Robert Perrego

If Another Stimulus Comes, It Needs to Be Different

Well everyone is realizing that when the CBO itself said only 12.6% of the so called stimulus bill was actually stimulus, the Crooks in DC cannot be trusted AT ALL. A second 'stimulus bill' would just present another opportunity for more useless Murtha Airports and more theft by the pork addicted Congress. This Congress is possibly the worst the country has ever had so no one trusts them with anything. The best way out of this mess is to tell them all to go home and come back in a few years. The less spending these crooks touch the better off we all are.

Gold as a Hedge, Not an Investment

Your reply still not not speak to the decreasing of gold available per person. If gold has no value why do people value it so much? The fact that it does not tarnish, corrode, rust, etc... is in itself a value store as that is exactly why people use it for jewelry. Sweat has salt and that is causes corrosion and gold does not react. Therefore with 300 million more people looking for jewelry that can be worn, be a status symbol, etc... the DECLINE in gold per person that can afford it INCREASES its value greatly.

Oh yeah - and now central banks are buyers as well.

Inflation does not figure into this equation anymore.


On Nov 16 10:58 AM Brian McMorris wrote:

> Gold is like any other mineral: it can be discovered and mined at
> a given cost. As gold continues higher (for now), mining companies
> will step up their exploration and mine development projects. It
> is just the same as for oil, copper or phosphates.
>
> For this reason, I am heavily invested in Fluor (FLR), the dominant
> heavy industry construction-engineering company in the world. Once
> supply is cranked back up (from 30 years of increasing neglect),
> supply will exceed demand and the price for gold will decline. I
> did not write about this in the body of my article, but I appreciate
> your prompt for this ancillary point.

Gold as a Hedge, Not an Investment

In response to gold supply never decreasing...

Gold production has been decreasing for a decade now and the number of people on the planet has been increasing at an increasing rate. Also, the economic revolutions in India and China have created 300 million more middle class consumers.

Therefore, the supply of gold relative to consumers that can afford a gold chain or gold earrings or to invest in gold is DECREASING. Gold per population is the appropriate metric here.

Gold as a Hedge, Not an Investment

The one point this entire articles misses is that the gold run is no longer just a function of inflation or deflation. The by product of the weak dollar and massive overseas holdings of dollars and treasuries is that China, Japan and the Middle East need somewhere to diversify their foreign currency holdings. Goldman Sachs recently upgraded gold to $1,200 an ounce on observation that central banks, long sellers of gold, are now BUYERS. India bought 200 tonnes off the IMF, China has been increasing gold reserves, Chile is a net buyer, etc...

Gold is a CURRENCY in a world of devaluing fiat currencies and will go much higher. I called gold $720 last November here on SeekingAlpha as the last chance you were going to get to get in low. Hopefully you listened. I see $1,200 to $1,300 as no problem by March. Seasonally gold peaks in late Feb - March.

The inflation-deflation debate is dead. When the massive foreign holdings of the dollar need to diversify, their choices are depreciating paper currencies or gold.

The WSJ's Unhelpful Aggression

Funny how fishy did not go into the fact that Obama really does not need that kind of info. Obama has never ever run a successful business much less anything to do with Wall Street or credit spreads. The White House's intrusion into the management of financial firms only underscores the fact that a little information can be dangerous and the last thing we need is a neophyte gumming up the works even worse.

Volcker seems on point. Obama's tendency to decide how business should be run and stimulated (read: cash for crappers) could be dangerous. This could all prove out if we end up with some kind of interest rate level legislation soon. I wouldn't be surprised.

Warren Buffett Getting No Respect

Warren got caught buying and holding and buying 'value' in a market where the bar on value (P/E) was dropping. Warren's death trap here is he did not count on the massive de-leveraging and a change in the entire market landscape. Home values dropping as they have, credit being withdrawn etc... is going to keep this market from running back up for years by restricting consumer buying power and thus demand on companies products.

The whole game has changed somewhat and if you are a buy and hold for long term sooner or later something like this catches up to you. The losses he has taken are huge and will take a decade to recoup, minimum.

Auto MPG: The Economics of CAFE, Part One

All of these 'problems' of course assume that without the noose of the union around their necks that these car companies would still fail.

Would they? An extra $1,800 profit a car sold (one estimate of the costs of employees no longer working at GM) might swing them to profitability even in bad times.

Is it the product choice or is it the suffocating crippling union that is killing GM and Chrysler?

Auto MPG: The Economics of CAFE, Part One

So the reply is mandating mpg and restricting consumer choice? That is the child's answer to the first question of a lawyer who has not taken the time to think it all through. Just slap a $1 a gallon tax on gas - would raise tax revenues, tamp down demand, change buying patterns, etc... and still provide for more choices by the consumer. Of course that would mean more freedom and that is not good. we all have to live like the getting bigger Government says so now.


On May 21 04:26 PM DenverDude wrote:

> We consume far more oil than we produce or can produce from our limited
> supplies, and there is a cost to our importation of oil. It takes
> the form of our military presence and intervention in the areas of
> the world where that oil is produced. We cannot remain free unless
> we have full control of our energy sources. We need to limit our
> consumption of imported energy. This requires decision making with
> a time horizon far beyond that used by most of us when we are selecting
> a vehicle for purchase. It looks like we are finally getting decision
> making with longer time horizons from the Obama Administration.<br/...
>
> Our "Big Three" automakers have made short term decisions that have
> resulted in harm to all of us. Foreign automakers such as Toyota,
> Honda, etc. have taken fuel efficiency seriously and they are "Cleaning"
> the joint and several "Clocks" of the "Big Three" while the "Big
> Three" have invested in lawsuits to delay the inevitable rather than
> tooling for fuel efficiency that would serve consumers and our country.
>
>
> There is a 2004 study of the impact of hybrid drives, both mild and
> full upon estimated EPA mileage estimates done by researchers at
> UC Davis. Google it if you wish. It is apparent that the "Big Three"
> ignored the lessons so clearly drawn in the study.

Auto MPG: The Economics of CAFE, Part One

LOVE IT! This is exactly how this should happen but Obama likes to rule and make declarations and he has no idea about how economics and proper placement of taxation for incentives and disincentives works. He is a lawmaker and not an economist - has no idea how to properly work within the economy and does not think past the first obvious question to find more efficient answers. Freedom? Under a socialist you are only free to be like everyone else. Mindthink drones is what they want.


On May 21 11:10 AM quickZ wrote:

> Of course, your entire argument dies on a threshold quesiton: Under
> what Consitutional rubric is our federal government supposed to be
> regulating fleet gas mileage and limiting our freedom to drive the
> vehicle we choose? The only argument for any of the CAFE mess is
> the "necessary and proper" clause in Art. I, Sec. 8, and under any
> reasonable reading of it, CAFE and indeed the EPA is unconstitutional.
> If we want to do these things, then let's amend our Constitution
> to permit the EPA, which will require building a concensus on this
> kind of regulation.
>
> In lieu of that, give me freedom--to drive what I want to drive.
>
>
> If you must regulate me, then tax the gasoline (a much more Constitutional
> approach, as at least the Const contemplates taxes and excises) so
> at least we can drive what we want if we are willing to pay the freight.
> Otherwise, we'll have lots of unsold little cars on car lots. <br/>
>
> When gas was 4.00 per gallon, Priuses were flying off the lots; when
> gas came back down, sales of P-cars dropped about 40%. Gas taxes
> make much more sense than CAFE standards--it is how the Europeans
> handle this issue, and it will generate more money for the govt as
> a bonus. It is simple, and it works.

2 Concerns with Michael Lewis's Review of Buffett Book 'The Snowball'

Uhhh yeah - but news out today says Buffett is running low on cash these days. He started buying the bottom on March 2008 (with Bill Miller and Eddie Lampert - other value legends that got destroyed in the last year) and blew most his wad while stocks were still coming down. Now his dry power is mostly used up and he has massive positions to average down and don't forget his $34 billion put. We get a new low in this market and his average down approach is DOA and the only time he will be happy is getting tax refunds when he posts massive losses every quarter.

The Worst Case Scenario (Someone Has to Say It)

Which point has Obama being run out of office early? I like that one.

Demystifying the Stress Tests

well the only thing less revealing than the release was this discussion of the release.

"We anticipate banks shares to remain volatile between now and May 4, as there will be speculation on which banks will emerge as well-capitalized and which ones will need additional capital. As we have seen in recent results declared by the banks, the losses have been rising sharply, and if a meaningful and fair exercise has been conducted by the regulators, then we suspect that at least some of these banks will be found to be in need of additional capital."

no kidding.

the only other option is that nothing at all happens as every bank passes.

Gingerly Stepping Back into Commercial Real Estate Shorts

What ETF's do you know of for this sector?

Why Bernanke Is More Important than G20

Easy enough - Bernanke works for the US of A - the economic engine that drives the world. want to admit it or not - we lead, they follow. period.

Congress: Shortsighted About Financials

We need to have a complete change - EVERY politician fired and a whole new set of people with new ideas and no favors owed, no dirt held on each other and no buddy network underhanded crap that permeates this nest of snakes pulling us all down.

Dodd, Rangel, Reid and Pelosi should be the first to go.


On Mar 25 04:09 PM Husker Mark wrote:

> While I agree with other commentors that banks receiving bailout
> money should not be paying executive bonuses, I also agree with the
> concept that Congress is not focused on what is important to the
> country.
>
> Members of Congress are interested only in public opinion and doing
> what might improve their chances for reelection. The continue to
> avoid the difficult questions that concern future generations such
> as dealing with Social Security and Medicare, Immigration, and the
> Alternative Minimum Tax. They keep putting temporary, band aid patches
> on things, hoping that they can make it to retirement and let someone
> else deal with the problems.
>
> The Stimulus Bill was just another good example: less than 30 percent
> of the money is scheduled to be spent in 2009, when it is really
> needed and way too much of the money is earmarked for either small
> pork-barrel projects that will help garner local votes or for short-term
> infrastructure projects that will not create the permanent jobs our
> economy needs.
>
> This country desparately needs term limits so elected officials can
> spend more time trying to do what needs to be done for the good of
> our nation instead of trying to get reelected. Representatives in
> Congress spend their first year legislating and must spend their
> second year running for reelection. That is not good use of taxpayer
> money, either.