Friday, December 9, 2011

Gold/Silver ratio revisited

I was surprised to read an article by a gold investor (which somehow I cannot remember where was that) stating that he is convinced the gold/silver ratio will not go below 40. For several decades, the gold/silver ratio has been kept above 40 with only visiting it briefly around 15 in early 1980. The reason I was surprised is that the amount of silver in the ground is roughly between 12 and 15 times that of gold so why would the price be 45 or higher than?
The arguments might be that gold is being used more widely as a monetary metal than silver. This means then that this same mismatch of ratio between the amount of gold mined every year and silver mined every year compared to their price should be seen with other commodities being compared with gold. Other commodities such as say copper. So, I've done some research to find out what are the current numbers for copper versus gold and silver:

As can be seen, the ratio of the yearly amount of copper mined every year compared to that of gold is roughly the same as the price of copper versus gold, meaning that purely from a mining perspective, copper is priced right compared to gold (6875 compared to 6250). But we can also see that in the case of silver, it is clearly under priced compared to gold. If silver was priced comparatively similar to copper, it would have a gold/silver price ratio of about 9, meaning a price of $220 per once on today's market (December 9, 2011).

Of course, this only cover the supply side, but it is interesting considering that silver is both an industrial metal as well as an investment being undervalued compared to copper which is only an industrial metal. Also, silver has about all the properties of its sister metal - copper - but even better. It is a better conductor of heat and electricity than copper. To me, this is quite bullish for silver considering the condition we are heading towards with the amount of paper and electronic money expected to paint over the debt bubble. They will print because they are at the source of the printing press and will be the first to benefit. They will print because that's the only thing history has shown politicians have ever learned to do.

In the meantime, perhaps this will be an interesting read to get an historical idea of where this distortion takes its root...
Silver stealers by Charles Savoie

Sunday, October 2, 2011

Why legalizing drugs? Or perhaps a better question: Why not?

If you ask any person on the street why drugs are illegal, the answer is likely to be something like
-Because criminals are in this business

Which should *logically* bring the next question - Why are criminals in this business? Now I have to admit that I'm not sure what is the most likely answer from this person on the street. Might be as simple as - "because they are criminals!".  This answer would definitely be right... but it does not justify making drugs illegal.
Shifting the perspective to - what if it was legal, surely then, criminals would no longer be criminals, violence in this area would go away as much as it is the case in the alcohol business. What would be the next complain from the main of the street? Probably something like:
- How would you make sure those driving under the influence of drug be found?
My answer: we have the same issue now. Someone who smoke marijuana and take any other drug, leave it at home and jump on his car free of any drugs, how would a policeman found out today? Making it legal or illegal doesn't change this problem. If the only counter argument give to this point is that making it illegal allows the cops to arrest those who do carry marijuana.  But then my argument to this is that - what if he was not driving under the influence while carrying marijuana?

We could go on and on, those against making it illegal are just analyzing this by looking strictly at the tip of the iceberg without making a solid and profound analysis.
If you happen to be against the legalization of drugs, please comment so I can carry on with the points.
But before you do, try to do some more research on your side by trying to defend all of your arguments yourself - are they really valid - like this one above?  If you are not sure, I hope to help you.
Until then, an excellent documentary is
The Union: the business behind getting high
Here it is on google video:

Monday, September 19, 2011


Yes, the mainstream media is a bit biased against Ron Paul. After the NBC debate, Ron Paul was winning the poll they had,  but to minimize its win, the bar chart was not up to scale for Ron's bar (smaller than reality) compared to the others that were all in appropriate relation.

So, the next time, they may not include Ron Paul in that poll at all, so in reaction, I'm doing it the other way. Here is my poll:

Who's the best GOP candidate
 Take my poll!

Who is the worst GOP candidate:
Take my poll!


Tuesday, August 9, 2011

Politician roadmap to socialism

Phase 1: Make a lot of nice promises on social services (gvt social security pension fund, universal healthcare, ...) that should get you elected.
Phase 2: Once elected, implement them but don't do true accounting. Don't charge enough for social security and taxes so you can get elected. Just let the deficit increase and punt the cost of those services to future generations. Remember, the main goal is to get reelected.
Phase 3:  Keep doing phase 2 as long as you have a AAA rating and true inflation is not fully realized by the electorate.

Combine all that with "Politician roadmap to feeding the military industrial complex and you've got a nice debt that can only be hidden under a carpet of paper money.

Friday, June 10, 2011

To trust or not to trust our government

Adolf Hitler wrote in his book "Mein Kampf":
"The size of the lie is a definite factor in causing it to be believed, for the vast masses of the nation are in the depths of their hearts more easily deceived than they are consciously and intentionally bad. The primitive simplicity of their minds renders them a more easy prey to a big lie than a small one, for they themselves often tell little lies but would be ashamed to tell a big one."

Another interesting quote:
"The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum — even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate"
-Noam Chomsky

I didn't know this person before and the little reading done so far allows me to conclude that I don't agree much with Mr. Chomsky position on many things but still, I find this quote very relevant. As Thomas Woods jr said rightly: you are an extremist if your position is outside the thinking of Mitt Romney to Joe Biden. I found this quote fitting it well. Tom wrote this to this effect:

Nearly all Americans are capable of entertaining the idea of a cover up or a plot by private corporations
that might be taking advantage of them, but this same perspective is never applied to the government in general. Perhaps on a few "bad apple" elected officials, but they are viewed as isolated. A widespread group of elected officials, white house staff as well as some directors of the FDA, TSA or any other 3 letter acronyms conspiring together with perhaps a few corporation on some sort of spending plan or fake news that will benefit them all is usually rejected. That the FDA - who happens to have its directors coming from corporations they are supposed to regulate - might be working in favor of those corporations instead of the people would be another good example.

What is required for something like Hitler's or Chomsky's quote to be valid is a media that filters, directs and controls the popular opinion. If there was no media other than the Internet and it was a leveled playing field between say, all journalistic bloggers, such spectrum would be as wide as the number of opinions that could emerge from the population. For sure, there would still be biased views but they would be dealing with unbiased opinion without enjoying the current edge they have right now with the mainstream media. Just a very few corporations own nearly all major newspapers and television stations, how far is that from the USSR's controlled Pravda-like media? Not far, but I would say it's actually a major improvement for a government who wants to follow Chomsky's principle where it gives people "the sense that there's free thinking going on". Such government who would be in bed with such corporations to move further away from free market capitalism and closer to corporatism (a softer word for fascism).

I remember seeing an episode of Deep Space Nine called Past Tense:
The action happens in 2024 San Francisco where it looks more like a modern Nazi like fascist state. In the story, one of the key factor in helping a revolution that will liberate the oppressed is the Internet.
Although this episode wasn't one of their best, could they have been somewhat right in their vision, at least about the medium... What I'm afraid of is about the laundry list of laws that are being considered in Washington in regards to the Internet, one of the last place where a large spectrum of ideas can still roam free.

Thursday, May 26, 2011

TSA scanners

One former member of the Obama administration left the white house to go to work for the very company selling the infamous "body" scanners to TSA.
Now, this is a perfect way to suck up the Federal government cow in a good old fashion corporatism way (fascism is another word) where people in the government and some key corporations work end to end to help each other.

What happen once this company has sold enough scanners to fill all airports of the country? Let's keep the cash flow coming and focus on other targets: bus stop, train station, highways...  which they did.

Now, if you listen to that video
at 2;00 minutes into the video, the truck driver said he has been waiting for 30 minutes.
Translation: add an additional delay in transport (higher cost for transport companies) meaning higher shipping cost leading to higher costs of food and everything else. Oh, and let's not forget the higher price induced by the inflation incurred by the money that will be printed to pay for the scanners and the TSA agents operating it.

Wednesday, May 25, 2011

Public park & libraries?

Everybody assumes librairies cannot be anything else than owned by the city or county. Same applies to park. But as usual, socialists will dismiss entertaining the idea strongly enough to forbid the intellectual journey of walking through what kind of world would that be.

First thing that must be recognized is that any endeavor done by the private sector rather than a public run enterprise is done better by the private sector. Note that in all cases, the publicly administrated organization has special benefits or an outright monopoly (think of the USPS which is protected by law to be the only entity allowed to provide mail delivery. Note that UPS and FedEx does not classify as such - just check the federal law in question).

Libraries could be all done and managed by private corporations that charges for membership and likely more than one such organization is in any city. For sure, the competition among them will make them work hard at adding services that will differentiate them from the rest of the competition. How about the poor? The wealthy usually buy the books brand new, they don't bother about going to the libraries, hence the majority of those who will be served are from the poor and middle class. If those companies wishes to attract them, they will need to offer a price low enough for the membership to account for their ability. The establishment where the libraries are could be owned by the city but managed by private companies, this is another alternative that is somewhat midpoint.

Central Park in NY. image from City of NY
City parks could still be owned by the city but managed entirely by a private management firm. Such firm would not receive a dime from the city and would not be taxed either on any profit in exchanged for maintaining the park with its primary purpose to serve the public a place to walk, jog, pic nic, with no fee to enter the park. How would they manage to get the money they need to maintain the park you ask? Well, some special food booth or other food court could be allowed by this management firm, again free of taxes, but for which these small restaurants would need to pay a monthly fee to the management firm to be able to operate in the park. You would be surprised how much better such park would be administrated.
In fact, a few city parks in the world are administrated privately and works much better this way.

To read more on this: