I am expecting to do the usual Friday night fun stuff, so leave requests. Tomorrow will be the last post for a while so enjoy while you can.
Why Would the Government Take Your Gold?
The always entertaining "Mogambo Guru" penned a hilarious missive that answers the often asked question "Will the government take private gold away?". Key excerpt:
Why the Government Does Not Need Your Gold
...Perhaps it is all this talk of confiscation of gold that has Doug Hornig of Casey Research’s Gold & Resource Report commenting that when FDR made private ownership of gold illegal in 1933, the dollar was on the gold standard and thus 100% backed by gold.
The difference between then and now is that “we have long since abandoned the gold standard, and Obama doesn’t face FDR’s constraints on monetary inflation” which is (insert sound of trumpet fanfare) the winner of the coveted Mogambo Award For The Understatement Of The Week (MAFTUOTW).
It wins for two reasons, the first being that is so terrifyingly true! There are no constraints on the government getting the Federal Reserve to create as many dollars as it, or anyone, needs or wants, and thus it is beyond ludicrous to even compare the 1933 gold-backed dollar against the pathetic piece of almost-worthless fiat money that the dollar has become, to which Mr. Hornig alludes when he says that Obama has it easy, as “However much money is needed to finance his New Deal Redux, he can have it. All he has to do is rev up the printing press or turn an unlimited number of bits and bytes into electronic cash.”
And he is, alas, absolutely right. Unlimited amounts of money can be created just by asking for it. In fact, no one has ever disputed that fact, as it is the whole reason behind having a fiat currency! Hahaha!
In relation to the prospects for a confiscation of gold, he asks, “Given this kind of clout, what does he need gold for?” which is exactly right! If you can print money to spend, why do you need gold to sell to get money to spend Hahaha.
Makes you laugh until you cry.
Consumption Must be Maintained
Mish had an article up today that called attention to some comments made by Toll Brothers CEO Bob Toll during an outlook conference call. I read it early in the morning and it stuck with me all day.
Luckily Seeking Alpha provides written transcripts of such calls, so tracking down the information was no problem.
Here is the section on page 7 (near the bottom):
Steve Sullivan - Banyan Securities asks:
Bob, could you give us your thoughts about any form of government rebates going forward given the federal levels rebate is set to expire in the fall?
Robert Toll:
I sure can. My thought is that the government, which means we, are foolish for not following the example and lesson of cash for clunkers that's been made evident to us. You can feel, sense and smell that the market wants to turn in housing. If you took that 8,000 make it 15,000, did it just four months, and did it for new home construction, you'd put twice as many people to work, twice as fast as what's being done with the auto industry...
...This isn't China. They decide to build a highway, two weeks later they're going to work. You decide to build a highway here, two years later, you're still talking to the audience about the repercussions of that highway on the neighborhood. It's just a shame we don't jump on this...
...I don't know how many dining room sets and sets of curtains and garden tools are bought every time we build a tunnel, but I'll be they're very few. So the collateral impact on the economy from building homes is known to be tremendous and therefore I think the government, which again is we, ought to jump on it.
So send those cards and letters in folks to your local reps and to your senators. Maybe we could get it cooking.
With respect to the rebate expiring, I don't think it will for all of the reasons above."
This guy is serious about this.
On August 3rd I wrote exactly about "Cash for Blank" programs and estimated a $25,000 housing component, so $15,000 is a steal!
This put me in mind of a great science fiction film.
In John Carpenter's "They Live" the hero (Roddy Piper) stumbles upon sunglasses, which once put on, reveal that aliens have taken over the Earth and use hi tech signals to mask their appearance. the aliens also use hidden messages on magazines, newspapers, TV, and billboards to influence behavior. Here is a shot of one scene:
Please notice the huge "BUY" sign and the "CONSUME" sign is partially hidden.
Bob Toll thinks handing out cash, which he even knows comes from our own pockets, to encourage buying a home so you can fill it with curtains and such is a grand idea. I would ask Mr. Toll to start us all of with the handout by donating 10% of his net worth towards the cash for homes programs he would dearly love to see out in place. You will make it back and more on the back end Bob, no worries!
At a time when housing prices are still in freefall, inventory of homes is huge (with plenty of "shadow" inventory to boot), and mortgage losses have yet to reveal their final number, the pushing of housing sales is at best poor judgement, and at worst criminally insane.
Consumption must be maintained at all costs. No matter the costs.
Have a good night.
