• The price of gold is back up to $429. We have no idea what will happen to the price of gold in the future. But gold is what we buy when we suspect that people aren’t as smart as they think they are…
Our "Trade of the Decade" is very simple. Buy gold, sell stocks. Currently, you can buy 24 ounces of gold for one unit of the Dow. The ratio has been as high as 40 and as low as 1. It is low when people feel fearful and stupid. It is high when they are complacent and smart. We announced our "Trade of the Decade" when the decade began. So far, we have done well. Gold has risen from under $300 an ounce to over $400. Stocks have gone down… but not nearly as much as we think they ought. We hold. We wait. We are happily cynical, and hopelessly romantic old fuddy-duddies.
• Poor MG Rover. The last of the British automakers is out of business. This week, workers were sent home. The company tried to work out a deal with a Chinese company, but it fell through at the last moment.
We actually owned an MG many years ago. It was an MGA of 1962 vintage. What a snappy little sports car! What a piece of junk! It rarely ran right. We spent more time under the hood than in the driver’s seat. It even had a hand crank, which came in handy. After you had worn the battery down trying to get the thing started you could wear yourself down turning the crank. But, when the sun was out… and the motor was running… what a delight! We put the top down and cruised around the tobacco fields of Southern Maryland. There was really nothing to do… and nowhere to go – but what fun it was getting there.
MG. RIP.
• But what’s this? Britney is pregnant! Britney who? And why should we care about that? We don’t know… but it is reported as news in the American press. If were to continue following the story… eventually, we would wonder how her pregnancy was going… and we could share her joy when the
baby is born. If that happens to us, dear reader… please promise you will pull the plug and take out the feeding tube.
• And there, on the editorial pages of the International Herald Tribune, is more entertainment. Advice for China… warnings to Russia… comments on the Vatican… it is like a chat room for busybodies!
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.
