Britain’s most famous alcoholic has just died. The papers and newswires are full of farewells. More below…
Meanwhile, our old friend, Jim Rogers was in town last week. What does he think of the new man at the Fed?
“Disaster. Bernanke will probably ensure the demise of the Federal Reserve. It won’t be completely his fault — Greenspan has laid the foundations — but the problem is that Bernanke doesn’t understand currency markets…
“He is the guy who said we control the printing presses and we will run them as fast as we have to. He’s the guy who says it doesn’t matter if the United States has the biggest trade deficit ever. I’m not the only person who’s getting worried about it. The Iranians are going to start trading oil in non-U.S. dollars next year and there are other people starting to try to figure out what in the hell to do about this situation.
“Bernanke does not understand that — on the contrary, he thinks there isn’t a problem. You know we’ve had two Central Banks in the United States before, they both failed and this one looks like it’s going to fail too.”
What will happen to the U.S. dollar?
“In 2003 and 2004, everyone was selling the U.S. dollar. It was on the font page of the New York Times for about three days in December 2004. That kind of coverage is always a sure sign that whatever the subject is, it’s about to go the other way. That rally [in the dollar] is continuing partly because the United States has given the multinational corporations these gigantic tax breaks to bring money back into the United States this year, so that is what they are doing.
“I don’t know how much further the rally has to go, but I have a feeling that something may happen to cause the final spike. It could be that Bush is going to pull out of Iraq sooner than expected, or it could be bird flu decimating Europe, but not America. But whenever it is that causes the final spike, I urge you to sell. I am still extremely bearish on the U.S. dollar fundamentally in the long term.”
Looking at a chart of the dollar is like looking at an EKG of a dying man. From 1800 until 1935 the lines go up and down. A dollar bought a dollar’s worth of goods and services in 1800…in 1850…in 1900…and up until about 1935. At that point, the line begins to fall. It does not rise again. Instead, each and every year it loses purchasing power, so that by 2005 the 1800 dollar is only worth about 5 cents.
We are not ancient, but even we can recall a much stronger dollar. In the autumn of 1972, we drove across the United States. We remember gasoline stations advertising: 25 cents a gallon!
It seems so long ago…another world…a dream-world. It makes us long for our youth…for our old ’53 Chevy pick-up (we paid $250 for it)…for our old house in New Mexico (we built it ourselves for less than $10,000)…for our old hair! Alas, it is all gone.
But one thing has neither aged, nor evolved, nor corroded, nor lost its value in all that time — gold. It was still illegal to hold gold back then — can you believe it, dear reader…is there any policy so stupid that politicians would not declare it the law of the land? But then, an ounce of gold was worth about the same thing as a new suit. Today, you can still get a new suit for an ounce of gold. And even during the time of Julius Caesar, two thousand years ago, an ounce of gold would buy you a toga and a belt.
The last feeble link between gold and paper money was cut by Richard Nixon on August 15, 1971. Since then, the dollar floats on air…like a feather…blown by the winds of the investment world…but gradually and steadily drifting down. Where will it end?
Perhaps a future government will do what de Gaulle did. Maybe they will take off a zero or two and issue a ‘new dollar’. Or maybe they will do what Argentina did — changing the name of currency itself. If so, we have a suggestion. We propose that the new currency be called the ‘Greenpeso’ in honor of America’s most revered Fed chief…
What kind of honor would be more fitting? *** We have never killed anyone. But we read the obituaries with approval. Only when a body comes to rest can we bend down and have a good look at it.
Reading carefully, dodging polite lies and chutzpah, we often learn something. George Best is “coming to the end of the long road of his ill-health,” said his doctor last night. He reached it this morning.
Who is George Best? He is a man who was once a talented soccer player, then a talented celebrity, tout de suite a talented womanizer, and when all his other talents seem to have failed him, a talented drinker. His career in soccer even included several stints in America, with the Los Angeles Aztecs, the Fort Lauderdale Strikers and the San Jose Earthquakes.
“The 59-year-old…has struggled with alcoholism,” all his life, says the Daily Telegraph. Yet, from the evidence, the man didn’t seem to struggle at all; he gave in without a fight, drinking as many as 9 bottles of white wine per day, even after being diagnosed with cirrhosis of the liver.
“The George Best tragedy,” continues the Telegraph, was a “classic…a man brought to ruin by a tragic flaw…Booze blighted everything. It destroyed his career, wrecked his marriages and brought financial ruin.
“It stole his dignity, fuelled his self-loathing and unleashed the violence within him. It ravaged his looks, corroded his liver and finally it is demanding, prematurely, his life…”
Here, too, we take issue with the Telegraph’s sniffy judgment. Best had everything men dream of. By the age of 17 he was earning 1,000 a week — which was a lot of money in those days — and was already a sports hero. He was smart and handsome with a natural Irish charm that was catnip to women. He was surrounded by them…adored by them…the most beautiful women in the world.
“I used to go missing a lot,” he explained in his later after-dinner speeches…with Miss Canada…Miss United Kingdom…Miss World. Miss World, 1973, Marjorie Wallace, had her title taken away after romping around publicly and disgracefully with Best.
Best was no Buffett. There was no bad habit he wanted to give up…no extravagance he didn’t want to indulge in…and no imprudence he didn’t want to commit. When it came to money, he didn’t worry about the return on his cash. He didn’t count on it ever returning at all. By middle age he was flat broke.
One of his most famous one-liners was: “I spent a lot of money on booze, birds and fast cars. The rest I just squandered.”
Later in life, Best laughed at his own dissolution. He would recount the moment it all went bad: “Tell me, Mr. Best, where did it all go wrong?” asked the waiter as he delivered vintage champagne to the footballer in a luxury hotel suite. At the time 20,000 was scattered on the bed, which also happened to contain Miss Universe.
Whether you take Mr. Best’s life as a cautionary tale, or an inspiring one, is entirely up to you. He could have lived gray and sensibly like the rest of us. Instead, he lived in Technicolor and never seemed to regret any of it.
When liver problems caught up with him, the aging sports star declared: “I’ve stopped drinking, but only while I’m asleep.” He got a liver transplant, and briefly went on the wagon, no drinking and no women: “the worst 20 minutes of my life.” Soon after, he turned yellow and died in a hospital across town with tubes in his nose.
George Best, RIP.
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis.