Flat is the new up

... and it doesn't get much flatter than the S&P 500 this year. It closed at 1257.60 compared to last year's 1257.64 for a loss of 0.003%. But you got 2% in dividends at least. Small-caps, foreign stocks, and emerging markets all did much worse.

Meanwhile, gold was up 11%, and up for the tenth year in a row.


A man for his time

"He's just an honest man, and that's something we need now in this day and time. It's a lot of politics, and no honesty. When you have honesty, well, people will try to do anything to blot you out, and that's what they will try to do is blot him out, because he will be honest, and they need more like him."

Truer words were never spoken. Are any other candidates speaking the truth about the sustainability of trillion-dollar deficits or the Federal Reserve's monetization of the them?


Charles Hugh Smith: Why I am hopeful

This is worth a read. While the Nanny/Police State is doomed to collapse under its own weight, people are social creatures and will re-discover community to save themselves and each other.


Putting Obama on Clearance

GayPatriot has Obama collectors' plates marked down to $2.99. HT: Instapundit.

I can beat that. I snapped this picture of an Obama "Yes We Can" puzzle at Big Lots! (née Pic n' Save) for $2.00 two days before Christmas. Hate to see what that's marked down to now!

UPDATE: Welcome, Instapundit readers! Please check out our Tea Party buddies the SLOBs (San Diego Local Order of Bloggers).

Greenspan's Body Count: Aziz "Bob" Yazdanpanah, NaFatemah Rahmati, Nona Yazdanpanah, Ali Yazdanpanah, Mohamad Hossein Zarei, Zohreh Rahmaty, and Sara Fatemeh Zarei

Alan Greenspan gets really twisted around the holidays.

His latest massacre involved a man dressing up as Santa to kill his family among their just-opened presents on Christmas Day.
The Dallas Morning News reported the family was having financial troubles and that the mother moved into the Grapevine apartment after separating from her husband, who is still living in the family's Colleyville home just a couple of miles away.

Last year, the bank foreclosed on the home, which was tied go the father's filing for bankruptcy according to federal records, The Dallas Morning News reported.

Neighbors told News 8 that the father had been living at the house and was seen just last week cleaning up leaves in the yard. They said the family lived there for at least 12 years.

Neighbors also told News 8 they believe the father works in real estate.
Aziz Yazdanpanah is listed at 5406 Sycamore Court in Colleyville, TX, which was purchased pre-bubble in 1999, so he almost certainly took out a big home equity loan to get in trouble.

Greenspan's Body Count stands at 207.

UPDATE: Islamic honor killing? There's plenty of blame to go around for this. Greenspan's Body Count killers are never otherwise well-adjusted individuals. Greenspan's bubble crashing is always a contributing factor that pushes at-risk people over the edge. So is Islam, apparently.


Merry Christmas

Same debt crisis, different Christmas.

 We can dream, can't we?


Efficient Portfolio Advisors' William Bernstein criticizes Ron Paul's portfolio

In the WSJ blog, on Ron Paul's heavy exposure to gold mining stocks and lack of bonds:

At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.
There are many possible doomsday scenarios for the U.S. economy and financial markets, explains Mr. Bernstein, and Rep. Paul’s portfolio protects against only one of them: unexpected inflation accompanied by a collapse in the value of the dollar. If deflation (to name one other possibility) occurs instead, “this portfolio is at great risk” because of its lack of bonds and high exposure to gold.
Running an investment portfolio that protects against only one bad outcome is like living in California and buying homeowner’s insurance that protects only against earthquakes, says Mr. Bernstein.  You also want protection against fire and wind and theft and the full range of risks that houses are prone to.
The bumbling Mr. Bernstein fails to consider the first and most important thing in financial planning: looking at the totality of the investor's financial circumstances.  Having served in Congress for decades, Ron Paul is entitled to a Congressional pension which caps out at 80% of final year's salary of $174,000, as well as full health care benefits.  He's also likely got some Social Security and a Congressional 401(k).

How exactly is a 76-year-old man with a Congressional pension well over $100,000 a year, $500,000 in cash, and full Congressional health care benefits at risk from deflation? In the unlikely event that sound money breaks out, Ron Paul is set for life!  Wouldn't it then make sense to use the bulk of Paul's investment assets to protect against the risk of unsound money, especially with serial deficits running around 10% of GDP and the central bank printing trillions of new dollars?

And as for bonds, don't get me started.  Treasuries have negative real yield.  You lose more in inflation than you are paid in nominal interest.  And then the government taxes you on the nominal interest anyway.  Sure, you could pick up a little more yield by taking on credit risk, but then if deflation actually does hit, those credit risks are going to default!  Ron Paul's decision to hold cash instead of bonds is sound.

UPDATE: I stand corrected.  In a selfless and principled move that sets him miles apart from the rest of the scum in Washington (I'm looking at you, Newt Gingrich!), Ron Paul refused his Congressional pension.  Still, with a half million in cash and millions in dividend-paying mining stocks, I don't think the deflation boogeyman keeps Ron Paul up at night.  And don't forget all that gold that he once had that he mysteriously stopped reporting to the government.

How central planners destroyed the economy and killed capitalism

... in the Wall Street Journal, nonetheless.

Via ZeroHedge:

Strangely parallel to the Yellowstone catastrophe was the start of the federal government's other fire-suppression policy with the 1984 Continental Illinois "too big to fail" bank bailout. This was followed by Alan Greenspan's pronouncement immediately after the 1987 stock market crash that the Federal Reserve stood by with "readiness to serve as a source of liquidity to support the economy and financial system," which heralded the birth of the "Greenspan put." The Fed would no longer tolerate fires of any size.

From a forestry point of view, the lessons were learned. In 1995, the Federal Wildland Fire Management Policy stated, "Science has changed the way we think about wildland fire and the way we manage it. Wildland fire, as a critical natural process, must be reintroduced into the ecosystem."

Herein are pearls of great wisdom for central bankers today. Central banks are creating a tinderbox by keeping alive many very bad investments, fertilizing them with everything from artificially low interest rates to preferential liquidity to outright securities purchases. As these institutions and instruments overrun the financial landscape, they hamper the economic ecosystem and perpetuate the environment of low growth and high unemployment in which we currently find ourselves.

Seeing periodic, naturally occurring catastrophes as part of the growth cycle requires thinking more than one step ahead, not only longer term but, more specifically, intertemporally. This is perhaps an insurmountable cognitive challenge, both to investors and central bankers in today's news-flash world. When contemplating the forest, we may intuitively understand nature's logic of growth. Yet when we look at the seeds of destruction we have sown through current monetary policy, it is clear we are lost in the trees.


Note: You Can Smuggle Knives Onto a Plane But Not a Fake Bullet Belt

Ahh the TSA. They've molested me, pulled out my questionable battery-operated devices in winding lines, scanned my boyfriend's naughty bits, harassed me for the state of California budget problems that prevented my state-issued ID from being released in a timely manner and destroyed my $700 HP laptop. My relationship with them goes beyond love-hate, it's a necessary evil that I accept as a person who actually needs to get out of town every few weeks or months. I've driven across the country - several times - but with 3 or 4 vacation days to cash in, what can I do but subject myself to the TSA violations just to escape from my homebase for 72 short but precious hours?

So when I read about the person stopped on a Washington to Chicago flight trying to smuggle in knives hidden in a carved-out book (a book about ninjas, none the less), I couldn't help but think back to my harassment on a flight to San Francisco from Richmond way back in 2009:

If anyone recalls, the first time I'd flown in a long time was mid 2009. The very nice but totally wrong TSA agent at Richmond International Airport confiscated my pink bullet belt (available from the terrorist costume outlet Hot Topic) because bullets were a "replica weapon," which are not allowed on American flights. I repeat: fake bullets grommeted to a pink canvas belt, looped into my pants. I'm crying in the airport carrying an Eeyore I used as a pillow and this guy wants to confiscate my lame Hot Topic belt because its (likely plastic) fake bullets "replicate" a weapon. Who am I going to threaten with the fake bullets firmly attached to what is holding up my pants?

Whatever. I let him toss it in the trash. It's not worth getting violated (I had been on vacation, I'd spent days doing that anyway) over a cheap ass belt. It was an awesome belt. My pants slipped down my ass all the way home once I made it back to San Francisco. Dickhead.

Anyway. What happened to the wanna-be ninja shlepping daggers to Reagan Airport in a ninja book? Finally, we know.

WUSA reports there are no plans to file charges, since investigators determined the passenger was not a security threat.

If I would have fought the TSO in Richmond about my precious bullet belt, I'd have missed my flight while sitting in a Richmond Airport jail cell. And yet, you're telling me some dude tried to hide knives in his carry-on and yet wasn't charged with anything?

There is something horribly fishy about this story.


Porter Stansberry: The Corruption of America

I've got mixed feelings about newsletter writer Porter Stansberry. I generally agree with his investment views, but his newsletter pitches are really annoying. He talks cryptically about basic investment ideas, making them sound like state secrets in order to get people to subscribe to his newsletter. Case in point: his $3.00 government silver secret. Or a recent e-mail pitch for the secret Walmart retirement strategy which made people into millionaires. Reading between the lines, he's just talking about ordinary old dividend reinvestment plans (DRIPs).

 However, a friend sent me his most recent subscription newsletter, which was devoted not to investment advice but to commenting on the sad state of our nation.  Every one of those words rang true, and it glowed like burning coal.  I forwarded it to friends but regretted not having an online copy that I could link here for WCV readers.

Well, here it is, a concise and precise explanation of the corruption that is rotting America from within.  Enjoy.

Porter Stansberry: The Corruption of America.


Ron Paul leads Iowa!

We are on the verge of a historic win for liberty.

PPP shows Ron Paul in the lead in Iowa.
According to the PPP pollMr. Gingrich's campaign poll numbers are dropping "rapidly" and Ron Paul has now taken the lead in Iowa. While Rep. Ron Paul, Texas Republican, is leading the poll at 23 percent, Mr. Gingrich is now at 14 percent. Only former Massachusetts Governor Mitt Romney barely trails Rep. Paul at 20 percent.
We have a stark choice in 2012: the status quo of never-ending debt, intrusive government, Wall Street looting of the economy, and global military adventurism; or peace, liberty, and fiscal responsibility.

Please give what you can here.


Greenspan's Body Count: Andre L. Turner, Henry Serrano, Robert Scott Lindsay

Another workplace shooting, and -- surprise! -- the killer was deeply underwater on his house.

An employee who killed two people at a Southern California Edison office before taking his own life targeted his victims, a witness said.

The shooter was identified Saturday as Andre Turner, 48, of Norco, the Los Angeles Times reported. He shot four co-workers at the company's information and technology office in Irwin Friday afternoon, including two who were critically injured.

Let's go to the real estate records. Turner was listed at 1495 Andalusian Drive in Norco in California's Inland Empire, ranked the #2 worst place in America.

Turner bought the McMansion in 2004 for $711,000, reportedly put a lot more money into it, and was trying to short-sell it for $590,000.

Workplace disputes rarely end in violence. The psychological impact of severe financial distress caused by Greenspan's bubbles cannot be underestimated. It is what pushes a few, like Andre Turner, over the edge.

Greenspan's Body Count stands at 200.

How to protect your assets from a thoroughly corrupt financial system

Barron's is aghast at the blatant theft of client gold and silver from segregated accounts at MF Global:
It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global.

It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%. That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.

The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value ...
Jesse's Cafe and Market Ticker have additional thoughts, with which I agree completely. This completely violates the basic assumption that any financial assets you hold through a broker are legally yours and protected by law. You should immediately reassess ALL of your financial assets held through brokers. Here are a few steps I'd recommend:

1) Immediately take your stock brokerage accounts out of "Type 2" (margin) and make them all "Type 1" (cash). If you have Type 2 accounts, your broker can lend out your securities to other banks (called "rehypothecation"), which is similar to what may have happened at MF Global. You don't need margin anyway unless you want to use risky leveraged stock and option strategies.

2) Consider taking your securities out of brokerage accounts entirely. You can request stock certificates be sent out to you, and you'll receive your dividend checks in the mail.

3) With respect to precious metals, there is no substitute for physical that you hold yourself or with a private storage firm such as Brinks that is not connected to a leveraged financial firm. We've warned before not to buy the ETFs, and that applies to futures and other derivatives. Just ask Gerald Celente or Bill Fleckenstein.

4) Don't hold any significant money in money market funds. Use FDIC-insured savings accounts or buy FDIC-insured short-term CDs instead. Many money market funds are invested in paper from European banks, and with funds paying essentially 0%, you are taking real risk without any compensation.

5) Where you must stay with a broker (for IRAs, for example), stick with independent, plain-vanilla firms like Schwab, e-Trade, Vanguard, or Fidelity. Avoid brokerages owned by the dirty, leveraged, global banks. See what Bank of America just did moving trillions of derivatives from its investment arm to its FDIC-insured bank arm? The global banks are ticking time bombs and they want to take their customers and the taxpayers down with them. Want to hide by going to 100% cash and Treasuries? Not so fast. Also in this week's Barron's, here is "Face-ripping inflation" from Lee Quaintance and Paul Brodsky of QB Asset Management:
The [trillions in systemic] bad debt could be restructured so that creditors get cents on the dollar. The QB partners doubt this will happen because it would cause too much pain.
The more likely outcome is that the central bankers print more base currency, reducing the buying power of the money already in circulation.

And voila! You have skin-peeling inflation.

"A full deleveraging of the banking system could mean that the dollar and other currencies will lose 70% to 80% of their purchasing power," Quaintance says, arguing that all major banks in developed lands will suffer because markets are so interconnected.

How should investors prepare if they buy into this Grinch-y world view? Buy gold and unlevered assets, says Quaintance. The losers in this scenario: holders of cash and "risk-free" Treasuries. Of course, cash and Treasuries are what risk-adverse investors favor right now.
Long-time W.C. Varones readers will recognize a familiar theme here. The unsustainable debt will be resolved either by inflation or default, and inflation is likely to be the political path of least resistance. I'm not as confident on the timing as Quaintance and Brodsky, as this has already taken longer to play out than I would have expected.

Stay diversified out there.

Tea Party News

Where has the Tea Party gone?  Why haven't we seen them in the streets lately?

They've gone indoors and are hammering the phones, organizing, and holding politicians accountable.  Read all about Tea Party 2.0 at Reuters, including a quote from our own Leslie Eastman.

In other Tea Party news, Tea Party Patriots spokesman Mark Meckler was arrested at a New York airport while declaring his permitted, locked, and unloaded gun per TSA regulations.  Leslie has the full story at Temple of Mut, and Sarah Bond discusses it with KOGO radio's LaDona Harvey here (starting 01:40).  Apparently the local cops have a history of harassing lawful gun owners in violation of federal law.  I think there's going to be blowback on this one.


We Fully Support This Bill

Given we have families we are most inclined to support whatever our leaders do. I have to say without reservation that we fully support the NEW America where the Constitution is now being openly gutted, as it should for the good of our leaders, and us of course. And where we should all view it a privilege to obey what our leaders mandate.

I for one am proud of this step and never ever want to be considered a terrorist because I'm certainly not one. I can state without reservation that I would give up all my freedoms to ensure that my freedoms are protected.

(Reuters) - The U.S. House of Representatives approved a defense bill on Wednesday requiring the military to handle suspected militants linked to al Qaeda, acting not long after President Barack Obama removed a veto threat from the controversial legislation.

The bill is expected to pass the Senate this week and then go to Obama's desk for his signature into law.

Shortly before the House vote, the White House announced the president's advisers would not recommend a veto, although they said they still had concerns about the measure.


The Change You Voted For

Posted on Patrick


Ron Paul ad on Newt Gingrich: Selling Access

I love that Ron Paul is now the leading Not Newt Romney candidate. The polls are looking great in Iowa!

Daniel Hannan Drops F'Bombs on the EU

It sounds so cool when English people go blue:

Hey Gay Legal Men and Those That Question McQueary

To anyone who believes that version of events, Amendola said, "I suggest you dial 1-800-REALITY."
Hey guys, welcome to the hottest place for triple-X action. Get ready for bulging, bursting pleasure with horny gay, bi, and bi-curious studs. Just 99 cents per minute.

More on Jerry Sandusky's rock solid legal defense here.


President Obama is right

Now this is a surprise -- President Obama delivered the beginning of a good speech today.

This bit made think for the first time that he -- or at least his speechwriter -- actually understands what's going on:
Long before the recession hit, hard work stopped paying off for too many people. Fewer and fewer of the folks who contributed to the success of our economy actually benefited from that success. Those at the very top grew wealthier from their incomes and their investments -- wealthier than ever before. But everybody else struggled with costs that were growing and paychecks that weren't -- and too many families found themselves racking up more and more debt just to keep up.

Now, for many years, credit cards and home equity loans papered over this harsh reality. But in 2008, the house of cards collapsed. We all know the story by now: Mortgages sold to people who couldn't afford them, or even sometimes understand them. Banks and investors allowed to keep packaging the risk and selling it off. Huge bets -- and huge bonuses -- made with other people's money on the line. Regulators who were supposed to warn us about the dangers of all this, but looked the other way or didn't have the authority to look at all.

That's exactly right.

The middle class fell behind for many reasons, both natural economic reasons and Washington-created policy error reasons. Chief among the first category are technological developments and international competition, in that order. ATMs replaced tellers, e-mail replaced mailmen, MERS replaced loan processors, computers replaced cubicle-dwellers (see our earlier posts Rise of the Machines and RotM continued).

The policy errors that contributed to the demise of the middle class include the Federal Reserve deliberately facilitating stock market and housing bubbles so that a generation of Americans thought they could get rich quick. Why get a difficult degree in engineering or medicine when you can make more money flipping stocks or flipping houses? These bubbles enriched those at the top (investment bankers, stock brokers, mortgage brokers, asset owners), and left middle-class workers with neither jobs nor skills after the bust. Beyond the Federal Reserve, Congress and many Administrations were complicit in the bubble-blowing with misguided policies via FHA, Fannie Mae, Freddie Mac, CRA, etc. Obama doesn't understand -- or doesn't admit to understanding -- this yet.

But if Obama is beginning to understand how we got here, he couldn't be further from understanding how to get us out of here. Obama's solutions are expensive mandates on businesses like ObamaCare, left-wing tribunals like the NLRB telling companies how they can run their businesses, and demonization and taxation of successful business people. Oh, and raising taxes for 10 years to pay for a 1-year re-election stimulus. All these will destroy job opportunities for the middle- and aspiring-middle classes.

What might turn the tide? Repeal ObamaCare, scrap the NLRB, and flatten the tax structure, ending loopholes and subsidies. Yeah, we need to deal with the debt issue too, but that's another post (and another area where Obama's policies make things worse).

I'm reminded of the lyrics of Son Volt's Drown:

What goes wrong
You're causing it to drown
Didn't want to turn that way
You're causing it to drown
Doesn't make a difference now
You're causing it to drown

ESPN Sportswriter Gets It

Sportswriters write the darndest things:
Scariest Words I Have Heard All Year: The Federal Reserve's moves to grant special favors to European governments "pose little risk to the U.S. taxpayer, Fed officials said, because the Fed is doing business with foreign central banks viewed as trustworthy." Fannie Mae and Freddie Mac, Bear Sterns, Lehman Brothers, Merrill Lynch, Dexia Bank of Belgium -- they were "viewed as trustworthy," too. U.S. taxpayers once were told they would never, ever have to cover Fannie Mae losses. Now U.S. taxpayers are being told they will never, ever have to cover losses for European bonds.

What happened last week was that the Fed offered deeply discounted "liquidity swap lines" to European banks. This mumbo-jumbo means European banks can borrow U.S. dollars from the United States at 0.5 percent interest. If you need to borrow for a car or credit card debt, can you get a 0.5 percent loan directly from the United States government? Now wealthy Europeans can!

As collateral, the Federal Reserve received promises of euros. Possibly you have read a newspaper at some point in the past year. If so, you know there is a real chance the euro might go out of existence. In that case the collateral becomes worthless. The Fed will have given a large amount of U.S. dollars to Europe to be squandered.

The Federal Reserve did not say how many U.S. dollars have been offered to European governments. The last time transactions of this sort happened, Fed "swaps" to Europe peaked at $580 billion. And as Bloomberg News pointed out last week in an important investigative story by Bob Ivry, Bradley Keoun and Phil Kuntz, the Fed recently has been handing insider companies huge subsidies without even disclosing that it is doing so.

The reason European banks seek dollars in the first place is that, at the moment, companies and investors don't want to borrow euros: corporations and investors know there is a risk the euro will become worthless. Last week that risk was shifted onto American taxpayers. Now European banks can make loans in dollars rather than in euros. If the loans succeed, the rich of Europe keep the profits. If the loans fail, average Americans will be handed the bill. Perhaps that's why the Fed announcement was written so as to be incomprehensible.

At the Fed, when high-level staffers leave, one year later they may seek lucrative jobs at the banks whose profits rise because of Fed actions. Banks and other big businesses often hire former regulators to cushy jobs, in order to send this message to current regulators: sell the public down the river, and there will be a cushy job for you too.

A Fed defender would say that if the economy rebounds and the euro stabilizes, then there will be GDP growth with no losses to taxpayers. Let's hope. Yet in this best-case scenario, the wealthy of Europe get their capital at a half percent courtesy of Uncle Sam, while typical Americans pay 4 to 20 percent interest to borrow. That's the best case!

Washington has not only put the younger generation on the hook for at least $14 trillion in debt -- now young Americans may end up on the hook for money squandered in Europe. TMQ asks again: Why aren't voters under age 30 outraged about this?
~ Gregg Easterbrook

CNBC "experts" should read more ESPN columns and watch more Comedy Central shows. They might learn something.

Newt Gingrich: ultimate hypocrite

A couple different friends have sent me this excellent Ron Paul ad against Gingrich today:

Also well worth reading is George Will's column, Romney and Gingrich, from bad to worse.
Gingrich, however, embodies the vanity and rapacity that make modern Washington repulsive. And there is his anti-conservative confidence that he has a comprehensive explanation of, and plan to perfect, everything.

Granted, his grandiose rhetoric celebrating his “transformative” self is entertaining: Recently he compared his revival of his campaign to Sam Walton’s and Ray Kroc’s creations of Wal-Mart and McDonald’s, two of America’s largest private-sector employers. There is almost artistic vulgarity in Gingrich’s unrepented role as a hired larynx for interests profiting from such government follies as ethanol and cheap mortgages. His Olympian sense of exemption from standards and logic allowed him, fresh from pocketing $1.6 million from Freddie Mac (for services as a “historian”), to say, “If you want to put people in jail,” look at “the politicians who profited from” Washington’s environment.

His temperament — intellectual hubris distilled — makes him blown about by gusts of enthusiasm for intellectual fads, from 1990s futurism to “Lean Six Sigma” today. On Election Eve 1994, he said a disturbed South Carolina mother drowning her children “vividly reminds” Americans “how sick the society is getting, and how much we need to change things. . . . The only way you get change is to vote Republican.” Compare this grotesque opportunism — tarted up as sociology — with his devious recasting of it in a letter to the Nov. 18, 1994, Wall Street Journal (http://bit.ly/vFbjAk). And remember his recent swoon over the theory that “Kenyan, anti-colonial” thinking explains Barack Obama.

Gingrich, who would have made a marvelous Marxist, believes everything is related to everything else and only he understands how. Conservatism, in contrast, is both cause and effect of modesty about understanding society’s complexities, controlling its trajectory and improving upon its spontaneous order. Conservatism inoculates against the hubristic volatility that Gingrich exemplifies and Genesis deplores: “Unstable as water, thou shalt not excel.”

Meanwhile, Ron Paul is a strong second in Iowa!

Let's hope Gingrich implodes before, not after, the nomination. And maybe we'll have a chance to vote for a real reform candidate this time.

What is Gold?

We've been huge fans of shiny metals for years. We love gold, silver, platinum, and even nickel. Precious metals are the bomb and when our fiat bubble bursts we believe they'll be worth a tad bit more than the price we acquired them for. But why is that and what kind of investment is it really? Is gold "a put against the idiocy of the political cycle" as Kyle Bass states here?

Seeking Alpha posted commentary on metals and fiat currencies titled "Is Gold A Risk Asset Or A Safe Haven" which offers an interesting argument.
One of the reasons the debate over whether gold is a risk asset or a safe haven seems to live on is the fact that one troy ounce of gold has a monetary value priced in fiat currency. This monetary value fluctuates up and down. As it does, people like to call gold a risk asset or a safe haven, based on how the fiat monetary value is performing relative to asset classes such as equities or fixed income. It seems like every time we see gold, in dollar terms, move in a direction opposite the S&P 500’s (SPY) daily movement, the debate heats up. Furthermore, people like to point out the bear market that dollar-priced gold suffered during the 1980s and 1990s as evidence that gold is neither an inflation hedge nor worth owning over long periods of time.

All of this misses the point about what gold as a store of value represents in a fiat currency world. When owning gold as a store of value in a world dominated by fiat currency, the only thing that should matter to the owner is the number of ounces owned. If gold is being owned to protect against the destruction of the current monetary system, then debating its daily moments when priced under the current monetary regime is pointless. All that matters is how many ounces an investor owns. These ounces, kept as a store of value, would then either be converted into whatever new currency regime comes about, if the current one fails, or continue to be held as a store of value in those instances in which the owner simply doesn’t trust the new currency structure.


Ciao Dr. Socrates


Last week we lost legendary Welsh player and manager Gary Speed to, still yet to be determined why, suicide. Yesterday we lost Dr. Socrates to a far more reasonable means of exit, death by alcohol abuse.

Socrates was the captain of the greatest soccer team that didn't win the World Cup, in 1982. While some may debate that, what is not debatable was that he was part of the most loved team in Brazil. That 1982 team was the most elegant practitioners of the beautiful game maybe in history. Socrates was their leader. Click here for a link to a fantastic tribute to that 1982 team.

He was known as Dr. Socrates because while playing he earned a medical degree and after his playing career was over became a doctor.

Obrigado Dr. Socrates, boa viagem.....


Adam Corolla on OWS

Hard to refute this. (Warning: language).



On November 17th we noted that the US National Debt hit $15,000,000,000,000. Today we hit $15,100,000,000,000. It took us 14 days to get one tenth of the way to $16,000,000,000,000. Using the most crude of methods that means we will hit that next milestone on April 5th of 2012.

And this guy added 6 trillion by his lonesome in his first 3 years in office:

Zerohedge with the deets.

Strange days indeed

I'm not much of a conspiracy theorist, but look at what the security agencies did to create and promote the Russia collusion hoax and th...