"They can force you to pay your bills in paper dollars. They can force you to trade stocks based on paper dollar prices. They can force you to pay income tax based on those prices. But nobody can force you to THINK in paper dollars. If you don't, then this alone can be a pretty good edge." Very astute Lobster. This is successful, wealthy thinking. As to the public's grasp of economics, check out the following recent poll. Apparently, Marxism is not dead...the proletariat is clearly still out to soak the rich. Punishing people for being productive is still in vouge: http://www.pollingreport.com/images/GALtax.GIF Question: The CHF is fully backed by gold bullion reserves. Do any other major currencies fall into this category?
If you count Jews as white, then I do, but it does not really matter what color, age, or sex our masters happen to be, does it? While I don't disagree with your post, my personal "big picture" is a little different. You are 100% correct that human nature is what makes the world such a bad place, and in particular, what causes us to be (50%) slaves. But what most people call "governments" are really the same idiots as those who max out their credit cards when they first get them and spend the rest of their lives trying to keep up with their interest payments. The two differences between Joe Schmo and Senator Moron are: 1. Joe will eventually die and take his debt with him, while the country would not die were it not for its debt. Death will come to Joe anyway, and it will be a relief for him. Death will come to our (and any other "modern" country made from "sophisticated consumers") BECAUSE of our debt. 2. Joe does not really have a way to avoid paying the interest on his debts for the rest of his life, while Senator Moron gets paid a high salary and a lot more than that in bribes and eventually retires to huge benefits for which he did not have to pay a dime. The only danger to him is that the country could collapse before his term is over (or, if he plans to retire in the US, before he expects to die). That is why all the "solutions" to our public debt problem are aimed at pushing the due date just a few years into the future. This, in turn, is very similar to what the "sophisticated consumer" does: Why pay $1000 now when I could pay $0 for 18 months and then only 500 easy monthly payments of $19.95? I believe you will pretty much agree with all I have said in this post so far. Therefore, we seem to have an understanding that human lazyness, stupidity, and greed are the underlying cause for our problems. Just like my own actions would be the reason for my death if I painted myself with blood and jumped into a pool full of hungry sharks. But that does not change the fact that there are the sharks. And in real life, there are the bankers (be they old, young, white, green, male, female, or bisexual). By bankers I don't mean the moron sitting in your local branch who chuckles when someone "jokes" about investing in gold. I mean those people who discovered centuries ago that if they could get everyone to use their bills as money and charge interest on them, they would be richer than anyone else could ever become; and that often times kings are just as short-sighted and "human" as Joe Schmo. Actually, the people who rule the world now are, of course, the descendants of those who had this knowledge and decided to abuse it and enslave us. The distinction I make between governments and bankers might not be as clear everywhere as it is in the US. It's just when you look at our congressmen questioning Greenspan, you can't help but notice that they are just as stupid and trapped as the rest of us, but Greenspan is not. (There is at least one congressman who knows what's really going on; It is unfair of me to generalize.) When you listen to their questions, it's really sad: They don't ask "As you know, Mr Chairman, 40% of all income taxes paid in America goes directly into the pockets of a few wealthy individuals who collect interest on every dollar in circulation anywhere in the world. Couldn't we eliminate all income taxes and have the same prosperity we enjoyed throughout the 19th century, when we had absolutely zero inflation and zero income tax, by simply enforcing the US constitution and use only gold and silver instead of debt as money?" No, they ask him "Well, don't you think it's soooooooo unfair that those bad, bad [Democrats/Republicans] want to raise this tax bracket by 1.2% and lower that one by 1.7%?" This is not a shark asking this question, this is a moron lifeguard ordering everyone into the water when he sees the sharks approaching. The way I see it, the governments are responsible for making us 50% slaves, but they have done it not out of evil intent, but mostly because of stupidity. We also have to keep in mind that the politicians are nothing but fellow slaves who get a few extra privileges and are in charge of keeping the rest of us working quietly and efficiently. The other 50% of our slavery is caused by every individual for himself. I am 50% free. Most others are not. They prefer 20 pairs of shoes, a couple of shiny new cars (to poison the whole planet with exhaust fumes), and a meal at a restaurant every night (to poison themselves with partially hydrogenated vegetable oils and sugar) to the freedom and independence they could attain by saving up their money. The truth is always somewhere inbetween. But if you research how the (clearly unconstitutional) Federal Reserve Act was passed, you can't help but notice that there were a few people who had a very clear agenda and pushed it through against nontrivial resistance. It's not like the mess we are in "just happened" because we are all lazy and stupid. It happened because our weakness has been deliberately exploited by a few people. Kennedy didn't shoot himself. (If you don't know enough about this, just look up Executive Order 11110)
Nice poll! What surprises me the most is that so many people don't seem to realize what would happen if we taxed corporations to death. Also, where do they think a corporation will get the money needed for its taxes? Could it be from the consumer? As with anything regarding money, I am not very well informed, not because I don't want to know, but because trustworthy information is not freely available. But I would be careful with the thought of the CHF being backed by gold. As far as I know, the CHF is a currency like any other. They used to have the constitutional requirement that at least 40% of their paper money be backed by gold, but we all know how these things go (see Article 1 Section 10 of the US constitution). I don't think the CHF is now even 40% backed by gold, but it is true that Switzerland holds lots of gold officially, plus there is certainly a huge concentration of privately owned gold in the country. Anyway, the details don't matter too much; In the end paper is always just paper. Even if it says something like "This certifies that there is on deposit in the Treasury of The United States of America One Dollar in silver payable to the bearer on demand." Mind you, not only does the current dollar bill lack this kind of statement, but what is much worse (and happens to illlustrate my point) is that if you have one of the old certificates that DO appear to give you the right to get silver from the treasury, you still won't get any silver. Paper is just paper, and when the government decided to stop honoring their promise, that's exactly what happened. You can now wipe your behind with that silver certificate just like with any federal reserve note.
Dark, I have a ton of gold positions. I'm a young guy (20s), and I plan to hold these positions for years. I feel like eventually, perhaps sooner rather than later, gold will be way way above $1000/ounce in my lifetime. I looked at the high in gold in 1980, and I adjusted for inflation, and I get a number over $3000/ounce. I think that we'll get attacked again by these Alqueda dudes. It will suck, but my gold will be up big time, and then I can buy Odz's house because he'll be bancrupt. I'm thinking that we could also have deflation, in which case my gold will go back down to $200 or $300 before turning back up, but I'm still holding these positions no matter what. I really don't care, and I don't plan on ever giving them up. In which case I'll have to hold off a few more years and then buy Odz's foreclosed on house at another time.
These posts are fantastic.... What comes after "credit binge blowout".... Deflation....or hyperinflation..?
What cale after that ? Easy guess, what is true for Cisco is true for every bubble only on different time scale and cycles. http://www.financialsense.com/Market/archive/2004/images/0105/csco90_00a.gif
My guess is hyperinflation. It's just easier to print money than just about anything else. By the way, I like your handle. Why do I get the feeling you might be hoarding those beautiful Mexican 50 pesos gold coins that say "INDEPENDENCIA Y LIBERTAD" around the rim?
Actually...the sovereign right to print money...hyperinflate...is what the Latin countries do now... You'll never deflate by printing....looks like that's what the US is doing...and also Japan...which is even buying our debt with it... It makes currency plays less boring...to say the least... And guess what inflation does....is offsetting to the would be housing deflation...creating even more Government intervened balancing acts.... This can go on for a long time...and yes...gold has interesting arguments at this time...perhaps more interesting than the previous 10 years...Gold is pure..pays nothing...gold stocks pay something..incur leverage...but you never know what they really have... I like the daily plays..the LT plays are too loose for me....
I agree with what you say, and even with this statement. However, it is not necessary for an investment to pay out a return. The reason why we have been chasing returns for decades now is that cash as we know it is a wasting asset. This has not always been the case. If you had buried a dollar in the year 1800 and unburied it in 1900, it would not have bought you any less food or clothing than 100 years earlier. Of course, if you buried a dollar in 1970 and wanted to spend it now, you would find that it would not even buy you a third of what it used to buy 30 years ago. That's why people feel the need (or should I say panic) to spend or invest all the money they might make, and then some.