"While I'd love for our leaders to adopt sensible policies that would reduce the tail risks so that I could sell our gold, one nice thing about gold is that it doesn't even have quarterly conference calls." - David Einhorn, Greenlight Capital, Inc. in a 5/3/12 Huffington Post column
Dear All,
Shadowstats' John Williams made the following observation about the most recent GDP report, which disappointing as it was, is vastly overstated
"The SGS-Alternate GDP estimate for first-quarter 2012 is an approximate annual contraction of 2.2% versus the official estimate of a 2.1% gain. Adjusted for gimmicked inflation and other methodological changes, the business downturn that began in 2006/2007 is ongoing; there has been no meaningful economic rebound.”
In the midst of the unemployment debacle is an under-reported trend. In the past 26 months the number of people on Federal disability roles has doubled. The trend actually began in the early 1990"s but has exploded in the past couple of years. In many cases disability benefits are comparable to what recipients would receive by working. Close to 11 million Americans are now receiving regular disability checks from the federal government. A good many of them are perfectly healthy and will never re-enter the work force. Not only is the Social Security system stressed by these fraudulent benefit recipients, ballooning disability roles further pressures Medicare, to which disability recipients (many in their 30's and 40's) become entitled after just 2 years: Investors.com: 4 Million Join Disability Rolls Under Obama
As discussed: ETFs – The Next Accident Waiting to Happen?
Jim Quinn has penned this terrific essay: The Burning Platform: Epic Fail - Part One
"There are 240 million voting age Americans. About 130 million will likely vote in the 2012 election based upon recent voter participation results. This means that 110 million Americans don’t give a crap about who runs this country or they’ve come to their senses and realize our votes don’t matter."
Directed at the lowest intellectual common denominator, political campaigns vie for the attention of boobus americanus between episodes of 'Mob Wives' or the like. Yet a remarkable number of reasonably intelligent citizens condone the charade, willingly accepting it as legitimate discourse along with the daily doses of horseshit dispensed by media pundits (such as Chris Mathews and Sean Hannity -- political hucksters in their own right) that masquerades as analysis. It is in fact the educated class (the product mainly of state run schools) that is largely responsible for perpetuating the syndrome wherein they elect a sociopath to office, subsequently discover they've been deceived, and then proceed to find an alternate scoundrel to replace him. I see this among my contemporaries. Standing in line to pull levers (all of which result in the same outcome) on Election Day stirs a self-delusional impression of participatory governance and an entirely false sense of civic pride. I personally opted out of this burlesque show a number of years ago. Mencken nailed it in 1956:
"The main thing that every political campaign in the United States demonstrates is that the politicians of all parties, despite their superficial enmities, are really members of one great brotherhood. Their principal, and indeed their sole, object is to collar public office, with all the privileges and profits that go therewith. They achieve this collaring by buying votes with other people's money. No professional politician is ever actually in favor of public economy. It is his implacable enemy, and he knows it. All professional politicians are dedicated wholeheartedly to waste and corruption. They are the enemies of every decent man."
Few things are as repulsive as ubiquitous and inane platitudes on the virtues of education, so often held up as the cure-all panacea for everything from commercial competitiveness to world peace. Glossed over is the pathetic state of what passes for education in the U.S., including colleges and universities, which have evolved into bastions of waste, collectivist thinking and intolerance.
Naomi Schaefer Riley was fired by The Chronicle for Higher Education this week for having penned this thoughtful piece which The Chronicle published: The Most Persuasive Case for Eliminating Black Studies? Just Read the Dissertations. Its readership expressed objection to Ms. Riley's reasoned views and The Chronicle folded to demands that she be terminated. Once upon a time editors defended their contributors, not necessarily for their views but their right to be heard. That academic world of open discussion, tolerance and debate no longer exists, having evolved into politically correct and intellectually corrupt "uni-think." Far from being the oasis for open dialogue and free expression of ideas it once was, higher education is today a leading force in censorship. The Weekly Standard's Jonathan Last weighs in.
Brandon Smith's piece, Has America Been Crippled By Intellectual Idiots? should be read.
This New York Times story on Saturday contained a quote from a Columbia University professor that typifies the sheltered and isolated world of campus rats:
“The university should be a place for reflection for the young to explore areas of the human experience, to be fully aware of history and the arts,” Professor [Andrew] Delbanco said. “We don’t want to have a population that has technical competence but is not able to think critically about the issues that face us as a society.”
"Reflection, exploration, human experience and critical thinking about the issues that face us as a society?" Really, Andy? It's time you vomited up the brochure you swallowed and exited your cocoon of loathesome clich'es. Could it be perhaps that among those critical issues facing society or more pointedly -- recent college grads, is that so many of them cannot find employment for lack of the very "technical competence" you eschew? Has it occurred to you that perhaps a good deal of that critical thinking and exploration might more appropriately come later in their lives, after they've received a return on their invested education capital and a foundation with which to make their financial way in the world?
The good news is that this dinosaur of an industry as currently constructed is -- thanks to the internet -- headed for an extensive makeover. Consumers of education products (yes, education is a product) are starting to get it and will be demanding better value for their education dollars -- less willing to pay for ideology indoctrination and frivolous curriculum. It is my hope and belief that my grandchildren will never attend college (at least as currently conceived). For insight in to where the higher education racket is headed you'll find this Charlie Rose interview of Stanford's Sebastian Thrun quite interesting. His discussion of 'Udacity' begins at 10:08. The entire interview however, is fascinating.
It is a sad reality that the world's best broadcast journalism emanates today from foreign sources such as Al Jazerra and Russia Today, who's Capital Account program recently conducted two noteworthy interviews. James Grant and GATA's Bill Murphy. were interviewed by Capital Account's Lauren Lyster. Both interviews are worth viewing if only to see something rare -- an informed and bright broadcast interviewer:
Jim Grant explains how Central Banks are Waging War on Supply and Demand
Bill Murphy exposes how the Gold Cartel is Bombing the Market for Precious Metals
It takes quite a lot for the Pentagon's civilian authority to appear more delusional than the military itself. The Secretary of Defense apparently has a lot of time on his hands, what with the war in Afghanistan going so well and a temporary dearth of flare-ups among rattlesnake pits the U.S. is stirring up. So, during a slow week of drone activity, killing people, and breaking things the Secretary was dispatched to tell the sheep there's a new bogeyman in town. Seriously, he said this: Panetta: Climate change a national security threat
Scientist James Lovelock admits he was 'alarmist' about climate change
The New York Sun responded to Charles Munger's comment to CNBC that "civilized people don't buy gold," an investment which incidentally, has over the past decade surpassed Berkshire Hathaway's stock performance by 350%.
The trend ('tales of the uncivilized') ...
Turkey Exports “Massive Quantities Of Gold” to Iran and Arab Spring Nations
Russia and Mexico Both Buy Nearly $1 Billion Worth of Gold in March
Bloomberg: China’s Gold Imports Jump Sixfold - May Become Biggest User
Regarding gold and silver...
John Aziz makes note of the decreasing market share of gold ETF's relative to investor ownership of physical gold since 2009. This is an important component of the physical demand force gradually overtaking the suppression of price on the London and the Comex paper mills: Azizonomics: Gold's Value Today
Mark Hulbert discusses The gold market’s steep wall of worry, precisely the sentiment that foretells upward price direction.
The financial system is again on the cusp (surprise, surprise) following the weekend's European elections. The takeaway is that voters are rejecting austerity (surprise, surprise), and politicians and central banks will provide the liquidity (i.e fresh curency) voters crave. The U.S. administration and the Fed, you can be sure, are taking note, which is not to say printing of massive amounts of fresh U.S. dollars wasn't pre-ordained. Do not be fooled by the price action in gold. I'll let John Embry sum up the war underway in the paper markets and particularly the shares. Their manufactured counter-intuitive price action is designed to shake out all but the strongest hands, which judging from my emails and calls, includes a number of readers here. GATA's Chris Powell likewise, articulates the dynamic manner in which gold has historically been re-priced, a wonderful perspective amid the current market turmoil: Gold has changed overnight, and likely will again
It takes a strong stomach to own the shares but they will reward you over time. The goldmap index is currently at 15.0 but the GOI, which measures the out-performance of silver and gold stocks to the metals reads 3.1, its lowest ever. Unless prices of the metals are about to collapse, precious metals stocks are the buy of a lifetime. Although he has morphed into a Federal Reserve cheerleader and defender of crony insider bailouts of which he's been on the receiving end, Warren Buffett once upon a time was merely an extraordinary capital allocator. Buffett, who has been diagnosed with prostate cancer and in recent years has displayed symptoms of ego malignancy, has nevertheless provided some axioms of his success, to wit,
"Be fearful when others are greedy and greedy when others are fearful."
My best,
Jeff