Playing With Goldbugs; Drunk And Immoral

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I Didn't Get Eaten By Goldbugs Moral Indignation Over Bush's Market Quote

MaryEllen Tribby Publisher   Jedd Canty Business Director   Nicole Reynolds Marketing   Jon Herring Editor   Charles Delvalle   Andrew M. Gordon   Dr. Russell McDougal D.D.S.   Rick Pendergraft   Lynn Carpenter   Andy Carpenter   Christian Hill     Tuesday, July 29, 2008 Forward the Internet's fastest growing financial newsletter, Investor’s Daily Edge.   I Didn't Get Eaten By Goldbugs       Lynn Carpenter Life is good. Investors Daily Edge readers take the time to e-mail their feedback and nobody shot the writer. Earlier this month after posting “Don’t Cheer for Gold If You Want a Bull Market Back” I braced for the feedback. In financial circles, saying anything that veers from “I love gold with all my heart, mind and body” party line, even slightly, is asking for trouble from a few ardent aurophiles. I was braced for a wicked backlash from the true believers and was happily surprised at the civilized responses from people who thought I was completely wrong as well as those who agreed.  In these days when Bill O’Reilly telling guests to “shut up” passes for rational discourse, it’s nice to be among adults. Several people who thought I was mildly to completely wrong suggested some books on the topic. I will read those, and thank you. Now let’s see what people had to say. …  starting with the best funny line from someone who thinks gold is not money:  What are we, a bunch of magpies or football players that we are attracted to stuff for no other reason than that it is shiny? J., who wrote the magpie comment,  is not a gold money fan, and he has his reasons… It may have had some legitimacy when its relative rarity, workability and corrosion resistance made it a good material for fashioning baubles to denote status and prestige, but in the end it is just another commodity… with some interesting characteristics. In the modern world there are far more practical, rare and intrinsically valuable materials which would form a more relevant basis for currency or a hedge against economic melt-down. Uranium, Iridium, Lithium, processed crystalline silicon, hell oil or fresh water! If you are really looking to hedge an economic meltdown you may be better off buying farmland, plows, shovels or ammunition; things you might actually need when you realize you can't eat gold. Jonathan. But we believe in balance here at IDE, so on to a reader who has reason to love his gold… I bought gold when it was $250, now it is near $1000, none of my stocks have done that well, Matter of fact I just sold the last of them as they have all tanked!!!!!!!!!!! And they have a long fall to go before they start back up!!!     Roy PS You would do well to get out of stocks for now and buy gold!!! Congrats, Roy.  For your reference, gold was at $250 from July to September 1999 and was almost that low again ($255 according to Kitco) in Feb-April 2001. Roy got in at a really sweet spot. That was the lowest price since 1980.  Some good points in this next letter from Mika, who corrected my statement that gold is not money. He’s right. If someone will take it in trade, it’s money. However, as Mika pointed out to me, it is not legal tender—because no one is required to accept gold in payment. But let’s let Mika tell it: You are confusing Money with Legal Tender.  Besides that you are wrong also on that account, Jersey for instance has a gold backed currency. Furthermore you have non-legal tender money such as for instance the "Liberty Dollar", which is Silver backed.  You can use it to buy groceries etc… Finally, you can have a rising stock market and rising gold price. For instance Australia had a rising stock market from mid-2003 to end of 2007 despite appreciating gold price. So it is not the rise of gold that causes stock markets to fail.  Gold however benefits when this happens as there is distrust in the various other asset classes and counter parties. A bit disappointing to read such mindless repetition of mainstream ignorance in Investors Daily Edge. It is articles like this that will ensure a majority of people stand clueless when US dollar goes through the floor. Kind regards Mika Well, much as I’d like to turn around and point to someone else, any mindless chatter in my articles is entirely my own. But Mika does make a good point that I should clarify in case I did not emphasize that enough in the original article. Gold does not make the stock market fall. It is typically the stock market’s own troubles—or other troubles --that come first. When gold rises steeply, (as opposed to a normal gentle rise) it is usually a sign that people think something’s wrong somewhere. The next to last letter I’ll quote on gold: Dear Ms. Carpenter: I just read your article "Hot Sectors and Bad News: Don’t Cheer for Gold If You Want a Bull Market Back" on HoweStreet.com. I must say that it was refreshing to read an anti-gold article on this website since it usually has pro gold information. While it was refreshing to read an offsetting article you missed the mark in more ways than one. The fact is that gold was money for 5,000 years, until 1971. Do you think that you can repeal human behavior with the stroke of a pen? Of course you cannot. Gold was useful because it was an antidote to human greed and cupidity. Without it credit grows exponentially and the result is financial disaster. Your gripes about gold are quite frankly absurd. Dealers take a cut when you buy! Well the spread between buy and sell on the Canadian Gold Maple Leaf is 3.5% at my local gold dealer. Spreads on less liquid stock can easily be 20%. When it comes to outright scams Lynn what could be worse than Canadian mutual funds…. [more on taxes and fees, all sadly true] The list of countries that have had paper (fiat) money go worthless is legion. In past eras there were two things that were considered to constitute wealth. They were land and precious metals (gold and silver). I believe that when all the dust clears we will return to these commonsense ideas. Of course I don't say that we should have all our savings in gold. This would also be equally absurd. But gold has been money for 5,000 years Lynn. It didn't stop being money yesterday just because some rotten dysfunctional government said so. I have attached a couple of articles for your perusal, one an interview with Peter Hambro, and the other information on archeological discoveries from Lake Issyk Kul in the Kyrgyz Mountains in Russia. Yes, they were using gold as money 2,500 years ago. Yours Sincerely John  And the last letter is simple… balm to a tired and battered writer’s ego:  Great job with this one, Lynn!  Many great points and facts....Your style is "right on "no matter the topic!” VWB Phew! I’d say I got off very lightly considering the topic was gold. Thank you all. In fact, I am going to dare fate and write about gold again…. Because I don’t really hate gold, but I’ve accumulated a lot of interesting factoids, trivia and maybe an important observation or two. But no political proselytizing will be done. I promise. So look for that on Thursday. One last letter to share, going back to the old series I did on trend lines. This is what I always hope will happen: Hello Lynn Carpenter, I just want to thank you for the articles you wrote a while back on trendlines.  Learning never ends and, being a bit of a novice, it can be easy to understand and to put into practice. I have been holding ABM shares for almost a year now.  After the trendline treatise, ABM's chart showed the most perfectly fit bear support and resistance lines and is now showing the same for bull trendlines.  Your articles kept me from selling at a loss.  I am now looking at a 20% profit! Robert R. This should happen to everyone. Now if only I could figure out how to find them on our web page and give you the links. Maybe this means I can sneak them back into the cycle next year as fresh copy. There’s a thought. Best, Lynn P.S.  To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. 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Moral Indignation Over Bush's Market Quote     Andy Carpenter   It’s ironic, I think, that my “Wall Street Got Drunk,” hit a nerve with those who claim a moral superiority to me. I don’t get what morality has to do with a presidential statement. But, these days if you don’t write, “George Bush is the kindest, bravest, warmest, most wonderful human being I've ever known in my life,” you’re going to catch swift and steady hell from the solitaire-playing crowd.   Paul R.’s note best expressed the emailed rapid response and moral indignation to the fact that I quoted verbatim something US President George Bush said last week. “You and your other a**hole self -seeking Democrats…   do you really think that the American people can’t see thru that puppet empty hollow presidential candidate Obama that you support. As we speak he is overseas selling us short telling them about how many mistakes we have made sucking a**. You and your spineless party are in for a big surprise come Election Day…  I can only hope that someday you will be able to understand [President Bush’s] statement about Wall Street getting drunk. Until then you should probably pour another double because it’s going to get worse come November for you and your phonies. Till then keep up your bullshit, America’s Moral Majority isn't buying it.” Not Good Work By the way, I agree with Chris B., who wrote that the “drunk” piece is… “Not your best work by a long way, but thanks for provoking thought.” I probably should have gone with the Iraq oil piece I’d spent a couple weeks working on. I think it actually advanced the oil conversations the financial media has been engaged in lately… which is kind of the reason journalism exists… to advance, not rehash, the day’s big ideas. But, to tell the truth, save for a glib comment on oil at the end of Saturday’s piece, it’s been all oil or all Freddy/Fannie all-the-time in the financial media lately… There has to be something else going that affects you, maybe we should dig a bit deeper. Anyway, I gunned out Saturday’s piece at the last minute… 2 a.m. Friday morning. And, as Chris noted, that’s not a recipe for success. Win A Free Newsletter Penned By A Morally Repugnant A**hole Still, the oily remarks at the bottom of the piece, interestingly, evoked another wave of rapid response. All called for drilling in the Alaska National Wildlife Refuge and offshore. By the way, I will award a free year’s subscription to my Asia Business & Investing newsletter to the first of you (by time received in the IDE email in box) who can identify the real and truly critical reason that the ANWR needs to be opened for drilling. And, I will accept no answers as being correct if they suggest ANWR drilling has anything to do with more supply or gas prices in the manner in which President Bush makes the ANWR case. Though, I write cryptically, supply is a crucial part of the correct answer – just not the way you’d expect. So, I guess what I am looking for is the truth. If you come upon the right answer, the truth will amaze you.  I’ll reveal my right answer – or yours’ if you find it – on Saturday, in my regular slot here at IDE. Just The Facts, Please    Anyway, back to the oil comment rapid response. My favorite ones are always the most reasonable, like this one from Karl N. “This oil mess started in the 70’s.  It was reenergized in the 90’s with Bill Clinton, and Al Gore.  It takes a long time to build something and just a little while to have blood sucking miss management in the 90’s tear it down.  We will be very fortunate to have our energy infrastructure rebuilt in the next decade.  So go ahead America, vote for more restrictions to any energy ventures and don’t complain when it bites you!” Now, you all know by now I like to let you have the last word. I don’t generally comment on your comments, because I like a fair fight… and getting the last shot is not fair. But there’s so much crap out there today about oil, I thought I’d share with you a list I just completed.  If you have the time, you can access the Energy Information Agency and do this yourself. In 1994, the world consumed 68.9 million barrels of oil a day. Today, the world consumes 86.4 million barrels a day. That’s a 25% jump in consumption during the past 14 years. Here is list of the price of a barrel of oil in Jan. 31, since 1991, and who was president on that Jan. 31. Most of the email I received this week blamed Bill Clinton, Al Gore and Democrats for the current the price of oil. This is an excellent argument if you’re preaching to the choir. But, I am tone deaf. You see, Republicans controlled congress between January 1995 and January 2007.    So here’s the list. GHW Bush – Jan. 31, 1991 – $21.54 GHW Bush – Jan. 31, 1992 – $18.90 WJ Clinton – Jan. 31, 1993 – $20.26 WJ Clinton – Jan. 31, 1994 – $15.19 WJ Clinton – Jan. 31, 1995 – $18.39 WJ Clinton – Jan. 31, 1996 – $17.74 WJ Clinton – Jan. 31, 1997 – $24.15 WJ Clinton – Jan. 31, 1998 – $17.21 WJ Clinton – Jan. 31, 1999 – $12.75 WJ Clinton – Jan. 31, 2000 – $27.61 GW Bush – Jan 31, 2001 – $28.66 GW Bush – Jan 31, 2002 – $19.48 GW Bush – Jan 31, 2003 – $33.51 GW Bush – Jan 31, 2004 – $33.05 GW Bush – Jan 31, 2005 – $48.20 GW Bush – Jan 31, 2006 – $67.92 GW Bush – Jan 31, 2007 – $58.14 GW Bush – Jan 31, 2008 – $91.75 GW Bush – July 25, 2008 – $125.26 As always, this morally deficient reporter awaits your corrective response. “… With My Needle And My Spoon” Finally, just as I was putting this Unplugged to bed, I received a late email that is destined to be one of my all-time favorites. I am just going to share with you the beginning and the end, because you can pretty much guess what’s in the middle. It’s from Barry J. “You are obviously one of those liberal junkies…  As my father taught me, if you can't say anything good then don't say anything at all.” See you on Saturday with the answer, and hopefully a winner, to the ANWR contest question. Andy P.S.  To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. INTERNAL ENDORSEMENT Just this Once BELIEVE THE HYPE!  It was the email that shocked the investment world. One noted investment authority told his readers to take seven huge stock market gains on one day… SEVEN HUGE WINNERS on one day that ranged from 526% to 102%... seven, and on stocks… not options. But that was just the beginning! It now looks to be setting up to happen again this year, too. That’s why you must check out the whole story right here.

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