If Gold Bugs' Fantasies Came True 61 comments
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There have been a number recent of very bullish analysis on gold, with a target price in the $5,000 to $10,000/oz. range (for examples, see this, this and this).
I would like to explore the question of what happens if every gold bug’s fantasy came true. The endgame would not be a happy one and the roads ahead are arduous, even if you owned lots of the yellow metal.
Happily ever after?
Modern children’s fairy tales end with “and they lived happily ever after.” Unfortunately, real life isn’t like that.
Even if the price of gold were to go to the aforementioned stratospheric levels, there are several questions that a commodity bull has to answer before he can truly live happily ever after:
- Does it even matter?
- Will you get to keep it?
- What happens afterwards?
Does it matter?
If you were long gold and gold went from $900/oz. to $9,000/oz. or more, does that make you rich?
The traditional reason to hold gold is that it is an insurance policy against inflation and the erosion of purchasing power from the debasement of paper currency. Gold is the constant in defining value. If everything else goes down, does that make you rich? What have you gained?
Gold is just inflation insurance. If your house burned down, would you hold a party and dance on the front lawn because you have fire insurance?
Do you get to keep it?
A skyrocketing gold price implies hyperinflation. Hyperinflation is often accompanied by political turmoil. Would political circumstances allow you to keep that wealth?
During these times of economic dislocation, society would be split between haves and have-nots. There would be searches for scapegoats under a populist government. When lynch mobs form, anything can happen.
Could you become a scapegoat?
As an example, not everyone suffered during the hyperinflationary days of the Weimar Republic. The holders of capital made out like bandits, while savers and suppliers of labor suffered. Those very painful market adjustments contributed to the rise of Nazism and Hitler. They had to find scapegoats. It just so happened that Jews formed much of the business class. In more recent memory, Malaysian prime minister Mahathir railed against evil foreign currency speculators during the Asian crisis.
If you think that populism and authoritarianism are unlikely to happen here, then consider this. In the wake of the controversy of prosecuting former Bush Administration officials over torture, the
reports that many Americans are supportive of these officials and support some form of torture. What was more surprising is that in the wake of the My Lai massacre in 1972, the author notes that: “[i]n the twenty-four hours after the military court declared Calley’s guilt, the White House received more than 5,000 telegrams and 1,500 phone calls. The messages ran 100:1 in Calley’s favor.”
Put it another way. If you were the owner of a food and grocery store in New Orleans in the aftermath of Hurricane Katrina, did it make you rich? Would your inventory be worth a lot more in light of the shortages? The answer is “yes”. But if the mobs were at the door and windows, would you be able to realize your windfall profit?
Unless you are willing to hole up in the metaphorical compound in the wilds of Idaho, stocked with food, fuel, water and surrounded by razor wire and claymore mines, you may not be able to stick around long enough to enjoy your wealth under these circumstances.
Is this the lifestyle change you really want if gold goes from $900 to $9,000?
What happens afterwards?
Even if we were to assume that society doesn’t totally disintegrate, such a massive revaluation in the gold price would cause incredible economic dislocation. There would be a gargantuan number of bankruptcies and business failures, which will result in widespread unemployment.
Consider the case of GM and Chrysler. The reason why the U.S. government tried to step in was because of the substantial employment effects if these companies were to be shuttered. It’s not just about the direct employment of GM and Chrysler. If these car companies went down, such an event would also affect all the car parts manufacturers and their employees. Car plants and parts plants are located in specific parts of the country. That’s not all. Car dealers, which are located in every city and town in the country, would also be forced to close and lay off staff.
Multiply those car manufacturer employment effects by five to ten and you start to get the idea of the implications of a skyrocketing gold price.
It would cause a gigantic deflationary collapse.
As an investor, you would have to be nimble enough to sell out your gold holdings at the top and move into cash or other deflation hedge vehicles. Are you that good a market timer? Even Jesse Livermore, who was prescient enough to be short and profit from the market crash in 1929, lost his fortune by going long too soon afterwards.
An arduous road ahead
For gold bugs, a tenfold increase or more in the price of gold is the end of the road. It isn’t. The road beyond is incredibly treacherous.
Out of control inflation is likely to be followed by an episode of deflationary collapse. Be prepared.
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This article has 61 comments:
You would probably need 100-1000 fold increase for the scenario you described.
We have a supposed "crisis" in health care. The country with the best health care system in the world has a health care crisis. Where are those in Canada and England gonna go when our care becomes like theirs. Once the gov't has control of health care that opens the door to everything from telling you how many Big Macs you can eat due to health issues to how much beer you can buy also because of health issues to what kind of car you can drive.
Another oil crisis is on the horizon. The US gov't suppresses oil and coal exploration and I understand is working to shut off offshore drilling. When gasoline starts to skyrocket again the gov't will step in and take over the oil cos under the guise of another crisis.
As for the auto cos. this was another generated crisis through auto regulation and UAW costs. The solution would have been to let the auto cos. go bankrupt and renegotiate all of their contracts with the UAW. Instead you have one UAW bailout after another and now a bankruptcy controlled by the gov't giving the UAW and the gov't control of GM. This gives us a gov't run car company which will end up making some kind of a crap vehicle to be forced upon the public and a never ending gov't supply of taxpayer money to the UAW. No reason for the UAW to sacrifice anything.
Watch out retirement funds. When all this gov't spending generates a federal bankrupty the only pile of money left for them to confiscate is in retirement funds. They will mostly likely offer some kind of social security deal in exchange for you giving the gov't access to your retirement account. The alternative would be your retirement fund downsizing to a small puddle.
For those cos. that think they can save their ass by getting a gov't bailout guess who ends up telling your ass what to do. And there is nothing quite like making everyone equal by cutting all the big boys down to size. So far from what I have seen I don't see much difference between the US gov't and the mob.
THE INHERENT VICE OF CAPITALISM IS THE UNEQUAL SHARING OF BLESSINGS.
THE INHERENT VITURE OF SOCIALISM IS THE EQUAL SHARING OF MISERIES.
Winston Churchill
. . . I predict a lot of very sticky gold bars.
(Ewwwwww!)
Yes, they predict the same kinds of things as happening as what you think would accompany very high priced gold.
better to have an even temporal store of value and a chance, than to be a cog in the mob and have none.
and, btw, referring to waterboarding, and the other rather mundane psycho-stressors employed defensively against an enemy which routinely severs heads and hands, and sends out suicide bombers against civilian targets, as "some form of torture"... is some form of stupid.
1) Does it matter? Yes it does, in a worst case scenario, those without gold may not eat. Witness what is transpiring in Zimbabwe as we speak. Those than cannot pan for gold are now staving. No, it will NOT make you "rich". As gold is merely utility in exchange, better known as money, the competitive devaluation of fiat going on right now leads one to an inescapable conclusion unless your so entrenched in fiat fairyland thinking that it escapes you. So yes, it does matter.
2) Do you get to keep it? Great question! I believe that the best situation for an individual is to be a citizen of one country, live in another country and keep MOST (but not all) your gold in a third country. Preferably in a private bank that has been in existence for a minimum of 200 years in a segregated vault. Otherwise, be prepared to physically defend your ownership.
3) What happens afterward? Depends on what happens before "afterwards." IF it is a hyper inflationary blow off (would almost have to be with gold at the figures quoted) and currency collapse, the world will become very local very fast. One should "get small" and be unobtrusive. IF it is a more "gentle" type inflation of just north of Jimmy Carter numbers, then your gold will keep a store of value and wealth and you should be just fine.
4) The arduous road ahead..on this we should all agree. Whatever happens, nothing easy or good lies ahead.
On May 15 11:10 PM Jasper M wrote:
> "If Gold Bugs' Fantasies Came True" . . .
>
> . . . I predict a lot of very sticky gold bars.
> (Ewwwwww!)
The GCC is still working on their Regional currency. The Asean Bloc has set up a fund for loans to countries in that locale.
I would hate to see what would happen if each region only accepted their currencies.
Meanwhile, California has decided that Buy American excludes Canadian goods. Should be very, very interesting to hear the Canadian response.
8 months) USD went up from 1,2 to 1.8 TL - that is 50 percent.
Plus the house prices fell %20 in local currency.
SO if you had a house selling for 100.000TL( 83000USD) is now 80000TL(44444 USD) and if you were holding US Dollars (or gold -as Gold is USD valued) you bought the same house.for almost half the price (I expect house prices to fall another %10-20).
So it wasn't the end of the world people who have it are buying, and who don't are very happy that they found a customer with cash...
My point is: Even if you didn't have 'gold' than and still Dollar can cause similar problems as well
Perth Mint
The traditional reason to hold gold is that it is an insurance policy against inflation and the erosion of purchasing power from the debasement of paper currency. Gold is the constant in defining value. If everything else goes down, does that make you rich? What have you gained?*90% in gold.
Gold is just inflation insurance. If your house burned down, would you hold a party and dance on the front lawn because you have fire insurance?*It would be paid for.
Deflation*Major debt default.
Are you a short?
Last point..There are always extremists in every group. Goldbugs are no different. However, I think its important to note that people holding physical metal are proactively trying to think outside the spin zone and do SOMETHING to try not to become a victim. AT its core, a noble pursuit.
I lived through the Carter inflation at least, and in any inflationary scenario the last thing you want to hold is CASH.
Does it matter? Yes, because the two alternatives are
a) Lose half your purchasing power,
b) Lose ALL your purchasing power.
Do I get to keep it? Honestly, why worry? If society falls apart, police protection vanishes and we are overrun by murderous gangs, nothing we own is safe anyway. They will take our homes, our property, and in all likelihood, our lives, since the food supply will dry up and 95% of us could not fend for ourselves in that environment. Game over.
What happens afterwards? The most likely scenario is not some Mad Max fantasy, it is what we have already seen in the 1930's. Global Depression, soup lines, 30% unemployment, etc. Like then, this will lead to political tension and wars. However, even in such "end of the world" times (and that is how they all saw WW II) gold was not worthless.
What happens afterward is not worth worrying about either, because again, the question is one of alternatives: Do you want to enter that era with empty pockets, or with gold in your pockets?
I have worked as a computer consultant on the periphery of the criminal justice system, and seen enough depositions, trials, gangs, and criminals to last me a lifetime. There are some tough, ruthless mofos on our streets, my friends. Now I do own a handgun, but I maintain zero illusions about my ability to fight them off in some Mad Max societal collapse scenario. They win.
So why worry? The only "afterward" that counts is one in which there is some semblance of law that keeps your assets from being stolen or seized by the government. Again, the Great Depression is the model there, and I'd rather go through that with something, instead of nothing.
Few gold bugs are ultimate survivalists but do share some of their concerns.
When you speak of healthcare, it shows you have not done your homework. Although most people think it so, the United States is not the best in the world; on the contrary, according to the World Health Organization, we are number 36. Canada, England, France, Germany, Japan....in fact most all of the industrialized countries are many notches ahead of us.
I most certainly advocate for free markets, but it is an unfortunate fact of life that human greed is very destructive, as it had been in our current economic situation and our bloated and failed health care system. I say failed because there are currently about 50 million uninsured people unable to get health care when needed (without first losing all their savings in order to qualify for Medicaid) and millions more in the wings. For most of the rest of us who are lucky enough to have insurance, the price is prohibitive in many cases. In this area, profit has not served us. Fourteen thousand physicians agree (See Physicians for a National Health Care System). A "single payer" health care system would go a long way in making the United States once again competitive in the world markets. As it does in most countries, private insurance can co-exist for those who can pay extra.
On May 15 10:42 PM psig wrote:
> In this climate of a crisis generated required action by the gov't
> anything could happen. Weren't there lynch mobs heading for AIG
> officials recently.
> We have a supposed "crisis" in health care. The country with the
> best health care system in the world has a health care crisis. Where
> are those in Canada and England gonna go when our care becomes like
> theirs. Once the gov't has control of health care that opens the
> door to everything from telling you how many Big Macs you can eat
> due to health issues to how much beer you can buy also because of
> health issues to what kind of car you can drive.
> Another oil crisis is on the horizon. The US gov't suppresses oil
> and coal exploration and I understand is working to shut off offshore
> drilling. When gasoline starts to skyrocket again the gov't will
> step in and take over the oil cos under the guise of another crisis.
>
> As for the auto cos. this was another generated crisis through auto
> regulation and UAW costs. The solution would have been to let the
> auto cos. go bankrupt and renegotiate all of their contracts with
> the UAW. Instead you have one UAW bailout after another and now
> a bankruptcy controlled by the gov't giving the UAW and the gov't
> control of GM. This gives us a gov't run car company which will
> end up making some kind of a crap vehicle to be forced upon the public
> and a never ending gov't supply of taxpayer money to the UAW. No
> reason for the UAW to sacrifice anything.
> Watch out retirement funds. When all this gov't spending generates
> a federal bankrupty the only pile of money left for them to confiscate
> is in retirement funds. They will mostly likely offer some kind
> of social security deal in exchange for you giving the gov't access
> to your retirement account. The alternative would be your retirement
> fund downsizing to a small puddle.
> For those cos. that think they can save their ass by getting a gov't
> bailout guess who ends up telling your ass what to do. And there
> is nothing quite like making everyone equal by cutting all the big
> boys down to size. So far from what I have seen I don't see much
> difference between the US gov't and the mob.
>
> THE INHERENT VICE OF CAPITALISM IS THE UNEQUAL SHARING OF BLESSINGS.
>
> THE INHERENT VITURE OF SOCIALISM IS THE EQUAL SHARING OF MISERIES.
>
> Winston Churchill
the hospital regulating agencies are just another organization that finds ways to justify itself and has it's major focus on BS instead of outcome. for instance if my procedure start time differs form the nurses by a minute, or the time the patient enters the room differs by a minute everyone get their panties in a bunch. the patient can die as long as the chart is OK. If between cases I do not lock up my drugs it is a problem, yet that is a critical point (from waking in the operating room to going to recovery room that I should only focus on the patient.). It is like asking the pilot to be doing silly things while he lands the plane. if the plane crashes, but all the things he had to write down were there it's OK.
On May 16 10:16 AM Merigolden wrote:
> Psig,
>
> When you speak of healthcare, it shows you have not done your homework.
> Although most people think it so, the United States is not the best
> in the world; on the contrary, according to the World Health Organization,
> we are number 36. Canada, England, France, Germany, Japan....in
> fact most all of the industrialized countries are many notches ahead
> of us.
>
> I most certainly advocate for free markets, but it is an unfortunate
> fact of life that human greed is very destructive, as it had been
> in our current economic situation and our bloated and failed health
> care system. I say failed because there are currently about 50 million
> uninsured people unable to get health care when needed (without first
> losing all their savings in order to qualify for Medicaid) and millions
> more in the wings. For most of the rest of us who are lucky enough
> to have insurance, the price is prohibitive in many cases. In this
> area, profit has not served us. Fourteen thousand physicians agree
> (See Physicians for a National Health Care System). A "single payer"
> health care system would go a long way in making the United States
> once again competitive in the world markets. As it does in most
> countries, private insurance can co-exist for those who can pay extra.
>
If gold goes to 9000 is that simply because it is not manipulated, some sudden demand, govts buying, what reason. It does not have to mean that the world fell apart. Diamonds could become 1 trillion a carrot would that end the world.
No matter which way things go I will always take faith in the shopkeepers with shotguns protecting what is thiers. Hopefully they run out of Mob before they run out of shells. That will depend upon how many others have the balls to stand and defend what they have worked hard for and how many are simply cowards who turn and run.
The cowards are guaranteed to starve to death, slow and miserable. But then they dont deserve this country any way if they wont stand or fight for it. Some things are worth dieing for and My country and my family are just two of those things.
Like generations of Americans before us I intend to stand and I am sure that there are 100's of thousands of present day Americans that will too.
The best way to deal with people shooting at you is to SHOOT BACK!!
i shoot back. now we are 2. my sort of isolated neighborhood no longer calls 911. we call each other. we already dealt with one gang from the nearest city. it was comical. we tried the police first but they always took a minimum of 35 mn. to arrive and refused to use any form of stealth.
precious metals are like all forms of insurance. i hope i never need them. in the present environment it seems prudent to add to the p.m. policy.
On May 16 03:38 AM Alan von Altendorf wrote:
> "a private bank that has been in existence for a minimum of 200 years
> in a segregated vault"
>
> Perth Mint
Farm living is the life for me.
Land spreading out so far and wide.
Take Manhatten just give me that countryside.
But let's get to an important part of your agrument. You say sky-rocketing gold prices lead to hyperinflation. That is incorrect. Skyrocketing gold price is the result of hyperinflation inflation not the other way around. Gold has intrinsic value, it always has and it always will as long as we live. That aspect of this commodity distinguishes it from all other things of value. It always represents a barter of exchange. Since modern day history has abandoned fiat currencies that are backed by gold it means that countries have agreed to appropriate value to each countries' paper (I owe you's) money. Since all countries are increasing the number of owe you's without increasing the value of goods and services then they are natuarally increasing the debasement of their currency. The only measure of this debasement is based on the value of gold. If you don't believe me check out the statistics and determine for your self how much gold it will take to buy a new car in 1975 versus the amount it'll take to buy a new car in 2009. When you discover why that is so, then you'll have your answer why gold is about to increase substantially over the next few years. Gold is the measure against the increase of money supply in the market. The issue of inflation arises in different ways. Germany in the past was a good example of this type of money debasement.
Your next argument about who is to keep their gold is tantamount to rediculous. Suffice it to say that banks have vaults for a reason. I don't want to get into the argument of social unrest because the debate is about the value of gold. You've in as much conceded your argument when you argued that holding gold is for insurance. Think about that statement. Your argument is self defeating. Better read a few books on the history of gold. LOL Looking after your money.
Dont buy gold?
If the worst of the worst happens , gold might not help.
Or , in that scenario , it may save your life.
And if less than the worst of the worst happens , it might generally be quite financially beneficial.
I dont think the question is if one should buy , or just what it is that will happen.
I think the question is what is the downside to buying as opposed to not.
At minimum ,workin out better than Lehman Bros. stock.
The value in gold is that it takes labor to mine it -- there is labor value in it. It is objective.
The value of fiat currency lies in the mind of the beholder. There is no labor value embodied in it. It is subjective.
Ho Hum
We are now doing that at an unprecedented pace, thats a simple fact. From 1971-2009 the purchasing power of the greenback (since Bretton Woods) has lost 81%. Gold has not, simple as that. The confiscation by FDR of gold bullion in 1933 is unlikely for poilitical reasons but inflation is inevitable as we must pay back trillions of foreign and domestic debt with printed currency.
Here is my prediction, watch gold go over 1000 this Summer and 1200 by fall and the moment the unemployment loss rate goes to zero or positive and we begin to explode the currrent account deficit(Import ratio) once again, gold will move smartly to 2500 within three years. Those with paper assets will have remember to subract what gains they "may" make from interest or capital apreciation by the loss of purchasing power. Conclusion:
Don't wait to buy gold, buy gold and wait!!!
This is the CATO website
www.cato.org/pub_displ...
On May 16 10:16 AM Merigolden wrote:
> Psig,
>
> When you speak of healthcare, it shows you have not done your homework.
> Although most people think it so, the United States is not the best
> in the world; on the contrary, according to the World Health Organization,
> we are number 36. Canada, England, France, Germany, Japan....in fact
> most all of the industrialized countries are many notches ahead of
> us.
>
> I most certainly advocate for free markets, but it is an unfortunate
> fact of life that human greed is very destructive, as it had been
> in our current economic situation and our bloated and failed health
> care system. I say failed because there are currently about 50 million
> uninsured people unable to get health care when needed (without first
> losing all their savings in order to qualify for Medicaid) and millions
> more in the wings. For most of the rest of us who are lucky enough
> to have insurance, the price is prohibitive in many cases. In this
> area, profit has not served us. Fourteen thousand physicians agree
> (See Physicians for a National Health Care System). A "single payer"
> health care system would go a long way in making the United States
> once again competitive in the world markets. As it does in most countries,
> private insurance can co-exist for those who can pay extra.
So, as the author says, be careful what you wish for.
On May 15 11:32 PM altaman wrote:
> Of course the prudent gold bug also owns one or more guns just in
> case the dream gets a little too wet.
GOOD posts, too.
IMHO the 9000 gold (figure used in article) would NOT be the END OF THE WORLD, since only the dollar would suffer its demise.
There is so much false information and manipulation out there that it defies explanation as to what “THEY” are up to.. and most of the time I don’t even think “THEY” know their ass from a hole in the ground..
Hope for the best and enjoy life as it exists now, but also buy metals, guns, ammo, food, barter items such as whiskey and toilet paper, and some land to live off of and keep your ass off the ridgeline…
Thank you for responding, but I am afraid you will not change my mind so easily. In my opinion, Michael Moore made some valid points with "Sicko". In addition, my late father had all his healthcare from the VA and he received exceptional care over a period of many years.
America is a great country, but don't let that blind you to some fatal flaws that urgently need our attention. Our middle class is what made this country exceptional and why so many of the world's poor have come here...because they had a chance for a much better life. Now, our middle class faces extinction. Maybe we also face anarchy. Got gold?
On May 16 03:52 PM psig wrote:
> Merigolden, you have been watching too many Michael Moore movies.
> May I turn your attention to the CATO Institute report which systematically
> deconstructs the making of the misleading "statistics" in the WHO
> report. The report is titled WHO's Fooling Who? The World Health
> Organization's Problematic Ranking of Health Care Systems by Glen
> Whitman. If you like the single payer system just ask a lot of
> veterans about the VA system. I am sure you have read about that
> in the paper. Just imagine the VA system times 50. What country
> makes the most advances in medicine and medical technology. If we
> have such a crappy country why are so many people trying to come
> to the USA to live and work? These health care systems in socialist
> countries are "fair" in that everyone is treated like crap not just
> a few. Who wants to live in Cuba for free health care and one chicken
> a month. Health care in these countries is rationed and limited
> and physicians have no incentive. It is my understanding that some
> US pharmaceutical cos. here even have programs to provide medicine
> for people who can't afford it. I am not unsympathetic to those
> who have medical issues and there is no perfect system but I still
> believe ours is the best. I also believe there are many charitable
> organizations that assist those with medical/financial problems.
> I have heard this talked about on the Sean Hannity program and I
> would recommend that if you know someone with severe medical/financial
> problems please have them contact his show. There is an email address
> on his website.
>
> This is the CATO website
> www.cato.org/pub_displ...
>a) Lose half your purchasing power,
>b) Lose ALL your purchasing power.
I suggest the debasing of the USD this time will be followed by general deliberate debasing of all other currencies both by government actions and global recession . On balance gold will have no need to rise to hyper levels. 2% inflation built into policy will devalue the dollar over time ( Its always going down ) Other countries will devalue very quickly to save thier own economies. So the world will slide in unison 12 years forward on the 2% scale to a place we all would be one day anyway. This does no mean no profit available in gold just I don't expect any run away
We must remember to government if it feels money flowing to strategic metals or oil or if too much money directed to gold puts the nations wealth at risk they will at least tax specifically to end the run.
I presume you are in the camp that sees massive gold purchases by the public not only as an effect of inflationary expectation, but also as a cause of further liquidity-strains and capital shortage.
After all, gold buried in a backyard means capital withdrawn from the economy that is most in need of it.
This is why I believe the official mints of the US and some other countries have, instead of ramping up production, stopped marketing gold coins to the public.
It is a classic case of doing what is good for the individual (insuring against rampant inflation) ending up being bad for us all collectively.
"Mr. Hui has been involved in the equity markets since 1980, both on the buy side and the sell side. He is currently semi-retired and living in Vancouver, Canada with his family. He maintains his interests in the markets and advises hedge funds and other clients as a consultant. He is a CFA Charterholder."
I don't believe that he nor anybody else expects the price of gold to go up to $9000, but any increase in gold prices indicates that the stock market becomes less attractive as an investment alternative.
Anyone who invests in gold to only "maintain" wealth is a WEAK GOLDBUG.
BTW, this was an excerpt from my free commodity newsletter. I have posted it here at the urging of some readers. If you are interested in getting on the email list drop me a line at cam at hbhinvestments dot com. promise that I will keep your email address to myself and won’t give, sell or rent your email away to anyone.
until you want to buy sugar, salt, coffee, toilet paper, rent, but property, etc.. then you have to borrow from an insolvent bank again.
we don't get much information from the "news media" on venezuela. i have a personal tie there. i get info from some who live there. the tyrant that carter helped sieze power on a bogus election and obamamama is kissing up to is rapidly creating a worker's paradise, aka hell on earth. the u.s. citizens never hear of the crazy prices, the utilization of gang criminals by government, the seizure and control of assets, refusal of govt. to pay "rent" for siezed properties. the waves of dissenters who get disapeared,...
years back my brother went there on a mission trip as part of a medical team. when he returned his fear was that he had gotten a glimpse of our future.
venezuela is rich in natural resouces, far richer than us in %s. because of a communist tyrant the country except for the select few and the military is writhing in poverty. the currency is a joke. my associates there and those that escaped here were at one time members of a wealthy middle class which is now extinct.
buy gold and silver. take possession. or don't and trust in the benevolence of statists.
So really he question is Gold ... or Lead
Also, these European socialist countries many admire have been allowed to squander a lot of their resources on socialist ideology because we have been for the most part providing their military defense. If we pull out our military from Europe they will have to fend for themselves which would be costly and I am not opposed to as long as our country is adequately defended. To be like France is to have a massive gov't, be excessively taxed, weak, defenseless, unionized, expensive, and drive Le Car.
On May 16 11:21 PM Merigolden wrote:
> Psig,
>
> Thank you for responding, but I am afraid you will not change my
> mind so easily. In my opinion, Michael Moore made some valid points
> with "Sicko". In addition, my late father had all his healthcare
> from the VA and he received exceptional care over a period of many
> years.
>
> America is a great country, but don't let that blind you to some
> fatal flaws that urgently need our attention. Our middle class is
> what made this country exceptional and why so many of the world's
> poor have come here...because they had a chance for a much better
> life. Now, our middle class faces extinction. Maybe we also face
> anarchy. Got gold?
>
> On May 16 03:52 PM psig wrote:
however, i am not writing just to repeat your excellent comments. i have a suggestion to improve medicine and make it more affordable for the average joe and joanna. a long time ago, this country found itself in a similar situation, rising business costs associated with worker injuries. so, large factors, including govt and business leaders, came together to reduce the cost of doing business. they created workman's compensation, an option that significantly lowered attorney involvement and reduced insurance premiums. the same thing could be a huge boon if applied to medicine.
rather than destroy the greatest healthcare system in the world, let's create a standard reimbursement for bad results in medicine. remove the attorneys from the mix and significantly lowering malpractice premiums.
this will make medicine more affordable and have the added benefit of improving quality of life for physicians, who currently have to make life or death decisions, while praying they aren't targeted by greedy attorneys. we should compensate injured parties, regardless of fault.
full disclosure: i am a non-practicing attorney. my wife is an excellent pediatrician. i ran her office for over twenty years.
Our health care system has some problems, mainly lawyers but I have lived in both England and the U.S. and I can tell you by experience the European system is awful.
In England I lived next door to a 16 year old girl who could hardly walk and needed a knee replacement. She was called to the hospital several times to wait for a "bed" but when I left England she was 19 and still no knee replacement. Typical time in the U.S: 3 months.
Then why does the WHO show the English system to be better? Because, it is based on satisfaction surveys. So they are using data from people to have been in only one system to compare tsystems. It is not surprising that the results are not valid.
Here is another hard performace number of the kind that Micheal Moore avoided: How much more likely are you to die of Prostate cancer five years after diagnosis if you are in England? Answer: 10 times more likely than the United States.
It is amazing that European medical concepts get any consideration at all in the US. I guess it is because people don't have the facts.
On May 16 10:16 AM Merigolden wrote:
> Psig,
>
> When you speak of healthcare, it shows you have not done your homework.
> Although most people think it so, the United States is not the best
> in the world; on the contrary, according to the World Health Organization,
> we are number 36. Canada, England, France, Germany, Japan....in fact
> most all of the industrialized countries are many notches ahead of
> us.
>
> I most certainly advocate for free markets, but it is an unfortunate
> fact of life that human greed is very destructive, as it had been
> in our current economic situation and our bloated and failed health
> care system. I say failed because there are currently about 50 million
> uninsured people unable to get health care when needed (without first
> losing all their savings in order to qualify for Medicaid) and millions
> more in the wings. For most of the rest of us who are lucky enough
> to have insurance, the price is prohibitive in many cases. In this
> area, profit has not served us. Fourteen thousand physicians agree
> (See Physicians for a National Health Care System). A "single payer"
> health care system would go a long way in making the United States
> once again competitive in the world markets. As it does in most countries,
> private insurance can co-exist for those who can pay extra.
1 last item, with 2.5 billion middle class coming in from china and india, what do you think will occur with ALL stocks? jejeje
It strikes me as possible that their predilection for gold may stem from an ideology/worldview, and not the other way round. If this is true, attempts to point out flaws in strategy amount to a criticism of a belief system, and not criticism of an investment strategy per se. Which is a long winded way of saying that you could be wasting your time. Just a thought. Interesting piece, if only because so few seem to appreciate how inextricably linked the perception of prosperity is to the social fabric we take so much for granted.
My wife is Japanese and my mother in law still lives in japan. Her choice. Her medical care is bad. When she was hurt they put her in a hospital bed to rot. The hospital collected money every day she filled that bed. They have incentive to fill beds to collect state money not heal you. After 40 days my wife had to fly back to japan and fight with the doctor to give her the surgery she needed. They only did it after my wife threatened to take her to another hospital which means they would have lost thier bed fee's.
I worked for a short time for a company owned by a canadian firm and the canadians in the company all had health insurance paid by the company IN ADDITION to the socialized care in canadia. This allowed them to see dr's that did not accept only the nationalized money. In other wards there are now 2 classes of citizens as far as health care is concerned.
Why do so many canadians come to the US for care.
Of the 50 million without health care a very large percent also simply elect NOT TO BUY IT. Thier choice!!! The number of citizens that do not have and want it is only a fraction of that number but you would have the other 270 million plus get worse care to help these smaller numbers.
That is both naive and illogical.
On May 16 11:21 PM Merigolden wrote:
> Psig,
>
> Thank you for responding, but I am afraid you will not change my
> mind so easily. In my opinion, Michael Moore made some valid points
> with "Sicko". In addition, my late father had all his healthcare
> from the VA and he received exceptional care over a period of many
> years.
>
> America is a great country, but don't let that blind you to some
> fatal flaws that urgently need our attention. Our middle class is
> what made this country exceptional and why so many of the world's
> poor have come here...because they had a chance for a much better
> life. Now, our middle class faces extinction. Maybe we also face
> anarchy. Got gold?
>
> On May 16 03:52 PM psig wrote:
I agree that gold is not a bone fide investment. In cases where humans can conduct their economic affairs honorably, gold is not even good insurance. It is insurance only at times when other forms of money cease to fill their role as a means of exchange and a store of value.
Gold is ONLY honest money. That’s all it is. It is not a real investment. A “real” investment attempts to increase the amount of material prosperity. Buying a gold coin is not at ALL the same as buying the stock of a promising business concern.
Honest money holds its purchasing power over time. And it should be fairly easy to use a a means of exchange. A Rembrandt will hold its value, but you can’t buy a car with one. Computer blips can make international commerce much more efficient, but will not necessarily hold their value.
As a store of value gold has been successful for about 5000 years - a good track record.
The only REAL profit that can be made off of gold, is when the price deviates quite far from its mean, if an investor can capture that.
The reason it is so hard for most people to understand gold is that they always think in terms of fiat dollars. And the actual purchasing power of fiat money changes. It’s hard to know what something is actually worth, when the measuring tool is so changeable. Your tape measure is actually rubber band. When those wise old guys said that honorable weights and measures were necessary for any civilization to sustain itself, they were on to something. Gold is honest money. That’s all it is.
If a government arbitrarily confiscates its subjects’ wealth, which they frequently do, that is simply not an economic issue; it is a political one.
If and when the economy crashes to that point, black markets will spring up, and you will have to know somebody to participate. And you will need actual gold and silver to get in. Even during the worst of the communist era, the black market was the actual economy. As long as you had precious metal to trade, you could eat well. If you go to Russia or any other formerly communist country, the house exteriors are s**tholes, but the interiors are quite opulent. Everyone with money hunkered down, got very small, and didn't let on that they had money. Anybody that conspicuously consumed was targeted, so people went around looking like bums. But the folks with gold and silver ate pretty well and enjoyed their tiny homes. They didn't starve.
What is the alternative to buying gold and silver? Buying paper money that can get worthless very quickly? Everyone should take possession of at least a few ounces of gold and silver. Hide it, don't talk about it, and don't act rich. If the world goes bad, you will be able to eat. If the sun comes out and the bluebirds begin to sing, cash it in and have a party. Personally, I'd rather be too early and potentially lose a few dollars, than to be even a day late and lose everything because I refused to buy gold.
Gold cannot be "money" because there isn't enough. When it was the reserve currency there were restrictions on private possesion. If the gold-bugs really had their way people would be forced to sell their gold to the government at prices nowhere near the market price. Their investments would be wiped out.
If gold is the only commodity immune to inflation then the best way for a government to hide inflation is the sieze gold, leaving the gold bugs with nothing more than a worthless pile of cash.