Wednesday, November 25, 2009

- Still Thankful

This will be a very short post… not because I because I don’t have lots to be thankful for, but because I’m so busy right now that I have very little time. Principle cause of that is that I’m doing the ‘single dad’ thing this year. My mother in law just passed away, so my wife has gone to Florida to tend to her dad and handle the details. My daughter and I are getting by OK on our own, but it’s a heavy workload even for someone who sleeps as little as me.

All the same though I could really use a nap.

I haven’t decided if I’m going to write a longer piece about my mother in law. She and her husband took on enormous and terrifying challenges in their lives, many of which had to do with guard dogs, barbed wire and machine guns. But she always considered herself a small person with a fairly ordinary life, for whom her family was by far the most important priority. There is a great deal more to say about her, and like I said, I may write about it; but not today.

Even with the tragic news, we have lots to be thankful for. We have our close connections (many made closer by the tragedy of loss), and we all have each other. Since she was little I’ve always told my daughter that people are much more important than stuff, and thankfully she seems to have taken that to heart. She’s terribly sad about it, but she’s handling the loss pretty well, as kids her age all surprisingly seem to do.

In an odd twist this year, I even find myself being thankful for president Obama, because as I said in this email to Jonah Goldberg, I’m not happy about what he’s doing, but he’s doing it in such a predictable way that I’m making a fortune on it.

Anyway… we’ve had bad news, but we are getting through it. And we haven’t lost sight of what’s important. But if you don’t hear from me until a week or so after the holiday, now you’ll know why.

Best to you and yours for this holiday.


Laughingdog said...

I wish I understood enough about investing to be benefiting as much as you are. It's funny that nuclear theory makes complete sense to me, yet trying to teach myself about investing just makes my eyes cross after a while.

Tom said...

I'm sure you would get finance too if you had the time to devote to it ... like most things it just takes time. But here is a small ‘leg up’.

The problem is that we have a poor definition of inflation. Like most of the things Keynes came up with, it only describes part of the story. Some will tell you that the price of a big-mac isn’t rising so there is no inflation… that’s incorrect. The value of cash held in US dollars is already falling relative to many things; it’s just not falling against everything. We already have asset inflation, and we’re going to have lots more. The fed will tell you “that’s the whole point” with one hand, and tell you we have ‘no inflation’ with the next. That alone should set off warning bells in your mind.

If it becomes a political problem (or rather…when it becomes one), the politicians can credibly blame it on other people...’speculators and foreign interests’ will become the villains, but it won’t be their fault. In the meantime, rampant inflation will give the politicians a means to balance the books of our government without getting chased from their offices by angry mobs. In effect, they’ll use inflation to steal the purchasing power of your money left in the bank. They’ll steal it from everyone who has savings in cash, and give it to whoever has debt. And they can do that without passing a single bill, or raising a single tax. (Ironically, Ron Paul will do as much to make this happen as anyone with his ‘fed audit’ amendment.)

The global story on gold is that it's the only instrument that can really be used as a hedge against sovereign default. Up to now, no one ever really thought seriously that a major economy could default. Bulgaria or the Ukraine might, but not Greece, or Ireland, or Spain, or even maybe Japan. But now it's a whole different ball game. If one of them issues a major default on debt, gold will go to unprecedented heights.

All paper currencies are being devalued together. Don't hold them if you can help it.