Off for a Run

by JDH on August 24, 2013

My apologies, but the title of today’s post, Off for a Run, does not refer to the stock market.  It may be getting ready for a run, but that’s not what I’m referring to.  The title is literal.  I am off for a run.

The weather today, and all week, has been great, so today I’m going to see how far I can run.  My goal: 20 kilometers (just under 12 and a half miles).  It will take me over two hours, and I may not make it all the way, but I’m going to give it a shot.  Why?

Why not?

I strongly believe that I am in charge of myself. I am responsible for my own health.  I can choose to sit in front of the T.V. all day and eat crap, or I can eat healthy, and get up early and go for a run.  My hope is that by living a healthy lifestyle, I will live a longer and more enjoyable life.  That’s my choice.

Of course not all people choose to make this choice.  As an example, I quote from a Charles Hugh Smith article from his oftwominds.com blog:

This dominance of moral hazard discourages integrity and responsibility and incentivizes risky speculation and irresponsible choices and lifestyles. My Mom (83) has told me that she’s heard men of her generation exclaim that there is no need to modify their unhealthy lifestyle because “the government will pay for another bypass.”

Interesting perspective, and I suppose for many it’s true.  Why take care of myself, if someone else will do it for me?  I suppose we all believe that, at some level.

If I tell my sons that I will be waking them up at 7:00 am for school, they won’t bother setting their alarm.  If I tell them that I will be leaving early for the office and they will have to wake themselves up, they do.  That’s just human nature.

As Mr. Smith surmises in his article, our society has come to depend on government largess.  As he points out:

What happens when all systemic risk ends up concentrated in the central state? Let’s start by noting that the central state (Federal government) backstops every category of risk: major flooding, crop failure, bank failure, student loans, old-age pensions, healthcare for the elderly and low-income, disability, and so on.

The Federal government pays for all these programs by collecting taxes and borrowing the difference between tax receipts and expenditures by selling Treasury bonds.

The foundational faith of this concentration of risk in the state is that crises that require massive deficit spending–borrowing vast sums to “get us through a rough patch”– will be intermittent and brief.

The Great Depression upended that faith: certain types of systemic financial crises were neither intermittent nor brief but chronic and resistant to conventional fixes.

True enough.  I don’t need to worry about whether or not my bank is solvent, because the government will bail them out.  I don’t need to save for retirement, because the government will take care of me.

My readers have scolded me in the past when this blog veers off into political commentary, so let me bring the train back onto the tracks by stating the obvious: if the government is “taking care of us” through deficit spending, we will eventually have to “pay the piper”.  Eventually we will have an implosion.

Which is why hard assets, like precious metals, are so important.  They can’t be printed, so when the currency inevitably implodes, they will be one of the few stores of value.

RGL-Aug-23-2013

As I have noted in previous weeks, perhaps this trend is starting.  As you can see from the chart of RGL.TO – Royal Gold Inc., this blue chip gold stock has had a very nice run recently, rising from $41.34 on June 26 to a close of $67.07 on August 23.  That’s a 62% bounce off the lows.  Not bad.

The long term down trend line is obviously broken, and while it is quite possible that we test the $41.34 low again, it appears increasingly unlikely.  Given a choice, I would rather be in gold than not in gold at the moment.

And, as MetalMeister points out over on the Forum, Martin Armstrong has again emphasized the point that the bigger the drop in gold, the more intense the slingshot move higher.  Armstrong isn’t saying it will happen tomorrow, but he is saying it’s inevitable.

Until then, I’m going to take care of myself by going for a run.  If I survive, I will see you next week.