In a move drawing outrage from gay rights leaders and the San Francisco District Attorney, the campaign to eliminate marriage for same-sex couples in California mailed flyers to voters with a picture of Barack Obama -- and Michele -- and a quote: "I'm not in favor of gay marriage." The message "Vote Yes on Prop 8" appears under Obama's image.
But Obama had gone on record AGAINST Prop 8, and the flyer was a blatant attempt to mislead California voters into believing to the contrary.
When National Center for Lesbian Rights legal director Shannon Minter brought this to my attention earlier today, I said it was especially infuriating because four days before the election Obama could not afford to publicly disavow it. Well I was selling short the man I hope will be our next President. In fact, late Friday evening his campaign put out a statement reaffirming his opposition to Prop 8. It gave me a pinch-me-I-must-be-dreaming moment.
When Congress passed DOMA weeks before the 1996 election, President Clinton signed it. It was widely believed that a veto would torpedo his reelection. Obama's response to this one misleading flyer is nowhere near as consequential as vetoing a law passed by Congress, but, still, I expected caution on Obama's part, and therefore silence.
I'm writing tonight from Hampton, Virginia, where I've been working this week on Get Out The Vote. The volunteers range from young people to 92. We work tirelessly. We have fun. We have faith in the future. And tonight my faith just deepened.
Poetry Friday - they called him mother sometimes ...
They called him mother sometimes,
curling their knees to their chests,
arms around their knees,
with their soft wet mouths pressed
against his side in the darkness.
He liked to cradle them that way,
he could love them easily then,
softly laying an arm over their cool shoulders,
tenderly so they wouldn't wake up.
In his mind they were the children he'd never had
and never would have, but better:
he never had to demand, for they gave.
curling their knees to their chests,
arms around their knees,
with their soft wet mouths pressed
against his side in the darkness.
He liked to cradle them that way,
he could love them easily then,
softly laying an arm over their cool shoulders,
tenderly so they wouldn't wake up.
In his mind they were the children he'd never had
and never would have, but better:
he never had to demand, for they gave.
4 January 1971
Poetry Friday - they called him mother sometimes ...
They called him mother sometimes,
curling their knees to their chests,
arms around their knees,
with their soft wet mouths pressed
against his side in the darkness.
He liked to cradle them that way,
he could love them easily then,
softly laying an arm over their cool shoulders,
tenderly so they wouldn't wake up.
In his mind they were the children he'd never had
and never would have, but better:
he never had to demand, for they gave.
curling their knees to their chests,
arms around their knees,
with their soft wet mouths pressed
against his side in the darkness.
He liked to cradle them that way,
he could love them easily then,
softly laying an arm over their cool shoulders,
tenderly so they wouldn't wake up.
In his mind they were the children he'd never had
and never would have, but better:
he never had to demand, for they gave.
4 January 1971
FIND YOURSELF A NEW BOY.
CMJ had no shortage of highlights, but perhaps the best pairing of the week came when two of the UK's finest new electro acts, The Whip and Late of the Pier, made their stateside debuts at the Music Hall of Williamsburg last Wednesday. Between the mechanical brilliance of the Whip's crushing synths and the over-the-top spectacle of Late of the Pier, it was one of the more lethal one-two punches the week had on tap and another reminder of just how many untouchable singles the Pier's Fantasy Black Channel has to offer. The way in which the shockingly young four-piece recontextualize familiar parts - the Gary Numan synths and Zeppelin-esque chorus of "Bathroom Gurgle", the Hendrix-inspired guitar breakdown of "Heartbeat" - in a wholly original new setting is amazing on record and something even more special to behold live, and you get the feeling this is a band who's only just begun to tap into their seemingly boundless potential. And speaking of "Bathroom Gurgle", the single that served as the band's schizophrenic statement of intent when they burst onto the scene with Moshi Moshi a year ago saw a beefed up re-release this week complete with a flurry of big name remixes. Enjoy its fruits in the form of Filthy Dukes' faithful reimagination of the track below.
MP3: "Bathroom Gurgle" (Filthy Dukes Remix) - Late of the Pier
// Signalnoise //
The swinging pendulum in history
Below is a table I created to show a rough estimate of returns for gold stocks versus the Dow Jones Industrial Average during recent periods in history. These periods correspond roughly with long-term (i.e. secular) bull and bear markets in general stocks. Homestake Mining was a long-time blue chip gold miner that merged with Barrick Gold Corporation (ticker symbol ABX) in 2001 and serves as a reasonable proxy for the gold mining sector during the final 70 years of the last century.
These returns are somewhat idealized, as no one can pick the exact top and bottom for a long-term bull move. These returns also ignore dividends and inflation, which are NOT negligible when calculating long-term returns. But the basic concept is well illustrated: when the general stock market takes a dump for 10-15 years, gold stocks are a good place to be. Conversely, when times are good and general stocks are doing well, gold stocks are a crappy investment.
What about the 2000-2008 time period? Using the the ticker symbol GDX, which is an ETF (like a mutual fund) that represents a basket of gold mining companies (with a few silver miners thrown in), the idealized return from the low in 2000 to today's close is 320%. For the Dow, from the high in 2000 to today's close gives a return of -23%. Quite a difference, eh? Not only that, but we have just undergone a wicked correction in gold stocks, while the crash in general stocks is just a hint of what's to come.
From here on out, gold stocks are going to start significantly outperforming general stocks and dividends for gold stocks are going to start increasing rapidly over the next few years. Buy gold stocks now and hold for several years (but not forever!).
Global trade collapse
The Baltic Dry Index tracks the price of shipping raw materials by sea. Because demand changes faster than the number of ships available to move cargo, it is used as a proxy for global demand for raw materials and is a leading economic indicator, meaning it can be looked to for its power to predict the health of the global economy over the coming months.
As a firm believer in the concept that price charts can tell better and more accurate stories than commentators can, let's take a look at a 6 year chart of the Baltic Dry Index chart:
This chart is saying that global commerce has come to a sudden, grinding halt. This is the real-world knock-on effect of the financial crisis. Everyone suspects everyone else is broke and no one wants to ship their goods to another country when they are concerned about whether or not they will get paid. Weaker countries are at risk of developing shortages of strategic goods and commodities if this keeps up.
How do central banks and politicians respond to such a crisis? By printing money and lowering interest rates to try to "grease" the wheels of commerce and get them turning again. This is why inflation will follow deflation like night follows day.
In a fiat currency world, you have to learn to jump from asset class to asset class or risk losing wealth due to currency depreciation. You can ill-afford significant losses when a 5% annual gain in paper wealth is needed just to keep up with inflation. When the stock market is in a nice, long-term secular bull market like in the period from 1982-2000, stocks will get you there and are the place to be. People who hold gold and gold mining stocks during these periods get KILLED.
When stocks enter a secular bull market correction (or secular bear market as its known to people who don't like bullshit and sugar coating on everything), such as the 1966-1982 period and the 2000-2008 period, people get KILLED by staying in general stocks with a "buy and hold forever" mentality. The current secular bear market won't end before 2015-2020, so there's plenty of time to get out of the general stock market and switch to what works. Gold and gold mining stocks are a good way to play this period and will perform just like regular stocks did from 1982-2000.
There are other proxies that can do well in these long bear market periods, such as cash when deflation is the primary problem or other commodities (e.g., oil, food) and commodity stocks when inflation is the primary problem. Because it can be confusing at times which force (deflation or inflation) will win out and tides can turn quickly (a la this summer when everyone thought oil was going to $200 and the dollar going to zero and now deflation is in full gear), gold and gold mining stocks are an easier way to play it than cash or general commodities.
By the way, when this secular bear market ends in a decade or so, I will be selling my gold and gold stocks and buying the S&P 500. I am not tied to any investment, I am a person looking to make money from my investments, whether it's real estate, stocks, bonds, oil, gold, or widgets. When an ounce of gold can just about buy the entire Dow Jones Industrial Average, I'll be looking to exit the gold trade and come back to CNBC to wallow in their ignorant financial cheerleading.
I think gold stocks have found a bottom, though they may have to re-test their lows to solidify a base to "launch" from. After that, it should be off to the races for a 50-100% gain in most gold stocks between this week and the end of May, 2009. Once spring comes, I'll be looking to exit gold stocks and go short the stock market again, though I will continue to accumulate physical gold as my safe cash equivalent that cannot be debased by the insidious actions of hopeless bureaucrats.
Not Gay Enough
The name of my blog is starting to seem like a misnomer: "So Gay"? Hah! I'm as obsessed with the U.S. elections as everybody else, for reasons having little to do with my fagitude. I haven't even mentioned California's Proposition 8, which aims to amend the California State Constitution to define marriage as an exclusively heterosexual affair. All the gay and gay-friendly bloggers are calling it Proposition Hate. So clever. (I've had reservations for many years about the use of the word "hate" to mean bigotry and its relatives, and I see no reason to cancel those reservations now; but of that more another time, perhaps.) I've begun wondering if the opposition to 8 is being led by the qualified professionals who've failed to defeat other such initiatives in the past; but of that, more another time. I don't know where the time goes. It's after 10:30 p.m. Bloomington time, and I'm just getting started on so many things that needed to be done today. (But then, as I found when I idly googled the phrase, some people are too gay, lots of people aren't gay enough. Maybe it's a new fad. Maybe it should become an organization, or a movement.)For now, I see from The Hankyoreh that:
The National Human Rights Commission of Korea has concluded that the police used excessive force in putting down the candlelight protests and in doing so violated participants’ civil rights. In its formal recommendation, it called on the police to abide by defensive guidelines and to prohibit the use of fire extinguishers, and it called for a warning for National Police Agency Chief Eo Cheong-soo and censure of riot police commanders.
This tends to support Amnesty International's report of last July on police abuses during the protests. Naturally, the police and President Lee Myeong-bak have ignored both Amnesty and the Human Rights Commission.
Also from The Hankyoreh, a new Korean organization has been founded to continue the project of protecting and extending democracy in Korea. The National Congress on Public Welfare and Democracy was inaugurated with a smallish rally on October 5 in Cheongye Plaza, the site of last summer's candlelight vigils.
There'll be plenty for them to do. On top of the rollback of democracy that President Lee has been trying to carry out, the South Korean economy is in as much trouble as that of the U.S. The Korean currency, the won, fell this week to its lowest level since April 6, 1998, the time of the great economic crisis. This will especially hurt small and middle-sized businesses; more in The Hankyoreh article I just linked. And that's enough for tonight.
Not Gay Enough
The name of my blog is starting to seem like a misnomer: "So Gay"? Hah! I'm as obsessed with the U.S. elections as everybody else, for reasons having little to do with my fagitude. I haven't even mentioned California's Proposition 8, which aims to amend the California State Constitution to define marriage as an exclusively heterosexual affair. All the gay and gay-friendly bloggers are calling it Proposition Hate. So clever. (I've had reservations for many years about the use of the word "hate" to mean bigotry and its relatives, and I see no reason to cancel those reservations now; but of that more another time, perhaps.) I've begun wondering if the opposition to 8 is being led by the qualified professionals who've failed to defeat other such initiatives in the past; but of that, more another time. I don't know where the time goes. It's after 10:30 p.m. Bloomington time, and I'm just getting started on so many things that needed to be done today. (But then, as I found when I idly googled the phrase, some people are too gay, lots of people aren't gay enough. Maybe it's a new fad. Maybe it should become an organization, or a movement.)For now, I see from The Hankyoreh that:
The National Human Rights Commission of Korea has concluded that the police used excessive force in putting down the candlelight protests and in doing so violated participants’ civil rights. In its formal recommendation, it called on the police to abide by defensive guidelines and to prohibit the use of fire extinguishers, and it called for a warning for National Police Agency Chief Eo Cheong-soo and censure of riot police commanders.
This tends to support Amnesty International's report of last July on police abuses during the protests. Naturally, the police and President Lee Myeong-bak have ignored both Amnesty and the Human Rights Commission.
Also from The Hankyoreh, a new Korean organization has been founded to continue the project of protecting and extending democracy in Korea. The National Congress on Public Welfare and Democracy was inaugurated with a smallish rally on October 5 in Cheongye Plaza, the site of last summer's candlelight vigils.
There'll be plenty for them to do. On top of the rollback of democracy that President Lee has been trying to carry out, the South Korean economy is in as much trouble as that of the U.S. The Korean currency, the won, fell this week to its lowest level since April 6, 1998, the time of the great economic crisis. This will especially hurt small and middle-sized businesses; more in The Hankyoreh article I just linked. And that's enough for tonight.
Why I am scared about the U.S. Dollar despite the current deflation
These two charts from the Federal Reserve website (http://research.stlouisfed.org/fred2/) show why. First, a chart of the nominal amount of "new money" created by the Federal Reserve lately, called the "Adjusted Monetary Base."
Next, to keep the nominal amounts in perspective, a chart that shows the percentage year-over-year change in the adjusted monetary base:
So, what does this mean? It means the Federal Reserve is printing money like mad. Right now, banks are hoarding the money instead of making new loans because banks are nervous to lend in this environment and consumers are either unable or unwilling to make major purchases right now (deflationary activities by these market participants). It is to the point where the Federal Reserve and U.S. Treasury are bypassing the banks and giving money directly to companies and shoring up commercial paper markets directly, trying anything and everything they can think of to ward off a deflationary spiral. Looking at the chart above, the monetary injections by the Fed after 9/11 and in anticipation of "Y2K" (anyone remember that crazy b.s.?) are tiny warm-ups compared to the current situation.
This monetary shitstorm is ultimately highly inflationary, though it will take time to work its way into the system. If everyone has $100 of Monopoly money and then the U.S. government hands out the equivalent of another $100 of Monopoly money per person, prices will double. That's inflation in an oversimplified nutshell. Cash is king during a deflationary period, which we are now in, but exactly how long it will last is difficult to predict precisely. Those who hold U.S. dollars during this period are doing the right thing, but they will need to switch back to other asset classes once this new money printing makes its way into society and the dollar begins to fall again.
This is why I hold physical gold. It will retain its purchasing power during the current deflationary environment (unlike other commodities such as oil) and it will rise in value once the next potentially massive inflationary wave gets underway. Gold does not require a healthy economy to perform as an asset and, in fact, tends to outperform (or at least hold its value) in times of economic trouble. For those who don't know anything about how to buy physical gold, it's time to learn.
SO GO ON PACK YOUR BAGS.
CMJ is behind us, but the hangover’s only just begun. Friendly Fires topped our list of bands to see at this year’s extravaganza, but between scouting obligations, Passion Pit blowing up all over the place and the sheer number of bands on offer they somehow fell by the wayside. A shame, as the Aeroplane remix of “Paris” has had them in heavy rotation more than ever around these parts. Au Revoir Simone helped out on the chorus of the original, but the roles are reversed here as they take the lead, the honeyed vocals setting the mood over churning basslines and sprightly synths that propel the song forward in that signature Aeroplane style. Transcendent stuff and just another reason the Belgian duo are some of the most lusted after remixers in the game right now.
MP3: "Paris" (Aeroplane Remix) - Friendly Fires
// Coloresque //
Recycling For a Better America
The Sideshow has this bit today:
As Alexander Cockburn put it at Counterpunch last weekend,
None of this is exactly obscure, and I hope I'm not the only person who remembers how the Democratic Congress of 2006 paid back those who voted them into office. Yet Obama fans and critics alike ignore what the man has been saying, quite loudly, all along. Ironically, his fans and his opponents agree that Obama is only pretending to be a "moderate" (read: right-wing supporter of empire and corporatism) and that once he's elected he'll rip off the mask to reveal himself as a man of the Left!!!!!! Of course it's possible, but it's more likely that he'll swing even farther to the right, with or without the help of the DLC. I mean, he's already been talking about bipartisanship with regard to the financial crisis. Does anyone have any illusions about what that means?
I hear some folks saying, Okay, once he's in office we'll hold his feet to the fire. Just how do they plan to do this, I wonder? By thinking pure thoughts? Does that mass network of supporters who've given him their money and worked for him have any independent access to each other that might enable them to build a mass movement that could actually bring pressure on him to "do what the people elected elected him to do"? A March on Washington? Or maybe they'll de-friend him on MySpace? That would bring him to heel! It seems to me that this talk is just a wishful-thinking fantasy. I think they believe Obama himself will lead them, and in the light of his record that's just plain nuts.
Digby says: "I've been writing for a very long time that the minute a Democratic president is sworn in, the Village cries for bipartisanship are going to be deafening. They did it after 2006 --- imagine what they'll do now. Just last week, Broder laid down the gauntlet. Now Obama fan (and former Bush sycophant) Howard Fineman is starting to get nervous." Yes, it's terrifying to think that Obama might actually do what the people elected him for, rather than to protect the Villagers and the Republicans from paying for their sins.Digby herself links to Howard Fineman at Newsweek. The article is blurbed "Obama's supporters have high expectations, and they may expect to have a voice in governing." It's startling to see such a blatant example of what Noam Chomsky has been claiming for years -- that American political elites, despite lip service to "democracy", are terrified by the the thought that the rabble might try to horn in on their racket. Fineman writes:
"His supporters have sky-high expectations and expect to be involved," says Will Marshall, who studied the Obama organization for the Democratic Leadership Council. "They are loyal but not easy to control." ...Fineman goes on to worry that Obama's "machine" might force (or enable?) him to defy "much of America" who want more US troops in Afghanistan. Even worse, "initiating talks with Iranian and Venezuelan dictators enjoys more support on his e-mail lists than in the rest of the country." (By "dictators" Fineman of course means properly elected presidents, unlike our own Dear Leader.) And so on; it's an entertaining performance. David Sirota, also linked by Digby, jeers at Fineman for "freaking out about an Obama presidency and how it might actually mean real change": "This is a portrayal designed to press Obama to immediately shun his base, capitulate to conservatives ... [and] deliberately 'disappoint' the people who elected him."
"We have a very trusting organization," David Plouffe, the campaign manager, told me. ... "These are people who are responsive," he says. "They want to be respected and to continue to be involved in what we do." And so they will be if Obama is elected. "If he wins, he's going to have a personal following he can use to press his agenda," says Marshall. "He can use these millions to reach over the heads of the Washington insiders, the Democrats on the Hill. It could be powerful."
As Alexander Cockburn put it at Counterpunch last weekend,
So far as the progressives and the left are concerned, Palin’s useful function has been to detain them from misgivings about the Democratic ticket which 98 per cent of them are going to vote for. From the vantage point of 2008 I wouldn’t blame Al Gore or John Kerry from feeling that maybe there’s been a double standard at work here, between the rough treatment they got from the left and from radical environmentalists, as compared to the well-mannered silence about Obama’s call for a 90,000 increase in the Armed Forces, his endorsement of nuclear power, “clean coal”, warrantless wire-tapping, tort reform, real ID, groveling to the bankers and the Israel lobby and so forth. K St loves Obama. So do the defense contractors. They love Biden too. Just to refresh your memories of what a progressive platform actually looks like, take a look at the website of the Nader campaign. Like the U.S. senators’ knowledge of foreign policy, the bar these days for what the left finds bearable is awfully low. The more the left holds its tongue, the lower the bar will go.Of course the Democratic Leadership Council is worried that Obama's constituents might be able to pressure him to move in a leftish direction; the DLC are the Reaganite scum who gave us the Clintons and Gore, among others, and they've been pushing the party to the right for decades. But I don't see any indication that Obama has any intention of being pushed in that direction, having made his plans deafeningly clear: continued occupation of Iraq, enlarge the armed forces, increase troop strength in Afghanistan and elsewhere; he wants to continue the Cuban embargo and restore US dominance in those Latin American countries that have begun to break away from it; he believes that Social Security is in crisis, he voted for the renewal of the Patriot Act and FISA, he helped drive through the Bush-Paulson bailout, and so on. (Obama has been advocating bipartisanship all along, in fact, and here's Rachel Maddow trying to argue that Obama is so bipartisan! -- as if collaboration with the Bush gang were something to be asserted with pride.)
None of this is exactly obscure, and I hope I'm not the only person who remembers how the Democratic Congress of 2006 paid back those who voted them into office. Yet Obama fans and critics alike ignore what the man has been saying, quite loudly, all along. Ironically, his fans and his opponents agree that Obama is only pretending to be a "moderate" (read: right-wing supporter of empire and corporatism) and that once he's elected he'll rip off the mask to reveal himself as a man of the Left!!!!!! Of course it's possible, but it's more likely that he'll swing even farther to the right, with or without the help of the DLC. I mean, he's already been talking about bipartisanship with regard to the financial crisis. Does anyone have any illusions about what that means?
I hear some folks saying, Okay, once he's in office we'll hold his feet to the fire. Just how do they plan to do this, I wonder? By thinking pure thoughts? Does that mass network of supporters who've given him their money and worked for him have any independent access to each other that might enable them to build a mass movement that could actually bring pressure on him to "do what the people elected elected him to do"? A March on Washington? Or maybe they'll de-friend him on MySpace? That would bring him to heel! It seems to me that this talk is just a wishful-thinking fantasy. I think they believe Obama himself will lead them, and in the light of his record that's just plain nuts.
Recycling For a Better America
The Sideshow has this bit today:
As Alexander Cockburn put it at Counterpunch last weekend,
None of this is exactly obscure, and I hope I'm not the only person who remembers how the Democratic Congress of 2006 paid back those who voted them into office. Yet Obama fans and critics alike ignore what the man has been saying, quite loudly, all along. Ironically, his fans and his opponents agree that Obama is only pretending to be a "moderate" (read: right-wing supporter of empire and corporatism) and that once he's elected he'll rip off the mask to reveal himself as a man of the Left!!!!!! Of course it's possible, but it's more likely that he'll swing even farther to the right, with or without the help of the DLC. I mean, he's already been talking about bipartisanship with regard to the financial crisis. Does anyone have any illusions about what that means?
I hear some folks saying, Okay, once he's in office we'll hold his feet to the fire. Just how do they plan to do this, I wonder? By thinking pure thoughts? Does that mass network of supporters who've given him their money and worked for him have any independent access to each other that might enable them to build a mass movement that could actually bring pressure on him to "do what the people elected elected him to do"? A March on Washington? Or maybe they'll de-friend him on MySpace? That would bring him to heel! It seems to me that this talk is just a wishful-thinking fantasy. I think they believe Obama himself will lead them, and in the light of his record that's just plain nuts.
Digby says: "I've been writing for a very long time that the minute a Democratic president is sworn in, the Village cries for bipartisanship are going to be deafening. They did it after 2006 --- imagine what they'll do now. Just last week, Broder laid down the gauntlet. Now Obama fan (and former Bush sycophant) Howard Fineman is starting to get nervous." Yes, it's terrifying to think that Obama might actually do what the people elected him for, rather than to protect the Villagers and the Republicans from paying for their sins.Digby herself links to Howard Fineman at Newsweek. The article is blurbed "Obama's supporters have high expectations, and they may expect to have a voice in governing." It's startling to see such a blatant example of what Noam Chomsky has been claiming for years -- that American political elites, despite lip service to "democracy", are terrified by the the thought that the rabble might try to horn in on their racket. Fineman writes:
"His supporters have sky-high expectations and expect to be involved," says Will Marshall, who studied the Obama organization for the Democratic Leadership Council. "They are loyal but not easy to control." ...Fineman goes on to worry that Obama's "machine" might force (or enable?) him to defy "much of America" who want more US troops in Afghanistan. Even worse, "initiating talks with Iranian and Venezuelan dictators enjoys more support on his e-mail lists than in the rest of the country." (By "dictators" Fineman of course means properly elected presidents, unlike our own Dear Leader.) And so on; it's an entertaining performance. David Sirota, also linked by Digby, jeers at Fineman for "freaking out about an Obama presidency and how it might actually mean real change": "This is a portrayal designed to press Obama to immediately shun his base, capitulate to conservatives ... [and] deliberately 'disappoint' the people who elected him."
"We have a very trusting organization," David Plouffe, the campaign manager, told me. ... "These are people who are responsive," he says. "They want to be respected and to continue to be involved in what we do." And so they will be if Obama is elected. "If he wins, he's going to have a personal following he can use to press his agenda," says Marshall. "He can use these millions to reach over the heads of the Washington insiders, the Democrats on the Hill. It could be powerful."
As Alexander Cockburn put it at Counterpunch last weekend,
So far as the progressives and the left are concerned, Palin’s useful function has been to detain them from misgivings about the Democratic ticket which 98 per cent of them are going to vote for. From the vantage point of 2008 I wouldn’t blame Al Gore or John Kerry from feeling that maybe there’s been a double standard at work here, between the rough treatment they got from the left and from radical environmentalists, as compared to the well-mannered silence about Obama’s call for a 90,000 increase in the Armed Forces, his endorsement of nuclear power, “clean coal”, warrantless wire-tapping, tort reform, real ID, groveling to the bankers and the Israel lobby and so forth. K St loves Obama. So do the defense contractors. They love Biden too. Just to refresh your memories of what a progressive platform actually looks like, take a look at the website of the Nader campaign. Like the U.S. senators’ knowledge of foreign policy, the bar these days for what the left finds bearable is awfully low. The more the left holds its tongue, the lower the bar will go.Of course the Democratic Leadership Council is worried that Obama's constituents might be able to pressure him to move in a leftish direction; the DLC are the Reaganite scum who gave us the Clintons and Gore, among others, and they've been pushing the party to the right for decades. But I don't see any indication that Obama has any intention of being pushed in that direction, having made his plans deafeningly clear: continued occupation of Iraq, enlarge the armed forces, increase troop strength in Afghanistan and elsewhere; he wants to continue the Cuban embargo and restore US dominance in those Latin American countries that have begun to break away from it; he believes that Social Security is in crisis, he voted for the renewal of the Patriot Act and FISA, he helped drive through the Bush-Paulson bailout, and so on. (Obama has been advocating bipartisanship all along, in fact, and here's Rachel Maddow trying to argue that Obama is so bipartisan! -- as if collaboration with the Bush gang were something to be asserted with pride.)
None of this is exactly obscure, and I hope I'm not the only person who remembers how the Democratic Congress of 2006 paid back those who voted them into office. Yet Obama fans and critics alike ignore what the man has been saying, quite loudly, all along. Ironically, his fans and his opponents agree that Obama is only pretending to be a "moderate" (read: right-wing supporter of empire and corporatism) and that once he's elected he'll rip off the mask to reveal himself as a man of the Left!!!!!! Of course it's possible, but it's more likely that he'll swing even farther to the right, with or without the help of the DLC. I mean, he's already been talking about bipartisanship with regard to the financial crisis. Does anyone have any illusions about what that means?
I hear some folks saying, Okay, once he's in office we'll hold his feet to the fire. Just how do they plan to do this, I wonder? By thinking pure thoughts? Does that mass network of supporters who've given him their money and worked for him have any independent access to each other that might enable them to build a mass movement that could actually bring pressure on him to "do what the people elected elected him to do"? A March on Washington? Or maybe they'll de-friend him on MySpace? That would bring him to heel! It seems to me that this talk is just a wishful-thinking fantasy. I think they believe Obama himself will lead them, and in the light of his record that's just plain nuts.
Spin
It's everywhere. Two examples from the past 24 hours (though I know there are many more) are astounding to me.
First courtesy of marketwatch.com (http://www.marketwatch.com/news/story/g7-yen-warning-raises-intervention/story.aspx?guid=%7B11870235%2D4DBB%2D499A%2DBAA2%2D3063C0237881%7D), the headline:
G7 warns against 'excessive' yen volatility
LONDON (MarketWatch) -- A warning by the Group of Seven industrialized nations against "excessive volatility" in the Japanese yen Monday did little to quell safe-haven flows, but could set the stage for coordinated intervention aimed at arresting the currency's ongoing rise, strategists said.
''We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability,'' G-7 finance ministers and central bank chiefs said, in a joint statement. "We will continue to monitor markets closely, and cooperate as appropriate."
Below is a chart of the Japanese Yen with my comments:
Where is the "excessive" volatility relative to the historical price action shown in this chart? Japan wants to help "cooperate" (i.e. intervention by policy makers of different countries into supposedly free markets) to make its currency weaker, which will punish all its citizens who hold cash as a store of value or who are on fixed incomes.
Next up, home sales data compliments of Yahoo! Finance (http://biz.yahoo.com/ap/081027/economy.html):
AP
September new home sales rise by 2.7 percent
New home sales post unexpected increase as prices fall to lowest level in 4 years
WASHINGTON (AP) -- Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday.
Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level…
After the headline and lead paragraphs, the following appears in this article: "The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst slump in housing in decades."
Let's take a look at housing in chart form, shall we? The chart below is stolen from the Paper Economy real estate blog (http://paper-money.blogspot.com/), a great site.
Housing comparisons are ALWAYS done on a year-over-year comparison basis due to normal seasonal variation that makes adjacent month-to-month comparisons dubious at best. Yet, every month without fail since the housing crash has started, mainstream journalists report a little ray of sunshine by having a headline completely opposed to reality. The latest numbers are ATROCIOUS and downright scary! A 33% drop from the previous year is a devastating decline and indicates housing ain't even close to bottoming out.
What is my point with all this? Listening to mainstream media or our government for information about markets and trying to make investment decisions based on this information is the worst possible thing you can do. In fact, you're much better off assuming the exact OPPOSITE of what is printed or said to be true. George Orwell would be so proud of the "1984" society we have created.
If information is printed or stated again and again enough times, people start to believe it. It seeps into their subconscious and affects their decision-making processes. "Buy and hold for the long term" is a great example of false information and even the great Warren Buffet is about to learn that this isn't such a great idea all the time.
We have been on a fake, Monopoly money system for so long that people think it's safe and normal. Nothing could be further from the truth. The long-term chart of the Dow-to-gold ratio is telling us that we are headed for a long-term breakdown of trust in paper assets, which is clearly well underway but also has much further to go.
Gold is a SAFE place to park your money during this financial storm, gold miners are now (i.e. now that the correction in gold stocks has ended) the best way to profit in this ongoing storm that has much further to go, and no one in the mainstream media will tell you this until it is TOO LATE!
Gold is laughed at despite its 3000+ year history of serving as a currency and store of value and despite the fact that EVERY FIAT CURRENCY SYSTEM IN HISTORY HAS FAILED. Every single one, and believe me, there have been many. The current downturn in global stock markets and asset prices will not end until people wake up and repudiate the lack of a gold (or other hard asset) backing for their money. We are quite a ways off from this event. The world has been awash in paper Monopoly money backed by nothing but the hollow promises of politicians. We have had both the good (i.e. stocks and real estate go up) and the bad (gasoline and food go up) effects of the subsequent inflations due to excessive money printing.
Now we are in a deflationary storm that will resist all efforts to "print our way out of it," but the political hubris to try anyway will persist long after it is appropriate and create serious long-term damage to the fragile confidence in our system of paper promises. Gold will hold its value through this storm and the companies who dig the precious metal out of the ground will now outshine every other asset class for at least the next 2-3 years.
IMPORTANT PARENTING LEGISLATION IN GREAT BRITAIN
When a bill passed by Great Britain’s House of Commons on October 22 becomes law, lesbians will have easier access to assisted reproduction. Current UK law requires fertility clinics to consider a child’s “need for a father” before accepting a patient for treatment. The new law requires clinics to consider a child’s need for “supportive parenting.” Equally important, a lesbian couple who has a child will be able to put both parents’ names on the birth certificate, so the non-biological mom will not have to adopt her own child. That’s what we are trying to do in the District of Columbia, and what couples who marry or enter civil unions/domestic partnerships in Massachusetts, California, Vermont, New Hampshire, New Jersey, and Oregon can already do.
Kudos to the LGB group Stonewall.
Kudos to the LGB group Stonewall.
Mama's Boys
The other night I watched a documentary called Blossoms of Fire, about the city of This is all very laudable, but it’s hardly a matriarchy, except to people to whom a situation that approaches equality equals rule by women over men. (Or even a situation that doesn’t approach equality – in the 1950s, when American women had been driven from the WWII factories back to the kitchens and family rooms, eunuchs like Philip Wylie and William Burroughs still claimed that the US was a matriarchy. For some men, mere sentience in women feels like a threat of dominance.) There are plenty of people who see things that way. Blossoms of Fire begins by describing local reaction to an article about Juchitán in the Mexican edition of the magazine Elle, which claimed that the Juchitanas “prohibit the men from buying and selling in the market” and force their husbands to “babysit” while they cavort with boy toys.
Now, Elle appears to be a fashionable mag that views itself as sophisticated, which confirms once again my observation that sophisticated, stylish people are generally quite stupid and backward – especially since what the women of Juchitán have achieved is what sophisticated North American and European women consider a major, if tenuous, achievement of their movements toward sexual equality. “You’ve come a long way, baby,” so far that you’ve almost caught up with a bunch of Indian women in the Mexican hinterlands. Except that these women wear “traditional” colorful native garb, and eschew makeup. (One of the pleasures of the film for me was its celebration of the beauty and strength of these middle-aged and older women, who exhibit the same confidence and pride that we gringos associate with older men, not women.)
Against the Juchitanas’ hard-earned equality, though, it should be noted that their society still has a cult of virginity – for women, of course. Another tradition is the “kidnapping” (robar is the Spanish word used by one of the men in the film) of brides by their grooms, which leads to negotiations between the respective families, and if the bride proves to be a virgin, she’s worth a lot more. This information appears in a 20-minute featurette on the DVD, which should have been integrated into the film itself; if you watch the DVD, be sure to watch the additional material as well. At 74 minutes, Blossoms of Fire wouldn’t be stretched by being a bit longer.
One thing I found very interesting about the film was its inclusion of several homosexuales (which the subtitles render, not quite correctly for reasons I’ll go into, as “gay”) and lesbians – or rather, one lesbian, a handsome woman with neck-length hair and a mildly butch affect, and a girlfriend (possibly) sitting next to her at the table in traditional Juchitana garb. It wouldn’t be correct to call her a marimacha, because she’s really not more masculine than the “matriarchs” who are at the center of the film: cut their hair to the same length, put them in t-shirts and jeans, and they’d probably look just like her. The homosexuales are all big queens, in halters and makeup and plucked eyebrows. They mostly agree that they are different from American gays because we Americans are always talking about “realizing” that we were gay at 15, or 20, or 30, whereas they all knew that they were homosexuales from the beginning. I must point out that American sissies are just as likely to have started dressing up in their mothers’ clothes at 3 as any homosexual. And nowadays the standard line even among gender-compliant Homo-Americans is that they knew they were Different from an early age, and therefore they must have been born gay.
As female-identified as the Juchitán homosexuales seem to be, however, the women they identify with aren’t their mothers. They don’t seem to work in the markets with their mothers, and their fashion role models, like those of American queens, are basically hookers. (Not that there's anything wrong with that! I've just always been baffled by the images of women many gay men see as their ideals. But see this article, for example. I've learned to be wary, though, when any place, from Morocco to San Francisco to Juchitán, is called a "Queer Paradise.") And to recall my rant on scientific models of the Homosexual from a couple of weeks ago, though the film doesn’t mention it, it’s safe to presume that they don’t have sex with each other: they fit the common Latin American model of the homosexual, so they look for Real Men, activos to match their pasivos. (“Active” and “passive” don’t really fit reality either – pasivos are about as passive as “starving ravens,” as the sociologist Annick Prieur put it in Mema’s House, Mexico City: on transvestites, queens, and machos (Chicago, 1998), her study of vestidas, or cross-dressing homosexuales in the metropole. But they are the standard terms in Spanish for sexual tradeoffs between males.) Which is why “gay” isn’t the right word for them – according to the “gay” model of homosexuality, both same-sex partners are gay, whether they penetrate, are penetrated, or trade off.
A reviewer in the Village Voice claimed that these figures hint at “the idea of a more fluid sexuality in the pre-European
Far from being “traditional”, these boys’ claim that they were born homosexuales aligns them with the cutting edge of modern Western science. Or turn it around: the cutting edge of modern Western science is a regression to old, traditional models of human sexuality and gender. I was gratified by Blossoms of Fire's inclusion of non-heterosexuals, almost as much as I was to learn about Juchitán’s long tradition of resistance to centralized authority, especially the right-wing dictatorship that currently rules
Mama's Boys
The other night I watched a documentary called Blossoms of Fire, about the city of This is all very laudable, but it’s hardly a matriarchy, except to people to whom a situation that approaches equality equals rule by women over men. (Or even a situation that doesn’t approach equality – in the 1950s, when American women had been driven from the WWII factories back to the kitchens and family rooms, eunuchs like Philip Wylie and William Burroughs still claimed that the US was a matriarchy. For some men, mere sentience in women feels like a threat of dominance.) There are plenty of people who see things that way. Blossoms of Fire begins by describing local reaction to an article about Juchitán in the Mexican edition of the magazine Elle, which claimed that the Juchitanas “prohibit the men from buying and selling in the market” and force their husbands to “babysit” while they cavort with boy toys.
Now, Elle appears to be a fashionable mag that views itself as sophisticated, which confirms once again my observation that sophisticated, stylish people are generally quite stupid and backward – especially since what the women of Juchitán have achieved is what sophisticated North American and European women consider a major, if tenuous, achievement of their movements toward sexual equality. “You’ve come a long way, baby,” so far that you’ve almost caught up with a bunch of Indian women in the Mexican hinterlands. Except that these women wear “traditional” colorful native garb, and eschew makeup. (One of the pleasures of the film for me was its celebration of the beauty and strength of these middle-aged and older women, who exhibit the same confidence and pride that we gringos associate with older men, not women.)
Against the Juchitanas’ hard-earned equality, though, it should be noted that their society still has a cult of virginity – for women, of course. Another tradition is the “kidnapping” (robar is the Spanish word used by one of the men in the film) of brides by their grooms, which leads to negotiations between the respective families, and if the bride proves to be a virgin, she’s worth a lot more. This information appears in a 20-minute featurette on the DVD, which should have been integrated into the film itself; if you watch the DVD, be sure to watch the additional material as well. At 74 minutes, Blossoms of Fire wouldn’t be stretched by being a bit longer.
One thing I found very interesting about the film was its inclusion of several homosexuales (which the subtitles render, not quite correctly for reasons I’ll go into, as “gay”) and lesbians – or rather, one lesbian, a handsome woman with neck-length hair and a mildly butch affect, and a girlfriend (possibly) sitting next to her at the table in traditional Juchitana garb. It wouldn’t be correct to call her a marimacha, because she’s really not more masculine than the “matriarchs” who are at the center of the film: cut their hair to the same length, put them in t-shirts and jeans, and they’d probably look just like her. The homosexuales are all big queens, in halters and makeup and plucked eyebrows. They mostly agree that they are different from American gays because we Americans are always talking about “realizing” that we were gay at 15, or 20, or 30, whereas they all knew that they were homosexuales from the beginning. I must point out that American sissies are just as likely to have started dressing up in their mothers’ clothes at 3 as any homosexual. And nowadays the standard line even among gender-compliant Homo-Americans is that they knew they were Different from an early age, and therefore they must have been born gay.
As female-identified as the Juchitán homosexuales seem to be, however, the women they identify with aren’t their mothers. They don’t seem to work in the markets with their mothers, and their fashion role models, like those of American queens, are basically hookers. (Not that there's anything wrong with that! I've just always been baffled by the images of women many gay men see as their ideals. But see this article, for example. I've learned to be wary, though, when any place, from Morocco to San Francisco to Juchitán, is called a "Queer Paradise.") And to recall my rant on scientific models of the Homosexual from a couple of weeks ago, though the film doesn’t mention it, it’s safe to presume that they don’t have sex with each other: they fit the common Latin American model of the homosexual, so they look for Real Men, activos to match their pasivos. (“Active” and “passive” don’t really fit reality either – pasivos are about as passive as “starving ravens,” as the sociologist Annick Prieur put it in Mema’s House, Mexico City: on transvestites, queens, and machos (Chicago, 1998), her study of vestidas, or cross-dressing homosexuales in the metropole. But they are the standard terms in Spanish for sexual tradeoffs between males.) Which is why “gay” isn’t the right word for them – according to the “gay” model of homosexuality, both same-sex partners are gay, whether they penetrate, are penetrated, or trade off.
A reviewer in the Village Voice claimed that these figures hint at “the idea of a more fluid sexuality in the pre-European
Far from being “traditional”, these boys’ claim that they were born homosexuales aligns them with the cutting edge of modern Western science. Or turn it around: the cutting edge of modern Western science is a regression to old, traditional models of human sexuality and gender. I was gratified by Blossoms of Fire's inclusion of non-heterosexuals, almost as much as I was to learn about Juchitán’s long tradition of resistance to centralized authority, especially the right-wing dictatorship that currently rules
Where we could be in the gold bull market
Markets often repeat in similar patterns and recognizing the past can often lead to an understanding of potential future outcomes, something that should always be of interest to investors and speculators.
When a hard correction occurs in a bull market, people's confidence gets shaken and they wonder if they made the right decision. This is the concept of "climbing a wall of worry" that makes skepticism a healthy symptom of a bull market. When everyone is convinced an investment is a no-brainer (remember the dot coms?) and will go up forever, the end of the bull is near.
Gold is in the midst of a bull market that saw its price rise from roughly $250/oz to $1000/oz before the current correction to $700/oz. Could it be the end of gold's bull market rather than just a correction? My opinion of course is that we're not even close. An example using charts may help put things in perspective.
Look at the two charts below, both part of historical bull markets. I have covered up the dates and names of the items being charted.
Both items went up over 300% then corrected roughly 30% or so. Somewhat similar, though there are clearly some differences. So what happens next? For the first chart, which is the Dow Jones from 1982 through the 1987 crash, this is what happened next:
So, when everyone was in a panic at the end of the 1987 crash, the smart thing to do would have been to buy even more at the temporary discount price and hold on for another decade or so. Because the long-term cyclical pendulum has swung in the direction of gold and away from stocks, the smart thing to do now is buy gold at the new discounted price and hold on for several more years (the second chart above by the way is the price of gold charted over the last 8 years or so). Once the price of an ounce of gold is almost equal to the headline price of the Dow Jones, everyone at work and on television will be saying that gold is going to $10,000/ounce and stocks are going to zero. At this point, calmly sell your gold and use the proceeds to buy stocks hand over fist.
However, we are not even close to this point yet. Gold is still considered a bizarre, outdated investment with no role in modern portfolios by a large percentage of investors. How many people do you encounter in your life who want to talk about buying gold bars and coins instead of their 401k when the subject of investing comes up? Big bull markets do not end until there is near universal participation. Gold went through a 20 year bear market from 1980-2000. It was overdue for a new bull market and one clearly started around 2001. The bear mentality towards gold persists in most mainstream circles despite a strong first leg of its new bull market. This is healthy, normal and indicates the end of the gold bull market is a long ways off from here.
Homework assignment
Is to click on the link below, read the article it leads to, and think about the potential ramifications.
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49N1XX20081024
To quote the Chinese STATE newspaper: "Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies."
Nice start. Wonder what comes after a start?
Being the reserve currency of the world has given the U.S. a huge advantage since WWII. Nixon broke our promise to the rest of the world when he stopped redeeming our dollar for gold in the early 1970s. Since we did this, we have been essentially relying on our charm, economic market stability and military strength to keep the charade going.
In the past several months, the global perception of our economic market stability has changed. Angry voices such as those put out by a STATE Chinese newspaper tell me our charm is wearing thin. And that last thing, the military strength, it requires the Chinese and Europeans (among others) to buy a lot of our bonds and use our dollar for transactions. If these two buyers aren't happy with us, they don't have to buy as many of our bonds and we run into a funding crunch that suspends the War on Iraq, the War on Afghanistan, the War on Terror, the possible War on Iran, and even the War on Drugs.
We'll be broke and overextended if currency "regime" changes like the one proposed above are implemented. These things, once started, can quickly become contagious. If all the "big money" around the world started to diversify out of this country, even a moderate amount, we could experience a serious currency crisis. This is what concerns me looking out at the big picture over the next decade.
I must hold gold due to my fear of this type of event. Cash is doing well right now - U.S. Dollars have been kicking ass. They've been the best bullish investment out there (though being a bull on being bearish and shorting the hell out of the market was the best strategy of all...). HOWEVER, the current currency game relies on cooperation. If cooperation fails, the U.S. stands to lose a lot.
If an "event" like this were to happen, there would be little or no time to prepare. If you woke up tomorrow and your currency had been devalued by 30-50% while you slept, what then? Gold protects against these types of events. That's why it's good portfolio insurance. Gold will be around longer than all the currencies now floating around the world. Think about all the global currency changes just during the last century. The Euro, a household name and a leading world currency, has been around only since 2002! Gold has been used as money for thousands of years, not less than a decade. Every fiat currency in history has failed. PERIOD. Gold may change in price, but hasn't failed in its long term role of maintaining purchasing power like fiat money has.
I don't deny that gold's shorter term twists and turns, like say the very brief (ha, ha) period from 1980 to 2001, can make it a poor investment at times. That's why I like the Dow to gold ratio, as I plan to switch back to regular stocks once they become undervalued relative to gold. Until then, gold and gold stocks are the apple of my eye.
Those who defied the government and kept gold after it was outlawed during the "First Great Depression" made out well relative to holding cash. That's the problem with cash in a fiat system. It fails to hold its value over time, which is one of the functions money is supposed to perform. If your family amassed 10,000 US dollars in 1929 and you kept them under your mattress and still had them, you'd have money for an exotic vacation or enough to buy part of a car. If someone gave you 10,000 US worth of gold in 1929, given that it sold for a little over $20/ounce, you would have received about 484 ounces of gold. At a current price of $700/ounce, you'd have over $338 thousand worth of gold (and gold's bull market ain't over yet).
Even if the U.S. dollar remains strong relative to other fiat currencies, they are ultimately all caught in a strong long-term bear market of depreciation. Gold isn't subject to depreciation in the same manner as fiat currency. Whether gold is hated, loved, laughed at, worshipped, ignored, buried in the ground or worn around an extremity, it retains value over long periods of time. The same cannot and should not be said about the US dollar or any other fiat currency.
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49N1XX20081024
To quote the Chinese STATE newspaper: "Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies."
Nice start. Wonder what comes after a start?
Being the reserve currency of the world has given the U.S. a huge advantage since WWII. Nixon broke our promise to the rest of the world when he stopped redeeming our dollar for gold in the early 1970s. Since we did this, we have been essentially relying on our charm, economic market stability and military strength to keep the charade going.
In the past several months, the global perception of our economic market stability has changed. Angry voices such as those put out by a STATE Chinese newspaper tell me our charm is wearing thin. And that last thing, the military strength, it requires the Chinese and Europeans (among others) to buy a lot of our bonds and use our dollar for transactions. If these two buyers aren't happy with us, they don't have to buy as many of our bonds and we run into a funding crunch that suspends the War on Iraq, the War on Afghanistan, the War on Terror, the possible War on Iran, and even the War on Drugs.
We'll be broke and overextended if currency "regime" changes like the one proposed above are implemented. These things, once started, can quickly become contagious. If all the "big money" around the world started to diversify out of this country, even a moderate amount, we could experience a serious currency crisis. This is what concerns me looking out at the big picture over the next decade.
I must hold gold due to my fear of this type of event. Cash is doing well right now - U.S. Dollars have been kicking ass. They've been the best bullish investment out there (though being a bull on being bearish and shorting the hell out of the market was the best strategy of all...). HOWEVER, the current currency game relies on cooperation. If cooperation fails, the U.S. stands to lose a lot.
If an "event" like this were to happen, there would be little or no time to prepare. If you woke up tomorrow and your currency had been devalued by 30-50% while you slept, what then? Gold protects against these types of events. That's why it's good portfolio insurance. Gold will be around longer than all the currencies now floating around the world. Think about all the global currency changes just during the last century. The Euro, a household name and a leading world currency, has been around only since 2002! Gold has been used as money for thousands of years, not less than a decade. Every fiat currency in history has failed. PERIOD. Gold may change in price, but hasn't failed in its long term role of maintaining purchasing power like fiat money has.
I don't deny that gold's shorter term twists and turns, like say the very brief (ha, ha) period from 1980 to 2001, can make it a poor investment at times. That's why I like the Dow to gold ratio, as I plan to switch back to regular stocks once they become undervalued relative to gold. Until then, gold and gold stocks are the apple of my eye.
Those who defied the government and kept gold after it was outlawed during the "First Great Depression" made out well relative to holding cash. That's the problem with cash in a fiat system. It fails to hold its value over time, which is one of the functions money is supposed to perform. If your family amassed 10,000 US dollars in 1929 and you kept them under your mattress and still had them, you'd have money for an exotic vacation or enough to buy part of a car. If someone gave you 10,000 US worth of gold in 1929, given that it sold for a little over $20/ounce, you would have received about 484 ounces of gold. At a current price of $700/ounce, you'd have over $338 thousand worth of gold (and gold's bull market ain't over yet).
Even if the U.S. dollar remains strong relative to other fiat currencies, they are ultimately all caught in a strong long-term bear market of depreciation. Gold isn't subject to depreciation in the same manner as fiat currency. Whether gold is hated, loved, laughed at, worshipped, ignored, buried in the ground or worn around an extremity, it retains value over long periods of time. The same cannot and should not be said about the US dollar or any other fiat currency.
Party like it's 1981 - Japan style!
The Japanese stock market got hammered this week like every global stock market. The long-term chart for the Japanese Nikkei stock market average is both compelling and instructive. Take a look:
This market is now back at levels seen in 1981. In other words, after 27 years, Japanese stocks in aggregate have made no net progress. If you factor in inflation and the offsetting effect of stock dividends, we're talking 27 years and zero net return. TWENTY SEVEN YEARS IN AN INVESTMENT AND NOT ONE DIME OF PROFIT.
Japan is a modern, advanced economy and they have a well-educated populace with similar age-related demographics. They do not have the same bounty of natural resources that we do, but they have an advanced physical infrastructure and a dedicated workforce. Their stock market lost 80% of its value between 1990 and 2003. No country, not even the good 'ol US of A, is immune from cycles and corrections.
Our stock market peaked in real terms in 2000 and has been mired in a secular (i.e. measured in decades, not years) bear market that will last until at least the year 2015. Possible targets are easy to guess at, but only a range can be provided with a best and worst case scenario:
Stay out of the general stock market, hold cash, buy gold, and invest in gold mining stocks. Traders can alter between shorting the stock market and riding the brief and wild bear market rallies. The nasty part of this stock market bear has already started, and though it is about to take well-deserved rest, the bear will awaken again in a few months to terrorize "the buy and hold forever" crowd. McCain, Obama, Paulson, Bernanke and anyone else with a slogan or plan to sell the sheep will only make things worse.
This market is now back at levels seen in 1981. In other words, after 27 years, Japanese stocks in aggregate have made no net progress. If you factor in inflation and the offsetting effect of stock dividends, we're talking 27 years and zero net return. TWENTY SEVEN YEARS IN AN INVESTMENT AND NOT ONE DIME OF PROFIT.
Japan is a modern, advanced economy and they have a well-educated populace with similar age-related demographics. They do not have the same bounty of natural resources that we do, but they have an advanced physical infrastructure and a dedicated workforce. Their stock market lost 80% of its value between 1990 and 2003. No country, not even the good 'ol US of A, is immune from cycles and corrections.
Our stock market peaked in real terms in 2000 and has been mired in a secular (i.e. measured in decades, not years) bear market that will last until at least the year 2015. Possible targets are easy to guess at, but only a range can be provided with a best and worst case scenario:
Stay out of the general stock market, hold cash, buy gold, and invest in gold mining stocks. Traders can alter between shorting the stock market and riding the brief and wild bear market rallies. The nasty part of this stock market bear has already started, and though it is about to take well-deserved rest, the bear will awaken again in a few months to terrorize "the buy and hold forever" crowd. McCain, Obama, Paulson, Bernanke and anyone else with a slogan or plan to sell the sheep will only make things worse.
Remain calm, all is well.
Below is a VERY SCARY chart from the Federal Reserve's website that has just been updated, which plots the "non-borrowed reserves of depository institutions" or in oversimplified English: "how much actual money banks have available to return to the people with bank accounts."
Now remember, the Federal Reserve is a private, for profit corporation with a no-bid government "contract" to print our money. At this point, the Fed has agreed to accept not just U.S. Treasuries as collateral from other banks, but dodgy, sketchy commercial paper that cannot be sold for more than 10-40 cents on the dollar. By the way, this dodgy collateral is losing value by the day as home values continue to plunge and people are scared to invest in these exotic instruments of mass financial destruction. How will the banks pay all the money they borrowed back to the Fed? What will the Fed do when this dodgy collateral loses even more value while it is still on their balance sheet?
I'm not saying banks are a lousy investment right now (although they are), I'm saying that banks are bankrupt and have no money. They took all the money we "gave" them in the form of deposits, leveraged up to the hilt in a rampant gambling scheme, and lost all of our money. The Fed is trying to bail them out, but make no mistake about it, the Fed will not risk their entire franchise to save all the banks.
So, when the banks continue to fall like dominoes, the FDIC will step in and guarantee all the deposits. But where will the FDIC get the money? Perhaps another bailout package?
Perhaps anyone making over 100 dollars a year should donate it all to the government and the FDIC. It would be patriotic as hell! Then, the government can give the citizen-donated money to the banks and the banks can loan the money back to us at a low, low interest rate (but hurry, this special rate won't last!). Of course, the congressional bill to accomplish this will require that 20-30% of the donated money must be used to bribe the congress to pass the bill they wrote, so we won't be able to get all the money lent back to us after we donate it. Such is the cost of freedom, but dammit we're American and we're the greatest!
I'm not trying to slam just America, because this is a global monetary system gone mad. How can almost everyone in the world accept that money can be printed into thin air, backed by nothing, and that this can lead to a stable system? The boom and bust swings are getting wilder, not tamer, since we gave the Federal Reserve the keys to our monetary kingdom. Bust dead ahead and it will be vicious, violent, and unprecedented. Remember, the Great Depression was not an event, but a long, drawn out process.
People who think gold bugs are crazy need to look in the mirror. A gold standard for money is a leash on unchecked government power and unchecked government spending. The leash is broken and a big, rabid government dog is on the loose and hungry for blood (and our wallets). If gold is a stupid investment, why does our government (and every other major government in the world) hold and own so much of it? Do what we say, not what we do? Why did the U.S. government make personal/private gold ownership illegal for 40 or so years? Is gold really that dangerous and, if so, why?
Bottom line: common sense is gone and the stock market is going to follow it into oblivion before we can have a meaningful recovery. If you haven't done so already, use the coming stock market rally to get out of general stock market investments (all stocks other than gold stocks). I prefer a heavier allocation to gold than cash (though I hold both), because the system backing our cash is much more fragile than anyone holding the reigns of power (or campaigning for office) knows and/or cares to admit.
Now remember, the Federal Reserve is a private, for profit corporation with a no-bid government "contract" to print our money. At this point, the Fed has agreed to accept not just U.S. Treasuries as collateral from other banks, but dodgy, sketchy commercial paper that cannot be sold for more than 10-40 cents on the dollar. By the way, this dodgy collateral is losing value by the day as home values continue to plunge and people are scared to invest in these exotic instruments of mass financial destruction. How will the banks pay all the money they borrowed back to the Fed? What will the Fed do when this dodgy collateral loses even more value while it is still on their balance sheet?
I'm not saying banks are a lousy investment right now (although they are), I'm saying that banks are bankrupt and have no money. They took all the money we "gave" them in the form of deposits, leveraged up to the hilt in a rampant gambling scheme, and lost all of our money. The Fed is trying to bail them out, but make no mistake about it, the Fed will not risk their entire franchise to save all the banks.
So, when the banks continue to fall like dominoes, the FDIC will step in and guarantee all the deposits. But where will the FDIC get the money? Perhaps another bailout package?
Perhaps anyone making over 100 dollars a year should donate it all to the government and the FDIC. It would be patriotic as hell! Then, the government can give the citizen-donated money to the banks and the banks can loan the money back to us at a low, low interest rate (but hurry, this special rate won't last!). Of course, the congressional bill to accomplish this will require that 20-30% of the donated money must be used to bribe the congress to pass the bill they wrote, so we won't be able to get all the money lent back to us after we donate it. Such is the cost of freedom, but dammit we're American and we're the greatest!
I'm not trying to slam just America, because this is a global monetary system gone mad. How can almost everyone in the world accept that money can be printed into thin air, backed by nothing, and that this can lead to a stable system? The boom and bust swings are getting wilder, not tamer, since we gave the Federal Reserve the keys to our monetary kingdom. Bust dead ahead and it will be vicious, violent, and unprecedented. Remember, the Great Depression was not an event, but a long, drawn out process.
People who think gold bugs are crazy need to look in the mirror. A gold standard for money is a leash on unchecked government power and unchecked government spending. The leash is broken and a big, rabid government dog is on the loose and hungry for blood (and our wallets). If gold is a stupid investment, why does our government (and every other major government in the world) hold and own so much of it? Do what we say, not what we do? Why did the U.S. government make personal/private gold ownership illegal for 40 or so years? Is gold really that dangerous and, if so, why?
Bottom line: common sense is gone and the stock market is going to follow it into oblivion before we can have a meaningful recovery. If you haven't done so already, use the coming stock market rally to get out of general stock market investments (all stocks other than gold stocks). I prefer a heavier allocation to gold than cash (though I hold both), because the system backing our cash is much more fragile than anyone holding the reigns of power (or campaigning for office) knows and/or cares to admit.
Poetry Friday - A cold day it was ...
A cold day it was, and the road stretched out
Beneath the gleaming snow and a winter sun.Only the tiretracks distinguished the route,
And one spot of ground looked like another one.
Fence posts poked black above glistening white.
Here and there were the prints of a quail or a fox.
A thick frigid comfort had been dropped in the night;
Even the cornfield showed no brittle stalks.
It is strange but not unpleasant to sit in the snow
With your back to a tree and eyes squint to the glare,
And no one to disturb you save an occasional crow,
While your warm breath collects ice on the cold quiet air.
With your fur grown as long as any other forest thing,
And your blood like molasses, you are waiting for spring.
December 1970
22 Jan 1971
22 Jan 1971
Poetry Friday - A cold day it was ...
A cold day it was, and the road stretched out
Beneath the gleaming snow and a winter sun.Only the tiretracks distinguished the route,
And one spot of ground looked like another one.
Fence posts poked black above glistening white.
Here and there were the prints of a quail or a fox.
A thick frigid comfort had been dropped in the night;
Even the cornfield showed no brittle stalks.
It is strange but not unpleasant to sit in the snow
With your back to a tree and eyes squint to the glare,
And no one to disturb you save an occasional crow,
While your warm breath collects ice on the cold quiet air.
With your fur grown as long as any other forest thing,
And your blood like molasses, you are waiting for spring.
December 1970
22 Jan 1971
22 Jan 1971
BUY, BUY, BUY!
Buy Gold stocks for profit, buy physical Gold for safety and hard cash that can't evaporate. The time is now. Buy, buy, buy!
The lows are either going to be in today or by the end of next week at the latest for Gold stocks. Gold may take a little longer, but it is still a good deal (if you can find any). The coming long term cyclical Gold bull in stocks will last 2-3 years and will create gains of 200-300% at a minimum while the rest of the market burns. If your 401k or 403b or IRA or Roth IRA won't let you buy Gold stocks, either take your money out and don't participate any more or stay in short-term US Federal government bond instruments (5 years to maturity and less).
General stocks (i.e. S&P 500, Dow) are bottoming over the next week and will rally for at least a few months, but then they are going down again - hard! Gold stocks are bottoming over the next week and then they are going to take off like a rocket ship and start a new bull market that will last years.
Buy, buy, BUY! BUY! BUY!
The lows are either going to be in today or by the end of next week at the latest for Gold stocks. Gold may take a little longer, but it is still a good deal (if you can find any). The coming long term cyclical Gold bull in stocks will last 2-3 years and will create gains of 200-300% at a minimum while the rest of the market burns. If your 401k or 403b or IRA or Roth IRA won't let you buy Gold stocks, either take your money out and don't participate any more or stay in short-term US Federal government bond instruments (5 years to maturity and less).
General stocks (i.e. S&P 500, Dow) are bottoming over the next week and will rally for at least a few months, but then they are going down again - hard! Gold stocks are bottoming over the next week and then they are going to take off like a rocket ship and start a new bull market that will last years.
Buy, buy, BUY! BUY! BUY!
Goodness Has Nothing To Do With It
Oh, my goodness. John McCain has criticized his only President, his Commander-in-Chief, George W. Bush: In the Washington Times interview, McCain listed a number of disagreements with the Bush administration, including, “spending, the conduct of the war in Iraq for years, growth in the size of government, larger than any time since the Great Society, laying a $10 trillion debt on future generations of America, owing $500 billion to China, obviously, failure to both enforce and modernize the [financial] regulatory agencies that were designed for the 1930s and certainly not for the 21st century, failure to address the issue of climate change seriously.”
It’s not all Bush’s fault, of course: McCain also blamed “the liberals”:
“They put a trillion-dollar debt on future generations of Americans, then allowed the liberals to expand it so they're paying my — they're paying for my prescription drugs. Why should the taxpayers pay for my prescription drugs?” McCain said.
This bit was an attack on Bush’s Medicare prescription drug plan. Funny, though – I’d have thought that as a veteran and a member of Congress, McCain’s prescription drugs are already paid for by the taxpayers. For that matter, I would expect that Medicare only covers McCain’s medical costs if he applied for the benefit, and a rich guy like him wouldn’t bother. (Would he?) But I don’t mind if my tax dollars pay for his drugs, as long as they’re also paying for the drugs of those who need the help.
According to the same article, the White House brushed aside McCain’s criticism in Christlike fashion, turning the other cheek. (Of the face.) Spokeswoman Dana Perino told the press that the President “supports John McCain, and he still believes that he can and should win. And he'll continue to support him until Election Day.”
I think it can safely be said that McCain has become desperate, seeing defeat yawn before him like the
(Photo swiped from Whatever It Is, I'm Against It.)
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