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"The
commercial world is very frequently put into confusion by the bankruptcy of
merchants that assumed the splendour of wealth, only to obtain the privilege
of trading with the stock of other men, and of contracting debts which
nothing but lucky casualties could enable them to pay; till after having
supported their appearance a while by tumultuary magnificence of boundless
traffic, they sink at once, and drag down into poverty those whom their
equipages had induced to trust them."
Samuel Johnson, Rambler #189, January 7, 1752
It is a good thing that modern economics has proven,
through a series of unstated and wildly unnatural assumptions, that
these things as described by Samuel Johnson above cannot happen anymore,
the gods of the market being selfless and possessed of perfectly rational
self-interest, supported by their higher intellects and superior character.
Dr. Johnson might respond, as he did when
considering Bishop Berkley's 'ingenious sophistry to prove the
nonexistence of matter,' by stepping outside and kicking a stone quite
soundly saying, 'I refute it thus!' Or in this case,
instead of a stone, he might choose to plant one on the posterior of
some smarmy white collar business cheat, his hands filled with other people's
money, and refute such nonsense once again.
It is almost comical to see a short lived ball of
dust gather itself up, and throw a puffball of a challenge into the
vastness of the universe. The lack of self awareness of the
self-obsessed is amazing.
Speaking of immaterial and manufactured nonsense,
there is quite a bit of it swirling around the precious metals this
week. Commentators are inventing strawmen arguments that, as far
as I can tell, never existed. One such example is the assertion
that precious metals crowd held a consensus that the passage of the
Swiss referendum was a sure
thing. And then these fellows use that canard to
mock the metals crowd gullibility, as a sure sign of their deficiency of
both intelligence and character.
As I responded to several correspondents today, it
really doesn't matter anymore. There are some enormous changes underway
in the world. Whether a few individuals think one thing or not, whether
we can truly understand what will happen or not, is a moot point. What
is going to happen will happen now, whether some puffed up Wall Street curb
crawlers think so or not, or some blogosphere click generators post
screaming headlines of an imminent price spike to incredible levels, every
other day.
There are some interesting things happening in the
Comex warehouses this month. I have included the usual reports below,
with an observation about gold in particular, and its concentration in two
warehouses. Silver is a bit different, but it always puzzles and
fascinated me. When the going for the metals gets rough, silver gets
weird.
With regard to the future course of events, I think
the die has been cast. This is a currency war, and a time of great
historical and political change. So as in all such cases, we are in the
hands of fortune now. What is coming will come when it has a mind for
it. But the time seems ripe for such a change.
We must wait then, and be watchful. We must be
still, and know, that we are not God. Great events occur, in both
history and nature, to remind us so. The insubstantial vanity of
our pretensions is made all the more hollow by the intensity with which
we embrace them.
Men make plans, sacrificing everything
around them to raise a mighty empire, designed to last for a thousand
years, and the universe laughs. Life is hidden in the little things,
and it alone endures. So do not squander your true fortune in the
pursuit of shadows and illusions.
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