Too Tired to Think

We came back after a two-day horseback trip up into the mountains.

After 18 hours of riding over the worst terrain you can imagine — and sleeping on the hard stone floor of an unheated refuge at 9,500 ft — we showed up at the house bruised…worn-out…wind-burned and sun beaten.

It was a great trip, in other words.

But your editor is too tired to think…or write.

In the 6th grade, at Owensville Elementary, our career path was decided for us. The entire class was told to write an essay. Pencils came down onto the paper immediately. Except for our pencil, that is. We sat looking up the ceiling.

Mrs Marshall came to our desk.

‘What are you doing?’ she asked.

‘I’m thinking,’ we replied.

‘Well, don’t think. Write.’

Which is about what we’ve been doing ever since.

But right now, we can barely sit. Writing will have to wait for tomorrow.

Please bear with us.

In the meantime, consider this from Bloomberg:

‘Central banks bought the most gold since 1964 last year just before the collapse in prices into a bear market underscored investors’ weakening faith in the world’s traditional store of value.

‘Nations from Colombia to Greece to South Africa bought gold as prices rose for an 11th year in 2011, highlighting the reversal of a three-decade-long bout of selling that diminished the world’s biggest bullion hoard by 19 percent. The World Gold Council says they added 534.6 metric tons to reserves in 2012, the most in almost a half century, and expects purchases of 450 to 550 tons this year, valued now at as much as $25.3 billion.’


Central banks are printing newfangled money at a record rate. They are also buying the old-fashioned money at a record rate.

Question: what are they using to buy the old-fashioned money?

Answer: directly or indirectly they are using the printing press money they create.

Here’s Matt Taibbi in the Rolling Stone:

Politics: Everything is Rigged: The Biggest Financial Scandal Yet

‘… banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”

‘That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

‘Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.’

Mr Taibbi is concerned with the way the swaps market is rigged. But that’s small potatoes compared to the way the entire world financial system is tricked up.

More on this when we are able to sit down for more than ten minutes, tomorrow.


Bill Bonner
for Markets and Money

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From the Archives…

Gold Demand: The Great Disconnect Between Paper and Bullion
26-04-13 – Greg Canavan

Lest We Forget
25-04-13 – Greg Canavan

Praying for Government Incompetence
24-04-13 – Bill Bonner

The Cracks in Solidarity at the Recent G20 Gabfest
23-04-13 – Greg Canavan

How Central Planners are Committed to Ruining the Economy
22-04-13 – Joel Bowman

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

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