Thursday, April 25, 2013

I Must Confess

I hate to say it, but I couldn't get all that fired up about the Boston bombings - our elites don't take such things seriously so any outrage that I could gin up would be pointless.  One of the core issues that we needed to fix in relation to the 9/11 attacks was our laid back immigration system, but Bush made it even more laid back and imported more Saudi 'students' (three times more as it turns out).  So their answer to fixing a problem is to make it worse.  The latest news is that the leftie types won't even reveal the large extent to which the bombers were dependent on America's welfare system to fund their terrorist fun.  The whole nation could be roasted on a nuclear flamed spit, so long as the teachings of the sacred socialist church are not called into question.

As can be expected, our treacherous elites are more concerned about the fate of their immigration bill, than actually making sure that America is set for, you know, Americans.

I had given serious thought to picking up some silver coins at various times over the past year, but I held off because a sleeve of the things was between $700 and $800.  I decided that having $700 (if that...) was better than having a difficult to convert pile of coins.

My procrastination paid off when the price of precious metals crashed a few days ago.  No, I still didn't buy any, it just made me feel better about having not done so.  As can be expected, the gold bugs at Zero Hedge came out in defense of their stand with anecdotal stories of strong demand for physical gold (rather than futures) and veiled inquires that implied that some government conspiracy might be behind it.  I don't count out a conspiracy, but it would require a large player (TBTF) to be very exposed with fake (or semi-fake) futures contracts for which they do not own the product.  In this scenario someone would sell futures contracts with the idea that they will be able to acquire the gold later at less than the price of the contract and pocket the difference.

What would be the point though?  A giant bank sells these contracts to artificially reflect a stronger production of gold and silver to drive down the price and...what?  Get liquidated by the government when they're caught so badly on a monster stupid-trade that even Fed money printing can't cover it up? And anyway, if the 'paper gold' was all that bad, and since "one in the hand is worth two in the bush" then the price of physical must be more sticky?  But no, it's down in the dumps as well.  A more likely explanation might be that the economy is (re)skidding and that in a deflationary (re)collapse, it's best to cash out while you can.
In lieu of an 'investment' in precious metals, I thought that I could likewise buy a firearm that could later be pawned for whatever the currency in the future is.  As Karl Denninger pointed out in relation to precious metals, the value of 'things' remains the same in relation to other 'things', so if I could buy a $500 firearm, but sell it for $400 (a $100 loss, ouch!) then I could at least get something back, which is probably asking a bit much from other investment vehicles.  And if later I'm able to sell the firearm for $4,000, I can still buy 400 loaves of $10/loaf bread.

But I have to say, that idea doesn't appeal to me either, better to retire some (outsized) debt I suppose, or buy 40 $10 pizzas.

1 comment:

MKP said...

I'm bullish long-term on precious metals, but your conclusion on the recent down-turn in price is certainly the most likely one. If this was some kind of conspiracy (send down the price, then buy up the physical gold for later profit), then wouldn't we see the price rebound to new highs pretty soon? Meaning, within 4 to 6 months at most?

The idea that massive printing/currency devaluation/interest-rate-lowering will eventually lead to wild inflation is certainly plausible. But that's a long-term (or even nobody-knows-when) scenario. In the near term, a deflationary recession could very easily drive gold and silver prices lower than they are even now.

Anyway, if you're going to buy a gun, be prepared to spend at least $800, plus a hundred more for the right equipment to store and clean it. No use in having a crappy gun that will depreciate in value.