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Exclusive: Interview With Eric Sprott

Tyler Durden's picture




 

Zero Hedge had an opportunity recently to ask Eric Sprott a variety of questions touching on everything from investment recommendations, to policy guidelines, to a general outlook for the world economy. As Sprott has long been a rare voice of contrarian reason in a field of lemming-like uniformity, lately driven by nothing more than a pursuit of centrally planned momentum and Bernanke-induced "heatmapping", we believe the answers were vastly more interesting and illuminating than anything available for mass media consumption.

Interview with Eric Sprott of Sprott Asset Management

1. The conspiracy of optimism, suggested by the likes of almost anyone appearing in the MSM (print and cable), is that the US is the place to invest in 2011. A glance at the hedge funds you manage (as of the end of 2010) suggest that you are not buying into this hype. Are the short positions you have in your Hedge Funds still mainly in the US? If so what sectors and why?

A: Our short positions are all exclusively in large cap US names, with a focus on the financial and consumer discretionary sectors. We’ve been bearish on US equities for some time, particularly those in the financial sector that remain severely over-levered in this environment. We’ve managed our long/short hedge fund with the view that we entered a long-term bear market in 2000, and we’ve enjoyed maintaining an active short portfolio throughout the decade. It’s provided specific opportunities to produce alpha, and also provided negative beta exposure during the sell offs when downside protection was needed most. I urge all my investors to consider adding a hedge fund that can short effectively. It really is one of the best investment vehicles to own during a long-term secular bear market for equities, which I firmly believe we are still in.
               
2. Conversely you are mostly long Canadian equities, with some international exposure. What international countries and sectors do you have exposure too?

A: Most of the equities we invest in long are listed in Toronto. Their underlying assets tend to be distributed globally, however. In the case of our mining exposure, we own mines all over the world: Africa, Southeast Asia, United States, South America. Our location in Toronto has proven advantageous in that it grants us access to the best management teams in the resource industry. Toronto is a major mining-finance capital and we have one of the busiest foyers on Bay Street, with various resource management teams visiting with us regularly to provide updates. We’ve been investing in this space for almost ten years now, so we’ve developed deep contacts within the mining industry internationally. Our sector focus is currently concentrated in precious metals and energy equities. We manage all the company-specific risks on an individual basis, but the sector weights are guided by our macro views.
 
3. We are currently seeing a massive rise in commodity costs across a broad spectrum of raw materials. The result of the Bernanke "wealth effect". What do you see as the consequences of the rise in commodity prices, for equity and credit markets?

A: It’s unbelievable to see. The food inflation is astounding,… when you see vegetable prices rising 40% in a month, grains up 20% on the year, eggs, sugar,… meat, all up 20-30% since July, it makes you wonder how they manage to massage the CPI so effectively. It’s becoming quite a serious issue, really. The Brent price is especially problematic – we always wonder about the consequences higher oil prices could potentially have on this “recovery”. We all saw the peripheral damage it caused in 2008, completely aside from the banking collapse that was happening at the time. There’s little doubt that these price increases are having a major impact across the globe – look at Egypt, for example. How much of that situation was initiated by food inflation? Same with UK with their recent numbers. It’s only a matter of time before we see more direct effects on prices here at home.
 
4. How do you see the end of QE2 playing out across the credit and equity markets?

A: I don’t think the market is prepared to go it alone yet. I don’t think we can have a strong equity market without more stimulus. It was amazing to see the sentiment shifts in January, as pundits began declaring the end of QE2, and no need for QE3,… but of course a few weeks pass and problems surface somewhere, this time in the Middle East, and Obama has to get up there and promise more printing to prevent a sell-off. I think the US is in such a difficult situation now with their Treasury auctions. We wrote about this in late ’09, asking how the US could realistically fund their debt requirements. The big question is how much of QE2 has been indirectly funneled back into on-the-run issues. It’s obvious the market doesn’t want to go there yet, but that is a vital question in anticipating the need for QE3.
 
5. Now that the "Wealth Effect" seems to be the main mandate of US the Federal Reserve, do you envision Bernanke having the ability to implement further incarnations of QE? If so under what circumstances?

A: I just think of how much they’ve spent up to this point to keep this thing going. Think of all the programs they’ve initiated. QE 1, QE 2, TARP, TALF, Fannie and Freddie – it’s all adds up to trillions, so it doesn’t seem far fetched to assume they’ll institute more measures to plug the dam.
 
6. Do you see any bubbles present or being blown in the world right now? If so, where and what are they?

A: I don’t see any greed bubbles in this market. Nobody’s buying T-bonds to get rich. While I do think the US bond market is a ‘bubble’ in the sense that it’s widely mispricing US risk, I don’t think investors are buying bonds with the expectation of selling them higher down the road. Investors are just trying to maintain some level of real return in here. Many are also trying to game the Fed, stay ahead of them. The commentators who call the precious metals market a bubble are laughable. Nobody owns the stuff. It’s extremely tightly held. Plenty of paper gold floating around, but that’s another story.
 
7. What possible or probable black swan event (timeline of 12-24 months) keeps you up at night?

A: A major supply disruption in the oil market would throw us over the edge. The economy isn’t strong enough to withstand high energy prices for an extended period.

You also have to wonder what happens if they don’t extend QE2 – and the impact the inevitable rise in rates would have on the US and global economy. We’re obviously in a very precarious environment today, so we have to be prepared for a “black swan” type event at any time. We’ve been managing our funds with a defensive view for over ten years now, so I would hope we could weather them better than most.
 
8. Your views on precious metals are well known. If there is a collapse in the USD and/or fiat currencies in general, how will gold be valued?

A: They’d likely be valued in terms of other goods, rather than in units of fiat currency. Investors won’t care what an ounce is worth in USD if the USD can’t be exchanged for anything. They’ll want to know what an ounce is worth in water, or food, anything consumable.

I think most mainstream investors still struggle to appreciate the changes that have occurred in precious metals market since 2008. Gold is reverting back into a world reserve currency – it’s so clearly visible now. It’s one of the only asset classes that has ‘worked’ for investors and savers. And yet there remains this large contingent who continue to question its legitimacy as an asset class.

One of the great struggles investors continue to have with gold, particularly in the US, is in embracing it as a monetary alternative. There are money managers and pension trustees who refuse to view gold as a store of value. They don’t understand the value argument. It’s a peculiar thing. If we lived in a different environment today, I’d understand their hesitance to embrace gold, but after everything we’ve gone through, and after acknowledging the fiscal reality of the Western powers, I just don’t understand why anyone would question the benefits of a hard currency. We need a hard currency today for SAVERS. Gold is for savers. We all need some sort of risk-free return vehicle in a properly functioning financial system. Bonds pay a negative real return today, so we’re forced to up our risk tolerance into equities or high-yield. You can’t save capital in cash in this environment – it’s as simple as that. You have to find another asset class to perform that function, and precious metals are once again reverting to their traditional monetary status to meet that need.
 
9. If you had the opportunity, what 3 policies would you enact that you believe would put the US on a path towards sustainable growth?

A: That’s a tough one. I try to focus more on what they’re doing, rather than worrying about what they should do. I think I’ve been fairly clear in articulating the challenges Western governments face today. Realistically, there is only so much austerity a country can take – look at the impact it’s already having in the UK. I just don’t see the US making the sacrifices required to put them back on the right path long-term. When you see the CBO forecasting budget deficits into 2021, one can only assume that the US plans to borrow in perpetuity. That only works as long as you can get the borrow. But we all know the game changes when the US can’t get the borrow through traditional means. We may already be there.

If I were to make recommendations, I’d focus on addressing leverage in the banking system. I firmly believe 20:1 is far too high a leverage multiple to maintain in this environment. I don’t even know what the right number is – maybe it’s no more than 5:1. But we can’t keep this situation going where a mere 5% shift in asset prices can completely wipe out your tangible equity.  I would also try removing the “too big to fail” safeguards that allow the financials to reach such insane levels of leverage. And then of course there’s the derivatives issue, which almost nobody even wants to talk about anymore… but it never went away. It’s probably an even bigger problem today.
 
10. You have been in the financial industry for well over 35 years. If you had to create a portfolio for a 30 year today, what would it look like. How would you advise one to manage said portfolio?

A: I would be invested heavily in precious metals, both the bullion and equities. I would maintain exposure to energy, and I would have some shorts on the table. Buy-and-hold isn’t dead if you hold the right things, but 30 years is probably too long a timeframe to park capital and forget about it. I’ve always been more of a long-term investor than a trader, and although my themes tend to last for many years, I’ve seen many different markets throughout my career. I’ve definitely repositioned my funds over time. I sincerely hope we do see a true bull market in equities again at some point – I would be the first to applaud one because it’s easier to pick stocks in a secular bull market. But for the time being, until we solve the debt problems, I think our current positioning is the best way to be invested. And for what it’s worth I also think there’s plenty of opportunity in this market as well – there certainly has been for us. It’s just a matter of staying on top of macro developments, focusing on valuation and investing with conviction.

Special thanks to Lizzie.

 

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Fri, 02/11/2011 - 15:46 | 953812 asdasmos
asdasmos's picture

Die hard pls.

Fri, 02/11/2011 - 16:08 | 953897 Herd Redirectio...
Herd Redirection Committee's picture

Well, if you are already "all in" then a plunge in price wouldn't help you at all, would it? Timing is the most difficult aspect of any trade, always waiting for one more dip to buy will leave you empty handed, in the end.

Any way, check out the latest from the Capital Research Institute:

http://www.capitalresearchinstitute.org

What is Wealth?

The Capital Research Institute presents: The Top Alternative Measures of Wealth for the 21st Century

6) Human Relationships.  Last, but certainly not least, meaningful relationships are one of the greatest forms of wealth.  If you need any proof of this, remember the maxim ‘Its not what you know, its who you know”. The people who currently run the world (of finance, and business, at least) achieved their lofty positions (Treasurer, Fed Chairman, etc.) by way of who they knew, not what they knew.  Why are Princeton, Harvard, Yale graduates in nearly all positions of power?  Why are the heads of atleast a dozen central banks Goldman Sachs alumni???  Clearly it is because of who you meet, while on Wall St/in the Ivy League/at secret society meetings.  “Active collusion isn’t necessary.  Jackals, hyenas, vultures, wild dogs – none of them collude but there actions conspire to the same end.”

Clearly, if those in power are using networking to the utmost, to remove them from power will require similar networking.

Fri, 02/11/2011 - 23:57 | 955112 lynnybee
lynnybee's picture

j.c.almighty, god help us all ......... i just read that link you provided to DAMON VRABEL's blog.    I need to get off the grid & take my kids & grandkids with me ..... where do we run ?   How will we ever get rid of these parasites.

Sat, 02/12/2011 - 00:55 | 955185 snowball777
snowball777's picture

Uhhhh....jackals, hyenas, and wild dogs...all pack hunters...they survive almost entirely by virtue of collusion.

Vultures, on the other hand, being carrion eaters, live the closest thing possible to a karma-free existence as they take no life and serve a useful purpose.

http://www.youtube.com/watch?v=K4ApWNFUJ4E

Sat, 02/12/2011 - 11:56 | 955670 unununium
unununium's picture

Never be "all in".

See special relativity.  It should require infinite return to get you to invest that last bit.

Sat, 02/12/2011 - 12:02 | 955679 tmosley
tmosley's picture

All you got isn't all there is.  It would cost an infinite amount of money/labor to obtain 100% of the supply. 

Sat, 02/12/2011 - 12:15 | 955699 ElvisDog
ElvisDog's picture

I agree. Diversification and debt-free-ness has one important benefit - a reduction in stress. If you're all-in, you have to worry about what happens to your wealth if you're wrong. Reducing stress is one of the big things you can do to improve your health, and good health is certainly one of those things people should invest in.

Fri, 02/11/2011 - 16:51 | 954031 Robot Traders Mom
Robot Traders Mom's picture

Read about DTC from their annual report. In 2009, they settled $1.48 QUADRILLION. DTC is a private company, owned by the banks, and mandated by the FED. This number isn't fathomable. The amount of derivatives outstanding make all currencies in the world worthless. Like Sprott says, metals won't be priced in fiat, but how much they can get from barter and hard assets (like food, land, guns, etc.).

That being said, I completely agree with you and that is where there is a divide in the metals community. I would personally like gold to go under $1,000 for some time so I can keep buying more. Anyone with a fucking brain and IQ above 58 knows the dollar will be worthless at some point and is losing value on a daily basis. I am very thankful there are so many functional retards in the world, otherwise I would have to sell my house and property to get a few ounces. Right now, I can keep buying at reasonable levels.

Sat, 02/12/2011 - 08:26 | 955490 creviceCaress
creviceCaress's picture

 

 

yer reel perty...hunny

Fri, 02/11/2011 - 19:33 | 954525 SoCalTrader
SoCalTrader's picture

Anyone with a fucking brain and IQ above 58 knows the dollar will be worthless at some point and is losing value on a daily basis. I am very thankful there are so many functional retards in the world, otherwise I would have to sell my house and property to get a few ounces. Right now, I can keep buying at reasonable levels.

 

 

Well said.

Sat, 02/12/2011 - 10:14 | 955569 h3m1ngw4y
h3m1ngw4y's picture

this troubles me. if the iq 59 have already caught the word (which i think is just not true) who is on the other side of the trade? martians? considering a fool (58 and less) and his money are alway soon parted no equity here. reinventing the exit seems to be ordre du jour.

Sat, 02/12/2011 - 12:19 | 955707 ElvisDog
ElvisDog's picture

I might agree on the eventual outcome, but not that the dollar's demise is imminent. When I think about the World's Elite, the one thing I think has the potential to upset the apple cart for them is social unrest. Hyperinflation is guarenteed to cause social unrest, therefore the Elite will not intentionally allow hyperinflation to happen. I think a slow, stagflation type death of the dollar taking place over 10-20 years is much more likely

Sat, 02/12/2011 - 13:55 | 955853 cranky-old-geezer
cranky-old-geezer's picture

I tend to agree, we're all surprised how well the US dollar is holding up given the massive money printing we're seeing.  WRC status with military enforcement working way better than anyone thought.

Fri, 02/11/2011 - 21:16 | 954799 dudditz
dudditz's picture

herehere

Sat, 02/12/2011 - 11:50 | 955665 Quinvarius
Quinvarius's picture

46 junks and counting.

Fri, 02/11/2011 - 15:56 | 953856 Iam Rich
Iam Rich's picture

Sprott suggests Au~2100, Ag up to 50.

Can't argue with a big blowup in equities taking Au/Ag with them.

Can't argue with your ratio either...Netflix at 70 (~70% decline) = silver at 20 (~30% decline).

There would be no silver left on the planet at 20 in "weak" hands.

 

Sat, 02/12/2011 - 12:09 | 955688 unununium
unununium's picture

Market sophisticates take note:  Sprott has bigger balls than you, and has actual short positions.

Fri, 02/11/2011 - 15:56 | 953858 jus_lite_reading
jus_lite_reading's picture

Silver will be ~$40-$45 in a month. Mark this post and come back. We'll see who is the bigger dick.

Fri, 02/11/2011 - 16:26 | 953946 Pladizow
Pladizow's picture

He who predicts the future lies, even if he tells the truth!

Fri, 02/11/2011 - 17:15 | 954123 tao400
tao400's picture

I need to see a bigger picture of your rack!

Fri, 02/11/2011 - 19:21 | 954493 PenchantForHoarding
PenchantForHoarding's picture

+1

Fri, 02/11/2011 - 19:56 | 954592 solgundy
solgundy's picture

go to National Geographic....search: beached whale

Sat, 02/12/2011 - 10:16 | 955571 h3m1ngw4y
h3m1ngw4y's picture

"He who predicts the future lies, even if he tells the truth!"

n1

Fri, 02/11/2011 - 17:29 | 954169 tekhneek
tekhneek's picture

you're off by a month. April 1st is going to be hilarious.

Especially when these guys rape the COMEX: http://standfordelivery.com/stand.php

Fri, 02/11/2011 - 17:54 | 954261 Bigger Dickus
Bigger Dickus's picture

A bunch of rednecks is gonna rape the politically connected TARDMEX? Get real.

Sat, 02/12/2011 - 20:18 | 956621 BigJim
BigJim's picture

How do you know their necks are red, anyway?

Fri, 02/11/2011 - 20:14 | 954633 Arvo Particleboard
Arvo Particleboard's picture

Silver + 1 month = $25.50

Sat, 02/12/2011 - 00:46 | 955171 Oracle of Kypseli
Oracle of Kypseli's picture

Still good return when we bought at $15

Sat, 02/12/2011 - 12:22 | 955715 ElvisDog
ElvisDog's picture

$25 is my re-entry point. I stopped buying at around $20 to see what would happen. From my point of view, the action of the last month or two is muddled as to whether it's going to keep going up or has reached a short-term peak. If it goes down to $25, I start buying again.

Fri, 02/11/2011 - 16:05 | 953887 Camtender
Camtender's picture

Dickus, is your personality your main birth control method?

 

Have you had a chance to look at some of Sprott's fund retuns?

 

Fri, 02/11/2011 - 16:29 | 953957 Pladizow
Pladizow's picture

I'd guess Sprott's net worth is just a tad higher than your own.

So if I was forced to choose which of the two of you to listen to, I'd pick the billionaire.

Sat, 02/12/2011 - 12:02 | 955676 unununium
unununium's picture

Careful with that logic.

Fri, 02/11/2011 - 16:08 | 953900 jus_lite_reading
jus_lite_reading's picture

Oh and check out his response to question 8. He thinks, as do I. GOLD right now has a value of ~$1400 fiat USD per oz. When it collapses with the financial system, it might be woth $50k/oz or $50mil/oz but at that point we'll be pricing it in bottles of potable water and cans of food. Say, if I already have both and you have your "stocks" what are you worth to me?

Fri, 02/11/2011 - 20:27 | 954672 Snidley Whipsnae
Snidley Whipsnae's picture

JFReading... Don't forget that which makes the industrial world function...Oil.

If the dollar is the reserve currency and the one that most oil is settled in, then the question is; what will oil be settled in? This is a very important question to answer for the all soverigns. The US currently imports 2/3rds of the oil that it consumes.

Without sufficient oil the earth will not support the number of people currently living here.

In the end game, oil will be purchased with PMs or soft commodities...imo.

Sat, 02/12/2011 - 12:26 | 955719 ElvisDog
ElvisDog's picture

And we're already seeing that in places like Egypt. It's not just the end of oil that matters, but the end of oil cheap enough so people earning $2000 a year with 6 kids can no longer afford food. The removal of Mubarak is great from the Liberty point of view, but isn't going to reduce food prices for the poor of Egypt.

Fri, 02/11/2011 - 16:09 | 953903 somaplease
somaplease's picture

Eric Sprott is the 55th wealthiest person in Canada.  Not bad!  He certaintly isn't up to par with Porter Standbury - but what can u do!

Fri, 02/11/2011 - 16:20 | 953929 adeptish
adeptish's picture

tosser

Fri, 02/11/2011 - 16:37 | 953982 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Wait till I release part 4 in an hour 'smaller DICKus" you will realize whats going on you duch sac.  Netflix at $70?  $238, and silver is at $30 you fucktard.

 

www.silvergoldsilver.blogspot.com

Fri, 02/11/2011 - 15:47 | 953815 Bigger Dickus
Bigger Dickus's picture

If gold breaks under €1000 per ounce again the door will be wide open to €950.= proportionately greater plunge in silver.

Fri, 02/11/2011 - 16:00 | 953871 Mongo
Mongo's picture

Well then I shall buy like crazy!

Fri, 02/11/2011 - 16:07 | 953894 tmosley
tmosley's picture

And if gravity reverses, we'll all be flung into space.

Fri, 02/11/2011 - 16:22 | 953932 Kaiser Sousa
Kaiser Sousa's picture

Tmos -

u funny man...

Fri, 02/11/2011 - 16:27 | 953950 Ignatius J Reilly
Ignatius J Reilly's picture

Can we vote on whom will be flung first?  I have a nomination.

Fri, 02/11/2011 - 17:28 | 954168 Bastiat
Bastiat's picture

Oh shit!!

Fri, 02/11/2011 - 17:40 | 954211 Ignatius J Reilly
Ignatius J Reilly's picture

To be clear, I didn't junk you.  I thought your comment was hilarious.

Fri, 02/11/2011 - 18:39 | 954395 philgramm
philgramm's picture

mad props on the handle.  Ignatius may be the funniest character in modern literature IMO

Fri, 02/11/2011 - 18:53 | 954432 Freebird
Freebird's picture

I did. Asshat.

Sat, 02/12/2011 - 12:28 | 955722 ElvisDog
ElvisDog's picture

Why do people bother to junk anyway. Does anyone give a flying fuck if their posts get junked? This isn't fucking Junior High School.

Fri, 02/11/2011 - 20:29 | 954679 Snidley Whipsnae
Snidley Whipsnae's picture

Angular momentum is a bitch! lol

Sat, 02/12/2011 - 05:20 | 955426 Triggernometry
Triggernometry's picture

Damned radians!!

Sat, 02/12/2011 - 00:30 | 955151 DaddyO
DaddyO's picture

 

That was truly funny!!!

DaddyO

Fri, 02/11/2011 - 16:24 | 953941 Kaiser Sousa
Kaiser Sousa's picture

"and, and, and if..."

never mind that statement is so stupid why bother.......

Sat, 02/12/2011 - 01:44 | 955264 Hook Line and S...
Hook Line and Sphincter's picture

Of course, and women really don't like a bigger dickus

and

dogs running around before a storm causes it to rain

Sat, 02/12/2011 - 11:22 | 955633 velobabe
velobabe's picture

ust as long as it can get H A R D †

Fri, 02/11/2011 - 15:48 | 953817 Jason T
Jason T's picture

college costs rising too.. Cornell up 4.5% last year and 4.7%  this year.  Not just food and energy going.  This 0.8% inflation is absurd.

Fri, 02/11/2011 - 16:10 | 953905 Johnny Lawrence
Johnny Lawrence's picture

College costs have been rising 5%-7% a year for the past several years...I wouldn't use that to make an inflation argument.

Fri, 02/11/2011 - 15:48 | 953821 Pladizow
Pladizow's picture

DONT WASTE YOUR TIME RESPONDING TO ABOVE!

Fri, 02/11/2011 - 16:05 | 953890 10kby2k
10kby2k's picture

 

Pladizow---my response to those tits is non verbal

Fri, 02/11/2011 - 16:53 | 954039 hedgeless_horseman
hedgeless_horseman's picture

You should see his prior art.

Fri, 02/11/2011 - 15:50 | 953824 Bastiat
Bastiat's picture

Dickus:

Last night you demonstrated that you are a depraved and stunted human being on personal level as well as an overall irrelevant, lightweight assclown on this board.  So why not just call it good and go away.

Fri, 02/11/2011 - 16:43 | 953997 Bay of Pigs
Bay of Pigs's picture

+1

"The commentators who call the precious metals market a bubble are laughable. Nobody owns the stuff. It’s extremely tightly held. Plenty of paper gold floating around, but that’s another story."

Best line in the article. When I tell people $1360 and $30 are still CHEAP, they just don't get it. Value, not price. Listen up Dickus.

Fri, 02/11/2011 - 17:08 | 954090 trav7777
trav7777's picture

i dunno about cheap...I wouldn't counsel anyone to rush right out and go balls-deep or anything.  But if you want to accumulate, accumulate...over time.  Sometimes you may exchange more FRNs, sometimes less.

The POG is being driven by monetary inflation and fundamental production trends.  2010 production looks to have made a new peak...if 2011 continues it, we'll see relatively weak price.  If production falls materially, it's on to $2000

Sat, 02/12/2011 - 12:07 | 955686 unununium
unununium's picture

I always tell the novices to run out and buy some right now.  Some.

Fri, 02/11/2011 - 17:13 | 954109 Bigger Dickus
Bigger Dickus's picture

Bastiat wasn't a real libertarian. He was a freemason douche who got bailed out by daddy just like Keynes.

Fri, 02/11/2011 - 17:33 | 954188 Bastiat
Bastiat's picture

What does that have to do with anything, you incoherent boob?

Fri, 02/11/2011 - 17:52 | 954254 Bigger Dickus
Bigger Dickus's picture

Your avatar. ./.

Fri, 02/11/2011 - 23:26 | 955062 dark pools of soros
dark pools of soros's picture

you can make children while jackin off to a mirror??  surround yourself with some more mirrors you fuckin attention whore

Fri, 02/11/2011 - 15:49 | 953826 bernorange
bernorange's picture

I loved his answer to #8.  Thanks.

Fri, 02/11/2011 - 15:57 | 953860 Cash_is_Trash
Cash_is_Trash's picture

Fiats have an intrinsic value of zero, no store of value whatsoever.

Therefore, the paper and ink are worth nothing... not even priced for wallpaper or making a fire.

Fri, 02/11/2011 - 16:15 | 953916 Oh regional Indian
Oh regional Indian's picture

True and it's debt that is the exclusive fuel of proto-capitalism.

Which is why everything we create too is so life negative. At their root lies debt, in itself a negative.

ORI

http://aadivaahan.wordpress.com/2011/01/26/a-ha-ahahaha/

Fri, 02/11/2011 - 17:59 | 954278 Cthonic
Cthonic's picture

Intrinsically or at least legally, FRNs are merely tax payment coupons which can also be used to extinguish indebtedness.  Nothing has intrinsic value; value being a non-aggregable, insummable subjective assessment which exists only in the mind.

Fri, 02/11/2011 - 23:24 | 955055 Bolweevil
Bolweevil's picture

"Nothing has intrinsic value; value being a non-aggregable, insummable subjective assessment which exists only in the mind."

Check out the brain on Brad!

Sat, 02/12/2011 - 08:29 | 955495 creviceCaress
creviceCaress's picture

 

 

is marcellus wallace a bitch?

Sat, 02/12/2011 - 13:17 | 955789 Bigger Dickus
Bigger Dickus's picture

Does Marcellus Wallace look like a bitch?

 

Fixed

Fri, 02/11/2011 - 15:52 | 953843 Cash_is_Trash
Cash_is_Trash's picture

This man is THE SHIT.

Live up to that Paul Krugman, you sack of shit.

Sat, 02/12/2011 - 01:37 | 955251 snowball777
snowball777's picture

I think it's time you got your fecal matter aggregated.

Fri, 02/11/2011 - 15:53 | 953847 Just Observing
Just Observing's picture

US CPI uses food as 7.8% of index

China CPI uses it at 31%

 

 

Fri, 02/11/2011 - 16:01 | 953873 jus_lite_reading
jus_lite_reading's picture

Americans are eating iPods. What does the average Amerikan need to live?

-iPod

-50" LCD TV

-McDonalds

-Newest sneakers

-Amerikan Idol and or Dancing With the Stars

 

That's about it. McD's imports Chinese "beef" on 500% margin so they have room to squeeze if that rises.

Sat, 02/12/2011 - 12:34 | 955734 ElvisDog
ElvisDog's picture

Spot on. To get to my house, I have to drive through a poorer neighborhood. The houses are small and not well maintained (they all need paint and the yards look like shit). But if I drive by at night, in almost every living room window a giant flat screen TV is lighting up the night.

Fri, 02/11/2011 - 16:02 | 953879 DonutBoy
DonutBoy's picture

The CPI is a crock of shit, but this is not the problem.  For the average American 7.8% of expenditures on food is reasonable, and for the average Chinese 31% is reasonable.  Their per-capita GDP is 1/8 of America's.  They lie about the prices used in the US CPI, just like they lie about the number of unemployed people.

Fri, 02/11/2011 - 15:53 | 953849 Clark Griswold
Clark Griswold's picture

Bigger Dickus:

 

I am pretty certain Eric Sprott won't be crying anywhere anytime soon.  Given his track record and his lucid reasoning, I am much more interested in his opinion than I am in yours.

Fri, 02/11/2011 - 15:56 | 953859 Sean7k
Sean7k's picture

Great interview and very sensible remarks. Thanks Lizzie.

Fri, 02/11/2011 - 15:58 | 953862 DoctoRx
DoctoRx's picture

Tx for the interview, Tyler.

Eric Sprott eats home cooking, so it appears.  Therefore he's more credible than a corp bigwig who gets a salary and stock options but never has to actually buy the stock w his own funds.  I'll take gold over that exec's stock.

Fri, 02/11/2011 - 15:58 | 953867 SRV - ES339
SRV - ES339's picture

Thanks... great interview, in part, because the questions were so good!

Anyone interested in PMs should be invested in Mr. Sprott's funds and trusts... simply the best, IMHO.

Fri, 02/11/2011 - 16:01 | 953876 TheGoodDoctor
TheGoodDoctor's picture

Love me some Sprott! Thanks Tyler!

Fri, 02/11/2011 - 16:02 | 953878 Henry Chinaski
Henry Chinaski's picture

What possible or probable black swan event (timeline of 12-24 months) keeps you up at night?

But we all know the game changes when the US can’t get the borrow through traditional means. We may already be there.

And then of course there’s the derivatives issue, which almost nobody even wants to talk about anymore… but it never went away. It’s probably an even bigger problem today.

When the goons in charge reach the end of thier rope, maybe there is a cyber attack that crashes the system.  Kills two birds with one stone.  Blame the subsequent financial collapse on terrorists and take total control of the internet.

http://www.latimes.com/news/nationworld/nation/la-na-intel-hearing-20110...

Fri, 02/11/2011 - 16:07 | 953882 Leo Kolivakis
Leo Kolivakis's picture

I remember when we visited Eric Sprott. He comes in the room and blurts: ''So you wanna know why the world is coming to an end?'' That was after he made 80% in a year shorting tech/ long gold (essentially a punt which paid off huge). Glad to see he's still his old bearish self, even if I think he's going to get crushed shorting this market. Btw, Tyler, next time go visit him at his Toronto office...some real nice eye candy working there! :p ;)

Fri, 02/11/2011 - 16:13 | 953911 Bill Lumbergh
Bill Lumbergh's picture

I presume he is selectively shorting stocks and allocating only a reasonable amount of capital towards those endeavors.  As the bull market in the precious metals continues the associated gains will dwarf any potential losses shorting.

Fri, 02/11/2011 - 18:47 | 954412 Jean Valjean
Jean Valjean's picture

Yes but why short at all when we have this Zimbabue stock market?

Fri, 02/11/2011 - 18:52 | 954425 Bill Lumbergh
Bill Lumbergh's picture

Obviously he thinks we will have some correction or deflationary event...or simply just hedging his other long positions.

Fri, 02/11/2011 - 18:45 | 954407 Jean Valjean
Jean Valjean's picture

Leo,

In this post you sound like that pompus prick Madhedgefundtrader.  Have you morphed?

Fri, 02/11/2011 - 21:56 | 954853 Leo Kolivakis
Leo Kolivakis's picture

The correct spelling is pompous! And no, I'm far from being a pompous prick! Eric Sprott is sharp and he has made several excellent calls in the past. But I take his comments and those of others (like commodity guru Jim Rogers) with a grain of salt. I prefer following what hedge funds actually buy and sell as opposed to what they say. Talk is cheap. Show me the quarterly filings from Citadel, Soros, SAC Capital, Renaissance Technologies, Caxton, Tudor Jones, and a few others. The rest is just smoke & mirrors.

Fri, 02/11/2011 - 21:35 | 954857 RoRoTrader
RoRoTrader's picture

Haven't seen the 'eye candy' up close like you Leo, but have talked to it over the phone and it sounds as sweet as you say it looks.

Sat, 02/12/2011 - 11:31 | 955641 velobabe
velobabe's picture

you men, why is it all about eye candy. woman don't all have to be beautiful looking, to be beautiful. i bet most of the men on this thread don't have "most beautiful" woman.

Sat, 02/12/2011 - 12:05 | 955684 Leo Kolivakis
Leo Kolivakis's picture

velobabe, you really need to chill...:)

Sat, 02/12/2011 - 15:11 | 955968 cranky-old-geezer
cranky-old-geezer's picture

"woman don't all have to be beautiful looking, to be beautiful"

You're viewing it with a woman's mind. 

A man's mind is completely different. No similarity at all.

Please don't try to infer a woman's thinking onto a man.

Fri, 02/11/2011 - 16:07 | 953896 f16hoser
f16hoser's picture

Anyone care to discuss what will happen if corporate America repatriates 1.5T in US dollars? It could happen if Obumer decides to tax them at 5% Vs. 35%......

Fri, 02/11/2011 - 16:30 | 953959 lieutenantjohnchard
lieutenantjohnchard's picture

don't forget the debt on the other side of the balance sheet. it's huge according to what i've read. i don't think repatriation will matter either. big companies are american only in the sense they have a usa charter. i doubt they'll invest that money here, not the least reason why is the poor prospects of the dollar. would you bring back a big chunk of money and buy into a doomed currency?

Fri, 02/11/2011 - 17:14 | 954112 Agent P
Agent P's picture

Who said anything about investing?  That cash will be used for share buybacks, plain and simple.

Fri, 02/11/2011 - 18:50 | 954422 Jean Valjean
Jean Valjean's picture

Yes, remember, although equity is valued in FRNs, it is NOT an FRN.  If a company has a necessary product, it's a hedge to the dollar.

Fri, 02/11/2011 - 16:38 | 953984 Sean7k
Sean7k's picture

They will hold it to help their balance sheet, to pay dividends domestically and finally to buy other companies. This will lead to greater concentration of labor and increase unemployment. 

Fri, 02/11/2011 - 16:58 | 954057 MrBoompi
MrBoompi's picture

I'll agree he should offer these assholes a 5% rate when he gives me back 80% of the taxes I paid over the past 10 years.

Fri, 02/11/2011 - 16:08 | 953901 apberusdisvet
apberusdisvet's picture

I started following all Sprott's jr mining picks in 08; I cashed out in Nov with 232% profit total; not too shabby.  Started buying physical on Sprott's recommendations in 09 and am well ahead there as well.

Fri, 02/11/2011 - 16:13 | 953912 Leo Kolivakis
Leo Kolivakis's picture

How many hedgies got crushed this week shorting JDSU??? GULP!!!

Fri, 02/11/2011 - 16:18 | 953922 hambone
hambone's picture

Is there really anyone left shorting???  I mean short only vs. a minor hedge?

Fri, 02/11/2011 - 16:39 | 953986 Pladizow
Pladizow's picture

Jim Chanos.

Fri, 02/11/2011 - 16:20 | 953926 Bill Lumbergh
Bill Lumbergh's picture

For those who like shorting this may be a good candidate to keep an eye on...looks like NAK which doubled in a month then proceeded to lose 20% in 2 trading days (but still may be a good long-term prospect).

Fri, 02/11/2011 - 17:39 | 954208 WilliamShatner
WilliamShatner's picture

Careful with NAK.

They are sitting on one of the biggest deposits of gold on earth, not to mention some of the other minerals on their properties. 

If gold starts going down it'll probably go down, but barring that or something else like a holdup by the EPA that company will be doing quite well once they go into production.  They don't even have to go into production, I wouldn't be surprised if one of the big gold producers buys them out.

 

Fri, 02/11/2011 - 18:02 | 954284 Bill Lumbergh
Bill Lumbergh's picture

I agree with your sentiments but price action was a bit maniacal for a while.  As for buyouts that may be a bit more difficult since Rio Tinto and Mitsubishi collectively own 30% of the firm.  Companies like NAK remind me of NG in some ways in that due to the size of their projects massive amounts of capital outlays must be made.  Accordingly only companies with sizeable resources will be able to joint venture or purchase their assets.

Fri, 02/11/2011 - 19:23 | 954501 WilliamShatner
WilliamShatner's picture

Price of NAK did get frothy, but it was clear that someone was buying and very few holders of the stock were willing to sell.  Big companies like Newmont need to replace depleating properties with new holdings or they are out of business, that's why they buy explorers like Fronteer. 

NAK is a gem and all the big players know it.

Fri, 02/11/2011 - 17:50 | 954246 hbjork1
hbjork1's picture

And then there's CSCO.

Fri, 02/11/2011 - 17:52 | 954247 hbjork1
hbjork1's picture

Repeat.

Sat, 02/12/2011 - 01:40 | 955258 snowball777
snowball777's picture

No, but that left shoulder and head have me thinking about it.

Fri, 02/11/2011 - 16:20 | 953925 TradingJoe
TradingJoe's picture

Think of Food Inflation...at some point rates have to rise....! POMO QE ad infinitum etc

it all won't work any longer! I predict The Benster will go all by himself, he is not as

stupid as we all think just a reckless piece of shit! The next "correction" will leave

grown men crying! Stick with physical PMs and buy more on any weakness!

If you got balls then try some puts on all else!

Sat, 02/12/2011 - 15:21 | 955984 cranky-old-geezer
cranky-old-geezer's picture

"at some point rates have to rise"

Nope, Bernokio can hold ZIRP as far as the eye can see and keep the presses running far as the eye can see ...as long as we have military maintaining WRC status for the US dollar.

Fri, 02/11/2011 - 16:22 | 953928 hambone
hambone's picture

BTW - Great Market Ticker headline just flashed accross

Mannkind sinks in mixed drug sector

TD - you doing a little moonlighting for MW???

Fri, 02/11/2011 - 16:23 | 953938 6 String
6 String's picture

60 trillion global GDP. 10 trillion global funding gap = crazy not to own precious metals.

But are equities the new risk free asset? Even a 1% decline alarms the bells for the plunge police. Meanwhile, the powers to be want to tar and feather anyone owning precious.

It's an apeshit world we live in.

 

 

Fri, 02/11/2011 - 16:25 | 953942 lieutenantjohnchard
lieutenantjohnchard's picture

good interview. if you want gold though ya gotta step up and pay the premium over sprott ... er ... spot. i've been able to get a few small silver deals on junk under melt. but it's hard and patience is rewarded only rarely. my hunch is the market might command a 20% premium or more on junk silver, and higher on the good stuff before it's all over. ditto for gold.

maybe some on the board have experienced or expect aomething similar.

Fri, 02/11/2011 - 16:28 | 953956 6 String
6 String's picture

maybe some on the board have experienced or expect aomething similar.

I keep an eye on this too. Two weeks ago, new Silver Eagles were to be had for 31 and change at a few reputable dealers....today it's 33 and change without the corresponding uptick in spot. Demand is high, but premiums going higher?

Fri, 02/11/2011 - 16:36 | 953979 lieutenantjohnchard
lieutenantjohnchard's picture

thanks for the observation. i got some silver eagles yesterday for a little below $34 once the shipping was considered. it killed me considering the pittance i've paid for them in the past few years. but maybe that $50 figure is possible. i've been paying about $75 to $100 above spot for gold with shipping charges included. that's about 7%. on the bright side mutual fund loads in the 70's were 8.5%. so things are looking up.

Fri, 02/11/2011 - 17:01 | 954067 6 String
6 String's picture

Yeah, the premiums are tough to swallow. It's one reason I believe PM stocks also make sense if bought at sensible prices. And the premium for T bonds--negative carry--makes the precious premiums look cheap by definition, along with piece of mind so there is some, errr, silver lining, right?

 

 

Fri, 02/11/2011 - 20:02 | 954606 PenchantForHoarding
PenchantForHoarding's picture

Like anything, you have to shop around.  Markup and shipping do vary among dealers, and obvious discounts like wiring $$$ vs credit card help close the gap.  I've been avoiding the urge to make regular small buys, and going for monthly or bimonthly larger orders - all cash.  It's stressful amid volatile pricing, but cooler heads prevail.

Sat, 02/12/2011 - 01:55 | 955278 lincolnsteffens
lincolnsteffens's picture

I've bought up sterling silver. I bought lousy dented stuff for $18 an oz. and good saleable Tiffany for 30-40oz. bypassing middle men. Found a bit of 18th Century English Sterling too. Now that stuff has a premium! When I get enough scrap i'llget it refined and made into rounds. BITCHEZZZ!

Fri, 02/11/2011 - 16:26 | 953948 mick_richfield
mick_richfield's picture

I don't understand Sprott's (and others') interest in PM mining equities. 

After everything we have seen in the last few years, how much doubt can there be that a significant collapse in the worldwide fiat currency regime would not include many nationalizations of PM mines? 

The US already seems, at high strata, effectively lawless to me.  Why does anyone think they will not seize PM mines, and tell you that you're an Enemy of the People if you don't like being robbed?

Ye who own PM shares -- I'd like to hear your thoughts.

 

Fed delenda est.

Fri, 02/11/2011 - 16:34 | 953969 Sean7k
Sean7k's picture

In the 1980 run up in silver and gold, one class did better- mining stocks. Huge percentage increases. 

As for confiscation? You have to know when to get out I guess. That is how I look at it. Like much in life- it's a gamble. Confiscation is rarely an overnight operation and the large miners are poitically connected. They would have to play along, but that is a whole other conspiracy theory. 

Fri, 02/11/2011 - 19:14 | 954471 MrSteve
MrSteve's picture

The government needs mines to be operating if it needs gold, which is why it confiscates it, so it doesn't make sense to shut down mines when production is what's needed. Case in point: Homestake in the 20th century depression; it soared after FDR seized all gold coinage.

Not a 100% certainty, but highly likey that if gold were called in, your mining shares would just keep on ticking along. In FDR's plan, gold was called in at $20.37 an ounce and revalued under controls at $35.00, making a nifty seignorage of $15.00 per ounce for the government.

Fri, 02/11/2011 - 16:54 | 954047 oddjob
oddjob's picture

Stick to producing North American Gold and Silver miners.

Fri, 02/11/2011 - 17:14 | 954120 trav7777
trav7777's picture

they won't seize de jure, they will raise crown royalties.

Chavez has proven beyond all doubt what happens when governments take over operation of resource projects.

If the major gold producers seized control of their mines, same shit as S. Africa with the implementation of diversity reconciliation or wtfever they call stacking the ownership with blacks...the trend in production takes a nosedive.

Everywhere nationalization has been tried, the result has been a huge decrease in productivity.  China's mines are already effectively nationalized; among other major gold producers, does anyone see Canada really doing such a thing?

Either way, geopolitical risk needs to be part of DD for any speculative position (note I did not say investment)

Fri, 02/11/2011 - 19:07 | 954457 AUD
AUD's picture

One of Sprott's funds bought into Norton Gold here in Australia at about 30 cents.

It's now trading at about 17 cents. How do I know this? I bought it at about 10 cents at the end of '08.

What a piece of shit, after 'lifting their hedges', read converting their hopelessly underwater forward sales into convertible notes, they now have massive liabilities. At current rates of production there will be no dividends for Sprott's investors.

 

Fri, 02/11/2011 - 16:27 | 953952 AbbeBrel
AbbeBrel's picture

Hey hey I am with Leo K...

I would rather be long than be short picking up that nickel with one foot stuck under the steamroller!!

Transports are going nuts upwards, that means (per Mr. Dow) (rule #4) the DJIA is movin' up!  (at least for today!).

Don't get your knickers in a knot if that gets in your shorts!  -AB

Fri, 02/11/2011 - 17:34 | 954197 Leo Kolivakis
Leo Kolivakis's picture

Exactly, don't get cute shorting bc right when you think you got it pegged...BAM!!!....you get slaughtered. This market wants to bubble up...be careful!!!!!!!

Fri, 02/11/2011 - 21:42 | 954870 RoRoTrader
RoRoTrader's picture

The DAX did that exact thing just today.

Fri, 02/11/2011 - 16:42 | 953995 PulauHantu29
PulauHantu29's picture

When the Tunesian/Egyptian "democracy" hit Saudi Arabia, Syria, Jordan.....oil will hit $200 and gas $10.

The bicycle industry will boom as will motor scooters.

Fri, 02/11/2011 - 16:59 | 954060 European American
European American's picture

Someday "trading" in the paper sense, will no longer be allowed. It won't be banned (perhaps in the beginning), it simply won't be a choice. Shorts and/or Longs will be something you wear in the summer and/or winter. The new financial doctrine will be predicated on whether the action supports or damages life, all life...all the way down the line.

I know, it's probably not going to go over well with this crowd, but hey, isn't it clear our life-styles, predominately based on selfishness and greed, have reached the resource-full (-empty) end of the line?  Austerity measures will be embraced; back to a more simple life, but using technology that aids in physical/mental work. I mean, at this point in our evolution there's only one direction to go now, right? Of course, over the next ten years or so we'll have to drop to the basement level, but when that's finally over, and we've learned our lesson, voila!, enjoy that gold and silver we were smart enough to purchase while it was dirt cheap back around 2011.

What's that old Zen adage? "Sometimes one's roots have to reach the depths of Hell before one's leaves can attain the lofty heights of Heaven."

It will be good for us all in the long run, i.e. those that make it.

Fri, 02/11/2011 - 18:22 | 954352 Fiat Money
Fiat Money's picture

there's a pretty simple model for what you are proposing: namely life on a navy ship, submarine, or especially on-board a long duration spacecraft (or, more  generally, on any military base or life in the military).  A very "SOCIALIZED" (govt pay for everyone) "we're all in this together" system!

   But no matter how technical the setting, there will always be WINNERS and LOSERS: HIERARCHICAL, class and status societies are extremely prevalent in the primate world, and in the predator world (lions, bears, wolves, etc.)  it's usually winner-take-all. Ultimately, it's about who gets to pass on their genes: food, prime nesting sites, and other trappings of wealth are just a means to get access (to the females in most cases) for passing on one's own genes. 

  That's what hundreds of thousands, upon tens millions of years, of genetic programming are all about - we really are programmed to fighting, f'ing, and securing our next meal.

Fri, 02/11/2011 - 19:03 | 954448 European American
European American's picture

The eternal optimist, the innocent child in me, that saw a golden aura around every creature I came upon during those informative years, wants to believe that after the massive numbers of bodies are buried or burned in the "great die off", a special time will arrive when humans treat all life with respect and gratitude. I still remember that faint world, and with that silver sliver of hope guiding my life I do the best I can to treat others as I wish to be treated (but it's not easy).

In the meantime, as the contradiction rears it's other head, along with my gold and silver and stored food and water filters and seeds and solar panels and wind turbine and a small arsenal of weapons, I'll continue collecting more 230 grain .45 hp for my Mark 23 while it's still available and relatively cheap, so as to do my best to avert the danger that has not yet begun.

Good luck to you.

Fri, 02/11/2011 - 19:42 | 954549 Fiat Money
Fiat Money's picture

"Children of Men" was a damn good "post-apocalypse" movie,   http://www.imdb.com/title/tt0206634/   the army soldiers taking on "the resistance" fighters in blown-to-bits apartment buildings was very realistic  (and looked just like the Serb-Croat-Bosnia Yugoslavia civil war & ethnic cleansing news videos & photos) even if the plot was a stretch.   Mass casualties on both sides (just like Yugo)

 

Fri, 02/11/2011 - 22:28 | 954730 European American
European American's picture

One of my all time favorites. Got two copies on dvd. Chillingly real. In fact, isn't that life in G.B.?

 

Yeah, the plot was secondary, but added a touch of hope for humankind.

 

The bombing in the beginning. Women exits from the smoke holding her blown off arm in her hand. That sucked me right in.

 

Get ready, brother. THIS IS NO DRILL!

Sat, 02/12/2011 - 02:06 | 955290 lincolnsteffens
lincolnsteffens's picture

It is called "The Nature of The Beast". Genetic code is designed for the survival of the fittest/most clever. As Jack London's Wolf Larsen said "We are all just foaming yeast, fighting each other for the last bit of food".

Sat, 02/12/2011 - 13:50 | 955845 Bastiat
Bastiat's picture

If you get a chance sometime go to Jack London State Park in Glen Ellen, CA -- it is the visionary farm he started and developed with his book profits.  He was a pioneer of sustainable agriculture and humane treatment of livestock. 

"The grapes on a score of rolling hills are red with autumn flame. Across Sonoma Mountain wisps of sea fog are stealing. The afternoon sun smoulders in the drowsy sky. I have everything to make me glad I am alive. I am filled with dreams and mysteries. I am all sun and air and sparkle. I am vitalized, organic."

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                      - Jack London

http://www.parks.sonoma.net/JLPark.html

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Fri, 02/11/2011 - 17:09 | 954074 Fiat Money
Fiat Money's picture

 "3 policies would you enact that you believe would put the US on a path towards sustainable growth?
  That's EASY: #1. a "Manhatten Project" + Apollo (space race) project + US interstate hwy. scale program to PUT SOLAR PANELS on EVERY roof in America - certainly the ones in the sunbelt.   Hello?  The Space Station(s) are ALREADY powered by Solar panels - and they're extremely high energy consumption!   In concert with a massive construction program using available technology, you would of course put Los Alamos,  Lawrence Livermore, Sandia, & other national  labs not on making better nukes, but on making ever cheaper and more efficient solar panels.  Ideally, a thin, flexible film that could be rolled and unrolled on spools, or even roof-tiles that could be plugged in to a roof grid like Christmas lights. (Sort of like leaves plug into the branches of a tree.) 

     The only reason that America isn't already 10 years down the road in this direction (given, HELLO? our CRITICAL DEPENDENCE on fossil fuels - see THIS article!)  is because of the relentless SABOTAGE of progress here, by the Big Financial cartels (jpm, gs, bp, enron/exxon/mobil/shell,  et al)  for who MONPOLY CONTROL of fossil fuel sources is a major "PROFIT center."    http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html 

Indeed, an indication of the sheer treachery and RIGHT-WING REACTIONARY deceit of the Obama administration, is that it wasn't until uber Neo-Con Rahm Emanuel  departed the White House -  almost 2, full, DISMAL years into Obama's presidency  - that Obama co. took even the SYMBOLIC step, of putting  Carter's 1970s era Solar panels BACK on the White House (they were taken down by Reagan in early 1981).

Fri, 02/11/2011 - 19:31 | 954517 MrSteve
MrSteve's picture

In 1979, I toured the  U of R's Laser Energetics Lab in Rochester, NY. The fusion research test bed designed and fabbed by Eastman was imploding pellets of D2O from Exxon, who was funding the research along with the DoD, as they were at Livermore. The big energy giants have been involved in fusion research for over two decades because the fuel will be free and the waste will be clean. Solar is a 21st century's hippy dream, the cost is just too high for a weather-dependent, clear sky-view system. How does solar work on a 35 story apartment building? Those buildings barely get sunlight inside the rooms! Other major systemic problems abound. Solar energy is a solution in the same class as chicken soup curing pneumonia: sounds good, feels good, doesn't work well enough to effect a recovery. all IMO.

Fri, 02/11/2011 - 19:37 | 954534 Fiat Money
Fiat Money's picture

a South Florida paper (Sun-Sentinel) wrote up a local home owner who anted up the __$40,000__ to install solar panels on his house.  His electric/ac bill went from high $200s/month down to $30... and the footprint of his panel system was only about 8' x 14', tops.  Double or triple that, times every house in the neighborhood, you could take thousands of homes OFF the grid during daylight hours.   This isn't "pie in the sky" it's not only do-able, but for a tiny fraction of the money we have given the banksters.

Sat, 02/12/2011 - 11:10 | 955622 Matt
Matt's picture

So at current rates he will break even in 20 years, supposing no maintenance / replacement costs. Not a horrible investment. The real question is, what makes you think government subsidies will somehow be better than people choosing to invest in the solar panels on their own?

Regarding the International Space Station, much of the enery from sunlight is dispersed in the atmosphere, so the panels in space receive alot more energy, and have many more hours of exposure over the course of a year.

Fri, 02/11/2011 - 19:32 | 954520 Fiat Money
Fiat Money's picture

 re "flagged as junk: 

 - what'sa matter: no one like the revelation that the rahm emanuel, robt rubin (larry summers, gary gensler, mary schapiro, jared bernstein, et al) Neo-Cons are RULING the obama White House, and SABOTAGING the alternative energy options that WERE POSSIBLE 30+ years ago ??!   and that such options are THE OBVIOUS way to drag America out of its current economic malaise (nightmare)?

Sat, 02/12/2011 - 11:13 | 955626 Matt
Matt's picture

Sounds like you should have done more to try to get Jimmy Carter re-elected.

Sat, 02/12/2011 - 20:41 | 956658 BigJim
BigJim's picture

I didn't junk you. But anyone who blames the decades-long bipartisan Washington clusterfuck on "RIGHT-WING REACTIONARY" forces certainly deserves to be junked.

Sun, 02/13/2011 - 13:08 | 957710 Matt
Matt's picture

So if the parties are entirely symbolic, what else changed between the Carter and Reagan administrations? What group of lobbyists said "the world is running out of oil, lets put solar panels on the White House", before somehow lossing their influence to "there is plenty of oil, take down that solar panel"?

At some time in the past, leaders mattered and the parties had at least some effect on what the priorities were, although from GW Bush term I onwards it has been quite clear that lobbying forces have incredible amounts of influence.

G.W. Bush's presidency was clearly driven by the Oil Companies; I think Barrack's was supposed to be controlled by Labor Union power, but they got usurped by the Banksters.

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