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Some Words Of Advice From Kyle Bass
Michael Lewis' latest compilation of Vanity Fair articles into book format, Boomerang, is the usual entertaining romp around those back and front waters of the world that are currently on the verge of bankruptcy: from Greece, to Ireland, to Germany and, of course, to California. The premise at its core is an interview that the former Salomon bond salesman had with investing wunderkind Kyle Bass several years back which inspired to him to ask what it is that the Texan saw three years ago that so few others, due to a permafrosty cognitive bias or what have you, could (i.e., that the world is bankrupt and getting much worse). Oh, did we say wunderkind? We meant billionaire. Because unlike that other "anti-Midas" who only piggybacked on the good ideas, while blowing up LPs when left to his own non-Goldman Sachs facilitated devices, Bass actually could always see the big picture for what it is. So courtesy of Lewis' latest book, here are three pieces of advice from Bass to people everywhere, which will surely bring the fanatically jealous anti-gold crew to accusations that Bass made his billions from buying and reselling tinfoil hats.
On gold:
A guy sitting in an office in Dallas, Texas, making sweeping claims about the future of countries he’d hardly set foot in: how on earth could he know how a bunch of people he’d never met might behave? As he laid out his ideas I had an experience I’ve often had, while listening to people who seem perfectly certain about uncertain events. One part of me was swept away by his argument and began to worry the world was about to collapse; the other part suspected he might be nuts. “That’s great,” I said, but I was already thinking about the flight I needed to catch. “But even if you’re right, what can any normal person do about it?”
He stared at me as if he’d just seen an interesting sight: the world’s stupidest man.
“What do you tell your mother when she asks you where to put her money?” I asked.
“Guns and gold,” he said simply.
“Guns and gold,” I said. So he was nuts.
But not gold futures,” he said, paying no attention to my thoughts.
"You need physical gold.” He explained that when the next crisis struck, the gold futures market was likely to seize up, as there were more outstanding futures contracts than available gold. People who thought they owned gold would find they owned pieces of paper instead. He opened his desk drawer, hauled out a giant gold brick, and dropped it on the desk. “We’ve bought a lot of this stuff.” At this point, I was giggling nervously and glancing toward the door.
So many others were giggling along. They were giggling all the way as gold rose from $800 to $1900. Probably not giggling now...
On nickels:
He still owned stacks of gold and platinum bars that had roughly doubled in value, but he remained on the lookout for hard stores of wealth as a hedge against what he assumed was the coming debasement of fiat currency. Nickels, for instance.
“The value of the metal in a nickel is worth six point eight cents,” he said. “Did you know that?”
I didn’t.
“I just bought a million dollars’ worth of them,” he said, and then, perhaps sensing I couldn’t do the math: “twenty million nickels.”
“You bought twenty million nickels?”
“Uh-huh.”
“How do you buy twenty million nickels?”
“Actually, it’s very difficult,” he said, and then explained that he had to call his bank and talk them into ordering him twenty million nickels. The bank had finally done it, but the Federal Reserve had its own questions. “The Fed apparently called my guy at the bank,” he says. “They asked him, ‘Why do you want all these nickels?’ So he called me and asked, ‘Why do you want all these nickels?’ And I said, ‘I just like nickels.’”
He pulled out a photograph of his nickels and handed it to me. There they were, piled up on giant wooden pallets in a Brink’s vault in downtown Dallas.
“I’m telling you, in the next two years they’ll change the content of the nickel,” he said. “You really ought to call your bank and buy some now.”
And on how to prepare for what is coming and why it is coming:
We hopped into his Hummer, decorated with bumper stickers (God Bless Our Troops, Especially Our Snipers) and customized to maximize the amount of fun its owner could have in it: for instance, he could press a button and, James Bond–like, coat the road behind him in giant tacks. We roared out into the Texas hill country, where, with the fortune he’d made off the subprime crisis, Kyle Bass had purchased what amounted to a fort: a forty-thousand-square-foot ranch house on thousands of acres in the middle of nowhere, with its own water supply, and an arsenal of automatic weapons and sniper rifles and small explosives to equip a battalion. That night we tore around his property in the back of his U.S. Army jeep, firing the very latest-issue U.S. Army sniper rifles, equipped with infrared scopes, at the beavers that he felt were a menace to his waterways. “There are these explosives you can buy on the Internet,” he said, as we bounded over the yellow hills. “It’s a molecular reaction. FedEx will deliver hundreds of pounds of these things.” The few beavers that survived the initial night rifle assault would wake up to watch their dams being more or less vaporized.
“It doesn’t exactly sound like a fair fight,” I said.
“Beavers are rodents,” he said.
Whatever else he was doing, he was clearly having fun. He’d spent two and a half years watching the global financial system, and the people who ran it, confirm his dark view of them. It didn’t get him down. It thrilled him to have gotten his mind around seemingly incomprehensible events. “I’m not someone who is hell-bent on being negative his whole life,” he said. “I think this is something we need to go through. It’s atonement. It’s atonement for the sins of the past.”
The take home: Atonement is coming, bitchez. Beavers beware.
For those who want much more, here is a one hour interview in which Todd Groome and Toni Moss spoke with Kyle at AmeriCatalyst 2010 in Austin in September, asking him about his thoughts on prospects for housing market recovery, current policy issues and national debt implications, global debt imbalances and his perspectives on the influence of policy on the timing, sequence and magnitude of potential sovereign defaults and debt restructurings. Fascinating stuff.
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Stocks only go up. Everything else is an illusion and should be ignored.
Yes, just like the price of houses, and Obama's approval ratings.
Just how high did you expect the dead cat to bounce?
Pretty funny. I should be looking for beaver till the 'aftermath'
Kyle Bass always gets my attention. Him and Faber are met worth listening to.
I concur. And Gerald Celente forth trifecta.
Include Jim Rogers with them. Also Sprott.
Always listen to Kyle Bass. His analysis goes farther than chart patterns.
Just like you see on TeeVee, we need you to send money to help us fund new infrastructure. Your donation will help us sign a petition to raise money we don't have.
The United Nations has a provision for providing financial assistance and monetary relief for member states. These organizations are the World Bank and the International Monetary Fund. Both the World Bank and the International Monetary fund were products of the Bretton Woods Agreement which took place in 1945, approximately around the time the United Nations
http://www.uniosil.org/
When you see are dog/cat, hungry third world children commercials, send your money now!!
Explosives, guns and beaver...sounds like a great time. When it said he ws shooting the beaver, was that a euphemism?
Kyle knows his shit.
Except he left out the name of the explosive http://www.tannerite.com/
Profiles in Psychopathy. We have an odd future coming to a fiefdom near you.
Now that is truly fucking insightful funny.
Mommy, I can't sleep....
http://www.dailymail.co.uk/news/article-2044363/Kyle-Bass-Meet-Texan-investor-millions-credit-crunch.html
"Mr Bass spoke to Harvard economics expert Kenneth Rogoff about sovereign balance sheets and finally realised the scale of the problem when he presented him with some research.
Professor Rogoff told Mr Bass: 'I can hardly believe it is this bad' after he had looked at their figures.
Mr Bass replied: 'If you don’t know this, who does?’ and thought: 'Holy s**t, who is paying attention?'"
Amazing how the experts don't do fundamental analysis. Looks like Reggie and Kyle are the only two.
Guns, Gold and Rockets Bitchez!
Tyler, I love you man, I really do...but
Your style of trying to create the longest unpuntuated sentence that still has (barely) meaning is trying.Yes I can understand you and if I was reading for (sadistic) pleasure I'm certain you would be my favorite. When it comes down to reading for information your prose is, well, noneconomical. I suspect the style you have developed is by now deeply ingrained and unchangeble but throw us a bone. Do a one sentece translation when you are done with the challange of saying every thing all at once.
thanks
your adoring fan base
If you think Tyler's writing style is difficult, try reading "Moby Dick".
Personally, I see nothing whatsoever difficult in his style at all. But then, I also routinely write sentences with multiple embedded clauses and five or six associated commas, liberally sprinkled with semicolons, colons, ellipses and hyphens. It seems that the dumbing-down of Americans continues, when even the readers of ZH demand simplistic, sound-bite compositions and analyses.
I vote for more complex sentences. What's with this simplicity? :P
Wha?
But I'm a subliterate cretin whose threshold of comprehension doesn't extend beyond monosyllabic utterances.
One green arrow for you sirrah, since it wont let me do so by way of mouse.
Moby Dick was written by an African American.
http://en.wikipedia.org/wiki/Herman_Melville
Whatever.
PS: If a (white) Afrikaaner moves to the United States, are they an "African American" too?
Ah, for the good ole days of:
Easy Reading
"PS: If a (white) Afrikaaner moves to the United States, are they an "African American" too?"
The hyphen is magical, it can actually change the pigmentation of someones skin ;-)
Life was so much simpler when we could just say "nigger".
Mrs. Thereza Heinz, from South Africa, lost her first husband, then eventually married my "Senior Senator". They tried the "African-American" thingie (she was imbibing gin-soaked raisins at the time) but the message didn't play. So they gave it up in favor for tax fraud on their new yacht.
I can't make this stuff up.
- Ned
Hold the boat.
Herman Melville was white... As if it fucking matters anyhow.
And what the fuck has that all to do with simplicity?
Other than the statement being patently incorrect?
http://www.youtube.com/watch?v=17m8OnHC7dQ
Well, if ya wanna look it it that way....
BTW, is it just my own sensitivity or is more of this "feeling" cropping up all over from all quarters?
Herman Melville had a black grandma, or mammy. Although suppresed, this is generally accepted. The protaganists obsession to kill the Great White Whale, is in fact, his own wrestling with his 1/4 BlackHood. Oh, and the Egyptians were black. Blacker than coal.
RafterManFMJ:
Well, skosh', but more importantly, the lad was hanging around Troy.
- Ned
I don't mind the run ons when it's well-known material, they're often like a big wind up and punch. When it's something esoteric it can be hard to follow.
akak... Neither Tyler nor Melville (author of Moby Dick) come anywhere near William Faulkner for sentence length and complexity.
Some of Faulkner's sentences run on for pages... and yes, he eventually won a Nobel Prize for literature.
It seems that often when no one understands what a person is doing, that person is given an award of one sort or another; ie, war mongers are awarded Peace Prizes, Ponzi schemers photos are to be found on the cover of Time as 'Man of the Year', moronic economists are awarded prizes that Nobel did not envision, etc...
I say Tyler's name be entered for consideration of an award! Do I hear a second?
The award? How about "Exposition of Ponzi Schemes and The Individuals That Created Them" ?... Or, "Draging the Rats Into The Spotlight" ? Feel free to offer up more suggestions.
BTW, imo Mark Twain remains the best American Novelist ever... Followed (again imo) by John Steinbeck, Hemingway, and many others. Of recent novelists I like Cormac McCarthy best. McCarthy has a unique way of sentence structure; he avoids punctuation...but somehow it works well.
Anyone planning on 'bunker living' after 'the crash' should stock up on some great books, lots of cheap partially used candles found at garage sales, and a good short wave radio capable of picking up faint radio signals from far flung places... A lively trade existed in used books, periodicals, and newspapers on the US Western Frontier and I don't doubt that trading reading material will become popular again.
Snidely:
Since then, the Nobel Committee has relaxed their standards in all disciplines.
- Ned
I did a college paper on Faukner. Faukner was drunk when he wrote and I was drunk when I read it. Fair is fair. I'm always sober when I read Tyler though.....hmmm...there may be a solution...
Tyler, love your work, but...
Your long sentences tire me. I understand them, and if this were recreation, you'd be my favorite writer. For journalism, your work is wordy. I realize this is style, but please edit. Shorter sentences are requested.
Thanks.
-- a fan
-----------------------------
Had to help you clean that up a bit. It was a mess.
You owe me a few bucks, but I'll let it slide this time.
Thanks for the edit. brevity and clarity...good
Kyle does indeed know his shit. He sounds like a happy realist. Those are rare birds.
He is probably right but, he sounds like a complete jerk.
Not a jerk, just a typical Texan.
But your confusion in differentiating between the two is quite understandable.
he may hide in his "fortress" from the OWS crowd when they arrive, he may bribe the Feds and they won't rade his compound (isn't having "explosive materials" after 9/11 ia verboten?), but let me forward the paragraph about "beavers" to some of my PETA friends - good luck to Bass... PETA is no Quds and no al qaida. they will f*&k him up in no time!
PETA founder Ingrid Newkirk has said "When it comes to pain, love, joy, loneliness, and fear, a rat is a pig is a dog is a boy."
It is legal to kill pigs and rats, using guns and poison.
A rat is a pig is a dog is a boy.
Therefore, it is legal to kill PETA members with either poison or firearms.
FUCK the HYPOCRITES at PETA!
PETA is the first group of Americans I will gladly blow off the map.
Personally I think Kyle may have used the incorrect word, for the masses, maybe he feels the need to Atone, I feel the need to recieve it, from those that have destroyed us.
Few here had a damn thing to do with it.
Amends or reparation made for an injury or wrong; expiation
Gold going to 12,000 an ounce will be the atonement you shall seek.
WHAT? WE NEED PHYSICAL METALS IN OUR POSSESSION? WHAT ? NOW WAIT A MINUTE...... WHERE IS THIS GUY FROM?
Yeah.
That's why he keeps several fucking tons of nickels in a vault in downtown Dallas Texas.
Like he'll be able to get there and the stuff still be on premises when TSHTF.
Grand fucking idea.
Particularly now that he's told the world that he's got tons of fully palletized valuable shit in a valut in downtown Dallas.
Logic check, Spock?
he understands a lot but he doesn't understand the way of the gold bug. keeping metals in someone else's vault is a no no........
I was thinking the same thing.
He made a terrible mistake telling everyone how smart he is.
If people were running through the burning streets of Dallas taking bites out of each others legs a ton a nickles would be about the last thing on my fucking checklist.
I'm surprised no commenter gets the nickels thing.
What do you think people are doing with pre-LBJ silver coins? They are bagged and sold by weight per their metal content. They are a traded asset and not melted.
The day the mint issues a new junk-metal-five-cent-coin, Bass bags up his stash and they trade just like "junk silver" coins or Morgans and in the same venues.
Profit realized
My understanding is that our elected leader's appointed bureaucrats deem this illegal, to melt nickels.
I present as exemplary evidence a 5 year old USA Today article:
http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm
BayAreaAlan
It's legal tender, and it's worth more by virtue of content.
So double play,and do you actually think at this point if anyone gives a rats arse what is legal and illegal melting nickels?, coming from the Rubes we have making them?.
Dream on bro.
That's the problem with being the ULTIMATE arbiters of making law for the land.
When the PEOPLE responsible for making them, do not OBEY them, then no one else will either.
Melting nickles? Yes, that makes sense. Hm.
Once they are demonetized, then the melt/export ban goes away. That subsidiary coinage melt exceeds face is pretty amazing. 1c and 5c in other times were basically markers, not worth anywhere near their nominal face value. Even silver at times, had a 50% seignorage.
"We hopped into his Hummer"
I guess he is not worried about peak oil. He should be.
Regards,
Nawar
He lives in Texas, plenty of West Texas Crude.
With a 99 percent water cut just to get it out of the ground, I have to wonder how much really is left there.
I can't stand it anymore...beavers and hummers on the same thread!!!
u b wishin'
I thought this was classic on the CNBC interview: "Since 2002, global debt has grown at 12%, while GDP has grown at 4%. This isn't sustainable."
God bless our troops? well that ain't going to happen....
but snipers? hmmm
a 3 man sniper team can cause a lot of mischief...........
That line is the tagline for LaRue Tactical, which makes all sorts of fun toys. They're based in Texas as well, and you get that bumper sticker with every order, and if it's a big order, usually a bottle opener built like a tank, in the shape of an armadillo, and a package of "Dillo Dust" meat seasoning.
Just a guess, I wouldn't know anything about guns, no sir-eee, not since the boating accident.
they make top grade mounts and have other very nice goodies. i will be doing business with them soon............
i don't argue with these lovers of military men. i want what they have but not for the reasons they think of course. it is not those wascally muslims that are the problem...........no sir, but try and tell that to lovers and sycophants of the us military and you get this strange blank stare. they cannot believe that someone would be into guns but at the same time not be on the same page as they are about the mercenary army and this out of control and illegal and immoral government we now have. they simply do not really and truely understand what the second ammendment really means and what it is really all about and frankly there is no time to bring them up to snuff. when the shit hits the fan idiots like this will just get in the way...........but that is the way it is, and those are the cards on the table
i wonder if the territory known as the kyle bass kingdom needs any border guards?
yes, and he pays you in nickels! duh!!!
i would do it for nothing. when the shtf, it would be a nice place to chill out and wait........
WHAT HAPPENED TO EDIT??
Need it to correct misspelled words, and bad sentence structure.
OK, just noticed that change, too.
Deleting the "edit" function --- now that is quite bizarre.
EDIT: And now it's back again. Weird.
This gent has been getting a lot of press lately. Very BAD OPSEC. As far as the hidey hole is concerned...letting people know about is...DUMB.
Maybe he has a private army...cool! gonna heve to feed, house, and keep those mothers happy after TEOTWASWKI.
Just saying... ;-)
This man is a sage...
Quick question to anyone who knows the answer.
I'm not privy to the details of Kyle Bass' family history but does he have any relation to Sid Bass? There's only one large wealthy Bass family in Texas that I'm aware of and I was wondering if there was any connection, or just coincidence.
On a side note, riding around and blowing up animals seems a bit...strange. To each his own I suppose.
i wondered that one myself...........
http://www.forbes.com/forbes/2010/0208/debt-recession-worldwide-finances...
he told the university of texas to invest in gold bullion. yet they keep it a new york vault. bad mistake if you ask me. it should be delivered to university of texas and stored in the university of texas tower for safe keeping....
like any bullion holder, storing it someone else's vault, imho, keeps you at risk , for a host of reasons.
With Bass' kind of money, he should be able to build his own secure vault facility in Texas and allow Texans to start storing their gold close to home.
http://www.dfwmostpowerful.com/
top 1000 movers and shakers in the dallas metroplex area.............hmmmm
Right...
Kyle Bass - Dallas
Sid Bass - Fort Worth
Both billionaires
I couldn't find anything online (though I didn't look hard) but that would be a helluva' coincidence if they aren't related.
If you own thousands of acres of land with plenty of water ways. And beavers start damming up your streams and flooding your highly valuable land. You're not going to sit back a let a few rodents destroy the lands usefulness. Espescially if the land is used for grazing beef. Beavers can flood hundreds of acres with their dams. And if you have multiple beaver dams this can turn into thousands of acres.
I have these pesky birds on my property. I use surface-to-air missles to take care of em'. Those things can shit on my property and create paint damage on my vehicles.
I don't think the missles and flak cannons are overboard. When they nest and start mating I take em' out with 60mm mortar rounds. These are normal methods of pest control.
Sounds like you've got the pest control problem well under control.
I don't believe the use of 60mm mortar rounds is going overboard at all. If it worked effectively during WWII to take out Krauts and Nips then I see no problem using them on pesky birds.
You might want to get yourself a .30 cal mini gun to start practicing on the best methods to bring large hordes of mindless bird shittin' animals down.
When the Mexican zombie hordes head north, well, you know, practice makes perfect.
.30 cal mini
Overheat
Hiding behind my door
And, if your making a last stand agains the zombie horde, you may need to get grandma involved:
Shootin granny
And lots of friends
I prefer a Sperry ball turret salvaged from an old B-52 customized with two GAU-19/A three-barrel 12.7mm gatling guns equipped with armor piercing rounds.
Must be some tough old birds in your neck of the woods !
do you have your own brass and do your own reloading? :)
....
BTW, they're not related
Beavers & hummers?
One in the pink, one in the stink...
Shocker!
do not go hunting with Cheney!
Bass called in in the summer of 2010. http://www.tickbytick.co.uk/home/must-watch-kyle-bass-of.html
Picked up CDS at 11bps
Sure you can; they're not indestructable. Hell, with a giant fresnel lens on a summer day, you can make them boil.
The proper thing for him to do is live trap them and move em...Plenty of Farmers want Beaver now for dam building.
What anyone does that you don't know about won't hurt you....
Well, we are prepared for a serious decline here but I am hoping this guy is way over the top. Nothing short of anarchy from his perspective. I see much really getting worse but not yet ready to man the gates here with ex Marine Platoon fighters.
Of course, I could be wrong.
To accelerate this, go to war with Iran. Lets see how US will be doing. No chance
Sen. Feinstein: U.S. on ‘collision course’ with Iran
http://www.rawstory.com/rs/2011/10/16/sen-feinstein-u-s-on-collision-cou...
Sounds like Feinstein is on a collusion course with the governments of Israel and Saudi Arabia.
Feinstein supporting Israel?
Imagine!
Bass on "any" tax increases for M's & B's...
If you took all the wealth from the top 0.1%, it would only cover the US budget for a year... the billionairs think we're so f'ing dumb, we would actually fall for for that shit!
I hear ya Kyle... I mean what's the point of raising your taxes if it won't cover the entire budget? He's just like all the rest... greed drives every choice he ever makes!
BEA(VE)R times bitcheeeez
I've been "collecting" nickels for months.
Nickels........a hedge against inflation & deflation......gotta love it
Been thinking and doing the same thing...and no thief will be able to run off with more than 300 dollars worth as they are quite heavy.
Finally, someone who gets it. I've been saying, if you have physical gold and silver in your hand, you are a bank. you can set any price in that worthless paper that you want. If you have any common sense at all, you should never be in a position of having to sell your gold and silver, no matter how hard the system tries to extort it out of you. That's how the central banks play keep away. They and their agents trade gold back and forth amongst themselves, setting the price arbitrarily low. You will never buy their gold. They don't want that worthless paper. That is your hot potato.
http://georgesblogforum.wordpress.com/2011/10/13/fiat-addiction-update-1...
You white trash losers voting for your Muslim criminal Obama bin laden are going to end up ass-fucked and wondering why GS has its corporate dick in your ass. No lube either you dumb motherfuckers. Eat shit and die, losers.
Do you kiss your mother with that mouth?
Why don't you tell us how you really feel?
Your sage and cogent arguments have convinced me, a white trash loser. I've eaten shit, and died. What is the next step in your plan?
BernankeHasHemo,
You do have a way with words. Did you learn your eloquence at anger management?
Speaking of "Anger Management", that's the name of Charlie Sheens new cable show coming next summer!
I'm not joking.
I can see that "anal retention" is not your psychological problem.:)
Just finished the book myself - his comments are vintage. There is a great part in the book where the German Central Banker says in respect of Greek Default "We still have all of our gold so our banks will be OK" and that REALLY caught my eye. I think that the Germans will make a fast getaway from Euroland and use their gold cache to save themselves. And if the squareheads are thinking that, then you KNOW that the country with the largest (alleged) Gold Cache are thinking the same. Gee - guess who that might be?
It is all incredibly bullish for hard asset holders and VERY VERY DIRE for the cash horders and those shorting stocks.
FRN's are doomed versus gold but supreme against all other global fiat BECAUSE of gold.
Actually FOFOA lays this out for us in this week's post. Scroll down to his handmade graphics. In a nutshell:
At its inception, ECB reserve assets were 15% gold, 85% fiat. A few years later, the revaluation of the gold assets changed the reserve ratios to 30% vs 70% fiat.
A few years after that, when gold hit $1,000, the value ratio of ECB reserve assets stood at 45% gold, 555 fiat.
At this point with gold in the 1600s, ECB is a gold-backed bank, at least in terms of its reserves. Note that they mark these assets to market, so the day will come soon when the value of the ECBs reserves will be in a proportion of 90%+ gold, 10%- fiat.
To map that to the German's comments, this phenomenon is affecting every CB that holds gold as a reserve asset. (Note: German gold is overseas, so they have a different problem).
As fiat declines and gold advances, CBs notice the value of their holdings increase. This may be a path to a kind of gold standard.
Hey...anyone catch the last few seconds of the video, too bad it was cut off...his comment about speaking with General Meigs, what did the General say, anyone know?
double post deleted
makes sense when you look how out-of-control Wall Street and Gubberment is.
november 11, 2011 is coming up. that is 11-11-11..........11 + 11 + 11 = 33..........hmmmm. great day for a party........
What an obvious trick. A kid from the Texas old money network makes a fortune based on the info on the other Texans strategy in the White House to empoverish the country. Not so wunderkindish. Then the corporate media is sent out to portray him as role model. Just because he is so nice and compassionate, he deliberately tells the people how they can be a small Bass during the next crisis. That has never and will never work out for stupid followers.
Just a few critical thoughts:
What will be the margin when safeguardedly transporting his nickels to one of the remaining and functioning mills, once the system breaks? He cannot believe, just because it is standardized, the nickel is suddenly traded for its intrinsic value instead of its face value. Especially with new, less loaded nickels around, as he is suggesting himself.
Sure, gold is trading up with M3 expansion, I also believe it is an inflation safegurad, however, all that under a certain set of assumptions, ie a banking system functionig, a society in order and the expectation to normality. If the system breaks, it is a mere illusion to be able to safeguard personal wealth, owing to all kinds of reasons. The dynamic in run for gold creates a bubble seen with all bubbles since the tullips. As gold has no intrinsic value and owes its function only to its for now by supply limits determined price, there is a risk of realization or fear that the price paid may become volatile and value is actually lost.
There is no absolute value outside of cognition, the appreciation of gold lies only in the thousand-year training of mankind that there is such a thing as absolute value, Eventually, people will run for gold, as the system breaks, but that's exactly why Bass is promoting it, he will be the seller then. Anyone seriously promoting gold right now, must have the intention to become a seller at the tipping point but in exchange for what.
As means for exchange, gold won't be very practical. Also, owning, storing of and walking around with the shiny metal after the last crash will make people a nice target for those, who have nothing. Finally, if the gold value storage function will really work out until that point, gold will at last get stigmatized and thus socially be devalued. Nobody can seriously believe that a final crash with the wealth distribution having by now skewed to the very extremes will allow an emerging system to respect that value has been stored and transferred by the evil people from the good times.
No, that is just not plausible. If you take into account the dynamic of things during emerging mega crises, you will realize that the advocates of gold often stop short. Such planning for the unthinkable is mostly only created costs during good times and then been run over in the first stages of the emerging crisis.
If you want to prepare, think about how and where to best survive and be able to sustain a living. Storage of wealth should be the least of your problem.
I must say, I was for the first time kind of shocked by ZH promoting and applauding such an obvious trick as Bass.
Sure, gold is trading up with M3 expansion, I also believe it is an inflation safegurad, however, all that under a certain set of assumptions,
*************
You have everything assbackwards-
If Gold is an Inflation safeguard-like you "believe" then the period from 1980-2001 must have been a period of Deflation?
Asynchronous price developments. With the most complex of all valuation systems and dependencies behind it, if you like, it overshoots and delays. So, post-WWII, drop of gold backing, believe in fiat all have their longer term social effects, only being fully priced into an asset such as gold over time. If you believe in true spot value, how can gold be at 1950 one day and be down 15% weeks later?
If you believe in true spot value, how can gold be at 1950 one day and be down 15% weeks later?
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I don't know what the price of Gold should be and neither do you-
How can Gold go up 17% a year for 10 years?
For the same reason in can go down 15% in a few weeks-
A 15 or even a 25% correction in any long trend bull market is healthy and flushes the weaklings out-
I call it typical long trend bull market action-sounds to me like you missed the boat-
The "nominal value" of gold does not mean shit to a tree. It's "purchasing power" that matters and gold is a way to retain it!
That holds true for any type of money-
I vote for tally sticks!
Plus, you can whup the hell out of anyone who doesn't pay you back....
There is .1% of society that can store 'value'. They have no relative value system of wealth such as money of appreciation of gold, but an absolute value system measured in terms of power.
True, Market Efficient but that form of wealth also requires confidence. The advantage of global capital also reduces support from the locals. Mercenaries are no replacement for a patriotic, standing army. Hiring mercenaries and relying on their loyalty is foolish. Odyessa and Rome. Fleeing East won't work this time for a lot of reasons but mainly because of Chinese peg failures and the usual lack of containment.
In these times, I have to agree with Jesus suggestion of keeping your eye simple. Building a sense of community outside of the raw obsession for power is more satsifying than endless dishonest forms of attempting to 'compete'.
Refocus your life around healthy concepts and you'll probably survive the next decade.
Gold will retain its purchasing power in an inflationary, deflationary or stationary economy.
Gold will retain its purchasing power in an inflationary, deflationary or stationary economy.
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Gold will gain in buying power in Deflation and lose in Inflation-
Look at the DOW/Gold ratio for proof--
I read some insurance companies were buying gold as protection against Deflation ...not inflation (even though you can't eat it):
http://www.insurance-forums.net/forum/life-insurance-forum/nwml-buys-gol...
I read some insurance companies were buying gold as protection against Deflation ...not inflation
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Absoulutly-money is "always" King in Deflation-
Bass is no trick, he knows his numbers and most countries better than ANYONE. Even better he warned Wall Street on the failure of their housing models which showed 8% plus growth per year per loan to infinity. He did not just take advantage, he tried to help those realize their mistake. He also spoke with Congress who are not listening very well.
His biggest play will be on Japan, look it up.
He said "Everyone will wake up and go to work just a whole lot poorer" and "Many people are going to loose a lot of money and we don't want to be one of them, maybe make a little on the way down." The compound he has scares me a little. Marc Faber, Jim Rodgers, Peter Shiff, Gerald Celmente, Chris Martenson, all say the same thing.
FS
See my post above(?) about Richard Rainwater from 2005.
Or just look up Proverbs 22:3
Kyle made a boat load of money on a smart play. If the stupidity had not gotten so far out of hand with an administration fixated on a war against terror and spending trillions to achieve it while Wall Street Cronies were making hay while the sun shines, we might not be idolizing him now.
Beavers are an important part of the eco system. A pond could be stocked with fish. He could catch the fish. Instead he sounds like a dumb hick with too much money .. he has jumped the shark.
Anecdotes like these add more than a touch of fright to the thought that another Texan might wind up in the White House.
Fannie and Freddie, Still the Socialites
http://www.nytimes.com/2011/10/16/business/fannie-mae-and-freddie-mac-st...
WTF
And when things fall apart and Bass has his compound set up and the beavers exterminated, his standard of living will rapidly deteriorate within a year. Too bad, so sad.
Kyle Bass should inves in Vaseline and stitches...cause when he gets drilled, there wont be enough lube and band aids to stop the hemmorage. Actually.... I think he'sright but like to toss a beating to everyone. My only issue with his assesment is this: As a hedge fund manager he isnt actively managing the money. In fact, if he's just long gold and ammo he could get smoked by a prolonged ecession...no matter how much fiat is printed. Everyone hated the Euro, hated debt, loves gold , hates equity. If I had to make the call I'd be invested in short dated US corporate debt. But what do I know? Gold and ammo sounds like we can shoot people with our gold Desert Eagle .50's as they rip my gutters off for scrap!!! Go Kyle! Er...
I've heard of Striped Bass, I heard of Bass Ale - but I've never heard of Kyle Bass...
Is it some sort of newly-discovered, beer-swilling aquatic critter? Or maybe a social disease of some sort: "I'm sorry madam, but - judging by the coloration of the discharge - you appear to have a particulalry virulent case of Kyle Bass..."
tia
Hey Frankie, not all geniuses come from New York, least of all YOU!
Maybe to balance this one should read The Rainwater Prophecy which is an interview with Richard Rainwater the Billionaire. From 2005
The Rainwater Prophecy
Richard Rainwater made billions by knowing how to profit from a crisis. Now he foresees the biggest one yet.
FORTUNE MagazineTuesday, December 13, 2005 You have to push way past conventional thinking, test the boundaries of chaos, see events in a bigger context. You have to look at all the scenarios, from "A to friggin' Z," as he says, and not be afraid to focus on Z. Only when you've vacuumed up as much information as possible and you know the world is at a major inflection point do you put a hell of a lot of money behind your conviction.
"This is a nonrecurring event," he says. "The 100-year flood in Houston real estate was one, the ability to buy oil and gas really cheap was another, and now there's the opportunity to do something based on a shortage of natural resources. Can you make money? Well, yeah. One way is to just stay long domestic oil. But there may be something more important than making money. This is the first scenario I've seen where I question the survivability of mankind. I don't want the world to wake up one day and say, 'How come some doofus billionaire in Texas made all this money by being aware of this, and why didn't someone tell us?'"Let's see, I have enough gold, silver, platinum... I still have too much cash and I need to get rid of some. Let me think. What the hell. Let's buy some nickels! That's a guy with way too much money. Maybe he will try to hoard silver. He's from Texas and they have a history of doing that... If he buys up enough, he can create a shortage and force Apple to create their own inventory. That will push the value of his silver to the moon. How come no billionare has thought of this. I suppose it is fear that the end result will be silver prices crashing back down. As soon as someone loses their fear, look out!
By the way, the video is excellent. Bass is brilliant and extremely lucid.
www.goldsilverdata.com
For those who may not know nickels dated 1942-1945 are called "war nickels" and contain 35% silver and are one of the cheapest ways to own silver. Usually, you can buy them for around spot.
A Texas blowhard called Bass
Had his head so far up his a$$,
That when people called "Kyle!"
Instead of a smile
All he could do was pass gas!
I though the Treasury was responsible for coinage.
Why was it the Fed, not the Treasury, that asked questions?
balance sheet thingie
Great stuff ZH.
Like I posted last week, retail sales were DOWN 5% and today the industrial capacity numbers show no growth.
http://confoundedinterest.wordpress.com
and futures are UP.........
Excellent video. Still fewer than 1,000 views when I watched it.
His perspective of the EU moving toward centralized tax collection that will drive out Germany makes a lot of sense.
On pensions - Mgrs still using an 8% long-term return rate in their models even though they have moved to more high-grade fixed instruments, market returns have been much lower for risk assets, and the Fed's promise to keep rates low for years to come. Public pension recipients in blogosphere think growth will return or bonds will be issued to preserve promises - think again.
He states that the all-time high cash levels on corporate balance sheets will more than be wiped out if current pension promises are kept.
Early slides in the presentation showing the weakness of the bounceback despite historically massive government intervention. His take on Bernanke's and others' academic arrogance and their coming real-world education.
A tip of the hat to private citizens who are paying off debt and living conservatively. Even though most don't understand the details, they have a sense that officials and talking heads are not telling the truth, or in many cases believe what they say but are simply wrong.
As Kyle stated, the solution to all this is broken promises. Debt writedowns and reduced social contract payouts.
I did not know that the Bush prescription benefit accumulated deficit already exceeds that of Social Security accumulated shortfall since inception.
A very important point is that this recession is structural, not cyclical. Most of the millions of lost jobs will not return.
Housing - If you're in the market and Mr. Bass is correct, take your time.
Politically, Obama has the choice of beginning to make progress for the people or get reelected. I think he choses the latter.
Lots of other great points. Well worth the hour of viewing. Supporting documentation not seen from other analysts, especially telling when he shows his findings to officials who admit their model assumptions have not changed much since before 2008.