Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

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Mister Imperceptible
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Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Mister Imperceptible » Sun Feb 10, 2019 12:16 am

I would like to preface all of the below with a disclaimer. None of this is “investment advice.” (CYA!) It is a little compendium of things I have been thinking about. I do not think I know it all, but perhaps my writing style indicates I think as much. I have a bit of an attitude. I cannot help it, I was beaten as a child. I am always looking for new information. If I have missed something, please provide me with additional information. I have seen a lot of complacency on these boards, and I think this complacency is dangerous. As I consider you my friends, I would be remiss if I did not share what might be useful. Dr. Fisker quotes Confucius and says “bring me 3 corners and I will give you the 4th.” I joined the forums a year and change ago, having maybe one corner, and perhaps now I have 2. Albion Rule#6 says “share expert knowledge,” but given the bizarro world we live in, I consider this to be “expert bewilderment.” Perhaps this is useful for someone trying to expand their thinking, insofar as those adhering to a classic 60/40 portfolio are receptive to the thought process of a demented person. Grab a 6-pack and enjoy.
black_son_of_gray wrote:
Sat Dec 01, 2018 4:21 pm
Brent Johnson calls this the "Dollar Milkshake Theory"
black_son_of_gray wrote:
Sat Dec 01, 2018 4:21 pm
The Everything Bubble still hasn't popped because there is still air being blown into it. The US stock market is still receiving economic stimulus - it's just coming from other countries. Brent Johnson calls this the "Dollar Milkshake Theory": as other central banks stimulate their economies, the US sucks up their milkshake. We drink it up! (Full explanation here - Most relevant part starts about ~13 min mark)

....

As the US raises rates, it sucks in capital from around the world, pushing US asset prices higher, which allows the Fed to keep raising, which makes a benign circle within the United States, and a terrifying circle outside the United States, which ends very very badly, but not yet. -Quoted from first minute here.
Just released on Real Vision, but recorded in May 2018:

https://m.youtube.com/watch?v=vDr3lRZ01Zo

Johnson was also on MacroVoices back in December.

https://www.macrovoices.com/

Erik Townsend agrees with Johnson on what Townsend calls the “dollar-gold pairs trade.”

Grant Williams was also on MacroVoices recently and, as in the video linked by @bsog above, disagrees. He says the dollar just cannot get that strong without it being “stamped out.” A dollar that strong would bring the world to a crashing halt.

The most recent interview on MacroVoices was with Alex Gurevich, who, like Grant Williams, says he does not care if gold is at $1200 or $1400 in the short term. Gurevich gives an eventual price target of $3000-4000 for gold. Williams says, as usual, that he does not care about the money price of gold, which is also what Tony Deden would say. And I think that is the right way of looking at it. We shouldn’t be thinking as our baseline unit of account a green piece of paper with dreams written on them that is just a promise from someone/something that we know is a liar who does not keep their promises.

Johnson mentioned in @bsog’s video that there is a huge fractional reserve setup in gold on COMEX, just as there is $90 trillion of worldwide dollar-denominated debt for $4 trillion monetary base. Which should not only give you pause about paper gold....but even bank desposits, money market accounts, short term treasury funds, and perhaps everything except physical banknotes themselves.
jacob wrote:
Sat Dec 01, 2018 6:00 pm
The idea/hope that all that paper money will someday collapse into gold is an old one. It's not something I would bet on. Why not collapse into something else like farmland or luxury condos?
As Johnson says in the Real Vision video, it would only take 1% of the world’s financial assets to move into gold, and the price would double. And looking at what the ratios are of gold reserves/gold prices to global debt, the current price of gold is historically low.

These ratios are explained at length by Daniel Oliver of Myrmikan Capital, who I discovered after he was mentioned by David Collum in his most recent Year in Review:

http://www.myrmikan.com/port/

It is also worth wondering to what degree people will be able to believe central banks anymore, as they lose their credibility. Farmland sounds like a good bet, where it’s value as crisis hedge does not make it already fully priced or overpriced. A victory garden, solar panels, assault rifles, yes, all of those things too. It’s not mutually exclusive. But I can’t buy $20,000 worth of peanut butter. The 5,000+ year history of gold and silver as money is extremely comforting.

In his most recent memo, Howard Marks was sh*tting his pants regarding populism:

https://www.oaktreecapital.com/docs/def ... eality.pdf

As was Seth Klarman:

https://www.mauldineconomics.com/frontl ... source=ska

All this with a Cold War 2.0 with China looming.

It will be interesting to see what the hoi polloi would think about QE 4 5 6 7 8 9 going to support the luxury condo prices. Add 300 million firearms, a screaming desperate and ethnically heterogeneous population that is almost completely ignorant, and 2 political parties ready to stoke the flames of racial animus and garbage identity politics, things should get.....fun. Maybe they will just roll over as the Fed keyboards unlimited fun tickets, allowing Lloyd Blankfein to do the Lord’s work. Or maybe not.

And while I have scorn for the AOC gimme-gimme types, it was Wall Street and the Republican/Democrat mafia-style government and their democratization of exploded Wall Street bets that brought us to this point. Ray Dalio, get out of my face with this “beautiful deleveraging” nonsense. You talk of “radical honesty.” Stop trying to make the horrifying sound like something innocuous.

And while I cannot necessarily say I am “hoping” for a big upward move in the money price of gold, given all the....you know, chaos, suffering, and death, I would likely become more attractive to the opposite sex as my rival suitors are no longer able to finance their romantic overtures with credit card debt. “Come into my bomb shelter, baby.” :twisted:

A gentleman at work was in the process of buying his 10th rental property. I said he was getting diminishing returns and should buy gold instead. He asked wtf was he supposed to do with it. I said, “Well, you could also buy a silo instead, and fill it with grain.” We both laughed maniacally.

If you really hate precious metals that much, I am here to say, Warren Buffett and Jack Bogle have brainwashed you into wrongthink, and they have done you a disservice in that regard. Like most in league with Wall Street, they did not stand to profit when someone bought gold and buried it in their backyard. And yet in the last 20 years, burying pet rocks in your backyard outperformed the S&P 500.

Grant Williams and Brent Johnson said they had a 35-40% allocation to physical precious metals. Doug Casey inferred it was something higher for him. Tony Deden’s fund was at 35% according to his last disclosure. Mister Imperceptible is at 46% pet rocks, with 15% in mining equities. No need to pussyfoot around this.

What to do with remaining funds?
Lucky C wrote:
Wed Nov 14, 2018 12:12 pm
You can be wrong most of the time and still have a winning strategy, e.g. 60% of your bets are wrong with an average loss of 5% and 40% of your bets are right with an average gain of 20%.
I also discovered Christopher Cole thru MacroVoices. Fascinating stuff:

https://www.artemiscm.com/

I’m less inclined to buy volatility derivatives, but the idea that the vol trade will be the dominant one of the next 10 years may lead me to an attempt at a market neutral call and put strategy, with a nice cash buffer. Stocks and bonds are so overvalued/manipulated that I cannot buy them without feeling like a sucker. But you cannot just short the market. Hussman has been getting pulverized for 10 years doing that. David Einhorn has been getting his ass handed to him. We have to be more flexible than that.

Mark Spitznagel on defense, long-term compounding, the failure of Modern Portfolio Theory, and the need to “jiu-jitsu the Fed”:
https://m.youtube.com/watch?v=PnqnGYQyzHg&t=1s

Spitznagel back on Bloomberg a few days ago. He was asked whether “progressive liberalism would undo capitalism.” Wall Street is afraid of the mess they have created:
https://m.youtube.com/watch?v=xiBjBkXBHLw

What the HBPP taught me was the value of uncorrelated returns. But Harry Browne died in 2006, and would be very dubious now about a 50% allocation to government paper. He probably would be aghast at the level of government intervention. Ben Graham cannot help us now.

Intrinsic Value and Volatility
Source: Artemis Capital Management
Page 10
This past summer the ever-wise Jim Grant of Grant’s Interest Rate Observer asked for my thoughts on the low volatility regime. In the middle of my explanation on the short volatility trade, out of nowhere, Jim says, “What does any of this have to do with intrinsic value?” I was floored... I honestly didn’t know how to answer his question. The truth... the short volatility trade is about the absence of value. In a bull market, when investors can’t find value in traditional assets, they must manufacture yield through financial engineering. In a mania the system begins to devour its own tail.

“Regardless of how it is measured volatility reflects the difference between the world as we imagine it to be and the world that actually exists....We will only prosper if we relentlessly search for nothing but the truth, otherwise the truth will find us through volatility.”
-Christopher Cole

https://m.youtube.com/watch?v=RGUSRGYz7_g

My Kimber K6S, Glock30, and Mossberg 590 are close at hand. Looking to “diversify my holdings” with a rifle soon. We live in interesting times.

Have a great evening!

arcyallen
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by arcyallen » Sun Feb 10, 2019 9:51 am

Let me start off by saying I didn't click on any of your links. You are obviously passionate (and possibly a bit emotional?) about this and while that feels good to you it may be clouding your judgement a bit. Before you go on the defense understand the problem with what I said (and hearing what I said) is that if it's happening to you...or me...we won't usually be astute enough to recognize it. Having said that, the only real thing I can really comment on is this:
If you really hate precious metals that much, I am here to say, Warren Buffett and Jack Bogle have brainwashed you into wrongthink, and they have done you a disservice in that regard. Like most in league with Wall Street, they did not stand to profit when someone bought gold and buried it in their backyard. And yet in the last 20 years, burying pet rocks in your backyard outperformed the S&P 500.
I don't hate precious metals any more than I hate rocks or leaves. But they have a limited utility and are by nature non-productive. I'm quite confident that Warren Buffett isn't steering you away from gold because he's "in league with Wall Street", or because he won't profit from your decision to buy it. (That assumption is part of why I think you're a bit emotionally charged on this.) He's doing it because he knows historically it's been a poor long term investment because it's non-productive, and has said as much many times.

The 20 year time frame you quoted just happens to be a time period where gold outperformed the S&P. But add five years...or subtract 5 years...or look at any longer time period, and you'll find the S&P outperforms gold and is much less volatile. The market value of gold is based on nothing but the whim of the public. I'm not a fan of relying on the whim of the public! With stocks at least there is productivity behind the value.

If we want to cherry pick time frames, check out 1980-2008. Gold was practically flat for 28 YEARS while the S&P went up fifteen fold.

If you're thinking that the economy is going to collapse or there'll be long term positive speculation on gold, OK. I understand but I don't agree. But assuming that Buffett is brainwashing you for his own benefit is silly.

stand@desk
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by stand@desk » Sun Feb 10, 2019 10:04 am

What about the permanent portfolio?
25% Broad Market Stock Indexes
25% GOLD
25% Long Term Bonds
25% Cash or T-Bills

Or, just Dollar Cost Average away forever, apparently it is the best way
I wish I invested that way from the beginning. It would have been more like saving instead of investing but hindsight is 20/20. Buying too many stocks is a waste of time and too big a risk for me I have learned.

Mister Imperceptible
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Mister Imperceptible » Sun Feb 10, 2019 12:18 pm

@arcyallen

I can afford to edit my writings so they sound more reasonable and less from the mouth of a carnival barker. I just had to get that out last night before falling asleep and did not have time to edit, so what you saw written was unadulterated.

I take no offense, I am highly open. My being emotional or neurotic or disagreeable does not prevent me from keeping an open mind.

Gold is not an investment, gold is money. I would just as soon buy stocks or bonds but market intervention has made the cost of yield too expensive and the possibility of negative skew make the risk/reward profile outrageous. I recommend Christopher Cole’s thought pieces as a one stop shop that summarizes all of this.

https://static1.squarespace.com/static/ ... 7s+End.pdf
https://static1.squarespace.com/static/ ... Object.pdf
https://static1.squarespace.com/static/ ... ilemma.pdf
https://static1.squarespace.com/static/ ... k_2017.pdf

What irritates me about Buffett is that when the market crashes, he can waltz in and buy preferred shares of big banks with ridiculous payouts. Then he goes on TV or writes a newspaper article encouraging everyone to buy US equities so more money flows up the pyramid to him, as if the zero-interest loans thru the insurance businesses (insurance premiums = float) were not enough. I like his shareholder letters from the fifties and sixties, when he was smaller, more honest, committed to value, and investing in a saner environment. Now he is a spokesperson for our corrupt financial structure, and anything he says at this point must be taken with half a shaker of salt.

https://www.nytimes.com/2008/10/17/opin ... ffett.html

https://amp.mcclatchydc.com/news/nation ... 32354.html

@stand@desk

An HBPP is better than 100% stocks or classic 60/40 for sure, but I am a neurotic and relentless optimizer. Governments are committed to negative real interest rates as a result of excessive debt, which makes a 50% allocation to government paper a dubious proposition.

https://www.nber.org/papers/w16893.pdf

arcyallen
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by arcyallen » Sun Feb 10, 2019 3:33 pm

Mister Imperceptible wrote:
Sun Feb 10, 2019 12:18 pm
My being emotional or neurotic or disagreeable does not prevent me from keeping an open mind...

...What irritates me about Buffett is that when the market crashes, he can waltz in and buy preferred shares of big banks with ridiculous payouts. Then he goes on TV or writes a newspaper article encouraging everyone to buy US equities so more money flows up the pyramid to him, as if the zero-interest loans thru the insurance businesses (insurance premiums = float) were not enough. I like his shareholder letters from the fifties and sixties, when he was smaller, more honest, committed to value, and investing in a saner environment. Now he is a spokesperson for our corrupt financial structure, and anything he says at this point must be taken with half a shaker of salt...

...I have seen a lot of complacency on these boards, and I think this complacency is dangerous.
I think I'm going to adopt a new internet tagline: "Just because I'm neurotic doesn't mean I'm close minded!"

I'm curious what Buffett has said or done to make you think he's less honest or committed to value now. He's one of the few corporate/investing entities that I trust wholeheartedly.

Thanks for being open-minded. I know it may at times be highly irritating to see "complacency" about things you disagree with. I think using any social media/forums requires a lot of this "complacency", whoever. If we always corrected what we thought was wrong, we'd never have time to eat or sleep! I often feel that way in investing discussions and politics, and in the end I just try to have faith that my fellow man isn't a total idiot and will see something for what it is...or at least what -I- think it is :)

Mister Imperceptible
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Mister Imperceptible » Sun Feb 10, 2019 4:04 pm

Buffett got so big that it is impossible for him to invest in small, undervalued companies. (It is hard to say there are still even such value opportunities that exist.)

But in the spirit of Montaigne, “What do I know?”

I have included extensive text because by your own admission you have not clicked on any of the provided links.

I welcome any data and am always open to changing my mind.

http://www.berkshirehathaway.com/letters/2011ltr.pdf

A rebuttal from Tony’s Deden’s Edelweiss Journal:

http://edelweissjournal.com/pdfs/Edelwe ... al-005.pdf

And here is a bit from Howard Buffett, Warren’s father:

https://www.fgmr.com/wp-content/uploads ... y-1948.pdf

[moderator removed extensive quoting]

arcyallen
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by arcyallen » Sun Feb 10, 2019 4:41 pm

I read the two Edelweiss Journal pieces. One of my shortcomings is when something is stately snarkily like that, I can't seem to listen or agree no matter how it actually might make sense. So yeah, I think the second article was silly and the first mostly ridiculous too. I also have a hard time when people demonize others when I think it's totally misplaced. Same situation here. BUT, maybe I'll re-read it later and contemplate some more.

classical_Liberal
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by classical_Liberal » Mon Feb 11, 2019 4:01 pm

@MI
I think there is a fine line between being "right" and saving/investing well. You may be correct. The fiat currency, boom/bust credit cycle, US as an empire extracting resources from it's "colonies", etc. This will likely all end bad. But when and how? When do I get off the train? which new train should I jump on? The UK (previous global empire) still has very viable business interests which make a fortune.

To completely discount the social contract between billions of humans is unwise. To completely discount the US as a very powerful empire (albeit an aging one making poor macro decisions) is unwise. Hedge your bets intelligently? Keep an open mind and invest according to macro economic change? Absolutely! But bet everything on collapse of current social contract structure within the next 4-5 decades... Not sold, because even if you're right and it happens soon, we still do not know how it will play out.

Edit: For example, what if to prop up currency the US seizes all gold and offers a price of $1000 oz? Give it to them or go to prison... it's happened recently!

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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by jacob » Mon Feb 11, 2019 4:28 pm

classical_Liberal wrote:
Mon Feb 11, 2019 4:01 pm
I think there is a fine line between being "right" and saving/investing well.
That line is not fine. It's everything. It's usually summarized by the pithy statement that the market can remain irrational longer than you can remain solvent. Assume you're completely correct while the market is sometimes wrong and sometimes right. This does you no good if you don't want to come to the market or the market doesn't want to come to you. (This was my main problem as a professional trader and why I wasn't very good at it. I'm much better as an investor.) One example that illustrates this on a longer investment timescale is when the markets crashed in 2009. You might have had a strategy saying that the stockmarket are not worthwhile to buy unless CAPE10 is under 12. There are all sorts of great arguments for why this is. However, the market never came down that far and so it never interacted with you and consequently your opportunity costs would have been immense. If you want to check out a live example of this, see Hussmanfunds.

Fundamentally, profit is made when you are positioned slightly less wrong than the market. The pithy summary of that is picking pennies up in front of a steam roller. Unfortunately, thanks to inflation, you need to be quite rich to stay out entirely.

Lucky C
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Lucky C » Mon Feb 11, 2019 7:51 pm

A backtest on cfiresim shows that a 3% SWR works for 30 years down to a 12% stocks / 88% bonds allocation, so you can still survive quite a long time with an extremely conservative portfolio. Probably too extreme of a portfolio for most people, but if you underweight equities now, the odds are very high that there will be a better time to be more balanced in the future, and you'll be in a good position to rebalance when the time comes.

Now try the same backtest but with 12% stocks / 88% gold over 30 years and you'll have a lot of failures!

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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Mister Imperceptible » Mon Feb 11, 2019 8:35 pm

@LuckyC

The answer to that is to never have a permanently fixed allocation, but to reevaluate the risks in the changing macro environment.

Harry Browne had the good sense in 1980 to sell some of his gold and buy long-term Treasuries and stocks.

Terhorst and Dominguez advocated an all-LTT portfolio in the 80’s because that is what was most suitable in that environment.

Times change.
classical_Liberal wrote:
Mon Feb 11, 2019 4:01 pm
what if to prop up currency the US seizes all gold and offers a price of $1000 oz? Give it to them or go to prison... it's happened recently!
If this happens, hide your gold, refuse to sell, claim to have none, and wait until either the government collapses or gold ownership is relegalized. If you have heirs, pass them down in secret. If the government does not collapse and it is never relegalized, then all of this talk means little because economic life is so dominated by central authority that we are all slaves anyway. Unless you care to be a house slave instead of a field slave. In such a scenario, I would likely be killed for mouthing off.

thegreatvoid

Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by thegreatvoid » Tue Feb 12, 2019 1:44 am

Mister Imperceptible wrote:
Mon Feb 11, 2019 8:35 pm

government collapses or gold ownership is relegalized. If you have heirs, pass them down in secret. If the government does not collapse and it is never relegalized, then all of this talk means little because economic life is so dominated by central authority that we are all slaves anyway. Unless you care to be a house slave instead of a field slave. In such a scenario, I would likely be killed for mouthing off.
I find it amusing that some people plan for a scenario , where the US government collapses. should this ever be the case, the world is going to be so fucked up, that none of us domesticated house-cats would a survive a week. plundering, murdering ... Most would probably kill themselves :|

And yes we are all worker drones / slaves.

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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by suomalainen » Tue Feb 12, 2019 1:57 am

I think I’m with @thegreatvoid on this. As a social species, the social contract is everything. If that collapses, all talk of investment seems worthless. We’re all fucked. Hello dark ages. So what if you survive the first five years with your guns and whatnot? The next fifty years will be no fucking fun at all. Much better to keep the current paradigm chugging along, even if you are a “loser” within it. What’s the alternative? On the other hand, if you feel you have nothing to lose? Fuck it. Burn it all down.

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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by classical_Liberal » Tue Feb 12, 2019 1:57 am

@jacob
What you wrote is exactly the point I was trying to express. Being "right" that the current situation is not sustainable does nothing for me or @MI as an investor. Then there is also the chance @MI wrong. When vast resources are being allocated towards status quo, when there is a huge empire backing it up (along with it's most wealthy citizens), when most of the wealthy portion of the world only stands to benefit under this social contract, there's a good chance it'll hang on for awhile.

@MI
Your answer makes no sense. What good does all that gold do if you can't even use it to buy one last chance to mouth off before the firing squad?

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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by frihet » Tue Feb 12, 2019 4:10 am

Gentlemen, I don't believe the facts suggest that the world need to go under for gold to be a productive asset in your portfolio.

Gold is simply an uncorrelated part of a whole. It is also of course insurance against turmoil, but as you mentioned it's best if that turmoil remains contained by society's social contract. Just like you wouldn't hope that your house burns down so you can cash in your house insurance.

But please remind us with gold in our portfolio to rebalance next time the media screams that everything is fallling a part, stocks crash and gold soars......

I also listen to Macrovoices almost every week since it started and although a lot goes over my head I've recognized that no one has a crystal ball. Although I find the experts mentioning of possible war and ongoing riots a bit troublesome. What can I really do about it?

Well I've been thinking of where to migrate if things go bad here in Sweden. But that migration is not happening yet, hopefully never.......

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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by vexed87 » Tue Feb 12, 2019 6:47 am

suomalainen wrote:
Tue Feb 12, 2019 1:57 am
I think I’m with @thegreatvoid on this. As a social species, the social contract is everything. If that collapses, all talk of investment seems worthless. We’re all fucked. Hello dark ages. So what if you survive the first five years with your guns and whatnot? The next fifty years will be no fucking fun at all. Much better to keep the current paradigm chugging along, even if you are a “loser” within it. What’s the alternative? On the other hand, if you feel you have nothing to lose? Fuck it. Burn it all down.
I subscribe to some pretty bleak outcomes for industrial society, but even I see this is a well worn tale, and I don't believe it will pan out quite as dramatically as that. JMG makes the case repeatedly in his various works, the myth of full blown social apocalypse vs infinite progress techno optimism are presented as the only two possible outcomes of our society on the precipice, that false dichotomy is not only overly dramatic, but also incredibly misleading as it invites hopelessness and proposes individuals have no agency over their future. In reality there is a huge spectrum of possibilities that falls between the two outcomes where we are far more likely to land. Having a stack of gold (remember, we already agreed, gold is really just another form of money) is quite sensible. When your fiat currency eventually collapses (not if, but when, but timescales are still important) ala venezuela, zimbabwe, weimar republic, it makes sense to have some alternative money to set up shop elsewhere more stable or survive the transition from one currency to another. Communities may set up their own decentralised currencies in response to the unwinding of the globalised market or they may forgo money entirely, but the latter has rarely happened, money has existed because it solves a problem, but in times of reduced social complexity money simply becomes less important, especially in rural areas outside of the city centres or industrial areas. Reciprocal exchange takes over as the dominant means of economic interaction. BUT... there will always be markets of some kind assuming some remnants of a society survive. If you don't think any will survive, you are really taking an extreme view, let the world burn is a defeatist attitude and it stops serious thought on such matters. Whilst I am happy to partake in reciprocal exchange economy and do away with illusions that comes with previously amassed tertiary wealth, I would rather retain some access to markets too, just in case, even if they are wildly pared back forms of the former modern day market. Expecting to profit wildly in a collapse scenario on the back of gold investments would, I admit, make you a target of the deplorables. I don't think that's what anyone here is really planning on doing?

Yes, there will be challenging times, there will eventually be an exodus from cities into rural areas, but labour will be needed there, and there will be opportunity for those prepared to settle and defend land. Even after the fall of the Roman empire, when Britain regressed to the bronze age (technologically speaking), the chances of dying at the hands of a war lord were still incredibly low, assuming one survived the initial economic depression they would go on to live happy meaningful lives. Communities will not simply roll over and die, they will (re)organise and defend themselves, newcomers from the city will be welcomed, at first at least because rural communities are incredibly short of labour, this will enable them to form militias for defence. Life will never be as easy as it was for the global top 10% under the stable conditions of the market economy, but one could certainly do worse than to have a little gold to buy up essential resources when the first of the climacterics arrive. Your reformed community might value you for your foresight.
Last edited by vexed87 on Tue Feb 12, 2019 9:26 am, edited 3 times in total.

Kriegsspiel
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Kriegsspiel » Tue Feb 12, 2019 8:28 am

thegreatvoid wrote:
Tue Feb 12, 2019 1:44 am
I find it amusing that some people plan for a scenario , where the US government collapses. should this ever be the case, the world is going to be so fucked up, that none of us domesticated house-cats would a survive a week. plundering, murdering ... Most would probably kill themselves :|

And yes we are all worker drones / slaves.
Yup, no difference at all between a computer programmer and a combat veteran at all. :lol:

Seppia
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by Seppia » Tue Feb 12, 2019 10:25 am

So the smart hedge for the computer programmer would be to make friends with a combat veteran rather than buying gold.

vexed87
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by vexed87 » Tue Feb 12, 2019 10:30 am

Seppia wrote:
Tue Feb 12, 2019 10:25 am
So the smart hedge for the computer programmer would be to make friends with a combat veteran rather than buying gold.
Or do both?

jacob
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Re: Slightly Unhinged Investing Thoughts at the Corner of the Corner of Dr. Fisker’s Mountain

Post by jacob » Tue Feb 12, 2019 11:35 am

@vexed87 - Totally agree on the spectrum. I suppose the problem is that these narratives doesn't sell compared to the "flying cars and green energy revolution" on aisle A or the "zombie apocalypse climate disaster" on aisle B. How many bestsellers on that note from the 1970s were there which accurately predicted that 2020 would look much like 1970 except for microwave ovens, increased obesity, the internet, vastly more "screens" in each home, and a shittier environment outside... but otherwise much the same. Because those were the predictions that actually turned out to be correct.

People already barter gold with other valuable things in "I'll pay cash today"-type transactions, but I'm hard pressed to think of anything I could barter with my neighbors for a double eagle. What would they use it for? I see ration coupons or simply traditional cash (notes and coins) as being much more useful insofar all financial assets are frozen. Alternative kinds of scrip could be introduced quickly by the local bank, lawyer, accountant, ... if society really decomplexifies to a level where a central monetary authority ceases to exist. Insofar the financial system collapses these things tend to come with an economic collapse as well. Gold [coin] would not be able to find any buyers (willing to sell it for stuff) because it's main problem currently is that very very few are actually sitting on it. This means that the holders of gold have to convince everybody else that it's a useful currency before they will accept it as such. Otherwise it's just a shiny collectible. Here jewelry would work better. I don't think we can take it for granted that people will automagically revert to the habits of 100+ years ago.

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