The Measuring Stick Illusion

In a world gone mad with paper debt ticket orgies, maintaining the purchasing power of one's savings is difficult. The more debt-based currency entries that are created, the more each existing currency entry is diluted. The lag time and unevenness of the price distortions created by such a bizarre out-of-control monetary system hold the system together, as the sheeple, in aggregate, can't put two and two together. Everyone thought real estate was a great store of wealth a few years ago. Now, not so much.

Those who have put two and two together can never go back. Once you break through to the other side of the matrix, there's no ignoring what's happening before our eyes. The value of any currency units saved is being destroyed. Yes, it may take some time for this to be "officially" recognized and it may take time for the things we want to get more expensive, but the value destruction has already occurred.

The reality is that bubbles can collapse faster than currency value can, so that holding U.S. Dollars over the past few years has made one wealthier in real estate terms, as one can now buy a greater amount of real estate for the same number of debt tickets/currency units. Inflationism is everywhere in a fiat paper debt ticket system out of control, but it seeks out different asset classes during different parts of the longer term economic cycle.

When the traditional asset classes collapse, such as real estate and the stock markets, the rampant excess of previously created currency units flocks into different asset classes in a bid to preserve wealth and find safety. Some believe that safety is in the U.S. Dollar while others place their faith in Gold or other "hard"/tangible assets such as oil or copper.

But will Gold truly be a safe haven? What if the U.S. Dollar continues to "strengthen" and a strong deflation takes hold? The answer to that question lies in the government response to such a scenario. How do you think our government will respond to a rapidly strengthening U.S. Dollar? How did the U.S. government respond to such an event during the Great Fall Panic of 2008? How did all of the major economies of the world (i.e. Europe and America) respond to a deflationary collapse scenario in the 1930s?

If Gold goes to $1500/oz, what does this mean? We in America all think in terms of Dollars because that's what we use to pay for bread, clothes and shelter. But does Gold truly get more valuable? If so, why? How can the value of a piece of metal change assuming a relatively stable supply?

Gold is a mirror of the paper currency measuring stick. When times get hard in any country, governments reach for the same playbook they have been using since long before Roman times. Defiling the value of currency units causes asset prices to rise. Rising asset prices favor bankers holding debt instruments against those assets and favor governments who tax those assets based on their nominal value. Which asset classes rise when currency is debased in part depends on the state of the economy. Gold is generally a lousy investment when times are "good," plain and simple.

When a Kondratieff Winter (aka K-Wave Winter, secular credit contraction or economic depression) has begun, Gold is the go to asset. A secular credit contraction occurs once debt has overwhelmed the system. In this scenario, unlike the other parts of an economic cycle, no significant net aggregate benefit accrues to the economy by piling on further debt. An economic depression plays a role in cleansing an economic system of bad debt so that the slate can be wiped clean and the game can start all over again in the next generation/next cycle.

As sick as it sounds, this is a repetitive cycle of economic herd behavior. Bust follows boom like night follows day. Because the biggest cycles last at least a generation, it seems as though every other generation has to learn their economic lessons all over again. A stock and real estate mania led up to the 1930s secular credit contraction just like it did over the past decade in America and just as it preceded the Japanese bust that began in 1990 (continuing to this day in the case of Japan if you didn't know). Such cycles happen with or without a Gold money standard, although debt-backed paper money ensures the manic-depressive swings are wilder and more destructive. This is why the swings in the Dow to Gold ratio became more erratic once we gave control over our nation's money to a private corporation that is not a part of the government and has no reserves - I guess this is why we call them the federal reserve.

But the stability of the measuring stick also changes how far one can fall behind if one holds the wrong asset class. In other words, a debt-backed, out of control paper system means you better get it right in the investment casino or your savings will collapse in purchasing power awful fast. Look at the plot of the Gold price below, which covers the time period from 1973 thru the end of February, 2010 (chart copied from Goldprice.org):



Since the 1979-1980 Gold price "spike" American Gold investors talk about, which doesn't look like much when Gold is priced in Indian Rupees, Gold has gone up roughly ten fold in Rupee terms thru February 2010. That would put us at $8500/oz in Dollar terms if our Gold price chart were the same! And yet, we all know that the value of Gold is not significantly different between the two countries at the same point in time. The measuring stick is different. The currencies are of different value relative to one another and relative to Gold.

Here's the Gold price since 1973 priced in South African Rands (chart copied from Goldprice.org):



The value of our American currency measuring stick will be changing in different ways over the short and intermediate-term. But in the longer run, the value of our currency is going to be significantly lower. A squalid debtor who has lost the faith of the global economy (i.e. the United States) does not emerge on the other side of the debacle with a strengthening currency - at least if history has any value at all in predicting future outcomes.

For example, certain U.S. Dollar-based deflationists point to the strengthening U.S. Dollar that occurred during the 1930s and state that the Dollar will rise again during the current deflationary period. But we were a net creditor in the 1930s and are a squalid debtor during the current cycle. If we want to compare apples to apples, let's compare the America of today with the British economy of the 1930s. Want to guess how Gold fared using London Market prices once Britain, the heavily indebted senior economy of the world at the time, bailed on its Gold standard?

The following is copied from the Measuring Worth site and I did not attempt to verify the accuracy of these numbers, so caveat emptor (if anyone has access to chart(s) of the market price of Gold denominated in European currencies during the 1930s, please let me know!):

Year London Market Price

1925 £ 4.27
1926 £ 4.25
1927 £ 4.25
1928 £ 4.25
1929 £ 4.25
1930 £ 4.25
1931 £ 4.63
1932 £ 5.90
1933 £ 6.24
1934 £ 6.88
1935 £ 7.11
1936 £ 7.01
1937 £ 7.04
1938 £ 7.13
1939 £ 7.72
1940 £ 8.40

Couple this with a chart of the British Pound (stolen from Martin Armstrong) from the 1930s and you see the illusion clearly:



The British Pound collapsed in value when Britain left the Gold standard but then rebounded to new highs a few years later! This is deflation in action. However, despite the currency "index" moving higher, the Gold price continued to rise and outperformed the Pound by a massive margin when looking at the full depression "cycle." So, yes, the U.S. Dollar Index may fibrillate to and fro relative to other debt-backed paper tickets, but Gold will continue to rise and outperform the U.S. Dollar (short term swings aside) over the next few years.

And when that measuring stick known as our currency becomes noticeably "shorter," the economy will be so weak that stocks may or may not be able to reach significant nominal new highs, as with real estate. But Gold will protect people's savings during this portion of the cycle as people look to preserve what little they've got left and the speculative animal spirits continue to drain out of traditional asset class markets into the last bull market left standing: money itself.

Those who think Gold is no longer money think a 40 year reckless experiment can supplant common sense and thousands of years of collective wisdom. For even if we switch from a U.S. Dollar debt-based international monetary system to a new debt-based monetary system, Gold will continue to be the immutable measuring stick by which currencies are measured.

This is why paper debt peddlers (i.e. central bankstaz and governments) hate Gold so much and will continue to fight its rise with misinformation, slander and market manipulation. But they will fail to stop Gold's rise, as they have throughout history. This is because Gold is more reliable than the paper promises of apparatchiks and will continue to be a measure of people's confidence in those paper promises long after the current cast of characters is gone. Those in charge know this (i.e. central bankstaz and their respective governments), which is why they own much of the world's Gold and list it on their balance sheets as money!

Holding real money means much more than nominal gains. In other words, it is not just about being able to buy more paper debt tickets with your Gold, it is about the increased purchasing power Gold will continue to have relative to stocks, bonds and real estate over the next few years. Paper debt tickets may buy more real estate and stocks in a few years than they can now, but there are no guarantees (the inflation-deflation debate ain't over!). However, it will take a greater number of paper debt tickets to buy the same amount of Gold in a few years and thus one's "true" savings will increase to a much greater extent by holding physical Gold rather than U.S. Dollar cash if deflation is where we are headed. The secular bull market in Gold is not over and won't be close to over until the Dow to Gold ratio reaches 2, and we may well go below 1 this cycle.

The Great Churn of Being

I was going to write about faith, especially about David Fergusson's Faith and Its Critics: A Conversation (Oxford, 2009), but my mind is still chewing its cud, as it were, over what I want to say. Besides, reading Fergusson sent me back to the great scholar James Barr's 1977 book Fundamentalism (Westminster Press), which had a great influence on me when I first read it in the early 1980s. For one thing, I'm pretty sure it was from Barr that I learned (or realized) that fundamentalists do not read the Bible literally. Fundamentalism is a big book, 340-odd pages of smallish type plus endnotes and bibliography, but for me it is fascinating, fun to read, and endlessly quotable. Here are some samples from the last chapter. Some of what he wrote is dated, but all too much of it is still relevant, more than thirty years later.

It is often argued by theologians that modern man cannot understand Christianity except where it is re-expressed in a form that takes account of the modern tendencies of modern thought. Fundamentalism shows clearly that this is not so. On the contrary, it is perfectly possible to form a version of Christianity which rejects or ignores large areas of modern thought and knowledge, but which works reasonably well for large numbers of people and is also reasonably stable. The decision between the two options is not at all a matter of inevitability: rather, it is a choice [314].

Barr also dismissed the idea, still popular among some of the New Atheists, that

one cannot listen to the radio or use the telephone and at the same time believe in miracles like Balaam's ass or the journey of Jonah in the belly of the whale[. It] is quite erroneous; thousand of people combine both of these things without the slightest difficulty [314].

I'd say, though Barr didn't, that this is the flip side of the reactionary Christian claim that atheists with moral values are unfairly and dishonestly piggybacking on religion.

This next passage has some bearing on the Atheist Bus campaign:

People say, for instance, that fundamentalism depends basically upon an attitude of fear, a sense of insecurity that demands something absolute and infallible to hold on to. This is said not only by critics of fundamentalism, but also by highly conservative people. … But, whether this is so or not, the position in this book does not depend upon it. I do not doubt that fundamentalism can be a reaction of fear, and that resistance to change can follow from fear of change. But I do not think that this is necessarily the case, and I do not see why fundamentalist convictions should not be found allied with a courageous and cheerful psychological constitution. The emphasis in this book falls not on the psychological states, but on the logical and methodological perceptions which go to form fundamentalism. This is surely a better approach, if only because it has a chance of doing some good; little is achieved by saying that such and such a religious trend is motivated by fear, except to irritate those concerned; the psychological argument is often paralyzing and useless. It is my opinion that fundamentalism can and often does go with a quite stable and balanced personality, and this fits with the point I have already made about the stability of fundamentalist ideology. I do think that fundamentalism is a pathological condition of Christianity; but that does not mean that it is psychologically pathological ... [317-18]

This immediately leads us to state a further reason why I have not in this book developed the ‘psychological’ sort of criticisms often made against fundamentalism: in so far as these criticisms are valid, they [332] have to be levelled not only against fundamentalists but also against many other currents within Christianity. The idea that religious behaviour is motivated through fear rather than love or faith is one that could be quite broadly spread, as a criticism of the most diverse Christian traditions; the accusation of individualism has also been made on all sides; and as for pathological attitudes about sex and other matters of life-style, the less said anywhere in Christianity the better. In so far as these are difficulties for fundamentalism, they are difficulties that it shares with a variety of currents, especially minority currents and extreme currents, within diverse segments of Christianity [331-32].

On "extremism":

As with some other comparable social movements, there is always a position more extreme than the one you are talking with at any particular moment. A person whom an average mainstream Christian will regard as a rabid fundamentalist will often be found to consider himself rather moderate; beyond him there lie, it appears, whole tracts of belief that are much more intransigent and uncompromising. The fundamentalist polemicist thus puzzles people by assuming a pose of moderation. He affects to suppose, at least at times, that his is in fact a central position within Christianity. One the one side you have the severe distortions of Roman Catholicism, on the other you have the utter perversions of liberalism, and in the middle you have the sound, central and moderate position of his own conservative evangelicalism. There may indeed be persons who push the conservative evangelical position to unnecessary extremes, it is admitted, but the average sound conservative (i.e., the one you are talking to at the moment) occupies middle ground. It is thus not uncommon to find a person who holds absolutely all the tenets of fundamentalist belief, … but who nevertheless uses the term ‘fundamentalist’ not for himself but for some shadowy group of people who hold a yet more extreme position.

On human sexuality. This part probably will seem the most problematic to people who are concerned with contemporary anti-gay crusades by conservative Christians, or with abusive neo-patriarchal sects within fundamentalism. Even so, from my own observations (and books such as Heather Hendershot's excellent Shaking the World for Jesus: Media and Conservative Evangelical Culture [Chicago, 2004]), I'd say that Barr is still basically right:

In the matter of sexual relationships, the literature of central conservative groups gives little basis for the idea of a pathological prurience. My own criticism would be the opposite, that the material is childishly naïve in a pre-1914 schoolboy-idealistic manner, culminating perhaps in the immortal piece of advice, “To share a common interest in Sunday School work is not, in itself, a decisive indicator that you should get married.” This was published in 1964! At least as far as one can nudge from the published literature, the conservative evangelical view of sex and marriage, far from being haunted by sin and guilt, is light and superficial. What the conservative student gets from his reading matter is advice of a prudential kind about the unwisdom of playing with other people’s affections, holding hands unless one is serious, kissing before becoming engaged and, most of all, getting married hastily on the basis of a common devotion to the work of the Lord. All these are indeed not matters without any importance: but as an ethical implication of the (supposedly earth-shaking) gospel they are just laughably negligible in comparison with the perception of ethical issues in theologians in mainstream theology. I suspect that relations between men and women in fundamentalist groups are commonly quite happy and wholesome, but for this no thanks are due to the mediocre guidance on ethical questions handed out by the group. More can be ascribed to the common sense of purpose and neglect of self in common devotion to the work of the Lord [331].

The gay-marriage movement, I suspect, is partially driven by similar attitudes to human sexuality by younger GLBT Christians.

Finally, on quasi-fundamentalism among mainstream Christians:

The point is that many people in the church, though rejecting fundamentalism, continue to treat some biblical passages, or some sections of the Bible, in a manner that seems to be close to the fundamentalist understanding. This is quite a serious matter. People do not think, with fundamentalism, that everything is accurate, and they consider some passages, perhaps in the Old Testament, to have no value for the church today or otherwise not to be the Word of God; but when they come to the passages that are important for them they use them as if they were a direct transcript of the actual words of Jesus, or as if they were in the fullest sense the Word of God. Is there not therefore something that might be called a selective fundamentalism in the mind of moderate Christians? … It is quite doubtful, however, whether the cachet “selective fundamentalism” is deserved. … Nevertheless there is some cause for disquiet about this phenomenon [333-34].

Compare, for example, some of my posts on gay Christians and their use of the Bible.

It may seem odd -- it does to me, a little -- for me to be talking so favorably about a Christian writer, an elderly heterosexual one at that. (He died just a couple of years ago, and I very much regret that I never wrote to him to thank him for his work.) I should stress that Barr was on his own account conservative theologically, and I don't claim or believe that he would approve of my positions on these issues.

But he was also an enthusiastic controversialist. His first book, The Semantics of Biblical Language (Oxford, 1961), threw down the gauntlet against the apologetic use of the dictionary by mainstream biblical scholars, and he often returned to the theme, as in Biblical Words for Time (SCM, 1969). Several of his books, like Beyond Fundamentalism (Westminster, 1984) and The Bible in the Modern World (SCM, 1973), were intended for a general audience. The Times obituary says that "For one who was so critical and sharp with his pen he was strangely reluctant to engage in serious oral debate and discussion, either on the details of his own work or on matters of academic concern in general," but according to the Independent, "When Barr debated the matter [of fundamentalism] openly with his opponents one evening in Oxford at All Saints' Church, not surprisingly the meeting was well attended." And do I need to tell you how gratified I was to read this footnote (page 51, note 17) in Barr's Gifford Lectures, Biblical Faith and Natural Theology (Clarendon Press, 1993)?

It seems necessary to say this, if only to notice and to counter the suggestions of John Boswell, Christianity, Social Tolerance and Homosexuality (Chicago: University of Chicago Press, 1980), who thinks, for example, that St Paul 'never suggested that there was any historical or legal reason to oppose homosexual behaviour: if he did object to it, it was purely on the basis of functional, contemporary moral standards' (p. 106) -- especially since his work includes some discussion of Paul's use of 'nature' in our passage. Interesting as his work is in its gathering of material from the later history, in its handling of biblical texts and above all in its arguments from specific biblical words I can only say that I find it to be staggering in the degree of its misjudgment.

(The full text of the lectures is available online.)

I'd had a good many doubts about Boswell's discussion of the biblical material in Christianity, Social Tolerance, and Homosexuality, but lacking all Greek and Hebrew I couldn't confirm them, so it was very gratifying to find that an expert like Barr felt the same way I did. For the same reason I was also pleased to find that Barr's discussion of the anti-homosexual passage Romans 1:26-28 agreed at key points with the conclusions I'd already reached on my own. And as far as I can tell from Biblical Faith and Natural Theology, Barr's criticism of Boswell was not based on homophobia, as so many conservative scholars' critiques were. That's notable and impressive for a conservative Christian of Barr's generation.

According to another obituary, "it is typical of him that to the very end he was looking for new projects. Left on his desk was the beginning of a major work about prophecy." I wish he could have finished it; Barr was one of those writers whose ideas and opinions I'm always interested to read.

The Great Churn of Being

I was going to write about faith, especially about David Fergusson's Faith and Its Critics: A Conversation (Oxford, 2009), but my mind is still chewing its cud, as it were, over what I want to say. Besides, reading Fergusson sent me back to the great scholar James Barr's 1977 book Fundamentalism (Westminster Press), which had a great influence on me when I first read it in the early 1980s. For one thing, I'm pretty sure it was from Barr that I learned (or realized) that fundamentalists do not read the Bible literally. Fundamentalism is a big book, 340-odd pages of smallish type plus endnotes and bibliography, but for me it is fascinating, fun to read, and endlessly quotable. Here are some samples from the last chapter. Some of what he wrote is dated, but all too much of it is still relevant, more than thirty years later.

It is often argued by theologians that modern man cannot understand Christianity except where it is re-expressed in a form that takes account of the modern tendencies of modern thought. Fundamentalism shows clearly that this is not so. On the contrary, it is perfectly possible to form a version of Christianity which rejects or ignores large areas of modern thought and knowledge, but which works reasonably well for large numbers of people and is also reasonably stable. The decision between the two options is not at all a matter of inevitability: rather, it is a choice [314].

Barr also dismissed the idea, still popular among some of the New Atheists, that

one cannot listen to the radio or use the telephone and at the same time believe in miracles like Balaam's ass or the journey of Jonah in the belly of the whale[. It] is quite erroneous; thousand of people combine both of these things without the slightest difficulty [314].

I'd say, though Barr didn't, that this is the flip side of the reactionary Christian claim that atheists with moral values are unfairly and dishonestly piggybacking on religion.

This next passage has some bearing on the Atheist Bus campaign:

People say, for instance, that fundamentalism depends basically upon an attitude of fear, a sense of insecurity that demands something absolute and infallible to hold on to. This is said not only by critics of fundamentalism, but also by highly conservative people. … But, whether this is so or not, the position in this book does not depend upon it. I do not doubt that fundamentalism can be a reaction of fear, and that resistance to change can follow from fear of change. But I do not think that this is necessarily the case, and I do not see why fundamentalist convictions should not be found allied with a courageous and cheerful psychological constitution. The emphasis in this book falls not on the psychological states, but on the logical and methodological perceptions which go to form fundamentalism. This is surely a better approach, if only because it has a chance of doing some good; little is achieved by saying that such and such a religious trend is motivated by fear, except to irritate those concerned; the psychological argument is often paralyzing and useless. It is my opinion that fundamentalism can and often does go with a quite stable and balanced personality, and this fits with the point I have already made about the stability of fundamentalist ideology. I do think that fundamentalism is a pathological condition of Christianity; but that does not mean that it is psychologically pathological ... [317-18]

This immediately leads us to state a further reason why I have not in this book developed the ‘psychological’ sort of criticisms often made against fundamentalism: in so far as these criticisms are valid, they [332] have to be levelled not only against fundamentalists but also against many other currents within Christianity. The idea that religious behaviour is motivated through fear rather than love or faith is one that could be quite broadly spread, as a criticism of the most diverse Christian traditions; the accusation of individualism has also been made on all sides; and as for pathological attitudes about sex and other matters of life-style, the less said anywhere in Christianity the better. In so far as these are difficulties for fundamentalism, they are difficulties that it shares with a variety of currents, especially minority currents and extreme currents, within diverse segments of Christianity [331-32].

On "extremism":

As with some other comparable social movements, there is always a position more extreme than the one you are talking with at any particular moment. A person whom an average mainstream Christian will regard as a rabid fundamentalist will often be found to consider himself rather moderate; beyond him there lie, it appears, whole tracts of belief that are much more intransigent and uncompromising. The fundamentalist polemicist thus puzzles people by assuming a pose of moderation. He affects to suppose, at least at times, that his is in fact a central position within Christianity. One the one side you have the severe distortions of Roman Catholicism, on the other you have the utter perversions of liberalism, and in the middle you have the sound, central and moderate position of his own conservative evangelicalism. There may indeed be persons who push the conservative evangelical position to unnecessary extremes, it is admitted, but the average sound conservative (i.e., the one you are talking to at the moment) occupies middle ground. It is thus not uncommon to find a person who holds absolutely all the tenets of fundamentalist belief, … but who nevertheless uses the term ‘fundamentalist’ not for himself but for some shadowy group of people who hold a yet more extreme position.

On human sexuality. This part probably will seem the most problematic to people who are concerned with contemporary anti-gay crusades by conservative Christians, or with abusive neo-patriarchal sects within fundamentalism. Even so, from my own observations (and books such as Heather Hendershot's excellent Shaking the World for Jesus: Media and Conservative Evangelical Culture [Chicago, 2004]), I'd say that Barr is still basically right:

In the matter of sexual relationships, the literature of central conservative groups gives little basis for the idea of a pathological prurience. My own criticism would be the opposite, that the material is childishly naïve in a pre-1914 schoolboy-idealistic manner, culminating perhaps in the immortal piece of advice, “To share a common interest in Sunday School work is not, in itself, a decisive indicator that you should get married.” This was published in 1964! At least as far as one can nudge from the published literature, the conservative evangelical view of sex and marriage, far from being haunted by sin and guilt, is light and superficial. What the conservative student gets from his reading matter is advice of a prudential kind about the unwisdom of playing with other people’s affections, holding hands unless one is serious, kissing before becoming engaged and, most of all, getting married hastily on the basis of a common devotion to the work of the Lord. All these are indeed not matters without any importance: but as an ethical implication of the (supposedly earth-shaking) gospel they are just laughably negligible in comparison with the perception of ethical issues in theologians in mainstream theology. I suspect that relations between men and women in fundamentalist groups are commonly quite happy and wholesome, but for this no thanks are due to the mediocre guidance on ethical questions handed out by the group. More can be ascribed to the common sense of purpose and neglect of self in common devotion to the work of the Lord [331].

The gay-marriage movement, I suspect, is partially driven by similar attitudes to human sexuality by younger GLBT Christians.

Finally, on quasi-fundamentalism among mainstream Christians:

The point is that many people in the church, though rejecting fundamentalism, continue to treat some biblical passages, or some sections of the Bible, in a manner that seems to be close to the fundamentalist understanding. This is quite a serious matter. People do not think, with fundamentalism, that everything is accurate, and they consider some passages, perhaps in the Old Testament, to have no value for the church today or otherwise not to be the Word of God; but when they come to the passages that are important for them they use them as if they were a direct transcript of the actual words of Jesus, or as if they were in the fullest sense the Word of God. Is there not therefore something that might be called a selective fundamentalism in the mind of moderate Christians? … It is quite doubtful, however, whether the cachet “selective fundamentalism” is deserved. … Nevertheless there is some cause for disquiet about this phenomenon [333-34].

Compare, for example, some of my posts on gay Christians and their use of the Bible.

It may seem odd -- it does to me, a little -- for me to be talking so favorably about a Christian writer, an elderly heterosexual one at that. (He died just a couple of years ago, and I very much regret that I never wrote to him to thank him for his work.) I should stress that Barr was on his own account conservative theologically, and I don't claim or believe that he would approve of my positions on these issues.

But he was also an enthusiastic controversialist. His first book, The Semantics of Biblical Language (Oxford, 1961), threw down the gauntlet against the apologetic use of the dictionary by mainstream biblical scholars, and he often returned to the theme, as in Biblical Words for Time (SCM, 1969). Several of his books, like Beyond Fundamentalism (Westminster, 1984) and The Bible in the Modern World (SCM, 1973), were intended for a general audience. The Times obituary says that "For one who was so critical and sharp with his pen he was strangely reluctant to engage in serious oral debate and discussion, either on the details of his own work or on matters of academic concern in general," but according to the Independent, "When Barr debated the matter [of fundamentalism] openly with his opponents one evening in Oxford at All Saints' Church, not surprisingly the meeting was well attended." And do I need to tell you how gratified I was to read this footnote (page 51, note 17) in Barr's Gifford Lectures, Biblical Faith and Natural Theology (Clarendon Press, 1993)?

It seems necessary to say this, if only to notice and to counter the suggestions of John Boswell, Christianity, Social Tolerance and Homosexuality (Chicago: University of Chicago Press, 1980), who thinks, for example, that St Paul 'never suggested that there was any historical or legal reason to oppose homosexual behaviour: if he did object to it, it was purely on the basis of functional, contemporary moral standards' (p. 106) -- especially since his work includes some discussion of Paul's use of 'nature' in our passage. Interesting as his work is in its gathering of material from the later history, in its handling of biblical texts and above all in its arguments from specific biblical words I can only say that I find it to be staggering in the degree of its misjudgment.

(The full text of the lectures is available online.)

I'd had a good many doubts about Boswell's discussion of the biblical material in Christianity, Social Tolerance, and Homosexuality, but lacking all Greek and Hebrew I couldn't confirm them, so it was very gratifying to find that an expert like Barr felt the same way I did. For the same reason I was also pleased to find that Barr's discussion of the anti-homosexual passage Romans 1:26-28 agreed at key points with the conclusions I'd already reached on my own. And as far as I can tell from Biblical Faith and Natural Theology, Barr's criticism of Boswell was not based on homophobia, as so many conservative scholars' critiques were. That's notable and impressive for a conservative Christian of Barr's generation.

According to another obituary, "it is typical of him that to the very end he was looking for new projects. Left on his desk was the beginning of a major work about prophecy." I wish he could have finished it; Barr was one of those writers whose ideas and opinions I'm always interested to read.

Priorities

She has a point. But how much you want to bet that this young woman wouldn't have bothered with the sign if "Canada" hadn't been "defeated" at the Winter Olympics? I did a cursory search and am not sure which defeat this refers to. Maybe hockey? Eat my ice chips, Canuckistan! It's not so different from the fancy that the US invasion of Iraq was a strike against Saddam Hussein personally.

Dave Zirin was in a bit of a tizzy at The Nation a couple of weeks ago because Christopher Hitchens had pooped on Sport. I respect Zirin and have learned a lot from his writing, but here I have to part company with him, even at the cost of agreeing with Hitchens. "Yes there is much to detest in the world of sports," Zirin wrote. "But why then is it also such a source of solace, joy, and - heaven forefend – fun? Hitchens doesn't care to explore this question." Hell: public executions, bear-baiting, gladiatorial contests, and feeding Christians to the lions used to be sources of solace, joy, and fun, not just to the "rabble" but to the better classes. That's not an argument, Mr. Zirin.

I'd say that "sport" is less the problem than competition itself. I'm not the first to notice that the vaunted Olympic spirit of transcending petty nationalism is bogus, that there's hardly even a pretense of it in the structure of the whole business, let alone the fans and the sports media. The pursuit of excellence is an excellent thing, and I'm as happy as anyone else to admire the photos of trained, buff bodies that are part of Olympic publicity.

I can't help wondering if the human cost is worth it, though, apart from the financial ruin the Olympics bring to the cities they prey upon every four years. The stress of competition at that level, following on years of incredibly demanding preparation, the elimination of large numbers of competitors along the way, and the rapid downhill slide after the Games, even for the winners -- it seems to me like using up a lot of people for not very much, but it's not for decide, is it? I'm particularly haunted by a video I saw some years ago of the men's diving competition. Even on the diving board, and immediately after diving, the divers had to have television cameras focused on their faces in closeup. It must be hard enough to perform in front of huge crowds, both in person and via television around the world, without having one's every facial tic analyzed by sports journalists who have to enliven the dead air somehow. (And as the Tiger Woods scandal has confirmed yet again, sports journalists are not the sharpest pencils in the box.)

Anyway, yes, a decent health care system counts for more than successful athletes. A country that provides health care, food, housing, and education for its least citizens might then be able to justify the cost of prepping athletes for international competition, if international competition still seemed worth bothering with. Despite my personal lack of interest in sport, though, I'm not opposed to exercise and play. Those would be included in the category of health care, of course. People will probably also want organized, social, group-oriented play, and that also is fine with me. What I'm objecting to is competition, especially the extremely high-stakes kind of competition involved in professional and Olympic sports. There are other ways for people to find solace, joy, and fun than such wasteful and destructive pastimes.

Priorities

She has a point. But how much you want to bet that this young woman wouldn't have bothered with the sign if "Canada" hadn't been "defeated" at the Winter Olympics? I did a cursory search and am not sure which defeat this refers to. Maybe hockey? Eat my ice chips, Canuckistan! It's not so different from the fancy that the US invasion of Iraq was a strike against Saddam Hussein personally.

Dave Zirin was in a bit of a tizzy at The Nation a couple of weeks ago because Christopher Hitchens had pooped on Sport. I respect Zirin and have learned a lot from his writing, but here I have to part company with him, even at the cost of agreeing with Hitchens. "Yes there is much to detest in the world of sports," Zirin wrote. "But why then is it also such a source of solace, joy, and - heaven forefend – fun? Hitchens doesn't care to explore this question." Hell: public executions, bear-baiting, gladiatorial contests, and feeding Christians to the lions used to be sources of solace, joy, and fun, not just to the "rabble" but to the better classes. That's not an argument, Mr. Zirin.

I'd say that "sport" is less the problem than competition itself. I'm not the first to notice that the vaunted Olympic spirit of transcending petty nationalism is bogus, that there's hardly even a pretense of it in the structure of the whole business, let alone the fans and the sports media. The pursuit of excellence is an excellent thing, and I'm as happy as anyone else to admire the photos of trained, buff bodies that are part of Olympic publicity.

I can't help wondering if the human cost is worth it, though, apart from the financial ruin the Olympics bring to the cities they prey upon every four years. The stress of competition at that level, following on years of incredibly demanding preparation, the elimination of large numbers of competitors along the way, and the rapid downhill slide after the Games, even for the winners -- it seems to me like using up a lot of people for not very much, but it's not for decide, is it? I'm particularly haunted by a video I saw some years ago of the men's diving competition. Even on the diving board, and immediately after diving, the divers had to have television cameras focused on their faces in closeup. It must be hard enough to perform in front of huge crowds, both in person and via television around the world, without having one's every facial tic analyzed by sports journalists who have to enliven the dead air somehow. (And as the Tiger Woods scandal has confirmed yet again, sports journalists are not the sharpest pencils in the box.)

Anyway, yes, a decent health care system counts for more than successful athletes. A country that provides health care, food, housing, and education for its least citizens might then be able to justify the cost of prepping athletes for international competition, if international competition still seemed worth bothering with. Despite my personal lack of interest in sport, though, I'm not opposed to exercise and play. Those would be included in the category of health care, of course. People will probably also want organized, social, group-oriented play, and that also is fine with me. What I'm objecting to is competition, especially the extremely high-stakes kind of competition involved in professional and Olympic sports. There are other ways for people to find solace, joy, and fun than such wasteful and destructive pastimes.

Gold Stock Fractal Dreamin' - On the Threshold

Looking for repetitive patterns, or fractals, in markets is something I enjoy. I know I need another hobby, but knowing what's happened in the past and what is possible based on historical precedents can help one to make speculative decisions and anticipate future movements. Sometimes it works, sometimes it doesn't...

I still think we are in for a VERY strong move in Gold mining stocks to the upside. I still believe a valid construct for analyzing what may come next is the 2001-2002 time frame. If so, we are on the threshold of that big move I am dreaming of as someone who is all in on both Gold and Gold stocks at this point (as well as a little silver and some silver miner exposure). Now hope don't make it so and isn't a very good investment strategy, to be sure. But the fundamentals are there and are as strong as they have been during this entire secular bull market based on the "real" price of Gold (i.e. Gold price divided by a basket of commodities).

Anyhoo, here's an 11 year weekly log scale chart of the $HUI Gold mining index divided by the price of Gold ($HUI:$GOLD) to show where I think we are:



I know it's a busy chart with too many marks on it and keep in mind that I am only a casual tinkerer when it comes to labeling price movements using Elliott Wave theory, but the implications are important if they are correct. Remember that the $HUI is an unhedged Gold stock index and it underperformed the price of Gold for FIVE YEARS before the capitulation lows in the $HUI:$GOLD ratio during the Great Fall Panic of 2008. After a 5 year bear market in the $HUI:$GOLD ratio, we are highly unlikely to see Gold stocks continue to underperform after only a one year bull market in this ratio. The real price of Gold tells us that the profitability of Gold miners is there on an operating margin basis. Though not all Gold miners will be in a position to cash in on this new margin expansion, others will and the sector as a whole should be set to benefit in a big way.

It is also important to remember that this stage of the Gold bull market, which has shifted from stealth to middle stage, will have even more power behind it. When big institutional money moves in (e.g., Soros, Paulson, Tudor Jones, Einhorn, Northwestern Mutual Life, China, India), this is bullish. It doesn't mean the trade is too crowded, it means the bull market is about to become easier to ride. And who will all these big investors sell to? They will sell to the public and the Gold permabulls, but not until the price of their investments is much higher than it is now. Do you really believe that Soros and Paulson are doubling down on their bullish bets at the exact top?

Only when there is widespread public participation can a mania or bubble occur. Think internet or housing bubbles. Selling your Gold jewelry at 20 cents on the dollar to pay the rent ain't a sign of a bubble, it is a sign that people are broke and desperate.

And don't forget that the final stage of a bubble can last for a year or more and entails a dramatic vertical spike of greater than 50% that dwarfs previous phases/up moves of the preceding bull market before the bubble pops. In other words, the 20% gain last fall in the Gold price is not even close to constituting a bubble dynamic in our "modern," unrestrained, fiat, debt-based monetary system. In the last secular Gold bull market, the final Gold price spike was 300% or so higher in ONE year (and silver was around 700%!!!). Now I understand that this cannot possibly happen again according to "experts" who told us Gold would never break out over $1000/oz. and now that it did the Gold price is about to collapse any second, but why would anyone care what these experts have to say?

I remain wildly bullish on all things precious and metal and think we are getting awfully close to a powerful breakout for both Gold and Gold stocks in U.S. Dollar terms. Of course, those who calculate prices in Euros are already enjoying historic secular new nominal highs in the price of Gold. New highs are coming for the Gold price in U.S. Dollar terms shortly in my opinion and I believe this will occur before the spring is over.

I believe Gold stocks will provide good leverage on the next multi-month move higher in the Gold price. I have already put my money where my electronic pen is, so I am as biased as can be. Once the Dow to Gold ratio gets to 2, I will be starting to sell my physical Gold. I plan on taking the proceeds from selling my physical Gold and buying Gold stocks (surprised?) for their final run, as Gold stocks should top out after the metal if the last two secular Gold bull markets are a good guide.

Gold stocks are historically significantly undervalued (see chart at the end of this post for proof) and a simple reversion to the mean should provide explosive profits in the Gold mining sector during 2010. I plan to be along for the ride.

Love Me, I'm a Liberal

Today at Counterpunch there was a rather odd article by Clancy Sigal, complaining that liberals have "lost their thunder."

There is an astonishing lack of anger among liberals, progressives and radicals who have abandoned emotion to the right. Our role model continues to be not FDR, still less Malcolm X, but our "bipartisan" and apparently tone-deaf President Obama. In this second or third year of a devastating depression, not just recession, that has inflicted an epidemic of suffering on the lower half of the American nation, Obama is very busy being fluent and civil while being essentially untouched by the rage felt by so many of us. Our world, as we have known it, is being annihilated, and nobody in power shows signs of giving a damn.

The real anger is all on the right, kidnapped – or authentically voiced – by the all-white Tea Partiers, Palinites, Oath Keepers and "armed and dangerous" patriot groups, some but not all of whom are native-fascistic but also include pissed-off libertarians and the disappointed and dispossessed at the bottom of the pile.

I grew up in a boisterous, immigrant, loud neighborhood where everyone had an opinion and voiced it full throttle. Somewhere along the line, maybe when I shifted from working class to middle class, I lost my rough, grating, empowered, assertive voice – and maybe the anger that had fuelled it. If so, that's a pity.

We need liberal anger now more than ever.

I've written of my wish for a liberal backlash, though I realized long ago that it was like hoping for compassionate conservatism (though, as you'll see, that term sums up American liberalism very well). I've also written about the popular confusion between radical ideas and anger as a performance style, and Raymond Williams's reflections on his own Welsh working-class background are also relevant, I think.

I think that Sigal goes wrong from the beginning in lumping "liberals, progressives and radicals" together, since liberals have been at odd with radicals for as long as I can remember, and I remember quite a ways back. The oddest thing about his article is its apparent belief that liberals used to be angry, assertive, and rough-hewn -- when in fact, they have always been notorious for being wishy-washy and ready to sell out when the going gets tough (and it always gets tough). It's not necessary to go very far back to see this, since so many liberals fell into line behind George W. Bush before the dust had settled on the rubble of the World Trade Towers, and many supported his invasion of Iraq a couple of years later. That could be explained partly as their fear of being accused of pacifism, but that's why we have cruise missile liberals, to give their reluctant but enthusiastic support to mass slaughter. (Unfortunately, Edward S. Herman's original article delineating the species seems to have vanished from the web, but this piece is still up. CORRECTION: Here's Herman's original article.) Liberals are always quite ready to get angry at the left: the name of Ralph Nader still gives them conniptions, even more than those of George W. Bush and Ronald Reagan, and if you want to see an angry liberal, just badmouth Barack Obama or John F. Kennedy.

This is why liberals have such an enduringly bad reputation. As far back as the mid-1960s, the protest singer Phil Ochs wrote and performed "Love Me, I'm a Liberal." Updated covers have been produced by Jello Biafra and Mojo Nixon, Daniel Cioper, Evan Greer, and others. I've always thought Ochs was overrated as a performer and as a writer ("Tears ran down my spine"?), but his heavy-handed satire catches the type in this song.

Once I was young and impulsive
I wore every conceivable pin
Even went to the socialist meetings
Learned all the old union hymns
But I've grown older and wiser
And that's why I'm turning you in

Long before Ochs, though, there was Langston Hughes, probably the best-known writer of the Harlem Renaissance. Hughes has become canonical, and I don't think he's usually thought of as a radical. (Jonathan Kozol did get fired for reading one of Hughes' poems to fourth-graders in his inner-city Boston classroom in 1964, though, so who knows?) Hughes wrote a popular series of stories about Jesse B. Semple, or "Simple," commenting on the issues of the day, and one of them, from 1949, was called "Liberals Need a Mascot":

"Just what is a liberal?" asked Simple.

"Well, as nearly as I can tell, a liberal is a nice man who acts decently toward people, talks democratically, and often is democratic in his personal life, but does not stand up very well in action when some social issue like Jim Crow comes up."

"Like my boss," said Simple, "who is always telling me he believes in equal rights and I am the most intelligent Negro he ever saw -- and I deserve a better job. I say, 'Why don't you give it to me, then?' And he says, 'Unfortunately, I don't have one for you.'

"'But ever so often you hire new white men that ain't had the experience of me and I have to tell them what to do, though they are over me. How come that?'

"'Well,' he says, 'the time just ain't ripe.' Is that what a liberal is?" asked Simple.

"That's just about what a liberal is," I said ...

That's not to say, of course, that all liberals are pious hypocrites, or that all radicals live consistently with their principles; of course not. For that matter, conservatives often take surprising stands. But given the history of the term "liberal", I am mystified by Clancy Sigal's appeal to liberalism's shining, or gritty, past. Do we need "liberal anger"? I suppose it wouldn't hurt, if it could make President Obama feel pressure from somebody else than his corporate sponsors. I like anger, it's nature's way of telling us something is wrong, but I don't think one ought be a slave to it. I also think that dwelling on anger misses the point. If someone gives me that "I'm mad as hell, and I'm not gonna take it anymore!" line, I want to ask them what they're angry about, why their anger is any more interesting than mine or someone else's, and how throwing a tantrum is going to make things better. Smashing a plane into a government building, or blowing one up for that matter, may be dramatic, but who's going to get hurt? George W. Bush was angry at Saddam Hussein, and we know how well that turned out.

Love Me, I'm a Liberal

Today at Counterpunch there was a rather odd article by Clancy Sigal, complaining that liberals have "lost their thunder."

There is an astonishing lack of anger among liberals, progressives and radicals who have abandoned emotion to the right. Our role model continues to be not FDR, still less Malcolm X, but our "bipartisan" and apparently tone-deaf President Obama. In this second or third year of a devastating depression, not just recession, that has inflicted an epidemic of suffering on the lower half of the American nation, Obama is very busy being fluent and civil while being essentially untouched by the rage felt by so many of us. Our world, as we have known it, is being annihilated, and nobody in power shows signs of giving a damn.

The real anger is all on the right, kidnapped – or authentically voiced – by the all-white Tea Partiers, Palinites, Oath Keepers and "armed and dangerous" patriot groups, some but not all of whom are native-fascistic but also include pissed-off libertarians and the disappointed and dispossessed at the bottom of the pile.

I grew up in a boisterous, immigrant, loud neighborhood where everyone had an opinion and voiced it full throttle. Somewhere along the line, maybe when I shifted from working class to middle class, I lost my rough, grating, empowered, assertive voice – and maybe the anger that had fuelled it. If so, that's a pity.

We need liberal anger now more than ever.

I've written of my wish for a liberal backlash, though I realized long ago that it was like hoping for compassionate conservatism (though, as you'll see, that term sums up American liberalism very well). I've also written about the popular confusion between radical ideas and anger as a performance style, and Raymond Williams's reflections on his own Welsh working-class background are also relevant, I think.

I think that Sigal goes wrong from the beginning in lumping "liberals, progressives and radicals" together, since liberals have been at odd with radicals for as long as I can remember, and I remember quite a ways back. The oddest thing about his article is its apparent belief that liberals used to be angry, assertive, and rough-hewn -- when in fact, they have always been notorious for being wishy-washy and ready to sell out when the going gets tough (and it always gets tough). It's not necessary to go very far back to see this, since so many liberals fell into line behind George W. Bush before the dust had settled on the rubble of the World Trade Towers, and many supported his invasion of Iraq a couple of years later. That could be explained partly as their fear of being accused of pacifism, but that's why we have cruise missile liberals, to give their reluctant but enthusiastic support to mass slaughter. (Unfortunately, Edward S. Herman's original article delineating the species seems to have vanished from the web, but this piece is still up. CORRECTION: Here's Herman's original article.) Liberals are always quite ready to get angry at the left: the name of Ralph Nader still gives them conniptions, even more than those of George W. Bush and Ronald Reagan, and if you want to see an angry liberal, just badmouth Barack Obama or John F. Kennedy.

This is why liberals have such an enduringly bad reputation. As far back as the mid-1960s, the protest singer Phil Ochs wrote and performed "Love Me, I'm a Liberal." Updated covers have been produced by Jello Biafra and Mojo Nixon, Daniel Cioper, Evan Greer, and others. I've always thought Ochs was overrated as a performer and as a writer ("Tears ran down my spine"?), but his heavy-handed satire catches the type in this song.

Once I was young and impulsive
I wore every conceivable pin
Even went to the socialist meetings
Learned all the old union hymns
But I've grown older and wiser
And that's why I'm turning you in

Long before Ochs, though, there was Langston Hughes, probably the best-known writer of the Harlem Renaissance. Hughes has become canonical, and I don't think he's usually thought of as a radical. (Jonathan Kozol did get fired for reading one of Hughes' poems to fourth-graders in his inner-city Boston classroom in 1964, though, so who knows?) Hughes wrote a popular series of stories about Jesse B. Semple, or "Simple," commenting on the issues of the day, and one of them, from 1949, was called "Liberals Need a Mascot":

"Just what is a liberal?" asked Simple.

"Well, as nearly as I can tell, a liberal is a nice man who acts decently toward people, talks democratically, and often is democratic in his personal life, but does not stand up very well in action when some social issue like Jim Crow comes up."

"Like my boss," said Simple, "who is always telling me he believes in equal rights and I am the most intelligent Negro he ever saw -- and I deserve a better job. I say, 'Why don't you give it to me, then?' And he says, 'Unfortunately, I don't have one for you.'

"'But ever so often you hire new white men that ain't had the experience of me and I have to tell them what to do, though they are over me. How come that?'

"'Well,' he says, 'the time just ain't ripe.' Is that what a liberal is?" asked Simple.

"That's just about what a liberal is," I said ...

That's not to say, of course, that all liberals are pious hypocrites, or that all radicals live consistently with their principles; of course not. For that matter, conservatives often take surprising stands. But given the history of the term "liberal", I am mystified by Clancy Sigal's appeal to liberalism's shining, or gritty, past. Do we need "liberal anger"? I suppose it wouldn't hurt, if it could make President Obama feel pressure from somebody else than his corporate sponsors. I like anger, it's nature's way of telling us something is wrong, but I don't think one ought be a slave to it. I also think that dwelling on anger misses the point. If someone gives me that "I'm mad as hell, and I'm not gonna take it anymore!" line, I want to ask them what they're angry about, why their anger is any more interesting than mine or someone else's, and how throwing a tantrum is going to make things better. Smashing a plane into a government building, or blowing one up for that matter, may be dramatic, but who's going to get hurt? George W. Bush was angry at Saddam Hussein, and we know how well that turned out.

I Still Smell a Replay

A replay of the general stocks down, Gold and Gold stocks up scenario that occurred during the 2000-2003 bear market in general stocks, the 1973-1974 bear market in stocks, and the 1929-1932 bear market in stocks. I think Gold stocks are going to rise while the general market declines. I think we are getting real close and I think the bottom is already in for the Gold price and general Gold stock indices.

I am thinking something like the chart below is what's in store. This chart is stolen from Frank Barbera with my scribbles on it:



For those who don't know, Homestake was a huge Gold mining company that was around for both the 1930s and 1970s Gold stock bull markets and its remnants are now part of Barrick Gold (ticker: ABX). Speaking of Homestake, perhaps something like this chart, stolen from Mr. Ian Gordon at the Longwave Group, may be coming:



I know, I know, Bloomberg sayz Gold and Gold stocks only do well during inflation and Gold stocks go the same direction as the general market. Except for the fact that some of the greatest historical bull moves in Gold secular bull markets over the past century have done exactly the opposite, including those from 2000-2003. I know, I know, markets never rhyme or repeat and the swinging pendulum of market history can't possibly work because it's general stocks for the long haul, duh.

You can put your money where you want, but I don't fear a return of the general stock bear market at all. Flea on a bull's back. It is Gold's time. Gold stocks will eventually start to outperform the Gold price on multiple consecutive days and even for weeks at a time, in a manner very similar to what Gold stock indices did today.

I don't think today's move in Newmont (ticker: NEM) was a one-day wonder, I think it is setting the tone for the next 2-4 week move higher. I don't like Newmont as an investment, but stodgy blue chip Gold miners often lead the move then slow down and lag as other faster growing Gold stocks come to life. Here's the last 3 weeks of action in NEM using a 15 minute intraday chart:



I am not saying that general stocks can't go higher - they can. But I smell a rhyme of some of the most successful Gold stock and Gold moves coming up and it don't matter one iota whether the stock market goes up or down. A stock market crash spares almost no stock, but a bear market in general stocks is irrelevant right now for the Gold bull market. Still stubbornly long and wildly bullish all things precious and metal.

SCATTERED BY YOUR HAND.

We alluded to the pretty sick remix package that's come together around our upcoming next single with Yes Giantess, and while Big Stereo debuted the brill Baby Monster remix last week, today we've got the undeniable highlight in the form of another out of this world rework by London's Fear of Tigers. The whole thing's basically just a high energy build up to the 2.5 minute mark, at which point Tigers just lets loose with an explosion of his signature electro fireworks, all screaming synths cascading back and forth across the night sky while Yes Giantess make out with your girlfriend on a picnic blanket on the field below.

MP3: "The Ruins" (Fear of Tigers Remix) - Yes Giantess [exclusive]

How We Get Out of a Deflationary Debt Spiral

Simple. Default (refuse to pay/declare bankruptcy/re-negotiate debt) and/or debase/devalue the currency (a "subtler" form of default). Don't forget the end game when you're watching the daily squiggles. In the 1930s, contrary to what you will read if you study mainstream economic texts or the current paperbug clowns (a la Krugman), the federal reserve (which is not a part of the government and does not have any reserves) made heroic efforts to stop the deflationary slide. People argue that they didn't lower interest rates fast enough, print enough new debt, or turn some other economic knob at the right time.

OK, perhaps this is true. In fact, I'll say that it is true. Because central planning of an economy doesn't work well over time (ask Russia) and can't work even with a star quarterback at the helm (and Bernanke is no star, trust me). If we gave Paul Volcker the reigns right now, the same thing would occur that is going to occur under Bernanke's stewardship of our unconstitutional central bank. In our current fiat system, printing money means printing more debt. But more debt makes things worse in the current setting when debt cannot be paid back. Of course, this won't stop everyone "in charge" from trying.

More job programs that don't work, more "stimulus" that causes only a greater stupor, more wars that only serve to increase our enemies' strength at the expense of our own, more government control over the economy that ensures it will stay weaker for longer than it needs to, and more welfare for anyone deemed less fortunate than the average Joe. Forget common sense. It won't be back for awhile.

And when things are worse five years from now than they are today, the cause will again be misdiagnosed and economists will be "surprised" as "no one could have seen it coming." The blame will also be laid on those who are long gone and no longer beholden to "the people." But the final trump card will be available and will be used at some point during this cycle, make no mistake about it.

This trump card is currency destruction. There are those who say we cannot devalue our currency in the U.S. because we have no one to devalue against as the world's reserve currency. Those who say this cannot see the forest through the trees and won't until the game is already over. If what's left of the global free market will not devalue the U.S. Dollar despite reckless government policies designed to do just that, then the trump card gets played.

This trump card has been played for centuries, whether via abandonment of a Gold standard (a la every major global economy in the 1930s), an announced devaluation of paper currency (a la the recent actions in Venezuela and Vietnam), decreasing the metal content of coins (a la Roman times and the U.S. in the middle of the 20th century) or introducing an entirely new monetary system (a la the Euro). The only lesson Bernanke learned from the 1930s is to try to devalue the currency quicker and as fast as possible so a new cyclical false inflationary boom can begin sooner rather than later! The devaluation of the U.S. currency in 1934 (i.e. Gold peg changed from $20.67/oz to $35/oz) brought back a multi-year cycle of inflation without delay. Any consequences after a few years are handed to the next group of politicians, so why concern oneself with longer term analysis?

I suspect the bankstaz have no plans to go back to a Gold standard unless bloody riots force it upon them. I am not holding my breath for such an outcome, as the level of monetary ignorance among even educated and intelligent citizens of the world is generally higher than seems remotely possible to those who have crossed over to the other side of the matrix. This leaves three outcomes in my mind that are most likely, though there may well be others.

First is a super-sovereign currency a la the Euro, whether on a Western basis (i.e. something along the lines of the Amero but with a different name) or via something from the IMF. The second possibility is a coup by one or more of the emerging economies of the world, who could introduce a hard asset-backed currency in an act of economic warfare. Such a plan could help explain why China is the first country using a paper debt-backed monetary system in a long, long time (ever?) to openly encourage its citizens to buy silver and Gold.

Finally, there is the possibility of the paper masters of the world fostering a Gold bubble. As Soros said, the ultimate asset bubble is Gold. By encouraging Gold prices to go higher, the declining value of paper money is overtly exposed to market participants and can become self-sustaining. Of course, most Gold bulls believe that this will happen with or without government assistance and I agree. Governments cannot change the primary trend, but they can distort it and current distortions serve to slow the Gold bull market down rather than speed it up.

Regardless of which of these "solutions" are chosen, and none are fair or reasonable from the point of view of we ants of the world, a debt default thru repudiation or currency defilement will economically destroy those who hold their life savings in U.S. Dollars. Don't worry, though, mommy government will take care of you after the deed is done. And, no, this unilateral policy action will not be openly discussed, voted upon by the public or announced in advance.

Because of where we are in the economic cycle, stocks are likely to lag whatever inflationary jolt can be achieved by destroying the paper promises standing behind our transactional money. This is why Gold does well during a Kondratieff Winter. The lack of confidence in the economy and government behind it leaves few good investment choices. Prechter believes the reason Gold didn't tank in the 1930s (if I understand him correctly) is because Gold was linked to the U.S. Dollar. I think he has it backwards. The reason Gold didn't soar higher in the 1930s was because its price was fixed and thus Gold was not allowed to find its true market value.

The bearishness in the retail Gold crowd is palpable right now and misplaced in my opinion. No one can predict the short term with any consistency (though it is fun to try!). Sentiment and interest in the Gold patch are at indecipherable lows despite $1000 now acting as a floor for the Gold price instead of the ceiling. Now that a four digit Gold price is cemented in market participants' minds, the only important question is related to what number will be the first of those four digits when the secular Gold bull market comes to an end. I don't claim to know, but here's a hint: it ain't the number 1, although this may be the magic number for the Dow to Gold ratio when the Gold bull peaks.

Postscript on "Race" as a Social Construct

As it happens, when I read and criticized Michael J. Smith's ruminations on race yesterday, I had just begun reading Eduardo Bonilla-Silva's Racism Without Racists: Color-Blind Racism & Racial Inequality in Contemporary America (3rd edition, Rowman & Littlefield, 2010). I'd picked it up off the new arrivals shelves at the university library because it included a new chapter on the "Obama Phenomenon", and then someone recalled it, so I had to read it soon. It's an interesting book, which draws on interviews about race with a wide range of white Americans as well as the usual scholarly literature.

I finished reading it tonight, and in the final chapter read this among a short list of examples of "how most whites think and talk about racism in contemporary America" (261f):

“Race is a myth, an invention, a socially constructed category. Therefore, we should not make it ‘real’ by using it in our analyses. People are people, not black, white, or Indian. White males are just people.”

Bonilla-Silva added in an endnote (272, note 1):

A colleague said something like this to me almost verbatim a few years ago in response to a presentation I gave about racism in sociology. Later on, the same colleague uttered a statement along the same lines to challenge a graduate student’s presentation on whiteness. Denying the social reality of race because of its constructed nature (see chapter 1), unfortunately, has become respectable in academia. This position, which has been uttered by conservatives such as David Horowitz, has now been adopted by liberals such as Todd Gitlin and even radicals (or former radicals) such as Paul Gilroy.

Nice coincidence, isn't it? Smith's complaint puts him in some distinguished company. Now, Smith did concede that it's valid to study the history of race and racism, as long as one doesn't indulge in excessive jargon (that is, more jargon than he himself employed) or create new departments with "studies" in their names. This, he held, somehow conformed to the worst tendencies in academia, and produced people like the African-American female writer he was denouncing in the first place, for usurping a page in The Nation that properly belonged to a white male writer. (I've been wondering if she was actually replacing Patricia J. Williams, a black female law professor. If not, surely The Nation doesn't need two black women writing for them on a regular basis! That's reverse discrimination!)

But the more I think about it, the more confusing it all seems, because Smith attacks academia while at the same time granting legitimacy to what I can only call traditional disciplines like history: "To demand that historians, say, should start paying attention to formerly ignored historical subjects was a great thing", as long as you didn't create new departments to study those formerly ignored subjects when the old white men refused to study them or to permit their students to do so.

But none of these critiques require you to be a race specialist: they require you to be a historian or a scientist or an organizer. If you are none of these things, your critique is going to be rather feeble, because you don't have the knowledge you need to make it stick.

It is, of course, possible, to be all of "these things." It seems that Smith is calling here for a return to, or the conservation of, traditional disciplinary boundaries in Academe (those pesky "studies" departments have a distressing tendency to be multi-disciplinary). Maybe I just stumbled onto the National Association of Scholars webpage by mistake?

Postscript on "Race" as a Social Construct

As it happens, when I read and criticized Michael J. Smith's ruminations on race yesterday, I had just begun reading Eduardo Bonilla-Silva's Racism Without Racists: Color-Blind Racism & Racial Inequality in Contemporary America (3rd edition, Rowman & Littlefield, 2010). I'd picked it up off the new arrivals shelves at the university library because it included a new chapter on the "Obama Phenomenon", and then someone recalled it, so I had to read it soon. It's an interesting book, which draws on interviews about race with a wide range of white Americans as well as the usual scholarly literature.

I finished reading it tonight, and in the final chapter read this among a short list of examples of "how most whites think and talk about racism in contemporary America" (261f):

“Race is a myth, an invention, a socially constructed category. Therefore, we should not make it ‘real’ by using it in our analyses. People are people, not black, white, or Indian. White males are just people.”

Bonilla-Silva added in an endnote (272, note 1):

A colleague said something like this to me almost verbatim a few years ago in response to a presentation I gave about racism in sociology. Later on, the same colleague uttered a statement along the same lines to challenge a graduate student’s presentation on whiteness. Denying the social reality of race because of its constructed nature (see chapter 1), unfortunately, has become respectable in academia. This position, which has been uttered by conservatives such as David Horowitz, has now been adopted by liberals such as Todd Gitlin and even radicals (or former radicals) such as Paul Gilroy.

Nice coincidence, isn't it? Smith's complaint puts him in some distinguished company. Now, Smith did concede that it's valid to study the history of race and racism, as long as one doesn't indulge in excessive jargon (that is, more jargon than he himself employed) or create new departments with "studies" in their names. This, he held, somehow conformed to the worst tendencies in academia, and produced people like the African-American female writer he was denouncing in the first place, for usurping a page in The Nation that properly belonged to a white male writer. (I've been wondering if she was actually replacing Patricia J. Williams, a black female law professor. If not, surely The Nation doesn't need two black women writing for them on a regular basis! That's reverse discrimination!)

But the more I think about it, the more confusing it all seems, because Smith attacks academia while at the same time granting legitimacy to what I can only call traditional disciplines like history: "To demand that historians, say, should start paying attention to formerly ignored historical subjects was a great thing", as long as you didn't create new departments to study those formerly ignored subjects when the old white men refused to study them or to permit their students to do so.

But none of these critiques require you to be a race specialist: they require you to be a historian or a scientist or an organizer. If you are none of these things, your critique is going to be rather feeble, because you don't have the knowledge you need to make it stick.

It is, of course, possible, to be all of "these things." It seems that Smith is calling here for a return to, or the conservation of, traditional disciplinary boundaries in Academe (those pesky "studies" departments have a distressing tendency to be multi-disciplinary). Maybe I just stumbled onto the National Association of Scholars webpage by mistake?