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The Exter Inverted Pyramid - A Refresher

Tyler Durden's picture


This morning, a vastly expansive essay by Lew Spellman of the University of Texas in Austin titled "Warren Buffett and the New Calculus of Gold" is making the rounds, and while the narrative is largely defensive of gold, and its role as the only true safe collateral in a world rapidly depleted of the latter (as we have been arguing for the past 2 years) as proven over and over by the fact that the entire modern system now relies more on re-re-re-rehypothection of existing collateral than on spending money for CapEx purposes and to replace an aging asset base, we wonder: is this realization really just now being grasped by the world? Are the forward thinkers of the world only now understanding that in a world with hundreds of trillions of imaginary collateral whose ultimate owner will never be tracked down, and a daisy-chained bankrupt domino collapse will come before anyone finds out who owns what (much in the same was as MF Global is a symptom of the entire modern financial system), only that which is tangible, undilutible and real will have value? Finally, is the avant-garde of Keynesian thought only now (re)discovering the Exter inverted pyramid? Because one can spend 30 minutes reading the Spellman essay, or... cast a quick glance at the picture below to understand the true value of everything in a world in which the monetary fabulation of the past 99 years is finally unwinding.

One picture in this case is absolutely worth well over a thousand words.


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Mon, 04/23/2012 - 08:55 | 2366381 GetZeeGold
GetZeeGold's picture



On sale!!!!


Blue light Monday morning surprise special.


Mon, 04/23/2012 - 08:56 | 2366386 SilverTree
SilverTree's picture

Let us Vajazzle that graphic, and all will be well.

Mon, 04/23/2012 - 09:19 | 2366457 bigdumbnugly
bigdumbnugly's picture

"Are the forward thinkers of the world only now understanding that in a world with hundreds of trillions of imaginary collateral whose ultimate owner will never be tracked down, and a daisy-chained bankrupt domino collapse will come before anyone finds out who owns what (much in the same was as MF Global is a symptom of the entire modern financial system), only that which is tangible, undilutible and real will have value?"

apparently not quite yet.  gold and silver getting reamed again this morning.

Mon, 04/23/2012 - 09:32 | 2366493 A_MacLaren
A_MacLaren's picture

AND the fiatistas are still in love with their credit default swaps.

Mon, 04/23/2012 - 09:59 | 2366577 edwardscpa
edwardscpa's picture

I find it curious that Real Estate and Commodities are up in the red zone.  They are hard assets after all.  Gold is a commodity too, only it serves as money, so I agree it should top the other hard assets.  ...but it's good to have hard assets that are less portable - harder to steal - like real estate.

Mon, 04/23/2012 - 10:04 | 2366597 I am more equal...
I am more equal than others's picture

Wiemar republic would suggest the opposite.  Values dropped more than 80%.  Think real return that is the interest rate less inflation.  If you sell real estate in a hyper situation you'd lose between contract date and close date.  Also, who os going to lend under that situation?  Its called an illiquid investment for good reason. 

Mon, 04/23/2012 - 10:39 | 2366768 mess nonster
mess nonster's picture

There are two kinds of real estate. One the one hand, there are tract homes, apartments, condos, and commercial buildings. Essentially, this is all urban real estate. This kind of "property" rightfully belongs exactly where it is on the pyramid. It's value is highly determinate, based on all sorts of human "laws" and constructs that can collapse at any moment and render this property worthless.

On the other hand is land capable of producing food or other raw materials. This is rural real estate. To someone who lives on the land, and has the skills to realize economic value (ie, food) from the land, this property elevates the owner to a realm entirely separate from the flucutations of money valuation. So what if the "price" of the land drops to zero? The owner is independent- he/she gains sustenance from the land itself, and the economy, so called, can go f**k itself.

Land with water will make a man truly free- hence Jefferson's desire to base a true free republic around small agricultural freeholders who on the most essential basis were independent.

Mon, 04/23/2012 - 10:53 | 2366841 DosZap
DosZap's picture

On the other hand is land capable of producing food or other raw materials. This is rural real estate. To someone who lives on the land, and has the skills to realize economic value (ie, food) from the land, this property elevates the owner to a realm entirely separate from the flucutations of money valuation. So what if the "price" of the land drops to zero? The owner is independent- he/she gains sustenance from the land itself, and the economy, so called, can go f**k itself.

Your are 100% SPOT on, for the past 5000yrs.........but no longer.

The PTB have passed already  laws stopping you from doing exactly what you want to do................

Mon, 04/23/2012 - 11:23 | 2366972 LowProfile
LowProfile's picture

Catching comes before hanging.

Force projection can be an issue when you can't pay to project your force forcefully.

All politics are local.

You don't live in the country.

Mon, 04/23/2012 - 11:49 | 2367112 BidnessMan
BidnessMan's picture

The flaw is that the PTB rely upon the mid and lower level employees for implementation.  If / when things really go in the dumper, and the implementers are not getting paid or get overwhelmed, it all breaks down.  I was in New Orleans after Hurricane Katrina, and nothing was getting implemented until outside resources came in.  The police and municipal workers all melted away.  There were no foreclosures or evictions for weeks after Hurricane Katrina.  The legal system and the police will be overwhelmed.  Out of sight and out of mind will a good place to be until the inevitable Jubilee.

Mon, 04/23/2012 - 11:57 | 2367143 LowProfile
LowProfile's picture


We have a winnahhhh...!

Mon, 04/23/2012 - 13:19 | 2367512 tocointhephrase
tocointhephrase's picture

Property is worth some its weight in metal as long you follow the cliche rules (location location location) so for you guys over there its like around Central Park, for this side of the pond its Central London, so yes Tyler we do indeed have a winner! Can't wait for the physical average in Gold. If i'm not mistaken thats around 50 oz's, but please quote me if i'm wrong!

Mon, 04/23/2012 - 21:44 | 2368912 WillyGroper
WillyGroper's picture

Been living that way since 1984. Not an easy life, but a rewarding healthy one, at least until they monitize or pollute the water well. Hope all these whiney Boomer Blamers can comprehend ur post, but then again some people fish while others cut bait. 

Mon, 04/23/2012 - 10:46 | 2366808 MachoMan
MachoMan's picture

It's called if you haven't moved into a permanent residence already, then you're probably renting...  rent changes month to month in that scenario... 

There are certainly risks...  but there are also ways to mitigate risk...

Mon, 04/23/2012 - 11:18 | 2366935 LowProfile
LowProfile's picture


I find it curious that Real Estate and Commodities are up in the red zone.

The issue is liquidity, and RE is very illiquid (even with clear title).

I would make a few changes however:

Commodities I agree should be further down depending on utility (food lower, rare earth elements higher). 

Right before gold we should see fine art, gemstones, copper, nickle and silver, in that order

Right after gold we should see lead & brass.

Mon, 04/23/2012 - 11:40 | 2367077 fourchan
fourchan's picture


Mon, 04/23/2012 - 11:42 | 2367079 LowProfile
LowProfile's picture

I am?

Point out where.  RE is a LIQUID asset?  ORLY?


You're an idiot.

Mon, 04/23/2012 - 12:18 | 2367223 DoChenRollingBearing
DoChenRollingBearing's picture

@ edwards CPA and LowProfile

Correct.  Exter's Pyramid shows LIQUIDITY!  Not all hard assets are liquid (easy to sell at near their worth).  Yes, I might tinker a little bit to with relative liquidity of various things.  Lead and brass surely would be liquid as of course silver.  Fine art will hold its value over longer periods of time, but might not be liquid (only way to get rid of it, in extremis, would be to sell it a a fire sale price).

Mon, 04/23/2012 - 13:36 | 2367578 edwardscpa
edwardscpa's picture

Ah - yes, then, a liquidity pyramid makes sense.  As a store of value, I'd put RE up higher.  And I use value loosely.  I pay cash, and am not concerned about selling at unfavorable times.  I'm talking about rental property, where rents would eventually scale with the value of the currency (or a new currency...).  Something that offers some level of protection, vs a bond say.  In short-term "societal breakdown", a squatter may be hard to evict as noted above, but provided we don't revert to being cave men, law and title will eventually kick in.  I wouldn't suggest buying RE with your milk money, but with excess cash, why not?

Mon, 04/23/2012 - 10:15 | 2366646 DosZap
DosZap's picture

gold and silver getting reamed again this morning.

To be the EU crashes and burns, we will ultimately lose 40% of our export business.

Whoooops dere it tis!!!..................then , there goes our market, make sure you keep lots of dry powder,because the deal of the century is coming our way. Great shot at gold at under 1k, and silver in the teens, lower twenty region..........

Just hope you are fast on the trigger.

Mon, 04/23/2012 - 11:57 | 2367140 GrinandBearit
GrinandBearit's picture

Fast on the trigger is one thing, but the availability of phyzz at those prices is quite another.

Mon, 04/23/2012 - 12:20 | 2367230 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 to Dos and Grin.

Get your pysical while you can.Wheter it is two years from now, or two weeks from now, real gold will be hard to get., especially at the low prices we see now.

Mon, 04/23/2012 - 13:30 | 2367526 tocointhephrase
tocointhephrase's picture

¬So Whoooop der it iz whoooop der it iz


And as per previous post, thank you Blythe, you little minx. 1 oz Silver Maples at £25-26 from a London Dealer! (Not from previous post) I could suck your c£iT (and rub my tounge on it at the same time)

Wooop der it iz

Mon, 04/23/2012 - 10:12 | 2366629 Freegolder
Freegolder's picture

I genuinely have sympathy for silver bugs. It's nothing but an industrial metal these days. Look to the future: do you see central banks and Kyle Bass and other wealthy giants buying silver? No, just gold.

At the very least hold 50/50 by value, but silver is going to really suffer when the economies of the world retrench to their post-bubble levels. The futures/physical mismatch will not help you.

Also, be wary of China's huge silver supply, and the market they're just launching, it's bound to drive down prices. Silver could easily be the new Nat Gas.

Mon, 04/23/2012 - 10:36 | 2366750 Bullionaire
Bullionaire's picture



Thanks for the funny.



Mon, 04/23/2012 - 11:39 | 2367078 LowProfile
LowProfile's picture


do you see central banks and Kyle Bass and other wealthy giants buying silver? No, just gold.

He's right.

You're not.

Mon, 04/23/2012 - 12:24 | 2367244 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1


Freegolder, while perhaps a bit uncharitable with his words, is probably right.  The central banks store only gold.

Gold is for preserving wealth.  Silver is for speculating and for spending in a SHTF.  Look, I own silver too.  But, the great $-value of my PMs are in GOLD!

Mon, 04/23/2012 - 10:47 | 2366816 DosZap
DosZap's picture

Also, be wary of China's huge silver supply, and the market they're just launching, it's bound to drive down prices.

Agree to apoint, but the poor Eastern peoples cannot afford any gold, so their next choice is Silver.And there are a hell of a lot of them.Then you have supply and demand,to which silver is in very short supply right now,and as the numbers increse in the eastern bloc, demand for it will also, the only reason its at 31.00 is because the PTB slam it when it starts EVERY run.

Silver has always been the go to for money, used  far more as such than gold over thousands of years.

Mon, 04/23/2012 - 11:38 | 2367066 LowProfile
LowProfile's picture

I wonder if China's game is to monetize silver.

They have (I believe) the longest stretch of history where it was used as sovereign money.

I am a FOFOA follower, but that would throw a huuuuuuge monkey wrench into his thesis.

Mon, 04/23/2012 - 12:27 | 2367250 DoChenRollingBearing
DoChenRollingBearing's picture

FOFOA is my Trail Guide too.  We would have to see if China (and maybe Mexico) did use silver as money.

I kinda doubt that it will happen, but my track record at predicting the future is well-documented to not be very good...

Mon, 04/23/2012 - 13:46 | 2367616 tocointhephrase
tocointhephrase's picture

Trolling plain and simple

Mon, 04/23/2012 - 09:04 | 2366411 Kina
Kina's picture


Mon, 04/23/2012 - 09:17 | 2366452 PaperWillBurn
PaperWillBurn's picture

Here's where the pyramid originated


It should be read by all

Mon, 04/23/2012 - 09:35 | 2366498 Arnold Ziffel
Arnold Ziffel's picture

excellent read, paperwillburn. thnx.

Mon, 04/23/2012 - 11:22 | 2366963 machineh
machineh's picture

Thanks for the reference, paperwillburn.

If "down" = "more secure," there's a basic problem with the pyramid.

Since stockholders rank lower than bondholders in bankruptcy, "listed stocks" belong ABOVE "corporate bonds," not below.

Stocks also belong above muni bonds, since municipalities have the power to tax and corporations don't.

Good concept on the inverted pyramid, but the asset hierarchy is muddled.

Mon, 04/23/2012 - 12:28 | 2367256 DoChenRollingBearing
DoChenRollingBearing's picture

The pyramid measures LIQUIDITY.  Real estate is a hard asset, but not liquid (defined as being easy to sell at a normal (non-firesale) price).

Mon, 04/23/2012 - 11:32 | 2367035 LowProfile
LowProfile's picture

Mayer adapted it from Exter.

Kind of a chore to find the original.

Mon, 04/23/2012 - 12:19 | 2367228 PaperWillBurn
PaperWillBurn's picture

So change "pyramid" to image as I was talking about the exact image which was posted not "exter's pyramid"

Mon, 04/23/2012 - 09:49 | 2366549 DosZap
DosZap's picture

The Pyramid is screwed,the last one is correct the three above it are as bad as the the top three tiers of the pyramid.

Mon, 04/23/2012 - 10:06 | 2366616 bigdumbnugly
bigdumbnugly's picture

this is true.  but i think the pyramid suggests the order in which wealth flees from one "investment op" or perceived "safe haven" to another.

Mon, 04/23/2012 - 11:03 | 2366882 Arthor Bearing
Arthor Bearing's picture

I agree. Real estate is certainly too high up, it may be overpriced but it is a real asset with ineradicable value unlike many others up there. And somewhere there should be something to indicate that the pyramid expands according to a log scale, and that the top layers should really be wide enough to fill ten or so widescreen computer monitors.

Mon, 04/23/2012 - 12:00 | 2367004 LowProfile
LowProfile's picture

It is a LIQUIDITY pyramid.


It is also dependent on rule of law to establish ownership, and it's price (own or rent) is PURELY A FUNCTION OF THE LOCAL PREVAILING WAGE.

You guys sound like you need to buy some precious metals.

Mon, 04/23/2012 - 12:23 | 2367240 Arthor Bearing
Arthor Bearing's picture

You could have pointed that out without the caps or bold print, though admittedly the condescension may have been warrented since I did not read the linked article but just looked at the picture.

Mon, 04/23/2012 - 11:26 | 2367010 Ag Tex
Ag Tex's picture

The last three millimeters at the tip of the pyramid under "GOLD" will soon read "SILVER".

Mon, 04/23/2012 - 08:55 | 2366385 Squishi
Squishi's picture

Bernanke will own all the Gold after this...

Mon, 04/23/2012 - 08:56 | 2366388 GetZeeGold
GetZeeGold's picture



Of course he will.....that's been the plan all the time.


Hope the Muppets don't figure it out.


Mon, 04/23/2012 - 09:06 | 2366421 Popo
Popo's picture

Bernanke doesn't need to own the gold.  Confiscation was a messy business afterall.

Today, they'll likely pass a Gold Sales and Export Act which puts a 35% tax on all transactions involving gold,  and a 50% tax on gold exports -- with confiscatory penalties for evasion.   

Simple as that, the Gubmint will confiscate the value of gold without having to go through the messiness of seizure.

Don't think it isn't coming.   The good news is that we'll likely hit $5k per ounce right around the time that happens.   The trick to any good trade is knowing when to get out.   And I promise you that most people who were smart enough to buy will not be smart enough to call a top.


Mon, 04/23/2012 - 09:09 | 2366431 spartan117
spartan117's picture

Will there be a tax when I spend my gold?

Mon, 04/23/2012 - 09:14 | 2366442 GetZeeGold
GetZeeGold's picture



If you feel like it......send them a check right now. Warren's secretary did!


Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782


Mon, 04/23/2012 - 09:11 | 2366436 GetZeeGold
GetZeeGold's picture



Sell if for silver......what else would you sell gold for?


Mon, 04/23/2012 - 09:45 | 2366536 A_MacLaren
A_MacLaren's picture

20 acres of farmland with a sharecroppers shack and water rights, 2 mules, more beans, bukkets and bandaids?

Mon, 04/23/2012 - 11:05 | 2366894 trebuchet
trebuchet's picture

+ 4 ak47s ammo and spares

Mon, 04/23/2012 - 09:13 | 2366443 fonzannoon
fonzannoon's picture

There was that article out yesterday about them taxing the 401ks going forward. I am curious to see if they do that. If that pisses people off it could potentially push more people into buying physical. If they then turn around and tax the hell out of that like you say I think things totally break down.

Mon, 04/23/2012 - 10:00 | 2366586 5880
5880's picture

401ks are taxed (deferred)

Mon, 04/23/2012 - 10:37 | 2366701 DosZap
DosZap's picture

401ks are taxed (deferred)

Uh, hate to rain on your parade,but the legislation these idiots are speaking of makes them taxable when the funds are put INTO the 401k, so WHY own them?.

Talk about a disincentive to participate, or even HAVE  a plan is stupid....................................under the proposed NEW rules.

Mon, 04/23/2012 - 10:57 | 2366854 Hedgetard55
Hedgetard55's picture

They then become like a ROTH IRA, except you still get a match from your employer.

Mon, 04/23/2012 - 10:04 | 2366598 DosZap
DosZap's picture

There was that article out yesterday about them taxing the 401ks going forward

I saw it also, idiots. Five will get you ten, that will pass and be made retroactive.

Time to cash out and pay the taxes before Bush tax breaks expires,or they are seized.

No faster way to kill a savings plan.WHY in GODS name would anyone put funds into a plan, that has no benefit for the saver?.

Just like Roths, why cant everyone participate????............stupid.

Be way better off controlling your own money, and either buying hard assets, or putting it in a 1.5% account at the Bank,at least you HAVE access to it.

Mon, 04/23/2012 - 11:56 | 2367137 BooMushroom
BooMushroom's picture

Bullish for mattresses!

Mon, 04/23/2012 - 09:20 | 2366460 LawsofPhysics
LawsofPhysics's picture

You assume that the government will be smart enough to know when a transaction in gold or silver has occurred.  I see it happening in my neck of the woods already.  For the most part, aside from the two parties involved, no one else knows.  FAIL.

Mon, 04/23/2012 - 09:31 | 2366486 fonzannoon
fonzannoon's picture

I am assuming that people are stupid. I am assuming that just the announcement of it, after people saw their retirement accounts taxed very effectively, will be enough to get people to open their eyes. But who the hell knows. Maybe not. Like Stepehen King wrote..

"A mule doesn't like to plow. But he likes carrots. So you hang a carrot in front of his eyes. A mule without a carrot gets exhausted. A mule with a carrot spends a long time being tired. You get it?"


Mon, 04/23/2012 - 08:57 | 2366395 SilverTree
SilverTree's picture

No, Eurasia will.

Mon, 04/23/2012 - 09:04 | 2366418 Kina
Kina's picture

I doubt that he will even have ownership of his own anus when this over.

Mon, 04/23/2012 - 11:18 | 2366942 pupton
pupton's picture

Up arrow for making me chuckle on a Monday with AG getting taken out.  :)

Mon, 04/23/2012 - 10:02 | 2366593 Peter Pan
Peter Pan's picture

So he is  a traditionalist after all !!! Better late than never.

Mon, 04/23/2012 - 08:56 | 2366389 Burr's 2nd Shot
Burr's 2nd Shot's picture

Might need to move govies higher up (lower quality) in the pyramid.

Mon, 04/23/2012 - 08:57 | 2366391 Red Heeler
Red Heeler's picture

I get the point.

Mon, 04/23/2012 - 08:57 | 2366393 francis_sawyer
francis_sawyer's picture

To me... The symbol just looks like a large scale version of the comment buttons at the side of Max Fischer comments (except for the tiny green coloring at the bottom)...

Mon, 04/23/2012 - 08:58 | 2366397 Eclipse89
Eclipse89's picture

Just put diamonds away from that red area...

Mon, 04/23/2012 - 10:08 | 2366621 DosZap
DosZap's picture

Just put diamonds away from that red area...

Where u want em'?, unless they are TOP grade GEM quality, top of the heap, they are almost worthless, DeBeers sets prices on all of them.And owns the entire market.

Mon, 04/23/2012 - 11:26 | 2367009 donsluck
donsluck's picture

Not any more. That lock was broken years ago.

Mon, 04/23/2012 - 13:06 | 2367434 Mesquite
Mesquite's picture

Uh...Don't forget the arrival of 'man-made diamonds'...

Mon, 04/23/2012 - 10:34 | 2366727 HardlyZero
HardlyZero's picture

High quality investment grade diamonds should be far lower, nearer Gold.  Even if DeBeers were to no longer be controlling the diamond market there will always be diamonds.  Diamonds have a way of surviving the problems and are extremely compact and easy to store and move.  See how wealth is transferred when there are major upheavals...portable and 'no backer' assets will always shine..."shine on you crazy diamond".  Silver, platnum and maybe palladium should be on this 'modern' inverted-pyramid.  And add "all other derivatives".

Mon, 04/23/2012 - 13:24 | 2367532 animalspirit
animalspirit's picture

Can you tell a difference between a synthetic diamond created in a lab and the one your girlfriend wants to wear?  Thought not.

As far as the incluson of the other major precious metals don't forget its digital brethren, bitcoin.  If a form of money needs to be delivered someone electronically (say a family member in another country), fast, that gold and silver might not be as useful as an online equivalent. 

Mon, 04/23/2012 - 09:00 | 2366398 falak pema
falak pema's picture

If gold is green then I'll buy it. Its the golden color that puts me off. Reminds me of Iconic penitence and eternal shame, for just having the privilege of being born a human being. 

Having now lived some time, I do realise we are the worst bugs that the Creator of All invented. We've even managed to paint food into gold stained junk and pure water into waste effluent. Now that takes some doing! 

Maybe eternal shame is the name of the game. I'm beginning to have my doubts about human progress. But I'll never vote for a bearded Only One ; I prefer to think it has gorgeous tits! 

Mon, 04/23/2012 - 09:29 | 2366480 dereksatkinson
dereksatkinson's picture

Iran Claims It Has A Blockade On The Strait Of Hormuz

Mon, 04/23/2012 - 12:00 | 2367150 BooMushroom
BooMushroom's picture


Mon, 04/23/2012 - 11:28 | 2367019 donsluck
donsluck's picture

Chaos "created" (evolved) us, and chaos will "destroy" (evolve) us.

Mon, 04/23/2012 - 12:03 | 2367161 LowProfile
LowProfile's picture

False on it's face, evolution implies negative entropy.

Mon, 04/23/2012 - 09:00 | 2366400 GeneMarchbanks
GeneMarchbanks's picture

'Commodities' doesn't quite capture the petrobuck paradigm. That'll be an issue, some might even say problem.

Mon, 04/23/2012 - 09:02 | 2366408 GetZeeGold
GetZeeGold's picture



If you want to buy petrol from'd better have some gold.


Mon, 04/23/2012 - 09:05 | 2366420 Sudden Debt
Sudden Debt's picture

Or 4 aircraft carriers and a shitload of ballistic missiles carrying 30 pounds of silver...

Mon, 04/23/2012 - 09:49 | 2366548 GetZeeGold
GetZeeGold's picture



Heh heh.....true that!

Mon, 04/23/2012 - 09:01 | 2366404 Quinvarius
Quinvarius's picture

If only the bankers didn't make this more true with their every action.  Nothing changes.  All paper money dies when not backed by gold.  All paper money returns to gold to save itself before once again debasing.  It is the cycle of ponzi.

Mon, 04/23/2012 - 09:02 | 2366406 LongSoupLine
LongSoupLine's picture



whoa...hold on a second, something's not right.  Where's AAPL in that pyramid?

Mon, 04/23/2012 - 09:03 | 2366412 GetZeeGold
GetZeeGold's picture



It's right at the tippy point.....but you need a magnifying glass to see it.


Mon, 04/23/2012 - 09:04 | 2366415 ebworthen
ebworthen's picture

"Your OS is no longer supported, you need to purchase OSXXVIII."

"This song has been transferred to more than 3 devices and is no longer valid."

"FoxConn employees are happy and well paid."

Mon, 04/23/2012 - 09:02 | 2366407 ebworthen
ebworthen's picture

Ron Paul knocking it out of the park on CNBC this morning.


Gold on sale today!

Mon, 04/23/2012 - 09:41 | 2366521 azzhatter
azzhatter's picture

LIESman has a hard time interviewing Dr Paul. Guess because he's an ignorant journalist prick. That Sorkin punk can't even string together a question and Squicky just keeps saying "but......but....Warren says"

Mon, 04/23/2012 - 09:04 | 2366416 gmak
gmak's picture

My only objection to the pyramid is that the bottom green point should have "productive assets", including agricultural real estate. Gold is not the only real asset - and all the paper above is a claim against real assets.

Mon, 04/23/2012 - 11:29 | 2367023 SilverRhino
SilverRhino's picture

The base of the pyramid is for items that meet all 4 definitions of money.   Productive assets are nice to have, right up until you have to try to move them in order to escape.  

Mon, 04/23/2012 - 09:04 | 2366417 Dr. Engali
Dr. Engali's picture

What? No silver?

Mon, 04/23/2012 - 09:07 | 2366428 Sudden Debt
Sudden Debt's picture

by the time everybody runs to gold, there won't be any silver left.


Mon, 04/23/2012 - 09:10 | 2366433 junkyardjack
junkyardjack's picture

Falls under commodities as worthless, better go stock up on AAPL I guess, its valued more highly in the pyramid 

Mon, 04/23/2012 - 09:05 | 2366422 Scalaris
Scalaris's picture

(1) Gold (2) T-Bills (3) Llama wool


Mon, 04/23/2012 - 09:06 | 2366424 manhunter
manhunter's picture

Spellman mugged FOFOA, but still got it partly wrong. Gold won't back currency but will float against all currencies.

Mon, 04/23/2012 - 09:13 | 2366446 Dr. Engali
Dr. Engali's picture

To be fair FOFOA is a little hard to read, so one can understand that plagiarizing him would be even more difficult.

Mon, 04/23/2012 - 09:18 | 2366456 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

What, like it does now then?

Mon, 04/23/2012 - 09:27 | 2366474 manhunter
manhunter's picture

Currently pricing paper gold at par with physical gold depresses the price. Eliminate the paper gold to discover the real price of gold. 


Mon, 04/23/2012 - 09:48 | 2366547 Peter Pan
Peter Pan's picture

What for? Let the dummies buy a bit more paper gold. The only cure for manipulation is to let it go beyond the point of no return.


Mon, 04/23/2012 - 09:10 | 2366435 junkyardjack
junkyardjack's picture

They are missing one more part of the pyramid. On top of Gold goes Guns and Ammunition 

Mon, 04/23/2012 - 09:13 | 2366445 mayhem_korner
mayhem_korner's picture



Guns & ammo go in front of your gold.

Mon, 04/23/2012 - 09:50 | 2366552 Peter Pan
Peter Pan's picture

Food and potable water might rate above all else if cities breakdown.

Mon, 04/23/2012 - 12:32 | 2367270 delacroix
delacroix's picture

a good woman, is worth more than any amount of gold. rich and alone, is just another form of poverty

Mon, 04/23/2012 - 09:11 | 2366437 Ted Baker
Ted Baker's picture


Mon, 04/23/2012 - 09:11 | 2366438 PeaBird
PeaBird's picture

“Fiat money has no place to go but gold,” - Alan Greenspan 15th Sept 2010:

And as covered by George Washington at the time:

Mon, 04/23/2012 - 09:45 | 2366532 Peter Pan
Peter Pan's picture

In the short run it is true that fiat has no place to go but gold. In the long run fiat has no place to go but hell.

Mon, 04/23/2012 - 09:17 | 2366450 Beastmanager
Beastmanager's picture

Hmmm, am I travelling in time and watching the wrong market data? In my screen gold is going DOWN big time, and silver is WINNING the race DOWN!

So, who is discovering what pyramid, eh?

Mon, 04/23/2012 - 09:22 | 2366468 PeaBird
PeaBird's picture

So you buy when it's up? Note to self, sell to Beastmanager when it's up...hahaha

Mon, 04/23/2012 - 09:30 | 2366485 Beastmanager
Beastmanager's picture

Either your IQ or your age is very low. Do not need to know, keep it for yourself.

Mon, 04/23/2012 - 09:59 | 2366575 PeaBird
PeaBird's picture

Are you trying to be a 'try hard'? Since when... did either IQ or Age, make a person profitable in markets? Neither one or the other, makes a person profitable in markets. So why are you trying to put shit on me, by suggesting two lame things: IQ & Age; that you consider me deficient in?

Mon, 04/23/2012 - 09:38 | 2366511 fuu
fuu's picture

1642 at open to 1629 right now is going down big time?

Mon, 04/23/2012 - 10:45 | 2366805 Bullionaire
Bullionaire's picture



Another funny!


Thank you.



Mon, 04/23/2012 - 09:23 | 2366466 Xue
Xue's picture

forgot guns and ammo below gold.

Mon, 04/23/2012 - 09:22 | 2366467 Xue
Xue's picture

forgot guns and ammo below gold.

Mon, 04/23/2012 - 09:25 | 2366471 JustObserving
JustObserving's picture

Silver down 3.28% Gold down 0.97%  QQQ down 0.84%.The pyramid has been temporarily inverted thanks to the power of the Fed.

Mon, 04/23/2012 - 09:37 | 2366505 Stuck on Zero
Stuck on Zero's picture

Sell in May and go away.

Mon, 04/23/2012 - 09:28 | 2366477 5880
5880's picture

Gold looks sick

Mon, 04/23/2012 - 09:36 | 2366500 fuu
fuu's picture

You keep using that word. I do not think it means what you think it means.

Mon, 04/23/2012 - 09:58 | 2366572 prole
prole's picture

There's a shortage of perfect breasts in this world

Mon, 04/23/2012 - 10:05 | 2366608 5880
5880's picture

If fiat does die,

first phase is horrible deflation crushing everything including spot gold

timing is everything

Mon, 04/23/2012 - 10:24 | 2366687 fuu
fuu's picture

"first phase is horrible deflation crushing everything including spot gold"

Good luck timing that.

Mon, 04/23/2012 - 09:57 | 2366571 ebworthen
ebworthen's picture

"On Sale" not "sick", "On Sale".

Options expiration and price suppression.

Dow/Gold ratio means equities are sick, Gold running circles around the patient.

Mon, 04/23/2012 - 09:30 | 2366481 DonutBoy
DonutBoy's picture

Brain-dead.  The triangle asserts Fed paper is a harder asset than diamonds or an apartment building.  I want to do deals with people who believe in this.

Mon, 04/23/2012 - 09:36 | 2366503 Croatian Patriot
Croatian Patriot's picture

F= m x g

free fall

Mon, 04/23/2012 - 09:42 | 2366523 Peter Pan
Peter Pan's picture

With the exception of gold occupying the premier position, the positioning of everything else is absolute crap. Give me real estate of any sort in the event of a meltdown rather than useless paper money which we won't be able to access when banks screw their doors closed.

The fact remains that we are basically shuffling around the same aging physical assets and shuffling the same old paper assets which can only be rolled over and never paid off.

The populace will however be soothed by emergency supplies of hot dogs and soda and free access to cable TV in the event of a meltdown so that they can remain INFORMED between sports programs.

Mon, 04/23/2012 - 09:54 | 2366561 Bullwinkle Moose
Bullwinkle Moose's picture

You still must pay property taxes. If there is not enough income from the real estate property to pay the taxes, the government will sell it on public auction. That would be a 100% loss.

Mon, 04/23/2012 - 09:46 | 2366538 Silveramada
Silveramada's picture

should be GOLD/SILVER...


Mon, 04/23/2012 - 09:48 | 2366544 Graabein
Graabein's picture

Please indicate where SILVER is !!

Mon, 04/23/2012 - 09:54 | 2366564 Peter Pan
Peter Pan's picture

Don't worry. Silver is there in the embrace of gold. Regardless of what multiples one trades to the other, they are both items with a historically solid pedigree. Both will be worth a lot more than the system which is currently ignoring them, manilating them and bagging them.

Mon, 04/23/2012 - 10:46 | 2366811 AGuy
AGuy's picture

Interesting that Stock are much higher up the FRN's. Consider that the As the gov't prints trillions, devaluing the currency, Stocks will go up in value. Consider than since the low in march 2009, the S&P has nearly doubled while the purchasing power of the dollar (in terms of food and energy) as nearly lost half of its value. In times of high inflation or hyperinflation, stocks hold value better than paper currency. although they usually do not retain 100% of their value. They just devalue less than paper currecies.

Treasury Bills are probably worse than Corporate and MUNI bonds, since the yields onf Treasuries are close to zero or have negative real yields. I perfer to own quality Corp. Bonds over Treasuries. Big companies offering Corp Bonds are just as secure as treasuries since the gov't will bail out the too big to fail.

I would also change the bottom "Gold" into tangible assets which include PM's along other high value assets that are likely to retain value no matter what happens.




Mon, 04/23/2012 - 10:52 | 2366835 prains
prains's picture

love a big vi jay jay that also has arrows to the spot

Mon, 04/23/2012 - 11:05 | 2366892 jumbo maverick
jumbo maverick's picture

The inverted pyramid reminds me somewhat of a Columbian prostitutes pubic region. Go for the gold.

Mon, 04/23/2012 - 11:06 | 2366898 Debugas
Debugas's picture

next choice for poor people is not silver but welfare credit cards and new virtual tax-free local community money we see poping up in Argentina Greece and Spain

Mon, 04/23/2012 - 11:36 | 2367054 tamboo
tamboo's picture

water, food.

Mon, 04/23/2012 - 14:48 | 2367877 q99x2
q99x2's picture

Invert the Pyramid

Mon, 04/23/2012 - 21:52 | 2368917 cityguyusa
cityguyusa's picture

Surprisingly you might be on the cutting edge.

Just last week we had a Q&A for the future Congressional House theives.  Nine of them in all.  I was so appalled with their slights and slurs at various people, regardless of party, that I just couldn't believe what I was hearing.

Only after when I was telling a friend of mine it dawned on me, they're truly stupid.  They have no insight, they have no fresh ideas or solutions, they are just idiots spewing the same terrible party rhetoric for the millionith time.

If you truly asked them a pointed question about economics or paper currencies I think they would sound just like CNBC or some similar outlet.  They are all the product of years of propaganda and even though one of them was the lawyer for the marine funeral's father that tried to sue that quaint church from Topeka, KS (ie a lawyer that holds some special esteem in our area) he was just as unimpressive as all the rest and yet he presented a Constitutional case.  Scary!

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