Nov 14, 2015

Butler Shaffer on the decline of Western Civilization

What I was saying – and what I have been saying for many decades – is that Western Civilization should be spoken of in the past tense; that its life-affirming conditions have been destroyed by the content of our thinking.  I have written elsewhere that civilizations are created by individuals; they are destroyed by collectives.

~ Butler Shaffer, "'The Death of Western Civilization' - Continued," Blog, November 14, 2015

Sep 24, 2015

Yogi Berra on the value of going to funerals

You should always go to other people's funerals. Otherwise they won't come to yours.

~ Yogi Berra

(Baseball legend Yogi Berra died September 22nd at the age of 90.)

Aug 6, 2015

Lew Rockwell on the religion of environmentalism

Like socialism, environmentalism combines an atheistic religion with virulent statism. But it ups the ante. Marxism at least professed a concern with human beings; environmentalism harks back to a godless, manless, and mindless Garden of Eden.

~ Lew Rockwell, An Anti-environmentalist Manifesto, 1990

Aug 5, 2015

Alexis de Tocqueville on the destiny of two great powers: America and Russia (1840)

Today, two great nations of the earth seem to be advancing toward the same destination from different starting points: the Russians and the Anglo-Americans.

Both have grown unobserved and, while men's attention has been preoccupied elsewhere, they have climbed up into the leading rank of nations and the world has learned of both their birth and their greatness at almost the same moment.

All other nations appear to have reached almost the upper limits of their natural development and have nothing left to do except preserve what they have, whereas these two nations are growing: all the others have either halted or are advancing by a great exertion of effort, whereas these two progress rapidly and comfortably on a seemingly unending course as far as we can see.

Americans struggle against obstacles placed there by nature; Russians are in conflict with men.  The former fight the wilderness and barbarity; the latter, civilization with all its weaponry: thus, American victories are achieved with the plowshare, Russia's with the soldier's sword.

To achieve their aim, the former rely upon self-interest and allow free scope to the unguided strength and common sense of individuals.

The latter focus the whole power of society upon a single man.

The former deploy freedom as their main mode of action; the latter, slavish obedience.

The point of departure is different, their paths are diverse, but each of them seems destined by some secret providential design to hold in their hands the fate of half the world at some date in the future.

~ Alexis de Tocqueville, Democracy in America, 1840

Jul 29, 2015

MarketWatch's David Weidner: "gold always has been a sucker's bet" (2015)

Gold has always been the favorite commodity of a fringe crowd that doesn’t trust governments, central banks, politicians and the financial system. This part of the gold market drives a lot of the buying and selling; it whips up a lot of frenzy. I don’t have any hard evidence, but I’d argue that gold’s value is inflated by people who aren’t investing in a commodity but in a belief system that may or may not include black helicopters and a U.S. invasion of Texas.

The sad part is that gold always has been a sucker’s bet. It’s supposed to protect against inflation. It doesn’t. It’s supposed to retain its value. It doesn’t. For those reasons, gold is supposed to be the ultimate currency. It’s not.

As fund manager and blogger Barry Ritholtz said of gold’s fundamentals: “It has none.”

~ David Weidner, "Why gold is falling and won’t get up again," MarketWatch, July 21, 2015

WSJ's Jason Zweig on holding gold: "an act of faith" (2015)

It is time to call owning gold what it is: an act of faith. As the Epistle to the Hebrews defined it forevermore, “Faith is the substance of things hoped for, the evidence of things not seen.” Own gold if you feel you must, but admit honestly that you are relying on hope and imagination.

Recognize, too, that gold bugs—the people who believe in owning the yellow metal no matter what—often resemble the subjects of a laboratory experiment on the psychology of cognitive dissonance.

When you are in the grip of cognitive dissonance, anything that could be regarded as evidence that you might be wrong becomes proof that you must be right. If, for instance, massive money-printing by central banks hasn’t ignited apocalyptic inflation, that doesn’t mean it won’t. That means it is more likely than ever to happen—someday.

[...] So, if buying gold is an act of faith, how much money should you put on the line?

Laurens Swinkels, a senior researcher at Norges Bank Investment Management in Oslo, reckons that the total market value of the world’s financial assets at the end of 2014 was about $102.7 trillion. The World Gold Council estimates that the world’s total quantity of gold held for investment was about $1.4 trillion as of late 2014. So, if you held the same proportion of gold as the world’s investors as a whole, you would allocate 1.3% of your investment portfolio to it.

Anything much above that is more than an act of faith; it is a leap in the dark. Not even gold’s glitter can change that.

~ Jason Zweig, "Let's Be Honest About Gold: It's a Pet Rock," The Wall Street Journal, July 17, 2015

Paul Brodsky on the value of gold: "It's intrinsically worthless" (2015)

It’s intrinsically worthless or intrinsically priceless.  You can build a financial model to value it, but every input is going to be your imagination.

~ Paul Brodsky, a former hedge-fund manager who now is a strategist at Macro Allocation, an investment-research and consulting firm in New York, quoted in "Let's Be Honest About Gold: It's a Pet Rock," WSJ, July 17, 2015