Monthly Archives: June 2012

Gold Outperformed The S&P 500, 1995-2011

Gold outperformed the S&P 500 again in 2011.  However, gold did slightly underperform the Dow.

This article had a pretty serious error. It said “HAHAHA!! Gold investors are idiots! Long-term Treasuries crushed Gold in 2011!” You might say “WTF? Treasuries only yield a couple percent?” The point is that long-term interest rates sank in 2011, due to excessive money-printing, quantitative easing, a 0% Fed Funds Rate, and the expectation that the Fed Funds Rate will low for awhile. When yield decreases, bond prices increase. With a 30 year Treasury, a 1% decrease in yield corresponds to a bond price increase of approximately 18%. However, if you’re invested in Treasuries, you’re reinvesting at a now-lower rate. The only reason that long-term Treasury prices soared in 2011 is because long-term interest rates tanked. That gain was created by the State and the Federal Reserve. Rising Treasury bond prices subsidize bank profits, because banks have a leveraged investment in Treasury bonds.

GLD is slightly behind the S&P so far in 2012, but to be consistent, I’m going to use January 1, 2012 as my cutoff date.

I use VFINX as my source for the S&P 500. I use “adjusted close”, so I include reinvested dividends.  According to Yahoo Finance, VFINX adjusted close was 113.58 on Dec 31, 2010 and 115.80 on Dec 31, 2011.  That’s a gain of less than 2%.

In last year’s version of this post, you had to go back to 1997 to find a time when the S&P would have been a better investment than gold.

Because gold outperformed the S&P again in 2011, you now have to go back to 1995 to find a time when a S&P buy-and-hold-to-the-present investment would have been better than gold.  Anytime after 1995, a buy-and-hold gold investment would have crushed a buy-and-hold S&P 500 investment.

I use usagold as my source for the price of gold.

Here are my results. “Cum diff” is the cumulative difference, “Ann diff” is the difference converted to an annualized gain.

Year S&P 500 Gold Gold/VFINX Cum Dif Ann Cum Diff
2012 115.8 $1598.00 $13.80 13.13% 13.13%
2011 113.58 $1388.50 $12.22 25.33% 11.95%
2010 98.84 $1121.50 $11.35 34.50% 10.38%
2009 78.12 $874.50 $11.19 95.37% 18.23%
2008 124.05 $846.75 $6.83 151.40% 20.25%
2007 117.7 $639.75 $5.44 187.73% 19.26%
2006 101.78 $530.00 $5.21 240.10% 19.11%
2005 97.14 $444.74 $4.58 258.01% 17.28%
2004 87.72 $409.72 $4.67 270.14% 15.65%
2003 68.27 $363.38 $5.32 383.91% 17.08%
2002 87.71 $309.73 $3.53 473.44% 17.21%
2001 99.71 $271.04 $2.72 466.92% 15.56%
2000 109.64 $279.11 $2.55 422.67% 13.57%
1999 90.55 $290.25 $3.21 389.03% 12.01%
1998 70.4 $288.70 $4.10 337.67% 10.34%
1997 52.87 $287.05 $5.43 163.95% 6.25%
1996 43.03 $369.00 $8.58 42.95% 2.12%
1995 31.3 $387.00 $12.36 42.69% 1.99%
1994 30.94 $383.25 $12.39 -0.41% -0.02%
1993 28.36 $391.75 $13.81 37.90% 1.62%
1992 26.2 $333.00 $12.71

If you go back to 1999, a buy-and-hold gold investment outperformed a buy-and-hold S&P 500 investment by 12% PER YEAR!

Here is the same information in chart form:

When viewing financial data over many years, you should use a log scale. Here’s the same information in log scale. On the log scale, it’s easier to see how gold is crushing the stock market recently.

The above two charts show that gold has crushed the S&P 500 over the past 15 years.

If you believe “Gold is money!”, then the above charts show that the stock market severely underperforms true inflation. Over a 10-15 year period, the price of gold should track true inflation pretty well. There are short term-fluctations, but this is a dramatic difference over a 15 year period.

A pro-State troll says “You should be diversified!” That is false. If you aren’t near retirement, your long-term savings should be in whatever provides the highest expected return. If you invest in stocks or bonds, you will get robbed by inflation. The number on your account balance will increase, but it won’t keep pace with true inflation.

A State financial planner will show a chart with exponential growth, showing your savings growing over time. That is a lie. In the stock market, your real return is negative 5% to negative 10% per year. Instead of exponential growth, it’s asymptotic growth. With a return of negative 10%, your maximum inflation-adjusted savings is 10x whatever you save in a year.

Unfortunately, for non-insiders, the stock market is a losing proposition. A stock market investment does not outperform true inflation. Instead of the stock market, you should buy gold and silver and take physical delivery.

This post shows that the stock market has not outperformed true inflation over the past 15 years.

Tiger Woods Ugly Plastic Surgery

I watched a bit of the US Open.  I noticed that Tiger Woods had a lot of plastic surgery.

Most celebrities get plastic surgery.  When you have proper lighting, makeup, and a proper camera angle, the plastic surgery may look decent.

However, in the golf tournament, Tiger Woods was filmed at a non-standard camera angle.  It looked *HORRIBLE* and unnatural.

It’s an amusing logical contradiction.  Professional athletes are not supposed to use steroids.  However, it’s acceptable and encouraged for celebrities to get plastic surgery?  That makes plastic surgery mandatory, if you want a career as a celebrity.

I’m getting better at noticing plastic surgery, especially when a celebrity is filmed from a different camera angle.  It looks hideous.

There was another interesting bit on “Pawn Stars”. There was one episode where a man tried to pawn stuff, claiming he needed the money to buy cocaine. The store managers refused to buy his stuff. Look at that guy’s eyes. His eyes were pretty messed up, a clear indication of a drug addiction.

Reader Mail – 06/10/2012 To 06/16/2012

Note: Due to a defect in the rawr plugin, the formatting for this post shows up wrong on the blog homepage, but it does show up correctly if you view it as a single post or in a RSS reader.
Gman commented on "American Ninja Warrior" Review.
I’m sure a lot of people who watch American Ninja Warrior have never seen the Japanese version, like me. I was curious about it when I saw the title show up on my PrimeTime Anytime recordings on my Hopper DVR. Actually, I found a lot of shows I had never seen before by looking on my Hopper. I used to rely on my Dish co-worker to tell me about what he was watching. With PrimeTime I feel like I’m getting more value out of my service, and now American Ninja Warrior is our family’s new favorite quality time activity.

You just barely qualified for the spam cutoff. I almost deleted this.

I am planning a post on the copyright lawsuit, regarding Hopper/Dish and the "skip commercials" feature.

jag0581 commented on Brian Banks, Victim Of A False Rape Accusation.
Unfortunately the girl who made the false accusation never actually lied under oath since he accepted a plea deal. It would have been better for him if he did go to trial because of this came out after a conviction then she could have been tried for perjury, but in this case she could not have been because she never testified under oath. Now I do wonder about the police report, and if she could be charged with filing a false police report, the only thing I might be able to say about that is that she might be able to get off because of statute of limitation. The other thing I wonder is if he could sue for defamation and severe emotional distress, if he can then he might be able to argue that he missed out of millions of dollars because of this.

Actually, lying to police investigators is a crime. That's what sent Martha Stewart to jail.

That's why you *NEVER* talk to the police. If you talk for an hour and say one false thing, then you're going to jail for "lying to a policeman".

However, false rape accusers must be coddled and encouraged, so the woman will probably get away with it.

Anonymous Coward commented on Common Hiring Myth - "Better To Reject A Good Candidate Than Hire A Bad Candidate".
Captain Capitalism's post is indeed good.

I've had many jobs. All ended for some reason.

Three jobs had excessive hours, by which I mean 60+ hours a week. In most of those jobs I was underpaid. Even if I wasn't rewarded for my level competence, I simply wasn't even paid proportionally for the extra hours I worked over other employees. In one job, I spent a large proportion of my time fixing mistakes by other people and working continually into the early hours of the morning to fix emergency problems caused by other people. Despite that I was attacked by the HR woman as performing below standard. Given I was fixing mistakes by other people, surely those people should be below standard, not me!

Robert Ferguson commented on Gary Johnson On The Daily Show.
Are you okay man?

WordPress mangled that post. I'll have to rewrite it.

Robert Ferguson commented on Gary Johnson On The Daily Show.

Ok cool.
Anonymous Coward commented on Record Low Gasoline Prices.
Do you believe that oil is formed from dead animals and plants? Do you ever wonder why oil is found miles underground, so deep it is below any fossils?

Do you believe the Russian abiotic theory which states oil is formed by processes deep inside the Earth? Perhaps methane under high temperatures and with catalysts gets converted into oil and seeps upwards.

Did you know you have artificially create oil from carbon monoxide and hydrogen? See

http://en.wikipedia.org/wiki/Fischer%E2%80%93Tropsch_process

commented on Record Low Gasoline Prices.

"state comedians" - i like that one.

I heard about that. Allegedly, some depleted oil fields now have oil again, which supports that theory.

"State comedian" is any type of State professional liar. I should update my "FSK Glossary" and FAQ section. I intended to finish those, but never got around to it.

Anonymous Coward commented on North Dakota Voters Considered Repealing Property Tax.
Property tax is the most evil tax of all.

It is even more evil than income tax.

Suppose I work for myself. Only if I make money do I pay tax and it is proportional to my income. If I get no work for a few months, I pay no tax. While I am waiting for sales to ramp up, I will hardly pay any tax.

However if my work does poorly for a few months, I won't be able to afford the property tax and so I will be thrown out of my home. Without a home I don't have anyway to work. If I have to pay high rent to someone else, then it makes it harder to me to be self-employed on a modest salary.

PROPERTY TAX IS THE MOST EVIL TAX OF ALL. MORE EVIL THAN INCOME TAX. LOSE YOUR JOB OR MAKE LITTLE MONEY AND YOU WILL LOSE YOUR HOME. YOU WILL BE GIVEN NO TIME TO GET BACK ON YOUR FEED. THE CROOKS WILL TAKE YOUR HOME.

Bob Sala commented on MLB Statistics - Why So Many No-Hitters?.
That's a good point about how a small decrease in overall batting average leads to a significant increase in no hitters, but it then begs the question as to why there has been a decline in overall batting average. I think you touched on it and I think that umpires have expanded the strike zone the past couple of years.

Maybe there's lower batting average because the players stopped taking steroids?

I'm an expert on the Math analysis. I don't know much about baseball.

Jerry Sandusky Trial Spectacle

There’s a lot of mainstream media coverage of the Jerry Sandusky trial.  It’s obviously excessive.  What’s the point?  What’s the propaganda goal achieved?

In a high-profile criminal trial, an obviously-guilty criminal is brought to justice by the State.  The fnords are “Only bad guys get accused of crimes.” and “The State always wins.”  With a high-profile trial leading to a conviction, that reinforces the omnipotence of the State. However, with Casey Anthony, the jurors didn’t follow the script and voted “not guilty”; the mainstream media said “The jurors made a mistake!” rather than “There was insufficient evidence.”

Some people did raise warnings about Sandusky, but were ignored, so this trial actually illustrates a failure of the State.  He should have been caught much sooner.

A lot of State resources are wasted on sex offender lists and “sex crime” prosecution.  For every obviously-guilty Sandusky, there’s probably 10-100+ Brian Banks, when people are encouraged to make false accusations.  In some cities, public urination can lead to getting on a “sex offender” list.

The lie is “Every stranger is a pervert who wants to rape you.  Be grateful that the State is there to protect you.”

Also, it’s pointless to send Jerry Sandusky to jail.  As long as there’s no risk of him being a repeat offender, nothing is gained by jailing him.  It would be better for him to work and send the money to his victims.  Instead, State resources are wasted on jailing him; prison worker unions lobby for strict sentencing laws.  Compensation-based justice is better than punishment-based justice.

There’s one hilarious bit.  There’s a Jerry Sandusky biography titled “Touched: The Jerry Sandusky Story”, published in 2001.  That is pretty ironic, that he picked “Touched” as the name of his biography.

Another amusing bit is that Sandusky went on “dates” with the victims.  He gradually escalated physical contact.

The Jerry Sandusky trial serves a lot of propaganda goals.  It reinforces the lie “Only guilty people are accused of crimes.  The State always wins.”  It reinforces the excessive “sex offender” laws and “sex offender registries”.  Every stranger is a pervert who wants to rape you, except for the police, who are there to protect you.

MLB Statistics – Why So Many No-Hitters?

Matt Cain pitched a perfect game for the Giants this week.  Some people have been wondering “WTF?  Why are there so many no-hitters and perfect games recently?”

Overall league batting average is down this season, compared to last season, by about 0.005 to 0.01.

It’s a nonlinear relationship.  If overall batting average decreases by a little, the odds of a no-hitter or perfect game increases dramatically.

Suppose that overall league batting average is x.  Then, the odds of a no-hitter are approximately (1-x)^27.  If you want to calculate the odds of a perfect game, use on-base percentage instead of batting average.

Using that formula, here are some details

League Batting Average Odds of a no-hitter
0.280 0.014%
0.270 0.020%
0.260 0.029%
0.250 0.042%

Notice that a small decrease in batting average leads to a huge increase in the odds of a no-hitter.  If overall batting average decreases from .270 to .260, then the chance of a no-hitter increases by nearly 50%!

Usually, when batting average decreases, MLB will change the rules to favor batters, either by lowering the pitcher’s mound or shrinking the strike zone. Until then, there will be more no-hitters, due to a decline in batting average.

There’s been an “explosion of no-hitters” recently, due to a decline in overall batting average. It’s a nonlinear relationship. A small decrease in batting average leads to a huge increase in the odds of a no-hitter

North Dakota Voters Considered Repealing Property Tax

This story was interesting. In North Dakota. there was a ballot proposal to amend North Dakota’s constitution, eliminating the property tax. Unfortunately, the law didn’t pass, by a vote of 75%-25%.

I’m disappointed that the law didn’t pass. However, it was encouraging! 25% of the people voted for greater freedom!

A pro-State troll says “75% of the people voted for the property tax! Therefore, the property tax is a valid law!” The majority does not have the right to steal from the minority. Why should those 75% be allowed to steal from the 25%, via property taxes?

As an individual, you do not have the right to steal my home. Therefore, you cannot authorize the government to tax/steal my home. Voting does not legitimize taxes, because you can’t delegate a right that you don’t have.

The most evil taxes are the income tax, the inflation tax, the property tax, and the regulation compliance tax. Via the income tax, the State steals a huge chunk of your labor. Via the inflation tax, the State steals your savings. Via property tax, the State steals your home, at a rate of a couple percent per year. The cost of regulation compliance is added to the bill whenever you buy something. Regulations make it hard for a new small business to compete with an established large corporation.

Some people argue about which tax is most evil. All taxation is theft, no matter how it is collected or how big the tax is.

The property tax is evil, because you never really own your land or home. All property is owned by the State. Via property taxes, all Americans are homeless slaves, living on property owned by their masters.

Via the property tax, you only own a perpetual transferable lease. Your landlord, the State, can arbitrarily raise the rent/tax at any time. As the voting outcome in North Dakota shows, voting does not prevent State thugs from increasing the tax/tribute.

People’s savings and salaries don’t keep pace with true inflation. Property taxes do keep pace with true inflation, as State parasites demand an increasing slice of a shrinking pie. The property tax forces retired people out of their homes, as the tax rises and their savings shrink.

In some parts of the country, the housing bust was really bad.  In some areas, the annual property tax due is greater than the value of the house!  In that case, there’s no reason to pay; abandon your home when the tax foreclosure occurs.  Under normal circumstances, property tax is only 1%-3% per year, so you don’t notice that the State is gradually stealing your home.  If there were no property tax, home values would be much higher; the tax is a drag on housing prices.

That’s why I advise physical gold and silver over real estate as an investment.  With real estate, you can be robbed via increasing property taxes.

The property tax makes subsistence farming not viable. Suppose you have a farm that produces just enough food to feed yourself and your family. That isn’t good enough, because you also must pay property tax. Either you need surplus food to sell, or take a wage slave job to earn money to pay the property tax. The property tax forces you to participate in the State economy, earning money to pay the property tax. Once in the State economy, you’re subjected to the income tax and inflation tax, further enhancing the ability for the State to rob you.

If the law did pass, “Move to North Dakota!” would be a serious option for a hardcore anarchist. If North Dakota had no property tax, a hardcore agorist in North Dakota could pay practically zero taxes! Allegedly, in New Hampshire and the Free State Project, many people are avoiding the income tax and inflation tax, but they still bend over and pay property tax.

The only way to raise money to pay property tax, is to sell goods and services to members of the State economy. With a system of corrupt debt-based money, new money is only created by banks. The property tax makes all slaves dependent on banksters, so they can get State money to pay the property tax.

The property tax also is regressive. Middle class and wealthier people tend to own a single-family home. Poorer people tend to rent. In NYC and most states, the property tax rate for apartments is greater than the property tax rate for single-family homes! The renters don’t know the true property tax cost, because it’s merely added to their rent.

In California, there’s a ballot law that limits property taxes and other tax hikes. There also are California ballot laws that require money be spent on certain things, leading to California being a mess.

There was an amusing bit. State employee unions lobbied against the property tax repeal! It is unfair that a State employee, dependent on taxes for his salary, can vote against a tax decrease or lobby against a tax decrease. That isn’t democracy. That’s corruption.

It is almost impossible to shrink the State by voting. People dependent on the State will always vote against or lobby against shrinking government.

Paradoxically, wealthy people and insiders like high taxes, because they’re negative taxpayers. It’s no hardship to pay $500M in taxes when you receive a State perk worth $1B+. Besides, the super-wealthy have many trusts and tricks, to avoid taxes. Taxes make it hard for successful small business owners to bootstrap with reinvested earnings and compete with insiders. Taxes make it hard for me to save and start a business. Warren Buffet likes high estate taxes, because heirs of successful small business owners are forced to sell to him to pay the estate tax.

That answers the question “Who really owns your home?” Via property taxes, you don’t own your home, the State owns it. More precisely, your home is owned by politicians, State employees, and other parasites who earn a living leeching off the government. Your home is actually collectively owned by State parasites. They provide you with the illusion that you own it, as long as you keep paying the tax/tribute.

A pro-State troll might say “Wait a minute! The teacher also pays property taxes!” If would be logically equivalent to say that the teacher owed no property tax, but the salary was reduced by an equivalent amount. State employees actually pay zero taxes. That’s just an illusion. Instead, their salaries could be reduced by the tax paid, and it would be logically equivalent.

Similarly, a bankster pays zero taxes. He receives direct and indirect State subsidies, but then pays a tax of part of the stolen money. If you steal $2B and pay back $1B, that’s logically equivalent to stealing $1B.

All taxation is theft. The property tax is evil. The property tax reduces American workers to homeless slaves, renting their home from their masters.

Gary Johnson On The Daily Show

My previous post on this subject got mangled! This is the first time that WordPress ate one of my posts!  Usually, WordPress says “Do you want to leave this page?” if I forgot to save, or it autosaves drafts.

I saw Gary Johnson on The Daily Show.  He was a wimp and a weak candidate.

He said “If only I can get to 15% in the poll!  Then, I’ll get invited to the debate!”  By saying that, he’s reinforcing the legitimacy of the process.  He should have said “The debates are just a scripted press conference!  They’re one big farce!”

He also said “The ‘Presidential Debate Commission’ set the threshold at 15%, to get invited to the debates, to prevent another ‘Ross Perot situation’.”  Gary Johnson acted like the Presidential debates are run by an independent third party.  They aren’t.  They are run by the two major parties.  The “15% poll rule” specifically exists to exclude outsiders.  15% is low enough to seem reasonable, but high enough to be practically impossible to achieve.

The Presidential Debates are one big farce.  However, most people won’t consider Gary Johnson at all, if he isn’t invited to the debate.  If Gary Johnson was serious, he could have made a YouTube video where he answers all of the debate questions, although most people wouldn’t bother reading it.

Gary Johnson should have pointed out the problem with mainstream media bias.  The mainstream media editors say “Gary Johnson has no chance of winning.  Therefore, we shouldn’t mention him.”  However, when they never mention him, he has no chance.  In a real sense, Rupert Murdoch and Sumner Redstone have more influence than politicians, because they decides who gets free publicity disguised as news.  In 2004-2006, Obama was widely touted as a hot new Senator from Illinois.  All that free publicity set him up to become President.

Gary Johnson should have pointed out the defect in the winner-take-all voting system.  It’s practically impossible to form a 3rd party, because you need a plurality in a district to elect a candidate.  For example, if 10% of the population in each district is a Libertarian, there will be zero Libertarian candidates elected.  The Libertarian Party needs to win a district to elect any candidates.

Also, ballot access laws discriminate against 3rd parties.  A 3rd party spends a substantial percentage of its budget, just to get listed on the ballot.

Gary Johnson said “Now that Ron Paul is out of the race, if you want liberty, I’m your best choice.”  However, Gary Johnson didn’t criticize the Federal Reserve during his interview with John Stewart.

John Stewart asked Gary Johnson weak questions, but Gary Johnson should have steered the debate more towards liberty-oriented subjects.  He didn’t mention “Taxation is theft!” or even “Taxes are way too high and government is way too big.”

Overall, Gary Johnson was a weak candidate.  By having a weak Libertarian candidate, people who are interested in freedom have no realistic choices.  The Libertarian Party exists as an outlet for people who want more freedom, but are still dumb enough to try working within the system.  You can’t work within a corrupt system to fix a corrupt system.

I was disappointed that Gary Johnson didn’t talk more about freedom during his Jon Stewart interview.  I was disappointed when he said “If only I can reach 15% in the polls and get invited to the debates!”, because that reinforces the legitimacy of the farce.

Record Low Gasoline Prices

This post on zerohedge was interesting.  Gasoline prices are at or near an all-time low.

Why is that?  If you look at prices in State paper money, prices are skyrocketing.  If you look at the price in gold or silver (i.e. real money), it’s near a record low.

State comedians come up with myths like “Peak Oil” to cover up hyperinflation.  They say “The supply of oil is decreasing.  Therefore, prices are rising.”  They always ignore the effect of inflation on prices.  There always is some other excuse, to justify higher prices.  If anything, we’re closer to Peak Paper than Peak Oil.

If you look at prices in State paper money, prices are skyrocketing.  Salaries do not keep pace with true inflation.  Most investments don’t keep pace with true inflation.  If you look at prices in gold or silver, prices are actually decreasing.