Weekend Reading - The Glory of the Human Individual

A relative of my wife's in-laws was called away in her sleep last night, at age 69. She had not been ill. As they say, only God knows the time and the place.

She was still working, to try and make ends meet. She was always cheerful, and always provided the meals for family gatherings. Some of her dishes were legendary.  She was no great person, and the world will not remark her passing. One less old person. And some will say good riddance, just another statistic.

And yet her children and grandchildren are heartbroken and will be missing her greatly. She was a remarkably good wife, a good mother, and a good woman, always.

And her soul will still exist when planets decay and fall from their orbits, and stars burn out, and those who think they are doing God's work will still be regretting their selfish carelessness. And so the individual can be treasured, much more than objects.

Boxed and labeled, and viewed as things, at first a few, and then millions of people, can be efficiently eliminated and burned, and be counted as a mere statistic.

If we have learned nothing in the twentieth century, we should at least remember this, and never forget it. But the darkness, and the madness, will rise again in banal men with hardened hearts and sickened, deformed minds.

"God beholds you individually, whoever you are. He calls you by your name. He sees you and understands you, as He made you. He knows what is in you, all your own peculiar feelings and thoughts, your dispositions and likings, your strength, your weakness.

He views you in your day of rejoicing, and your day of sorrow. He sympathises in your hopes and your temptations. He interests Himself in all your anxieties and remembrances, all the rising and failings of your spirit. He has numbered the very hairs of your head and the height of your stature.

He compasses you round and bears you in His arms; He takes you up and sets you down. He notes your very countenance, whether smiling or in tears, whether healthful or sickly. He looks tenderly upon your hands and your feet; He hears your voice, the beating of your heart, and your very breathing.

You do not love yourself better than He loves you. You cannot shrink from pain more than He dislikes your bearing it; and if He puts it on you, it is as you would put it on yourself, if you would be wise, for a greater good afterwards....

God has created you to do Him some definite service; He has committed some work to you which He has not committed to another. You have your mission -- you may never know it in this life but you shall be told it in the next.

You are a link in a chain, a bond of connection between persons. He has not created you for naught. You shall do good, you shall do His work. You shall be an angel of peace, a preacher of truth in your own place while not intending it if you do but keep His commandments.

Therefore I will trust Him. Whatever I am, I can never be thrown away. If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him. If I am in sorrow, my sorrow may serve Him. He does nothing in vain. He knows what He is about. He may take away my friends. He may throw me among strangers. He may make me feel desolate, make my spirits sink, hide my future from me -- still He knows what He is about.

May the Lord support us all the day long, till the shades lengthen and the evening comes, and the busy world is hushed, and the fever of life is over, and our work is done.

Then in His mercy may He give us a safe lodging, and a holy rest, and peace at the last."

John Henry Newman

It is easy to lose sight of the humanity of others. The objectification of the individual, the reduction of the person to a placeholder, is at the heart of all prejudice, most hatred, and much injustice..

Some think that a human being is a wonder of creation, one of the few things in all creation that lasts, and that each person has a potential for value and inherent worth, even if not greatness in this world. They are great, they are essential, they are unique, each significant in their own way. But not everyone turns out well.

Crudely and badly developed people tend to diminish the individual with respect to themselves, even if carelessly, often because of how they themselves have been treated, or how they have learned, and they seek to elevate themselves above the crowd whom they privately despise.

They attempt to climb out of the deep well of emptiness and self-deception that they have become by filling the hole in their being with things and people.  And people of this sort of development and viewpoint are always with us, to some degree in their minority. It is how they influence the majority, society as a whole, that is different from time to time, and place to place.

It is the attitude of society towards the individual, and its obligation to protect the weak, the elderly, and the different from the criminals and the unbalanced predators that sets its character out for all to see.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed..."

The American Constitution, even with its imperfections in realization over time, is laid on this founding principle, as expressed in the Declaration of Independence.

This is why corporatism is the very antithesis of American liberty.

Gold Daily and Silver Weekly Charts - Comex Bear Raid Continues

Next week Friday is an options expiration in stocks, and on August 25 is an option expiration in the metals on Comex.

I suspect world events will continue to drive the trade, with a steady undercurrent of high frequency price manipulation during periods of light participation by legitimate investors.

SP 500 and NDX Futures Daily Charts - A Nation of Financiers

"To found a great empire for the sole purpose of raising up a people of customers may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers; but extremely fit for a nation whose government is influenced by shopkeepers."

Adam Smith, Wealth of Nations

Most people do not realize that it was Adam Smith who wrote this famous characterization. He was writing about narrowly mercantilist nature of the British Empire and its colonial market strategy.  The exploitation of the Empire's resources and peoples by a few legendary companies is well known.

If one substitutes 'crony capitalists' or 'financiers' for 'shopkeepers' it might well be a decent fit for the latter years of the American Century's empire, which is based on a regime of guns and dollars.

As the Boer War marked the high tide for the Brits, and the invention of the concentration camp in their frustration, the American Century seems to be on the wane as well, resorting to camps of a sort of their own.

What broke it?  Why is the American moment running out of steam?  It is probably the failure to move to a non-military based economy after the cold war, and invest the peace dividend into domestic infrastructure and basic technology development for peaceful purposes and the improvement of life, instead of financial legerdemain, economic hoaxes and frauds.   The stagnation of the median wage is telling.

Having fed so well for many years on war, the  crony capitalists had to expand their operations at home again, and create new wars, to maintain their exorbitant privilege.

Will history judge them harshly? It all depends on who ends up writing the history. As the famous epigram observes:

"Treason doth never prosper: what’s the reason?
Why, if it prosper, none dare call it treason."

Perhaps not so much as treason in this case, but plunder, and the betrayal of oaths and trusts, and fraud on a grand scale. But this control of history and the interpretation of events is a major component of the credibility trap that impedes legitimate reform.

We may see more action on Sunday evening depending on the developments in Europe. I believe the Iowa straw poll results for the American election will be released tomorrow, but they do have a spotty record of forecasting the primary results.

The elections will be interesting as they will represent a major power struggle, but conducted largely 'behind the scenes.' It is confusing I know, since the candidates have a somewhat wispy and ephemeral character about them, more like an ad for toothpaste than a profound and substantial leader of the free world. 

We seem to have left those kinds of leaders behind several decades ago.  Or at least the leaders are still out there, but they cannot obtain the leverage to make it into the selection process which is dominated with the taint of corporate money and the vested interests that seek only to maintain the status quo, the public be damned.  I am not so much an idealist as you might think, having first started observating politics during the Kennedy era, with the Nixon and Johnson administrations that followed.  I even recall the dark days of McCarthy and the Watergate hearings.

Politics is always a dirty business.  But at least there was some hope that things would get done, and that a love of country and the Constitution would prevail at the end.  One has to reach a bit for that feeling these days.  There has always been a bad element.  It is just there as a minority, and not prevalent and so widely accepted and tolerated. 

These things move in cycles.  The idealistic youth of a hard pressed generation spawn greedy and self-centered children of privilege and relative ease, but their grandchildren rebel against vain materialism and find their voices again.  And so it goes.

Gold, and Platinum, and Money, Oh My!

Traders have recently been remarking about a highly unusual event in the metals markets.

For the first time in quite a while, the price of gold per ounce has exceed the price of platinum per ounce. This is shown in the first chart.

There is even a paired trade being touted, short gold and long platinum. The caveat is that this is said to be a profitable trade IF there is a global recovery. Personally I think one must also assume that the recovery is not due to money printing.

Platinum is largely an industrial and consumer metal, even moreso than silver. Platinum has wide industrial uses in jewelry, catalytic converters, fuel cells, and hard drives among other things. similar to copper, platinum is an indicator of industrial manufacturing activity.

The use of platinum as money a store of value has relatively little traction except among collectors. The big price drive is its very useful properties for industrial use. I am not aware that it has ever been used as a national currency except for a brief period of time in 19th century Russia.

There is some secular effect on platinum, with substitution in some applications being achieved by palladium. But the two metals are tracking one another in price, as show in the chart below. So that seems to be a minor influence.

Some are confused because of the relative rarity of platinum, which is produced in fairly small quantities each year. But to look only at supply without considering demand is a basic fallacy of pricing. There is a definite shortage of honest politicians in Washington, but the ones that are there do not seem to be commanding very high prices amongst lobbyists, for example, as demand for honesty is also relatively low.

It does serve to look at a few more items as we see in the chart comparing price performance, rather than price, in the mix of gold, the SP500, the Commodity Index, and platinum. The Commodity Index is used as a broad reference and includes much more than metals.

Clearly industrial activity would seem to be lagging, while the money components of things like gold are increasing for some reason unrelated to commodity demand. That ought not to surprise anyone following the markets. The supply of paper money is increasing beyond demand of organic growth in the real economy, while demand for commodities used in production is slumping.

I would therefore not think the gold platinum pair to be particularly useful. I would consider something else if I believed that there would be an imminent industrial recovery.

Notice that I did not include copper or silver in these charts. That is because their performance tends to crush the meaning out of the others. Silver is responding to a massive break in a long term price suppression caused by artificial shorting activity. And copper is a more speculative market than most commodities.

I also did not include crude oil because, as nine out of ten Americans will remember, it is not a metal. And it sometimes has a speculative life of its own, especially as a reaction to certain regional conflicts. However being the indulgent sort I have included it in a final chart. It is a commodity.