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“I expect an orderly devaluation of around 5% per year till net capital inflow starts subsiding.”

Um…I am REALLY curious how you arrived at a 5% devaluation per year. The dollar has dropped from appx 87 to 79 on the USD index in the past 52 weeks! By my estimate, that’s NINE percent. Oh, and that was BEFORE the whack-ass rate cut yesterday. If the dollar has had that kind of decline when the rates were held steady for four years, you are smoking the finest crack known to man if you think for one minute that the dollar is going to dive at a leisurely 5% per year. Hold on to your hat, fella.

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>At least gold coins don’t depreciate.

Tell that to the people that bought gold in 1980 🙂

Nice chart. But if you really want to understand the effects of inflation on the dollar and why you never really lose purchasing power when you hold gold, consider the following:

Gold will buy the same amount of goods today that it did in 1975, because the purchasing power of gold rises or falls to reflect the relative strength (or lack thereof) of the dollar.

In 1975, 100 oz of gold would buy a mid-size care for $3500.

In 2003, 100 oz of gold would buy the same mid-size car for $35,000.

Today, 100 oz of gold will buy the mid-size car PLUS a couple of Rolexes. Granted, it is historically unusual for the purchasing power of gold to be so completely disproportionate to that of the dollar, but hey — that’s what happens when your currency is collapsing.

So even though gold has fallen, for the past two (2) decades, from it’s all time high of $800 oz (which was, incidentally, the last time we faced a near-currency collapse), gold has always bought the same amount of goods in those intervening years. Meaning, whether gold was $50/oz or $250/oz, it always bought the SAME mid-size car.

There aren’t many investments that will give you that kind of security. Scratch that, there aren’t ANY other investments that will give you that kind of security.

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I think the fact that countless civilizations (many more advanced than ours) saw the value and utility in gold impresses me much more than musings from the Oracle of Omaha. Ten thousand years ago, gold was seen as the ultimate store value, and no one had ever heard of Berkshire Hathaway. Ten thousand years from now, gold will still be here — and I doubt very much that anyone will remember who the hell Warren Buffet or Berkshire Hathaway were. Some of us know history.

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Hey cashman, how do you get sales data on zip? I just see listing prices…

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Hey cashman, how do you get sales data on zip? I just see listing prices…

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“In the end it really doesn’t matter who you vote for. I can assure you either party will grow the government. They always have. This is the fundamental problem. I think we’re at the point where even a Ron Paul couldn’t stop it from happening.
Gov’t is so big and powerful now and Americans are so apathetic to the tyranny they are voting in for themselves that I think it’s all futile to even debate the merits of one candidate or another.
There…I killed the thread.”

I wish I could disagree with you, but I’m having trouble coming up with reasons why I would…

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“Uhhhh, do you know anything about Warren Buffett? Here’s a good place to start: Buffett slams dividend tax cut. You appear to be clueless about many things pp.”

Buffett slams the dividend tax cut, so that classifies him as a man who isn’t part of the establishment and who is willing to take the existing system and improve it? Bring your heads out of the clouds, TB. 35% of the financial community slams the dividend tax cut. The dividend tax cut, like the inheritance tax, isn’t exactly a revolutionary issue because it affects primarily the WEALTHY. Why don’t you share with me Buffett’s thoughts on issues that affect the bulk of Americans?

You, my friend, are the one who is completely clueless. I’d love to hear you give more examples of Buffett’s efforts to take on the system and change it. I’d love to hear Buffett’s thoughts on outsourcing, tax cuts and credits for corporations shifting the base of their operations out of the U.S., eliminating the electoral college, and a variety of other issues that would truly indicate where his interests lie. Don’t over-simplify the matter, TB.

And by the way, what else do “I appear to be clueless about,” TB? I write a lengthy post outlining specific concerns, and the best you can do is tell me I’m clueless? Do you have any thoughts on the questions I raised about Obama’s position on Iran or any of the other issues I raised? Please, before you start name-calling, please do me the favor of calling out the specific issues you take umbrage with. Otherwise, don’t even bother to weigh in with your one-note thoughts. And show some decency by giving posters who disagree with you some degree of respect and courtesy. I have done that in all of my previous posts, even when disagreeing with others. Name calling is the last resort of an ill-informed mind.

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Mark, you are so right. Anyone who resorts to slandering Obama by feeding into racist stereotypes about his name, or how similar it sounds to “Osama”, is simply unintelligent and too lazy to address the real issues. I have never, and would never, play into such racism. That said, I heard this AM that 23% of Americans wouldn’t vote for Mitt Romne because he’s MORMON! Not because he’s a Republican, or because he’s pro life — but simply because he’s Mormon. Do we think these people are more open-minded about a black man with a Muslim surname…?

“Actually, I think that’s the only way, Obama will get elected. Voters are only willing to take a chance on someone who they trust will not change things too much.”

Sigh…on that we can agree, Perry. But it truly saddens me, because given the very serious issues facing this country ,we now find ourselves at an inflection point. Maintaining the staus quo simply won’t work anymore: hard decisions must be be made about dependence on foreign credit, alternative energy sources, outsourcing, tax cuts (or increases) to support imminent Baby Boomer entitlements… We don’t need pragmatic politics or someone who plays it safe; we need a firebrand who will speak his/her mind and — for once — be more invested in telling the truth than playing the game. We need a candidate who has the balls to stand up and deliver the bitter pill of truth instead of spending their time courting special interest groups! But if you are right and Americans are really only looking for someone who won’t change things too much…then I fear we are doomed.

And again, Perry — I remind you that one of Obama’s closest friends is Warren Buffett. Think about that. He receives investment advice from the richest American. Is it possible that he receives counsel from him on other matters? Indeed, who wouldn’t be swayed or intimidated by a man of such wealth? Do you really think Buffett is advising Obama to take the existing system and improve it? Do you think Buffett or any of Obama’s other insanely-wealthy supporters have any interest in making that happen? And consider this: Obama has made more appearances at AIPAC events than any other Dem except Hillary. Perhaps this is where his hawkish talk on Iran comes from. The sad truth is that it’s hard to change the system or chart a new course for our country when you spend so much time appealing to powerful and wealthy investors and interest groups.

Say what you will about Howard Dean, but the primary reason I supported him was because the mainstream was not supporting him. He was isolated from Hollywood and Wall Street. He stood on his own two feet and raised money from the BOTTOM up without the help of the wealthy. Because he did this, I had faith that he would hold the interests of most Americans — and not his wealthy donors (because he really had none) — at heart. This man had a seriously strong shot of being the Democratic candidate. But what did the media do? Use a silly crowd-pleasing gesture to torpedo him because he became too threatening to the establishment. I have a theory and would curious to get your thoughts on it: the establishment is represented by corporate America; corporate America controls the media. By deduction, if the media is enraptured with a candidate, it necessarily means that they aren’t threatening the establishment. My feeling is that if the media ever torpedoes Obama like they torpedoed Dean, that will be some evidence that he is truly a threat to the system. Until then, I remain suspicous of his ties to the elite and the media’s fascination with him.

“At the very least, he’s better than any of the Republican or Democratic alternatives.” I am curious, why is Obama a better candidate than Edwards? What about his platform distinguishes him from Edwards? I really can’t find any solid distinctions in my research, so I would appreciate an education here. As an aside, I am actually most impressed with Ron Paul. Certainly, he is not charismatic, but he is dousing Americans with much-needed truth about the true state of our economy and our military. Perhaps if the media wasn’t as infatuated with charismatic, well-funded candidates Americans might learn more about this man and like what they hear.

On the subject of Iran…I think we’ll know sometime this year whether this administration is ignorant enough to make the same mistake twice. I am not encouraged by how feeble the Democratic-controlled Congress has been to date: they supported Bush’s Iraq funding bill, WHILE also affirming that Bush does not need Congressional approval to strike Iran. I question why that rider was even included in the bill if an attack on Iran is merely hypothetical. Given that we have several thousand troops now mobilized along the Iraq/Iran border, 3 aircraft carriers off the coast of Iran and the largest fleet build-up in the Gulf since the eve of the Iraq invasion, and the fact that Iran is now selling 60% of its oil in other currencies, thereby reducing global demand for the dollar significantly over the past 6 mos (chart the dollar index — it’s at an all-time low), I would bet that a strike is coming. I hope I am wrong.

Perry, it has been delightful corresponding with you!

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“Is it even necessary to take any stand against iran? that’s the underlying question, why is iran being portrayed as a threat.”

That is the underlying question, drunkle. But the problem is regardless of whether Iran is an actual threat, to even think about a military strike would be military and economic suicide for this country. If Obama was shrewd enough to anticipate the quagmire in Iraq, then surely he should be able to anticipate the hell that Iran would unleash. I don’t think it’s pragmatic to even consider this option, and I know the majority of Americans would not support a strike.

“it’s the same position that any politician would take in matters of unknown threats. any specific objections that obama had on iraq were actually stated specifically; lack of projection, lack of reliable information, etc.”

Curiously, these same arguments could be made now with respect to Iran. We don’t have any projections or reliable information. Once again, we are speculating as to their WMD capability. There is really no practical difference between the intelligence we had about Iraq and the intelligence we have about Iran. So to take a stand against invading one country while leaving the option on the table of invading the other is inconsistent and hypocritical. My point is that Obama stands no differently from the other candidates on this very important issue, and I believe that is a major red flag. It is one of the few issues on which he has been forced to commit to a position, and his position is quite telling.

As I said in my earlier post, it is very easy to criticize policy and go against the grain when you are not in the position to vote on that policy; it is another matter entirely to stand up against perceptions of “weakness” and “fear” when you are in the position to vote and to be held accountable. Don’t forget, everyone is clobbering Hillary now for making the very decisions with respect to Iraq you say Obama is making: she was trying to be “political and pragmatic”. My point is that Hillary and Obama are cut from the same cloth in that respect; don’t expect changes from Obama that you wouldn’t get from Hillary. Be realistic in your expectations. This man is not going to lead us into a New Age of Enlightenment.

For my part, I want a candidate who will stand up and say, “Iran may be a threat, but the only way we can possibly deal with this threat is through cooperation with the international community. Let’s not repeat Iraq on a grander scale, folks.” But Obama doesn’t have the courage to do that now that his butt is on the line.

BTW, I appreciate your comments, drunkle. They are thoughtful and thought-provoking 🙂

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“partypup, all you’re saying is that you’d didn’t get the right vibes from Obama. Perhaps you were nerdy and Obama preferred to hang out with the popular students. Students can be that way. If that was the case, then of course he seemed aloof to you.”

Perry, that isn’t all I’m saying. I made at least four other points in my last post — separate and apart form my personal knowledge of Obama. So please re-read it.

First, let me be very clear: “vibes” play only a very small role in my analysis. I am a lawyer; I don’t operate solely on the basis of instinct and gut feelings; I observe, synthesize data and analyze it critically. I ask questions, probe inconsistencies, and take very little that is said at face value. Before I take action, I have to know why and understand the consequences. So forgive me if I am simply amazed that so many people would vote someone into the country’s highest office because he seems nice and makes people feel good.

I look at it this way: if I am dying on the operating table, I don’t want the good-looking, charismatic, new doctor who talks a good game; I need the the frumpy, quiet one with hands-on experience. In my opinion, America is dying now. Which surgeon do we want to call?

Second, to simply discount me as a “nerd” and Obama as a member of the “popular” crowd makes no sense in the context of law school. We were ALL nerds. No one was popular. We all spent most of our waking hours in the library. To be clear, we are talking about law school, not high school.

Third, I begrudgingly accept that Americans today don’t demand much from their candidates in the way of substance. But for the record, can you please tell me why — as I have repeatedly pointed out, but no Obama supporters seem to want to respond — Obama came out against the invasion of Iraq, but is now ready to take down Iran? Even if we were to presume they both countries have/had WMDs, on what basis does he distinguish Iraq from Iran? I personally think this is perhaps the single most important campaign issue facing the electorate, as another war in that region would effectively render all the feel-good, race unification, lovey dovey talk about the future virtually meaningless. The economic effects would be catastrophic, as would the environmental repercussions.

Are you not extremely concerned about this blatant inconsistency? Because if he becomes President and makes good on his threat against Iran, I fear he will, indeed, bring us all together: black, white, Latino, Musliam, Christian in one big, raggedy, rapidly-sinking boat.

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I work at a tevelevisionnetwork, make 240K/year with a 80K bonus. I drive a 2006 Jetta (diesel, 500 miles/tank) and have 5K credit card debt (0.5 % interest until balance is paid in full). I sold my home as soon as I could find a buyer, have 500K in the bank and starting next month I will be renting. I figure I can save 6K/month this way. My goal is to never buy another piece of property in this country. I hope to retire in New Zealand or South Africa after I have amassed $1M and buy a small, comfortable house and write. I am 40, have tried many careers, so I started saving a little later than I should have, but I think I’m still on track to realize my goals.

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Juice, I agree that the Republican candidates are extremely poor in this race. Please don’t misunderstand me: I loathe all of these candidates, with the exception of Ron Paul and POSSIBLY Bill Richardson or John Edwards. In fact, I believe the fact that so many people loathe the choices and the current administration has actually lead voters to lower their expectations and be less critical than they otherwise would be. We have feasted so long on slop that we are thrilled when we are fed anything that tastes a wee bit better. It’s a horrible position for the American electorate to find itself in, but here we are.

At any other time in American history, a candidate with Obama’s experience and lack of substance would not have garnered nearly so much attention. But we are desperate for heroes and saviors as we have never been before, and that leaves us vulnerable, as you said, to voting for someone “without knowing exactly what [we] are voting for.” Very sad.

My problem with Obama, as I said in my first post, is that voters are being mislead to believe that he can deliver more than he can — or even, as I deeply suspect, more than he truly wants to. Say what you will about Bush, but he makes no bones about who he represents and where his interests lie: with the wealthy elite and corporate America. For that reason, I did not vote for him. It is much, much more difficult to discern where Obama’s true allegiance lies — partly because of his extreme lack of experience, and partly because he’s so much more media-packaged than most candidates that it’s hard to perceive what lies at his core. I’m not a Republican, but I could easily get behind Colin Powell for president because I knew what he stood for, didn’t feel he was schmoozing me, and felt confident in his experience.

I stand beside my earlier observations: having known him, I have always felt there was something pleasant, but terribly insincere about him. When he spoke I felt the satisfaction of having eaten a heavy Chinese meal, then an hour later feeling empty and having to remind myself what I just ate. Granted, that didn’t matter to me much as president of a law review — and I would like to reiterate that I VOTED for him then. However, this concerns me much more in someone seeking the presidency of the United States.

“Obama will energize the Democratic base, enlarge the voter pool by appealing to minorities and young voters and he will appeal to moderate white voters who will say “I really like this guy” without knowing exactly what they are voting for.”

My voting inclinations aside, the question of whether Obama can get elected will, I believe, become largely an academic one. Obama will be the true test of whether racism in this country is alive and well. I think we saw that it was doing just fine in Tenessee last year when Harold Ford was summarily trounced. He was a strong candidate, articulate, extremely intelligent. I would have voted for him if I were a TN resident. But that contest was reduced to race, and even the mainstream media picked up on that. Don’t forget that more of this country resembles Tennessee than Southern California or Chicago.

Lastly, if Obama is truly the threat you believe he presents to the establishment, then keep in mind that voting irregularities can and will probably crop to keep him away from the throne. If the establishment feared little Al Gore enough to enlist the aid of the Supreme Court to keep him away from the White House, I can only imagine what forces will be at work to keep a black man out.

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“Lovely how he treats the folks who raised him”

This is very sad, JG. I can’t imagine how his grandparents must feel to know that they are being shunted aside because they don’t fit into the pre-packaged, Obama-is-really-black marketing campaign. For whatever reason, he seems to feel this country will be more accepting of him as a black man than as a biracial man, which is so unfortunate. If I can’t trust a man to be authentic about his identity, it makes me wonder where else his authenticity is lacking.

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“Riddle me this, if Obama is so afraid to rock the boat, why did he speak out against the war back in 2002 when everybody and their brother was for it?”

It is strange that you choose to assail me when I — unlike other posters in this thread — actually have some first-hand knoweldge of, and experience with, Obama. I can’t imagine why you find that so threatening. I find your reference to Swiftboat appalling. Are you implying that I am somehow twisting the truth? If so, please tell me what facts you base this on.

In any event, you claim that I spew a lot of b.s., but yet the only part of a very lengthy post you choose to focus on is the fact that Obama spoke out against the war in 2002 “when everybody and their brother was for it”.

If you think back very long and carefully, TB, you willrecall that Obama actually wasn’t alone in speaking out against the war: he was joined by Howard Dean. Oh, and what did Obama and Dean have in common? Let’s see…oh yes, now I remember. Neither one of them was a member of Congress at the time, so neither one of them could vote for or against the war, and therefore neither one of them was accountable, as the other candidates were and still are.

Speaking out against the threat of war when you aren’t tied to a vote is not nearly as impressive as speaking out against the threat of war when you’re a member of Congress. And now, as a member of Congress, Obama has found himself — like Edwards and Clinton — bound to support our next foray into the Middle East: Iran.

Now riddle me this, TB: why does a self-proclaimed champion of change, civil rights, peace and freedom condemn the war in Iraq on one hand, while on the other hand he waits to unleash the dogs of war on Iran? Here’s a hint: because the path of least resistance in Congress now — as it was in 2003 — is to support an attack on Iran. Demicons and Republicorps all gave Bush a blank cheque to invade Iraq, just as they are giving him a blank cheque to invade Iran now. Obama is not speaking out now, just as Edwards and Clinton didn’t speak out in 2003. Because he is now just as co-opted as they are.

Don’t shoot the messenger. Just consider the message. And please refrain from the use of profanity. It’s unseemly and shows a lack of intelligence. There’s no need to resort to coarse behavior if your arguments are sound.

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I went to law school with Obama and was a member of Harvard Law Review when he was elected president. I voted for Obama then. At the time, I believed what qualified him to be president was his amiable nature (so many on the Review were just plain annoying), intelligence, and the fact that he was well-spoken and thoughtful. But something in the back of my mind always nagged me about him…something I couldn’t quite put a finger on. Certainly, he tended toward arrogance — as do so many at Harvard. Some of my classmates dubbed him a “smooth operator”. He went out of his way not to say anything controversial or exceptionally unique. He never “rocked the boat”, and when he spoke I always got the feeling that he was looking past me, past this moment, and plotting two or three steps ahead. Very calculating, very deliberate. Looking back, I now realize that what I saw in Obama was naked ambition.

When Obama first announced that he was running, my first thought was “What the hell? He can’t be any worse than any of the white candidates, so why not give him a shot?? But as his campaign has moved forward and as this race has unfolded, it has become clear to me that people are supporting Obama for the wrong reasons: they actually believe this man WILL make a difference, that he will somehow change their lives and set this country on a new and better course for the future. Nothing could be further from the truth.

Based on the man I knew in law school and the pre-packaged, faux-MLK soundbites he has grown accustomed to delivering now, I am firmly convinced that no Democratic candidate — with the exception of Hillary — has become more co-opted and firmly a part of the political Machine. How can you honestly believe that Obama is working outside the system when he admits to receiving investment advice from his “good friend”, Warren Buffett? When Oprah loans him her private jet for fundraising trips? When George Clooney, David Geffen and Steven Spielberg fawn over him like schoolgirls? When he visits Wall Street to raise money?

It is telling that Obama has had to work harder to garner support from black constituents than he has to win over his white, upper middle class supporters. Historically, blacks have developed an instinct for things and people not to be trusted. Call it a survival skill. But luckily Obama can count on the white folks, because he relieves their guilt and makes them feel like we have “come so far” as a people. The tall, charming bi-racial man became a success story. The system must work!

But if you listen very carefully to Obama, and you aren’t swept away by the cult of personality (as an earlier poster so aptly put it), you will notice that Obama isn’t saying anything new or revolutionary. He is gaining traction simply because he is smart, charming, has a resume too sparse to yield and scandals or mistakes — and oh yes, he ISN’T Hillary Clinton.

Obama never speaks to what truly ails this country: a crushing national debt, a dollar that is falling in value so rapidly that it boggles the mind, a silent war being waged on the middle class, our dependence on foreign debt to sustain ourselves. No, instead Obama would rather wax poetic about “dreams” of the father he never met and offer glib platitudes to the multitude of Americans who could use more truth and cold, hard reality and less Tony Robbins, Dr. Feelgood campaign speak. And by the way, his foreign policy isn’t revolutionary, either. He has strong ties with AIPAC, actively courts them, and has vowed to “neutralize” Iran at all costs, including militarily. Make no mistake: this man will drag us into another war, just as Hillary, Pelosi or Dubya would. The wealthy shareholders in Obama, Inc. would have it no other way.

But what is perhaps most disturbing about Obama is his infatuation with HIMSELF. Even amongst the self-indulgent crowd in the Beltway, Obama has taken narcissism to new heights. Doodling portraits of himself while he waits to speak; using every spare moment during Congressional recess to write books (and ask yourself why a man 45 years old deems his life important enough to write two books about his life and his thoughts? Can we expect 15 memoirs by the time he is 60?) Pumping his fist like a rapper when he appears on Oprah.

Obama, like a child star, has risen so far, so fast — that the money, attention and acclaim seem to have dazed him. And who could expect otherwise? We are so incredibly jaded and desperate for leadership that we have chosen to hitch our wagon to someone freshly emerged from the womb — simply because they haven’t screwed up yet, don’t have any ostensible baggage, and may us feel warm and fuzzy about the future.

I think it’s a mistake to be fooled by Obama, and I believe the next 18 mos will prove me right. When the gleam wears off and a more critical eye is used, we will see that Obama is more flash than substance, more Hollywood-revolutionary than civil rights revolutionary.

TK, if you are voting for Obama because you want change, because you want to see this country move in a radically different direction that will return power to the middle class, restore America to greatness, and because you want to see someone think and operate outside the box…then you are bound to be sorely disappointed if Obama is elected (which, by the way, is about as likely as Hillary being elected — i.e., it ain’t hapening in these United States anytime soon. The vast majority of red America just isn’t ready for a woman, a black man — hell, not even a white Catholic man or a Mormon!). But if you are voting for Obama because you want to tread the path of least resistance, keep rowing in the same general direction we’ve been heading and hear some pep talk along the way as we head off toward the raging rapids ahead, then Obama is your man.

The choice is yours. Be informed in your decision-making. Be critical with your questions. You owe it to yourself and to this country not to be swayed by the cult of personality.

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