con·trar·i·an /kənˈtre(ə)rēən/ /kän-/
- Opposing or rejecting popular opinion; going against current practice
- the comment came more from a contrarian disposition than moral conviction
This term has gained popularity recently. Many people fancy themselves contrarian thinkers or investors but have little knowledge of what this means. As you become truly committed to a contrarian trade you spend more and more time alone. Collective thinkers travel on paved highways; contrarians travel alone in the wilderness. At some point they have become convinced that an undiscovered destination justifies this journey.
Last week we wrote at length about the fundamentals of the uranium market. The news coming from Japan had some of our junior uranium miners selling for the value of their cash alone effectively giving us an equity stake in their projects for free. This was an absolute overreaction characterized by a herd trampling everything as it runs to perceived safety. The market fundamentals and pure economics were difficult to follow but Wednesday morning we took advantage of discounts in several uranium, rare earth and silver miners. As a reminder you should rely on the advice of your broker or financial planner when making decisions.
As previously mentioned, do not think for one second that there is any popularity waiting for you on the contrarian journey. In fact, prepare to be ridiculed and shunned constantly. There is no need to worry though, many of these people who emotionally attack you were never allies to begin with and they merely tolerated you because you did not disrupt their personal agenda.
As you read the article below try as hard as possible to be completely objective. If possible, imagine that you are from another world and are trying to get only the news in order to find your bearings in this society. See if you then can notice the hostility and aggressive tone used by the people who have been selected to respond to this issue.
Legislator says the state needs its own currency
Published in: Wire
RALEIGH Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, state Rep. Glen Bradley wants North Carolina to issue its own legal tender backed by silver and gold.
The Republican from Youngsville has introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.
If the state treasurer starts accepting precious metals as payment, Bradley said that could prod the private sector to follow suit - potentially allowing residents to trade gold for groceries.
"I think we're in the process of inflating a dollar bubble that could be very devastating," said Bradley, a freshman legislator elected in November's GOP tide. "The idea is once the study commission finishes its work, then we could build on top of the hard-money currency with an actual State Tender Act that will basically [issue currency] in correspondence to precious metals stored in the state treasury."
Bradley's bill has yet to attract any co-sponsors among his fellow Republicans.
Mike Walden, an economics professor at N.C. State University, said the notion of North Carolina reverting to having its own currency is outlandish.
"We dealt with this issue about 100 years ago when the Federal Reserve was established," Walden said. "If North Carolina were to have its own currency, that would put us at an extreme competitive disadvantage vis-a-vis other parts of the country and other parts of the world."
State Treasurer Janet Cowell joked that Bradley's precious metals proposal could increase efficiency in state government by providing a good use for her department's old basement vault, which is currently used for storage.
"I look forward to engaging in an important public policy debate about whose face should be on the gold coin," quipped Cowell, a Democrat.
But Bradley predicts that world events could soon prove him prescient.
"I don't necessarily believe [the Federal Reserve] is about to collapse right now," said Bradley, 37. "There are still a few things they can do with qualitative easing to sort of extend their survival. It's just a question of how long. Right know we have a lot of sovereign debt going to China and Japan. When that debt stops being purchased by foreign countries, that currency is going to flood back onto American shores, potentially creating hyperinflation and bursting the currency bubble we have coming in Federal Reserve notes today."
The Austrian School
Bradley, a self-employed computer technician and former Marine, attended Southeastern Baptist Theological Seminary in Wake Forest until he could no longer afford tuition, he said. While he has not taken any in-depth classes in economics, Bradley described himself as a devotee of the Austrian School, a branch of economic thought that originated in Vienna and was influential before World War I.
Back then the value of most of the world's currencies were tied to the amount of the gold amassed in their national treasuries. The United States abandoned the gold standard in 1933, after it was blamed for worsening the Great Depression.
Though the ideas of the Austrian School have been rejected by mainstream economists for much of the last century, they are in vogue with Libertarians and some supporters of the tea party movement.
The language of Bradley's House Bill 301 predicts a dire future for the U.S. economy.
"Many widely recognized experts predict the inevitable destruction of the Federal Reserve System's currency through hyperinflation in the foreseeable future," the bill declares. "In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the State is not prepared, the State's governmental finances and private economy will be thrown into chaos. ..."
Asked who are the "widely recognized experts" to which his bill refers, Bradley cited U.S. Rep. Ron Paul of Texas and Peter Schiff, a precious-metals dealer and investor who regularly appears as a commentator on Fox News.
Walden, the economics professor, said the views espoused by adherents of the Austrian School are well outside the mainstream of modern economic thought.
Bradley's ideas for taking the state back to the Gilded Age don't end at economics.
About Commerce Clause
A strict Constitutionalist, he has also introduced bills to exempt North Carolina agricultural products and firearms manufactured in the state from federal regulation as long as they are not sold or exported across state lines, measures that fly in the face of more than a century of U.S. Supreme Court rulings interpreting the Commerce Clause of the U.S. Constitution.
"They're wrong," Bradley said confidently of generations of justices. "The 10th Amendment is quite clear that those powers not reserved in the Constitution for the federal government are reserved to the states. It's doesn't take a high-priced lawyer to interpret the Constitution."
Rep. Becky Carney, a Charlotte Democrat, said she found Bradley's currency bill "perplexing."
"There has absolutely been no indication of the collapse of the Federal Reserve system," said Carney, who serves on the House banking committee. "It sounds like the Chicken Little story about 'the sky is falling.'"
The office of House Speaker Thom Tillis declined to say whether the GOP leadership supports Bradley's proposal to create a state currency. His bill has been referred to the House rules committee, where legislation is sometimes sent to die.
"There are a lot of diverse opinions and diverse views in our caucus," said Jordan Shaw, Tillis' spokesman. "I don't think we're going to forecast what will happen."