Monday, July 14, 2008

"Ready For Anything" Nation

A few thoughts on the GSE situation. Unlike most of what's happened during the past seven-plus years, there's enough blame to go around for both Republicans and Democrats. If you don't know how institutionalized Fannie and Freddie have become, here's a good, basic article from over the weekend. I've posted before (most recently here) about the exigencies of the "system" and how the government's ability to both guarantee and bail out depends on the primacy of the dollar. Any country that rejects that primacy creates unpleasant consequences, and that constitutes an existential threat to the system. Keep it in mind over the next few months. Remember, statists hate consequences, especially when culpability is clear.

I think right now the main danger is that the current bunch (yes, including Bernanke) knows it will be gone soon, so expediency could determine policy even more than it has during the past few years. In January, with oil at $100, I wrote:

I think years from now Bernanke will be seen as a temporary cut-out, an Arthur Burns mini-me, a front man for expediency, someone to damn the monetary torpedoes and then get the hell out before some Very Serious People (who no doubt quietly shifted their own savings into euros and gold long ago) announce that no, that didn't go well, but we've found a Volcker-type to come in and clean things up.

That outcome's looking increasingly likely. But if you think inflation's a problem now, wait until you see what happens to the dollar and therefore the cost of living if we breezily embark on some massive new expansion of government liabilities. The dollar has already factored in part of this, so the worst effects might not be felt right away. But down the road -- after January 20, 2009, obviously -- it would be devastating.

Next, the "ownership society." The debacle with housing, Bear Stearns, and the GSEs has redefined the concept. You mean you didn't hedge your savings against inflation and the socialization of risk by speculating in real estate, or by owning stock in Fannie (or Bear Stearns or other financial firms) and deftly selling before the collapse? Well, too bad. This is what an ownership society is, or at least becomes when fiscal and monetary policy go awry. You'd better dutifully play along with the charade on the way up, because you'll definitely be included on the way down.

Related, if you're one of those strident advocates of "fixing" Social Security via private accounts (as is McCain, and others on the Right who were strangely silent about the financial market turmoil last week) you've got some 'splainin to do. This mess exposes the folly of building an even higher government backstop in the name of ownership society. And let's not kid ourselves: if Social Security funds were invested in the common stock of Fannie or Bear Stearns or the raft of other financial firms currently in trouble, what effect would that have on Washington's definition of "too big to fail"? Since the mid-90's, the Federal Reserve has proven itself unable to resist the pressure to take extraordinary measures to boost the stock market. That's part of the reason we're in this mess. On a political, economic, social, and perhaps most importantly a spiritual level, do we really need the financial markets to become an even greater national priority, and for the Fed to expand its role as the Keeper of the Flame of National Purpose? Why not a stock market ticker on every street corner, continually flashing "Your retirement money guaranteed by the federal government." Or maybe "Bubbleamus, ergo sumus" -- which, if I remember my verb conjugations from seventh-grade Latin, should roughly translate as "We bubble, therefore we are."

Finally, does anyone else find the lack of national outrage about all this a bit unsettling? It's almost a serene, sedated acceptance. Maybe after seven-plus years it's outrage fatigue. Maybe the pain's not bad enough yet. Or maybe democracy's simply working as it should, and people will vote calmly in November to throw the bums out. I'm not sure what I expected in terms of outrage. But in a week that saw oil wink at $150, one of the largest bank failures in U.S. history, and media speculation about a doubling of the public debt with a bailout of Fannie and Freddie, I didn't expect to hear a top economic advisor to one of the candidates claim that it's all in our heads. I do think that if things get bad enough, eventually there will be calls to prosecute the policymakers -- both elected and appointed -- responsible for this mess. War crimes or something else might be the proximate cause for that prosecution, but economic collapse, if it happens, could create an environment in which the public demands it. Electoral victory shouldn't confer the unfettered right to run a country into the ground.

But if "sedated acceptance" explains the absence of pitchforks, that has ominous implications. Thomas Mann described the effects of inflation on a nation's collective psyche, but his observations arguably apply to any period of profound institutional failure to which the public becomes inured:

The market woman who demanded in a dry tone "one hundred billion" mark for a single egg had lost during inflation her ability to be amazed at anything. Since that time nothing was so mad or so atrocious that it could have caused any awe in people anymore.

In Crowds and Power, Canetti argues that economic chaos causes a society to place less value on human life:

The natural tendency afterwards is to find something which is worth even less than oneself...It is not enough to take over an old contempt and to maintain it at the same level. What is wanted is a dynamic process of humiliation. Something must be treated in such a way that it becomes worth less and less, as the unit of money did during the inflation. And this process must be continued until its object is reduced to a state of utter worthlessness. Then one can throw it away like paper, or repulp it.

Sebastian Haffner on what happens when sedated acceptance meets Canetti's dynamic process of humiliation:

Everything takes place under a kind of anesthesia. Objectively dreadful deeds produce a thin, puny emotional response. Murders are committed like schoolboy pranks. Humiliation and moral decay are accepted like minor incidents. Even death under torture only produces the response 'Bad luck'...The result of this million-fold nervous breakdown is the unified nation, ready for anything, that is today the nightmare of the rest of the world.

The woman selling eggs in the market starts to look abroad. I don't think you can blame "the rest of the world" for watching us right now with a very wary eye -- and not just for currency reasons.


Anonymous Anne Laurie said...

Finally, does anyone else find the lack of national outrage about all this a bit unsettling? It's almost a serene, sedated acceptance. Maybe after seven-plus years it's outrage fatigue. Maybe the pain's not bad enough yet...

To me it seems more like the learned helplessnes of a lab rat shocked into quiessence. The last seven (or, if you assume the roots of the current Oval Office debacle go back to Cheney's / Rumsfeld's / Perle's apprenticeship during Watergate, thirty-five) years have reduced our American "community" into a series of walled fiefdoms surrounded by desolation, where the much-vaunted Average Voter has been reduced to a poker chip in the winner-take-all games of the richest 2% of the population -- a 2% that has much more in common with the sheiks of Abu Dhabai, the Russian nomenklatura, or the Red Princes in China than it does with their nominal fellow-Americans. As the old saying goes, what can't go on forever, doesn't... but we wage slaves in the Unblessed Ninety-Eight-Percent are too busy, too weary, or too scared to do more than hold our breath as the balance tips.

7/14/2008 1:15 AM  
Anonymous Anonymous said...

Even if they do invade Iran it doesn't absolve them of the consequences. It puts oil up in the short term but it doesn't really affect the long -term situation much -- they won't be able to blame the coming problems on a bit of bombing, and bombing is all they could do. If they do bomb Iran they won't get a sniff of Iraqi oil for the forseeable future, Iran will build a bomb for certain and the Iranian regime will be in power for a generation, they'll sell their oil in Euros etc. The only positive Bush can take from Iraq is bases and oil access but he loses them both for certain if he attacks Iran, plus loses strategically (Iranian regime cemented/building nukes etc.)

So bombing Iran doesn't absolve Bush/44 from the conseqences of recent policies but in the long run amplifies them. So it won't happen, despite Israel jumping up and down angrily demanding it.

7/14/2008 1:49 AM  
Anonymous goldhorder said...

Whatever. I'm just buying gold...and silver...and bullets. Remington 870, Colt 1911, Remington 740. I've got my gold...I've got my guns...just keep your distance you starving hoard of sheep.

7/14/2008 2:10 AM  
Anonymous rapier said...

There is no sense of outrage because there is no understanding. There is no understanding because there is no leadership in opposition.

On matters financial there is in fact no difference between the parties. Clinton institutionalize the Wall Street paradigm of wildcat finance, the partnership of Wall Street the Fed and the Treasury by bringing Rubin on board and allowing the demise of Glass Stegel.

Liberals and progressives lack of knowledge and understanding of monetary and financial things has for decades been practically worn as a badge of honor. In many ways politicians of all stripes are little better. Things monetary and financial are accepted to rightly be under the control of the high priests of money. Even at this moment there is a blind faith that the Paulson's of the world have things under control, when nothing could be furter from the truth.

The most freigtning thing is that as things deteriorate further and the high priests are seen as liars and fools in control of nothing there will be no plan B. The only plan B extant is the Ron Paul one; end the Fed and other such simplistic Libertarian ideological folly. That's it. No Democrats have any alternative. Hell, they love FNM more than anyone and actualy still spout the GSE's role in 'affordable housing' as housing prices fall from the most unaffordable peak in history.

The lack of understanding is total.

7/14/2008 5:42 AM  
Anonymous Anonymous said...

Oh well, it was fun (for the privileged among us anyway) while it lasted. Still, I can't help but feel a certain glee at the pending collapse of all that is capitalistically sacred. No doubt this is a self-serving psychological salve that will be painfully washed away when the millennial flood covers all but the enlightened few.

7/14/2008 7:31 AM  
Blogger Spider said...

I think the lack of outrage isn't from learned helplessness, nor from anesthesia from this being so shitty for so long. (Though the latter does apply somewhat.) I think that with regards to these financial meltdowns and bailouts that TCR writes about in this post most people, and I would venture upwards of 75% of the population don't understand one iota of what's going on and that they should be outraged.

If you can't even understand, because our educational system is so poorly lacking in financial education, then how can you be outraged!!

And I, ashamedly, am a case in point! I have my undergraduate degree in Mathematics, Music Performance and Ethics. My Masters Degree is in Studio Composition. With a more than 200 college credits, I didn't take one business class. I have learned more about economics, both micro and macro, in the past years reading TCR's blog than I did in 7 years of higher education. (In hindsight, I do regret taking psychology and sociology for my social science requirements instead of economics and personal finance.)

My fiance, equally high educations (just finished a Masters Degree in Forensic Psychology), gets a haze over her when ever dollar signs appear in a conversation. She's great at math, but mention money and she has a mental block with it. Good thing we trust her accountant.

So in our minute soundbite news culture, where it really would take a good 10-15 minutes of air time to explain, in simple enough terms, so the common American (case in point, my best friend who is a police sergeant in NYC with an Associates Degree but still spouts of talking points from Sean Hannity and sticks to his blind Christian fundamentalism and Neo-Conservatism)can understand, how can we expect to have any outrage?!

On top our collective anesthesia of having to pay so much for everything just to survive.

Not saying that there shouldn't be outrage. That just how I see as to why there isn't more. (Well, there's more reasons than that.)

Thanks again, TCR, for a very education post! I'm going to mull all day now about how fucked we are as a nation. And think about the practicality of moving to Ireland where I have citizenship.

7/14/2008 9:15 AM  
Blogger Spider said...

Oh, and we've already started to de-value human life.

How to value life? EPA devalues its estimate

7/14/2008 9:18 AM  
Anonymous Anonymous said...

American Capitalism = Bailout Nation?

Isn't there such a thing as economic terrorism, and aren't these folks as guilty as those others that would harm our Nation?

The gun solution is easy, the brain solution is hard. One is abundant, the other scarce.

Is it November yet?

7/14/2008 12:42 PM  
Anonymous Kilfarsnar said...

I'm with Rapier and Spider on this one. I don't think most people understand what is going on. I think I have a decent layman's understanding. But still I don't fully understand what is happening and why. The mainstream media are no help. They clearly don't understand themselves, or don't want to explain for any number of reasons. So what is the average over-worked American to do? This is one more way in which our democracy is weakened (if it still exists at all).

Our private financial system and government monetary system are so complicated and interconnected it can be difficult to explain and understand even for professional in the field. As CR alluded to, most people do not have the time or the inclination to research and learn what they should know. I personally find a lot of it rather dry. But I have the time (single, no kids, light workload) and I have come to understand that I am being screwed, which gives me the inclination to push through.

One more reason I like this 'blog is that it gives me some hints and direction in my research. As I have said before, both the posts and the comments can be very enlightening (the comments on most blogs are not worth reading). It can be hard to know where to start and what is important to look into. I have a relative who is a financial analyst. But he thinks Fed chairmen are insulated from politics, most businessmen are honest and morally upright, and that the financial system works the way they teach you in school. So he is obviously no help.

Finally, One more factor that plays in is apathy. The system has run for so long without the average citizen's intervention that people just think it kinda runs itself. So people don't take the time to understand their government, or monetary policy, or social policy, or how factory farming is making their food unsafe to eat, or how the military/industrial/congressional/intelligence complex is leading them towards fascism at home and world war abroad. People think that what the TV tells them is true. They believe the conventional wisdom and common myths. When I try to explain how the government has been taken over by wealthy interests for their own purposes, or how it uses an overblown terrorist threat to scare us into giving up our rights, I am often met with cockeyed glares. When that happens, I don't even bother to go into what really happened in the Fall of 2001 and what it really means.

With rare exception, recent history has shown that we only respond to manifest crisis. Imminent crisis is not enough; it must be manifest. And, of course, by the time a crisis is manifest, all of the best options are gone. So the only option left for most people is to put their head between their knees and grab their ankles.

7/14/2008 12:57 PM  
Anonymous mary said...

Yep, I think it's a complete lack of understanding. People immersed in "private" lives and/celebrity gossip. And a media that seems to want to be covering celebrities rather than politics and therefore can't or won't focus on the issues that really should matter -- we get stories about Obama's pinless lapels, McCain's "straight talk," Hillary Clinton's cleavage, the other Clinton's sex life, Edwards's haircuts, and on and on. And when there is actual coverage of issues, it's usually very ill-informed and/or lazy -- he said/she said, false dichotomies between the so-called philosophies of "left" and "right" ("government intervention" vs. "free market"), etc. etc.

And, not coincidentally, all of this serves the (Republican) status quo. No wonder McCain knows nothing about economics (or anything else) -- why should he bother to figure out how Social Security works if he doesn't have to?! No one in the media is going to call him on anything. And if Obama were to speak in plain terms about the situation? He'd be ignored, or worse yet called an elitest/foreigner/communist. (Remember the gas-tax holiday? And have you seen the latest New Yorker cover, btw?) And I won't even get started on the obstructionist Repubs and too-often-spineless Dems in Congress.

I'm not trying to make excuses for anyone, of course. It's not like the media has ever been great, for the most part. But yes, as we've all been saying, it'll take a huge crisis -- one that affects a huge percentage of the "haves" and not just the "have nots" -- to shake us out of our lethargy.

7/14/2008 1:25 PM  
Anonymous Fledermaus said...

On matters financial there is in fact no difference between the parties. Clinton institutionalize the Wall Street paradigm of wildcat finance, the partnership of Wall Street the Fed and the Treasury by bringing Rubin on board and allowing the demise of Glass Stegel.

Bingo. our congress peoples have been whistling pas the graveyard for so long now, they naturally assume that these finance guys must know what they are doing - after all they went to the right schools and know all the right people, besides there's a lobbist trip to France coming up and all this financial stuff is just so complicated, yadda yadda.

The media and congress for the most part are just assuming these people know what they are doing.

7/14/2008 2:30 PM  
Blogger Mr. Hedley Bowes said...

When I travel to Canada and tune into CBC radio, I hear extensive discussion of issues affecting government, business, individuals and resources. I hear a variety of informed opinion engaged in intelligent debate. I hear a media culture alive with intelligence. Then I come back to the states. Our media, even PBS and NPR (with the notable exceptions of Frontline, Bill Moyers, et al), presents canned pablum and little substantive debate. One of the pleasant side effects of the Obama campaign is that there is more attention to and time for progressive positions from informed individuals on the center left (read: not neo-con) end of the spectrum. Even still: it's typically 2 GOP shills to 1 Dem. Most of what we hear in these discussions are packaged soundbites intended to obscure or spin issues to the particular agenda of the speaker's paymasters. It's how we found ourselves with an incompetent/malicious administration imposed by a specious decision of the Supreme Court, how we find our armed forces bogged down in Iraq (remember how quickly those objections were shouted down in 2002/2003?) and how we find ourselves in position for another economic collapse on the scale of 1930-1933. Grover Norquist and the tax freedom folks over at the CATO Institute presented their argument for tax reduction based on national wealth created from the period of 1920-1929. I kid you not. When chellenged, they waved off. Now that the chickens are come home to roost, the price of feed's gone through the roof and the coop's being foreclosed.

These trends are all the result of aggregation of power away from individual citizens and toward corporations. I read this over the weekend and found it to be compelling:

7/14/2008 3:04 PM  
Anonymous george bush said...

They never stop thinking about new ways to harm our country and our people, and neither do we.

7/14/2008 3:43 PM  
Anonymous Thomas Daulton said...

A small, but certainly refreshing, amount of outrage over this subject appears at the Distant Ocean today. His blog-post title basically says it all:
You, on the other hand, are just the right size to fail

From the comments:
visitor 'Save the Oocytes': "I forgot what your take was on this, exactly, John. What do you suppose happens next if the government lets the FM's and (e.g.) the airlines go down? It may just be lack of cojones on my part, but I have trouble even imagining what the valley would look like without Goliath towering over us. Would his fall topple all our little anthills?"
blog owner John Caruso: "I have no idea what would happen next, but I'd like for us to try it and see. I'm tired of the triumphalism of corporate capitalists who preach about the inevitability of a system that really only survives thanks to constant intervention from the state sector, and frequent infusions of our money. Let's stop propping it up and see what happens."

7/14/2008 4:21 PM  
Anonymous mary said...

RIght, so after years and years of Republican rule (which means that people voted Republicans into office again and again), now that the sh*t has hit the fan there's no difference between the parties. AKA, it's all Clinton's fault.

Of course, there are many, many Dems who have prospered in the Reagan and post-Reagan eras (Schumer, Feinstein, etc., etc.) -- I haven't voted for Feinstein in at least a decade and am waiting, hoping, for her to retire. But I digress. I just think it's amusing, this trope about the parties being exactly the same . . . were the Dems supposed to save the Repubs from themselves, or something?

7/14/2008 4:30 PM  
Anonymous Cheryl said...

I agree with everyone who has said none of us really understand what's going on. Here's another liberal arts major w/o any college credits in any kind of business/economics classes. I was forced in high school to take a consumer ed class in which I learned how to fill out a check. There was probably more, but I don't remember any of it.

The really scary part to me is McCain knows about as much as I do about this stuff, only he doesn't want to learn about it.

7/14/2008 5:18 PM  
Anonymous Anne Laurie said...

I don't think most people understand what is going on. I think I have a decent layman's understanding. But still I don't fully understand what is happening and why... Our private financial system and government monetary system are so complicated and interconnected it can be difficult to explain and understand even for professional in the field...

The average German peasant, and even the average German cleric, couldn't understand the key values of transubstantiation or why the question of salvation-thru-faith versus salvation-thru-works was worth killing so many people, but the Hundred Years' War went on regardless. Sometimes I suspect that our modern "scientific" culture is using High Finance language as its own form of theology -- it's not really about the details, it's about using those details as a cover for looting the neighboring baron's fiefdom for whatever can be carried away before the next Righteous Crusader shows up.

7/14/2008 6:00 PM  
Anonymous Anonymous said...

"Or maybe democracy's simply working as it should, and people will vote calmly in November to throw the bums out. "

Vote them out...and replace them with who? It's all bums, all the way down. We need an alternative to have an alternative.

7/14/2008 7:12 PM  
Blogger Chris F. said...

Combine this with the coming ecological terrors, and we have a real calamity on our hands. I had no idea that GW Bush would be the bringer of the apocalypse...hell, he can't even ride a horse.

7/14/2008 7:47 PM  
Anonymous Anonymous said...

Haffner's book is a must read, never more so than right now.

7/14/2008 9:35 PM  
Anonymous Anonymous said...

Equity markets have recently lost over $2 trillion in the U.S. and even more globally -- many times the likely amount of mortgage and corporate debt losses in the foreseeable future. This is in part a correction from the sharp global equity run-up through mid-July. Current prices still signal growth ahead

Dow 3,000 or 15,000?

large caps into small and mid, it has longer-term bullish implications and doesn't bode very well for the masses who seem to be looking for 1300 on the S&P.

I noticed even the bullish Carl Fu

7/14/2008 11:09 PM  
Anonymous goldhorder said...

John Taylor Gatto.
Funny...she mentions the Germans. We copied their mass educational system. Obedience...Obedience...Obedience. We have learned just what they wanted to teach us. LOL.

Yes I agree you are all dummies. You have not bought have not bought guns. You are in deep doo doo.

7/15/2008 1:45 AM  
Blogger Spider said...


For what it's worth, I do respect you. But seriously, how was I supposed buy gold when for the past ten years I have moved 20 times and have only been able to stay barely above my bills. I have not had extra income to buy gold much less invest in anything.

And since I have moved 20 times in the past ten years, how would have I have kept it or transported it? Really should I trust a bank note that says that I own x amount of gold?

Note, I'm not disagreeing with you is that yes, I should have been buying gold and getting a gun (much against my pacifist nature), but I, and others, don't need the added guilt that I'm a dummy for not doing so.

I recognize how fucked I will be in an economic collapse. And yes, I'm looking for anything I can do to make it as painless for myself as I can.

7/15/2008 11:02 AM  
Anonymous Anonymous said...

Notice the front page picture of the NY Times today with people lined up outside IndyMac bank to withdraw their money. Is it the 1930's yet?

7/15/2008 12:47 PM  
Anonymous Kilfarsnar said...

Once again, I'm with Spider. I am interested in buying gold. But I want to actually buy gold. I don't want some certificate saying I own some gold in some vault somewhere. Unfortunately, I don't have the expertise to evaluate what I'm buying, even if I knew where to go to get it. And I too an considering exercising my second amendment rights.

Goldhorder, when you buy gold, are you buying physical metal, or are you buying certificates? If it is physical gold, what is your method? If it is certs, why do you think those will be helpful during an economic/social collapse?

As far as my preparations go, I have a frame pack, a tent, hiking boots, the SAS survival manual and a book on edible plants of the northeast. Basically, I'm trying to answer the question, "If you had to leave your home in 10 minutes and never return, what would you take?"

7/15/2008 12:52 PM  
Anonymous Anonymous said...

I can't help but like Goldhorder. He reminds me of the mythical paleocon, the likes of which hasn't been seen in politics for some time.

-Medicine Man

7/15/2008 2:40 PM  
Anonymous Anonymous said...

I was wondering why so many Republicans, old-timers, have been "retiring", dropping out,..., I mean, Dennis Hastert didn't even finish his term, either did Trent Lott. So, for 25 years they make a mess bringing politics to new lows, reap billions to line their and their cronies pockets at the expense of the Nation, and run when the foundation (or lack of) they pushed to build starts cracking.

7/15/2008 3:51 PM  
Anonymous Anonymous said...

"shock doctrine"

"There is a clear political strategy, and has been for several decades, to exploit these moments when people are desperate for quick-fix solutions and more inclined to believe in a kind of a magical cure, to push through very, very unpopular policies that don’t actually solve the crisis at hand, that don’t actually help people, but are incredibly profitable for multinational corporations."

7/15/2008 3:55 PM  
Anonymous Anonymous said...

Meanwhile, on the news last night I heard that Bernanke is being called a hero for wanting to add rules that tell financial institutions they can no longer do the stuff they do not want to do anymore anyway. If only Greenspan had done then what what Bernanke is doing now, they say.

7/15/2008 4:53 PM  
Anonymous Anonymous said...

Yes, the pardon list could be interesting.

7/15/2008 5:14 PM  
Anonymous Anonymous said...

There's no outrage because we're still near the top. Just October things could be a whole lot dicier, stocks a whole lot lower.

Gold, however, seems far from cheap. "Everybody" is talking about gold now, and destruction of the dollar. What does it mean when, at the time gold was the buy of the decade (~2000?), even mining companies were selling their future production forward and long time gold newsletter writers were folding up shop? That's what a price low looks like. Whatever else is known, NOW is not a particularly cheap time to by gold. Is buying gold now like buying tech stocks at NASDAQ 2000 or NASDAQ 4900? And don't claim that buying gold is a long term holding. There is no such thing if you have to buy food or electricity or heat.

"For sure" steps to take:
1) Eliminate debt.
2) Minimize exposure to the US banking industry (and mutual funds, brokerage houses, and insurance companies all rely on the US banking industry).

"Maybe, maybe not" steps to take:
1) accumulate some cash.
2) hold T-bills as "savings."
3) buy some gold coins or bars...recognizing that if there's a credit collapse the price of gold could drop in half, or a lot more, before it goes a lot higher from where we are now. Don't buy if you can't stomach that.

7/15/2008 5:54 PM  
Anonymous Not Sure said...

"to push through very, very unpopular policies that don’t actually solve the crisis at hand"

Like drilling along the coasts ?

7/15/2008 6:12 PM  
Anonymous goldhorder said...

I agree somewhat with what anon. says above. But gold is still not a mainstream investment and everybody should have had at least 20 percent of their retirement income in gold...and if they did...they would have known how to buy gold...and then when it became obvious the house of cards was going to collapse they could have increased that to 40 percent. Only the Wealthy and Asians buy gold. Mainstream America has not bought gold since FDR made it illegal. If Americans do start flocking to gold, I’ll probably start buying stocks!!! LOL! But answer some of the questions above...yes...I take physical possession. If I buy from a dealer I buy from Camino Coin in San Francisco. Although the great and wise Burt Blumert is retired, he has left his business in good hands. You won’t deal with a more honest bunch. If you can't afford gold buy silver. If you want to try to score some gold or silver on the cheap you must attend estate sales and auctions…although this has become harder to do…more people are seeking a bargain nowadays. I guess you can also do an infomercial about selling gold and silver jewelry for cash..hahahaha. Those crack me up. But seriously

All that being said…our economic woes are not behind us. We are still saddled with debt and our stock market is still wildly overvalued. Our government still is dying to wage war on Iran. The Fed is between a rock and a hard place. They either don’t inflate and we have a recession or they inflate and the USD drops even more. If the Fed inflates…gold will go up again. I don’t think Gold is overvalued now. I think it is exactly where it should be. Gold served as the anchor of our financial system until 1972. When discussing gold as an investment it only makes sense to look at 1972 to the present. I’ve said it before…but I’ll repeat it again…1972 to 1980 gold beats dow…1980 to 2000 dow beats gold…2000 to present gold beats dow. Don’t let the financial geniuses fool you. They all make money from people investing in the stock market. Anybody can buy gold. You don’t need a financial advisor. You just need an honest dealer. If the fed increases rates and we enter into a recession and the public doesn’t riot…then it might be a good idea to sell my gold…the real estate market will be collapsed by then so I would probably look for more real estate investments. This is what I do since people seem curious.

10 percent Cash (thinking about increasing that)
60 percent Gold and Silver…I did have a goldmoney account at one time…when the credit crunch started to happen I got nervous…This caused me some problems getting my money back into the US that I won’t discuss here.
30 Percent Stocks and Bonds of this a bit under half is a Roth IRA…It would all be a Roth IRA except for company match requirements
I also own 3 properties…I didn’t pay more than 150K for any of them. No Mcmansions for me.

7/15/2008 7:54 PM  
Blogger Kevin said...

Seriously...quit your whining! Everything is going te be just fine. George Will and Sean Hannity said so just before they got into their spacepods headed for vacation on Mars.

7/15/2008 9:34 PM  
Anonymous goldhorder said...

spider...just to clarify. I'm really not happy about the situation. I just have to laugh to keep from crying. My cynical attitude is just my why of dealing with my unhappiness. Life will get harder for everybody here. It is a shame how fast our political leaders have pissed it all away. All I have done is to take steps to shield the blow to myself.

7/16/2008 1:23 AM  
Anonymous George said...

Jeez, with all you guys buying guns, maybe I should buy some stock?

7/16/2008 3:01 AM  
Anonymous Cheryl said...

I don't really understand the gold thing. If I have potatoes and don't want your gold in exchange for them, what good does that do you? I suppose if it's enough gold you can hit me over the head with it and take the potatoes.

7/16/2008 12:55 PM  
Anonymous Anonymous said...

Let's not underestimate the effectiveness of the repressive apparatus that's already in place. Try demonstrating in a good-sized city, or during a visible campaign event. You will all shut up too when this becomes impermissible.

7/16/2008 5:59 PM  
Anonymous Anonymous said...

What's wrong with all you people! Why are you wasting your lives on thought and discussion and reading when you could be catching some more news and great shows on cable!! Go on, just one little peek. It won't hurt you. You know you want it. Don't forget its educational for your kids too, and you want the best for them, don't you?

7/17/2008 4:16 AM  
Anonymous Kilfarsnar said...


I think at bottom the point of gold is that it has been a form of currency since time immemorial. Even through the strangest of times, gold has held some value. It is a useful industrial metal and it gets all shiny when you polish it.

7/17/2008 10:11 AM  
Anonymous goldhorder said...

Very true Kilfarsnar...It was the basis of the US dollar until 1972! We have only had a Fiat(A currency based on nice paper with funny faces painted on them) Currency for 36 years. Our US fiat dollar unbacked by Gold has a total history of 36 years. Gold has a history of money for over a thousand years. Our political leaders and Bankers can not print more gold. They can not control the value of gold. If you don't trust the bankers or your political leaders gold is a great way to hedge your bets. That's it. That is all there is to it.

7/17/2008 6:53 PM  
Anonymous goldhorder said...

I left one thing out. You can take your gold to Canada, find a gold dealer (they are in every major city) and get a fist full on loonies and buy however many potatoes you want to. You can go to Mexico, sell some gold, get a fist full of pesos, and buy as many potatoes as you want to. You can take your gold to China, Find a dealer, sell some of your gold pandas (LOL), get a fistful of Renminbi, and buy as many potatoes as you want.

7/17/2008 7:01 PM  
Anonymous Anonymous said...

President Jimmy Carter speech, July 15, 1979, "Crisis of Confidence". It seemed he tried to speak the truth, the public didn't like it, and voted "Republican". Energy policy, nope. Confidence, kill it. Close-knit communities, divide them. Exactly what we needed we got the antithesis, plus that stupid Gingrich, "Contract with America" ;-)

Charlie Rose had a show with Richard Stengel, Time Magazine, and MA Justice Margaret Marshall, in celebration of Nelson Mandela 90th birthday. While watching, I realized great leaders are far and few between. And although there are all kinds of people, a leader can make or break an environment. If they make it, good people thrive and are able to help in creating a great Nation. If they break it, the good people struggle and the balance turns toward corruption and the negative qualities of human-beings. I wish we had a great leader(s). ;-(

7/19/2008 4:50 PM  
Anonymous Anonymous said...

There is no outrage because of the ignorance of the mob. The powers that be have done a good job keeping he sheeple focused on the mundane and worked them hard enough that they barely have the time or energy to focus on anything else. But not too hard mind you - they do not want a revolt.

Another though I have had is to the steady flow of immigrants into this country. Perhaps they are the least outraged of all. After all, where they came from was likely worse.

7/25/2008 7:29 PM  
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