Maybe I Was Born Paranoid

Some people see the glass as half full; we call them optimists. Some see the glass as half empty; we call them pessimists. Some people worry that the state of the glass is not known; we call them skeptics. Some people worry we will never find water, that the glass is completely empty and that it is poison in the glass besides; we call them paranoid.

In engineering, there is a concept of 'insufficiently paranoid', a condition where someone has failed to consider all the possible ramifications. Insufficiently paranoid engineers often go on to design systems that fail spectacularly, bringing their pride down to a more appropriate level.

I guess what I am getting at is that paranoia is not a bad thing. Too much paranoia leads to inaction or to action that is not particularly helpful, such as stocking a bunker in the Nevada desert. Too little paranoia has you sitting on a beach as a hurricane bears down. The right amount of paranoia is, quixotically, referred to as 'prudence'.

So, what is a prudent man to make of the world? Russia sabre rattling at Georgia, with the US and NATO apparently unable to take steps to accept Georgia's inclusion into a group armed with nuclear missiles, pretty much the only thing that will guarantee Russia will leave Georgia alone.

Russia, however, may soon not be a problem, that is, if EU countries are willing to allow the drilling for gas in their shale gas reserves, but the truth is that the greenie is against anything that might smack of progress, as they relentlessly march us all into their cold grey future where thousands of us must die so Gaia can quit crying or whatever.

Watermelon is the term commonly used to refer to the alliance of the old red with the new green, green on the outside and red on the inside. Why must the red/green hate progress so? Is it happiness they hate? Why do normal ordinary people follow these tenets of green, such as pointless recycling and reduction of energy use?

The truth, as it stands, is that the world has never been so flush with energy. It is good news. It should be leading to cheaper energy, which normally leads to an economic boom for everyone. Instead, we have nations rationing energy, constructing bird slicers and other, even dafter ideas to harvest 'renewable' energy, such as tide power, which is an idea that literally leaves me speechless. Seriously.

Take windmills -- please, take them. Windmills cause changes in the wind pattern in the lower atmosphere leading to a reduction in the relative humidity, causing those areas downwind to dry out and see a reduction in vegetation. This is on top of their killing birds wholesale. They also require invasive modification of whatever land they are placed on, including cutting trees, leveling ground and mounting massive concrete and steel bases that will probably never be removed. All of this for very little power when the wind is blowing, which is not nearly often enough.

Take electric cars. The battery in an electric car uses toxic chemicals. The magnets in the motors use rare earths. The cars themselves are very lightly constructed, meaning they are not particularly safe. They have a low payload. They are also much more expensive to purchase. Under most conditions, they will not cost less over the lifespan of the vehicle because their purchase cost exceeds the difference in fuel cost. This includes hybrids.

There are some valid engineering reasons to build electric cars, and, when the day comes that they are cost-effective, I will gladly buy one. However, in the short term, trying to increase the uptake of hybrids and electrics through taxes is just wasting money to make people feel better, when we should be telling them the truth.

For instance, recycling is mostly a waste (haha, bad pun). The commonly recycled materials, glass, paper and aluminum, each have their problems. Of them, aluminum is easily the most useful recyclable, something that the junk man will actually pay you for because he can sell it on.

However, paper is a relatively pointless thing to recycle, if for no reason that, naively, putting the paper in the ground (landfills) sequesters CO2. Other than that, there is the question of hauling it to a recycling plant, recycling it and then selling it back into the market. All of this is generally more costly than simply using new wood, which is normally sprint-grown for this purpose. If you add up all the costs of recycling paper, you find there is a very slim reduction in energy used for certain post-consumer products, such as napkins, but that slim reduction in energy comes at a high cost.

Glass is just silly. Glass is made out of sand, and, if left alone, will become sand again. The cost of reconditioning glass is really about the same, overall, as the cost of making new, and glass in a recycling bin will be colored, which is a problem.

Saying we're running out of material so must recycle glass is admitting to not understanding anything about the production of glass. It is as laughable as those who wish to argue we're running out of water, when what they really mean to say is that we're running out of cheap water, that the budget has other concerns than fixing the leaking pipes and besides, we all need to sacrifice because it takes a village.

The water thing, in particular, annoys me. I have low flush toilets. I have a four inch main sewer pipe. I have to run water in my tub periodically to keep the pipes clean. The toilets do not produce enough flow to keep the pipes clean.

Besides, how good is a low-flush toilet if it has to be flushed multiple times?

Then there are the evil low-flow shower heads I hate so much. Why am I penalized for wanting to be clean?

Were this at all necessary, it'd be one thing, but the fact is that those toilets and that shower constitute a tiny percentage of the water used. The greenies will tell you that the percentage is large, but the percentage they use is of domestic water use, not total water use, and, almost certainly, industrial water use dwarfs domestic water use, so, even were the toilets and showers 50% of domestic use, that would run up to, say, 5% of the total use.

All those numbers are off the top of my head, and you can do your own research on the subject.

I'm just saying that we are flush with resources, and we need to push back against these greenies that seem to be grabbing power everywhere.

What is really going on...

We're going back to pretending we know what is happening. Some of the opinions in these articles are very well researched while most are just hunches. The subject of this post is the latter.

At the moment, silver has been over sold. That means that the price is lower than it ought to be due to more people than normal having sold. Why this happens in May is not really a mystery; people have to pay taxes in April so easily negotiable investments go down in May. Thus it has always been.

About the market in general, though, there is much more to say. At the moment, a silver shortage is under way, according to all sorts of semi-reputable rumor. From sources with the same level of reliability, we're hearing that the amount of refined silver available to the market is perhaps one tenth that of gold. This means there is ten times as many gold as there is silver available to sell right now.

Gold, by and large, is used little in industry, most of it being used for jewelry and other decorative purposes, and the balance used for investment. This means most of the gold mined is converted to the sorts of things people hang on to. The things made out of gold are, also, easily convertible to pure (investment grade) gold.

Silver, on the other hand, is primarily an industrial metal. Most of the silver mined is used for industrial purposes, in electronics, in health care, and in a myriad other applications. Most of the silver so used is not easily recovered, and, while the recycling of electronics is on the rise, a significant amount of silver has already been disposed of in landfills.

The much smaller percentage of silver that ends up as investment grade also is used more as a conduit for other financial purposes, rather than as a store of value. This means that silver swings wildly, one of the reasons people tend to hold gold instead. Given that it takes far less money to drive the silver market by purchasing a large order, it is easier for a hedge fund investor, for instance, to park money in silver while moving it somewhere else, making a nice profit in the process. I won't discuss how this is done right now, because I barely understand it myself, but it does happen.

All this means that gold ends up being the preferred money store. To a certain extent, this is so because it is so. In other words, while silver certainly appears to be considerably more scarce relative to gold at the moment, people still believe gold to be valued because it is scarce, which is only partly true.

It is scarce, but it is largely scarce because investors buy and hold it. This is the same situation the dollar is in, that it is held in massive amounts by foreign interests, keeping its value up. Since many investors, both public and private, buy and hold gold as a hedge against inflation, it works as a hedge against inflation. The price is kept high because people are buying and not selling.

Silver, on the other hand, has both upside and downside potential. It is known as the cheaper money metal, meaning that young and less wealthy buy it because they get more for their money, so there has always been a market for it. Also, it has been no secret that it appears more scarce than gold, so speculators have also been buying it as a long-running speculation. This author, for instance, bought silver at $7 an ounce some five years ago, with the current price around $35 or so, last I checked.

The potential upside could be a flip in the relationship of gold and silver, which happened in medieval times, when new silver mines led to silver being far less scarce and therefore worth less. Were this to happen, the amount of fiat money that could be made would be very impressive, indeed.

However, if you believe, as the Bureau unanimously does, that inflation must happen in the future, silver may be a better hedge, as it may go up against gold and oil, as well as food and property, things that you will need. Were this to happen, it would present both a profit opportunity and a hedge.

As usual, this article is not intended as investment advice. You are urged to do your own research, as it is your money you are investing, and we won't help you if you lose it.