Most of us have heard of economic inflation, grade inflation, and other such bubbles. Here is one that is perhaps new to folks: waist inflation. This is the phenomenon where the a size, such as 38 inches men’s waist size, will actually fit someone much larger, say 41-42 inches. As I am now in slimming mode, I’ve found that my 40″ Hanes stretchy trousers are too lose at 40.5 inches, yet they still fit when my waist was 44″. Thus, I could easily deceive myself that I was only a size 40 when I was really 44. Deception is the name of the game when it comes to phoney markets and economies.
A couple times now, men have told me: “I’m a 38″, when in fact they were manifestly fatter than me when I was at 42″+. In their cases, they were wearing Levis. Denim is a fabric that shrinks upon washing and drying and stretches to size in the first few minutes of wearing. Thus, these men convinced themselves that they had 38″ waists. Levis, size 38″, fit nicely when one is 41”.
The manufacturers of these products, particularly Hanes, know what they are doing. They know that if someone thinks he’s a 36, and tries on a 36 and it’s too snug, he will reject that particular label for a one with a size 36 that fits him better. So they make trousers about one size too big, just to appeal to the vanity and lack of realism on the part of the consumer. And they also created trousers with stretchy waistbands just so that a man may maintain his pants size while allowing his belly to go to pot.
The result of this waist inflation is too often adverse health related to obesity. A man who can claim to be a waist that is as much as four inches smaller than his real size deceives himself and may delay necessary lifestyle adjustments. In my case, the lifestyle adjustments came as result not of acknowledging realistically my girth but of finally understanding that many of my adverse symptoms were related to high blood sugar: peripheral neuropathy, arthritis, and chronic levels of fatigue after eating.
Many of our serious problems in Western culture require a denial of reality. Our debt-based money system makes us think, for example, that we can continue to borrow and never pay back. But illnesses will set in, killing the organism, if lifestyle changes don’t occur. The pathologies related to waist inflation, thus, are analogous to the sickness of the debt-based economy in which we live. We deny the disease which is ultimately killing us.
The phoney silver and gold markets, e.g., the London and New York exchanges, trade in multiples of paper in relationship the actual available physical metal. Today, a call to my local coin dealer shows that the market price is far too low. The Canadian PMX expects to have one ounce physical coins including silver American Eagles, Silver Rounds, Maple Leafs, Philharmonics, and bars; and 1 oz gold Maple Leafs, bars, and Philharmonics only by the middle of January. This means: (1) the mints can’t keep up with the investor demand because the current market price is too low; (2) no one who actually already owns physical species of precious metals in the Toronto area are bringing their coins to Canadian PMX to redeem them at these pathetically low market prices. Thus, those with physical metal know that they are holding value, while the current paper market in which traders pass back and forth many multiples of paper metal with little physical backing is an absolute farce.
I remember those who came from manipulated markets in the Soviet bloc countries during the cold war had severe supply demands. I heard a testimony once that people would stand in line at markets for a long time, not even knowing what was for sale. When you final came to the front of the line, they might be selling left shoes size ten, and you would buy them, as many as you could, because you never knew when you might have another chance to buy something.
Currently, the physical market is very tight. If buyers have a chance to put their hands on physical metal, they should. You never know the next time you’ll have a chance.
Disclosure: I currently have positions in Sprott Physical Gold Trust and Sprott Physical Silver Trust.
Stockhouse has a great piece this morning, Don’t fear a normal gold correction, except that is exactly wrong. Gold doesn’t “correct”. Gold is real money with intrinsic value that has been of great worth for thousands of years. The dollar is a fiat currency with only symbolic value and it is constantly going down in value against real goods like precious metals, oil and food. So if anything, the United States dollar, like all fiat currencies, to the degree that anyone accepts them in exchange for real goods and services, is technically in bubble territory. Here, we see in the inverse Kitco chart, that this morning, the dollar is correcting against gold. This correction will continue with a high degree of volatility (meaning that it won’t be a straight line down), until the US dollar is worth nothing and people will stop attempting to determine the value of gold and other real things in dollar terms.
I like Randall Hoven, normally. But this article at the American Thinker really pissed me off (Why doesn’t the world imitate the US):
We all know that the U.S. has been defending Europe and the “free world” since World War II. But the U.S. spends just 4.06% of its GDP on defense, according to the CIA World Factbook. France spends 2.6%, and the U.K. spends 2.7%. That 1.5%-of-GDP gap is not significant in explaining the differences in wealth.
Take Canada, which spends only 1.1% of its GDP on defense and is one of the wealthier large countries. It is 83.9% as wealthy as the U.S. If you net out what we both spend on defense, it is still only 86.5% as wealthy as the U.S. Defense spending does not explain the large differences in wealth between the U.S. and most of the world.
So, yes, the free world freeloads off us for defense. But that’s a minor part of its total freeloading portfolio.
Mr. Hoven, have you considered the impact of the United States ability to export its currency into this question of foreigners “free-loading”? Consider this is an extremely offensive manner to describe the post-WWII alliances that the US has with the world, where some countries were literally forced to cede their right to provide their own security and to accept US military bases in their countries–so yes, the US provides security for the world. But the rest of the world agrees to accept worthless US dollars (worthless since Nixon took the US dollar off the gold standard). Who’s freeloading off of whom? We foreigners, because you provide security for us, or you yanks, because you can buy our goods in exchange for essentially worthless currency that your Fed Chair conjures out of the thin air of Federal debt-balance sheet?
Americans are free-loading off the rest of the world too. Just remember that when you drive your foreign-made car and you put Canadian gas in it, and you go to Walmart to buy goods made in China that you can buy these things because you are able to export worthless currency that required you next to nothing to create, while the exporters offer you real things made out of real raw materials. This trade of free goods for security may not last much longer. Enjoy it while you can.