isn't just good old-fashioned scientific racism.

I was even more startled when Michael Shermer declared in his The Science of Good and Evil (Holt, 2005, page 6):
Most people don’t go to church to hear an explanation for the origin of the cosmos and life (and if they did, and they knew something about the findings of modern science, they would be dismayed to be told that the Genesis myth of a six-day creation less than ten thousand years ago was to be taken literally). Instead, most folks go to socialize with like-minded friends, neighbors, and colleagues to contemplate the meaning of their lives and life and to glean moral messages from the homilies presented in stories, myths and anecdotes of the knotty problems that life presents to us all. To date science – even scientism – has had little to do or say in this social mode, …

As long as religion does not make quasi-scientific claims about the factual nature of the world, then there is no conflict between science and religion.
Why doesn’t this reassure me? The avoidance of turf wars between two vicious gangs doesn’t necessarily make a better world.

I am still boggled by Shermer's claim that science has had little to do or say in this social mode. As Pichot's book shows, this is completely false, though I knew that long before I'd read Pichot. Shermer lets the cat out of the bag when he says a few pages later (9), "As such, evolutionary ethics is a subdivision of a larger science called evolutionary psychology, which attempts a scientific study of all social and psychological human behavior." Evolutionary psychology is the current alias of sociobiology, the main intervention of "science -- even scientism" into the "social mode."

Pichot says it better (341):
Against these temptations and attempts, it has to be reasserted that the universality of human rights is not based on the genetic identity of the human species. Such a notion leads straight to the differentiation of social and political rights as a function of variations in the genome – whether these are racial variations or not. It is not up to biology to lay down the law, to make decisions of a political and social order, whether on matters of race or of ‘genetic correctness’.

As we have explained, there are two quite distinct social uses of biology … On the one hand, there are uses, such as Pasteurianism, that are essentially technical, and these are perfectly acceptable and even desirable. On the other hand, there are uses, such as those made of genetics and Darwinism, that claim the right (or even the obligation) to intervene in the social-political order and modify this to make it correspond to a [342] supposedly natural order – which in reality is more like an order of profitability. This second category of social uses is totally unacceptable.

In these matters of society and politics, geneticists have nothing to say; it is up to political philosophers to make comments and recommendations. As these latter keep silent and abandon the field to biologists, which they certainly should not do, I shall attempt, for better or worse, to step into their place and maintain that, although the objective physical and intellectual qualities of individuals may be different – whether this difference is hereditary or acquired – this does not affect these individuals in their essential being, because they cannot be reduced to a set of objective qualities. Persons are not objects, ‘human resources’ whose profitability or contribution to progress is to be measured. In this respect, they are neither unequal nor different; they are in fact incomparable. And it is because they are incomparable that they are equal, in an equality that is based neither on measurement nor on comparison, but on an equality of dignity and right. Biological criteria have no place here.
Of course, we mere humans needn't defer to political philosophers either...

Spheres of Influence

Returning to The Pure Society -- Pichot touched on a question that has been on my mind for some time now, ever since I read Stephen Jay Gould's Rocks of Ages: Science and Religion in the Fullness of Life (Ballantine, 1999). I've read most of his other books, and Rocks of Ages was the first I couldn't finish. Gould argued for a division of spheres of influence between science and religion, for what he called "non-overlapping magisteria" or NOMA. He actually drew a parallel between this proposed division and the infamous division of the New World into Spanish and Portuguese spheres by the Treaty of Tordesillas, which overrode Pope Alexander VI's bull granting most of the land to Spain. In both cases, there are other claimants to the territories involved, not least the people who are living in them to begin with.

Gould first declared that moral and social questions were the proper sphere of religion, and explanation of the universe was the proper sphere of science. As long as each magisterium kept to its knitting, all would be well. But then he backtracked, admitting that religion hadn't done such a good job with moral questions, and dropped the matter. The author of The Mismeasure of Man might have done better to point out just how badly science had done when it ventured into the moral and social arena.

Richard Dawkins attacked Gould in his normal manner, what Pichot calls the "idiotic hawker" (70) style, in The God Delusion (Houghton Mifflin, 2006). To some extent I agree with Dawkins, as when he asks why religion should be consulted at all:
I suspect that both astronomers were, yet again, bending over backwards to be polite: theologians have nothing worthwhile to say about anything else; let's throw them a sop and let them worry away at a couple of questions that nobody can answer and maybe never will. Unlike my astronomer friends, I don't think we should even throw them a sop, I have yet to see any good reason that theology (as opposed to biblical history, literature, etc.) is a subject at all.
Similarly, we can all agree that science's entitlement to advise us on moral values is problematic, to say the least. But does Gould really want to cede to religion the right to tell us what is good and what is bad? The fact that it has nothing else to contribute to human wisdom is no reason to hand religion a free license to tell us what to do. Which religion, anyway? The one in which we happen to have been brought up?
As I already pointed out, Gould had backtracked on the advisability of letting religion pronounce on moral and social questions. One might also ask, though, why anyone would ask Dawkins's advice on morality or any other matter. (Of course "theology" is a subject, if an eminently dismissible one; the idiotic hawker is letting his rhetoric run away with him, as usual.) His discourse on social matters, which has been abundant, is no better than that of "religion" (as though religion were a coherent body of discourse), notable for its incoherence when it isn't just good old-fashioned scientific racism.

I was even more startled when Michael Shermer declared in his The Science of Good and Evil (Holt, 2005, page 6):
Most people don’t go to church to hear an explanation for the origin of the cosmos and life (and if they did, and they knew something about the findings of modern science, they would be dismayed to be told that the Genesis myth of a six-day creation less than ten thousand years ago was to be taken literally). Instead, most folks go to socialize with like-minded friends, neighbors, and colleagues to contemplate the meaning of their lives and life and to glean moral messages from the homilies presented in stories, myths and anecdotes of the knotty problems that life presents to us all. To date science – even scientism – has had little to do or say in this social mode, …

As long as religion does not make quasi-scientific claims about the factual nature of the world, then there is no conflict between science and religion.
Why doesn’t this reassure me? The avoidance of turf wars between two vicious gangs doesn’t necessarily make a better world.

I am still boggled by Shermer's claim that science has had little to do or say in this social mode. As Pichot's book shows, this is completely false, though I knew that long before I'd read Pichot. Shermer lets the cat out of the bag when he says a few pages later (9), "As such, evolutionary ethics is a subdivision of a larger science called evolutionary psychology, which attempts a scientific study of all social and psychological human behavior." Evolutionary psychology is the current alias of sociobiology, the main intervention of "science -- even scientism" into the "social mode."

Pichot says it better (341):
Against these temptations and attempts, it has to be reasserted that the universality of human rights is not based on the genetic identity of the human species. Such a notion leads straight to the differentiation of social and political rights as a function of variations in the genome – whether these are racial variations or not. It is not up to biology to lay down the law, to make decisions of a political and social order, whether on matters of race or of ‘genetic correctness’.

As we have explained, there are two quite distinct social uses of biology … On the one hand, there are uses, such as Pasteurianism, that are essentially technical, and these are perfectly acceptable and even desirable. On the other hand, there are uses, such as those made of genetics and Darwinism, that claim the right (or even the obligation) to intervene in the social-political order and modify this to make it correspond to a [342] supposedly natural order – which in reality is more like an order of profitability. This second category of social uses is totally unacceptable.

In these matters of society and politics, geneticists have nothing to say; it is up to political philosophers to make comments and recommendations. As these latter keep silent and abandon the field to biologists, which they certainly should not do, I shall attempt, for better or worse, to step into their place and maintain that, although the objective physical and intellectual qualities of individuals may be different – whether this difference is hereditary or acquired – this does not affect these individuals in their essential being, because they cannot be reduced to a set of objective qualities. Persons are not objects, ‘human resources’ whose profitability or contribution to progress is to be measured. In this respect, they are neither unequal nor different; they are in fact incomparable. And it is because they are incomparable that they are equal, in an equality that is based neither on measurement nor on comparison, but on an equality of dignity and right. Biological criteria have no place here.
Of course, we mere humans needn't defer to political philosophers either...

G5/G-7/G-20/G-Worthless




The meeting of "G" Groups causes more trader gossip than the "G" spot at a porn convention. Much like the days surrounding federal reserve meetings and announcements, rumors of the pending announcements get people all worked up about pending short-term moves. This is an aura that the federal reserve and G-5/G-7/G-20/G-Worthless apparatchiks would like to maintain.

Of course, as I have stated time and time again, governments and central banks can distort or amplify the primary trend, but they cannot create it. Everyone thinks Bernanke can wave his magic wand and all of the economies' troubles will go away with a sprinkle of some pixie dust (and money, of course). Ok, here, let's extrapolate this out a little bit.

I wager that U.S. stock markets will be 30-50% lower one year from now. If I am right, then it must mean Bernanke cannot do what everyone thinks he can. Because, as we all know, Bernanke wants the stock market to keep going higher. Keep in mind the ridiculous amount of stimulus applied to the stock markets and financial institutions during late 2007 and the first half of 2008, which did not prevent the Great Panic of 2008 from occurring last fall.

Many of us love to believe in wizards. But much like the wizard of Oz, pulling back the curtain at the federal reserve reveals a few crusty old white boyz with Princeton degrees and no common sense. Yes, the figure heads at the federal reserve take orders from the behind-the-scenes owners of the non-federal, for-profit federal reserve who are the real brains and brawn of the operation. And yes, these folks have an unfair advantage over the rest of us. C'est la vie.

But this does not mean investing in the primary trend is unprofitable for the educated masses who throw their hats into the rigged casino for the long term. Buying Gold will be a good choice until the Dow to Gold ratio gets to the 0.5-2 range, regardless of what the secretive central bankstas and G-20/G-Worthless apparatchiks do.

By the way, notice that the G-20 came up with nothing of value and made no concrete plans or decisions on a single important issue. Lots of rhetoric and lots of wasteful spending of taxpayer dollars, but no results. The more apparatchiks in a room, the less that gets done. It's like any federal government on steroids. Trading the "news" that comes from such public displays of incompetence is a great way to lose all your money. When the important changes come, they are never announced in advance by costumed buffoons.

Forget the central banksta and apparatchik wizards. Focus on the long-term trends: economic depression, lost decade(s), Gold is good, stocks are bad and real estate is bad. No government or banksta meeting will change these trends until they have run their course, short and intermediate-term swings aside.

A Difficult Concept for Many to Grasp

... I guess it's rocket science. But this guy summed it up neatly. (Thanks to PunkAssBlog for the image and the link.)

Lisa Kansas at PunkAssBlog also shared this bit of good news:

Operation Rescue says it’s broke, may shut down

Scott Roeder, 51, of Kansas City, Mo., faces charges of murder and aggravated assault in the slaying of Tiller as the Wichita abortion provider ushered at a Sunday morning church service.

Tiller’s killing has also been a public relations nightmare for the group — despite its public condemnation of the slaying — since the name and phone number of the group’s senior policy adviser was found in Roeder’s car when he was arrested. A television crew zoomed in on the scrawled note inside the car in images that made their way to the Internet.

This was a couple of weeks ago, but I hadn't been paying attention. I'll have to check out PAB more often.

Avedon at the Sideshow complained that nobody linked to her analysis of the New York Times poll on health care, so there's the link. Her podcast interview/conversation is worth a listen, too. (Someone mentioned that until they listened to it, they weren't sure how to pronounce her name, which is one reason I decided to listen to it; I'm gratified to find that I've been pronouncing it correctly in my head all along.)

A Difficult Concept for Many to Grasp

... I guess it's rocket science. But this guy summed it up neatly. (Thanks to PunkAssBlog for the image and the link.)

Lisa Kansas at PunkAssBlog also shared this bit of good news:

Operation Rescue says it’s broke, may shut down

Scott Roeder, 51, of Kansas City, Mo., faces charges of murder and aggravated assault in the slaying of Tiller as the Wichita abortion provider ushered at a Sunday morning church service.

Tiller’s killing has also been a public relations nightmare for the group — despite its public condemnation of the slaying — since the name and phone number of the group’s senior policy adviser was found in Roeder’s car when he was arrested. A television crew zoomed in on the scrawled note inside the car in images that made their way to the Internet.

This was a couple of weeks ago, but I hadn't been paying attention. I'll have to check out PAB more often.

Avedon at the Sideshow complained that nobody linked to her analysis of the New York Times poll on health care, so there's the link. Her podcast interview/conversation is worth a listen, too. (Someone mentioned that until they listened to it, they weren't sure how to pronounce her name, which is one reason I decided to listen to it; I'm gratified to find that I've been pronouncing it correctly in my head all along.)

More Bearish Real Estate Info




Those who have done their homework and "get it" that real estate is toast don't need any more data. Housing is done. Kaput. Put a fork in it. STAY AWAY!

Whatever you think is a good deal now will be significantly overpriced in 1-2 years. We just had the top in 2005-2006, so the bottom takes more than a few years to occur, particularly in bubble states like California, Florida, Nevada and Arizona. The depth of the fraud that fed the final upward push in sales and prices is slowly being discovered and reported. Of course, this is several years too late, but mainstream media sources were busy promoting the bubble housing mania instead of cautioning people to beware. Now they are cheerleading every sub-1% blip in the data as "the bottom" and a "great time to buy," just like they did all the way down when the tech bubble collapsed in 2000. Wash. Rinse. Repeat.

This article shows the depths of the fraud in some markets. This was the moral hazard fostered by the U.S. government, which encouraged reckless lending on homes (Alan Greenspan thought exotic mortgage products designed to explode in the "homeowner's" face were peachy keen and said so publicly). Fannie and Freddie purchased many of these toxic mortgages, giving them the implied backing of the U.S. Government.

Wall Street basically told mortgage originators to bring them any loans on any houses, regardless of quality, and those who did so were rewarded financially. Americans who took on houses they knew they couldn't afford were allowed to get something for nothing, albeit temporarily and with a great cost to society and America's reputation in the financial sphere.

The way the fraud works, with various twists, is to create "straw" or artificial buyers by enticing them with kickback payments. The builder and/or a mortgage originating company helps the pseudobuyer fill out the paperwork using a "no documentation loan." The pseudobuyer (i.e. fraud accomplice and/or naive speculator) intentionally overpays for the house in return for a cash kick-back at closing. The builder gets the house off their books at a profit. The mortgage originator gets their fees plus any kickback if one is arranged. Wall Street and Uncle Sam get toxic garbage.

In the case of Wall Street, the toxic garbage is re-sold to institutional investors like pension funds and mutual funds, and labeled as a high-grade/"AAA", ultra-safe investment by firms like Moody's who openly solicited bribes and/or exorbitant fees to put their stamp of approval on a shitty product. Wall Street gets a lot of this stuff off their books, but is so drunk with greed and feelings of invincibility that some of the firms keep some on their own books as a speculative investment. The government, of course, is "fully invested" for the long haul. This is why Fannie and Freddie are costing U.S. taxpayers trillions of dollars.

Now, on a much larger scale were those buyers who weren't committing fraud but rather were chasing the American Dream. People who were running as fast as they could (sprinting, really) to get a leg up on their competition (the Joneses). In areas like southern Florida, southern California, Las Vegas and parts of Arizona, this required more and more toxic loan products to get people into a high end ($500,000-$1.5 million) home that was far beyond their means.

This high-end real estate is the next shoe dropping right now. These high-end homes will become absolute bargains as the pool of available buyers shrinks massively once the current economic conditions play out and lending returns to rational standards. Of course, the government is pledging taxpayer money to disallow reason to return to lending, which is why 90% of new mortgage loans are now backed by the U.S. government. Private firms know the game is over and can't find anyone to lend to that is of interest to them/meets their new more stringent loan guidelines!

Please don't forget this chart, which anyone who has done any investigation into the current housing debacle has hopefully seen by now:



Those Alt-A and option ARM mortgages are now blowing up right on schedule, are for homes with higher values than subprime-backed homes, and will be "contained" (to use Bernanke's phrase) about as well as subprime was. The high end of the real estate market in many areas is about to detonate and it will be even uglier than subprime. Living in a home that once cost a million dollars while squatters and decay cause blight in the home next door will cause a lot of people to lose it. And you can bet many will walk away from their obligations, damn the consequences, once they realize just how much they've been had. When you paid $1 million for a house and a foreclosure next door goes for $500,000, how can you possibly justify continuing to throw good money after bad based on a vague concept of ethics that our federal government and financial institutions refuse to follow? This is especially true once the following happens to your "re-cast" option ARM loan:



The bulk of these option ARM loans are based in California, which already has a 12% unemployment rate that is continuing to rise. By the way, 80-90% of people with these Option ARM loans have actually been paying the "minimum allowable payment" that creates negative amortization, so this re-cast scenario is not hypothetical - it is actually happening! And this is a "re-cast," of the loan, which is different than an interest rate change. It means the entire terms of the loan change from "pay less than interest only every month while your principal owed goes up every month" to "your loan balance is now above the limits we put in small print at the closing, so now we want a traditional fixed 30 year interest and principal payment every month starting right now or you are in default." Interest rates could be at less than zero and these loans would still explode on cue (except for the fact that people are walking away before this can even happen). And Alt-A is one step behind option ARM in terms of toxicity (notice they are both spiking together in the first chart above).

This means we have 2 years (give or take) before we even hit the peak of foreclosure activity. On top of this, banks are now delaying foreclosure proceedings for up to 2 years (at times, delays are mandated by the government itself!), banks are renting homes and/or failing to list or auction homes once they have taken them back (Wells Fargo execs need a place to party, after all), and the government is stepping in to try to artificially prop up the housing market with taxpayer money (which, of course, will fail utterly and completely).

Translation: DON'T START LOOKING TO BUY A HOME YET. WAIT. IT'S WAY, WAY TOO EARLY. DEALS OF A LIFETIME ARE ONLY A FEW SHORT YEARS AWAY (it may take 5-10 years, but why rush to buy a depreciating asset?). RENT WILL BE DROPPING DURING THIS TIME, SO YOU WILL BE "MAKING MONEY" IN HOUSING BY NOT BEING LOCKED INTO A MORTGAGE AND THUS BEING ABLE TO SPEND LESS EVERY YEAR ON THE SAME ROOF OVER YOUR HEAD.

And once CNBC finally tells you to sell your home and/or walk away from your mortgage, it will be time to buy again. Wash. Rinse. Repeat.

Smite the Amalekites

Intriguing little article here about former child star Kirk Cameron (later of the Left Behind movies) joining the campaign against Darwin and evolution. I liked this bit:
The 50-page intro [to the selections from Darwin's Origin of Species], written by evangelist author Ray Comfort, will present a "balanced view of Creationism with information from scientists who actually believe God created the universe." Those scientists include Albert Einstein and a host of thinkers whose lives predated 'The Origin of Species,' such as Isaac Newton and Nicolaus Copernicus.
It's open to question whether Einstein actually believed that "God created the universe" -- Einstein's concept of God was that of Baruch Spinoza, who was excommunicated from the Amsterdam synagogue for his heretical views. "In [his later philosophical] works, Spinoza denies the immortality of the soul; strongly rejects the notion of a providential God—the God of Abraham, Isaac and Jacob; and claims that the Law was neither literally given by God nor any longer binding on Jews. Can there be any mystery as to why one of history's boldest and most radical thinkers was sanctioned by an orthodox Jewish community?" I think Kirk Cameron and Ray Comfort would side with the synagogue rather than with Spinoza or Einstein.

It's also well-established by now, thanks to James R. Moore's The Post-Darwinian Controversies (Cambridge, 1979) and David Livingstone's Darwin's Forgotten Defenders (Eerdman, 1987), that the initial Christian response to The Origin of Species was often quite positive, and that among the Christians who embraced Darwin's theory were such exemplars of conservative evangelical thought as Benjamin Warfield of Princeton Theological Seminary. (The Theopedia article on Warfield, significantly, forgets to mention Warfield's embrace of Natural Selection.)

Comfort's introduction "paints Darwin as both racist and misogynistic and explicitly highlights 'Adolph Hitler's undeniable connection to the theory.'" This is a hot-button topic, of course: it's okay for evangelists and teabaggers to play the Hitler card, but not for anyone else, and Comfort's historical sloppiness about Einstein should warn the public to be skeptical about anything else he says. The Hitler connection is tricky, and of course contemporary Darwinists will reflexively deny it. In a new English translation of his 2001 book The Pure Society from Darwin to Hitler (Verso Books, 2009), the historian of science Andre Pichot undermines the denial, though not in a way that will give any comfort to today's Creationists or Intelligent Designers. (Thanks to Richard Seymour at Lenin's Tomb for bringing Pichot to my attention with this post.)

The eugenic laws that were enacted by Hitler and his regime didn't derive directly from Darwin, but they were endorsed by many if not most Darwinian biologists of the early 20th century, who connected them to Darwinian theory. It's important to remember that forced sterilization of the "unfit" and "inferior" began not in Hitler's Germany but in the United States -- the first such law was passed in Indiana in 1907. As Pichot writes (page 179),
It is probable, therefore, that even without the Nazis, Germany would at some point or other have adopted and put into effect legislation of this kind. Besides, it was only the Catholic Church that made any institutional protest, particularly in the person of the bishop of Münster, Clemens August Graf von Galen – whom we shall meet again later on, and who condemned eugenic sterilization in a pastoral declaration of 29 January 1937.
Comfort's guilt-by-association doesn't work very well in any case. Pichot reminds us that eugenic research in the US and Germany was supported by
fairly characteristic individuals and groups: Krupp (steel and armaments), Harriman (railways), Carnegie (steel), Rockefeller (petrol), Wickliffe Draper (textiles), to list only the names already encountered. The mildest comment would be that these fairy godparents who watched over the cradle of eugenics made a mistake in their philanthropic aim, and that the Rockefeller Foundation’s funding of Nazi biology is at the very least a sign of a certain blindness – comparable to that of the Carnegie Institution, which did not put an end to the eugenic activity at Cold Spring Harbor until 1940, when the laboratory was drifting into becoming a centre of Nazi propaganda. ... [185]

And to the extent that this work involved reputable scientists rather than mere fantasists, there was no reason why Rockefeller should not fund it. After all, a journal as prestigious as Nature published in 1936 an article signed E. W. M. (perhaps E. W. MacBride), which proposed to resolve social problems by way of social sterilization, with a view to punishing people who appealed to state aid for raising their children [188].
Worse still for the Creationists, some of the same wealthy philanthropists who funded the eugenic research that Hitler used as a springboard for the Final Solution, also funded and supported "end-time prophecy" work in the US. Paul Boyer wrote in And Time Shall Be No More (Harvard, 1992, page 100):
Nor did premillennialism in the 1865-1920 years appeal solely to the poor and disaffected; it also found support among the middle classes, the well-to-do, and even the elite. The signers of an 1891 memorial to President Benjamin Harrison written by premillennialist William Blackstone and urging support for a Jewish homeland in Palestine included Cyrus McCormick, J. P. Morgan, and John D. Rockefeller. Two Los Angeles oilmen, Lyman and Milton Stewart, financed the publication and distribution of The Fundamentals. Chicago department-store owner John Pirie hosted Cyrus Scofield's annual Bible conferences at Sea Cliff, Pirie's estate on Long Island. The head of the Quaker Oats Company, Henry Crowell, chaired the board of trustees of the Moody Bible Institute. Large middle-class Baptist and Presbyterian churches in New York, St. Louis, Boston, Cincinnati, Minneapolis, and many other cities were bastions of premillennialism in these years. As Ian Rennie has written, dispensationalism attracted some of the most outstanding evangelicals of the day – and some of the wealthiest. Whatever else may be said of, belief in an imminent Second Coming, in punishment of the wicked, and in a Millennium when the injustices of the present age will be set right, cannot be dismissed -- in the Middle Ages, in the pre- World War I, era, or in the late twentieth century -- as merely the desperate creed of the disinherited.
And why not? As Boyer also points out (page 95), "Some interpreters even saw union-made labels as the Mark of the Beast."

B. B. Warfield, the Calvinist divine who embraced Darwin's theory, was anti-racist and used evolutionary theory to argue for the unity of the human species. (See Livingstone's Darwin's Forgotten Defenders, page 120-1.) Proto-creationists like the geologist and paleontologist Louis Agassiz, on the other hand, were often explicitly racist; Agassiz defended slavery, and his writings were used by slaveowners to justify their lifestyle. (It wasn't until 1995 that the Southern Baptist Convention, which was founded in 1845 when the SBC seceded from the mainstream Baptists, repudiated its original defense of slavery and racism.)

Pichot doesn't mention misogyny in connection with Darwin, but though it wouldn't surprise me, it should be a point in his favor where conservative Christians are concerned. Pichot says that like his contemporary and co-inventor of the theory of natural selection, Alfred Wallace, "Darwin himself shows an astonishing (and very Victorian) mixture of religious moralism and intellectual poverty, along with a colonialist racism quite lacking in soul" (85). As for racism, Pichot quotes (63) Darwin from The Descent of Man (689 in the 2004 Penguin edition):
The main conclusion arrived at in this work, namely that man is descended from some lowly organized form, will, I regret to think, be highly distasteful to many … For my own part I would as soon be descended from that heroic little monkey, who braved his dreaded enemy in order to save the life of his keeper, or from that old baboon, who descending from the mountains, carried away in triumph his young comrade from a crowd of astonished dogs – as from a savage who delights to torture his enemies, offers up bloody sacrifices, practices infanticide without remorse, treats his wives like slaves, knows no decency, and is haunted by the grossest superstitions.
Again, this is not the kind of racism that most conservative Christians, either in Darwin's day or the present, would object to. Considering what Christian English and American society were like then, or now, complaints about savages torturing their enemies, offering up bloody sacrifices (read the history of European war for the bloody sacrifice of millions of human lives in the cause of Christianity and democracy), subjecting their women, knowing no decency, or haunted by gross superstitions obviously boomerang on Darwin. And on today's Christian Right: has Cameron or Comfort had anything to say about the use of torture by the Bush administration, for example?

Coming from American Christians, complaints about Darwin's racism ring especially false. The Protestants who colonized the English colonies were quite happy to equate the original inhabitants of the land they claimed with the Canaanites and Amalekites, to be exterminated without compunction or mercy, and their present-day successors haven't really repudiated that view, preferring at most to try to ignore it. Pichot also quotes Wallace from his Contributions to the Theory of Natural Selection (Macmillan, 1875, 318-319), which he says Darwin praised in The Descent of Man:
It is the same great law of “the preservation of favoured races in the struggle for life”, which leads to the inevitable extinction of all those low and mentally undeveloped populations with which Europeans come into contact. The red Indian in North America, and in Brazil; the Tasmanian, Australian, and New Zealander in the southern hemisphere, die out, not from any one special cause, but from the inevitable effects of an unequal mental and physical struggle. The intellectual and moral, as well as the physical, qualities of the European are superior; the same powers and capacities which have made him rise in a few centuries from the condition of the wandering savage with a scanty and stationary population, to his present state of culture and advancement, with a greater average longevity, a greater average strength, and a capacity of more rapid increase, -- enable him when in contact with the savage man, to conquer him in the struggle for existence, and to increase at his expense, just as the better adapted, increase at the expense of the less adapted varieties in the animal and vegetable kingdoms, -- just as the weeds of Europe overrun North America and Australia, extinguishing native productions by the inherent vigour of their organization, and by their greater capacity for existence and multiplication.
Pichot comments acidly, "We might of course remind Wallace that many American and African plants were introduced to Europe and prospered (which is more than people from these lands ever did), but the suspicion is that the purpose of the botanical comparison is simply to naturalize the extermination of indigenous Americans and Australians, reducing this to as natural a phenomenon as the disappearance of a plant in a habitat colonized by another" (56). The trouble with Wallace and Darwin, then, is not that they broke with Christianity, but they didn't break with it decisively enough. But given the divisions on race among both Darwinians and anti-Darwinians, it's clear that Pichot is right to say (page 266) that "As we have already seen in the case of eugenics, Darwinian genetic theories were an inexhaustible sophistry, on the basis of which anything and everything could be justified." You could say the same thing about Christianity.

Smite the Amalekites

Intriguing little article here about former child star Kirk Cameron (later of the Left Behind movies) joining the campaign against Darwin and evolution. I liked this bit:
The 50-page intro [to the selections from Darwin's Origin of Species], written by evangelist author Ray Comfort, will present a "balanced view of Creationism with information from scientists who actually believe God created the universe." Those scientists include Albert Einstein and a host of thinkers whose lives predated 'The Origin of Species,' such as Isaac Newton and Nicolaus Copernicus.
It's open to question whether Einstein actually believed that "God created the universe" -- Einstein's concept of God was that of Baruch Spinoza, who was excommunicated from the Amsterdam synagogue for his heretical views. "In [his later philosophical] works, Spinoza denies the immortality of the soul; strongly rejects the notion of a providential God—the God of Abraham, Isaac and Jacob; and claims that the Law was neither literally given by God nor any longer binding on Jews. Can there be any mystery as to why one of history's boldest and most radical thinkers was sanctioned by an orthodox Jewish community?" I think Kirk Cameron and Ray Comfort would side with the synagogue rather than with Spinoza or Einstein.

It's also well-established by now, thanks to James R. Moore's The Post-Darwinian Controversies (Cambridge, 1979) and David Livingstone's Darwin's Forgotten Defenders (Eerdman, 1987), that the initial Christian response to The Origin of Species was often quite positive, and that among the Christians who embraced Darwin's theory were such exemplars of conservative evangelical thought as Benjamin Warfield of Princeton Theological Seminary. (The Theopedia article on Warfield, significantly, forgets to mention Warfield's embrace of Natural Selection.)

Comfort's introduction "paints Darwin as both racist and misogynistic and explicitly highlights 'Adolph Hitler's undeniable connection to the theory.'" This is a hot-button topic, of course: it's okay for evangelists and teabaggers to play the Hitler card, but not for anyone else, and Comfort's historical sloppiness about Einstein should warn the public to be skeptical about anything else he says. The Hitler connection is tricky, and of course contemporary Darwinists will reflexively deny it. In a new English translation of his 2001 book The Pure Society from Darwin to Hitler (Verso Books, 2009), the historian of science Andre Pichot undermines the denial, though not in a way that will give any comfort to today's Creationists or Intelligent Designers. (Thanks to Richard Seymour at Lenin's Tomb for bringing Pichot to my attention with this post.)

The eugenic laws that were enacted by Hitler and his regime didn't derive directly from Darwin, but they were endorsed by many if not most Darwinian biologists of the early 20th century, who connected them to Darwinian theory. It's important to remember that forced sterilization of the "unfit" and "inferior" began not in Hitler's Germany but in the United States -- the first such law was passed in Indiana in 1907. As Pichot writes (page 179),
It is probable, therefore, that even without the Nazis, Germany would at some point or other have adopted and put into effect legislation of this kind. Besides, it was only the Catholic Church that made any institutional protest, particularly in the person of the bishop of Münster, Clemens August Graf von Galen – whom we shall meet again later on, and who condemned eugenic sterilization in a pastoral declaration of 29 January 1937.
Comfort's guilt-by-association doesn't work very well in any case. Pichot reminds us that eugenic research in the US and Germany was supported by
fairly characteristic individuals and groups: Krupp (steel and armaments), Harriman (railways), Carnegie (steel), Rockefeller (petrol), Wickliffe Draper (textiles), to list only the names already encountered. The mildest comment would be that these fairy godparents who watched over the cradle of eugenics made a mistake in their philanthropic aim, and that the Rockefeller Foundation’s funding of Nazi biology is at the very least a sign of a certain blindness – comparable to that of the Carnegie Institution, which did not put an end to the eugenic activity at Cold Spring Harbor until 1940, when the laboratory was drifting into becoming a centre of Nazi propaganda. ... [185]

And to the extent that this work involved reputable scientists rather than mere fantasists, there was no reason why Rockefeller should not fund it. After all, a journal as prestigious as Nature published in 1936 an article signed E. W. M. (perhaps E. W. MacBride), which proposed to resolve social problems by way of social sterilization, with a view to punishing people who appealed to state aid for raising their children [188].
Worse still for the Creationists, some of the same wealthy philanthropists who funded the eugenic research that Hitler used as a springboard for the Final Solution, also funded and supported "end-time prophecy" work in the US. Paul Boyer wrote in And Time Shall Be No More (Harvard, 1992, page 100):
Nor did premillennialism in the 1865-1920 years appeal solely to the poor and disaffected; it also found support among the middle classes, the well-to-do, and even the elite. The signers of an 1891 memorial to President Benjamin Harrison written by premillennialist William Blackstone and urging support for a Jewish homeland in Palestine included Cyrus McCormick, J. P. Morgan, and John D. Rockefeller. Two Los Angeles oilmen, Lyman and Milton Stewart, financed the publication and distribution of The Fundamentals. Chicago department-store owner John Pirie hosted Cyrus Scofield's annual Bible conferences at Sea Cliff, Pirie's estate on Long Island. The head of the Quaker Oats Company, Henry Crowell, chaired the board of trustees of the Moody Bible Institute. Large middle-class Baptist and Presbyterian churches in New York, St. Louis, Boston, Cincinnati, Minneapolis, and many other cities were bastions of premillennialism in these years. As Ian Rennie has written, dispensationalism attracted some of the most outstanding evangelicals of the day – and some of the wealthiest. Whatever else may be said of, belief in an imminent Second Coming, in punishment of the wicked, and in a Millennium when the injustices of the present age will be set right, cannot be dismissed -- in the Middle Ages, in the pre- World War I, era, or in the late twentieth century -- as merely the desperate creed of the disinherited.
And why not? As Boyer also points out (page 95), "Some interpreters even saw union-made labels as the Mark of the Beast."

B. B. Warfield, the Calvinist divine who embraced Darwin's theory, was anti-racist and used evolutionary theory to argue for the unity of the human species. (See Livingstone's Darwin's Forgotten Defenders, page 120-1.) Proto-creationists like the geologist and paleontologist Louis Agassiz, on the other hand, were often explicitly racist; Agassiz defended slavery, and his writings were used by slaveowners to justify their lifestyle. (It wasn't until 1995 that the Southern Baptist Convention, which was founded in 1845 when the SBC seceded from the mainstream Baptists, repudiated its original defense of slavery and racism.)

Pichot doesn't mention misogyny in connection with Darwin, but though it wouldn't surprise me, it should be a point in his favor where conservative Christians are concerned. Pichot says that like his contemporary and co-inventor of the theory of natural selection, Alfred Wallace, "Darwin himself shows an astonishing (and very Victorian) mixture of religious moralism and intellectual poverty, along with a colonialist racism quite lacking in soul" (85). As for racism, Pichot quotes (63) Darwin from The Descent of Man (689 in the 2004 Penguin edition):
The main conclusion arrived at in this work, namely that man is descended from some lowly organized form, will, I regret to think, be highly distasteful to many … For my own part I would as soon be descended from that heroic little monkey, who braved his dreaded enemy in order to save the life of his keeper, or from that old baboon, who descending from the mountains, carried away in triumph his young comrade from a crowd of astonished dogs – as from a savage who delights to torture his enemies, offers up bloody sacrifices, practices infanticide without remorse, treats his wives like slaves, knows no decency, and is haunted by the grossest superstitions.
Again, this is not the kind of racism that most conservative Christians, either in Darwin's day or the present, would object to. Considering what Christian English and American society were like then, or now, complaints about savages torturing their enemies, offering up bloody sacrifices (read the history of European war for the bloody sacrifice of millions of human lives in the cause of Christianity and democracy), subjecting their women, knowing no decency, or haunted by gross superstitions obviously boomerang on Darwin. And on today's Christian Right: has Cameron or Comfort had anything to say about the use of torture by the Bush administration, for example?

Coming from American Christians, complaints about Darwin's racism ring especially false. The Protestants who colonized the English colonies were quite happy to equate the original inhabitants of the land they claimed with the Canaanites and Amalekites, to be exterminated without compunction or mercy, and their present-day successors haven't really repudiated that view, preferring at most to try to ignore it. Pichot also quotes Wallace from his Contributions to the Theory of Natural Selection (Macmillan, 1875, 318-319), which he says Darwin praised in The Descent of Man:
It is the same great law of “the preservation of favoured races in the struggle for life”, which leads to the inevitable extinction of all those low and mentally undeveloped populations with which Europeans come into contact. The red Indian in North America, and in Brazil; the Tasmanian, Australian, and New Zealander in the southern hemisphere, die out, not from any one special cause, but from the inevitable effects of an unequal mental and physical struggle. The intellectual and moral, as well as the physical, qualities of the European are superior; the same powers and capacities which have made him rise in a few centuries from the condition of the wandering savage with a scanty and stationary population, to his present state of culture and advancement, with a greater average longevity, a greater average strength, and a capacity of more rapid increase, -- enable him when in contact with the savage man, to conquer him in the struggle for existence, and to increase at his expense, just as the better adapted, increase at the expense of the less adapted varieties in the animal and vegetable kingdoms, -- just as the weeds of Europe overrun North America and Australia, extinguishing native productions by the inherent vigour of their organization, and by their greater capacity for existence and multiplication.
Pichot comments acidly, "We might of course remind Wallace that many American and African plants were introduced to Europe and prospered (which is more than people from these lands ever did), but the suspicion is that the purpose of the botanical comparison is simply to naturalize the extermination of indigenous Americans and Australians, reducing this to as natural a phenomenon as the disappearance of a plant in a habitat colonized by another" (56). The trouble with Wallace and Darwin, then, is not that they broke with Christianity, but they didn't break with it decisively enough. But given the divisions on race among both Darwinians and anti-Darwinians, it's clear that Pichot is right to say (page 266) that "As we have already seen in the case of eugenics, Darwinian genetic theories were an inexhaustible sophistry, on the basis of which anything and everything could be justified." You could say the same thing about Christianity.

Gold was $850 in 1980




Everyone into Gold has heard it many times and some, like me, want to scream every time some mainstream financial analyst puts this comment into one of their articles or commentaries. It must be part of the Wall Street and financial planner training manual. It goes something like this, for those who haven't heard or seen it yet: "Gold was $850/ounce in 1980 and in 2009 it is only around $850/ounce. When you factor in inflation, if you bought Gold at the exact top of its previous bull market in 1980 at $850, this would have been a terrible long-term investment."

Yes, this is why buy-and-hold forever is stupid advice in any asset class, and yet those who use this argument for Gold typically then tell you to just buy stocks and hold for the long term. The next time you read this argument about Gold (if you ever read mainstream financial articles you will read/see it again, trust me), remember the following historical data points:

*Gold at $850: 1980 and 2009 (29 years)
*Nikkei Japanese stock index at 7,000: 1980 and 2008 (28 years)
*Dow Jones Industrial Average at 386: 1929 and 1954: (25 years)
*Dow Jones Industrial Average at 40: 1897 and 1932: (35 years)

Similar examples can be found throughout history if one takes the time to look. What the typical Gold-bashing article fails to mention is exactly what it means for an asset class to have the same price 25-35 years apart. In an inflationary fiat world where the value of every currency is constantly sinking over the long term (i.e. inflation), it probably means that that the asset class in question is undervalued! It probably means it's a decent long-term buy. On the flip side, I know U.S. stocks and real estate are HORRIBLE investments right now for the long term precisely because they ran up too high in their most recent cycles. General U.S. Stocks may be a long-term buy again in the 2014-2020 time frame, but before then they are a losing proposition on an inflation-adjusted basis for buy-and-hold investors.

Because every asset class is cyclical, underperformance by an asset class for 20-30 years is a sign to think about going long that asset class! This is what "buy low and sell high" means. In order to do this, you have to buy when no one else is interested with an eye towards the future.

Gold is in a secular bull market that is not close to being over. Those that talk about a Gold "bubble" after Gold has only increased 300% from its lows are idiots or have an agenda and should never be trusted for their financial opinion again. Try 1329% for the recent oil bubble (1999-2008), 1489% for the S&P 500 (1980-2000) stock bubble, and 2328% for the 1970s Gold (1970-1980) bubble.

The easy money has already been made in Gold, but there is plenty of upside potential left in Gold relative to other asset classes like general stocks, corporate bonds, commodities and real estate. And once the Dow to Gold ratio hits 2 again (which it will and it may well go below one this cycle), it will be time to sell Gold and look around for the next secular bull market. Perhaps Japan's ongoing 20 year economic depression and secular stock bear market will be coming to an end by that time...

National Geographic Explorer does good job on gender

As a young law student and lawyer in the 1970’s, John Money was one of my heroes. John Money was a Johns Hopkins University psychologist who researched gender and sexuality. He concluded that sexual orientation was fixed at a young age and that a lesbian mother could not “make” her child gay. He was willing to testify for gay parents when their custody or visitation rights were challenged by their heterosexual ex-spouses. When you remember that Anita Bryant was getting gay rights ordinances repealed by arguing the need to “save the children” from “recruitment” into homosexuality, you can see how important it was that a respected expert would say that custody with a gay parent would not make a child gay.

Dr. Money also articulated the difference between sexual orientation and gender identity; and concluded that nothing about gay and lesbian parents would make their girl children identify as boys or their boy children identify as girls. This, too, was an important part of debunking the myths and stereotypes that cost so many parents who came out after heterosexual marriages access to their children.

Unfortunately, Dr. Money also believed that gender identity itself could be molded through upbringing if started at an early age. And this was his downfall. In what may his most famous case, he persuaded the parents of a boy whose circumcision had gone wildly wrong and resulted in destruction of the penis that their son could be turned into a daughter through surgery to create female-appearing genitalia, through hormones, and through consistent upbringing as a girl. The life story – and ultimate suicide- of Money’s victim, David Reimer, was told in As Nature Made Him.

I thought of Money while watching an excellent National Geographic Explorer episode, Sex, Lies, and Gender. The show highlights three distinct situations: intersexed individuals, focusing on a soldier whose MRI well into adulthood reveals that he has ovaries; transgender children, focusing on one family whose son identified immediately as a girl and how his parents came to allow the child to be fully herself; and the hijra in India, focusing on one person who balked at an arranged marriage to a woman, was ejected from his family, and went on to become an advocate for hijra, also known as the “third sex.”

I highly recommend this program. Among other things, it rightly criticizes Dr. Money for the damage he and his theories caused. That I remember the contribution he once made towards educating judges and the public about gay and lesbian parents in no way excuses the harms he caused by believing that gender was malleable at birth.

Doomed to Repeat It, Before It's Even History

President Obama ranted to the G20 Summit about Iran's nuclear program the other day. "Rant" is the right word, too. Where did Obama ever get his reputation as an effective speaker? Every time I hear him, I cringe: the hectoring tone, the mechanical Daddy-Won't-Stand-For-This-One-Second-Longer attitude. And when I read him, the obfuscations and lies drive me up the wall.

Numerous writers have been pointing out the errors in Obama's tirade (with this defender), but does he care? He's the President. For all I know he may have the support of most Americans on Iran (though not on Afghanistan, probably because we have American troops dying over there while we don't - yet -- in Iran; but does he care?), but he's still wrong. And I've known just how bad he was since I read his New York Daily News op-ed piece (via SteveB's comment under this article) from 2007 (see "discussion" here); it prepared me to be skeptical of him and his acolytes forever after. As I wrote in comments at A Tiny Revolution (no link to the comment, alas):

Reading SteveB's diary and the comments was interesting too; it made me notice some things about Obama's op-ed that I hadn't before. For example, Iran as a "challenge to American interests" -- "American interests" meaning, of course, the usual elite corporate interests. As Noam Chomsky likes to say, when national politicians and the media denounce "special interests" they mean working people, racial minorities, women, the elderly -- in short, the vast majority of the American population. By "the national interest" they mean the wealthy, the corporate, a tiny percentage of the population.

Bearing this in mind, the main threat to American interests in the Middle East is the government of the United States of America. It is also the main threat to peace in the Middle East, with Israel a close second. The foreign country most responsible for violence in Iraq, including arming Shi'a terrorists, is the United States of America. That Obama would single out Iran, in the face of this well-known reality, shows just how dangerous he is.

His insistence on diplomacy is not reassuring. Some of the Kos commenters yelled that Obama was calling for diplomacy, not war! But by chance I looked at Jon's post of April 19, 2007, in which he quoted George Bush saying, three days before the invasion of Iraq: "Tomorrow is the day that we will determine whether or not diplomacy can work..." Bush always pretended -- not very convincingly, of course -- that he only went to war because diplomacy had failed. (So did Clinton, so did Bush Sr.) So, who'd trust Obama? Not me.

There's another thing I've been meaning to mention here, from Whatever It Is I'm Against It, this quotation from an interview Obama gave to the Toledo Blade:
I was always a big believer in - when I was doing organizing before I went to law school - that focusing on concrete, local, immediate issues that have an impact on people’s lives is what really makes a difference and that having protests about abstractions [such] as global capitalism or something, generally, is not really going to make much of a difference.
It's not exactly new to hear Establishment figures (and you can't get much Establishment than Barack Obama is now) deriding popular protests on any subject. Just stay at home, you silly-billies, and let us professionals work out the hard issues! Often you can tell by just how peeved they are that the protests are indeed making them feel the pressure. It's hard to say just how much effect the worldwide protests against globalization have, but it seems that they did support the heads of state who rebelled in the late 1990s against US domination of the IMF and WTO, and that is not a bad thing. Katha Pollitt once did a great piece in The Nation (March 16, 1998, though it's not on the site unless you're a subscriber -- you can see part of it here) about a small, well-organized protest during a "Town Hall meeting" (sound familiar) at Ohio State University meant to drum up support for Bill Clinton's plan to bomb Iraq. It worked so well, to the consternation of Clinton himself, his Secretary of State Madeleine Albright, and CNN (who helped stage the spectacle) that heads of state from other countries declined to support US warmongering. "Global capitalism" isn't really an "abstraction" in the sense Obama means anyway: the protesters have very concrete notions about what they're against.

What's most offensive about Obama's statement is that, judging from his autobiography, his community organizing in Chicago was based more on his need for a job than for any clear sense of what was wrong and what needed to be done: rather, he went in to try to find something to protest. And even worse, his remarks are a slap in the face to his many earnest and idealistic supporters, who on his recommendation should have stayed home and pressured their city councils instead of joining the campaign of a cynical opportunist who made vague, pretty, and abstract promises that led them to believe he was more than just another politician on the make. Sorry, grassroots -- you were astroturf all along.

Doomed to Repeat It, Before It's Even History

President Obama ranted to the G20 Summit about Iran's nuclear program the other day. "Rant" is the right word, too. Where did Obama ever get his reputation as an effective speaker? Every time I hear him, I cringe: the hectoring tone, the mechanical Daddy-Won't-Stand-For-This-One-Second-Longer attitude. And when I read him, the obfuscations and lies drive me up the wall.

Numerous writers have been pointing out the errors in Obama's tirade (with this defender), but does he care? He's the President. For all I know he may have the support of most Americans on Iran (though not on Afghanistan, probably because we have American troops dying over there while we don't - yet -- in Iran; but does he care?), but he's still wrong. And I've known just how bad he was since I read his New York Daily News op-ed piece (via SteveB's comment under this article) from 2007 (see "discussion" here); it prepared me to be skeptical of him and his acolytes forever after. As I wrote in comments at A Tiny Revolution (no link to the comment, alas):

Reading SteveB's diary and the comments was interesting too; it made me notice some things about Obama's op-ed that I hadn't before. For example, Iran as a "challenge to American interests" -- "American interests" meaning, of course, the usual elite corporate interests. As Noam Chomsky likes to say, when national politicians and the media denounce "special interests" they mean working people, racial minorities, women, the elderly -- in short, the vast majority of the American population. By "the national interest" they mean the wealthy, the corporate, a tiny percentage of the population.

Bearing this in mind, the main threat to American interests in the Middle East is the government of the United States of America. It is also the main threat to peace in the Middle East, with Israel a close second. The foreign country most responsible for violence in Iraq, including arming Shi'a terrorists, is the United States of America. That Obama would single out Iran, in the face of this well-known reality, shows just how dangerous he is.

His insistence on diplomacy is not reassuring. Some of the Kos commenters yelled that Obama was calling for diplomacy, not war! But by chance I looked at Jon's post of April 19, 2007, in which he quoted George Bush saying, three days before the invasion of Iraq: "Tomorrow is the day that we will determine whether or not diplomacy can work..." Bush always pretended -- not very convincingly, of course -- that he only went to war because diplomacy had failed. (So did Clinton, so did Bush Sr.) So, who'd trust Obama? Not me.

There's another thing I've been meaning to mention here, from Whatever It Is I'm Against It, this quotation from an interview Obama gave to the Toledo Blade:
I was always a big believer in - when I was doing organizing before I went to law school - that focusing on concrete, local, immediate issues that have an impact on people’s lives is what really makes a difference and that having protests about abstractions [such] as global capitalism or something, generally, is not really going to make much of a difference.
It's not exactly new to hear Establishment figures (and you can't get much Establishment than Barack Obama is now) deriding popular protests on any subject. Just stay at home, you silly-billies, and let us professionals work out the hard issues! Often you can tell by just how peeved they are that the protests are indeed making them feel the pressure. It's hard to say just how much effect the worldwide protests against globalization have, but it seems that they did support the heads of state who rebelled in the late 1990s against US domination of the IMF and WTO, and that is not a bad thing. Katha Pollitt once did a great piece in The Nation (March 16, 1998, though it's not on the site unless you're a subscriber -- you can see part of it here) about a small, well-organized protest during a "Town Hall meeting" (sound familiar) at Ohio State University meant to drum up support for Bill Clinton's plan to bomb Iraq. It worked so well, to the consternation of Clinton himself, his Secretary of State Madeleine Albright, and CNN (who helped stage the spectacle) that heads of state from other countries declined to support US warmongering. "Global capitalism" isn't really an "abstraction" in the sense Obama means anyway: the protesters have very concrete notions about what they're against.

What's most offensive about Obama's statement is that, judging from his autobiography, his community organizing in Chicago was based more on his need for a job than for any clear sense of what was wrong and what needed to be done: rather, he went in to try to find something to protest. And even worse, his remarks are a slap in the face to his many earnest and idealistic supporters, who on his recommendation should have stayed home and pressured their city councils instead of joining the campaign of a cynical opportunist who made vague, pretty, and abstract promises that led them to believe he was more than just another politician on the make. Sorry, grassroots -- you were astroturf all along.

Asset Class of the Decade: Gold




In the end as an investor, it's all about the scoreboard. For those who aren't traders, allocation to the correct asset classes is critical to long-term returns. Following are the returns for the S&P 500, the U.S. Dollar (using the Dollar Index as a proxy), Commodities (using the Continuous Commodity Index [$CCI] as a proxy) and Gold. These returns ignore dividends, yields, and expenses, which are important concepts over the long-term and make this a less than ideal comparison. You can plug in whatever figures you think are appropriate and make your own comparison(s) if you're so inclined.



How is it possible that a hunk of metal has returns comparable to the stock market over the past 15 years? Does this surprise you? Are you familiar with the Dow to Gold ratio as a long-term concept? If not, perhaps it is not too late to familiarize your self with this concept, especially since the Dow to Gold ratio will drop to 2 at a minimum and may well drop below 1 this cycle.

Here's an up-to-date log scale chart of the Dow to Gold ratio over the past 5 years:



The long-term chart (20 year log scale candlestick chart) of Gold shows a strong bull market with no trend line breaks over the past 8 years and with aligned and rising 50 and 200 week moving averages:



The bull market in stocks and commodities is no longer in force using basic chart analysis. Things are always subject to change, of course, but with a trailing P:E ratio of 150 (based on reported earnings, not the garbage operating earnings spewed by CNBC bulltards) and a very weak global economy, stocks and commodities will likely not resume a secular bull market any time soon. This is also the message in their long term charts (following are 20 year log scale charts of the S&P and everyone's favorite commodity, oil [$WTIC]):





Since the Dow to Gold ratio will get back to 2 (at a minimum), those who sell their general stocks and buy physical Gold will be able to trade their Gold for at least 5 times the number of stocks within the next decade. This is equivalent to a 400% gain in stocks over a decade or less without taking the risk of owning stocks! The Gold bull market is alive, well, and not close to being done in time or price.