patrick.net

@ Dennis-

That is what a gold eagle is made up of. The weight is slightly more than 1oz so that there can be a full oz of gold without being too soft. Also, I believe the buffalo is in that camp or better.

"Every household had 2 incomes + the home earning a 3rd income. Home is now ‘not earning money’ so we go from 5% to 35% unemployment. Basic Math."

I like that. Yes, the unemployment of homes must be addressed!

Just think... if we could get all homes working again, and in fact BOOST their incomes....once prices got high enough, say 20X incomes of their residents, even with a modest 5% growth rate, everybody in the whole country could just quit their jobs, and and live off HELOCs from their ever expanding equity. Nobody would ever have to work again, because our homes are working for us!

It's just basic math!

@ Malcolm-

Just like 60 is the new 40 or whatever, the millionare is the new thousandare!

OK I feel better about Krugerrands now.

And to round out the cat con discussion:
http://en.wikipedia.org/wiki/Palladium_as_an_investment

Palladium prices recently rose to about $375 per troy ounce, which is still historically low.

Recent years' palladium surplus condition was caused by the Russian government selling off government stockpiles built up during the Soviet Era, at a pace of about 1.6 to 2 million ounces a year. The amount and status of this stockpile is kept as a state secret. The Russian stockpile sales over the years have been absorbed by strong investment demand from speculators who believe that once the Russian stockpile is exhausted, the palladium price should spike up significantly.

I love natural resources as an investment. :)

Still looking into blue gold...

Hey Mark,

We don't even need that. Let's just increase those rebate checks coming this spring to say 100k and then send them out every few months or so. Prosperity for everyone!!!

Paul Says:
February 27th, 2008 at 3:48 pm
@ Malcolm-
"Just like 60 is the new 40 or whatever, the millionare is the new thousandare!"

That's how I look at it, that's why I don't pat myself on the back. Everyone who had a decent house from before 99 had at least 300K in equity in the desireable parts of CA.

Remember in the German Weimar Republic everyone was a Trillionare but of course that didn't mean much at the end!

http://www.nowandfutures.com/us_weimar.html

DennisN Says:
February 27th, 2008 at 3:30 pm
"Plug-in hybrids have a gas engine so yes they will still need a cat con."

I wonder if the Aptera does. It's gas motor is just a small efficient generator which only charges the batteries. I suppose it probably does.

The coin dealer who cashed out my gold looked at a Mexican coin I happened to have. He told me I could get a dime if I had 999 more of them.

Malcolm Says:

> Isn’t a large part of SF built on reclaimed bay
> land? I thought that was part of why the 1906
> earthquake was so bad because it shook up the
> looser fill material.

The 1906 "earthquake" was not that bad (7.8 vs the 7.1 earthquake in 1989) it was the 1906 "fire" that destroyed most of SF (since hundreds of oil lamps tipped over and all the fire trucks in town were still pulled by horses)...

Peter P,

If you are interested in blue gold, look into PHO

If you are interested in blue gold, look into PHO

Yes. I was looking into PHO too. Thanks!

Harm - I 100% agree with your assessment. Pisses me off, but I agree.

The coin dealer who cashed out my gold
You actually went "physical" with your gold!? Did you go the "toilet tank" route or safety deposit box? Just curious as I may buy some Eagles with the gov't rebate money if we are still under $1000/oz. I am a bit paranoid, though, about getting bonked on the head exiting the coin shop (keep the motor running honey!). Can anyone recommend a reputable shop in the East Bay; otherwise, I am considering Kitco or www.nwtmintbullion.com.
I pledged to myself that I would go "all in" with the spare retirement money once we reached an all time (nominal) high, but chickened out and am waiting on GLD orders to be filled at

less than $800 (sigh, should just put in a sell at $2000/oz and ride it out with what I've got.) That Euro has got to fall, right?!

FuzzyMath Says:
What is everyone’s gut feel for the future of mortgage interest rates? Seems like their slipping upward even while the Fed is lowering.
...
Seems like alot of the price drops in housing could be moot for buyers sitting on the sidelines waiting for the bottom.

This is a favorite scare tactic of the realtwhore-troll crowd, and is probably an effective sales-tactic with those who suck at math.

Price-drops are the best for a buyer because they lower the true cost of ownership. Besides, a buyer can refinance into a lower rate but not into a lower price.

If someone buys now, they will end up paying today's price for a property that will be worth a lot less when interest rates are higher.

Do some real math instead of the fuzzy kind, it is pretty simple.

I know many on this board believe FDR was a hero. But I am still very angry every time I think of the prospect of gold confiscation.

EBGuy Says:
February 27th, 2008 at 4:26 pm
"The coin dealer who cashed out my gold
You actually went “physical” with your gold!? Did you go the “toilet tank” route or safety deposit box? Just curious as I may buy some Eagles with the gov’t rebate money if we are still under $1000/oz. I am a bit paranoid, though, about getting bonked on the head exiting the coin shop (keep the motor running honey!)."

Yes, I went physical, and yes at one time I had a 10oz bar which used to make me nervous. Probably not a good idea to publish my movements here but yes you do then have something tangible to worry about. Even though I paid a little more to cash out at the coin shop I don't like the idea of mailing the gold to someone in AZ and hoping a check will come back. I did that once and it went perfectly fine. I used to buy gold on Ebay. Sometimes I would get it right at spot including shipping.

I read your follow up post EB. Like anything in quantity you might buy some at a starting price and then continously try to buy it below. I really have to say that I'm concerned when everyone seems so sure something will move this or that way but I'm not a psychic.

This site offers some "comfort" :) :

Finally, gold and silver today don't represent the huge pool of wealth they represented in 1933. Why risk wide-spread disobedience to steal such a tiny plum? If the government wants to steal a big pool of wealth, they'll snatch your pension funds and IRAs, not your gold. Tyrants always shoot for the biggest target.

http://www.garynorth.com/public/268.cfm

A friend at my old office (6 years ago) was buying silver coins (like morgans) on ebay at below the spot price of $4.50.

Peter,

I have read that while it was law, no gold was ever in practice confiscated.

It is funny how we (me included) feel more nervous about having a coin or bar in our possesion than giving our money to perfect strangers to manage it or invest it in Enrons, New Centuries, etc.. and perfectly fine about it (no nervousness).

Why is that?

In the end, I got nothing for my Enron shares - kinda like being clunked on the head walking out of the coin shop!

In the end, I got nothing for my Enron shares - kinda like being clunked on the head walking out of the coin shop!

True, but you still own those Enron shares. :)

Property right is the foundation of our modern society. It is as important as human rights and civil liberties. Without the respect for property right, our existence means nothing.

how about I give you a worthless piece of paper that says you own gold? It's pointless - Enron is gone, done, over!

"Property right is the foundation of our modern society. It is as important as human rights and civil liberties. Without the respect for property right, our existence means nothing."

Exactly - that is why everyone is getting so pissed off when they see what the FRB is doing to us!

@SP

"This is a favorite scare tactic of the realtwhore-troll crowd, and is probably an effective sales-tactic with those who suck at math."

True, I've heard that before.

While in general it is true that expensive money/lower price is better for a buyer than the opposite, the true "math" depends on the situation.

Speaking of "math"... the term seems to be thrown around quite flippantly here. Whereas the math of certain situations might be quite easy, there are always economic factors at work which are always unknown. Those variables are the ones that can determine whether a financial decision was wise or not. If it was only math that made that determination, there would be alot of filthy rich calculus teachers.

That's why most scientists and engineers don't become filthy rich even when they have decent earnings. They just can't grasp the concept of emotional irrational variables in the equation.

They just can’t grasp the concept of emotional irrational variables in the equation.

Exactly.

The truth is over-rated. It will not make you rich. Perception of the "truth" is more important.

For a while, I was aspiring to be a logician. How naive was I!

There was a blogger on here "Randy H" who argued against gold at $600 and $700 per ounce before he stopped posting.

Malcolm

That sounds like another way saying that most of us "cannot relate", cannot make a connection to the mainstream, are nerds, geeks, dweebs or whatever.

Just another way of saying it.

"They just can’t grasp the concept of emotional irrational variables in the equation."

True... personally, I'm a physicist. And although I pull good income off of my work, I typically make bad overall financial decisions. Whereas I "get" the presence of the emotional variables, the fact that they are irrational makes any attempt at figuring them out a guess.

While I am attempting to learn enough to just keep what I have, I don't see a life spent flipping things (whether it be houses, stocks, gold) as a satisfying endeavor, nor do I see it's value to society. In fact, quite the opposite, I see it's detriment. It turns the economic landscape into a minefield for people who don't have enough time to become experts on emotional variables.

Physicist:

Investing on one's grasp of emotional irrational variables is another way of saying speculating on a bubble,

whether it is investing money on what asset bubble is hot, or it is investing your time on what fashion bubble is "in", or investing your libido on what babe-ilicious bubble is hot.

If you invest your capital, your time, your intimacy based on your values than even if you lose you win, (as long as you have decent values).

Malcolm,

Aptera is neat, but it is no replacement for a real car. The Aptera is 850lbs, fits 2 passengers and very little luggage, and is likely no good at going uphill.

In my estimation, the key to saving oil is not these we-went-all-out-with-futurism vehicles. The key is rather to get everyone out of their gas-guzzling V6 and V8 cars and into a moderately sized 4-cylinder engine of 2L or less. Oh, and it should be a diesel-electric hybrid. Then we will keep improving the technology, using ultracapacitors instead of batteries, reduce the engine size further, and so on.

Most people do not realize, but the key reason that hybrid works well is that the *average power* (as in, Watts) needed to propel a car is quite low. The problem is that the engine has to be dimensioned for peak power needs, which makes the whole package terribly inefficient. Gasoline engines (instead of diesel) add to the problem.

This is what hybrids do well: You take a small engine that provides enough power on the average, and combine it with an electric motor that handles the peaks (and also the very low speeds, but that is actually less important). The battery (and later ultracaps) provides the extra oomph when you accelerate. Regenerative breaking is a bonus, but it really does not work all that well with batteries as the energy storage medium. A good ultracap solution would be much more effective.

Aptera is a good example of what hybrid technology can do, but it is too radical for general use.

If everybody would just switch to a car that gets 50mpg this year or next, we would already be well on our way to energy independence.

I'm thinking about getting the new 2L VW Jetta TDI Diesel myself. It will be "california clean" and available later this year. It can get 48-50mpg if driven wisely. Next step would be a 1.2-1.5L 3-cyl diesel-electric hybrid. That would be even more efficient. I'm hoping Toyota can provide one soon.

By the way, Jetta is a pretty roomy car with a big trunk. You're not sacrificing much by driving it.

Different people are good at different things. I skated by in differential calculus, definitely not my strength and I respect people who are good at it and chemistry as well. I don't insult people, nor do I ever try to offend anyone who hasn't offended me. When technical people drop the atitude that they know everything and are superior because they shine in their field, and there are a very few who have listened, have either made a lot of money by following my lead or saved a lot of money by heeding my caution that it wasn't a good time to buy in 2004 despite what their peers were saying. I can cite specific examples of very credit worthy coworkers who were engineers and they had to listen to the condescending statements from their coworkers who thought because they weren't buying, they somehow must have been unable to buy. I had two friends in Phoenix, one of them arrogantly told me there was no way houses in Phoenix were going to drop, and another at Intel who had his colleagues say "That's OK man Intel will eventually give you a bonus you can put down on a house." That individual had over $300K in a semi liquid investment account. So as usual I have to disclaim that it is merely a recurring observation I have personally made. My statement is merely an observation and not intended to be degrading.

Does it make sense that an older couple retired and living on Social Security in Sonoma County would pay higher taxes than a NBA player making $5mm a year renting in Mahhattan?

If the older couple is living on several million dollars worth of land, yes, they should pay more.

The best idea I heard for the land value tax amount is just to let people pay what they want, but with each tax payment being a legally binding offer to sell at the implied valuation. So if the land value tax is 4% per year, then a payment of $4,000 implies you are willing to sell that land for $100,000. So if someone offers you $100K, you either have to accept it, or pay more tax right away.

Seems perfectly fair, but you can't be sure of living in any one spot forever.

sybrib,

I agree that it might be fulfilling to the individual. That does not make it good for society.

To me trading is just another casino rigged to transfer money to those who control the game.

"Aptera is a good example of what hybrid technology can do, but it is too radical for general use."

I don't agree that it is not a replacement for a regular car. My Boxster is also a 2 seater. For driving around San Diego it will suit me just fine. I am an incrementalist as well and look at it as stepping stone, but it is more than a Prius which showed us the way, it is the start of a new way of looking at cars. I disagree with your statement that the KWs to propel a car are low, that is why the car has to be so light. We are a two car family, we will probably keep the Prius for long trips but for me, I like the idea that I will basically be almost completely off of oil. The engine/generator comes on when the batteries drain, for the amount of driving I do I will almost never need it. My house is a net producer with solar so basically I will be living/demonstrating a fully renewable way to live without oil. On their FAQs they answer the question why they chose gasoline over diesel.

of course, If I had a cool million put away like Malcolm, then I would probably have the opposite opinion

That’s why most scientists and engineers don’t become filthy rich even when they have decent earnings. They just can’t grasp the concept of emotional irrational variables in the equation.

Economists fit the bill as well. Remember the Nobel laureates at LTCM that shook the financial system ten years ago.

I wish I'd ridden Buffett's picks more often. Crusty billionaires are sometimes worth listening to. Rode Freddie Mac up with his pick, basically during the '90s, for an 11-bagger. He dropped Freddie in 1999, which I took as a bad sign, and sold.

STCM