Wednesday, July 22, 2009

Gold Tsunami V: The $23 Trillion Bailout... and Counting

22 July 2009

The excesses of the post-bailout economy are so expansive in scope that little can be done to capture their enormity.

However, courtesy of Clusterstock, here is one chart that does well at capturing our current fundamental picture. Note that the bar chart below is denominated in trillions of US dollars:

Clusterstock provided the following caption in its July 20, 2009 mailing:

"TARP watchdog Neil Barofsky says the total size of the bailout has now hit $23.7 trillion, when all the guarantees are factored in. Of course, the government doesn't just provide a bailout total, so different parties may come up with different numbers. But one thing's clear: ever since the first bailout, the estimate has grown and grown and grown and grown and grown. Let's hope today's number is as big as it gets."

Jim Sinclair works this figure out to about $80,000 per American.

This will not be repaid in uninflated dollars.

When the dollar is devalued, the price of gold rises.

What happens when the value of the dollar collapses?

We will see a tsunami in gold.

I recently stated that the reversal in the 30-year "long bond" is the seismic event that will trigger the golden tsunami. Of course, the devaluation of the 30-year treasury bond is a consequence of the devaluation of the dollar.

You can't make everybody happy and maintain the value of your currency.

Only a government which can say "no" to the majority of its citizens in a time of crisis - particularly to those who are traditionally most influential - can preserve the integrity of the US dollar.

I predict that at some point a government will be elected which is strong enough to say
no to those who make unreasonable demands upon the US Treasury.

The present government is not that government.

We are not there yet.

The necessary national government policy changes will occur post-tsunami.

Man the lifeboats.

Seek the safe haven of the currency that no government can inflate.

Invest in gold now.

My gold tsunami posts are as follows:

There Is a Tsunami Coming in Gold

Gold Tsunami II: Anthropomorphizing Gold

Gold: Safe Haven in the Approaching Perfect Storm

Gold Tsunami III: James Kunstler's Use of the Analogy

Bond Prices: The Seismic Shift That Triggers the Gold Tsunami (IV)

Gold Tsunami V: The $23 Trillion Bailout... and Counting

Gold Tsunami VI: Looking for Patterns in Gold Price Advances

Gold Tsunami VII: This Is It

Gold Tsunami VIII: Gold Mining Stocks Now Participating

Blog Entries I Will Never Write:

I've been meaning to write this one for a while.

Have you noticed that Caterpillar is taken seriously when they release their revenue and earnings reports?

Stop and think about it.

Caterpillar is a North American vehicle manufacturer. They make Caterpillar equipment here. The company pays competitive wages. They sell their products in a competitive marketplace.

How is that different than GM?

Caterpillar makes money, whereas GM bleeds money.

Caterpillar operates its business without government assistance. GM would have sunk beneath the waves years ago without government bailouts.

Why are taxpayer dollars feeding the bloat at GM (and Chrysler) when we have vehicle makers like Caterpillar onshore?

You want to rescue a North American vehicle manufacturer?

My suggestion - put the taxpayer dollars in Caterpillar, not GM!

You'll get something back for your investment....

For goodness sake - put your own dollars in Caterpillar. It's a great company - with great products - that is well-run with the intention of making a profit - for shareholders!

Or in Canada, consider taking shares in Finning at current prices. Price to earnings ratio of about 12:1, and a 3% per year (44 cent) dividend.

Maybe someone at GM should have thought of managing the company for long-term profitability - several decades ago!

Thursday, July 16, 2009

Proust on Suffering and Beauty

16 July 2009

While watching Episode 7 of Torchwood Season Two last night, Susan and I noted that Captain Jack Harkness attributed the following statement to Proust:

"Only in suffering do we recognize beauty."

I have so far been unable to verify this quotation. However, I do note that my web search has uncovered the following remarks by Proust, most of them along this general theme:

"Those whose suffering is due to love are, as we say of certain invalids, their own physicians."

"And this is the artist's source of suffering: to be powerless to turn the eyes of memory, the mind's eye, and reason toward Beauty, Being, or Love."

"In reality, in love there is a permanent suffering which joy neutralizes, renders virtual, delays, but which can at any moment become what it would have become long earlier if one had not obtained what one wanted, atrocious."

"Until I saw Chardin's painting, I never realized how much beauty lay around me in my parents' house, in the half-cleared table, in the corner of a tablecloth left awry, in the knife beside the empty oyster shell."

"Let us leave pretty women to men without imagination."

"The past not merely is not fugitive, it remains present."

"We are healed of a suffering only by experiencing it to the full."

"Everything great in the world comes from neurotics. They alone have founded our religions, and composed our masterpieces. Never will the world know all it owes to them, nor all they have suffered to enrich us."

"The opinions which we hold of one another, our relations with friends and kinsfolk are in no sense permanent, save in appearance, but are as eternally fluid as the sea itself."

“Happiness serves hardly any other purpose than to make unhappiness possible.”

“Happiness is beneficial for the body, but it is grief that develops the powers of the mind.”

"It has been said that beauty brings a promise of happiness, but it could be otherwise that the possibility of joy is the beginning of beauty."

"We always end up doing the thing we are second best at."