Quiz winner!!!

For the second Month in a row - Lord Vader has captured the Mytwocents Quiz with a perfect 12 of 12 score. Congratulations are due, he has grown his Silver position. Bagholder was of the opinion this was an easy quiz, as it turned out it was more difficult than I imagined.  Here are the correct answers along with a brief explanation:

1. Paul - Tea party = smaller government, no taxes, no wars, balanced budget. While Bachman supporters would like to claim the tea party mantle, fact is she has voted for UNbalanced budgets & Increased troops in Iraq - while Paul voted NO on all wars & has never voted for a tax increase or unbalanced budget in his 23 years. 

2. Bachman - She gets the most with the least. The fact she is even in the running with her paper thin resume speaks to her Savvy.

3. Perry. This guy is George Bush less 20 IQ points (and we know W. didn't have too many to spare)

4. Romney - Harvard MBA - need I say more. 

5. Palin  The most skilled is the one who can lie while connecting with people on a personal level, such that they don't care about the lie. Clinton had it, Reagan had it, and so does Palin. 

6. Paul. This one was a hand out - there is no other name in the conversation. You want to turn Washington upside down, this is the guy.

7. Obama - His record speaks for itself. I could see an argument for Perry here too. 

8. Perry - This one isn't close either - have you seen his college transcript?

9. Palin - She has the Broadest appeal (no pun intended). Even if Obama wins the election - he won't carry the most states. Of course, she has to get the nomination first. 

10. Bachman - The Romans used to feed christian fundamentalists to starved lions, because they thought it just. Some of her religious utterances, are downright scary - for those of us living in reality.  Bagholder, being a big picture guy, would overlook this religious frailty & vote for her in a second.

11. Romney - The only real business man in the group, besides the only thing missing is the diamond pinkie ring

12. Obama - Another no-brainer. Someone who has driven the economy off a cliff has to be less qualified to get behind the wheel again than any of the 5 who didn't.

Vice Management

For a loser, Vegas is the meanest town on earth.  ~Hunter S. Thompson

As someone with more than his share of gamble, bagholder will be ushering in the new NFL season next weekend from the posh confines of Caesars Palace, Las Vegas. Seems only right to kickoff the new season in a Roman environment as NFL Football is the closest thing we have to Roman Gladiators.  While the NFL doesn't offer the blood, guts, and gore of ancient Rome, there is just enough violence to quench the more animalistic thirsts of the average American Male. 

Las Vegas holds a special place, deep in Bagholder's heart. Back in the day, Greyhound bus tickets were $12, rooms at Binions were $15, two room service omelets & pot of coffee with tip - $20.  We used to sit in the sportsbook on a gambling budget of less than $100 and bet football & horses all weekend, with a roll of quarters handy (for tipping the waitress bringing free beers) . Oh yeah, and ten cent craps. Ahhh the good old days. As an experienced veteran of weekend benders in Vegas here are some helpful hints for you rookies….

1. Set a gambling budget and stick to it. As childish as it sounds, it guarantees there will be more weekend benders in the future. 

2. Be caught up on sleep before heading to Vegas. If you are short of sleep and then head to Vegas, your chances of managing your roll wisely are low; add alcohol and/or drugs into the equation, and those chances are  nonexistent. 

3. Stay hydrated. Water is your friend. The dry air, the desert heat, the casino oxygen & the Alcohol all conspire to deprive your immune system of its most vital lubricant.

4. Leave the kids home. It is not a family town. Las Vegas is 24/7 debauchery on display for all to see, including your kids.  

5.  Any given weekend, there are a dozen good shows worth seeing. LV isn't all about the gambling, they do have top shelf entertainment

6.  Don't upset the locals. This cannot be underestimated. While you are there to "cry havoc" they Live there. Be respectful. 

7. While they tell you drinks are free at the tables, it takes time to get them there.  During that time, your roll is exposed - so really - they are not free. Believe me, Bagholder has ordered more than his share of four figure Heinekens. The reason alcohol is free is because it impairs judgement, the one thing you need to keep your money. 

8. 99.6% of the hot looking women who look you in the eye & smile, are WORKING. Bagholder believes you have a god-given right to skewer $1000/hr working girls, if that is your thing.  Be warned though, with this subtle nuance: While you are eyeing their valuables, they too are eyeing your valuables.

9. Eat well. Breakfast - omelet house (corner rancho & charleston) - the spartacus rocks.  Lunch - for the last 25 years it was the Stage Deli at ceasars, now that its closed - the American Grille at the Rio will do fine - the oysters rockefeller  wow. Dinner - Hugo's Cellar at the 4 queens, everything on the menu is good - has an old Vegas feel - for the nostalgics out there. 

10. Expect to lose. All gaming in Vegas - except poker - has a negative expectation value  (-EV for short).   This means, the more gambling you do - the greater your chances of losing.

So one of the keys to occasionally beating Vegas is to eat like a king, enjoy the shows, party like a rock star, smoke good cigars, ogle women, and NO long sessions at the tables/machines. But  rather, take your whole gambling budget and make 1 big bet. Something roughly 50-50 like the NFL, gives you 3 hours of rock solid entertainment for your bet & about half the time, you will go home a winner - if thats the only gambling you do. As any veteran of Las Vegas will tell you, going home a winner about half the time puts you miles ahead of most people. 

If we keep buying it, they will keep selling it.

  Bagholder believes we live in a world where  justice, more often than not, is served.  The universe, as a whole, has and requires balance. Those who choose to close their eyes to both history and reality are punished, while those who SEE reality as it is (not as you are told) are rewarded. If you can see through the fog of lies foisted upon us by the financial media - then success in the financial markets is easy. Understanding the motives of those who control markets is key to believing what you see, instead of falling prey to what you hear. 

What follows are 9 themes sold to us on a daily basis by the mainstream financial media. The visual evidence all these things are lies is overwhelming, and yet, people still believe. Then again, like the proverb says - there are none so blind as those who will not see. 

 Bonds are a safe. Right now 10 year treasuries return less than 2%. At that rate your money doubles in roughly 36 years. Who in their right mind would lend Gman a $1,000 today for $2,000 in the year 2047. Any sentient being can see inflation would erode the purchasing power of your bonds, for which the paltry return does not cover. In otherwords, bondholders are losing purchasing power. Does that sound "safe" to you?

  No inflation in consumer prices - says Gman. Do you believe what you are told or do you believe your own eyes when you walk thru the grocery store?  Bernanke & his minions get on TV and tell the people how inflation is only 1 percent per year. With 1 percent per year increase in prices it would take 70 years for that box of cheerios to double in price. In Bagholders reality, when he considers the rates of which box sizes are going down AND prices going up, Inflation is 5-10 times what Gman claims. Their motives for understating inflation are obvious, the lower the inflation rate - the less Gman has to pay those suckling on the government teat. 

 Gold is risky. How many times have you heard that? Where exactly could you have bought gold in the last decade - and been at risk? With no counter-party risk,  Gold is the safest asset on the planet. There is no risk  in owning something, the value of which is immune from theft via counterfeiting. The same cannot be said of your beloved paper dollars/stocks/bonds. Again the motives are obvious, labeling gold as risky keeps people OUT of Gold and IN the more controllable paper markets. 

 Diversification is key to success in the financial markets. This is a losers mentality. Losers divide their monetary soldiers into multiple areas, so they don't go broke. Notice how those who buy into the diversification mantra are focused on not losing instead of winning. While those who see reality as it is identify the right side of a  SINGLE market using our eyes - and then concentrate resources accordingly. That is how winners play. 

Gold is Volatile, they say. Psychologically speaking, most folks can't handle volatility.  The extremes can be crushing.  That is exactly why they try to associate gold with volatility. While we are told gold is volatile, we use our eyes to see Gold has been up 11 years in a row. Is that volatility, or is it something going up in value. As usual, we are told one thing, and reality is another. 

Unemployment is 9%. What a crock of shit. John Williams at Shadowstats claims actual unemployment (if measured the same as in the 1970's) right now is over 22%. Rigging numbers lower than they actually are is something of a specialty of Gman. This helps make the lies more believable.  What is most disturbing about the staggeringly high actual unemployment is it won't get any better until real wages paid in this country come down. This fact is never talked about, anywhere. 

Housing prices have stabilized….or so we are told. With our eyes we see massive backlog of inventory. Little or no demand.  Asking prices falling. Interest rates with nowhere to go except up. Fewer qualified buyers.  There is no visual evidence housing prices have bottomed. In fact , Bagholder is on the record stating housing prices will continue to fall in real terms until your average middle class home trades for 5 ounces of Gold - or 100 ounces of silver. 

Gold is in a bubble. This one cracks me up the most. The temerity of the lie is breath taking. They have been telling us for YEARS now about the gold bubble, yet bubbles exhibit certain elements our eyes do not see. Where is the widespread public participation, or the people leveraging their way in, or parabolic advances in price? There cannot be a bubble without these things. Again we hear one thing and see another.

 QE3 is needed. If a man invents a thermometer that reads cold in July & hot in January, he is deemed a failure. For some reason this doesn't apply to bankers. QE1 was implemented & failed, QE2 was implemented & failed. Is this not the thermometer which reads cold in July? We look around and see failure, yet are told we need more of it. The motivation behind QE3 is to enrich the suits on wall street. Just like QE1 & QE2, the end result will be to impoverish the working class even further. 

  In all these cases, the powers that be have a reason to perpetuate the lies. Propoganda is nothing new. It has been so for centuries.  So it will be today.  History does indeed, repeat.  Our leaders will continue to preach the above lies, all the while printing the dollar into oblivion. The simplest way to stop the suits from robbing your purchasing power is to buy Gold. End of story. 

Quiz time!! Win a Silver Eagle!!

With the Iowa straw poll thinning the Republican field a bit, It seems there are maybe 5 contenders for the 2012 crown. I guess 6, if you count Sarah. In the spirit of get to know your candidates, there are 12 questions - each must be answered with one of the following choices:

A. Bachmann

B. Palin

C. Paul

D. Perry

E. Romney

F. Obama

   The first person who posts in the comment section ALL 12 correct answers as judged by your host, Bagholder - will get a 1 ounce .999 fine US Silver Eagle Fedexed to your door. Have fun...

1. Who has a  platform most in-line with the tea party?

2. Who is the most savvy, politically?

3. If elected who would damage the country the most? 

4. Who is the most ethically challenged?

5. Who is the most skilled Liar?

6. Who would shrink government debt the most?

7. Who would grow government debt the most?

8. Intellectually, who has the dimmest bulb?

9. Who carries the most states in 2012?

10. As for religious beliefs, who is the most extreme?

11. Who would make the best used car salesman?

12. Who is the least qualified?

  Sorry, almost forgot...there are 12 questions with 6 possible answers....so to be fair & balanced we used each answer twice.......

How many times you gotta be told?

  Corporate America just wasn't for me. Bagholder's lone venture into corporate America was as a teenager (pre-internet days) working at a call center for a major Hotel chain. In a 40 hour week we would routinely handle 4000+ phone calls to get about 800 reservations. In those days, average room was $50 times 800 reservations meant each agent routinely typed up $40,000 worth of business per week while getting paid about $400. As a corporate drone, I dreamt of ways to turn those 4000 calls into $40,000 for me, instead of a faceless corporation…. 

 As luck would have it, Bagholder was working on that very problem one Friday in September just before week 1 of the NFL football season when the phone rings. Guy with a heavy foreign accent says "bet the Broncos" - and then hangs up. Most folks I know would just dismiss the call as a prank, Then laugh Sunday night when they happen to notice the Broncos won. Oh well, life goes on….

 Week 2 Friday night, phone rings again - guy says "bet the Vikings" - and then hangs up. Anyone who has been on this planet for more than 10 minutes knows "If the world tells you something, you listen". Bagholder goes long the Vikings right here. Most normal folks at this point, would still dismiss the call as as a prank - but make no mistake; they will go looking for that Vikings score on Sunday.  Sure enough the Vikings win.

 Week 3 Friday, phone rings. At this point most folks would begin looking the gift horse in the mouth - with something like "WHO IS THIS?". But the voice says "Bet the Raiders" & hangs up.  Most folks would still do nothing, but a healthy percentage of people would find a way to get a Benji or two down on the Raiders. Even the ones who don't bet will keep an eye on the Raiders - who of course, win. 

 Week 4. If you are like Bagholder, come week 4 you are sitting next to your phone waiting for the call. It comes with the words "Bet the Browns". Anyone who bet week three will be upping the sperm count this time. Those who didn't bet week three have to be questioning themselves. Some of those will rationalize along the lines of : This guy has been right 3 weeks in a row, I should try it. Browns win.  

 

 Week 5. There are people I know, who after being handed 4 winners in a row, would be emptying their checking accounts (fck the mortgage) after the phone rings with "bet the Rams". To be fair, there is a large percentage of people at this point who would still not bet the Rams, for a myriad of reasons - most of them psychological. Maybe they don't have gamble in them, or they are to lazy to make a bet, or perhaps they just do not believe. No matter, Rams win.

 Week 6 Call comes "bet the Colts". Those emptying their checking accounts last week are now paying their mortgage AND pounding the Colts. The ranks of the non-believers are shrinking as more and more people, after being told 5 times in a row, begin to listen.  Think about most men you know and how they would react in this situation. After being given 5 consecutive winners half the men I know would be betting the Colts - many of those would be wagering $$ well outside their comfort zones. Its OK, because Colts win.

 Week 7 Call says "bet the Lions". Many guys, including yours truly, would be booking suites at Caesars Palace by week 7.  Meanwhile the non-believers rationalize away the pain of lost opportunities with thoughts like: This is not possible, nobody could have information like this, why are they sharing with me, this is crazy, etc… Then again, how many times do you, as an individual, need to be told something before you listen? five, six, seven?  …. Oh, Lions win.

 Week 8 By now, there are some people to whom that Friday night phone call is a Religion. Their worlds revolve around that voice on the phone which says "Bet the Eagles".  Some folks I know would be doubling up their bets every week, while others would now be emptying their brokerage accounts for wagering capital. Meanwhile the non believer pool shrinks some more as all but the most stubborn non-believers start to listen and bet the Eagles.  Eagles win.

 Week 9  Phone call comes, guy says "I've given you 8 winners in a row, I can't carry you forever - this is the last winner you get for free. Next week you wire me 10 grand or we don't talk again. Got it? Now, bet the Jets." The non believers are screaming "I knew it, its a scam, they just wanted my money". While all that may be true - the voice gave 8 winners in a row. In short, he produced. In fact, make that 9 as the Jets win. 

  At this point there are a couple of questions which need addressing: 

What week would you climb on board?

Would you wire the money for the week 10 call? 

 For the record, Bagholder would wire the 10k.

**************************************************************

   While you might think the above scenario could never happen, all that is required is a devious mind willing to make exactly 4096 phone calls week one - telling half to bet the broncos & the other half bet their opponents. Because the broncos won, come week 2 you call only the 2048 people who were tipped the "broncos" and tell half to bet the vikings & the other half to bet their opponent. Repeat until after week 9. By then you will have handed 9 winners in a row to 8 different people (some of whom have elevated you to GOD status). Assume 1/2 are astounded enough to cough up the money for a week 10 pick, and that is how you turn 4000+ phone calls into $40,000.  

Disclaimer: Do not try this at home…. For the record, the above tale is complete fiction - bagholder knows nothing about the list of 5000 Gamblers Anonymous members whose phone numbers went missing back in the 80's.

The Worm gets his due

"I'm not one of those leeching sons of bitches. I want to earn everything I get."  Dennis Rodman  This weekend the NBA is inducting the "Worm" - aka Dennis Rodman into the NBA Hall of Fame. As a 30 year fan of NBA Basketball, we here at mytwocent$ would say Rodman is the best rebounder to have played the game in the last 3 decades. In fact, there really isn't another name in the conversation for best rebounder - thats how far he is ahead of the competition.     Rodman was very undersized relative to most NBA rebounding greats. The reason he succeeded in the land of the giants was because he had the heart of a champion, a nonstop motor, a very high basketball IQ, and a desire to do the dirty work.  Not only was he a world class rebounder, but he was a versatile defender who routinely shut down some of the games best frontcourt players. We also believe putting him on the court with MJ & Pippen, is the best three headed defensive monster the NBA has ever seen.  Rodman gave 110% effort every time he was on the court, while his off the court persona, left a little to be desired. The tattoos, piercings, and tantrums were about as rebellious as could be back then. Of course he never did anything half-way - that is part of what made him successful in the NBA. We are of the opinion, his efforts on the court were more than enough to punch his ticket into the hall. As for his escapades off the court, well lets just say - He is living proof, image isn't everything.

"For five years I've felt like the best prostitute in a high-class whorehouse. But all the other girls get paid more than I do."  Dennis Rodman

Gold & Silver - random thoughts

The Devil is like a strainer that separates the mud from the gold.
Carlos Santana 

-  Gold & Silver both, are very counterintuitive trades. It is very psychologically disturbing to work X number of hours to get $1600 together - hand it to the guy at the coin shop & he hands you a yellow hunk of metal not much bigger than a stick of gum. Sure, it has some heft - but $1600 - are you fckin kidding? That is peoples mindset, until their ability to reason overcomes that prejudice - they are going to miss the trade. 

- $1600 Gold & $40 Silver is not high. Everyone thinks that way because their opinion is based off where these metals have traded in the past. We here at Mytwocent$ are more forward looking. Relative to where these metals are headed, $1600 Gold  & $40 Silver is Low.

-  Gold & Silver are the simplest & safest means of storing wealth (and your labor) that exists. 

- Gold & Silver are antithetical to the way most people are raised. We are told from a young age to respect authority, have faith, and save (money) for a rainy day. Gold & Silver are the only way to profit from the fact all 3 of those ideas are absolute nonsense. 

- Gold & silver are the gambling equivalent of betting the don't pass at the crap table. Its the smart bet, and yet people just don't do it. Pride do cost - to use the parlance of our time.

- The fact Gold has made a high every year for 11 years now means anyone who has bought gold in the last decade, chose to do so at or near an all time high.  Psychologically, it is difficult to overcome the fear of purchasing something at or near an all time high.  This fact has kept GOLD very underowned. 

- The biggest complaint from the financial talking heads is Gold & Silver have no yield. While that is true, they also have NO counterparty risk; which is priceless considering the direction this country is currently headed. 

- Gold & Silver will continue to head higher until our political leaders address the debt issue and/or the currency collapses. Since the debt issue is now off the table until after 2012 - that sounds like a 16 month green-light for higher GOLD prices. 

- Speaking solely as a Gold-Bull - we here at Mytwocent$ will have to endorse Obama in that 2012 election. Gold was $740 (see Nov 08 on chart) when this nation elected Obama. Thats roughly a 120% return in 2.5 years. If he gets another term - we could do that 120% thing 2 more times!! That would put gold North of $8000 the ounce by the end of his 2nd term. HELL Yeah!! Lets do it!!

- Above ground in readily usable form, Silver is rarer than Gold.  Doubtful 1 person in a thousand is aware of this fact.

- In the 1970's gold bull, price rose roughly 24x, it was a US only phenomenon. This current Gold bull market will be a planet wide mania. With much wider demand, we can expect Gold to rise a lot more than 24x this time around. The 01 bottom was about $250 - 24 times that is $6,000. Yours truly might begin profit taking there. 

Debt, a four letter word indeed

There are two kinds of people in the world my friend, those with a rope around their neck, and those who do the cutting. -tuco

 There are parallels to be drawn from Tuco's words of wisdom. The spiraling out of control national debt is the noose threatening to hang us all. While those in charge of the cutting, our elected leaders, seem oblivious to our plight.

After months of wrangling between Obama & both houses of congress,  there has been a deal struck to raise the debt limit. This means we, as a nation, can go on spending money we don't have - it just goes on the federal credit card. It is the 70th time we as a nation have had our "limit" increased. Seems kind of silly to call it a limit really.  Could you imagine reaching your mastercard limit, then asking for an increase, and getting it - 70 times? 

 The agreement reached, like all good compromises,  has nobody getting what they want (need), but everybody getting a little something. Democrats get the next debt limit showdown moved until after the next election. Tea party gets no new taxes, Republicans get - well - their way, the masses get assfucked, and Gold & Silver Bulls make Bank - with a capital B.

  The   United States is the mathematical equivalent (with 8 zeroes removed) of  the guy who makes 24 grand (2.4 trillion revenues) per year while spending 39 grand (3.9 trillion budget) - Oh and his net worth is negative 150 grand (15 trillion debt).  The situation is simply not sustainable. Yet here we are. As anyone who has managed household budget would tell you, the first step is to get the spending under what you make - then tackle the debt. 

  So, after months of wrangling how do our leaders, ostensibly our best and brightest, approach this problem? The village idiots, I mean congress  decides to spend 37 grand rather than 39 - and then celebrate as though they are conquering Roman war heros returning home for the Bacchanal.  Instead of cutting spending in half, like is commensurate with the problem - we get token cuts. The kind smarmy politicians can show their constituents as proof they are addressing the spending issue. Like my dear departed dad would say, It ain't worth being the village idiots, unless you can prove it. 

  Meanwhile back on Earth, the real issue (the debt) continues to grow, unabated. In fact, they have agreed not to address the issue again until after 2012 election.  Our  political leaders are not serious about addressing the spending deficit. Which means they are not serious about addressing the debt either. So, if getting spending under control is off the table; then inflating (printing) the currency and/or default is all that is left.  

  Make no mistake, until our political focus changes - gold will head higher. In as much as our leaders have decided to print more currency - seemingly until we run out of trees - Gold bulls are the only real winners from today's deal as we recognize the US dollar and the political charade with it for what they are;  a currency in collapse and an empire in decay. Like Tuco might say, there are 2 kinds of people in the world my friend, those who get it (and buy gold) & those who don't. Which one are you?