Texas Hold 'Em or Know When to Fold Them?

By: Rob Kirby | Mon, Aug 1, 2005
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After spending 15 years of my life involved in institutional capital markets - followed by 3 or 4 years in the retail trade as an investment advisor - I finally decided to follow my instinctive need to write. After getting snake bit' or caught up in a process, I learned that the urge to write was always there. All that had been lacking was a good reason or suitable subject matter to do so. I had no focus.

It was not till I spent time in the sphere of the retail investment industry that something so peculiarly glaring and under reported 'struck me' that I felt compelled to begin articulating my own disbelief. This initial impetus stemmed directly from inexplicable irregularities in the world's gold market. While the peculiarities I refer to in the gold market are 'a story in their own rite'- and in my mind great reading, they are too focused. Further research lends support to the notion that 'the gold story' is really just a component, or a piece if you will, of a much larger multi faceted puzzle of much grander proportions. The story I speak of is about global wealth, how it's distributed and the underpinnings [or lack thereof] of the world's fiat monetary system. While this notion may be somewhat difficult for many to stomach, we should remember that the eventual demise of the fiat money system has even been surmised by Central Bankers themselves. The real question in my mind is this: what will ultimately replace the current fiat system? My hope and goal in this essay is to produce a comprehensive executive summary that hopefully illuminates the big picture and highlights the important pieces of the puzzle and give suggestions and clues as to how they best fit together.

As already mentioned, my research began with gold - so this is where I will begin. My interest was piqued in the gold market not because I'm [or wasn't] inherently conspiratorial by nature. The fact of the matter, with 15 years of work experience in the global capital markets to my credit, I was rather pre disposed to the line of thought that the 'rigging' of any globally traded financial product was all but impossible. The feat of doing so just seemed preposterous. What attracted my attention was my curiosity, an open mind and mere thought that anyone would believe such a proposition. As I began researching the topic I was intent on disproving the gold bugs case, but the simple fact that there were so many glaring inconsistencies regarding gold's stated relevance and conflicting empirical observations in the world financial order gave me reason to reconsider that opinion.

The Glitter of Gold

Firstly, and perhaps most importantly - one should realize the extent to which a gold standard imposes fiscal discipline on government, which by their very nature have historically been spend thrift. In recent years - in blatant attempts to de emphasize its reserve status - the world's Central Banks have referred to gold as a 'barbarous relic'. The inconsistency here is this: If gold really is unimportant as a reserve asset as Central Banks would have us believe, why is their official accounting so murky and their reporting of official stocks shrouded in such secrecy?

Secondly, folks should realize the importance that the world's gold trade is denominated and settles in U.S. dollars. The relevance of this is multi fold but perhaps most importantly; as an historically accepted reserve asset - gold is an alternative, or competition if you prefer, to the pre eminence or the global acceptability of the U.S. dollar. Put another way, gold can be viewed as the anti-dollar. If you accept the rational behind gold being the anti-dollar, is it such a reach to get one's head around the notion that fiat monetary authorities would have a vested interest ensuring that gold did not displace their beloved un backed fiat money as a 'go to' superior pseudo reserve currency alternative?

Empirical and anecdotal evidence, in spite of assertions and claims to the contrary, are highly suggestive, if not proof positive, that Central Banks or their auspices [namely the U.S. Federal Reserve and the U.S. Treasury] have directly interdicted in the gold and silver bullion markets in recent years with the intent to cap price rises. At the end of the day, if gold's importance is as redundant as Central Bankers and monetary authorities would have us believe, they could simply dispel any and all claims of impropriety by simply providing transparency; opening their books and allowing credible third party audits of vaulted reserves in places like Fort Knox, the N.Y. Fed, the Denver Mint and West Point. Isn't it strange, in light of a chorus of conspiracy claims, that the there has been no credible audit of the U.S. gold reserve since the 1950s - during the Eisenhower administration?

If you are reading this, you are likely aware of my views regarding gold price manipulation. Without going on ad nausea in this space today about gold price manipulation, I would like to confer upon you all, snippets of a couple of e-mails I received recently from a large hedge fund manager, who shall remain nameless, based in N.Y with many years of Wall Street experience under his belt - who offered these comments to me,

..."You are right about gold, of course. But it doesn't stop there."


..."I began noticing a few years ago that markets are not trading normally, not reacting as a 'natural' entity. It seemed to me that they were being controlled....."

Stopping? Who Said Anything About Stopping?

Gold and Silver have both historically served as monetary metals and as such have long established relationships in terms of their desirability from a 'store of wealth' perspective. Additionally, silver also happens to posses unique properties that make it highly desirable as well as not easily substituted in many industrial processes. The net effect of these and other factors mean, for all practical purposes, you cannot fix or 'rig' the price of one of these metals without simultaneously fixing the price of the other. Probably more telling than any thing else, that something is amiss, is the chronic supply/demand deficits that exist, as a matter of fact, in both gold and silver bullion - what we are talking about here is the amount of each metal required for investment/industry/jewelry etc. versus mine and scrap supply. These structural imbalances have been in existence for a great many years with an annual silver imbalance guesstimated by pundits to be in the neighborhood of 250 million ounces and gold running at approximately 1,500 tons. These imbalances are categorically being satisfied with above ground supplies. Supplies in the vaults of Central Banks [in the case of gold] are the only known above ground stockpiles large enough to satisfy these needs. It has long been rumored that annual global silver shortages have been and are being met with supply from China. This has long been suspected since known above ground supplies of silver are even more relatively scarce than gold in terms of annual deficit to known stocks. If Chinese supplies of silver are indeed filling this void, what would you all suppose they are getting in return for their cooperation? In the wake of such overwhelming annual deficits, any other commodity known to man - its price would surely be stratospheric - but curiously not so for gold or silver?

Take note how the above scenario, involving silver, even makes room for a completely plausible explanation as to why the U.S. in particular would be mired in a seemingly disadvantageous trade relationship with China that they must present to their unknowing population as beneficial and reciprocal free trade. Methinks or at least wouldn't be surprised if the free trade story really did have a 'silver lining' after all.

In fact, the annual shortfall in silver supply is so tenuous that it has been surmised by some that any exogenous or 'surprise' supply or demand shock to physical supply could create a 'tipping point' where price capping activity on the part of officialdom would surely be exposed. In this light it is no small wonder that a populist movement within Mexico trying to "re monetize" silver this past spring was defeated in a 'surprise' bill killing vote, in March of 2005, by Mexican central bankers. The act of re monetizing silver [a mineral that Mexico happens to be naturally generously graced with] and the accompanying withdrawal of supply [to mint silver coins] from world markets in all likelihood would have tipped the scale and caused the price to go parabolic - up of course.

It was no small wonder that just prior to this vote of Mexican monetary authorities that the esteemed Lawrence Summers [he of the President of Harvard and ex Treasury Secretary ilk] would just happen to have made an 'unofficial visit' to Mexico City in early March of 2005 for a timely Harvard Alumni reunion [don't laugh yet, it gets better!]. This would be the same Lawrence Summers who as Under Secretary of the Treasury under Robert Rubin in the Clinton Administration oversaw the 'successful' 50 billion bailout of Mexico in the peso crisis of 1994-95. In Robert Rubin's own book titled In An Uncertain World, he relates how much political stock or capital Summers garnered in Mexico in his dealings with monetary authorities resolving the peso crisis. Summer's appearance in Mexico - as it turned out to be - at such a crucial moment 'for price prospects of silver going forward' is just another one of many glaring and seemingly endless coincidences that can never pass a 'smell test' and just happen to keep a near term lid on the price of precious metals. Coincidentally, the two just happen to go together about as well as ants and a picnic.

In the end it will perhaps be likely that history will reveal actions such as this only 'bought a little more time' before economic fundamentals finally reasserted themselves. If this line of thought seems 'far fetched', one only need look at the words of then Treasury Secretary Rubin himself as he reveals the motivation or drivers of crisis management in the interaction between himself, Lawrence Summers, the ESF [exchange stabilization fund], the IMF and presumably the Maestro at the Fed - during the Clinton administration. On pages 290 - 291 of his book, In An Uncertain World, referencing the Brazilian financial crisis of the late 1990s, Rubin outlines how very expensive "bad decisions" can buy time. Sometimes, he asserts, these bad decisions have a great deal of merit because they can,

"..Probably defer the impact of the collapse for six or eight months, and that will more than justify the effort."

I would everyone to take a moment, if you would, and consider the words of his eminence - Robert Rubin - for just a few moments. The man actually wanted to be 'on the record' saying that bad decisions are ok and have merit - for no other reason than they might delay awful consequences for a while. Remember folks, this man now co-chairs Citibank. I have such trouble with this, dear reader, because on my planet when one puts off 'paying the piper' - the piper still gets paid - but much more than he or she otherwise would have.

I would like to move past the notion that precious metals prices are manipulated for a moment and ask the question why would any one want to do this anyway? The answer to this question lies in the fact that historically, the price of gold [and precious metals] rises when monetary authorities pursue inflationary policies - period. So it would be safe to say that if governments were pursuing inflationary policies there would be a tendency for the price of gold to want to rise. The acknowledgment of heightened inflation would categorically be dollar and interest rate negative. A significant deterioration in the bond market and the dollar would lessen the attractiveness of dollar denominated debt instruments to foreigners which in turn would restrict funding for government spending [profligacy] and perhaps make things like wars impossible to finance. Heck, it might even jeopardize the dollar's position as the global reserve currency. As to whether or not there is inflation present in the economy, you be the judge dear reader. All I ask is that you simply go to your local gas station and fill-er-up on your way home from buying groceries before you do so, ok?

The Ins and Outs of Inflation

It is difficult to have a meaningful discussion about gold or precious metals without having a hand in hand discussion about inflation, since the two are highly correlated and I would even suggest - joined at the hip. Inflation is a form of often misunderstood but officially sanctioned and cancerous theft. Much of this misunderstanding arises as a result of misreporting. It manifests itself through the debasement of currency. In Central Bank parlance, this is often referred to as printing money. Like other forms of theft, it does not happen by accident. Historically, a rising price of gold has been a harbinger of inflation. When inflation manifests itself through rising prices, these price increases have historically reflected statistically first in the Producer Price Index [PPI] and then in the Consumer Price Index [CPI] as increased costs work their way through the production cycle and ultimately get passed on to consumers. Generally speaking, governments and monetary authorities do not like being seen as vanquishing their minions - or us, the little people. This becomes an even more paramount issue when you happen to preside over the world's reserve currency [the U.S. dollar] in that the missteps and impropriety outlined above tends to have more widespread negative global consequences.

Fiat Fun Or Aces In The Hole?

It is often said that America's pass time is the grand ole game of baseball. After listening to Financial Sense's Jim Puplava [July 23/05] interview Mr. John Williams of Shadow Government Statistics fame, I wonder if baseball, as a pastime, has perhaps not been replaced with fudging numbers. For more than 20 years, Williams has been making a living providing clients [the list includes individuals as well as Fortune 500 companies] with forecasts and analyses of official U.S. economic reports. Williams claims that most widely watched and reported economic numbers are extremely misleading the way they are currently reported due to biases built into their calculation. He claims that these biases have increased over time and tend to understate inflation and overstate economic growth. In the interview, Williams outlines the history of the 'corruption' of these economic reports and explicitly outlines just how far we've come in short time by revealing the differences between today's current method of reporting to what the same selected numbers would have been prior to the Clinton Administration [Bush 41]. Highlights of the interview included the following revelations:

Williams points out that these economic reports were initially devised as a means to protect people - like the CPI was initially tabulated post WWII to act as escalator clauses in auto union contracts. He goes on to outline how each successive administration has co-opted the methodology used to tabulate different economic series. He goes on to point out that one of the very biggest reformers to the methodology used in reporting inflation numbers was/is none other than Sir Alan Greenspan who rewrote the book on measuring consumer price inflation. [RK emphasis]

Williams reveals that Greenspan along with Boskin allegedly made no bones about admitting that the alterations to the CPI tabulation methodology were consciously done to decrease the government's financial obligations [payments] to Social Security which contains clauses/escalators tied to the cost of living [CPI]. The upshot of the changes in CPI reporting as it relates to Social Security, according to Williams, is checks that currently get mailed to Social Security recipients are roughly one third less than what they would otherwise have been.

Williams goes on to explain how the official keeper of inflation statistics, the Bureau of Labor Statistics [BLS] has gasoline prices currently up 6.9% per cent year over year while the government's own Energy Information Agency currently shows gasoline prices up about 40% year over year.

Williams points out that pundits like to cite the core inflation stats - less the volatile elements of food and energy. He goes on to say that 'core' inflation was only conceptualized as a means of looking at components other than food and energy periodically to see how elements outside the food and energy complex were behaving in isolation, but NEVER intended to supplant the more important headline rate as is customarily practiced now on Wall Street and in the main stream media.

The list of tricks that are employed to alter inflation reporting numbers alone include the following:

When questioned on Greenspan's oft cited productivity gains, Williams points out that with GDP being categorically overstated, there is in fact no productivity miracle as often proclaimed by the politician Greenspan - whom he refuses to call an "economist". In fact, Williams states that the numbers put forward by Greenspan regarding productivity are, "absolutely worthless".

No Fishin On The Road To Perdition?

Williams feels that the likelihood of deflation becoming a real possibility is nil and any suggestions that this might happen by the likes of Greenspan and Co. is nothing but a canard or falsehood behind which rests the rationale for monetizing yet more sovereign debt.

When pressed by Puplava on why foreigners continue to buy U.S. government debt, Williams responds that a lot of the buying is by Central Banks [mercantilist in nature] and is therefore very political - and politics are subject to change. While Williams makes no claims to being a market timer, he suggests that change [inflationary recession] is likely between 2005 and 2007 due to the imbalances outlined above and he does not rule out a hyperinflation.

Williams describes hyperinflation in these terms: Imagine having a bottle of wine with dinner in a restaurant one evening. Now imagine waking up the next morning [hopefully without a hangover] and the glass bottle which your wine came in the night before is worth more as scrap glass than it was 'full' with wine the night before. Now that's INFLATION.

On the topic of money supply [M3], Williams explains that its growth has dramatically slowed to levels that have historically ushered in recessions in the past - all in spite of wide spread reporting in much of the main stream press that Wall Street, administration officials and Alan Greenspan make claims that the economy is strong and poised for growth. Puplava and Williams agree that the reason most investors don't hear this story from many main stream economists or their brokers is quite simple; main stream economists and Joe Six Pack's broker don't work for them, but instead for the Wall Street establishment whose job is to sell the product that generates the fees.

Williams reasons that sustainable economic growth is only possible when real incomes are growing at rates that exceed inflation. The reality we find ourselves in is that inflation is grossly understated; and the American economy continues to bleed manufacturing jobs even as American multi national companies continue to ramp up production and employment in lower wage jurisdictions like China and India. American consumers are increasingly reliant on inflation to boost the values of their homes which they in turn utilize like ATM's extracting equity through refinance to meet current obligations and continue spending. To top it all off, the average Joe is oblivious to the realities at hand since the official economic numbers have been distorted beyond meaning.

On the issue of free trade Williams offers us this: What most economists never mention is the underlying assumptions in free trade agreements that are at the root of this move toward globalization of trade, namely, everyone benefits if the economies of all parties [countries] to the deal are operating at full employment. Unless this condition is met, jobs are rapidly displaced from the high cost to the low cost [wage] environment. I ask, dear reader, does this not sound familiar to you?

In spite of his analyses, Williams is a self described optimistic. He claims that being aware of these realities affords investors the opportunity to avoid much of the pain that he sees coming. He sees inflation ushering in much higher interest rates in our future and a much lower U.S. dollar over time. He views foreign currencies, gold and U.S. dollar avoidance with at least part of your investment portfolio as prudence. He feels that Alan Greenspan knows all of this and has admitted as much in his oblique Greenspanesque doublespeak on numerous occasions. In fact, Williams feels that the economy, left to its own devices, would probably have declined into a deep recession already, except for Sir Alan's pushing and pulling of levers to prevent the economic malaise from occurring on his watch. Williams also feels there is going to be a price to pay for having done this - the recession, whenever it does get here - is going to be much deeper than it otherwise would have been.

Inflation For the Nation?

In our fiat monetary system, all 'new money' created is loaned into existence [credit creation] by its creator - or historically in the case of the U.S., the Federal Reserve. By their very nature, loans are repaid with interest. Therefore, the Fed categorically must perpetually increase the money supply - if for nothing else - only to allow for servicing of existing debt/money in circulation. In this sense, the manta of Central Bankers in a fiat monetary system necessarily becomes 'inflate or die'. History is replete with examples that clearly illustrate when Central Banks pursue these inflationary policies, distortions inevitably result. The fact that Central Bankers face this dilemma is perhaps best summed up by Robert Blumen who writes,

"A central bank may set out to generate a permanent state of inflation as a matter of policy. But they can only go so far down this road before reaching a fork: one path is to save their monetary system, the other is to destroy it. To save the system, they must stop the printing presses and allow the economy to suffer the pain of unwinding the distortions created by the prior inflation. If the central bank chooses to persevere in their inflation, hyperinflation will be unleashed."

If one grasps the thoughts outlined above, one might conclude that the balancing act that must occur [at the fork in the road Mr. Blumen cites above] requires skillful manipulation of and a steady hand on the printing press, interest rate and foreign exchange levers at this critical juncture; where too much money/credit creation results in regular inflation metastasizing into hyperinflation and not enough results in the already indebted being unable to service their existing debts - or deflationary collapse.

Gaining an understanding of the delicate balancing act that officialdom is attempting to orchestrate, one soon realizes that all financial markets that are symbolic of or embody U.S. dollar strength have most certainly been steered at least, to outright manipulated or rigged at worst - because they simply must be given the realities of deficits - both fiscal and trade.

Lest I be accused of 'piling on' in pointing out the real challenges where the U.S. dollar is concerned; let me state for the record that all fiat currencies ultimately share the same fate - one of demise. The U.S. dollar receives special attention due to its unique position as the world's reserve currency and enjoys the accompanying seignorage [benefit] that comes with occupying that role.

Currently, the world price of oil is set and settles in U.S. dollars. Over the past few years it has likely become abundantly clear to even the most disinterested observer that the price of crude oil has gone from roughly 20 bucks to approximately 60 at the time of writing. While a portion of this price rise is undoubtedly tied to concerns relating to "peak oil" as well as rising demand emanating from the industrialization of both China and India, the inflationary expansion of credit and money supply has had a hand in this dramatic price rise as well. In that sense, the west has effectively exported lots of fiat invigorating inflation to China. After all, to a large extent it has been 'return seeking' western capital that has allowed the Asian miracle to unfold in the manner and at the pace it has - hasn't it?

We see hints of manipulation in the bond market through the unexplained [to date] machinations in the U.S. Treasury's TIC data published monthly where unexplained "new buyers" of government debt, frequently alleged to be hedge funds - appear out of 'nowhere' to replace the suddenly absent buying power of entities such as the Bank of China or the Bank of Japan - America's traditional financiers.

Interference in the interest rate complex is further evidenced through the explosive growth of the unregulated "off balance sheet" derivatives market - largely interest rate based - that now measures in the hundreds of trillions yet it's overbearing size is - conveniently - seldom even mentioned when 'pundits' sit down to discuss U.S. dollar interest rate policy? Have we not all been lulled into complacency; with such 'Fed friendly' institutions as J.P. Morgan Chase alone with derivatives books of business exceeding 45 Trillion U.S. dollars in notional value with Sir Alan of Greenspan trumpeting these types of developments as "good" and providing the U.S. economy with a degree of flexibility to meet any unanticipated exogenous shocks. While this has all combined to produce the lowest interest rates in generations, the resulting boom has also provided the impetus for banks to package or bundle loans - securitizing them and thus getting the associated risk off their balance sheets freeing up capital allowing this daisy-chain form of finance to continue relentlessly. As such, the institutions created with mandates to silo these financial products - the GSE's, Fannie and Freddie - have become alternate quasi central banks in their own right [a budding turf war with the Fed, perhaps?] in this unnaturally low interest rate environment with their ability to extend seemingly endless credit to the realty industry. Need we say more?

Of course we'll say more! We also see this frequently in the stock market when, in the wake of poor economic news in the early morning hours, when plunging DOW or NASDAQ futures have the stock market poised to open a hundred or more points lower at 8:30 am. - then the "stock market fairies", as Financial Sense's Jim Puplava affectionately refers to them, typically show up out of nowhere to produce flat or "up" equity market openings on these indexes by 9:30 am.

We see this in the foreign exchange markets often when economic fundamentals are clearly being ignored by foreign Central Banks acting in their own nationalistic mercantilist interests and also in unrelated incidences when charts are 'painted' from a technical standpoint producing contra trend 'black box' trading movements in defiance of fundamentals.

All of these actions outlined above combine to effectively 'remove' volatility from the financial markets. This is evidenced with the VIX index [an exchange tradable unit of volatility] at its lowest levels in recorded history. This is more inclined to happen when markets do not behave in a fashion that players would logically anticipate based on fundamentals.

Compliments: www.stockcharts.com

In laymen speak, people take their pales and shovels and go home; refusing to play in the sandbox that makes no sense or they do not understand. The problem with this lack of volatility is that it breeds complacency. Complacency lends itself to folks taking bigger risks - like larger loans, mortgages, more leverage in futures, larger equity positions, etc - all in an environment that is arguably becoming inherently more risky. Catch the drift of this double edged sword?

Partners In Crime Or Going Alone?

In the aftermath of the stock market bubble bursting, post Y2K, the U.S. and world economies were already reeling from the associated economic contraction brought on by a 'tightening Fed' [raising interest rates], when the U.S. was hit with the events of 9-11. The resulting jolt to western economies and to the fiat system was to push the entire monetary system to the precipice of 'seizing up' - or deflationary collapse. With a system that needs a degree of inflation as much we need oxygen to survive, on its knees; the Fed reacted by opening the monetary spigots - dramatically lowering rates and flooding the financial system with liquidity and cheap credit once again. The effects of this excessive monetary ease, to date, have been extremely inflationary with the equity markets temporarily buoyed or rising, an explosion in the price of commodities and real estate and a good wave of corporate takeovers and mergers which have only led to fewer manufacturing jobs in the name of synergies creating redundancies. It seems the 'now fashionable' globalist mentality of world trade means that new plant and equipment [and the associated jobs] are almost exclusively built in low wage jurisdictions with poor or lacking environmental and human rights traditions and policies. I wonder if it has only occurred to me that this new miracle of globalization has been largely seed financed with Western Capital [or credit]. Funny isn't it, how this is all spun as good for business and therefore - somehow - good for everyone?

Herein lies the rub: the globalist agenda that dominates modern economic thought is clearly beneficial to corporate interests, but we do all know that the measuring stick where the reported unemployment rate is concerned has been - shall we say - tampered with, don't we? Under these conditions, is it not true that unfettered access to cheap labor has enriched corporate executives and shareholders at the expense of hollowing out of the middle class in America? Perhaps the loose money and credit conditions required to maintain and perpetuate the inflation reliant fiat monetary system simply provided fertile ground for this unwanted 'side effect' to propagate and flourish? Perhaps everyone involved, from Wall Street to the main stream media are too busy cheerleading or commenting on the symptoms [asset bubbles] rather than identifying the disease [inflation]? Is this a stretch, given that the good Dr. - Sir Alan of Greenspan and Co. - has pronounced the economy to be fit [at close to full employment] and essentially free of inflation?

You see, dear reader, I cannot help but think we reached the fork in the road, so to speak, some time ago. I cannot help but think the Fed has chosen the path to persevere in their inflationary ways. While historic tell tale indicators of inflation have been neutered or rendered indistinguishable, this is still evidenced with loose and accommodative monetary policy that fuels everything from speculation in commodities to ever higher real estate prices enabling the debt weary American consumer to dig a deeper debt hole while remaining China's newest and best [perhaps only?] customer. Acknowledgement of the true picture regarding inflation would bring a swift end to all the deceptions, meaning no more conundrums for Sir Alan, dramatically higher interest rates and in all likelihood a deflationary depression - and I would speculate - along with the end of the fiat monetary system as we know it today. Instead, we get to savor the prospects of what in all likelihood will result in an inflationary recession or worse yet, a hyperinflationary depression - with much the same ultimate outcome. In other words, we have a lot to look forward to - don't we? Thank you Sir Alan of Greenspan for shepherding the economy to the brink before you bow out and retire, or perhaps fold your tent and bolt from Dodge - riding your recessionary rickshaw into the next town on the carnie circuit while we all eat your words.

As for myself, as a self confessed converted gold bug, I still try to think outside the gold centric box. From where I sit, there is a lot more in play here than a 'goosed or rigged gold market'. The one constant, as I see it, is the complete and utter lack of forthrightness on the part of officialdom where the true economic picture is concerned. In an environment such as this, the whole house of financial cards is in play in what has become a most bizarre game of Texas Hold Em. The exact timing as to when the last hand is played is still anyone's guess. I just want to make sure I take a couple of tricks and live to play another game. I intuitively know that my best chances of taking a few tricks rests with my avoiding variable rate debt/leverage and allocating a healthy portion of my investment portfolio to 'real stuff' - like precious metals and/or essential tangibles such as energy. If I know Greenspan, he's 'all in' trying to bushwhack everyone with a pair of deuces. One sure bet is he'll play them like they're aces to the bitter end.

In case any of you are wondering, you'll only have to risk your IRA and your 401K if you want to call his bluff! If he decides to raise - you'll have to toss in your deed and keys and wager your house. That's called bettin the ranch folks, or Texas Hold 'Em!


Rob Kirby

Author: Rob Kirby

Rob Kirby
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