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Mike Krieger On Why 2011 Is Not 2008 - Why It Is Much Worse - And On Dow-Gold Parity

Tyler Durden's picture


From Michael Krieger of KAM LP:

If we are to have another contest in the near future of our national existence, I predict that the dividing line will not be Mason and Dixon's but between patriotism and intelligence on the one side, and superstition, ambition and ignorance on the other.

- Ulysses S. Grant


Mubarak has been an ally of ours in a number of things. And he’s been very responsible on, relative to geopolitical interest in the region, the Middle East peace efforts; the actions Egypt has taken relative to normalizing relationship with – with Israel. … I would not refer to him as a dictator.

- United States Vice President Joe Biden


Stuck in a Time Capsule

I remember as a kid on several occasion putting together a time capsule as part of a school project.  I am sure many of you reading this have done a similar thing at some point.  The concept is simple and elegant.  The group involved in creating the time capsule picks various things from their current society or culture that they feel is representative of the environment at the time and then they bury these items so that future generations can get a glimpse of what life was like for people in a prior time.  The reason humans have a desire to perform acts such as this is because our collective consciousness understands how much things change over time.  Empires rise and fall, major belief systems dominate and then become discredited, broad concepts of what is considered acceptable human behavior with respect to our fellow human beings also change and vary within different cultures over time.  Everyone knows the saying “nothing is certain except death and taxes.”  Actually this is garbage.  Taxes may be certain in the current society we live in but there is nothing eternal about taxes.  It is entirely a human creation.  I would replace taxes with the word change (not Obama change, real change).  From my perspective the one thing in addition to death that is certain in humanity’s existence is change.  Volatile, massive change.  What confuses people is that this change happens very suddenly and seemingly out of nowhere to those only paying attention to the establishment parrots that assure you all is stable and ok because they are the elites and they want things to stay the same.  They want that giant boot stamped firmly on your face forever.

This is exactly where we find ourselves today.  In the middle of the most profound change in the paradigm of the world as we know it that we will ever see in our lifetimes.  Hosni Mubarak had been dictator of Egypt since 1981.  So basically my entire life on this planet this guy had dominated the Egyptian people (with complete and total U.S. government support).  He was an immovable object.  Yet within a couple of weeks this guy was tossed out with relatively little violence.  For someone like me that lives and breathes within the macro zeitgeist of this planet this event was absolutely extraordinary and more importantly just a small piece of the wider puzzle of the world changing all around us.  As anyone that has been reading my pieces for several years knows I have been saying for a very long time that we are in a period of immense economic, geopolitical and social change throughout the world.  This change is of an order of magnitude so great that by the time this period passes (we are still very early in the process) virtually nothing about the way we live our lives and view the world will be the same.  This will be the case everywhere, but nowhere will the impact be as great as in the United States.  The reason is quite simple.  What we are witnessing in the Middle East is the dismantling of the American Empire, the existence of which is actually not even known to the majority of Americans as a result of highly effective media and cultural propaganda.  Most Americans have lived their lives in complete ignorance that it is this American Empire rooted in a counterfeit currency that we force down the world’s throat which has given them their bloated standard of living and will therefore be completely confused about why their standard of living has collapsed once the Empire crumbles.  The entire purpose of these articles is to wake up as many people in the United States as possible to the reality of the situation we are dealing with so they can prepare for what is coming and ride out the storm as best as possible.  So that people can form tighter communities and learn to help their neighbors.  The biggest risk we face is not lower standards of living.  That is written in stone in the near-term.  The biggest risk is that the emotional trauma caused by such an event allows us to be thrown into the arms of a demagogue that promises us security, stability and strength.  This is exactly how it went down in Nazi Germany.  

So back to the time capsule.  On the infrequent occasions that I do turn on the television I am absolutely stunned by the characters the stations wheel out.  I listen to the ways these guys talk and I really feel as if I have found the “Time Capsule 2006 Station.”  We can call it the TCS.  One guy the other day was squawking about how what is happening in the Middle East was “interesting but not significant.”  When it became “significant” he said he would act accordingly.  Seriously, where do they find these clowns? 

The worst part about the crisis in 2008 was the reaction to it.  We promoted and bailed out the “leaders” in all spheres of life, not least of which were money managers.  While I may offend many people on this list with what I am about to say, it needs to be said.  Many of the “investors” managing a significant amount of American capital right now have absolutely no business doing so.  They had no idea what they were doing into 2008 and they have less of an idea what they are doing now.  I am not going to try to call out who knows what they are doing and who doesn’t because we are all about to find out relatively shortly, but by the time this is over the financial industry will be unrecognizable.  In fact, it will probably have to be restarted completely from scratch.  Many massive funds will simply go away in the dust pile that will be their investors assets.  Right now the financials weighting in the S&P500 is 16.5% and the basic materials is 3.5%.  Within five years I expect these weighting to have completely reversed. 
We continue to roll out people on television who are morally repugnant yet the media elevates them to the status of superstars to be emulated.  Warren Buffett is a prime example.  When they rolled out this dinosaur (who wouldn’t even exist without the Fed’s IV into Berkshires vein) on CNBC the other day he basically defended the concept of too big to fail.  Of course he did.  His company is essentially a financial institution and therefore he needs too big too fail to stay around so that he can continue to parade around like some oracle.  Then there was Larry Fink on Bloomberg television the other day.  The first words out of this guy’s mouth (the CEO of Blackrock which manages over $3 trillion) was “market’s like totalitarian governments.”  Link here  As I retorted last week: “market’s may like totalitarian governments but humans do not.”  Furthermore let’s make one thing very clear.  He did NOT say “market’s like stability” he said “market’s like totalitarian governments.”  The word totalitarian was right on the tip of this guy’s tongue.  The fact that he blurted that word out says a lot about this man’s character and what sort of dark thoughts percolate in the recesses of his sick mind.
What about that lover of fascism George Soros who markets himself as some victim that cares about the people when he is the biggest elitist control freak I have ever seen.  He could barely contain his enthusiasm for China’s authoritarian political regime the other day.  He was quoted as saying:    “Perfect order and global governance are not realistic expectations. However, it is a sad fact that Western democracies provide less successful leadership than China.”  Of course, Soros and his buddies would rule us and the rules wouldn’t apply to his pals who would be in charge of the “order”.  This is just a continuation of the “markets like totalitarian governments” meme rolled out by that Fink last week.  They are trying to sell tyranny to us!  Link here:

This is NOT 2008      

This is not 2008, it is much, much worse and far more dangerous.  This will not simply be the collapse of the banking system (although I fully expect that), rather it will be the collapse of the central banking system.  This will not be the temporary collapse of some phony paper wealth, it will be the permanent destruction of real wealth and the end of how the economy functions today which we can simply call “the system.”  While many people think the stock market will fly up 5,000% as it did in the Zimbabwe hyperinflation I have never held this view and still do not.  I do however believe that the Dow Industrials and the price of gold will trade at a 1:1 ratio.  If I had to take my best guess that level will be around 5,000.  That said, I may change my mind about this depending on what happens going forward but I still think that is the most likely scenario. 

I have not commented on the Dow/Gold ratio for awhile but I think the time has come to do so because I anticipate a MAJOR move here over the remainder of 2011.  Below is a chart of this ratio going back both eighty years years on a monthly chart and five years on a daily chart.    

Dow/Gold Monthly Chart 1925-2011

Dow/Gold Daily Chart 2006-2011

During my days at Bernstein I used to write about this a lot and in meetings I would always call the first chart the most important macro chart in the world.  For you see, during the prior two major secular bear markets for stocks the Dow:Gold ratio hit about 1:1.  It didn’t matter whether it was a deflationary period or an inflationary one.  Given this cycle is as bad as the Depression and way worse the 1970s I fully expect the same to happen again.

The second chart is important because it shows what has happened since the bottom in share prices in March 2009.  At that time the Dow:Gold ratio hit a new low for this cycle of 7:1.  It then rallied to the high that fall of 10:1 and has actually been declining ever since.  So the truth of the matter is that stocks in real terms had a very brief but sharp bounce into the fall of 2009 but have basically been falling ever since, down about 15% to the current ratio of 8.5:1.  The key thing is that new lows have not been hit since March 2009.  The reason I am mentioning this now is because I believe this range trade is about to end and we are about to see a massive plunge in this ratio in the months ahead.  Specifically, I think we are going to be at new lows to around 6:1 within twelve months, which would represent a 30% drop in stocks in real terms.  I actually think the Dow will sell off but more importantly gold will soar. 

No one expects this and even those that do are probably not positioned for it.  Everyone thinks if stocks plunge gold will plunge.  I think they are about to move in opposite directions and in a massive way that virtually no one will be positioned for.  Only time will tell, but I think those calling for a major plunge in everything are wrongly staring at a time capsule from 2008.

Have a great weekend,


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Thu, 03/10/2011 - 14:18 | 1037084 props2009
props2009's picture

Highest ever revenue deficit. Highest ever interest payout for US government in Fourth quarter as US pays $416 billion in interests. Revenu deficit hits $1.5 trillion

Thu, 03/10/2011 - 14:26 | 1037120 ghostfaceinvestah
ghostfaceinvestah's picture

"Luckily" much of that 416b will be returned by the Federal Reserve as "profits".

Keep buying gold, is all I can say.

Thu, 03/10/2011 - 15:51 | 1037612 fredquimby
fredquimby's picture

Couldn't agree more. Today 10/03/2011 I got these for only 225 pieces of (Swiss) paper for each. (So about $225 too!)

What a bloody bargain!!


Thu, 03/10/2011 - 14:27 | 1037123 koot
koot's picture

Peak fiat currency is at the top inside the time capsule and something historians will be writing about for many centuries.

Thu, 03/10/2011 - 15:04 | 1037338 markmotive
markmotive's picture

The dow-to-gold ratio is the one trading rule of thumb needed. Nothing else. That's it. It works wonders.

Not trying to spam this to death, but I spent a lot of time on this and want to make sure someone other than my mom benefits...

Free inflation guide (march 10th only):

Thu, 03/10/2011 - 16:02 | 1037659 nyse
nyse's picture

I like it. Thx.

Thu, 03/10/2011 - 14:21 | 1037091 bullandbearwise
bullandbearwise's picture

Aligns precisely with my thinking. Boy, is our generation in for a real eye-opener...

Thu, 03/10/2011 - 14:32 | 1037146 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

The Internet is the worst plague on the globe ever know to mankind.

Soon there will be online havens where all truth seeks will congratulate. The lizard jews will try to penetrate with their well polished CGI effects, to no avail.

It is time to expose our lizard overlords and fight back. Shut this FED Ponzi factory DOWN!

When this thing dips again exchange your fiatcons in for real money. Hard money that is not made from paper.

Thu, 03/10/2011 - 16:03 | 1037660 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

Show yourselves you Junk cowards!

Thu, 03/10/2011 - 16:18 | 1037737 Andy Lewis
Andy Lewis's picture

Fuck off.

Thu, 03/10/2011 - 22:39 | 1039191 DosZap
DosZap's picture

Didn't junk you, your showing yourself as a huge racist bigot you  are.

Lizard Jews?.

Some Nazis never change.

Thu, 03/10/2011 - 22:41 | 1039192 long-shorty
long-shorty's picture

Anyone who can blame the world's woes, or one's own woes, on one particular ethnic or religious group is utterly lacking in the ability to accurately assess reality for what it is.

That's why I junked you.


Fri, 03/11/2011 - 00:22 | 1039461 Ahmeexnal
Ahmeexnal's picture

Somebody ought to carve a swastika on your forehead.

You are a JPMorgan/Rockefeller/Vatican/Goldman lackey.

Trying to deflect blame onto others. Just like their coward puppet did in Germany.


Thu, 03/10/2011 - 19:39 | 1038650 Creed
Creed's picture

I had to log in just to junk you.

Once you start calling Jews "lizard overlords" you've outed yourself as a George Soros wannabe Jew killer.

So yeah, go fuck yourself.

Thu, 03/10/2011 - 14:23 | 1037098 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

I wish all the true bearz would show us their cards. No photoshop facsimiles allowed.

You Goldman guys are funny.

Thu, 03/10/2011 - 14:22 | 1037099 trav7777
trav7777's picture

a dude who lacked the perspicacity to see that NeObama was a schmuck is now to be trusted with further prognostication?  LOL

Thu, 03/10/2011 - 14:35 | 1037107 chumbawamba
chumbawamba's picture

Next up: Paul Krugman discusses why deflation is BAD.

I am Chumbawamba.

Thu, 03/10/2011 - 14:44 | 1037230 Dr. Richard Head
Dr. Richard Head's picture

Shit, I came around.  I voted for Bush...twice....oy vey!  Sometimes it takes a good smack with the hammer on the thumb to learn.

Thu, 03/10/2011 - 14:52 | 1037267 chumbawamba
chumbawamba's picture

Fucking TWICE??  Jesus Shitting Christ, man, there is really no excuse for that.

Yours will be a TV sitcom-like hell.

I am Chumbawamba.

Thu, 03/10/2011 - 14:54 | 1037274 william the bastard
william the bastard's picture

Will you leave when Obama does?

I am The Bastard

Thu, 03/10/2011 - 15:07 | 1037351 chumbawamba
chumbawamba's picture

Shouldn't you be soaking up some menstrual blood somewhere?

I am Chumbawamba.

Thu, 03/10/2011 - 15:20 | 1037446 tmosley
tmosley's picture

He should, but Spalding stuck him up the wrong hole.

Thu, 03/10/2011 - 15:21 | 1037460 william the bastard
william the bastard's picture

When will you leave? Date.

Thu, 03/10/2011 - 15:29 | 1037491 tmosley
tmosley's picture

When physical silver is available for less than $20 an ounce.  You are the only one that knows the actual date, as you have said it will happen immediately after the end of QE.

So you tell me.  You have never had the conviction to come up with a date, and stake your continued presence here on it.  Because you are a coward.

Thu, 03/10/2011 - 16:41 | 1037822 william the bastard
william the bastard's picture

it will happen immediately after the end of QE

vas te faire voir ailleurs

Thu, 03/10/2011 - 16:51 | 1037856 tmosley
tmosley's picture

QE will end immediately after the end of QE?

Are you retarded or something?

Thu, 03/10/2011 - 17:06 | 1037925 william the bastard
william the bastard's picture

Are you an abortion doctor?

Thu, 03/10/2011 - 17:33 | 1038018 chumbawamba
chumbawamba's picture

Speaking of abortion, I'm having sushi tonight.

I am Chumbawamba.

Thu, 03/10/2011 - 22:51 | 1039216 Abitdodgie
Abitdodgie's picture

I dream of sushi, I moved from Los Angeles to get out of the way, now I live in North Dakota , do me a favor when you go order a caterpillar roll and tell me how it was !

Fri, 03/11/2011 - 00:42 | 1039526 chumbawamba
chumbawamba's picture

Dude!  I wanted to get the caterpillar roll because it was way cooler looking than the dragon roll but we ended up with the latter.

I should've ordered a small sake.  I had to pound the last two shots.  The Kirin was great.

I am Chumbawamba.

Thu, 03/10/2011 - 17:38 | 1038033 tmosley
tmosley's picture

No, I'm a chemist.  I've posted papers from my research, for fucks sake.  You think an abortion doctor moonlights in materials science?

I repeat the question, are you retarded or something?

Thu, 03/10/2011 - 18:09 | 1038151 chumbawamba
chumbawamba's picture

Really?  Fuck yeah!  What sort of materials do you generally work with?

Thu, 03/10/2011 - 18:34 | 1038275 tmosley
tmosley's picture

Numerous types.  We incorporate a new antimicrobial technology that was invented by our chief scientists into or onto pretty much any material you can think of, from polyurethane to silicone to titanium to stainless steel to ceramics.  We are currently focusing on medical applications, but are attempting to branch out into industrial applications as well.

We are also able to label proteins, peptides, and other organic molecules with it, with the intention of developing antimicrobial, anti cancer, and anti viral drugs.

We already have a couple of orthodonic products on the market, one of which is basically a cavity blocker.  Once your teeth are sealed with this material, you won't get a cavity until the sealant wears away, which takes about two years with brushing.  I'm not convinced you need to brush once you have it on, though.  I'm probably going to get it done myself in a couple of months.

I would post the website, but there are too many gay stalkers about.

Thu, 03/10/2011 - 19:07 | 1038484 chumbawamba
chumbawamba's picture

Oh yeah, I asked you about this before.  But this time you have actual products.  Wow, the progression of technology will not cease!

I wouldn't mind sealing up my teeth either.  What's the procedure cost?  And what's the underlying material?  Is it going to give me cancer or some other undesirable side effect as the film wears away and enters into my system?

Thu, 03/10/2011 - 14:54 | 1037275 DoChenRollingBearing
DoChenRollingBearing's picture

And Al Gore and John Kerry would have been better?

We will ALL be in a hell before long.


I am a friend of gold and rolling bearings.

Thu, 03/10/2011 - 15:04 | 1037336 chumbawamba
chumbawamba's picture

No, of course not!  We should have brought back Bill Clinton, silly!

I am Chumbawamba.

Thu, 03/10/2011 - 23:09 | 1039260 DosZap
DosZap's picture

You Is Chumbawamba,( the group?)you on the white powder?

Clinton?, why?, he is just a whore mongering ,lying sack of "IS",is.

His record everyone looks up to,never realizing his initial direction, was far hard left. 

Until he lost a testicle, and the Pubs beat his ass right,otherwise we would have been close to Owanger.

His Surplus, was not his doing, it was the Pubs, that steered him there.Under duress might add.

At least he did care about the people a bit, what we have now, is a barnacle on a ship hull.

Who's idea of being POTUS is playing more Golf in 12 mos than Bush did in 8 yrs.Does   he have Griswalds family truckster?

That's worse than holding up a runway tarmac while Clinton got a $350.00 trim job.

Atta boy, Bill.



 If I had to take my best guess that level will be around 5,000.  That said, I may change my mind about this depending on what happens going forward but I still think that is the most likely scenario

Your guesstimate is as you know just south of several HUGE guns in the business.By a couple of G's.


Fri, 03/11/2011 - 00:49 | 1039548 chumbawamba
chumbawamba's picture

Dude.  Dude.  If everytime I wanted to be sarcastic I had to indicate it then I wouldn't be Chumbawamba, I'd be some other schlub.  If you were one of my fawning sycophants then you'd be in synchronicity with my implied sarcasm.  That's your loss.

I am Chumbawamba.

Thu, 03/10/2011 - 14:55 | 1037277 william the bastard
william the bastard's picture

Bush had a MENA plan.

I am The Bastard

Thu, 03/10/2011 - 15:55 | 1037629 doggings
doggings's picture

Bastard, you and Spalding are on this paid trolls program aren't you?

I hope they pay you enough to humiliate yourselves on here daily.

Thu, 03/10/2011 - 17:53 | 1038086 ElvisDog
ElvisDog's picture

How do I get one of them paid troll jobs?

Thu, 03/10/2011 - 23:11 | 1039272 DosZap
DosZap's picture


No, that was Clitton.

At least get your states right. Illegitimate child.

Thu, 03/10/2011 - 22:40 | 1039196 DosZap
DosZap's picture

If you didn't does that mean you gave us the MAN god?.

Hopefully not.


Thu, 03/10/2011 - 15:42 | 1037565 equity_momo
equity_momo's picture

Sir , please refrain from wasting the fossil fuel it takes to drive or the calories it takes to walk to the polling station next year. Take a leaf out of the late , great George Carlin's book and jerk off on polling day. The 2 party GOP-DEM system is a complete waste of yours and my time.

Thu, 03/10/2011 - 15:13 | 1037395 lilimarlene1
lilimarlene1's picture

Umm...he DID win a Nobel Peace Prize.

Just like The President!!!

Thu, 03/10/2011 - 15:09 | 1037363 IQ 145
IQ 145's picture

 I don't know why you call that Putz a schmuck. he's just in the wrong job. I'm sure he would have made a perfectly good golf caddy.

Thu, 03/10/2011 - 15:30 | 1037498 snowball777
snowball777's picture

Say something relevant or take your personality flaws to the curb with the other trash.

Thu, 03/10/2011 - 15:48 | 1037600 trav7777
trav7777's picture

fuck off

how's that for relevant, bitch?

Thu, 03/10/2011 - 16:12 | 1037709 tmosley
tmosley's picture

Uhhh, it's not.

But hey, why don't you tell us all again about how the brains of blacks and mulattoes are so much smaller than those of whites.  While you're at it, you can make with the Borat impressions and talk about the smaller brains of women too.

Thu, 03/10/2011 - 16:42 | 1037828 william the bastard
william the bastard's picture

By his count you are a mulatto woman

Thu, 03/10/2011 - 16:45 | 1037842 Harmonious_Diss...
Harmonious_Dissonance's picture

Fucking Bastard!

Thu, 03/10/2011 - 16:51 | 1037851 william the bastard
william the bastard's picture

Va chier toi

vas te faire foutre

Thu, 03/10/2011 - 16:54 | 1037869 tmosley
tmosley's picture

Thinking of your mother again?

I know I am.  

Thu, 03/10/2011 - 14:26 | 1037101 rich_wicks
rich_wicks's picture

You want to see something REALLY scary?

This is the national debt, measured in ounces of gold:

At it's low, the national debt was 1 billion ounces of gold in 1980, and that was for the AVERAGE price of gold in 1980, not it's $800 high.  more like $500.

I predict $20,000 gold because by 2020, that national debt will be 33 trillion dollars, assuming that the nation just doesn't collapse, then gold won't be measured in dollars at all anymore.

I think the DJIA is going up but the dollar is going down, WAY down.

The national debt has grown about 9.4% since 1971.  Here's a graph of the actual national debt versus the projected debt at 9.4% yearly growth, on a log scale:

You really think we're going to have a tremendous slowdown in it's growth, after 40 years of pretty consistent debt and an even FASTER growth of debt in the last decade?

Thu, 03/10/2011 - 14:52 | 1037268 DoChenRollingBearing
DoChenRollingBearing's picture

+ $20,000 or more.  Buy gold, as much as you can.

NONE of our financial problems have been solved.

NO ONE of significance has gone to jail.

CUT .gov spending.

FED delenda est.

Thu, 03/10/2011 - 15:01 | 1037314 Seasmoke
Seasmoke's picture

man i am not going to be able to walk around and wear my gold chains if that happens

Thu, 03/10/2011 - 22:45 | 1039206 DosZap
DosZap's picture

Perchance oh man of muyuch means, you could fashion yourself a suit of mail.Won't stop much lead, but damn sure make you hard to carry.

Thu, 03/10/2011 - 15:27 | 1037481 william the bastard
william the bastard's picture

"NONE of our financial problems have been solved.

NO ONE of significance has gone to jail."

What a hoot, You should get some o dat learnin stuff.



Thu, 03/10/2011 - 15:37 | 1037533 DoChenRollingBearing
DoChenRollingBearing's picture

Which of our financial problems have been solved?

Who has gone to jail (Madoff was just a sideshow)?

Thu, 03/10/2011 - 15:54 | 1037622 gmrpeabody
gmrpeabody's picture

I thought you filled your tank already and quit buying? Having second thoughts?

Thu, 03/10/2011 - 16:04 | 1037665 DoChenRollingBearing
DoChenRollingBearing's picture

gmr, you must have missed my Press Release as week or so ago!

I am back in the game!

(partly because I had some money come in and partly because the needle on my Paranoia Meter is in the Red Zone again)

And now that I am back in, I can say:

Gold, Bitchez!

Thu, 03/10/2011 - 16:57 | 1037881 william the bastard
william the bastard's picture

So because "no" financial problems have been solved and no one went to jail gold goes to $20,000?

Ya call that logical?

Thu, 03/10/2011 - 17:02 | 1037905 tmosley
tmosley's picture

Yes.  It's called "fundamentals".  Grade school trolls like yourself probably don't know the meaning of such a multisyllabic word (or that one, for that matter).  In any event, things won't change until they change.  This is something you should understand, as you keep telling us that QE will end either when it ends, or shortly after it ends.

Thu, 03/10/2011 - 16:58 | 1037883 william the bastard
william the bastard's picture

So because "no" financial problems have been solved and no one went to jail gold goes to $20,000?

Ya call that logical?

Fri, 03/11/2011 - 01:26 | 1039637 rich_wicks
rich_wicks's picture

No, it's because the entire US monetary system is a complete fraud that gold is going to $20,000.

If you can't realize how corrupt our government is yet, then, well, good luck.  It's not going to be smarts that saves you.

Thu, 03/10/2011 - 15:57 | 1037647 rich_wicks
rich_wicks's picture

I can't tell if you're an idiot or a troll.

Hopefully, an idiot.  We need to clean up the gene pool.

Thu, 03/10/2011 - 16:19 | 1037741 tmosley
tmosley's picture

Nothing stopping him from being both.

He's a coward too.  He keeps telling all the gold and silver bugs how they are going to get crushed (even while he claims to have silver himself) when QE ends, but he never tells us when it's going to happen.  Instead, all he does is run around like an idiot insulting random people for no apparent reason.

Thu, 03/10/2011 - 16:54 | 1037866 william the bastard
william the bastard's picture

When QE ends you wil be puking gold.

That's when you idiot.

vas te faire foutre

Thu, 03/10/2011 - 16:54 | 1037873 tmosley
tmosley's picture

Oh, so now QE ends when QE ends, rather than it ending immediately after it ends.  Great answer, you blithering coward.

Thu, 03/10/2011 - 16:59 | 1037891 william the bastard
william the bastard's picture

Oh! I get it! You want a date like June 3, 4pm EST.

Thu, 03/10/2011 - 17:04 | 1037910 tmosley
tmosley's picture

Yes.  Is that your final answer?

Thu, 03/10/2011 - 16:24 | 1037756 Papasmurf
Papasmurf's picture

Only one in jail is Bernie.  And that's because he confessed.  He left them no choice.

Thu, 03/10/2011 - 16:54 | 1037875 william the bastard
william the bastard's picture

So for that reason gold goes ro $20,000.

Mmmm ok.

Thu, 03/10/2011 - 17:33 | 1038019 DoChenRollingBearing
DoChenRollingBearing's picture

The preacher I read says $55,000:

His blog is hard to understand, and you need to put in the effort to understand what he is trying to say.

He says that as gold's REAL role of best wealth preserver there is becomes recognized and when paper vs. physical gold's prices diverge, physical will go WAY UP.  Too many paper claims on the physical.

Check it out.

Disclosure: I have CONTRIBUTED to FOFOA's site!

Thu, 03/10/2011 - 17:41 | 1038052 Calmyourself
Calmyourself's picture

No, it goes to $200.00 sell me yours now for $800.00, make a killing..

Fri, 03/11/2011 - 21:50 | 1043037 sub Z
sub Z's picture

About that...

AMY GOODMAN: You suggest in your piece that Bernie Madoff went to jail because it was rich people who were the victims.

MATT TAIBBI: Absolutely. Every single former investigator or current investigator that I talked to said the same thing: Madoff went to jail because the wrong people suffered. You know, it was famous actors. It was, you know, the glitterati in New York. If these were teachers and firemen and all the usual suspects—you know, look at the—we have a million people in foreclosure in this country right now, and a lot of them are there because of predatory lending and because of this fraud scheme, but there are no criminal prosecutions. I think that’s the reality now, is that we don’t see anybody being criminally targeted unless their victims were powerful people themselves.

We have two-and-a-half million people in jail this country, you know, more than a million who are in jail for nonviolent crimes. And yet, we couldn’t find a single person on Wall Street to do even a day in jail for losing 40 percent of the world’s wealth in a criminal fraud scheme? And that tells you that we have—this goes beyond the cliché that rich people have better lawyers and they have an advantage. This is a step beyond that. This is a situation where the system is completely corrupted, and it’s true regulatory capture. The SEC and the Justice Department are essentially subsidiaries of Wall Street.

"Where are the Handcuffs?" Why Aren't Bankers in Jail?

Inside Job: “Not a single executive has gone to jail

Thu, 03/10/2011 - 16:58 | 1037880 Shell Game
Shell Game's picture

You really think this government and this government's debt will be around by 2020?  Revolution and repudiation well before then.  One think you are dead right on is the exchange of paper for real money.

Thu, 03/10/2011 - 14:25 | 1037106 koot
koot's picture

Dead on, and the dead point being "Peak Fiat Currencies".  This is what is dying around the world.  When people realize that Cash in Fiat currency accounts becomes more a liability than an asset, things happen fast.  What is money?  This is something people are going to learn, most the hard way very few the easy way.

Thu, 03/10/2011 - 14:32 | 1037145 ghostfaceinvestah
ghostfaceinvestah's picture

Mises will be proven correct eventually

Thu, 03/10/2011 - 14:58 | 1037292 chumbawamba
chumbawamba's picture

I've always heard it was Marx that would eventually be proven correct.

So this sets us up for the 21st Century Edition of the WWE Smackdown!


Which socioeconomist will end up being right?

Will we end up with a libertarian free market economy or a statist socialist republic?

The answer is coming to you after these commercial messages!

I am Chumbawamba.

Thu, 03/10/2011 - 15:48 | 1037596 equity_momo
equity_momo's picture

I am no Marxist but i do believe he is in the process of being proven right for the past 3 years (possibly even longer till the last recession).

Capitalism RIP. You served us well until we succumbed to the inevitable end point.


Thu, 03/10/2011 - 16:28 | 1037781 chumbawamba
chumbawamba's picture

If Capitalism is dead, it died a long time ago and was replaced by fascism.

Anyway, fuck all these isms.  Just give me a free market and get the fuck out my way.

I am Chumbawamba.

Thu, 03/10/2011 - 16:33 | 1037796 equity_momo
equity_momo's picture

Oh i'll gladly get the fuck out of your way once we get that new paradigm of free markets. I am not sure mankind has ever had free markets though so its a big ask.

Thu, 03/10/2011 - 16:57 | 1037887 rich_wicks
rich_wicks's picture

Oh, we have certainly had free markets before.

In the absence of a government, you always have a free market and you can literally buy or sell anything in one of those.

I am not a proponent of ABSOLUTELY free markets - but I doubt anybody thinks you should be able to buy or sell lives.  We need a minimal government to prevent that kind fo crap, but only a minimal one.  We don't need a government to run the TSA, we just need a government that will hold an airline reponsible for allowing a terrorist to get on board.

That's all.  Businesses want to stay in businesses, especially when there is no corporate shielding.  Get rid of the corporate shield, and all this funny business is going to go away when the CEO loses all his ill gotten gains for driving his company into the ground, along with all the board members.

Thu, 03/10/2011 - 17:02 | 1037906 equity_momo
equity_momo's picture

In agreement with that rich.

Thu, 03/10/2011 - 17:39 | 1038043 chumbawamba
chumbawamba's picture

There is no conflict between human rights and absolute free markets.  No one in their right liberty-minded mind would think to enslave a human being for sale as chattle.  Any such transactions should be met with disgust, condemnation and action to end it, with force if necessary.

The ultimate solution is to arm everyone.  A slave can only be taken when there is a severe imbalance in power.

Free the World: Arms to All.

I am Chumbawamba.

Fri, 03/11/2011 - 00:03 | 1039352 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Oh, we have certainly had free markets before.In the absence of a government, you always have a free market and you can literally buy or sell anything in one of those.

In agreement with that rich.

No, just no.

Who enforces contracts when a party goes rogue on it and there is no government? You going to do it with your guns and ammo? Then the other guy just has incentive to pay for protection from a mafia or "privately competing defense corporation".

Men are shitty assholes, in general, and in the absence of government this does not change. Some could argue that they behave like even worse assholes in the absence of government.

We have never had free markets before and I doubt we ever will. But go ahead and believe in free markets and unicorns too, if you like. While you're at it, go ahead and take the energy you could spend in debunking your own fallacies and apply it toward debunking the fallacies you see in others. That's the way to feel like a winner and to be one too!

edit: I'm reading more of your stuff down the page now... Maybe you meant "in the absence of government regulation, favoritism, corruption" we could have free arguments. I guess that could be so. Maybe as we come through the crises, people will come to prefer a government that does keep hands off all markets. Maybe. First thing we have to do? Abolish democracy forever. I don't mean abolish liberty or freedom. I mean abolish the ability for a majority to vote itself what it does not deserve. Second thing to do? Exorcise corruption and dishonesty from our cultures as much as possible, ostracizing and punishing corrupt business practices without preference or prejudice. But good luck with all this. Next thing you know you will hear me start talking about unicorns like they're real.

Fri, 03/11/2011 - 00:58 | 1039566 chumbawamba
chumbawamba's picture

What are governments but pacts between clans, tribes, and gangs.  These simply evolved over time into having the veneer of officialdom, and we grew to accept it.  Forced to accept it is probably more accurate.

So we simply draw up new pacts and we, as honorable men, stick to them.  If we don't, we pay the consequences.  And there should be.  Ostracism (financial and social), eviction, even deletion if the transgression is serious enough.  Government is obsolete, and should not have a monopoly on force, as it has proven itself both inefficient and corrupt.  I can take care of my own disputes, as long as I'm allowed to enforce a social code of ethics with the threat (and occasional use) of a shotgun.

I am Chumbawamba.

Thu, 03/10/2011 - 17:11 | 1037946 Confuchius
Confuchius's picture


The most likely "ism" is now "ion" as in disintegration!

Thu, 03/10/2011 - 17:40 | 1038046 chumbawamba
chumbawamba's picture


I am Chumbawamba.

Thu, 03/10/2011 - 16:09 | 1037696 rich_wicks
rich_wicks's picture

Marx was just some crazy Jew who wrote a few crazy books.  His ideas have never actually been implemented, although every communist nation would claim otherwise - he was desperately poor for most of his life, and never had any understanding economics.

To call him a socioeconomist - is a stretch.  He was just a nut.

He failed to understand that in a truly capitalist system (not a fascist system, not a kleptocracy) that capital flows to those who make products that society needs and wants and buy them voluntarily, and as a result are the best group of people to provide for society.

He viewed these people as exploiters, but they weren't.  They were the producers of society, and they still are.  They match maket demand with market needs and they are well paid for it, when they do well.  When they don't do well, in a capitalist system, they go bankrupt.

Now in a fascist system, like our banking system, even if they don't do the right thing, and they screw up making worthless products (like CDOs for example) they still stay in business to continue wasting money and misallocating it, while their superior competitors languish as small banks that can't take over more market share, because the government prevents them.

Thu, 03/10/2011 - 16:32 | 1037790 equity_momo
equity_momo's picture

I thought his point was capitalism would eventually be corrupted by politics and anti-competitiveness (ie anti-capitalistic) agendas that would lead to its eventual implosion?  

If you take competitiveness to its Nth degree , you end up with no competition. Politics just expedited that journey.

we havent had true capitalism for quite some time - we even have a Marxist as figurehead of the USA. How ironic!

Thu, 03/10/2011 - 16:53 | 1037863 rich_wicks
rich_wicks's picture

Well, corruption is part of the system too - which is why you end up with black markets, BS currencies that aren't backed by anything, credit collapses, and the eventual downfall of governments keeping non competitive anti-capitalist systems alive.

Mises appears to have been correct about a lot of his theories.  He just looked at the way people were and how that made an economy, and predicted based off from that.  Mises would be predicting a complete collapse of fiat currencies today and eventually, a rebirth of capitalism at the end of it.

Marx wanted to make people something they aren't.  He had some nice ideals, but he never took into account what people really are like.  Mises just looked at how people were, and made his models predicated upon that.  I don't know if Mises was happy with how people were, but his theories are proving useful to me.

Mises never proposed a system either, like Keynes did or Marx did.  He just said, this is the system that would always evolve when force isn't applied by a government to thwart it, and any government that tried to thwart it, would eventually collapse.  I think that sums him up in a nutshell.  He was the only scientist I know of in economics.

Thu, 03/10/2011 - 17:05 | 1037915 chumbawamba
chumbawamba's picture

That's basically it.

I am Chumbawamba.

Thu, 03/10/2011 - 17:09 | 1037935 equity_momo
equity_momo's picture

Your last paragraph is key.   But governments are like the universe. They will expand until theres nothing. That puts great difficulty on plotting a timeline for Mises theories.

Neo-darkages here we come.

Thu, 03/10/2011 - 16:33 | 1037793 chumbawamba
chumbawamba's picture

I can't disagree.  Marx is a mental midget compared to Mises.

I am Chumbawamba.

Thu, 03/10/2011 - 16:57 | 1037885 fiddler_on_the_roof
fiddler_on_the_roof's picture

had to junk you. Marx was a classical economist who knew how the mind of ordinary folks works(both capital and labour). He was certainly more hard on the capitalists, but he was right that capitalists will always strive to create monopoly and consolidation(media, Indistry, Finance....) and they will squeeze labour so hard that and make them debtors that ultimately they will make their own rope to hang. " 'The last capitalist we hang shall be the one who sold us the rope.' Labour never has power in present day China or former Russia, it was always a few elites ruling the masses.

Fri, 03/11/2011 - 01:15 | 1039568 rich_wicks
rich_wicks's picture

had to junk you.

I would assume "junk" indicates junk, not something you simply disagree with.  You know, something like, grow your penis by 15 inches tomorow, just send $19.99 in 5 easy payments to...

Marx was a classical economist

No, he wasn't.

You don't understand what a capitalist is.  A capitalist that is inside the government controlling laws, bills, etc in order to gain a strategic advange isn't a capitalist anymore but is instead a fascist.

It's the responsibility of people and government to stop fascism.  The US is openly fascist by bailing out corportaions like Goldman Sachs, and AIG, instead of letting them go broke.  The corporate shield is part of fascism. The concept that a corporation is a legal entity is part of our fascist system.

Our media covertly encourages fascism by constantly calling it "socalism" if it's Fox News or "capitalism" when it's no any other station.  Our media sucks.  If you believed them about weapons of mass destruction, and the new economy and why housing won't go down, then you believe them about this too.  Their job is to confuse and lie to you.

Anyhow - Marx didn't know what a fascist was, but Mussolini and Hitler made it pretty clear and that really is a good part of our system today.  Until you understand that, you won't understand what is going on today, or how to stop it.

Thu, 03/10/2011 - 18:49 | 1038383 4horse
4horse's picture

 you can sell a capitalist the rope with which to hang him

Thu, 03/10/2011 - 18:55 | 1038419 A Texan
A Texan's picture

Marx was not Jewish, though he was descended from Jews.  His family converted to Lutheranism in order to be able to become a lawyer, a profession closed to Jews at the time.  Marx himself was an atheist.  His family history, which he rejected out of hand, has nothing whatsoever to do with his sick ideas.


It is just amazing - Jews are blamed for Communism and all of its evils because of Marx, Engels and Trotsky, yet also blamed for all of Capitalisms evils.  Well, it can't be both ways, decide which it is.

Fri, 03/11/2011 - 01:18 | 1039616 rich_wicks
rich_wicks's picture

Well Ludwig von Mises was a Jew.

And probaby one of the greatest economists that has ever been alive.

Fri, 03/11/2011 - 02:49 | 1039798 Ahmeexnal
Ahmeexnal's picture

Jesus effin Christ and Muhammad were too.

Thu, 03/10/2011 - 18:09 | 1038152 Diogenes
Diogenes's picture

Marx has already been proven right in a weird way. A large chunk of the world did go Communist, they did bring in Socialism as the first stage toward Communism, and the state eventually did wither away. Just not in the way everyone expected.

Thu, 03/10/2011 - 15:12 | 1037394 The Disappointed
The Disappointed's picture

And Gresham too!

Don't spend your nickles!

Thu, 03/10/2011 - 15:18 | 1037443 DoChenRollingBearing
DoChenRollingBearing's picture

I bought $80 in nickels yesterday, looks like the US Mint will reformulate the nickel before long.

Thu, 03/10/2011 - 15:44 | 1037570 chumbawamba
chumbawamba's picture


Let me take you through a mental exercise:

Imagine, you're back in 1965.  January 1.  Debasement is in the air.  The US Mint has just rolled out its brand new cupronickel replacements for the coins that once had silver content.  There is now a mad scramble to collect up every last silver coin in circulation and once again prove Gresham right.

Now, let's zoom forward in time.  Imagine now it's 2012.  That's not too far off.  In fact, that's next year!  Debasement is once again in the air.  Big time.  The US Mint has just rolled out its brand new stainless steel replacements for the coins that once had nickel and copper content.  There is now a mad scramble to collect up every last nickle in circulation and (once more) prove Gresham right.

In conclusion: $80?  Come on, man, you can do better than that.  This is another opportunity of a lifetime!

Consider this: the current US nickel, an alloy of 25% nickle and 75% copper, is worth more in metal value than a US dime.  Not crazy enough for you?  Ok, consider this then: a US nickel is worth more than a US quarter.

Yes, it's fucking true.  The obvious conclusion should be drawn here.

I am Chumbawamba.

Thu, 03/10/2011 - 15:59 | 1037652 DoChenRollingBearing
DoChenRollingBearing's picture

I was talking with a friend yesterday about nickels, and he poopoo-ed the whole idea.

I emailed him back that if he had saved his silver quarters in 1965, he would have gotten 25 x his money as a gain.

I see pretty much the same thing happening this time, bags of "junk nickels" coming into the market in a year or two or three.  LOL.  Yeah, I know, $80 is not much, but I have been saving the nickels from spare change for over a year now.  Maybe I will go out and buy $80 more when I get lunch today...

Every day I check coinflation, I'm there in the choir brother.

RockyRacoon!  A coin coon's perspective would double the intellectual input here...

Thu, 03/10/2011 - 17:13 | 1037947 chumbawamba
chumbawamba's picture

Nickels are currently a no-lose proposition.  The worst that could happen is you end up with exactly the amount of money you put into them.

If you buy $100 worth of nickels and X then Y, where:

X: we see massive inflation
Y: the underlying metal value of the coin will track with inflation and will ultimately be worth multiples of its face value, same as a pre-1965 US silver coin

X: we see hyperinflation (destruction of the dollar)
Y: they will be tradeable as a source of pure cupronickel, a very useful industrial metal

X: we see deflation
Y: they will always spend like currency, and will always be officially worth five US cents

It's a WIN-WIN-WIN (#winning).

Is there any downside?  I can't think of one.  Is there any reason not to go out tomorrow and exchange $100 or $1,000 or even $10,000 worth of FRN paper for US Mint metal?  I can't think of one.

I am Chumbawamba.

Thu, 03/10/2011 - 17:35 | 1038028 DoChenRollingBearing
DoChenRollingBearing's picture

Just bought $20 more when I got lunch!

Saving some money for my gold purchase tomorrow...

Thu, 03/10/2011 - 17:52 | 1038080 chumbawamba
chumbawamba's picture

That is an acceptable diversion for your dollars ;)

I am Chumbawamba.

Thu, 03/10/2011 - 17:29 | 1037998 Grimbert
Grimbert's picture

I always assumed a Nickel was 100% nickel (I'm not American so what do I know). The fact that it is cupro-nickel makes it no better than any other alloy coin.


I think I'd rather buy silver coins or hoard pure copper. My son and I are currently buying bags of pennies and 2p's to strip out the pre-1992 ones. 8p in copper coins weighs an ounce (useful for small scales). An ounce of copper is worth 16p.

Fri, 03/11/2011 - 01:04 | 1039577 chumbawamba
chumbawamba's picture

They have 25% nickel, while dimes, quarters, half dollars and dollar coins have only 8% nickel.  Even though a nickel weighs less than a US quarter, it still has more nickel content and therefore is more valuable than the quarter (by like a penny).  It's also an alloy, whereas the quarter, dime, etc. are a sandwich of the two metals.

I am Chumbawamba.

Fri, 03/11/2011 - 02:13 | 1039735 robertocarlos
robertocarlos's picture

I separated my pre 82 US pennies from the post 82 US pennies. I could easily see the pre 70s coins as copper but had a hard time telling the 70s from the 90s. The 70s are too light in colour and fooled me in guessing the year. Now I have a whole 5 dollars worth of almost pure copper.

I will visit the USA one of these years and return your post 82 pennies by buying a chocolate bar or two. I want our Canadian quarters back.

Thu, 03/10/2011 - 17:05 | 1037899 fiddler_on_the_roof
fiddler_on_the_roof's picture

How do you buy this in large amounts ? As Chumba  says, it looks like a good idea.

Also How do you sell them at a later date. Nickels takes up lots of volume.

Thu, 03/10/2011 - 17:20 | 1037966 chumbawamba
chumbawamba's picture

Just tell the teller at your local branch that you want $X in nickels.  If it's a large amount they'll order them for you.  Most banks will not charge to order them.  My bank didn't charge me and neither did the bank of a fellow I inspired to get his first $1,000 (he plans to eventually get $10,000).  It's part of what they do.

As far as selling them later, worry about crossing that bridge when we get to the river.  It is presently illegal to melt down US coin currency (enacted during the previous up-wave of the secular commodity metals bull) so you won't be able to legally melt down the coins, but that's not to say you can't sell them on to someone else who might.  And nothing's illegal unless you get caught.  And then it comes down to who can tell a better story.

Anyway, storage is indeed an issue.  Just put them in a sturdy steel container, like a toolbox or ammo cases, and find a corner of a cabinet in the garage to stack them and then lock it up.  Each box of $100 weighs 22 pounds, so it's no more valuable than a good set of sockets (both are forms of wealth).  You do want to keep them secure, but you don't have to go crazy with the security for them, so you can put them just about anywhere there's room.  The basement, the closet, the laudry room, maybe the floor of the pantry, etc.  No self-respecting thief is going to try to haul out 22lbs of nickels; he'd sooner go for the socket set.

I am Chumbawamba.

Thu, 03/10/2011 - 18:16 | 1038196 Diogenes
Diogenes's picture

In the early 70s there were guys who made a business of transporting large amounts of Canadian silver change into the US where they exchanged it for US change, which they then took to Canada.

It is not illegal to melt US coins in Canada, or Canadian coins in the US.

Thu, 03/10/2011 - 19:08 | 1038493 A Texan
A Texan's picture

It is, however, illegal (since December 2006) to transport coins out of the US in excess of $5 face value, or $100 if for genuine numismatic purposes.  Big ass fines for violation.  Same applies to pennies.


Note that these regs are patterned after those regarding the melting of dimes, quarters and halves from 1967-69, and pennies from 1974-78...each of which expired or was revoked.  The present regs will also be revoked at some point, likely when enough of the cheap-ass replacement slugs replace the nickels and pennies in a couple of years.


In the meanwhile, I'm buying $10-$20/week of nickels and putting them away, and also getting loads of pennies (you can order them in $25 boxes from your bank - I got 4 this week) to sort out the pre-'82s that have 95% copper.  Bigger bang for the buck (no pun intended), but sorting is a PITA.  I find that about 14% are the pre-'82s, and I get about 1 in 500 that are wheat-backs, with the occasional Canadian penny.  I'm sorting out pre-1960 nickels out of the hope that they may be a bit more valuable, and also the low-mintage 2009s.  Otherwise, the nickels get re-rolled and stuck in a .30 caliber ammo can.  Apparently, one can get between $188 and $192 of nickels in one can, depending on how you stack them:

Thu, 03/10/2011 - 20:06 | 1038742 chumbawamba
chumbawamba's picture

Thanks for the link to the US Mint article.  I wonder how many people unwittingly break that law everyday by driving across the border of either Mexico or Canada with $5 worth of nickels and pennies stuffed in their ashtray and lost under the mats and between the seats of their car?

Searching through a couple boxes of nickels so far has yielded two Buffalos and one war nickel (1943: 35% silver, 9% manganese), and a handful of otherwise pre-1960s.  Certainly not worth it, but it's fun, and I have better things to do, so it's a good time waster.

But if you're going to go through pennies you'll need to get an automated sorter.  Check eBay.  You'll find what you need there.

I am Chumbawamba.

Thu, 03/10/2011 - 15:18 | 1037445 chumbawamba
chumbawamba's picture

Been saving every one for over a year now.  Just picked up $1,000 worth from the bank ;)

I am Chumbawamba.

Thu, 03/10/2011 - 17:02 | 1037902 william the bastard
william the bastard's picture

$1,000 in nickels is $1,000 of spending money. Is it a pain to carry around?

Thu, 03/10/2011 - 17:05 | 1037926 tmosley
tmosley's picture

This is why your mother spends your inheritance of silver quarters on booze instead of saving it for you.

She asked me to tell you to pick up your room.  It's a fucking pig sty, boy.

Fri, 03/11/2011 - 02:17 | 1039743 Stock-Paper-Silver
Stock-Paper-Silver's picture

tmosley honestly, not sure how the heck you do it day in and day out! Others come and go, names change...

Just about everyday since August I scan ZH for some real news to augment the drivel. At the end of the day I scan the comments for the occasional nugget link or rumor, but mostly for the occasional humorous post but I rarely chime in. There are a few other regulars that are good, but you manage take the cake on a daily basis. Your relentless troll bashing, sacasm, and throwdown before the drop of the hat coupled with the pithy knowledge, perspective and most of all, trash talking and wit, make the rent-a-trolls look so foolish, it's almost hurts to watch and yet I must.

Nobody is above reproach, but everyday when I'm scrolling and I see that little black monster with the red eye I have to stop and read just to see who the recipient is of the daily "Fist Down the Throat."

So in short... thanks for the laughs, keep up the good work.

Thu, 03/10/2011 - 17:23 | 1037973 chumbawamba
chumbawamba's picture

That isn't even remotely witty.

Thu, 03/10/2011 - 17:43 | 1038053 DoChenRollingBearing
DoChenRollingBearing's picture

But, carrying them around IS good exercise!

Thu, 03/10/2011 - 17:58 | 1038092 chumbawamba
chumbawamba's picture

You ain't kidding.  A box of $100 (2,000 nickels) is not much larger than the size of a typical construction brick, but they weigh 22lbs.  Copper and nickel share basically the same density, not quite as dense as silver (8.9g/cc vs. 10.49g/cc), but heavier than the equivalent sized hunk of steel (~7.85g/cc).

I am Chumbawamba.

Thu, 03/10/2011 - 14:40 | 1037193 tickhound
tickhound's picture

Ah yes, the end game.  Faith based money vs real money... It will certainly be an "expensive" education.

Thu, 03/10/2011 - 14:26 | 1037119 lsbumblebee
lsbumblebee's picture

"Everyone thinks if stocks plunge gold will plunge."

Speak for yourself Mike o'buddy o'boy.

Thu, 03/10/2011 - 14:29 | 1037134 Vergeltung
Vergeltung's picture

great read!

Thu, 03/10/2011 - 14:30 | 1037136 John Wilmot
John Wilmot's picture

Well said, the idea that the dollar would perform as it did in 08-09 again is insane. The world is rapidly moving away from the dollar for international exchange and into gold and silver or other currencies; the American fiscal situation continues to deteriorate; it is by all appearances impossible for the Fed to stop monetizing debt without default; the American economy in real terms is sputtering badly.

Wheres the safety??

I think another market crash, i.e. if QE3 doesn't occur, will witness bonds and general equities selling off fairly hard, with some commodities (PM's and oil esp.) rallying. This is a correction, not a crash. If there is a crash, because QE3 never occurs, then we will arrive at the same position as it might have taken us years to reach under QE-infinity: currency crisis, but in this case, through default.

Thu, 03/10/2011 - 14:45 | 1037235 Commander Cody
Commander Cody's picture

QE to infinity!  Why?  Because...somebody has to buy the Treasuries.

Thu, 03/10/2011 - 15:01 | 1037317 DosZap
DosZap's picture


This is a correction, not a crash

We better Hope this is a CRASH, that can be corrected.

I am clueless why we do not just declare a DEFAULT.

Evey one could do the same, and start from scratch.

No need for Nukes then.



Thu, 03/10/2011 - 14:31 | 1037140 william the bastard
william the bastard's picture

If it doesn't stick to the wall Mike, it's probably a poorly cooked argument.

Thu, 03/10/2011 - 18:06 | 1038138 BigJim
BigJim's picture

If it doesn't make any sense, it's probably a "william the bastard" comment.

Thu, 03/10/2011 - 14:31 | 1037150 CU1981
CU1981's picture

Wrong... Gold up and Stocks up. Gold up lots more tho . Before it all falls to pieces.


My .02

Thu, 03/10/2011 - 16:16 | 1037725 rich_wicks
rich_wicks's picture

What do you think is going to happen?  Stock and gold are going to collapse, relative to what?  A currency in which the US government adds like 1.5 trillion dollars a year to in debt?

That's more more than the M1 money supply.

No, neither stocks nor gold are going to crash.  The current bubble that is working it's way out, is the dollar.

Thu, 03/10/2011 - 14:50 | 1037200 Flakmeister
Flakmeister's picture


Thu, 03/10/2011 - 14:41 | 1037202 MrSteve
MrSteve's picture

Gold has been the monetary standard longer than debt has been crushing fiat currencies, though governments with gold-based currencies also have been destroyed by too much debt. The golden rule is that gold rules because it is a stable store of value, the ultimate basket of commodities that fiat currencies trade for out of convenience. The convenience is no longer satisfactory, so back to gold for a while. Don't miss out on the conversion by having insufficient gold.

Thu, 03/10/2011 - 14:57 | 1037288 DoChenRollingBearing
DoChenRollingBearing's picture

Have some Pb and Pb delivery systems on hand to secure your gold.

Also, having food & medical supplies on hand would be smart if things get REALLY BAD.

Thu, 03/10/2011 - 14:44 | 1037208 fiddler_on_the_roof
fiddler_on_the_roof's picture

I agree with the conculsion. This time 2011 is different from 2008. Gold will diverge from everything(even Oil and Silver).

Thu, 03/10/2011 - 14:47 | 1037238 Flakmeister
Flakmeister's picture

 There may be some divergence between gold and oil, do not expect it to last long though.. The two are tied at the hip on a very fundamental basis.

Thu, 03/10/2011 - 14:42 | 1037217 Bastiat
Bastiat's picture

Blthe just threw the Kaopectate bottle at the wall.

Thu, 03/10/2011 - 14:58 | 1037287 william the bastard
william the bastard's picture

while you circle the drain

Thu, 03/10/2011 - 14:58 | 1037301 DoChenRollingBearing
DoChenRollingBearing's picture

Wow, william and Blythe...  Now there's a couple!  Call People Magazine ASAP!

Thu, 03/10/2011 - 14:59 | 1037302 chumbawamba
chumbawamba's picture

Is that what the kids are calling a rimjob today?

I am Chumbawamba.

Thu, 03/10/2011 - 15:16 | 1037410 DoChenRollingBearing
DoChenRollingBearing's picture

Chumba, if you are still around I would like your view on a notion I present below (downthread).

Thu, 03/10/2011 - 14:46 | 1037231 glenlloyd
glenlloyd's picture

It's the story of every fiat currency, the temptation to inflate and create 'good times' is always present and politicized, so the inflation continues...until it can't.

It's tragic really, but we will see the collapse of all that we've known. The good part about it is that it will expose the waste/swindle for what it is and it will all fall away.

Those that say the Germans are too paranoid about inflation don't fully understand what kind of hell Germany went through in the 20's. The history of these events tells you how best to prepare.

I'm convinced it will be worse here because of the reliance of so many on govt largesse.

Thu, 03/10/2011 - 18:19 | 1038211 Diogenes
Diogenes's picture

Germans saw their money go to zero three times between 1914 and 1945. Fat chance pulling that scam again without causing a stampede to hard assets.

Thu, 03/10/2011 - 14:45 | 1037234 Quixote2
Quixote2's picture

My take-away:

"What we are witnessing in the Middle East is the dismantling of the American Empire..."

Thu, 03/10/2011 - 14:55 | 1037269 velobabe
velobabe's picture

tryler, you gave repeated very hard captcha. but finally guess one answer right, thanks. i was going to call the narrator on you†

mikey, i didn't know you worked at bernstein. in NYC or Boston. why did you quit? nice article. joe biden is a traitor, and should be charged and sentenced.

Thu, 03/10/2011 - 15:01 | 1037320 DoChenRollingBearing
DoChenRollingBearing's picture

velo, I have noticed a curious pattern re captcha.  During the day and early evenings (when traffic is very high), the captchas tend to be easy.  

Late at night, they are hard!  When there are fewer people hitting the ZH servers.



Agree re Joe "Hair Plug" Biden.

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