There’s an interesting interview with Marshall Auerback of Pinetree Captial Management posted over on Mineweb.com. It’s interesting not because of any particular subject matter, but rather the complete contradictions presented therein. The first half consists of a well-reasoned case for owning gold and why it is being remonetized in an overextended financial system. By contrast, the second half is a fallacy laden justification of many of the failed policies that are driving people to own gold.
I’m always amazed at the number of people I meet who believe that Washington DC will still get its spending under control, that it’s just a matter of getting the right person, or the right party, into office and disaster will be averted. Or, that when we finally hit a real crisis, politicians will do the right thing – which is, incidentally, the complete opposite of what they’ve been doing for the last 100 years. Those are long odds if you ask me.
Recently, on CNBC’s Squawk Box, Paul Krugman ran into some surprisingly strong skepticism about his calls for more government spending. It was clear from the onset that no one was buying into the Keynesian philosophy that infinite government spending will save us all. It wasn’t easy, but the interviewers finally managed to tie him down as to how much spending is too much.
Notable mainstream economists and influential policy makers are calling for more quantitative easing, so many that QE3 is a given. Officially, it will be QE3, but in actuality it will be QE4 because “Operation Twist” is quantitative easing with another name. One important voice now calling for another round of QE is no less than
Paul Craig Roberts is the former Assistant Treasury Secretary under Reagan. He is also a man who is not very popular in Washington. The following interview is as good a reason as any why that is.
It’s almost cognitive dissonance the way the financial markets go about their business. Everyone knows that the United States is bankrupt. Everyone knows that US Treasuries are a bubble. Yet, it’s the first place everyone runs to when things start to get messy.
Although the title, Red and Blue and Broke All Over, suggests that the book is another expose of America’s dire financial state of affairs, that is not the case. Red and Blue inextricably links our prosperity to our liberties and warns that if “solutions” to our existing financial woes and the “War on Terrorism” put still more controls on us, our prosperity will decline as our liberties vanish.
A while back I caught a Peter Schiff interview on one of the mainstream financial channels where he was recommending gold. The interviewer commented that for every investment thesis there existed a scenario in which the thesis would fail. He asked, what was that scenario for gold? Mr. Schiff replied that it would require massive spending cuts out of Washington DC and a balanced budget.
Anyone who has been paying attention to the precious metals world over the last couple of years is well aware of the circumstantial evidence of price manipulation. None of which is particularly surprising, as all the way up through the gold pool of the late 1960s, it has been the open policy of the US and UK governments to control the dollar price of gold.
Well, we’ve heard from Warren Buffet and Charlie Munger on the subject of gold. Looks like it’s time for their young protégé Bill Gates to jump in the ring and throw a few wild punches. Next time though, guys, how about a few dry runs off camera first?