Saturday, September 13, 2008

Odes to Deflationary Motherland

How do you know gold have values?

Because you CASH them out to pay for BK cheeseburgers, RIGHT?

Now, get thinking. In STRONG deflationary system, why would people set aside CASH to pay for non-necessities?

GLD can increase in price when CASH can be set aside and support its price just because it's an alternative investment and it made sense to diversify.

Suppose you say, NAY, this NOT going to be deflationary? HELICOPTER BEN says it so in HIS PAPER.

In a late night supper, Ben sat down with me and told me people should evaluate that in the context of 2001 economy.

YES, there was a MINOR deflation, and it WAS VERY BAD. Much much much worse than say, a small overinflation.

At the time, he would contend and I agree, houses were 10-20% below fair value. That would translate to 1-2T HELICOPTER DROP now, would it? So long as people were made aware with the government support such as Freddie and Fannie.

Were houses really up 10-20% after that, OR was it up more like 100-200%?

Ben closed the comment by saying he was indeed looking at a B-2 bomber strikes as opposed to a surgical Apache driveby he wanted to execute. And now he is just gonna have to do his best to minimize the damage as the economy DEFLATES.

That means no gold bar for you, no Potash, and you shouldn't think bartering with oil when the s* hits the fan.

Here's the song for you to enjoy while lovely gazing that hunk of Potash you put in the living room:



Mister Spy

I always be enjoying dees here comments from you

no longer should one diversify their bonds nigga, like wu tang suggested to me and my beautiful ivory wifey

you be saying, if i read you right, that FED will attempt the inflation but that in the end the market forces will overcome and only cash and cash eq. (short term treasury) will be left standing

In what way do you expect the inflation attempts to roll into the hood:

i been thinking ZIRP for one
some type of new lending shiz from FRE FNM

other thoughts mister spy would be appreciated as my WU TANG advisor is now incarcerated and he can only get the WSJ no FT and even so he can only make on conference call a week


also impressive steepening in da curve friday with that $irx and $tnx

would youse be expecting the steepening to continue or should the $tnx continue down if we approach ZIRP

PS is this that greenie blogger guy right here???

ARAK said...


How long has the commodities crush to go on from a time frame perspective? Is most of the move down over or it still time to join/continue riding the bus?

MTGSPY said...

Please start charting the safest route for you and your family.

stockfarmer said...

Fuck I didn't want to hear that. I need some bulk foods and a wood stove. I have no path out. I just hope the violence stays in the cities.

I'm guessing the looters are already on flights to Zurich?

MTGSPY said...

From TF I obtained information that Glock 30 or Glock 30 SF has a very good stopping power and very light weight. I guess that and armor piercing bullet would be all the travel insurance to canada by the end of 2009 that I'd ever need. I think in the country side the violence would also be inevitable because crazed gangs from urban areas might decide it's a good white area to loot with a ton of good looking white chicks to boot. I don't know, I only have been witness to three riots in my entire life. Need more data points to be authoritative in this field.

Penn said...

Dude you are fucking scaring the shit out of me. I don't consider you to be a rabble-rouser per se, and this gang violence shit coming you are spewing out is making me squirmy. Time to take gun lessons, pronto

MTGSPY said...

i am not survivalist, jehovah witness or kunstler. I am using a mathematical model in my head and assigned probability #s in my head for different types of event. The event where everyone in the US who never really produced anything was suddenly aware that they wouldnt get anything in return would i think climax in some kind of high noon, but it's just gonna be between one guy and the next.

D said...

FN "FiveSeven"

Stock up on can find incendiary rounds.


Greenie said...

Well, my friend, something somewhere just went wrong in your mathematical model.

Time to look for short circuits?

MTGSPY said...

Greenie, what is wrong with my math? That the civilization is about to take a dump for a while? So if they don't stash their money in oil they'd stash in gold? How about diamonds? C'mon you know the drills and you're just lucky, better cash that out before the real face of deflation shows up. Yes, political upheaval / war does wonder for gold but that's not for awhile - I will be preparing the most leisurely route to canada anyway.

It will, and guess what, you're lucky you don't live in virginia or I would feel entitled to get some of that glitter you so proudly announced you have. Diamond's better by the way, easier to defend against looters or potential looters like myself. Get ready boy-o.

MTGSPY said...

I will be procuring my first gun this week. Have you?

gtt said...

I will be as well, as soon as someone can recommend a good gun store to me in San Diego.

MTGSPY said...

Gtt, I think your geographic location demands that you at least upgraded to semi automatic, but I would think about getting some claymores to buy extra time as well, you never know how resilient San Diego population could be cuz they have seen multiple warfares you know, in their homelands.

stockfarmer said...

Have fun with the Glock. I'll pick one or two up this fall. I don't have a hand gun and need something that can be concealed. The hunting rifles, shotguns and AR-15 are hard to hide. :)

So it looks like we have both inflation and deflation now.

gler said...

I asked about Atherton and Los Altos Hills earlier. Being a renter in the area, I really have to ask - are things really that bad!?

It is hard to imagine mega-rich areas cracking; the folks here pay the most taxes, so the po-po have our backs. And private security doesn't hurt either.

I guess the US will become a 2 caste system.

MTGSPY said...

Look, I have seen the inside of 4 banks you would consider giants in the US (2 of them were GSE, one of then Citi, and another is where I work now dubbed the "short seller nightmare" cuz it just won't go down in price). Yet all of them were insolvent or on the way to insolvency within MAX 12 months. Whatever the steps taken by the government it will involve either cutting the pain, or keep adding heroin until the patient is terminal. I am telling you that once the patient is SCREAMING, what will happen is some kind of social unrest. I know, I know, making this kind of prediction is "unpopular" and very low odd. But consider this, it takes 2 weeks for the average civilization to descend from soccer mom to riot-mom once the economy fails. When does an economy fail? Well, you WILL know from the appearance of the riot-moms, that's why it doesn't pay NOT to prepare/predict in this type of situation. There simply won't be ANY warning.

PCap said...

If you need a place to crash in Canada, give me a ring.

BTW - I'm working on moving out of here, so you better hurry up!

MTGSPY said...

i'll e-mail u later - u moving to HK?

D said...

FYI - engineered diamonds make diamonds unappealing as a store. Even the DeBeers family sold a 26% stake to begin diversifying away.

GE has had a patented process for manufacturing diamonds for over a decade now. There are several others like Apollo group that have processes for manufacturing that are better than GE's.

The diamond industry survives ONLY because it is organized crime. Someday, I might just buy the manufacturing rights and drop them from helicopters like Bernanke wishes he could do.

Anonymous said...

I am ready to fly back to china.

A banned fucktard from tf.

mliu_01 said...

Funny that I have argued about inflation/deflation with kd for so long.

and he banned me on the day he capitualte.

A total ban. What a pussy.

MTGSPY said...

welcome Mliu, we are all fucktard one way or the other. Make urself at home, i am sure we will have a lot in common to talk about as fellow fuktards. :D

mliu_01 said...

mtgspy: do you have an email. Would you please send an email to

this is not for the comment.