Understanding the serious stuff — what is wealth?

Following the money in this day of ever fancier derivatives, and hedge funds based upon validation from “talking heads” about M1, and M2, and M3, and M4, does this mean that true “M,” the wealth of this earth, no longer comes from mineral soil —be it mined, pumped from, sprouted on, collected, harvested, fenced-in, surveyed, or manufactured in our own backyard?

How is it that Keynesian economists cannot explain how it is that since the U.S. went off the gold/silver standard — explained away as foreign governments were benefiting from inflation, at the American taxpayers expense — that the “free market” spot price of gold/silver/oil can be plotted on a “dollars to buy” chart, with matching highs, and lows?  Unfortunately, if one could find charts used by popular media during the Cold War days to prove how much better off an average American worker was, comparing the man hours it took to buy a loaf of bread, etc., let alone medical care, in “less fortunate” countries,

How is it then, especially in these days of stagflation causing devaluation, when city folk who would not stand a chance if one natural resource — oil— was so expensive that other resources as pork bellies, corn, beef, wheat, could not even be delivered in global warming friendly hybrid vehicles so dependant upon exotic mineral resources — that the sophisticated reply to, “Pssst. Want to buy a gold mine?” still brings a guaranteed laugh?

Especially to E-Market day traders of super-short selling ETFs, and especially chasing Exxon stock after a back page announcement was made that the Alaskan jury verdict punishing the Valdez drunken oil spill had been “reduced,” while the front page announced the largest yearly corporate profit, ever?

And since I am working the euphonic “E’s,” as Enron, staring Kenneth Lay who taught a whole generation of fund managers how to “look good” through flipping, let me pass on this out of bloger-land. Most American’s think he got his for destroying a whole generations retirement plans by selling an untraceable commodity back and forth, but actually he “passed away” while visiting a luxury ski resort in Colorado, in a county that, allegedly, only had one medical examiner, who was reported, supposedly, satisfied that the convicted Lay had died of a heart attack. And, allegedly the body was cremated within three days. And, the story goes, as Ken had been out on appeal of his conviction by a jury, the judge vacated the sentence so that his widow could be refunded $40 million out of his bankruptcy.

The good blogger news is — apparently a beautiful, surgically altered, “Ken-dra” is wowing sex-starved miners in Alice Springs, Australia by exotically dancing a new version of “pump and dump.” If it really is the she we are talking about, he is the one bending over this time in the barrel. I guarantee the stockbroker who laughs at the stupidity of owning gold will smile with pride at the suggestion that the guy with an enviable record of contributing $550,025 in paper PAC money to Bush the First, actually pulled it off.

What is Enron doing in the middle of our conversation about mining? Well, because they seemed to be the ones whose online boiler room phone recorded sales conversations, when flipping unregulated, non-existent, energy back and forth, were laughing at the plight of ordinary people and small businessmen in California trying to survive the rolling blackouts and hyper-inflated power-bills that some economists consider the beginning of today’s sub-prime mortgage fiasco.

From the prospector viewpoint how is it that while the demand for silver has gone up, the U.S. supply has gone down. In 2002 the spot price per ounce of AG was $4.64, and production was 1,350 tons (the 19th year of supply not meeting demand). In ‘04 a spot price of $6.69 brought a decrease to only 1,140 tons. In ‘06 an average $11.20 per only produced, 1,000 tons. It is too early to predict what ‘08 prices already reaching $20.50 will lead to in production?