This page has been archived and commenting is disabled.

Mike Krieger Explains How To Short Corruption In 2011

Tyler Durden's picture




 

Submitted by Mike Krieger of KAM LP

How to Short Corruption in 2011

Just because you do not take an interest in politics doesn't mean politics won't take an interest in you.
- Attributed to Pericles, ca 430 BC
 
Suspicion towards a currency, once awaken, develops insomnia.
- James Dines

 

Addressing the Commodity Chatter

In the waning days of 2010 and the first week of 2011 it seems everyone under the sun has decided to weigh in on commodities general and gold specifically.  Although I disagree with the conclusion of many of these notes, several of them are very well thought out and bring up excellent points of debate.  I will address one note in particular in this email and others possibly in the future.
 
Dylan Grice of Societe General is in my opinion one of the best big picture guys on the sell-side today.  I find him to be intellectually honest and someone with a deep sense of human history, which is the crucial component of any successful analysis of global macro trends.  History is in effect an intricate model of human nature.  Since human being are the components of both civilizations and markets, what ultimately drives the big dynamic shifts that change the world forever is human nature itself.  In the period that we are told is the whole of civilized human history (I have serious doubts about this but that is for another time), human nature has clearly not changed although our toys and weaponry have.  All you have to do is study history to see this.  If you don’t understand human nature or and the intricate but volatile web of events we call history you have no business being a macro investor.
 
Ok, so back to the Grice piece.  In his Popular Delusions piece from December 15, 2010 he talks about how commodities are a horrible investment in the long-run and that you are much better investing in growing businesses.  I am not going to argue with him here although I just want to make two points.  First, is commodities have powerful secular bull markets and having exposure to this asset class is absolutely crucial to a macro investor such as myself that plays these big secular trends.  I have not succumbed to a delusional love affair with this asset nor am I buying into some long-term Malthusian nightmare.  At some stage investors will get this way (it happened in 2H08), commodities will rise to far too fast, and it will be time to get out.  The attitude toward commodities in early 2011 is nothing like it was in 1H08.  It is much more restrained and in fact more investors like equities than commodities today.  I was there in 1H08.  I called it a bubble then.  I have a track record.  This is not 2H08 from a sentiment perspective.  This run has a long way to go in certain commodities (precious metals, agriculture and oil) from where I sit.  A long way.
 
The more important point Grice makes is one I am hearing repeated by parrots on television that don’t have half the brain power or understanding of Grice.  As such, I want to address this point of view once and for all.  In his note Grice writes:

When you buy commodities, you’re selling human ingenuity. Why bet against human ingenuity by buying physical commodities when you can bet on it by investing in the enterprises whose task is to remove the bottlenecks and lower commodity prices? As a strategy, this is something I will focus on in later notes. I think there are more efficient ways to gain exposure to commodity markets and I will write in more detail about them after Christmas.

While I think this statement on its face it correct, it is misleading and subject to poor interpretation by the weak minded.  Yes, it is true that when you put capital into commodities you are betting against human ingenuity, but human ingenuity can be stifled by outside factors such as government and corruption.  So in buying commodities, and precious metals in particular, I am in fact betting against real GDP growth and human ingenuity…in the SHORT-RUN (this can be described as several years or more when you look at markets from a truly long-term perspective as I do).  Longer-term a bet against human ingenuity has been a disastrous bet and I believe it will be again.  Nevertheless, the state of corruption and incompetence embedded within the current leaders of the United States and the Western World in general (and our Asian soft-colonies) is of such a magnitude that they are stifling human nature, its ability and desire to innovate and yes, ingenuity itself.
 
Shorting Corruption in 2011

While many will say I am a perma bear and just see everything as half full, I cannot wait until the day that I can sell all of my precious metals and commodity exposure and start to invest in non-mining and commodity businesses and equities generally.  I have no doubt that this day will come but this is all a process and we are very, very far away from that day from a price perspective.  A large part of my intent in writing these notes is to catalyze the change so that it happens as quickly as possible.  The quicker we can change the guard within the elite class on Wall Street and Washington the quicker we can get on with human ingenuity.
 
Very early on I noticed that what Aldous Huxley and others have called the “power elite” have almost total political and economic control of the system.  Remember the quote attributed to Mayer Rothschild over two hundred years ago that perfectly and simply states:  “Give me control of a nation's money and I care not who makes the laws.” Combine this quote with Lord Acton’s: “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men” and you can start to really put all the pieces together on how money power works and how it has taken the entire world hostage to its selfish ends.
 
The founding fathers of the United States of America were very well aware of this aspect of human nature when they framed the constitution which is why they made money gold and silver coin and also why they were obsessed with the idea of a division of powers between the executive, legislative and judicial branches.  It is also why states rights was such as big issue.  Unfortunately, what we have today is almost the worst case scenario.  While under a gold standard the politicians will cheat and print and then default (like the United States did in 1971) at least there is the legal framework of moral money during that period.  Under a completely fiat system where money can be created to infinity and that power is granted to a small group of unelected academics (the Fed) that answer to the banks...well you get what we have today.  A society where all the wealth has become concentrated in the hands of a very small, corrupt and unenlightened elite.  Once their greed has collapsed the system they then scramble to secure their positions using their political connections (see the period from 2008-today) and in the process destroy the middle class.  To protect themselves from the “people” they then try to put in a police state or a more authoritarian government.  This has happened over and over and over in history and is happening again right now.  This is pre-1789 France make no mistake about it.
 
So when the masses of a formerly free people figure out what has happened to them it is not pretty.  My whole hope is to avoid the masses turning violent.  There is no need for it.  The system has an Achilles heel and it is precious metals.  People must become educated on money power, how it works and then use the system against itself.  The entire power of the elite resides in fiat money creation.  Buy physical gold and silver and take delivery if you want to short corruption in 2011.  Take that away and they go away.  Enter human ingenuity.   
 
George Soros and the New World Order

Many people hear the term “New World Order” and immediately shut down.  They think conspiracy theory.  The truth is this is a term the elite themselves use all the time in describing what they want (see Soros interview here http://www.dailypaul.com/node/153418?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+dailypaul%2FFClq+%28The+Daily+Paul+-+Continuing+the+Ron+Paul+Revolution+Ron+Paul+for+President+2008%29).  What we have the is second worst possible outcome in the U.S. dollar currency system.  The absolute WORST outcome for humanity and freedom is the New World Order outcome, which in a nutshell is a global government and a one world currency.  Think about it.  It is bad enough to have the U.S. fiat dollar but at least you can flee to another nation.  If there is one currency that must be used everywhere and it is managed by some power hungry maniac in Brussels what kind of world do you think that will be like?  I’d rather not.
 
I personally think there will be no New World Order because people are waking up and becoming educated on how things work and they are doing it fast.  The smartest of the elite are in their old age and we will be rid of them soon enough thanks to natural causes.  My observation of their progeny is that they are much less intelligent, motivated and forward thinking than their ancestors.  I can’t wait until the day I don’t have to listen to the dangerous fantasies about how civilizations should function from the like of George Soros or Warren Buffet.  You guys had your day.  Go away please you have done enough to ruin the future of my generation.
 
All the best as always,
Mike

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 01/06/2011 - 14:40 | 853355 Traianus Augustus
Traianus Augustus's picture

Most optimistic piece I have read in quiet a while.  Those SOB's can't go fast enough for me!!!

Thu, 01/06/2011 - 16:26 | 853712 sgt_doom
sgt_doom's picture

A great couple of links I found over at ampedstatus.com awhile back, which explains the Global Banking Cartel in a most pithy and brilliant manner (only 3 to 4 pages in length):

http://csper.wordpress.com/2010/08/12/monopoly-money-and-the-international-banking-cartel/

http://csper.wordpress.com/2010/08/20/global-empire-and-the-international-banking-cartel-part-2/

Thu, 01/06/2011 - 21:59 | 854766 Thomas
Thomas's picture

Maybe Simon Johnson's "The Quiet Coup" nomenclature should be redirected to Mike's "buy gold" thesis.

Fri, 01/07/2011 - 11:28 | 856110 4xaddict
4xaddict's picture

Here's an idea, no one over 80 years of age is allowed to have assets in excess of 300M and if they die with more than 50M in their estate the balance goes to their local council.

Sound draconian? I think that's plenty for them to live on and ensurers they feel the same violation of their rights that the young feel.

Sure there are technicalities, but that's what the legal system is for. 

Fri, 01/07/2011 - 11:28 | 856111 4xaddict
4xaddict's picture

Here's an idea, no one over 80 years of age is allowed to have assets in excess of 300M and if they die with more than 50M in their estate the balance goes to their local council.

Sound draconian? I think that's plenty for them to live on and ensurers they feel the same violation of their rights that the young feel.

Sure there are technicalities, but that's what the legal system is for. 

Fri, 01/07/2011 - 16:04 | 857283 akak
akak's picture

Here's an idea, no one over 80 years of age is allowed to have assets in excess of 300M and if they die with more than 50M in their estate the balance goes to their local council.

"local council" of just whom, exactly?

Thu, 01/06/2011 - 14:39 | 853359 Nacho.Libre
Nacho.Libre's picture

My observation of their progeny is that they are much less intelligent, motivated and forward thinking than their ancestors.

They must be a product of our skool system.

Great article!

Thu, 01/06/2011 - 16:26 | 853711 XitSam
XitSam's picture

The progeny may be much less intelligent, motivated and forward thinking than their ancestors.  But I think they are also much more thuggish, corrupt and evil.

 

 

 


Thu, 01/06/2011 - 17:21 | 853932 Nacho.Libre
Nacho.Libre's picture

It's just SOP (standard operating procedure).  If they can no longer trick you into being their serfs, then they will force you at gun point and/or threat of imprisonment  That's why if you don't buy health insurance, you pay a tax or go to jail.  As the society less docile the elite become more aggressive.

Thu, 01/06/2011 - 18:13 | 854093 Things that go bump
Things that go bump's picture

There are lots of thuggish, corrupt, evil people around, but it takes that spark of genius to really elevate those characteristics from a simple propensity for petty crime and bullying into the sort of success enjoyed by someone like Soros.    

Fri, 01/07/2011 - 10:27 | 855882 tamboo
tamboo's picture

no need to think too hard, just read the protocols. i'm sure gene simmons keeps a copy handy.
http://www.iamthewitness.com/Protocols-of-Zion.htm

Thu, 01/06/2011 - 14:40 | 853363 Don Birnam
Don Birnam's picture

Human ingenuity is all well and good, but when the fruits of said ingenuity are reckoned in ever-depreciating units of account by the name of the "United States Dollar," it is the wise investor who will commit at least a portion of his ingenious wealth in the not-so-ingenious gold or silver coin.

Thu, 01/06/2011 - 16:04 | 853632 NotApplicable
NotApplicable's picture

I think you mean "Federal Reserve Note." The "United States Dollar" was murdered along with Kennedy.

Thu, 01/06/2011 - 19:09 | 854238 Don Birnam
Don Birnam's picture

+1

Duly noted...

Thu, 01/06/2011 - 14:43 | 853369 buzzsaw99
buzzsaw99's picture

The system can't be saved nor should it be.

Thu, 01/06/2011 - 14:43 | 853378 NOTW777
NOTW777's picture

when do they announce the JPMorgues silver short profit

Thu, 01/06/2011 - 14:45 | 853382 jus_lite_reading
jus_lite_reading's picture

Let me say this: I was junked 11+ times for simply stating that the mass animal kills around the world are disturbing and right now, everything is speculation as to the cause. Also, it would be more simple to say if there was a connection between the mass fish/bird kills and the military but it's not... something is going on!

That I was junked for that is disturbing...

 

 

Thu, 01/06/2011 - 15:04 | 853459 TheProphet
TheProphet's picture

I junked you. What's one more?

 

The map for the deaths in the US seems to follow the jet stream on the inland, and the Atlantic current on the seaboard. Am I the only one who noticed this?

Thu, 01/06/2011 - 15:49 | 853592 JLee2027
JLee2027's picture

:(

Thu, 01/06/2011 - 15:06 | 853468 Commander Cody
Commander Cody's picture

Wrong thread.

Thu, 01/06/2011 - 16:27 | 853716 sgt_doom
sgt_doom's picture

It's those e-bots from the US Chamber of Commerce --- don't let it trouble you, sir.

Thu, 01/06/2011 - 16:43 | 853775 Wynn
Wynn's picture

Junk weeds out the weaker hands. Man up or get out.

Thu, 01/06/2011 - 17:00 | 853843 NotApplicable
NotApplicable's picture

LOL

I junked you to see if I could strengthen your resolve. ;)

Thu, 01/06/2011 - 17:23 | 853941 Wynn
Wynn's picture

back at ya  :-)

Thu, 01/06/2011 - 17:40 | 853991 illyia
illyia's picture

Probably an off-topic thing as much as a tin-foil-hat one.

I won't junk you... but birds aren't this issue. They are another, different, issue.

Thu, 01/06/2011 - 14:45 | 853383 Turd Ferguson
Turd Ferguson's picture

This is fun. Here's a link to the CNBS coverage of last month's BLS BS report. Watch this, then ask yourself how in the world anyone can expect a 400M+ number tomorrow.

http://www.cnbc.com/id/15840232/?video=1680661595&play=1

Thu, 01/06/2011 - 14:54 | 853422 Hephasteus
Hephasteus's picture

I expect a huge number because I fully expect them to lie their asses off and then get caught.

Thu, 01/06/2011 - 15:34 | 853552 ReeferMac
ReeferMac's picture

They'll never get caught.. Sheesh!

Thu, 01/06/2011 - 16:58 | 853835 NotApplicable
NotApplicable's picture

How could they get caught when they can blame the snowstorms and the sleeping/drunk snowplow drivers?

See, it's really a theological and union issue.

Thu, 01/06/2011 - 15:07 | 853474 TheProphet
TheProphet's picture

Turd, last month's number was fabricated by tinkering the seasonal employment calculation. In October, they tinkered did the exact same thing.

What is to stop them from doing it again?

Question for you: in December, did unemployment benefits expire for long term folks, who since the passage of the law extending benefits will now be added back to the rolls this month?

Thu, 01/06/2011 - 14:47 | 853392 NOTW777
NOTW777's picture

cnbc personnel given bonus money for trashing PMs - who sent the memo

they didnt notice the recent move in gold from 1160 to 1420 but the dollar move down today is getting massive coverage

Thu, 01/06/2011 - 14:48 | 853396 TheClub55
TheClub55's picture

I have zero fear of the one gov one currency... just look at the world today no way it can happen. Even the euro which is made up of very similar nations is looking shaky. And the "greed" of the powerful will stop them from giving up the power to one world wide government.

Thu, 01/06/2011 - 14:52 | 853411 faustian bargain
faustian bargain's picture

The powerful of which you speak are already international.

Thu, 01/06/2011 - 16:49 | 853794 buzzsaw99
buzzsaw99's picture

+1 If there was just one world currency then the maggots couldn't get rich manipulating the exchange rate.

Thu, 01/06/2011 - 14:50 | 853403 Uncle Remus
Uncle Remus's picture

Short corruption in 2011 - buy physical gold and silver and take delivery.

I like it.

Thu, 01/06/2011 - 14:54 | 853425 traderjoe
traderjoe's picture

The trick won't be just to purchase gold and silver - but to actually use it in the course of business. To get vendors and shopkeepers to accept it. To have it be widely circulated and for the masses to recognize the coins and rounds, to understand their conversion and values, etc. IMHO, it won't help, in fact even be counter-productive, to have a precious few own the metals - and for the metals to go on a rip higher in price. Silver and gold have to be money of the people.

On to being long human ingenuity. I worry sometimes that Malthus has been thoroughly discredited - to our collective detriment. Perhaps he was just a bit early. The Midwest aquifer is being drawn down. The genetically modified seeds are spawning huge resistant weeds and the bees are dying off.  Economics, IMHO, has a key flaw - it assumes perpetual (infinite) growth in a finite world. The laws of thermodynamics and systems will trump the theories and 'models' of economics.  

Thu, 01/06/2011 - 16:25 | 853713 CU1981
CU1981's picture

+++

Peak Population is knocking on the door.

Thu, 01/06/2011 - 16:39 | 853752 the rookie cynic
the rookie cynic's picture

Agreed: Exponential function mathematics of economics vs. dynamic equilibrium mathematics of nature

http://therookiecynic.wordpress.com/2010/10/12/your-lethal-education-par...

Thu, 01/06/2011 - 17:12 | 853897 fockewulf190
fockewulf190's picture

Well, if anybody offers me silver in exchange for my neuro-rehab services, I´ll gladly accept.  Only thing is I can´t advertise it because I´d have the financial Gestapo driving up in black wagons if I did.  I´m not living in Indonesia where silver dirhams are all over the place and are accepted.

Thu, 01/06/2011 - 15:03 | 853455 Cognitive Dissonance
Cognitive Dissonance's picture

So when the masses of a formerly free people figure out what has happened to them it is not pretty.  My whole hope is to avoid the masses turning violent.  There is no need for it.  The system has an Achilles heel and it is precious metals.

This sums up nicely why I have started my own Johnny Silverseed project. The corrupt are vulnerable and they know it. This is why we are subjected to non stop propaganda. We must change minds one at a time. My small effort is one way we can do so.

http://www.zerohedge.com/article/johnny-silverseed

Thu, 01/06/2011 - 16:45 | 853783 NotApplicable
NotApplicable's picture

That's a very interesting methodology you've come up. I've been thinking about the need to get junk silver into the hands of the public, as I'm sure it is the best currency available for private transactions once our financial reckoning day arrives.

I hadn't yet developed a sales pitch like you have, but I did realize the perfect name for this movement, The March of Dimes 2.0.

Please feel free to use this label as you wish, and there is no need to provide attribution to me (because, as always, it's simply not applicable).

Thu, 01/06/2011 - 15:02 | 853456 Missiondweller
Missiondweller's picture

Great post Tyler.

I too look forward to a day when we can once again invest in equities of innovative new companies. But now is no that time.

When we nolonger have free markets and real price discovery without fed schemes and massive government largess we cannot make informed, rational investment choices. Investment in PM's are a "no confidence" vote of the current system. I cannot say I see a change away from this system soon but see it coming in the form of some type of collapse. In the face of that, the only logical place to put money is in PM's and commodities.

Thu, 01/06/2011 - 15:28 | 853531 traderjoe
traderjoe's picture

Diffuse public ownership of companies is currently a scam in part perpetuated by the corporate executives - who now make massive multiples of the average worker. There is no way they would profit to these magnitudes if the companies were private. When executives make "only" 10-20x a line worker - and the other conditions are met - will I consider owning a portion of a publicly traded company. 

Thu, 01/06/2011 - 15:31 | 853537 bigdumbnugly
bigdumbnugly's picture

agreed, it's hard to even imagine a more controlled and corrupt market than we currently have under the pretension of a free market system.

i don't know if it will ever come to the NWO scenario, but if it does they won't be taking me with them - not while i'm still vertical anyway.

Thu, 01/06/2011 - 15:50 | 853593 blindfaith
blindfaith's picture

let me tell all you "investors and speculators" in commodities what YOU are doing...you are killing, like viruses, you own homegrown industries and your Country.  Junk me, go ahead.

YOU TELL ME HOW, HOW any business in this America is going to survive and compete, and hire when you drive copper, tin, lead, and all the other metals to the sky.  Will you be happy when the last house in your neighborhood, town and city are in foreclosure?  When there are no jobs to be created because no business can plan or compete, or afford to exist?

You tell me how I, as a manufacturer, can pass on copper double in 6 months, common solder from $10 to 17 a pound in 3 months, tin through the roof, brass the same and everyother metal we are using?  You tell me why I, or any creator of products and jobs (which is the basis for a nations wealth) should bother?  Tell me!  What so your kid can have a job?

Over 100 people now lost jobs, 7 stores closed, taxes lost, hopes and dreams in the smoke...and you don't give a funking fat rats ass do you?  Nope not as long as you can rub your hands in dirty blood soaked money.  You think you, somehow, are doing some smarter then the rest of us act, by speculating until the fat lady screams.   Your driving your country into another deeper recession and more pain so you can have more, and more, and more.  When is enough?  Can YOU really have enough ever?  Is there a point when you say to yourself, I am part of the destruction of the Nation I live in just as surely as any foreign threat!

No, like a virus, you will kill your host.  Without remorse, guilt, without regard to age, health, sex, color, blood, or anything else that makes a human being.  You will watch your friends, neighbors, your Country die before your eyes, as you caress every last dollar you have managed to accumulate.

And, you think Bernanke is the problem.  It is you, and has been all along. 

" I cannot say I see a change away from this system soon but see it coming in the form of some type of collapse. In the face of that, the only logical place to put money is in PM's and commodities."  NO...YOU SIR, ARE WHAT WILL MAKE IT COLLAPSE.    YOU.  YOU.

Thu, 01/06/2011 - 16:40 | 853758 akak
akak's picture

While you are raging against the inmates who inadvertently trample you while fleeing the prison through the one hole in the fence, you might more properly direct your rage against the persons and the power who built that prison and who imprisoned those fleeing it instead.

Fri, 01/07/2011 - 02:08 | 855217 The Rock
The Rock's picture

Well said.

Thu, 01/06/2011 - 16:44 | 853781 Stevm30
Stevm30's picture

use BOLD because BOLD will make your incoherent emotional rambling true.

Thu, 01/06/2011 - 16:58 | 853840 Apocalicious
Apocalicious's picture

Yes, blindfaith, yes. <strokes head tenderly>

Close your eyes, and it will all be over soon.

Thu, 01/06/2011 - 17:08 | 853881 faustian bargain
faustian bargain's picture

You've been a member here for over a year, and you still think this? Welcome to my 'ignore' filter.

Thu, 01/06/2011 - 17:20 | 853927 the rookie cynic
the rookie cynic's picture

Tell us what you'd do instead please.

Thu, 01/06/2011 - 15:19 | 853505 Xibalba
Xibalba's picture

One world currency you say?  Cue the hoards of Armageddon doomsday prophets.  I'll go first:  

16 And he causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a mark on their right hand, or on their forehead,

 17 and he provides that no one should be able to buy or to sell, except the one who has the mark, either the name of the beast or the number of his name.

 (Rev 13:16-17 NAS)

Thu, 01/06/2011 - 16:30 | 853731 NotApplicable
NotApplicable's picture

I can see Congress now, mandating implanted RFID chips in welfare recipients in order to stop debit-card fraud (once we get to say... 150M people on welfare). Not to mention all of the other political "problems" it will solve.

Thu, 01/06/2011 - 15:25 | 853518 malikai
malikai's picture

"While many will say I am a perma bear and just see everything as half full, I cannot wait until the day that I can sell all of my precious metals and commodity exposure and start to invest in non-mining and commodity businesses and equities generally."

I believe investment in a mining or raw material business should be an investment in human ingenuity. After all, as time goes on it takes significant ingenuity to extract more resources from diminishing reserves, nevermind what it takes to find the stuff in the first place. And mining companies can and do go broke during their industry's bull periods. Think Enhanced Oil Recovery and In Situ Leaching.

Thu, 01/06/2011 - 15:24 | 853522 GottaBKiddn
GottaBKiddn's picture

Food, Bitchez!!

Thu, 01/06/2011 - 15:24 | 853525 velobabe
velobabe's picture

mikey, your very calming for me. maybe boulder and it's energy and weather has gifted your ideas and pen. i enjoyed reading your peace.

Thu, 01/06/2011 - 15:27 | 853527 CIABS
CIABS's picture

i am very reluctant to say anything discouraging about krieger's outlook and attitude, which i admire.  but i'd feel a lot better about his recommendation if i didn't think that the members of world's ruling class have been personally accumulating gold and related assets in recent decades and that they already own most of the gold in the world.  that leaves a lot of us trying to get hold of a little bit of their true currency so as to be able to play their game when the game changes.

Thu, 01/06/2011 - 16:22 | 853691 hidingfromhelis
hidingfromhelis's picture

Agree completely.  The uber-wealthy are typically ruthless and corrupt, and I bet they can read the writing on the wall.  Most of them didn't get where they are by being ignorant.  They are invested in tangible things as well.  The rest of us are scrambling for the little bullion crumbs that have fallen on the floor at this point.  Whatever form reset takes, a lot of the same folks will emerge with wealth and power intact.

P.S.  When I got up from the chair, your avatar's "eyeball" seemed to track my movements...creepy.

Thu, 01/06/2011 - 16:44 | 853779 the rookie cynic
the rookie cynic's picture

I'd be suprised if the New World Order playbook didn't include a gold and silver end-around, complete with chop blocks, leg whips, and uneccessary roughness.

Thu, 01/06/2011 - 15:28 | 853529 Bruce
Bruce's picture

Another zinger by his lordship:

"The issue which has swept down the centuries and
which will have to be fought sooner or later is
the people versus the banks." - Lord Acton

deja vu...

 

Thu, 01/06/2011 - 15:28 | 853530 RicktheDick
RicktheDick's picture

Good piece and I do agree with most of what Mike espouses here. However, he seems to drastically underestimate the extent that the ruling class will go to in order to reatin their elite status. One truism of human nature is that people do not go quietly.  

Thu, 01/06/2011 - 15:32 | 853544 the grateful un...
the grateful unemployed's picture

its also possible human nature has changed, and technology hasn't. i consider someone like Bill Gates the enemy of his own technology. in order to make a large business out of Microsoft he destroyed competition and innovation. the elite are largely hanging on to wealth that no longer means anything. and yes human ingenuity makes all commodities fungible. the bailout was done to keep the financial dinosaurs from going extinct. the first capitalist thought, we need to give the people a reason to work (other than fear and oppression) so let's give them money, and never quite as much as they need. 

it's ironic of course that Bernanke and Obama want to push the stuff out of helicopters! They realize how worthless money is!! but I agree that the new world order is just a loaf of wonder bread for everyone. the real new world order is that the best and brightest nation will rule, without the use of power, or manipulation or greed, which is were Bernanke and Obama lose it. people who crow about the decline of the Am Empire have it all wrong, it is just the beginning, because we do everything much better than the rest of the world, which includes cleaning up our own messes.

Thu, 01/06/2011 - 15:32 | 853547 jeffgroove102
jeffgroove102's picture

Excellent article, and I firmly agree on how things actually change, the old farts with the unenlightened ideas need to die off. I still am a bit concerned that the public is not really vested in precious metals. It unfortunately creates that old saying"when the gap between the rich and the poor widens, revolution ensues."

Thu, 01/06/2011 - 15:43 | 853577 max2205
max2205's picture

too funny...you'll be waiting a while since the bottom was in 2009 and prices are dear at this point... good luck

Thu, 01/06/2011 - 17:12 | 853889 faustian bargain
faustian bargain's picture

Is that why food prices are rising?

Thu, 01/06/2011 - 15:57 | 853607 Trailer Trash
Trailer Trash's picture

Dear ZH Community, Please provide some advice.  I would like to purchase some Gold and Silver today, my first purchases.  I have decided to buy Eagles just for personal reasons, realizing that there is a premium. My questions are: Regarding Gold, Does anybody care about "Dates of our Choice" versus a specific year and "Original Mint Tubes" or "Brand New Coins".  I would prefer the "cheaper" gold unless all of the other stuff is of any specific concern or value. Also, if the premium is roughly the same, is there value in purchasing .5 oz versus 1 oz.   Regarding Silver, Monster boxes, sealed or unsealed.  Again, I would prefer the "cheaper silver" unless there is some express advantage in the purchase of a mint sealed box. From your previous recommendations, I understand that Tulving is a reputable house from which to purchase.  Yes? 

Thu, 01/06/2011 - 16:13 | 853665 MrBoompi
MrBoompi's picture

Like almost everything else, the more you buy, the cheaper the price.  Dates of choice might have more value to the numismatist as opposed to an investor.  One ounce of .9999 silver is worth the same as another, unless the coin itself is special for some reason.

 

If you can afford a full monster box, good for you!  I have most of my stuff stored at Goldmoney, but buy some rounds from APMEX too.  I found Goldmoney to be convenient and cost-effective even though I pay storage fees.

Thu, 01/06/2011 - 16:35 | 853735 Cognitive Dissonance
Cognitive Dissonance's picture

I have most of my stuff stored at Goldmoney.....I found Goldmoney to be convenient and cost-effective even though I pay storage fees.

Considering the fractional reserve nature of Gold and Silver selling, IMHO if you don't physically control it you don't own it. Period!

I don't care what they tell you, it's quite possible they don't even control what they claim they are controlling for you.

Thu, 01/06/2011 - 17:24 | 853942 RunningMan
RunningMan's picture

CD is right. Buy a safe, and hold the physical. And guard it with your second amendment rights.

Thu, 01/06/2011 - 18:00 | 854049 Dagny Taggart
Dagny Taggart's picture

Absolutely. And FYI for anyone who BTFD, APMEX has received silver eagles and resumed timely shipping.

Thu, 01/06/2011 - 19:09 | 854248 velobabe
velobabe's picture

buy a heavy safe. when the shit hits you know what, i am renting now, but i will take the contents out and run with it. i thought i would have to think about exiting with my safe in tow. but i can't do that. i will just leave it in this piece of shit condo shit and take my PM's i am wearing and go gentle into the night. the safe is just that, safe.

Thu, 01/06/2011 - 18:36 | 854141 Dollar Damocles
Dollar Damocles's picture

I've heard James Turk (owner of goldmoney) interviewed countless times over the last three years.  I would give that guy my gold with no reciept and trust him to credit it to an account with my name.  Few people in the world that I would trust like that.  Eric Sprott is another.

That being said, PMs stored at gold money are not private.  They are just as subject to capital controls and taxes as any other bank account.  Gold is the only truly private financial asset left in the world if you buy it with cash and hold it physically.  Take advantage of that.  Since the most dangerous thing to the PM investment is political (not economic) risk, keep in mind that total secresy is the best "vault".

I hold some PMs with goldmoney, primarily because of the great convenience of being able to sell into multiple currencies, and WT money to foreign bank accounts.  GM is just a bank the way a bank should be - a storage vault that charges fees and doesn't do loans with their clients money.  But I would never hold more than a small fraction of my bullion with anyone, even goldmoney, because Turk is trustworthy, Uncle Sam isn't though, and he will know every oz that you have held at GM under current reporting laws.

Thu, 01/06/2011 - 19:13 | 854257 velobabe
velobabe's picture

don't trust anybody, except yourself. you are the only person that has your best interest at hand. believe me on this one. your spouse, could be questionable, your children, ? your pilot of your gulfstream 650, ?

Thu, 01/06/2011 - 19:41 | 854345 Dollar Damocles
Dollar Damocles's picture

My trust is very discretionary.  I follow a pretty simple formula.  To trust anyone with money, they need to A:  Have character and B:  Have more gold than me (i.e. be solvent)!!!  This basic formula can be applied to any individual or institution accross all of human history.

An interesting thing about those who understand and love sound money, is that they generally tend to be moral people.  The cause of all of the economic problems in the world today, which you can describe till your face turns blue in mechanical ways (business cycle theory, credit expansion and contraction, inflation deflation, etc etc), could really be summed up in two words...  Fraud and Theft.  So I guess it's not suprising that those with the greatest insight into our economic problems, and who predicted it, generally tend to have moral insight, which usually is an attribute of moral people.  People who love sound money and understand the connection between sound money and individual freedom are also some of the best people I've ever had the pleasure to know, both those I know personally and those I know only through interviews, speeches, and lectures.  The guys from GATA, Jim Sinclair, Eric Sprott, John Embry, Ron Paul etc, you listen to these guys and when they stray from talking about the markets and into philosophy or political philosophy, you will see that these guys are noble and decent people - very idealistic, very moral.

Funny that you mention family - I don't trust my family with my metals cause they don't meet my formula - honesty yes, solvency no.  James Turk on the other hand, I do, because he does.  However, over all I agree with you.  The only thing better than knowing people you can trust, is not having to trust them.  I keep 80% of my metals in my own fist and recommend that to anyone.  That being said, there are multiple ways to own gold and silver, each with their own pros and cons, and it is not a bad idea to be somewhat "diversified" (the word that has killed so many 401kers who are only diverse in equities) in the way and the location that you own gold.

Thu, 01/06/2011 - 19:50 | 854372 Don Birnam
Don Birnam's picture

+1

Thu, 01/06/2011 - 16:24 | 853709 NotApplicable
NotApplicable's picture

The advantage of sealed vs. unsealed monster boxes is the added degree of confidence that the contents have not been altered, thus a slightly higher premium.

As far as different sized gold eagles, smaller coins may be easier to liquidate. The premiums will never be close to equal though, as it relates more to per coin, than it does per ounce. So, if you want to maximize your gold holdings, go for 1 oz. coins, while if you want to maximize your ability to liquidate, smaller coins are better. 

I have dealt with Tulving and found him reputable, but his minimum purchase sizes are prohibitive to small buyers.

Thu, 01/06/2011 - 16:46 | 853782 akak
akak's picture

Dear TrailerTrash,

Why do you keep asking this exact same question over and over again on multiple threads for the last several days (at least), despite having been answered numerous times already?

To other ZH posters: I am suspicious of this poster for just this reason, and would not answer their questions.

Thu, 01/06/2011 - 16:51 | 853799 NotApplicable
NotApplicable's picture

First purchase = overcoming inertia = fear of buyers remorse

Change is never easy, especially when it is counter-intuitive to "conventional wisdom."

Most of the people I convinced to buy Eagles took over 2 years to finally move.

Thu, 01/06/2011 - 18:35 | 854139 Trailer Trash
Trailer Trash's picture

Thank You NA.  You hit the nail on the head!  And, sorry akak.  When I first asked, akak was the only person who responded.  My professional background leads me to like larger sample sizes when collecting data. I was trying to get around ten opinions before making a decision. Many in the ZH community are very knowlegeable about PM purchases, and, perhaps, for that reason rarely talk specifics. They might talk preferences, but do not explain why.  I read often but post little.

Fri, 01/07/2011 - 03:32 | 855315 akak
akak's picture

OK, sorry TT. I can now see why you might have wanted to post your question multiple times, in order to receive some kind of consensus answer --- I had not considered that angle.

We have had enough questionable or outright dishonest characters in this (and other) forums, that perhaps I am a bit too watchful and suspicious by this point, some might say even a bit paranoid.  I am sorry if I unjustly accused you of being here in bad faith.

Thu, 01/06/2011 - 17:04 | 853864 Apocalicious
Apocalicious's picture

Agreed akak. This isn't someone who needs convincing. This is someone from some sort of a sales angle, perhaps tracking the frequencies of certain responses. The posts are virtually identical, over weeks, I believe, not days.

 

I smells a rat, a rat I says...

Thu, 01/06/2011 - 18:35 | 854145 Trailer Trash
Trailer Trash's picture

No Apo, just since this Monday, first business day of the year.

Thu, 01/06/2011 - 17:07 | 853875 Stuck on Zero
Stuck on Zero's picture

I would buy old U.S. silver dollars.  Everyone recognizes and loves them.  They are the old "cartwheels" from Vegas.

Thu, 01/06/2011 - 16:06 | 853642 MrBoompi
MrBoompi's picture

I buy silver because I see absolutely no ingenuity in inflating the money supply.  But I did receive this alert from APMEX yesterday:

 

Have you secured your order of 2011 Silver American Eagles yet? Now is the time to act. We have received news that the U.S. Mint is limiting the allocation of 2011 Silver American Eagles to distributors. We will accommodate as many of our customers as possible, but it will be “first come, first served” for this beginning allocation.

Thu, 01/06/2011 - 17:32 | 853967 ApplesConspiracy
ApplesConspiracy's picture

I'm not sure I buy that. 

 

I've been on their site the past few days and the marketing/pricing of the site looks like it is designed to take advantage of the yearly-buyer type collectors who would be looking to add 2011 versions. 

Maybe I'm off base, but I find the premiums and such a little bit higher than usual just in time for the wave of 2011 buying.

As an anecdotal example, you suddenly need to buy 30 of common coin types to get a discount instead of 20. 

Thu, 01/06/2011 - 16:07 | 853647 Tao Jonesing
Tao Jonesing's picture

I cannot wait until the entire world is back to using just gold as money.  That will fix the George Soroses of the world who want a single world currency!

Oh . . . uh . . . heh . . .

Yeah.  There's more than one way for your NWO to skin the one world currency cat. 

Thu, 01/06/2011 - 17:14 | 853900 faustian bargain
faustian bargain's picture

Which is why money should be determined by the market, not fiat.

Thu, 01/06/2011 - 16:09 | 853653 NotApplicable
NotApplicable's picture

The quicker we can change the guard within the elite class on Wall Street and Washington the quicker we can get on with human ingenuity.

Meet the new boss, same as the old boss.

And also,

Don't hate the player, hate the game.

Thu, 01/06/2011 - 16:32 | 853738 gorillaonyourback
gorillaonyourback's picture

yes very optimistic, but hard betting against the champs, they have been running things along time, the internet has been the big soap box, but will it continue, think about net neutrality, who controls the telecommunications satellites. The rebelion/revolution has to start locally and spread to neighboring cities.  Its not bad enough yet. Can they feed us and give us our soma? I think only when we get hungry will it be time. In a way i hope i start getting hungry. I need to loose a few fuckin pounds anyway

Thu, 01/06/2011 - 16:42 | 853763 Stevm30
Stevm30's picture

aka: Die already.

Thu, 01/06/2011 - 17:06 | 853869 Stuck on Zero
Stuck on Zero's picture

Great piece of work.  As for the New World Order ... everyone is in favor of it in concept.  Everyone hates the people who would be these leaders.

Thu, 01/06/2011 - 17:14 | 853908 faustian bargain
faustian bargain's picture

Who is this 'everyone' of which you speak?

Thu, 01/06/2011 - 17:39 | 853989 Stuck on Zero
Stuck on Zero's picture

Think of the NWO as sold: International coordination, end to poverty, no more wars between nations, cooperation on the environment, global labor laws, free trade etc.  In other words the NWO promises to end all problems associated with nations fighting each other.  Who isn't for that?

Thu, 01/06/2011 - 17:17 | 853916 goldmiddelfinger
goldmiddelfinger's picture

Shorting corruption has never been much of a money maker to my mind. The bad guys in finance are in a golden era

Thu, 01/06/2011 - 18:41 | 854164 reddog
reddog's picture

Today it's  “Give me control of the world's COMPUTERS and I care NOT ABOUT ANYTHING ELSE.” 

Thu, 01/06/2011 - 19:03 | 854218 gangland
gangland's picture

"Yes, it is true that when you put capital into commodities you are betting against human ingenuity, but human ingenuity can be stifled by outside factors such as government and corruption.  So in buying commodities, and precious metals in particular, I am in fact betting against real GDP growth and human ingenuity…in the SHORT-RUN (this can be described as several years or more when you look at markets from a truly long-term perspective as I do).  Longer-term a bet against human ingenuity has been a disastrous bet and I believe it will be again.  Nevertheless, the state of corruption and incompetence embedded within the current leaders of the United States and the Western World in general (and our Asian soft-colonies) is of such a magnitude that they are stifling human nature, its ability and desire to innovate and yes, ingenuity itself...the quicker we can change the guard within the elite class on Wall Street and Washington the quicker we can get on with human ingenuity."

Mike, thanks, that was very good, best explanation of a bear mentality I've come across.

But I don't think people are waking up in enough numbers at a fast enough rate and if they are, they'll reject it, they won't fight, they'll beg for the police state. especially in the big cities.

Thu, 01/06/2011 - 19:22 | 854281 velobabe
velobabe's picture

just my observation about the elites progeny or multiplies of them from several X's, they are dumb and ugly on the whole. i have seen a lot of them. low expectations on their parts, for sure. they are so screwed in the head. daddy did it to them. one i know of in particular, has all his boyz learning kung fu etc. he has a full time martial arts warrior on board his private jets that fly the world around daily. i wonder what that tells about one elite. trying to bring some Zen into the time traveling fraud and corruption and raping of every continent he can get his hands on. quite simple folks, these elites are just pussy men.

Fri, 01/07/2011 - 00:42 | 855068 Violetta (not verified)
Violetta's picture

"The quicker we can change the guard within the elite class on Wall Street and Washington the quicker we can get on with human ingenuity.
 
Very early on I noticed that what Aldous Huxley and others have called the “power elite” have almost total political and economic control of the system."

and he is expecting radical change anytime soon? 

Fri, 01/07/2011 - 06:26 | 855414 mt paul
mt paul's picture

power 

always needs 

a neutral...

 

to complete the circuit ...

 

metaphor bytches

Fri, 01/07/2011 - 07:02 | 855446 velobabe
velobabe's picture

hey mikey, i think the science of human ingenuity is what the chinese has totally cornered the market on ............cheapness.

they have really seized the moment of invention of making products and goods the cheapest ass way know to mankind. really it takes talent to build thing so cheaply and crappy.

over and out†

Do NOT follow this link or you will be banned from the site!