Jab Psychology

 

                           There are none so blind, as those who will not see

   You would think an actual Blind person would see less than someone who can see, but chooses not to. The reality of it though, is while the blind person sees nothing; the person who can see - but refuses - sees less than nothing. They only see the bad information already in their head. Given the choice between no information (the blind) and bad information (those who can see, but refuse), Bagholder would prefer no information. Hence the expression, "there are none so blind, as those who will not see."

   At the root level, this expression speaks to the virtues of being open minded. Psychologists would say when a mind is closed to new information it is usually due to holding a belief that runs counter to what new information is saying. The Psychological term for this is cognitive dissonance.  Simply put, there is a gap between what is believed, and reality. When this occurs, there are

My Way

 

     I am doing my best to find something to write about other than Covid, and the Vaccines. Its tough to do, because its everywhere you look. Its simply amazing  the number of people who willingly roll up their sleeves, for an untested vaccine (which offers no immunity) to fight a virus which has a survival rate of 99.76% - same as the flu. The thought process of most adults has been corrupted, no doubt.  My guess is the educational system is largely to blame. So lets discuss them & leave the Covid out of it. 

   Bagholder has always believed public schools are not there to teach, but rather they are there to familiarize and condition the young to the ways of institution, eliminating any bit of independent thought or self awareness along the way. As far back as I could remember, it was:

To Jab or not to jab (Part 3)

 

     In the mid 1980’s a friend of mine approached me with the opportunity to parachute out of an airplane.  Bagholder was in - all the way in!   Since we were noobies, before jumping we were required to take a 4 hour class designed to help us out should something go wrong during the jump.  One of the things they had us do was watch a 90 minute video of all the possible problems ranging from,  a non opening chute, a tangled chute, a torn chute, a torn ripcord, a partially opened chute, etc…. The video was just one disaster after the next.  After 90 minutes of that, about half of the people in my class got up, walked out, went to their cars, and drove away.  Even Bagholder was having second thoughts.  

     So, i pulled the instructor aside and asked him

Poker Faces

     Bagholder spent much of the last week in the Silicone implant capital of the world - sunny Las Vegas - playing No limit Holdem.  While most people consider Holdem a card game played with people, those of us in the know understand its a people game played with cards. The key to winning consistently at the game is understanding the psychological makeup of your opponent. If you can do that, the cards don't matter.  Today's blog will discuss some of the more common personalities found at the poker table.

1 Liars. You would think natural born Liars would have a distinct advantage in Poker because deception comes so naturally to them. There is extreme difficulty determining when they are lying, because they are so good at it. Having said that, they lie way more than is necessary. They check monsters, and put money in pots when they don't have cards to justify it. They have their default set to Lying. Properly played, poker requires mostly honest play, with the occasional lie. Liars, as we all know, engage in much more than the occasional lie. This makes them easily recognizable as well as very predictable. At the poker table that is a very lethal combination.

2. Nits.  They do it by the by the book. They raise when they have cards, they fold when they don't,  as a consequence - they usually get their money in good. They are disciplined and patient, as such their actions  tend to be calculated & deliberate. They are also pretty easy to spot - after just a few showdowns - you will have seen a dozen of their decisions. That is a large enough sample to stereotype someone as a Nit. Sharks will tell you, when it comes to hand reading - nits are the easiest group to predict. As people, nits lack creativity & vision. Consequently, their play is the well trodden path of play BIG cards. Many old-timers & most women fall into this group. While its the Liars who have the most deceit in their game, its the Nits who are the most genuine. 

3.  The benevolent. These are the people who repeatedly check the river in position with hands that should be bet for value. As people, the benevolent are more interested in ending hostilities, than engaging in aggressive behavior. As a regular in LV cardrooms the last 2 decades, Bagholder can attest - there are plenty of these folks out there. You can sit down at a table, strike up a friendly conversation with guy on your left. Next thing you know, he is checking the nuts on the river - because he likes your seemingly friendly nature. In life, the benevolent are among the finest human beings on the planet. Problem is, there is really no place for these people in Poker. You simply cannot make money at this game long term without the willingness to rape & pillage your opponents at every conceivable opportunity. 

4. The temperamental. In poker, just like in business - emotions cost money. Decisions in poker, if they are good ones, must have a logical foundation. Inject emotion anywhere along the line, and you are destined to fail. Poker players call it going on tilt. Even the most seasoned pros struggle with controlling "tilt". Emotional tilt comes about because human beings have a tendency to personalize more than is warranted. Some of the biggest evils in the history of planet earth have been perpetrated by powerful people who have personalized something they shouldn't. In life, they call it one of the 7 deadlies - Wrath.  Somebody puts a bad beat on you, and most folks will go out of their way to return the favor. Its human nature to start pushing in marginal situations,  becoming obsessed with evening the score. That is not a recipe for winning poker, in fact its a one way ticket to the poor house.   

5. Gamblers.  They are going to see more than their share of flops. They will push their draws harder than most. They will also call off their stack lightly. They live & play, seemingly without fear. All this makes them seem reckless & aggressive.   The psyches of most gamblers are riddled with the seven deadlies. In fact, At any given moment, anyone of those seven deadlies is probably running the show.  In the real world, this often makes them the life of the party. At the poker table, They are both a blessing and a curse. A blessing because they will put their money in bad, and a curse because because you cant push them out of pots with anything less than a stick of dynamite. When these guys are catching cards, they can book some huge wins, putting sick beats on people in the process.  While gamblers can wreak havoc on your bankroll at the poker table, in life they are usually a pleasure to be around. 

6. Psychopaths. More specifically the anti-social types. In society, psychopaths are less than 2 percent of the populace.  In poker, its probably more like 15%.   Psychopaths, by definition, lack empathy. As opponents, they are ruthless, fearless, and deceptive. Psychologists would tell you due to their callous detached disposition, they have an extraordinary talent for lying. In layman's terms, they believe their own bullshit - so they bet the same way when they have cards & when they don't.  As people, psychopaths are completely incapable of connecting with others on an emotional level. So their relationships can only be defined by exploitation and manipulation. Seemingly a perfect fit, for the poker table as all this makes them very difficult opponents to read. Their greatest asset however (their detached nature) is also their biggest weakness. Simply stated, they cannot read you. They cannot sense even primitive emotions in others like greed & fear. So they are left incapable of playing their opponents.  

7. Fish.   These folks are easy to spot as all their decisions are based on their own two cards. You will never see them 3 bet preflop with deuce-seven, nor will you see them fold QQ  preflop under any circumstances. In other words, they are playing checkers, while the sharks are playing chess.  As such they have no chance to win long term. They do not understand Holdem is a people game - they think its a card game. So they play the cards they are dealt as opposed to playing their opponents. In terms of sheer numbers, this is most populated group as anyone new to the game starts here. The downside is there are no long term winners in this group, because their understanding of the game is very rudimentary. Worse yet, most folks don't ever progress beyond this group. 

8. Math geeks. Their decisions resemble those made by fish, with one big exception. The very close decisions are governed based on the math of a given situation. For example, they will not chase flushes or straights unless the pot is laying proper odds. Most folks would not have a clue what the proper pot odds should be to chase a straight. Make no mistake, the math guys know - and their decisions are made accordingly. This fact makes them easily manipulated by those who recognize them for the math geeks they are. Savvy players can simply price them into pots when they want them in, or price them out of pots where they want them out.  You can pretty much count on one or two of these guys at every table in Las Vegas card rooms. 

9.  Narcissists are defined as egomaniacs with an over-inflated sense of self worth. They believe themselves superior to others. In life, as well as poker, this feeling of superiority prevents growth, because narcissists look outward (rather than inward) for the solution to their problems.  These are the guys cursing rotten luck when they lose, but crediting their skills when they win. They are easy to spot, as they belittle others, and often yearn for others to fail - even their own friends & family. They do it, because it reinforces their feeling of superiority. They believe external forces are to blame for their woes. Since they don't look inward, they repeat their mistakes over & over. Their power of Denial is legendary.  This makes them very profitable opponent to have in a card game, because they are among the most stubborn folks on the planet. In real life, denial prevents spiritual growth, in poker it enables savvy players to charge narcissists the max on made hands - because they just won't listen.  

10. Players. These are your long term winners. The players single greatest gift is the ability to adapt their behavior to fit the context of a situation.  When their opponents play scissors, they have an uncanny knack for showing up as a rock.  They relentlessly attack weakness. As extraordinary empaths, they are experts at spotting said weakness. They understand people better than most folks understand themselves. This insight into people makes them exceptionally skilled at hand reading. Precisely for that reason they seemingly always get their money in good. They take the best traits from all the above groups and forge them into an incredibly tough opponent, capable of almost anything. They have the patience, humility, and self-discipline required to continue growing as both a person and a poker player. 

The Fifth Dimension

"There is a fifth dimension beyond that which is known to man. It is a dimension as vast as space and as timeless as infinity. It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man's fears and the summit of his knowledge. This is the dimension of imagination. A dimension not only of sight and sound, but of mind. Next stop, the Twilight Zone

    We here at Mytwocent$ always like to acknowledge excellence. With that in mind we will dedicate today's blog to one of the most influential television shows in Bagholder's life: Rod Serling's the Twilight Zone The show routinely explored all facets of human frailty, often from multiple perspectives.  Many of the episodes had an obvious psychological bent. In like fashion, today's blog will have strong psychological overtones.

CUE: Rod Serling's voice….

  When running an empire, Its one thing to enslave the masses into a life of servitude.  Its something all together different to make them content with that life……

  Consider, if you will, Gas prices.   While most folks think its market forces which dictate those prices, we here in the Twilight Zone know better.   The powers that be (TPTB) raise prices while simultaneously  conditioning the masses into willingly accepting the higher prices.  TPTB understand its not high or low prices that affects the national mood one way , or the other. Much more important is whether prices are rising or falling. Stated another way, prices could be low, but rising; and the masses will be complaining. On the flip side, prices could be high, but falling; and people will be content. At first glance this might not make sense, as it is very counter-intuitive. Think about it this way: nobody would be happy to pay $4 Gallon for gas today. However, run the price up to $5 for a month or two & then they let it fall to $4, and just like that, the masses would be happy to pay $4 a gallon.  TPTB get what they want - $4 gallon with content customers …. while the masses get what they want - falling prices and healthier psyches (specious though it may be). 

 In true Twilight zone fashion, Its a mind game TPTB play over & over, and yet the masses never catch on. Another example is Unemployment which spent most of the last decade hovering around 5%.  This means  an unemployment rate of 7.5% throws 50% more people out of work. Nobody would be happy with that. Unless of course, TPTB run the Unemployment rate up to 10% first.  Then they let it fall back to 7.5% and everybody is happy.  Same game as the gas prices, and the same result. More people out of work, but the masses are ok with it. These are examples of applied herd  psychology with the intended purpose of making the masses more content (less trouble) in their servitude. Precisely because of that fact, Bagholder can guarantee both gas prices & unemployment will be high, but falling come election day.  TPTB do not stop at numbers games either, they run just as many games with words….

  Directly from the Hitler playbook of "the bigger the lie, the more they believe";  we have the recent settlement between Gman and the US banks who raped & pillaged the mortgage market for the last decade. Gman, with his infinite wisdom, has traded away future prosecutions for Robosigning, foreclosure fraud, or any other crimes related to the collapse of the real estate market for a paltry $25 billion. Even worse,  only 5.8 billion is payable now.  JP could pay the 5.8 by themselves with about 2 weeks of revenues. By the time the fine gets divided amongst all the banks involved, JP's share of the fine will equate to maybe 2 hours of revenue.  In essence, their punishment is a slap on the wrist. Yet,  Obama actually had the temerity to gloat about how he was sticking it to the US banks for their despicable behavior.  The masses are spun psychologically to feel better because banks are supposedly getting their "comeuppance", but those same masses are too dim-witted to realize the fine is nothing more than a "get out of jail free card" , the cost of which ($25 billion) is a microscopically  small fraction of what their misdeeds warranted.  

  As you might expect, here in the Twilight Zone,  TPTB also use word games for the purpose of multiplying their wealth. Consider this Zerohedge post which says Gold bugs are now classified by the FBI as Extremists.  This qualifies them for a government paid, middle of the night, black bagging & whisking off to Guantamo whenever Gman decides we need more up close & personal psychological conditioning.  While Gman probably won't resort to that extreme, the possible effects of the extremist label on Gold are worth considering. The new classification will be recognized by critical thinkers as Big brother  propaganda designed to keep a healthy slice of the non-critical thinking populace out of the Gold market. Those same non critical thinkers, meaning the masses, will unknowingly - in the back corners of their mind -  associate owning gold with criminal behavior. This is just another piece of MSM propaganda, no different than any of the other tired old lines like Gold is a barbarous relic, Gold is risky, Gold is a popped bubble, Gold is only owned by evil speculators, etc….  Oh well, it keeps the Gold Bull traveling light.  

  Today, there is no way to avoid the 24/7 onslaught of psychological conditioning by TPTB.  If you can think independently, their propaganda will be recognized for what it is - Lies, intended to misdirect.  If you can't think independently and you believe what you are told,  you will be condemned to a life of perpetual angst.  Psychologists call it a cognitive dissonance, In layman's terms - one of the leading causes of personal stress is when a disconnect exists between what we sense (see & hear) and reality.  For example, Obama says he is punishing the Bankers, people believe him. Yet bankers continue on, business as usual. That is a Disconnect. We are told there is no inflation, yet anyone who has been to the grocery store knows better. That is a disconnect. We are told Gold is a risky investment not worth buying near an all time high price - yet its up 11 years running. That is a disconnect. We are told ours is a better nation because we have open elections where we can choose between two parties, one that represents higher taxes & bigger government and one that represents lower taxes & less government. Yet, no matter who is in charge, government just keeps growing and taxes just keep going up. Just another disconnect - in fact - they are everywhere you look. 

  The societal disconnects that exist today as well as the resultant national angst are products of the 24/7 propaganda/conditioning by our masters.  The disconnects are too painful for the psyche to acknowledge directly, so people just live with the resultant stress.  They walk around angry, and can't figure out why. They are victims trapped in a psychological never-never land of wondering just what is true, and what isn't. Its a miserable place to live, because the only way out is a path too psychologically painful for most folks to follow. So they are condemned to a life, 

in the Twilight Zone……..

Popped Psychology

  Bubbles are a fascinating subject to us here at Mytwocent$. When inside one, it is often difficult to realize it. Human nature as well as flawed perspective makes spotting bubbles very tricky - doubly so, when you are in them. Rather than focus on historical precedents in identifying a bubble, it is much better to study the behavior of  market participants in an objective manner. Human nature is a constant. As such all bubble participants, regardless of the underlying subject,  exhibit the same behaviors.  Identify those, and you can spot a bubble. 

  For starters, participation is always widespread. When people who have no connection to a particular industry are piling in - its a bubble. Secondly, most participants are leveraging their way in, meaning they are borrowing (OPM) other peoples money just to participate. Third, the growth rates are mathematically unsustainable, yet participants in a bubble turn a blind eye (some due to greed, others due to ignorance) to the compelling math, with emotional justifications like "this time is different". Fourth, and perhaps most importantly - you can't reason with participants on any fundamental level, because it is faith driving their decisions - not rational thought. 

 Viewed through this lens, it becomes easier to differentiate between Bubbles & Bull markets.   Since most big  bull markets eventually give way to blowoff bubble tops before collapse, the value of being able to tell the difference is priceless. 

   We will examine eight of the largest bubbles in existence today, and then one market - which obviously does not qualify - no matter what the MSM says. 

  

1. Government spending  - all four bubble elements are here. Unsustainable widespread use of other peoples money, seemingly with no rational thought.  Government spending is over 40% of this nations GDP, and growing exponentially.  Our universe abhors a vacuum, as such it does not allow anything to grow at an increasing exponential rate indefinitely.  That means, either they get spending under control or the whole system collapses under its own weight. There is no third alternative

2. Educational costs - College tuition in this nation is out of control. It has grown in cost, exponentially,  for decades, seemingly with no end in sight. Gman (using OPM) forces up tuition costs through their student loan programs, to levels much higher than what the market would support if students actually had to pay their own way upfront.  They also saddle our brightest youths with massive debt burdens in the process.  Is it any wonder our universities teach almost everything except independent thought?

3. Medical costs - This is another market driven to stratospheric levels because of the widespread use of OPM. When Mom gets sick and has to go to the hospital, she deserves nothing but the best. Cost is no object. That attitude is prevalent, because of OPM. If people had to pay as you go for medical care, market forces would push costs down to a fraction of what they are today. Once again, its widespread use of OPM that drives up costs, saddling the sicker members of society with massive debt burdens in the process. Despicable. 

4. Military complex - As a nation, we spend 10x more $$ on a military, than any other nation on the planet. The Imperialistic ways of  empire & maintaining the paper con are to blame. Do you really believe other nations would take our paper in exchange for their goods, if it weren't for our military? Saddam said no more dollars for oil, he had a rope around his neck in less than three years. One of the chief causes of the collapse of the Roman Empire was maintenance of the oversized military.  It will contribute to our undoing as well.    

5. Wars - I'm calling a bubble in wars also. Iraq, Libya, Afghanistan, the drug war, war on poverty - I'm tired of it. Gman could never fund all these wars without the widespread use of other peoples money.  The only group who benefits from war are the bankers. Everyone else suffers. This is why Ron Paul represents the only alternative to the status quo in the next election. He, unlike ALL the others,  wants to end these wars. His is clearly the moral high ground.  

6. Paper dollars - Of all the bubbles on this list, this one amazes me the most - due to the sheer number of people taken in by it. Equally amazing is how futile it is to reason with those whose faith is placed in paper dollars. Even a casual glance at history shows ALL paper currencies eventually collapse once the victims get spooked & lose faith. Fact is, when you hold a dollar - you hold a claim backed by the full faith & credit of the US Government. I ask you dear reader, what could that really be worth?

7. Corruption - It is the oil which lubricates the economic engine of this country. The problem is corruption is so widespread, said engine is submerged. Its everywhere you look, and it always involves OPM. Ponzi schemes, rigged bids, kickbacks, political donations, earmarks, bailouts, legalized theft (MF Global), Manipulated markets, hidden taxes, short sales,  the list is endless. Corruption is a moral cancer which has taken over the host organism (our country). Like all things in nature which grow at an exponential rate, the cancer as well as the host, will eventually die.  

8. Bonds - this is, by far, the most dangerous of the bubbles listed here. When this one pops, all the other bubbles listed here will pop too. Buying Bonds today is no different than playing the childhood game of musical chairs. There comes a point where interest rates can't go any lower, meaning Bonds can't go any higher. That is where the music stops , and you either have a chair, or you don't. BTW, chairs only come in two types, Gold or Silver. 

9.  Gold market - There is no widespread participation. Nor, are there people leveraging their way into gold. Well paper gold maybe, but not the real deal. History would suggest the growth rate in dollar price is plenty sustainable for another decade. Gold bulls do not own gold because of any blind faith, they own it because logically & fundamentally its the place to park your wealth. Bagholder would argue, it is misplaced faith in Gmans paper by 99 percent of the populace that will make the 1 percent of us long gold, wealthy beyond the dreams of avarice. Since none of the bubble criteria exist here, its obvious Gold must be in a Bull market instead. Come get you some!!!!

Pay No Attention to the Man Behind the Curtain

It is well known in Literary circles that Baum's masterpiece The Wizard of Oz is an allegory for monetary reform cleverly disguised as a children's fictional tale. Oz was written in the late 1890's when the single biggest political issue, by far, was monetary reform. Baum himself, placed a disclaimer in the introduction of the book stating "OZ" was just a children's tale. Thinking logically, why put a disclaimer in the book at all, unless its known, in advance, people will perceive the story to be something more than a fictional tale. The characters & the symbolism within are much too dead-on to be a mere coincidence. It speaks to Baum's Genius that he could condense the political/monetary landscape as well as all the players of the 1890's, into a fictional tale to which anyone could relate. His genius is further evidenced by the timelessness of "Oz". While the present political landscape is certainly different than the 1890's; The players and the lessons to be learned are even more applicable today.  

   The great and powerful Wizard of Oz himself, is the symbolic representation of Government (Gman). In todays world, Gman is looked to for answers to everybody's problems - just like the Wizard of Oz. He is seemingly all-powerful, unless you are fortunate enough to get a peek behind the curtain - where Gmans deceptions and ineptitude are made obvious. Truth is Oz, just like Gman today, has no answers. Gman is little more than a giant complex wealth re-distribution machine created to mislead people into believing the cure for what ails them requires looking to Gman, instead of an inward looking examination of self. This was a minor problem in the 1890's, today its an epidemic. 

 Then we have the Wicked Witch representing the interests of the Paper Aristocracy. They seek to control people - plain & simple.  The Witch used flying monkeys to further her cause, today's Paper Aristocracy uses the MainStream-Media (granted, they don't fly, but they are monkeys none-the-less). The Witch used a crystal ball for clairvoyance, todays Paper Aristocracy simply make the headlines. The Witch used fear as her chief instrument of control. Today's Paper Aristocracy has gathered most every form of human frailty known including fear, greed, vanity, power, and ignorance; and forged them into the finest instrument of control mankind has ever seen - paper money.   

  Dorothy symbolizes the will of the people, the electorate. As a group - they are not particularly savvy - but they do have common sense. Dorothy, like the US electorate is not perfect, as her reasoning is easily swayed by emotion, distraction, and specious tales of woe. Dorothy was a lost soul looking only for a way back home, to a simpler more black and white world.  She buys into the proffered nirvana of the Emerald city (read: green paper) just as the US electorate bought into the Bankers pitch of fiat paper money.  Dorthy and her companions obsession with the Emerald city (and its supposed answers to their problems) is no different than peoples blinding obsession with paper money today. Just think how many folks you know who would tell you their lives would be so much better if they just had more, green paper. The victims come from all walks of life too. Farmers (scarecrows), industrial kings (lions),  workers (Tin men), and munchkins (poor) all have their share of wretched souls lost beneath a sea of paper money.

Once Dorothy gets to the Emerald city, she realizes immediately the system is fraudulent. She and her companions discover they held the answers to their problems, all along. In her case the Ruby slippers, which are not Ruby at all. Hollywood made them Ruby red to stand out on screen, taking advantage of the fact Wizard of Oz was among the first color films ever made.  In the book they are silver slippers which gave Dorothy the means to go where she wanted. In other words, to be free. Free people, by definition are not controlled, which explains why the silver slippers were so coveted by the witch. The key to Dorothy's freedom was silver. In today's world, buying physical silver is the only way to unlock and remove the shackles of paper money. Slaves keep their money in paper, free men keep theirs in Silver. 

   In Oz, the yellow brick road is the path to nirvana. Everybody knows it, but until Dorothy comes along - nobody follows it. Is Gold really any different today? History is clear, a Gold standard is the answer to todays economic woes. Just like the munchkins of Oz who wouldn't follow the yellow-brick road, the masses today continue to play the rigged games (stock, bond, and money markets) of the paper aristocracy, becoming more impoverished every day. Gold was the path in the 1890's, it is the path today. The Paper Aristocracy (just like the wicked witch) is doing all they can to push people off the Gold path. They know Gold is the anecdote to the paper disease they spread. 

  Perhaps the best lesson to be taken from Oz is While the yellow brick road may have led into the Emerald city, it also led out. Emerald city, like paper money, is one giant con. It has only the power we give it. Real power, the power to change the way things are, lies within. You are not obligated to play the fiat money game, any more than Dorothy and her companions were required to stay in the Emerald city. You have the power to buy precious metals and take control away from the Paper Aristocracy.  Dorothy needed the Lion, Scarecrow, and Tin man to make her journey. In like manner, you need  brains, heart, and courage to recognize Gold for what it is - the only way out of the FIAT paper hell.

 Remenber, In Oz, the yellow brick road was not without scare.  In today's world, we have msm monkeys screaming "bubble" on every Gold rally & "popped bubble" on every pull back, hoping to push the lost souls off the yellow brick road!! Do not be fooled, this is a clear cut case of life needing to imitate art. Follow the yellow brick road!! Follow follow follow follow follow the yellow brick road!!

The great and powerful Bagholder, hath spoken. 

GOLD War - the psychological front lines....

   We here at MYTWOCENT$ have always had a fascination with the parsing of words. Normally, you can take peoples words at face value - but when dealing with politicians and/or bankers (species both known to bend a word or two) close scrutiny is advised as nuance is always part of the equation. It is a crying shame they only give Paul 5 minutes every few months to grill this guy. In an ongoing effort to retire debt, we here at mytwocent$  would gladly pitch in 10 grand for a 90 minute pay per view between these two. In any event,  what follows here is a blow by blow translation of the conversation from Thursday between perhaps the wisest elder statesman in congress and Benny the blasphemer on a subject near and dear to our heart - GOLD. 

Ron Paul: “When you wake up in the morning, do you care about the price of gold?”

  Like any good tactician, Paul only asks questions to which he knows the answer. Of course Ben cares about the price of gold - as gold is the proverbial canary in the coal mine. The higher it rips, the more Benny & the bankers are exposed for the frauds they are. Asked a point blank yes or no question, Benny does what any experienced politico would do. He evades. He knows Paul is looking for a yes, and he knows the truth is yes, but like most bankers his first instinct is to deny others, so he stops short of saying yes with:

  Ben Bernanke: “Well, I pay attention to the price of gold. But I think it reflects a lot of things. It reflects global uncertainties. I think the reason people hold gold is as protection against of what we call tail risks, really, really bad outcomes. And to the extent that the last few years have made people more worried about the potential of a major crisis then they have gold as a protection.”

 On a psychological level, Benny is working overtime. First he stops short of admitting he cares, then he openly tries to associate Gold (probably the surest thing on the planet) with uncertainty. He then proceeds to paint people who hold gold as extreme, sure he doesn't use the exact words, but look at his choice of nouns & adjectives - and what they imply. For example, "protection" implies defense (not offense),  so those looking to make a buck should look elsewhere.. "Tail" implies, no matter what comes - gold won't be needed until maybe the end of it - so we certainly don't need it today. "Risk" implies danger, bankers always like to associate gold with risk whenever possible - its no coincidence they appear in the same sentence here. "Really really bad outcomes" implies extreme and unforeseen.  "worried about the potential"  implies unlikely and extremely remote - hardly worth worrying about.  

Ron Paul: "Do you think gold is money?"

Ben Bernanke:  "No. It's a precious metal."

Of course gold is money and much more, Gold is the preeminent universal form of money. Always has been, always will be. So of course Benny does what bankers do, denies. He subtly coats the denial "no" with a known truth "its a precious metal". This has the effect of making his no seem more like a fact than an opinion - old debaters trick. What is really funny about this exchange is Paul knows Gold is money and then some, while Benny denies because he doesn't want to publicly acknowledge gold as a viable alternative to his BernankeBucks.  

Ron Paul: "Even if it's been money for 6,000 years? Somebody reversed that and eliminated that economic law?"

Ben Bernanke:  "Well, you know, it's an asset. Would you say treasury bills are money? I don't think they're money either, but they're a financial asset." 

   Benny just won't give it up. Instead he takes the opportunity to slander gold by associating it with t-bills.  First rate con job, Lumping Gold in with a losing proposition like T-bills - what fckin balls on this guy. He is trying to insinuate both T-bills & Gold are assets; when In fact, one is an asset (gold), while the other is a paper liability (promise to pay).

Ron Paul: "Why do central banks hold it if it's not money?"

Ben Bernanke:  "Well, it's a form of reserves."

   What a nice nuance by Benny,"Its a form of reserves". Thats all, just a backup plan - nothing more. Another obvious attempt at manipulating the appeal of gold downward by minimizing its importance. The longer bankers continue to bad mouth gold (thus helping to cap its price), the longer they will have to trade their Bernankebucks for something of value. While Gold is a form of reserves it is also much more. Gold is a bet against paper currency. Gold is a bet on the continued debauchery, corruption, and parasitic behavior of our elected leaders - a sure bet if there ever was one. Gold is the only chance you have of being a player after the inevitable collapse of the almighty dollar.  

Ron Paul: "Why don't they hold diamonds?"

Ben Bernanke:  "Well, it's tradition. Long-term tradition."

Ron Paul: "Some people still think it's money."

  "Tradition" …….. People do a lot of stupid, carefree, expensive things in the name of tradition.  Bankers on the other hand, do not behave out of tradition, ever. They are motivated by getting more. Always more. They hold gold (and are buying more) because they know they are on the right side of the trade. They bad mouth Gold because bankers are more shrewd (and greedy) than most, and want the trade to themselves. Do not be fooled by their words - look at their deeds. Central banks are buying - are you?   

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  As of this writing, Gold is plumbing new highs at $1600 the ounce. While the herd (the masses) all think thats high, those of us ahead of the pack are long and still getting longer. The obscene rates at which Benny is printing up new dollars guarantees $1600 will look like a steal in a few years.  It was only 3 years ago gold was trading in the $800's. Everyone thought it was high then too. Just like today.  Even though $800 seemed high then, it seems cheap today. And so while $1600 may seem high today, history shows our perspective may be completely different in a few years time. 

Give me a $20 five and all the hardways...

 - Not all of us are gamblers, those who aren't don't matter - Bukowski
 
     I still remember the moment - like it was yesterday - the gambling gods first stuck the needle in my arm. I was 12 years old and convinced there was no way the Steelers could beat the Dallas cowboys in the 1979 super bowl. The 3 1/2 points Dallas was catching was just a bonus. As fate would have it, the Boys lost by 4 (with special thanks to Jackie "no hands" Smith). That 1/2 point cost me my lunch money for a whole week.  That was my first lesson in "No such thing as a sure thing". That summer I began working as a caddy at the local country club where I worked 3 summers. What an eye-opener. Show up at the crack of dawn along with 60 other teenage boys and wait for your name to get called. If you were lucky enough after hours of wait - you might get to "loop" someones 30 pound bag up and down hills for 5 hours for an $8 wage plus tip. The  caddymaster  (nicknamed "bags" because he carried money in little grey cloth bags) knew who tipped & who didn't. The caddies who wouldn't roll over got the non tippers, while the savvy caddies (who greased bags) got the good loops. 

 The primary way of passing time waiting for loops was to play games - for money of course. Poker - Pool - Pinball - Gin - Pingpong - Craps - Darts - Backgammon - Cribbage - Rummy - Paper/scissors/rock - Chess - Blackjack - there were always games going. Preppy kids of the wealthy club members used to come by with their holier-than-though attitudes and their designer clothes and lose more money in a day than I could earn caddying in a month.  I knew I had an edge in several of those games and I abused it.    Saturdays were my favorite because  there was usually a crap game going. I used to book "field" bets with a promise to pay double on all the "yo" elevens. Nobody else would, so I got all the action. That was my first real income stream.  Another time, I had an actual club member show up demanding to play backgammon with me because I beat his kid out of $80 over the prior couple of weeks. The old man was worse than the kid, and I went home with a roll of cash big enough to choke a horse.  I was shaken down by bags for $20 to look the other way as "gambling" was not allowed. After that though, When my name was called I got good loops. People would tip $25-$50 sometimes even a $100 - bags got his 20%. Win-win for everybody - another lesson learned. 

   The real lesson though from those caddyshack days was having an edge & working that edge.  I learned young to get on the right side of the math. As an adult today, as much as I love gambling - I know it has a negative expectation value (-EV for short). On this planet, the more -EV behavior you engage in, the more you lose. Period. If you want to make money (and as odd as it may seem, this is not the goal of most gamblers)  the only way to do it is to have that percent or two of math on your side (+EV),  this is what casino do.   Gamblers willingly engage in -EV  behaviors, casinos provide the setting and take the other side of the trade, the +EV side. Winners will tell you understanding exactly where the line is between -EV and +EV is critical to winning. To win consistently, it is not enough just to know where that line is, you must have the self discipline to respect it. This is where winners part ways with gamblers as most gamblers have personalities so riddled by the 7 deadlies, self-discipline is just a myth. 

   For those who know where the line is, its pride that blinds them into believing they can play on the wrong side of that line & win. It is also pride that prevents people from admitting mistakes which is why when gamblers lose - they just want to gamble more. Funny how that pride thing works - It gets you to cross the line, then when you lose - it sends you right back for more. Viciously reinforcing circle if there ever was one, but then again pride is a deadly sin.


  Most folks who play the lottery will tell you they know its a bad bet. They do it anyway because the lure of the "big one" is just too blinding - thats greed. Many will openly admit  the dream is what they are buying as they hand those dollars over for lottery tickets. Its greed making that decision, pure and simple. Lets not forget sloth - or laziness as some would say. It was really sloth which got me hooked as a youth at the caddyshack. Why haul heavy bags around for 5 hours for a paltry wage  when I could sit in an air-conditioned room in a comfortable chair with a cold drink and take someones money playing cards? The morality of what I was doing in those days never occurred to me. All I could see was the money and the fact I didn't have to work for it. Greed often works together with sloth.  To wit: Easy money makes for a strong lure (greed), not having to work for it (sloth) - well thats the hook. How appropriate, as most gamblers are considered fish. 

  While lust usually has a sexual connotation, in the gambling world it manifests itself differently.  Dante would say Lust is really about a deep desire to be accepted or admired by others.   Lust is why many casinos make spectacles of jackpot winners with bells & sirens attracting attention. People observe the spectacle, they want to become the spectacle, and again rational thought goes out the window. Almost anyone who regularly plays slot machines has at one time or another "felt"  a jackpot was imminent.  "I feel it coming" they say - In reality though its not a feeling, its lust at work. 


  The last two sins Wrath & Gluttony are reserved for the truly degenerate gamblers out there. Wrath is a single minded fixation often rooted in a denial of what is. While gluttony is most often associated with food, its really more a sin of excess. In the immortal words of Harry Callahan  "a man has got to know his limitations". Gluttons know no limits. Degenerate gamblers lives are consumed (wrath) by gambling to excess (gluttony) .  These are the folks who end up at GA meetings with sob stories of how they lost it all.

  

  While this blog might sound like I am ragging on gamblers - there are some positives. Precisely because gamblers routinely cross that line & live life on the dark side, they make for some of the most interesting personalities I have ever met. Financially speaking, the most successful people I know ALL have more than their share of gamble in them. As vices go, Gambling - if harnessed properly - is both harmless and therapeutic. Last but not least, I would count myself as someone with more than his share of Gamble. As proof I would offer this: There aren't many things on this planet better than pussy, but gambling at a hot craps table is one.