August 27, 2012
- A “nod” to the gold standard… or the bum’s rush? Or how serious is one political party about abolishing “political money”?
- An “attractive entry point”: Frank Holmes with a compelling gold chart
- “Stunning”: Patrick Cox on test results that deliver more ammo for the fight against the next flu pandemic
- Stimulus, Chinese style: Build a bridge, then rebuild it after it collapses
- Free again: An update on Brandon Raub… Reader reflections on jury duty… possible explanations for the varied spending habits of Republicans and Democrats at strip clubs… and more!
Few headlines have been more misleading than one that emerged on Friday: “Republicans Eye Return to Gold Standard.”
When a storm-delayed Republican convention gets under way in Tampa tomorrow — affording an extra day for extracurricular activities of the sort we described on Friday — the prospect of a “gold commission” appears set to find its way into the platform.
“The proposal,” according to the Financial Times, “is reminiscent of the Gold Commission created by former President Ronald Reagan in 1981, 10 years after Richard Nixon broke the link between gold and the dollar during the 1971 oil crisis.
“That commission,” the salmon-colored rag adds, “ultimately supported the status quo.”
Nor is there reason to expect a different outcome this time… if the commission is even formed in the first place.
“The move,” says the FT, “shows how five years of easy monetary policy — and the efforts of Congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.”
Heh… That must be why was Dr. Paul consigned to holding his own event with his own followers yesterday on the — well — fringes of the official convention.
Meanwhile, the draft of the platform refers appears to go out of its way to avoid the G-word, referring to “the feasibility of a metallic basis for U.S. currency,” and “a similar commission to investigate possible ways to set a fixed value for the dollar.”
Fixed to what?
“A crucial debate between monetary policy proponents is ongoing within the GOP,” explains Addison’s friend Ralph Benko of the American Principles Project.
“The discussion is whether to adopt a price rule, as favored by academic economists, or the golden rule.
“Without diminishing the importance of tax, spending and regulatory policy,” Mr. Benko goes on, “if Romney wins, his administration’s getting monetary policy exactly right will prove the determining factor in restoring vibrant economic growth as well as ending federal profligacy.”
Given Mr. Romney’s stated opinions, that’s a big “if.”
“I know that in the past when we had a gold standard,” Mitt Romney tells CNBC, “the idea that somehow it was detached from or free from any interference by Congress was simply wrong because even with the gold standard, someone has to decide what is the conversion rate between the gold and the dollar.”
“Someone has to decide…” That says everything about the top-down, central-planning mind-set, no?
“Whenever governments are granted the power to purchase their own debt,” wrote Ron Paul, getting to the heart of the matter, “they never fail to do so, eventually, destroying the value of the currency.”
That truism came from the 1982 edition of The Case for Gold – the “minority report” of the original Gold Commission. Of its 17 members, only Paul and Lew Lehrman recognized a screaming need for “commodity money” instead of “political money.”
“Political money always fails because free people eventually reject it,” Paul went on. “For short periods, individual countries can tell their citizens to use paper, but only at the sacrifice of personal and economic liberty.”
“Dr. Paul’s introduction to The Case for Gold is great,” says Addison. “Without ‘political money,’ the government cannot wage wars, maintain the welfare state or spend endlessly on pet projects. Paul forecasts many of the political shenanigans we’ve been living through… back in 1982!”
The whole book is still relevant 30 years later. (Don’t miss the part where he anticipates Dick Cheney’s infamous “deficits don’t matter” line.) It’s why we brought the slender, but idea-packed volume back into print.
And it remains prophetic… even anticipating a future when everything but the dollar might be used as money.
Our colleagues at Laissez Faire Books still have a limited supply… and we’re giving them away, along with a copy of Addison’s The Little Book of the Shrinking Dollar — packed with 47 ways to preserve the purchasing power of the dollars in your pocket.
It’s an offer we’ve never extended before… and once the current print run is exhausted, we might never again.
Gold priced in U.S. dollars sits roughly where it did at the close on Friday. At last check, the bid was $1,672. Silver’s showing more life… up to $31.17.
“Investors should use math to their advantage,” counsels U.S. Global Investors chief and Vancouver favorite Frank Holmes, assessing gold.
“Similar to card counting strategies used by blackjack players, count historical trends to discover inflection points.
“Gold appears to be at one of those inflection points right now. Using the last 10 years of data, if you plot the 12-month rolling return, you can see that gold has reached an extreme low, registering a -2 sigma.
“The last time gold reached this point was in August 2008,” explained Frank. “You can see below the yellow metal’s significant climb after hitting that standard deviation low.
Stocks are inching up this morning after turning in late-day gains Friday. At 1,415, the S&P is once again within spitting distance of the April 2 high of 1,419.
“The news is simply stunning,” Patrick Cox, our biotech guru writes about the fight against flu.
Last week, Patrick spoke to us about the high-tech breakthrough that according to him is “the biggest breakthrough in virus-borne disease since Edward Jenner developed the smallpox inoculation.”
We left off with Patrick announcing the release of an oral form of this potential drug that fights flu, HIV, herpes, dengue and Ebola.
“As I reported last week,” says Patrick, “this drug company has announced that their bionanotech influenza drug is orally deliverable.
“This week, however,” Patrick continues, “the first data have been released comparing the injectable with the pill form of this drug, and the news is simply stunning.
“The previously tested injected version was three orders of magnitude more effective than the only current flu drug, Tamiflu,” explains Patrick. And now? “We are looking at an influenza pill that is nearly as efficacious as the injection.
“Oral delivery opens up the financial potential of the company by billions of dollars annually and makes possible entirely new strategies for dealing with pandemics.”
Also, “this is particularly great news for doctors and other first responders who suffer the highest mortality rates when new and lethal influenzas emerge,” Patrick concludes, “as they cyclically do.”
The company that makes the drug is still under Patrick’s buy-up-to price… but with developments moving so fast, that may not last long.
For access to Breakthrough Technology Alert — including the scoop on the “miracle” supplement derived from tobacco — look here.
Oil prices have climbed down from above $97 to below $95 this morning.
Looks as if despite the Category 4 media hype, Tropical Storm Isaac won’t have much effect on the offshore rigs.
When stimulus goes wrong… or maybe not. On Friday, one of northern China’s longest bridges collapsed. Four trucks plunged 100 feet to the ground. Three people were killed.
The bridge opened only nine months ago.
“The 9.6-mile bridge is one of three built over the Songhua River in that area in the past four years,” reports The New York Times. “China’s economic stimulus program in 2009 and 2010 helped the country avoid most of the effects of the global economic downturn, but involved incurring heavy debt to pay for the rapid construction of new bridges, highways and high-speed rail lines all over the country.”
“Brilliant!” proclaims “Andy” from the Ace of Spades blog, dutifully passed on to us by Byron King. “If you build ‘infrastructure’ that has to be constantly rebuilt, those construction jobs become permanent.
It’s not a bridge collapse; it’s a new construction project…
Small victories: A judge in Virginia has ordered the release of Brandon Raub — the ex-Marine who was hauled into a psychiatric ward for “anti-government” and Sept. 11 “truther” posts on Facebook.
Last Thursday, a Virginia judge dismissed the government’s petition for involuntary commitment, saying the petition “is so devoid of any factual allegations that it could not be reasonably expected to give rise to a case or controversy.”
Seems like a self-evident truth, as a certain famous document puts it. But in this day in age…
“I used to work at John Randolph Medical Center,” a reader writes of the institution where Raub was first taken.
“I find it interesting that the Washingtonian criminology ‘brain trust’ — i.e., the FBI (Fumbling Bunch of Idiots) — would get involved in going after one of the locals here and then declaring him, in their ‘brilliant’ understanding of the criminally insane mind, to be dangerous enough to require psychiatric inpatient evaluation, and taking him to JRMC’s psych ward? The place is a dump.
“It has only the most marginal of psychiatrists on staff. Most are FMGs who have poor grasp of the language and a suboptimal knowledge of psychiatry. And they do this when there is a top-grade psychiatric facility nearby, as well as the Virginia Commonweath University’s Medical Center just a few miles up the road? Absolutely amazing. Your government at work.
“And we now learn a judge has called for Mr. Raub’s release and can’t seem to find anything really wrong with him. I think many of us could have phoned that one in from home.”
“My anonymous self, as well as the highly commendable Addison Wiggin, will both be facing jury duty next week,” a reader writes.
“I spent many years living in the home of a retired judge, and I am advised that the not-too-bright, emotionally vulnerable (to the case application) are selected by either attorney. So if I want to avoid being seated, I will act very smart and calculating and emotionally neutral when questioned.
“If I want to stay and influence the case, I act a bit out of it during the interview and provide the answers they are seeking… and then exert my influence on ‘justice.'”
“One of the ancient powers of a jury,” writes another, “is jury nullification, a jury deciding that a law is wrong and not to be enforced, or is inappropriately or excessively applied in a particular case and is therefore to be disregarded in that case.
“In earlier times, judges would sometimes inform juries of this jury power, but for about the last hundred years, they have systematically withheld this information. The main reason for this change was the desire to narrow the vision of the jury so that the jurors would limit themselves to questions of fact in relation to the framework of the law, that is become a weighing machine, rather than considering the whole picture and deciding on that basis.
“In the jury selection process, any who are likely to resort to the larger picture or to think independently are weeded out so that there will be fewer hung juries and the courts can proceed in a well-oiled, more predictable manner.
“Remember that it was jury nullification in the 1735 case of Peter Zenger that established the principle of freedom of the press in this country. In this case, the jury found Zenger not guilty even though he had clearly and admittedly violated a very explicit law.
“This is just another way in which power is being taken from the hands of the people and transferred to those superior beings who craft laws for us. We are discouraged from truly thinking about or analyzing the case we are expected to decide and encouraged to be rubber stamps for the system.”
“I chuckled at the reader’s take on jury duty, as I too, as an engineer, have been rejected a number of times for duty. But I’m writing to tell about a retired engineer who is a friend of mine.
“About five years ago, he received a call from the school board of a very large local school district.
“They told him they wanted him to apply for the position of superintendent of schools.
“He replied that must have the wrong Mr. Jones, as he was a retired engineer.
“They said, ‘No, we have the right person and we want you to apply.’
“He countered that he knew absolutely nothing about running a school district, let alone one that large.
“They replied, ‘It doesn’t matter.’
“He then asked why him in particular.
“They replied, ‘Because engineers are the only people left in our society who know how to think.’
“Believe it or not — this is a true story.”
The 5: Then why did they want him?
In any event, Addison’s latest adventures in jury duty are now over. He’s still reflecting on the experience and will share his thoughts tomorrow…
“Just like a liberal to be a cheapskate and a lousy tipper,” quips a reader reacting to our query Friday about why Republican conventioneers spend three times as much money as Democrats at strip joints.
“Unless they’re spending taxpayers’ money, then it’s Katy, bar the door, baby.”
“I’ve seen Lisa Ann,” he adds, referring to one of this week’s star attractions in Tampa. “The real Sarah Palin is WAAYY hotter.”
“Perhaps the Democrats get confused,” suggests another, “as to why the taxpayer doesn’t pick up the tab and stop spending. The Republicans know that no tax is necessary; the taxpayer picks it up through bond financing.”
The 5: Brings new meaning to the expression “yield curve”…
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. “The human mind,” writes Jeffrey Tucker in Laissez Faire Today, “is profoundly affected by that essential question: Is life getting better or worse?
“The answer for most of American history, save war and depression, has been very clear: It’s getting better. We are headed toward the light. Generation by generation. The trend now is clearly the opposite: We are headed away from light toward dark. The upcoming generation of workers is sure of it.
Jeffrey marshals some disturbing statistical evidence… and teases out the even more disturbing social implications… in this essay.