Uh oh. We’ve got good news and bad news. But you’ll have to figure out which is which.
We also have what is probably the most important thing you will read this year…
Gold does not seem inclined to go down much more…at least not immediately. And though some very big players seem to be dumping gold – we won’t mention any names – most of the gold orders are buys, not sells.
Here’s Paul Tustain, telling us what happened at BullionVault while gold was crashing:
‘…here are some BullionVault statistics [from last week], which I think offer a useful reminder about how markets work. Remember, first of all, that for all those people who sold in a bit of a panic, someone bought…
- Monday and Tuesday were our strongest 48 hour period for new customers this year.
- Since Friday the gross value of customer bullion sales increased markedly. About 1% of gold we look after was sold back to the main market. That was characterised by a few large sellers. Holders of 99% of BullionVault inventory were not panicked.
- Those who did sell have mostly not withdrawn their cash from the BullionVault system. To me that suggests they may be intending to buy back into gold sooner rather than later.
- We normally have about 230 deposits a day (300 on a Monday) and about 100 withdrawals a day (120 on a Monday). Mondays are usually higher because they include weekend activity. On Monday we had 723 deposits versus 284 withdrawals. On Tuesday we had 732 deposits versus 150 withdrawals.
- Monday was a record day for business transacted, beating the previous peak of September 2011.
And now…here’s why you really shouldn’t pay attention to any news. It’s ‘public information’…with little integrity, little quality, and little usefulness…
Here’s our friend Rolf Dobelli in The Guardian:
‘News is bad for you,’ he writes. It’s like sugar. It gives you a rush. It’s a distraction from your own concerns. It’s easy to digest. But this ‘candy for the mind’ can be toxic. Rolf continues…
‘In the past few decades, the fortunate among us have recognised the hazards of living with an overabundance of food (obesity, diabetes) and have started to change our diets. But most of us do not yet understand that news is to the mind what sugar is to the body. News is easy to digest.
‘The media feeds us small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking. That’s why we experience almost no saturation. Unlike reading books and long magazine articles (which require thinking), we can swallow limitless quantities of news flashes, which are bright-coloured candies for the mind. Today, we have reached the same point in relation to information that we faced 20 years ago in regard to food. We are beginning to recognise how toxic news can be.
News misleads. Take the following event (borrowed from Nassim Taleb). A car drives over a bridge, and the bridge collapses. What does the news media focus on? The car. The person in the car. Where he came from. Where he planned to go. How he experienced the crash (if he survived).
‘But that is all irrelevant. What’s relevant? The structural stability of the bridge. That’s the underlying risk that has been lurking, and could lurk in other bridges. But the car is flashy, it’s dramatic, it’s a person (non-abstract), and it’s news that’s cheap to produce. News leads us to walk around with the completely wrong risk map in our heads. So terrorism is over-rated.
‘Chronic stress is under-rated. The collapse of Lehman Brothers is overrated. Fiscal irresponsibility is under-rated. Astronauts are over-rated. Nurses are under-rated.
‘We are not rational enough to be exposed to the press. Watching an airplane crash on television is going to change your attitude toward that risk, regardless of its real probability.
‘If you think you can compensate with the strength of your own inner contemplation, you are wrong. Bankers and economists – who have powerful incentives to compensate for news-borne hazards – have shown that they cannot. The only solution: cut yourself off from news consumption entirely.
News makes us passive. News stories are overwhelmingly about things you cannot influence. The daily repetition of news about things we can’t act upon makes us passive. It grinds us down until we adopt a worldview that is pessimistic, desensitised, sarcastic and fatalistic. The scientific term is ‘learned helplessness’. It’s a bit of a stretch, but I would not be surprised if news consumption, at least partially contributes to the widespread disease of depression.
News kills creativity. Finally, things we already know limit our creativity. This is one reason that mathematicians, novelists, composers and entrepreneurs often produce their most creative works at a young age. Their brains enjoy a wide, uninhabited space that emboldens them to come up with and pursue novel ideas.
‘I don’t know a single truly creative mind who is a news junkie – not a writer, not a composer, mathematician, physician, scientist, musician, designer, architect or painter. On the other hand, I know a bunch of viciously uncreative minds who consume news like drugs. If you want to come up with old solutions, read news. If you are looking for new solutions, don’t.
‘Society needs journalism – but in a different way. Investigative journalism is always relevant. We need reporting that polices our institutions and uncovers truth. But important findings don’t have to arrive in the form of news. Long journal articles and in-depth books are good, too.
‘I have now gone without news for four years, so I can see, feel and report the effects of this freedom first-hand: less disruption, less anxiety, deeper thinking, more time, more insights. It’s not easy, but it’s worth it.’
for Markets and Money
From the Archives…
Why Too Much Data Might Actually Protect Your Privacy
19-04-13 – Sam Volkering
This Gold Bug Ain’t for Turning!
18-04-13 – Bill Bonner
Music for Contrarian Ears
17-04-13 – Dan Denning
Bring on the Gold Correction
16-04-13 – Bill Bonner
Why China’s ‘Population Pagoda’ Could Mean Slower Growth for Australia
15-04-13 – Dan Denning
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