i think what horowitz is saying is that people are unique in their wants, needs, desires, etc.

and as long as they make peaceful voluntary exchanges and transactions free from coercion there's nothing wrong with that

further if that produces a difference in the economic scenario or "inequality" between them he can live with that

where he has a problem is when people use political power to create coercion and legal force to fleece people to create that inequality

regards

pretty strange times these last 5 year; gold has more than doubled.  Like any asset, there is risk.  If you bought gold in 1980 (another unusual time) at a peak of over $600, you wouldnt have gotten your money back until 2007.  So, perhaps gold is a stable investment in times of stability, but be wary accumulating for the long-term during/after times of crisis.

As a kid, I used to collect stamps.  Somewhere what's left exists and I should try and dig it up and off it.  Now the only stamps that I would buy are forever stamps.  They are guarenteed to appreciate over time.  A better return than a savings account.  Pardon my apparently narrow view, but its how I'm putting my money where my mouth is.  It has worked pretty good over the past 5 or so years and I am decently ahead of the game.

Okay, I have a few moments and wanted to comment on this because I see it all the time.

a) the common refrain is that a barrel of oil costs the same as a good suit. You've adjusted to 3 to make it fit the current pricing, but a good suit can be anywhere from 400 to 4000 dollars. That's a 10X variance and gives a lot of room for confirmation bias.

b) similarly, the cost of gold in barrels of oil fluctuates from below 10 (barrels per ounce) to over 30 in crisis times (when you would expect gold to bounce as well).

All this really shows is that with enough slack and vagueness you can tie prices for commodities together in rough scale.  And even if this were perfectly true, it would mean only that holding gold as an investment has had an exactly zero return. It buys the same now that it did a long time ago. The idea of investing is to grow, not stagnate. I know, it's a hedge against inflation... but it's a lousy hedge, and I wouldn't put much of my portfolio in a zero return asset.

The statements about intrinsic value are also really odd. They seem to imply that holding other assets have no intrinsic value. But when you invest in Coke, or Clorox, or Apple, or any other stock, you are getting a percentage of a corporation that has assets, buildings, factories. They use all these in production to (hopefully) grow. Even if the sales are flat, there is still the real estate, machinery and other components that react to various market forces. It's not just a stock certificate that you are purchasing.

Good take.  I've given up on gold, even if I could afford it.  As the article suggests I'm plugging into silver in the form of silver eagles.  Savings accounts pay less than 1% these days.  I can get uncirculated ungraded eagles all day long for $55 each.  A few here, a few there.  Can flip them relatively easy should the need arise.  Silver's industrial value will never diminish.  US coin silver, Morgans and whatnot run around $45, but they are only 90% so might as well pay a little more for 100%.  Plus, I have physical possession.  I'm hard pressed to see silver fall much below its present value which is presently around $29 a z.  I bought some graded coins when silver was at its peak of around $50 and even with the drop down of 40% to $30, they are still worth what I paid for them.  They are also an off the books asset.

Silver is in small amounts that can be easily used in barter.  I see being able to go to a locally owned business and use them if needed.  Say I need new tires.  I believe that I could call around and find someone willing to trade silver eagles for Goodyear eagles.

Coin collecting thread anyone ?

Me, I'm starting to look closer into raw silver eagles and pay around $55 for them, even though silver is down around $29.  There is recent noise that the silver market is under investigation for price fixing.  Wouldn't surprise me and does not scare me.  We live in a bubble driven economy.  Funny thing about oil right now.  Plenty of sabre rattling in the Middle East and oil is relatively flat, even with Bernanke going nutz with his printing presses.  The ages old price relationship between gold and oil is starting to break down and be less predictable or is it my imagination ?  Gold has held a constant value since biblical times in what it would purchase when measured in its worth in other commodities.  With the exception of the gold bubble under Reagan IIRC, gold has always bought the same amount of oil regardless of its and oil's prices.  Today an oz will buy about 15 bbls.  Back when it was around $300 and oz. the same was true when oil was around $20 bbl.  There is also the same relationship in how many gentlemen's suits an oz is worth, which is around 3 suits to an ounce.  That has remained constant.  Loafs of bread is the biblical constant.  But in the long term, its safely trying up my money for a rainy day and a hedge against inflation.  I expect nothing more.

Pardon the long wind, but its keeping my mind off of other things.  Hope you don't mind.

Good article related to discussion on gold, more re. risk...and interesting concluding comment; can we ever get back to the garden?:

Gold does not rust, spoil or otherwise decay. But to Nassim Taleb, it is not antifragile.

Gold may be physically durable and culturally indispensable as a store of value over the centuries. Yet the metal doesn’t itself thrive by becoming stronger as a result of the inherent and unpredictable variations in conditions that the world constantly presents.

http://finance.yahoo.com/blogs/michael-santoli/gold-not-antifragile-enough-black-swan-author-141516155.html

 

Wow, hope that kept your mind off stuff for a bit.

I don't have time to go point by point, but I disagree with a bunch in there.  I'll just say there are always pessimists and there are always optimists. The pessimists look smart when things are in decline, the optimists look smart when things are on the way up.  

But that is what we keep hearing from DC.  TARP was the first cry.  Sequester is the most recent, with other events in between.  We had the country's debt rating lowered for the first time in history.  I said it before and will say it again, we would have survived without TARP just as we have survived the most recent bluff of Sequester.  We will survive, but what will we be on the other side ?

We survived 20% inflation and mortgages under Carter, but he only had 1 term to get that underway.  A second term would have been catastrophic economically.  We can argue that the roots of our present decline began under Carter with the CRA, which laid the foundation for risky banking practices over the notion of redlining.  If you won't accept that, then we can look forward to 1993 and the repeal of Glass Stegall which broke down all banking barriers and surely can be called the enabler of our present situation.  So at the very least, this scenario has been underway for 20 years.

Let's find something else that we might agree on.  Even in the worst of times, there are many entities that do well and prosper.  Niches do well as do some essentials.  Hard times for many are good times for some.  A total collapse is unlikely.  We have had gas rationing and periods of water rationing.

Rome did not have the Internet, firearms, super sonic aircraft, missles, nuclear weapons and drones.  Rome did not have 300 million people.  Rome was a theocracy / monarchy, in real practice.  We are in decline.  Detroit is under seige, economically.  San Bernardino is under econmic seige as is Stockton to name some.  Our standard of living is in decline.  Wages are falling, not rising, unless you work in the .gov somewhere.  Our primary education system is the laughing stock of the world.  1/6 of our country lives in poverty.  The real umemployment rate lingers at 15%.  We have several million less total jobs than we did 5 years ago.  We cannot create enough jobs to keep up with population growth, which requires 250k every month.  That's every month, forever.  The era of upward mobility is basically over.  The American work ethic is pretty much dead or so scarce as to be effectively dead in the upcoming generations.  I think we can agree on everything in this paragraph except for probably the type of gov Rome was.

So what kind of landing do we have ?  To think that patience is an abundant commodity in this age of instant gratification is false hope for lack of any other way to express it.  The prophet Cobain wrote the anthem for this cohort used to instant gratification.  Here we are now, entertain us ...  There are indeed sheep out there.  The same kind who were content with bread and circuses.  And we wish we could throw banksters and politicians to the lions.

The guy who I have listened to over the years, the one who perfectly diagramed the last 2007 crash a year before it happened is calling for a correction sometime between May and the beginning of 2014.  May being when we have the next round of the debt ceiling debate.  2014 ?  How long can Bernanke keep this going ?  We know the danger lies in when to tighten up the money supply.  It has yet to be done perfectly throughout history.  What can make anyone think otherwise this time around ?  The magic number is when unemployment falls to 6.5 %.  But which number is it for openers ?  The fake official one or the real one that everyone ignores ?  Do we rely on a guy using fake numbers to get it right ?  Not me.  But there is nothing I can do other than watch it happen or not happen.  I do not wish it to happen.

It doesn't have to be this way though.  We could turn this country around in 5 years if we wanted to.  Now that the myth of Peak Oil has finally been debunked, we hold our fate in own hands with all of our energy reserves.  We can be energy independent and an exporter for 50 to 100 years, freeing us from the Middle East and the War Middleman forever.  Something like Thorium or Cold Fusion will be in mass use long before we run out.  But we keep our money home so we buy things from people without having to declare war.  Problem is, there is a small faction opposed to petroleum of any kind and is willing to destroy this country with its passionate hatred and fearmongering.  We can drill ourselves out of the hole in 5 years if we went about it the same way we went about putting a man on the moon.

I started out with Cyprus being a focus, but another time.  So this is my common sense story and I'm sticking to it ...

Aren't you being a bit optimistic here?  Do you ever look at ShadowStats?

Figure the unemployment rate the way they did back in 1933 and low and behold......it looks like 1933.

 
From Shadowstats...
 

The real unemployment rate lingers at 15%.  

No problem. We disagree on some of the drivers and likely outcomes, but it's all about making educated guesses on where we see things heading. It will of course be colored by our surroundings. I can barely keep up with the growth in our industry and that is dragging several others along with it (including some metal commodities), so my views are more positive.  I also think that even at the worst, economic catastrophes won't devolve to total chaos (2009/10 was massive in terms of lost value and occupy wall st. was the loudest protest). If it ever tips over and goes to total chaos, unless we kill off 50% or more of the population (world wide), I don't think we'll get to the end time scenarios a lot of people are 'prepping' for.  If we do get to that point, no one will care much about gold and silver (copper maybe if there is still some industry left).  But this is all really speculation about how far down the economy and society will fall. I see very modest growth so at least directionally, we are okay. 

Big things don’t fall apart overnight. Even Rome took centuries to fall apart. It took 80 years past when their government formally split. We have yet to lose a city to siege, we haven't really even abandoned any cities yet (although we have abandoned sections of cities).  I just don't see eminent doom on the horizon. Sure there are problems, but there have always been problems. As long as there are still solutions we'll move forward. I think it will take a lot of unsolved problems for us to really go into decline, so far that's just not happening. 

Yes, but hopefully you realize that the fact that some people believe the Destruction of the Death Star was an inside job does not lend the theory any credibility.

Did The Empire Want to Blow Up the Death Star?

The level of support of gullible people for a theory is not a measure of its plausibility.

Oh no I assure you it applies to all words posted on the internet. One persons conspiracy theory is another persons writing on the wall.

I agree...the end of the world (or society) only comes once.  I do think we are in decline, mostly from dysfunctional politics.  As long we continue to squabble over made-up ideologies (less/more govt, please...every politician wants more of his and less of theirs), and ignore investing in our future.  There is a white knight out there - technology - but we are ignoring it.  

No problem. We disagree on some of the drivers and likely outcomes, but it's all about making educated guesses on where we see things heading. It will of course be colored by our surroundings. I can barely keep up with the growth in our industry and that is dragging several others along with it (including some metal commodities), so my views are more positive.  I also think that even at the worst, economic catastrophes won't devolve to total chaos (2009/10 was massive in terms of lost value and occupy wall st. was the loudest protest). If it ever tips over and goes to total chaos, unless we kill off 50% or more of the population (world wide), I don't think we'll get to the end time scenarios a lot of people are 'prepping' for.  If we do get to that point, no one will care much about gold and silver (copper maybe if there is still some industry left).  But this is all really speculation about how far down the economy and society will fall. I see very modest growth so at least directionally, we are okay. 

Big things don’t fall apart overnight. Even Rome took centuries to fall apart. It took 80 years past when their government formally split. We have yet to lose a city to siege, we haven't really even abandoned any cities yet (although we have abandoned sections of cities).  I just don't see eminent doom on the horizon. Sure there are problems, but there have always been problems. As long as there are still solutions we'll move forward. I think it will take a lot of unsolved problems for us to really go into decline, so far that's just not happening.