Hi Pezz, On gold, see here …
Message 17174382
On <<Today>> I am exercising, working, having a nice meal, and generally having a normal day.
I did, day before yesterday, in a moment of lighthearted weakness, and, probably, in ACF Mike’s spirit of Bull Part Deux, commit to buy an outrageous platinum miniature machine that holds the equation of time in multiple and perpetual astronomic complications. The machine, made by Alp-dwelling craftsman over one year elapsed time and mandays, is described as few of its kind, with words like care, passion, highly intricate, extremely fine, refinement, and superb workmanship sprinkled about. It sets me back about 10% of a desirable ocean-going boat preferred by ACF Mike, or 100% of an earth-coming Ferrari favored by DAK.
Ferraris do not get much mileage with the girls here in HK because one does not actually drive very much, except to the supermarket, with one’s own wife, and boats are for folks without friends who own boats. This watch will get the babes, probably better than Aztec chains and pressurized carbon molecules.
I will take delivery of the Eighth Wonder in about one month’s time, after the craftsman replaces the German date/day calendar wheels with English equivalent. Almost like a monetary platinum transfer between nations. Euro is cheap, and VAT is refunded for exported goodies, and I am hoping the Part Deux euphoria last out the month so that I can take delivery in a happy mindset. And yup, I will buy the Euro with newly earned USD paper, as opposed to using existing Euro holdings.
Nope, not to worry, I am not turning into a tasseled-loafer-and-bow-tie-wearing dandy sporting manicured hands. I will replace the leather watchband with a contraption I purchased in Hawaiian scuba dive shop, the Freestyle D-Ring Savage watchband, featuring tough canvass construction, and is quick drying, water proof and washable (USD 10), in environmentally safe package. It complements my Timberland and Land’s End wardrobe. I do plan and then do according to plan.
Finally, yes, the mania is back, and this time I am spending in anticipation, to collect the frequent air mileage points, as opposed to in subsequent agony, bathed in foam.
On a different plan, this is the trade I am thinking about: use depreciating and dying Japanese money at 1% nominal (5% real) cost, sourced as capital from Hong Kong, Taiwan and China entities, to acquire oil-soaked and gas-enveloped troppo-calypso Trinidad assets suffering from 12-15% nominal (8-11% real) cost of money. The return will be better if the sands adjacent to the Mediterranean explode in a potent fuel-air mixture of ancient religions and carbon energy, as Japan chokes and Trinidad fetes on higher cost energy. All this in the Asian/US context of pervasive negative returns, and insulting low returns.
The gods are with me, as the Yen is going up! Everybody gets what they want. The Japanese gets there bank books in order for another 12 month, until the next collapse, W gets a vibrant sheen to the economy to justify old policy initiatives, and Jay gets his cheap Japanese loan, now that the range of play is clear.
Politically, Japan and Trinidad are equally and hopelessly deadlocked, but with naive Japanese pretending that all is not dire, and with the totally unaware Trinis not knowing all is totally carbonized toast.
Normally, the place with the higher real rate will see its currency eventually fall, after a while, due to reduced economic dynamism; but perhaps the bet should be that Samurai Japan will not rise against troppo-calypso Trinidad.
The solution to the simultaneous equations of synchronized global recession/depression, concurrent military conflicts, and globalization is simple, elegant, and perhaps marketable. Even better, the solution has elements of natural industrial resources, without resorting to Aztec monetary gold, simultaneously arbitraging interest rates, knowledge gap, temperature, private relationships, policy access, and aggregate outlook differences. Well, yes, simple and elegant, but involved and hard to realize.
Now I must think about the nature of the beast being hunted, mechanics of the game, risk minimizing structuring, and, of course, just-in-case contingencies. I want to find a pony in the haystack, but I also want to see where the possibly fatal catch is.
There are always possible fatal catches, some spotted too late:
(a) Trini politics breakdown
(b) Currency blockage
(c) Collapse of oil due to demand implosion
(d) TT$, US$ and JYen exchange rates rub against each other the wrong way
(e) et cetera
Nonetheless, I feel more confident about the financial collapse script than ever before, because my anti-hero Greenspudkaput revealed that (last week's release of 1996 FMOC transcripts):
(a) he knew there was a bubble when Dow was at 5-6k, accounting was less cooked, debt was less high, and interest rate was more natural;
(b) he did nothing except raising rate by 0.25%, only to see Dow double;
(c) he signed on to the New Economy abracadabra, and thus encouraged the speculators and the innocents;
(d) he saw no major problems but for WTC911;
(e) the economy is recovering now, but with the Dow at 10.6k.
Greenspankie would have made an excellent Japanese Central Bankster, and he is doing it to J6P yet again.
I take all Greensputin said at face value, and easily conclude we will take a round trip back to Dow below 5k, and much below, due to Soros reflexivity (tendency for all feedback systems to over-shoot), much higher debt load, global synchronicity, aggregate falsehoods, and eventual baby boom age-induced hog-wild panic. What do you think? We do not need to disagree, as the settlement of any disagreement is unfortunately not avoidable, the last few officialdom tricks not withstanding.
We will, in the nasty meantime, wait to see that gold is proven to be money once more (being transferred between nations and amongst individuals for monetary purposes), and that raw un-hedonized economic stats, including balance of trade numbers, do matter.
We will also wait for the passing of the recession that few saw coming, and the arrival of something perhaps much less benign.
The solution leading to salvation is so simple: sit on hand, cash, near cash, wait, and think, while pretending to be a shell fish, but be ready for transmutation into a scavenging lobster.
My French ancestors’ 'Tout ou rein', all or nothing, can be improved through my Hakka Chinese ancestors’ know-how, admitted longish and less manageable, to 'suo you he yi qe, yong yuan bu yong qian', meaning, you guessed correctly, 'all and everything, without paying, forever' ;0)
Chugs, Jay |
