Guest Post: I Was Wrong About Everything

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

I Was Wrong About Everything

I was wrong: doing more of the same has solved all our problems.

Time for a mea maxima culpa: I've been wrong about everything: the stock market, the economy, globalization, energy, everything. Heck, I've even been wrong about the American diet and poor fitness; it's now clear that ice cream sundaes are health food that have been shown to extend life dramatically. Fast food is nutritious and cheap, a great combination, and there is basically nothing in the mind-body that can't be fixed in a jiffy with a handful of pills, all of which are almost free once you qualify for government healthcare programs.

The economy has not just dodged recession, it's in full-blown recovery. The only two indicators that are going down are the VIX volatility index, which might just fall to near-zero as investors realize there's no longer any downside in the market and therefore no need to buy hedges, and the unemployment rate, which is steadily declining.

2012 is like 1956, 1964, 1984 and 1996: the economy is booming, and a sitting president has wisely overseen the application of brilliant policies by the Pentagon, State and Treasury departments and the Federal Reserve. The policies were simple: when "more of the same" didn't work, do even more of the same. That did the trick in everything from waging war to finding new energy sources to stabilizing the financial and housing markets.

This quote from President Calvin Coolidge neatly sums up 2012: If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you. All we as a nation had to do to get through the rough patch of 2007-2011 was just do more of what we were doing before. And voila, all our troubles ran into the ditch. We have abundant energy, expanding opportunity, a growing economy, limitless credit and enjoy the highest possible levels of political liberty and human freedom.

And it's now obvious that this renewed prosperity will easily last to 2022 and beyond. The only question for the coming decade is how much better everything will be for everyone in 2022. As we all know, expanding opportunity and prosperity enable everyone to solve whatever problems arise in their lives.

Who remembers the critics and naysayers of 1956, 1964, 1984 and 1996? Nobody. In times of stable, permanent prosperity like 2012, the only problems left are of the trivial sort, such as American policy via a vis Botswana or which reality TV show is better. Since all the critically important policies and institutions are working smoothly, then we are free to pursue our own interests and desires without having to concern ourselves with larger issues.

Since our institutions are all functioning efficiently and transparently, and permanent prosperity, global stability and a rising market have returned in force, then there's really nothing left for me to do here. As the markets have demonstrated, virtually every asset class can now rise together: precious metals are in a long uptrend, real estate has bottomed and is now in recovery mode, stocks and bonds are both rising. Now that historical inverse correlations have been decisively broken, then everything can go up together: commodities, currencies, real estate, stocks, bonds, 'roo bellies, you name it.

The return of stable, permanent prosperity generated by visibly successful policies and institutions leaves me a choice: I can wallow in negativity as a bitter naysayer, or I can showcase photos of adorable puppies and kittens.

Since all our big problems have been resolved by simply doing more of the same, then there is nothing of importance left to analyze or discuss. All remaining issues are inconsequential, the equivalent of debating which is better, Bud or Bud Lite. Since I value my happiness above all else, I am opting out of naysaying and going with the photos of adorable puppies and kittens.

I considered finding some technology to fawn over, i.e. Windows 8 or 9 or 13 or whatever is being released next, or futurist nanotechnology robots that chew through clogged arteries or the iPad 3 or something like that, but there are already millions of sites fawning over technology. On the other hand, there can never be enough sites showcasing photos of adorable puppies and kittens.

So stay tuned; I'll have you murmuring "awww, so cute!" in no time.

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kato's picture

become the George Costanza world.

economics1996's picture

I use to think like that when I was high on microdot.

economics1996's picture

Do dealers still sell microdot?  I need a stash.

WonderDawg's picture

MDB must be CHS's alter ego.

Ahmeexnal's picture

The end of fiat has begun in earnest:

India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned
DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)
Tags: India China sanctions Iranian oil European Union Iranian oil for India

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.

NotApplicable's picture

Just the casus belli du jour. (as if we need anymore)

Has Kashmir been stirred up lately?

ShankyS's picture

When I read the title of the post I thought it was gonna be by RoboTrader. 

andybev01's picture

I thought that if he blew any more smoke up there I'd catch fire.

atomicwasted's picture

Would be nice if true, but Debka has less credibility than the Weekly World News. 

DoChenRollingBearing's picture

Ahmeexnal, thanks for the news flash, a big fat  + 1 to you.

IMO, that is REALLY STUPID of India and China to use their gold to pay for oil.  Were it me in that situation, I would pay in whatever fiat I could for as long as possible.  If they want to barter (to avoid the sanctions), pick something else (iPads?).  Or is it that India produces nothing that Iran would want...?

Ahmeexnal's picture

Hmmmm....Maybe it's paper GLD.
I'd like to see the Ayatollahs trying to redeem their paper gold for the real thing.

DaveyJones's picture

At least this way the US will not have to invade nuclear India and China to get their gold (along with iran's oil).

Problem Is's picture

"Or is it that India produces nothing that Iran would want...?"

India produces call centers...

For Iranian oil, India can handle Ahmadinejad's complaint lines...

grid-b-gone's picture

This is a brilliant strategy. Not only does it bypass the short-term freeze, but as mentioned, it really kicks the fiat currencies when they are down.

If other oil-exporting states adopt this policy, the world would be on a de facto gold standard in short order.

Long term, it has the potential to drain the most industrialized countries of wealth because oil exporters are trading something with lasting value for oil that the west will almost immediately consume. 

The more they trade oil for gold, the weaker the U.S. will become. The more they trade oil for gold, the more valuable their gold stash will become.

As this progresses, imagine the shift in mideast policy that could evolve. Any country that does not have gold or oil would see a major loss of international status.

Partnering with India and China also lowers the chance that the U.S. would eventually just take oil by force.  

This sort of move was  one reason Carter added the Department of Energy. The vision of long-term energy independence was eroded after 1980 and replaced once again by short-term thinking. This was great for Texans who had friends in oil and wanted to be president, but not very beneficial for long-term U.S. interests.

Banks, oil, and auto interests have done very well in recent decades, but they have left us seriously unprepared for a gold-for-oil world economy. 

At least we still have the water trump card. Let's hope we don't piss that away, too, as we frack and drill with abandon as oil dependent hostages. 

SamuelMaverick's picture

If this is true, then this is unbelievably vitally important financial macro news.  This could potentially have a significant impact on the status of the US Dollar as the reserve currency.  Lets see how this plays out.

i-dog's picture

No chance any CB would part with their gold stash for oil.

FYI, if Iran were to obtain gold for their oil, they could increase their gold stash by 1,700 tonnes/year, while their present reported stash is just 170 tonnes (give or take an oz).

Just more sensationalist nonsense from all sides to keep the sheeple confused and chattering.

merizobeach's picture

Exactly.  This report is total BS.  No country in the world has enough gold to use it to buy their oil.

Simple math: the US reportedly has 8000 tons of gold, I'll assume they're metric tons...

8000 tons x 1000 kilograms x 32 troy ounces x US$1700 = $435.2 billion... divided by about US$100 per barrel, equals a purchasing power of about 4.352 billion barrels of oil.

Well, since the US consumed a shade under 7 billion barrels of oil in each of 2009 and 2010, that means that even the most gold-rich country in the world wouldn't be able to buy a year's worth of oil for ALL of their gold.

In 2009, China consumed nearly 3 billion barrels of oil and India consumed slightly over one billion barrels.  Together they would've needed the entirety of the US' gold reserves to buy one year of oil.

Though I do much appreciate the tangential reading provided here by commenters, let's think a bit, folks, instead of swallowing every discredible, piece of shit article that gets thrown in our faces.


Ahmeexnal's picture

You obviously have never read the original posts by ANOTHER.

merizobeach's picture

I suppose you are correct.  What have I missed?  Are you referring to a ZH commenter?


After a web search, I hope you're not referring to something called AnOther, an internet fashion magazine, because I just don't think I need Tom Ford's advice about how to be a modern gentleman.

Think for yourself's picture

they wouldn't buy oil for gold... until the re-evaluation of gold, maybe?

merizobeach's picture

I've asked the same thing, but might not the 're-evaluation' of gold also accompany a similar change in oil price?  Seems like oil has been nearly tracking gold since 1970.

boattrash's picture

Do prices really matter to CB's, when they run the printing presses, they can just buy it back?

Captain Kink's picture

if both India and China do so, that's 100 million USD worth of oil per day...  that's 60,000 +/- ounces a day, 3700 pounds or almost 2 tons of gold  PER DAY.. Sounds like a bit much. even just logistically.

boattrash's picture

Ahmeexnal, Very interesting. Brings to mind a good reason for TPTB to work on some type of controls on gold huh, what with side-stepping sanctions and such shit?

HoofHearted's picture

Somebody doesn't know about the /sarc tag....

TruthInSunshine's picture

I'm all set to weather the storm with my 0.99 cent per day, no benefits, english speaking Indian virtual adminstrative assistant.

Brickwork India
RichardENixon's picture

.99 cents per day? You're getting robbed!

Conrad Murray's picture

Drugs are bad mmmmkay. Too many acids make your head swell up like a pumpkin.

economics1996's picture

Well, isn't that the objective?

Dixie Rect's picture

so that's what happened to Newt

Lone Deranger's picture

Nope.  No more microdot, orange sunshine, window pane, or sugar cubes.  It's all on paper now!

Conrad Murray's picture

The liquid is out there. Move in different circles. Gels and cubes nom nom nom.

But with sheets going for under $500, maybe it's not worth the hassle of the hunt.

peekcrackers's picture

economics 1996

You are showing your age.!

kato's picture

'He [George] had success in "The Opposite", in which Jerry advises him to do the opposite of what his instincts tell him to do, which results in him getting a girlfriend and a job with the New York Yankees.'

GeneMarchbanks's picture

Apology accepted. Now, how does crashing WTI happen again?

LawsofPhysics's picture

Right, well something is in the ditch anyway.

A Lunatic's picture

You'd think Ted Kennedy was driving.

Problem Is's picture


Did the economy let Mary Joe Kopechne drown while swimming to safety in cowardly fashion??

SPADOC4's picture weird movie, eh?

Azannoth's picture

.. now all we need to do is to put our feet up high, and think about what we'll do with the Trillion dollar budget surpluses in the coming years .. tbc.

youngman's picture

What ARE you drinking....I  want some...

niktamere's picture

Buy the pickle. For the pickles. -WB7