Saturday, February 15, 2014

Fukushima's Legacy: Understanding The Difference Between Nuclear Radiation & Contamination

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Submitted by Chris Martenson of Peak Prosperity,

Are fish from the Pacific safe to eat?  What about the elevated background radiation readings detected in Japan, and recently in California? Are these harmful levels?

Should we be worried? And if so, what should be done about these potential health threats? What steps should we take to protect ourselves?

As many of you know, I'm a scientist by training. In this report, I'll lay out the facts and data that explain the actual risks. I'll start by pointing out that Fukushima-related fears have been both overblown as well as heavily downplayed by parties on each side of the discussion.

Much of this stems from ignorance of the underlying science. But some of it, sadly, seems to be purposefully misleading. Again, on both sides.

To assess the true risks accurately, you need to know about the difference between radiation and contamination.  The distinction is vital and, unfortunately, one of the most glossed-over and misused facets of the reporting on nuclear energy.

All of my research and understanding of the risks of radiation at this point indicate that people living in the west coast of the US or in Hawaii are currently not in danger from the radiation released in the wake of the Fukushima tragedy. 

While the background levels are elevated somewhat, those detected so far remain well within what I consider to be a safe zone.  However, should there be another accident at the damaged facility leading to the release of another large plume of radioactive matter, then this assessment could, understandably, change.

The exception to this assessment is for those living within a hundred kilometers of Fukushima. For those people, my analysis points to serious risks, especially for those living with a kilometer or two of the coast, extending 100 kilometers in either direction. The details behind my assessment are contained in the full report below.

The intent of this report is to help readers understand the likely implications of the Fukushima situation with more clarity, as well as to provide a useful framework for identifying the risks posed by any future nuclear incidents and what your response to them should be.

The most important takeaway from this analysis should be this: Radiation, itself, is less a threat than most people imagine. But radioactive contamination is an entirely different and far more dangerous beast. 

While both deliver a ‘dose’ of radiation, it's contamination -- especially ingested contamination -- that has the greatest odds of delivering a concentrated dose to human tissue in a way that can lead to serious acute and/or chronic damage.

The difference between these two will be explained in detail. For those who chose not to read the full report and just want the punchline, it's this: Contamination is the process of acquiring radioactive particles that then become lodged on, or more dangerously in, your body. Do all you can to protect yourself against it.

Should you find yourself nearby during a nuclear accident, your first order of business is to avoid breathing or ingesting any contaminated particulate matter.  This usually involves sheltering in place and is when duct tape and plastic sheeting become your best friends.  While it may sound silly to use such a dime-store defense against a nuclear hazard, it is in fact both remarkably effective and entirely necessary. Merely keeping you and your family away from the fallout for a matter of 2-3 days, possibly a bit longer depending on conditions, can make an enormous difference in your survival odds. 

For now, the levels of radiation that have been detected and reported outside of Japan are between two and three orders of magnitude below what I would personally consider to be worrisome. And there’s no concrete evidence the the bigger concern, contamination, has traveled to countries outside of Japan.

And within Japan, the story takes on its own complexity (just as happened in the areas surrounding Chernobyl), where local wind patterns in the days after the accident created a complex quilt of danger and (relative) safety.  

For those who wish to engage with the context and details of the post-Fukushima world, the journey begins by understanding what ‘radiation’ actually is. 

What do we mean when we say 'radiation'?  It turns out, that word can mean any number of things. 

You are bathed in radiation every day: from sunlight, radio waves, wifi, etc. Some radiation is electromagnetic (in the case of light) and some is composed of particles (matter).

When we hear about ‘radiation’ in the press, what’s typically being referred to are potentially harmful forms of energetic emissions, both electromagnetic and particulate, that can damage biological organisms.

The main distinction between harmful and benign radiation lies in the ability of the radioactive wave or particle to ionize a molecule in your body. Technically, 'ionizing' means "to create an ion", which involves forcibly stripping an electron off of a molecule or atom. This leaves the molecule or atom in a charged state (referred to as 'ionic form'), and thus can cause the affected particle to break apart or otherwise not work as it did before. 

For example, the hemoglobin in your blood is a very complex molecule. Breaking even one of its internal bonds can completely destroy its ability to carry oxygen.  

Every cell in your body is an enormously complex machine with thousands of different molecules each with a crucial function. Wreck enough of these molecules through the process of ionization and the cell dies. Destroy or disrupt the DNA at the center of the cell, and malfunction will result; one dramatic form being the loss of the ability to self-regulate its growth, which we call cancer. 

Radioactive substances emit various forms of energy. Some of the energetic releases are in the form of photon waves (such as gamma or X-rays) while some are in the form of actual fast moving particles (such as alpha and beta particles, and neutrons).

We lump them all together and call them ‘radiation’. But when it comes to their impact on living organisms, not all forms of radiation are created equally. Some are far more effective 'disrupters of life' than others.

The basic types of radiation you would encounter as a consequence of a nuclear accident like Fukushima are:

Alpha particles.  These are fast moving nuclei of helium, meaning they consist of two protons and two neutrons.  The electron shell is missing, so these are charged particles in search of electrons to strip from some other hapless molecule or atom. In the subatomic world, these are very large particles and so are the most easily stopped. They cannot penetrate even a single sheet of paper or the layer of dead skin cells on the outside of your body. As a result, they are quite easy to protect against with minimal effort. However, we shouldn't take total comfort in this fact. The deadly toxin Polonium 210, the one used to kill various enimies of the Russians over the years, emits alpha particles and is quite effective as a poison. The reason for this lies in the fact that, once ingested, it works its damage in close proximity to a person's cells. On the outside of a body, alpha particles bump into already-dead skin cells, so no harmful damage results.  On the inside, they careen straight into living cells and are quite damaging.Beta particles.  These are electrons that have been ejected through a radioactive decay process (technically, it's when a neutron decays yielding both a proton and an electron).   Beta radiation can penetrate a sheet of paper easily, and requires something along the lines of an aluminum plate a few millimeters thick to stop it. Beta particles have medium ionizing power and medium penetrating power, but there is a very wide spectrum of potential power intensities depending on exactly which radioactive substance is emitting the beta particle. One very common radioactive substance found in nuclear plants, tritium, is a beta emitter.Gamma rays.  These are high-energy photons with strong penetrating power and high ionizing potential.  In the past, they were distinguished from x-rays on the basis of their energy potential, but they are really the same thing (they are both high-energy photons). Although, what we call an x-ray generally carries a lot less energy than a gamma ray. That is, an x-ray is at the low end of the energetic spectrum while a gamma ray is at the higher end. This is exactly analogous to the difference between visible sunlight and UV rays, which are the radiation (composed of high-energy photons) that burn your skin.  Just place gamma rays a lot further along that same spectrum all the way at the point where, instead of being stopped by your underlay of skin, the gamma rays can create an equivalent ‘sunburn’ on tissues all the way through your body. Gamma rays vary in strength and actually occupy a spectrum of energies (not unlike how white light includes the spectrum of all the colors of the rainbow), so we need to know more about the specific gamma rays in question to know how damaging they might be. Neutrons.  Neutrons are the bad boys of the radiation story; and are only found as a consequence of a nuclear reaction (controlled or uncontrolled).  Their penetrating power is extraordinary, requiring several meters of solid substance to stop them. They work their harm by indirect ionization, which is not unlike a pool ball smashing into a lamp. A typical example would be the capture of a neutron by a hydrogen nucleus consisting of a single proton, which is then ripped away from its position by the kinetic energy contained by the neutron, and then, like our billiard ball, careens about breaking things, ionizing some atoms/molecules, or shattering the bonds between atoms. In terms of biological damage, neutrons are horrific -- roughly ten times more damaging than beta or gamma radiation on a per unit of energy basis.

Of course, there's a lot of complexity buried within each of these 'buckets' of radiation types; especially given the uncertainty that each bucket has a range of energies associated with it. 

To help clarify this, imagine that we're talking about radiation as if it were vehicles traveling on a highway. It's not really possible to predict how destructive it would be to collide with 'a vehicle' because that answer depends on knowing factors like the vehicle’s size, weight and speed.

Bumping into a small car traveling slowly in your same direction will be far less damaging than slamming head-on into a large fully-loaded Mack truck going 80 mph.

The way this is technically measured is by the energy that each type of radiation carries, measured in units called 'electron volts' (eV).  Think of the eV rating as combining both the speed and the mass of the vehicle we are trying to rank. 

To the eV designation, we'll add the scientific shorthand of K for 'kilo' signifying 1,000 and M for Mega signifying 1,000,000. So 1 KeV = 1,000 eV, and 1 MeV = 1,000,000 eV

Along our radiation 'highway' we find that x-rays carry the least energy and are in the vicinity of 1.2 KeV.  They are small, light cars. Think Fiat.

Gamma rays are not a single vehicle type because they can have energies anywhere from a few KeV all the way up to 25 MeV.  They are everything and anything from tiny TR-6s to massive, fully loaded, Peterbuilt double trailer trucks traveling 80 mph. For reference, the gamma rays emitted by Cesium 137, a very common byproduct of nuclear reactors and a main component of the Fukushima releases, is 700 KeV, hundreds of times more energetic than your typical dentist x-ray, but not nearly the most potent gamma ray you could encounter.

Some common gamma emitters are cesium-137, cobalt-60 and technetium-99.  Also, about 10% of the radioactivity of iodine-131 is gamma, the rest is beta (making this is a mixed radioelement).

Alpha particles have very high kinetic energies standing at about 5 MeV. However, they have exceptionally poor penetrating power, so we might think of them as very large steamrollers that can lurch forwards violently, but only for a few feet. If you are right next to it, you're in big trouble; but otherwise you're safe.

In years years,  a potent alpha emitter, polonium-210, was used to assassinate both Yasser Arafat and Russian critic Alexander Litvinenko. Because polonium-210 only emits alpha particles, you could carry it in a glass vial in your pocket and slip though radiation detectors at any facility because none of the alpha particles would make it through the vial wall (and even if they somehow did, they’d be stopped by the fabric of your pants pocket). In fact, you could merrily rub it on your skin and suffer no ill effects. 

But if ingested? Just a few milligrams, a speck the size of a small grain of salt, would be sufficient to kill. All those gigantic lurching steamrollers would be positioned right next to your living cells, crashing into them and destroying your tissues one cell at a time.

Common alpha emitters include radium, radon, polonium, uranium and thorium.

Beta particles are electrons ejected during proton decay, and they travel at high speed. They can range anywhere between 5 KeV and 20 MeV. For our purposes, the isotopes most commonly associated with nuclear reactions are in the range of 19 KeV (tritium) to 600 KeV (iodine-131 and strontium-90) to 2.3 MeV (yttrium-90).  So these range from medium-sized cars to tractor trailers in our analogy.

Beta particles have medium penetrating power and they can easily get through your skin to the living tissues beneath. Think of them as being able to give you a very harsh sunburn from the outside-inwards if you were exposed long enough. Again, their worst effects come if ingested, where they can cause lots of damage.

Some common beta emitters are strontium-90, yttrium-90, iodine-131, carbon-14, and tritium.

Neutrons are a very wide topic, so we'll just talk about them in terms of a nuclear reactor. The moderate to fast neutrons emitted as a product of fission are extraordinarily dangerous and can penetrate lead shields and many meters of concrete. They are most readily stopped by interacting with hydrogen, so water and wax (and human bodies)-- which contain lots of hydrogen atoms -- are better at stopping neutrons than concrete. 

Neutrons are not part of the radioactive release from Fukushima. They really aren't ever an issue unless you somehow find yourself near an open, uncontained source of fission -- like inside the containment shell of an operating reactor, or in the vicinity of an exploding nuclear bomb. Then neutrons are a BIG problem.

Of note: in the early stages of the Fukushima meltdown, neutron 'beams' were detected 13 times from outside the reactors. This understandably caused the TEPCO workers a lot of worry and slowed their response efforts. This was a certain indication that there was spontaneous fission happening outside of a sealed containment vessel, something that TEPCO was busily assuring the world had not happened. They were still claiming that the vessels were intact and full of pumped cooling water. 

The bottom line is that the topic of radioactivity is complex. If we want to make intelligent decisions, then we need to know which type of radiation we are talking about. 

For example, there are folks walking about with mail-order radiation detectors and reporting ‘counts per minute’ readings. But counts of what exactly?  Is each ‘count’ a low-energy beta particle or a high-energy gamma ray? There’s a world of difference between the two.

So we owe it to ourselves to dig into the context before coming to conclusions. To determine how concerned we should be about any new data, we have to translate ‘counts’ of any particle into their potential health effects. 

Okay, here's the thing most people don't know about radiation: we are surrounded by it and have evolved with it over billions of years. The body can deal with exposure to a certain amount of ionizing radiation without any difficulty at all. Naturally occurring radioactive elements such as uranium and radon and carbon-14 have been a part of life since the very beginning. Gamma rays rain down from the celestial heavens every day.

So radiation alone is not a cause for concern for me.  Even temporary radiation levels that are significantly above my normal background baseline, as much as ten or twenty times, are not a concern of mine as a healthy adult.

But as our vehicle analogy above showed, first we have to know what kind of radiation we are talking about. Is it alpha, beta, or gamma?  How much energy is it carrying?

We also need to know about the person being exposed to the radiation. Tolerance levels for what's "safe" will be lower for kids, the old, and the frail.

For these reasons, science has struggled to come up with a universal measurement for the health impact caused by radiation. As a result, we have several different measurement methodologies parked into a few slightly different, but essentially related, scales. Each attempts to combine the acute effects of radiation exposure into a single 'dose' that is a measure of both the intensity and the duration of the exposure.

As mentioned previously, some radiation has the ability to travel right through our bodies entirely without being absorbed. So, the ‘dose’ reading needs to focus on the amount of any specific radiation type that will be absorbed (or stopped) by the body and thereby have opportunity to impact the molecules in that body.

The radiation absorbed dose is measured in the Gray, rad, rem and Sievert

Rads and Grays are related to each other. One Gray is a huge dose; and the rad just breaks the Grays down into finer units. One Gray = 100 rads (rad stands for Radiation Absorbed Dose). These measure the amount of energy that ionizing radiation imparts to matter.  This matter could be anything: a block of cement, or a human.  

Sieverts and rems are likewise related. One Sievert = 100 rems, but these are adjusted to provide a measure of the impact of the absorbed dose of ionizing radiation on biological tissue. To equate the two systems, the absorbed dose in Grays or rads is multiplied by a 'quality factor' that is specific to each type of radiation to account for their different biological impacts: the result is Sieverts or rems.  Thus, using our vehicle analogy from before, our small sedans get an adjustment factor of 1, while heavier vehicles get an adjustment factor as high as 10-20 times greater. 

(Source)

Based on this table, it's no wonder that polonium-210 is such a devastating radiological poison, because alpha particle get an adjustment factor of 20(!) making them twice as deadly as fast neutrons even. But, again, the alpha particles have to be ingested to have that impact; whereas neutrons can travel through ten feet of concrete and still be dangerous.

Keep in mind this table is a huge simplification of a very complicated field of study. For example, it also matters which tissues are being exposed, as they have very different sensitivities to radiation. 

However, if we are talking about an episode of external exposure to radiation, like a worker at Fukushima might get, then we care about the Sievert or rem scale:

1 Sievert (or 1 Sv), or 100 rem, will induce nausea and reduce the white blood cell count5 Sv, or 500 rems, would cause death for 50% of those exposed in a matter of months10 Sv, or 1,000 rems, is 100% fatal within weeks

The above table leaves out the element of time, so if you are standing near a source of ionizing radiation that is hitting you at the rate of 1 SV per hour, after ten hours you will have received 10 Sv, a fatal dose.  If you stand next to that source for an hour you will get nauseous, and destroy some of your white blood cells.  If you only stand there for ten minutes, you'll receive something like 100 mS (the maximum yearly allowed dose for US nuclear workers) and likely not feel any adverse effects.

Thus, dose is a function of intensity and time. You may recall seeing the grainy footage of Chernobyl ‘workers’ ducking out from behind cover and racing to move a single wheelbarrow of rubble from point A to point B. In those few seconds, they may have received a lifetime maximum dose of radiation and were (hopefully) sent home after accomplishing that one task.

The average global background radiation is 0.27 microS/hour (that's millionths of a Sievert). If we multiply that number by 24x365, it yields an average yearly dose of 2.4 mS/yr.  TEPCO workers are permitted to receive 250 mS/yr, while US nuclear worker standards are 100 mS/yr, which is roughly 25 times greater than background.

The average airport security screening device delivers a dose of 0.25 microS, or the equivalent of a full day's background radiation.  If that alarms you, just know that during the actual flight you take, the average exposure is ten times higher than that -- providing 2.7 microS per hour of flight at cruising altitude, or ten times normal background. So a 5-hour flight at cruising altitude will provide you with a dose of gamma radiation that measures 54 times more than you get at the airport screening itself, or two full days worth of background radiation.

Again, at these levels I am not even remotely concerned.  It there were something to worry about then the epidemiological data from flight attendants and pilots would have long ago revealed a health concern. That's one reason why I'm not worried about periodic episodes of 10x normal background radiation.

Of course, the Sievert is a very crude scale, developed a long time ago. One might argue that the biological impact of airport screeners and whole-body gamma irradiation might be more subtle and complex due to differences in tissue responses and how the radiation is concentrated on the surface of the skin by airport scanners.  All of that remains an open question to me, but no enough of one to concern me.

Still, the point here is that we are surrounded by radiation all the time and we absorb a yearly dose no matter where we live, but Denver-ites get a lot more than people living in Miami due to the altitude (less atmospheric protection from extra planetary gamma arrays).

Here's a link to a super useful graphic that visually shows the Sievert doses of both ordinary life and the Fukushima accident in relation to each other.

Based on this chart, plus all of the information above, even if your background radiation goes up by a factor of ten or twenty, I wouldn't be concerned.

But radioactive contamination?  That's a whole different beast. 

By "contamination", I mean ingesting some radioactive isotopes or particles that become lodged in the body somehow.  Perhaps it's a small speck of radioactive dust that gets lodged in the lung where it will persist (like coal dust and asbestos do), or perhaps it's a substance that our bodies try to accumulate because it resembles a biologically useful element (as is the case with iodine or strontium).

In Part II: The Contamination Threat, we examine in depth the threats posed by radioactive contamination, including the most prevalent contaminants to be wary of, and the compounding effects of bioaccumulation and biomagnification. One of the most nefarious aspects of contamination is how it uses Nature's processes against itself.

For the record, we are aware of no imminent public health threat from nuclear contamination outside of already-identified "hot zones". But for those who wish to better understand the risks and prudent protection measures related to the real dangers of a similar Fukushima-type event in the future (or an unfortunate escalation of the current Fukushima situation), being forewarned is forearmed.

Click here to access Part II of this report (free executive summary; enrollment required for full access).

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Friday, February 14, 2014

Why Draghi's OMT "Whatever It Takes" Dream Is Fundamentally Flawed

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Authored by Ashoka Mody, originally posted at Project Syndicate,

The German Constitutional Court’s recent decision to refer the complaint against the European Central Bank’s so-called “outright monetary transactions” to the European Court of Justice (ECJ) leaves the scheme’s fate uncertain. What is clear is that the economics behind OMT is flawed – and so is the politics.

The OMT program arose in August 2012, when months of relentlessly rising risk premiums on Spanish and Italian sovereign bonds were threatening the eurozone’s survival and endangering the world economy. To restore confidence and buy time for governments to reduce borrowing, ECB President Mario Draghi pledged to do “whatever it takes” to preserve the eurozone – and that meant potentially unlimited purchases of distressed eurozone members’ government bonds.

Draghi’s declaration worked, prompting a sharp decline in risk premiums across the eurozone’s troubled economies. But Bundesbank President Jens Weidmann, a member of the ECB’s Governing Council, immediately challenged OMT, asserting that the program exceeded the ECB’s mandate and violated Article 123 of the Lisbon Treaty, which bars monetary financing of distressed sovereigns. Before OMT was ever activated, Weidmann took his case to the German Constitutional Court.

OMT supporters were aghast at Weidmann’s attempt to overturn the arrangement. After all, the mere announcement of the program had provided relief to struggling governments and may well have saved the monetary union, at least temporarily. Draghi audaciously described OMT as “probably the most successful monetary-policy measure undertaken in recent time.”

But the German Constitutional Court remains dubious. While it has withheld a final judgment in deference to the ECJ, it has upheld the Bundesbank’s view that OMT, in its current form, violates the Lisbon Treaty. OMT may still survive; but, if it does, it will likely be diluted, allowing the problems that inspired it to reemerge.

However problematic this might be for OMT’s supporters, it should not have come as a surprise. The program was ill-conceived and sold by sleight of hand. The court was right to question the factual basis of the ECB’s claim that the risk premiums reflected an unfounded market fear – a claim that was based on cherry-picked evidence. Indeed, the program’s public defense rests shakily on a presumption of baseless speculative pressures.

The program’s design, however, conceded that the market’s assessments of creditworthiness reflected a real default risk. As a lender of last resort to sovereigns, a central bank must stand ready to purchase sovereign debt unconditionally, in order to neutralize the effects of temporary market disruptions. But OMT is intended to operate more like the International Monetary Fund’s lending – that is, to rescue a particular government conditional on its pursuit of fiscal belt-tightening. If the ECB were truly convinced that risk premiums were unreasonably high, and that distressed countries’ debt was sustainable, conditionality would have been unnecessary.

Moreover, by tackling default risk, the OMT program created a new problem: private creditors, assured that the ECB would prevent governments from defaulting, were encouraged to lend with greater abandon. Reading the decline in risk premiums as a sign of renewed market confidence in distressed sovereigns’ creditworthiness was another self-serving misinterpretation.

A similar situation has unfolded before. In the pre-euro era, propping up the Italian lira invited unrelenting speculative pressure. With the lira eliminated, holding down yields on sovereign debt can be a fool’s errand.

Just as untenably high exchange rates must ultimately depreciate, default is necessary in cases of unsustainable sovereign debt. This is all the more important in view of the ECB’s disinclination to reverse near-deflationary conditions, which raise the effective debt-repayment burden further.

Sovereign-debt attorneys Lee Buchheit and Mitu Gulati warn that markets could “mercilessly test the ECB’s willingness to persist in buying unlimited quantities of peripheral sovereign bonds.” This test will be all the more severe if, as the ECB has conceded to the German Constitutional Court, the bond purchases would actually be limited.

The eurozone must allow for selective default on sovereign debt, with the ECB acting as a lender of last resort for solvent governments. Of course, solvency can be difficult to assess during a crisis. But pretending that sovereigns are never insolvent serves only to compound the problem. As the German court pointed out, the prospect of default will help to maintain financial-market discipline.

By attempting to create a quick fix for the eurozone’s deep-rooted problems, the ECB has stepped into a political quagmire. Even if the ECJ gives OMT the benefit of the doubt, the program’s legitimacy will remain plagued by qualms, leaving the ECB – if only behind the scenes – locked in political jockeying with distressed sovereigns.

The line between audacity and hubris is a fine one. Rather than constituting a great success, OMT may well be remembered as an error born of expediency. Worse, it could undermine the ECB’s hard-won independence and credibility. That is an outcome that the eurozone might not survive.

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What Does Bill Ackman Know About The Future Of Commercial Real Estate?

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Bill Ackman helped rescue General Growth Properties (GGP) - the US 2nd largest shopping mall operator - from bankruptcy in 2009/10 as the company collapsed in the financial crisis. Ackman  "turned $60 million into $1.6 billion" in the process but, according to Bloomberg, has now exited his entire position, dumping his final 28 million share back to the company via a buyback.

The spin, of course, is that it's right to take profits and that GGP is now 'a much different company than it was then."

However, given Ackman's knowledge of JCP (and perhaps RSH), we can't help but wonder, given all the exuberance about Fed tapering must mean the recovery is here and sustainable - just why Ackman would unload it all at such a pivotal time in the US economy...?

Via Bloomberg,

Bill Ackman sold all of his shares in General Growth Properties Inc. (GGP), the second-largest U.S. shopping-mall owner, marking the end of one of the hedge-fund manager’s most profitable investments.

General Growth bought back about 28 million shares from Ackman’s Pershing Square Capital Management LP for $556 million, the Chicago-based real estate investment trust said yesterday in a statement. The hedge-fund firm, which in September sold 25 million shares for $500 million, no longer holds any common stock, the company said.

Ackman, 47, helped rescue General Growth from near-collapse by pushing it to file for bankruptcy in 2009, and was part of an investor group in its subsequent reorganization. The effort “turned $60 million into $1.6 billion,” the hedge-fund manager told Bloomberg News in 2011, and contributed to his flagship fund’s net return of 29 percent in 2010.

...

General Growth shares have climbed 3.2 percent in the past 12 months and are up about 60 percent since the company’s exit from bankruptcy.

The company used “available liquidity” to fund the purchase of Pershing Square’s shares, according to yesterday’s statement.

“It’s a good thing,” Alexander Goldfarb, an analyst with Sandler O’Neill & Partners LP in New York, said in an interview. “This settles up and neatly separates the turnaround from where the company is today.”

Yellen is confident of economic growth; Economists are confident of economic growth; so what does Ackman potentially know about 'anchor tenants' in malls that means commercial real estate exposure is not for him...

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Thursday, February 13, 2014

Jim Grant: "Gold Is Nature's Bitcoin"

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Home Jim Grant: "Gold Is Nature's Bitcoin" Tyler Durden's picture Submitted by Tyler Durden on 02/11/2014 20:13 -0500

BitcoinCentral BanksFed SpeakJanet YellenJim GrantRealityTestimonyYield Curve


 

Having previously explained how "the Fed has its thumb and fingers on the scales of finance," and why it will end badly; Jim Grant takes today's testimony from Janet Yellen to task in this brief (but fun-filled) clip.

While the new Fed chair spoke at length, Grant notes she did not explain how "the Fed continues in this unprecedented exercise in price control," and in less than 30-seconds, the always eloquent founder of the Interest Rate Observer 'translates' her Fed speak into reality -

"What we mean to do is continue to nationalize the yield curve... and we would like to enlist the stock market in a program of wealth creation for the security holders of America."

The Fed has manipulated interest rates for 100 years but Grant adds, "never - until now - has it manipulated the stock market as if it were a lever of public policy."

His discussion ranges from the bubble in Biotech to holding Gold (which he describes as "nature's bitcoin") because it is "the reciprocal of faith in Central Banks."

 

Spend 135 seconds of your life to listen to this... way more informative than watching Bode Miller flop again (or Shaun White)...

 

And it seems CNBC saw fit to remove the reference to Bitcoin, gold, and faith in central banks - ironic really...

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Comment viewing options Flat list - collapsedFlat list - expandedThreaded list - collapsedThreaded list - expanded Date - newest firstDate - oldest first 10 comments per page30 comments per page50 comments per page70 comments per page90 comments per page150 comments per page200 comments per page250 comments per page300 comments per pageSelect your preferred way to display the comments and click "Save settings" to activate your changes. Tue, 02/11/2014 - 20:15 | 4426162 wallstreetapost... wallstreetaposteriori's picture Jim Grant: "Gold Is Nature's Bitcoin"... thats not what foneystar says Login or register to post comments Tue, 02/11/2014 - 20:16 | 4426169 BlackChicken BlackChicken's picture

True, but Grant nailed it though.

Login or register to post comments Tue, 02/11/2014 - 20:24 | 4426196 Soul Glow Soul Glow's picture

GOld is money and paper is nothing more than the ink that lines it.  A promise to pay means nothing when the creditor is broke, and all nations are broke.

Even China is broke considering that what backs them is UST debt.  And though they have bought gold hand over fist - and mined the shit out of their topography looking for it - it won't make a difference.  Unless gold revalues to over $50,000 an ounce.

Then they will have gold and be paid back their debt with the paper gold that sits on the Fed's balance sheet.  By then paper gold will be a way to keep the system going, but imagine when not even paper gold is traded, for lack of propietry.

Gold in the hand is all that matters when it comes to maintaining a store of wealth decade over decade.  

Login or register to post comments Tue, 02/11/2014 - 20:26 | 4426200 Supernova Born Supernova Born's picture

And Jim Grant is ZH's gold.

Login or register to post comments Tue, 02/11/2014 - 20:42 | 4426254 max2205 max2205's picture

MyStawks would at least give joe and Jane a chance to bank some coin if old Yellen keeps this from left to top right

Login or register to post comments Tue, 02/11/2014 - 21:07 | 4426359 philipat philipat's picture

"And it seems CNBC saw fit to remove the reference to Bitcoin, gold, and faith in central banks"

What a surprise!!

Login or register to post comments Tue, 02/11/2014 - 21:29 | 4426442 fonestar fonestar's picture

Bitcoin is fonestar's true love.

Login or register to post comments Tue, 02/11/2014 - 22:40 | 4426693 BlackChicken BlackChicken's picture

Bitcoin love you long time...

Login or register to post comments Tue, 02/11/2014 - 22:40 | 4426695 TheMeatTrapper TheMeatTrapper's picture

You have turned thousands of people off of Bitcoin because of your immature, deliberately annoying persona. 

Perhaps that is by design. 

What is sad is that regardless of your true intentions, you seem to have so little in the way of a real life. I really hope things turn around for you. I honestly do. Life is too short to spend it playing games on the internet. Step outside, roll up your sleeves and do something useful and productive. It will do you good. 

Login or register to post comments Tue, 02/11/2014 - 23:02 | 4426764 whatthecurtains whatthecurtains's picture

Be nice to Fonestar  He is worth his weight in Bitcoins.

Login or register to post comments Tue, 02/11/2014 - 23:54 | 4426909 silverserfer silverserfer's picture

naw, hes an attention whore who only comments at the begining of threads. 

Login or register to post comments Tue, 02/11/2014 - 20:46 | 4426266 boogerbently boogerbently's picture

Jim Grant and Rick Santelli for......something !

Login or register to post comments Tue, 02/11/2014 - 20:49 | 4426283 BLOTTO BLOTTO's picture

Don't kid yourselves - 'they' love gold too. 

.

I believe their is something more special about it outside of what we know. They've been getting us commoners to mine it for them since...

 

Login or register to post comments Tue, 02/11/2014 - 20:35 | 4426231 XitSam XitSam's picture

When gold reaches $50,000/oz, the dollar will be irrelevant.

Login or register to post comments Tue, 02/11/2014 - 20:40 | 4426253 DaveyJones DaveyJones's picture

Gold is the banker's spanker when he grows to be a wanker

Login or register to post comments Tue, 02/11/2014 - 20:24 | 4426202 Thomas Thomas's picture

Jim is the best.

Login or register to post comments Tue, 02/11/2014 - 20:27 | 4426210 Soul Glow Soul Glow's picture

The man who would be Fed Chair.

Login or register to post comments Wed, 02/12/2014 - 00:56 | 4427038 wintermute wintermute's picture

YES!

It should have happened this month. But no chance for sanity in the fiat Hall of Mirrors.

Login or register to post comments Tue, 02/11/2014 - 20:45 | 4426261 stocktivity stocktivity's picture

He may have nailed it but until the fed stops printing, It's all Bullshit!!!

Login or register to post comments Tue, 02/11/2014 - 20:15 | 4426163 stant stant's picture

saw that at lunch, good interview

Login or register to post comments Tue, 02/11/2014 - 20:20 | 4426174 LawsofPhysics LawsofPhysics's picture

Perhaps, one thing is for sure however, the laws of Nature and physics are what they are and always seem to do what they do regardless of the current dominant species...

 

I thnk about PMs differently I guess.  In order to actually do or create anything real, you need energy.

because refined gold is rather inert and will hang out indefinitely and it takes energy to refine and produce refined gold, gold is also a store of energy/work, it's inert nature makes it a safe store of value.  No surprise people have been willing to exchange their labor for gold for so long. Some people say that gold can be stolen.  I know four generations in my family who have never had their monetary gold stolen.

I guess common sense just isn't taught anymore.

Login or register to post comments Tue, 02/11/2014 - 20:29 | 4426218 Soul Glow Soul Glow's picture

Humanity will be tricked by banksters over and over again.

Login or register to post comments Tue, 02/11/2014 - 21:00 | 4426334 ForTheWorld ForTheWorld's picture

However, if the energy invested into producing an ounce of refined Gold is more than the Gold is valued in a particular currency, doesn't it become a poor investment of said energy at some point?

Yes, I've held Gold, because people have faith in it as a store of wealth, and accept it in transactions.

Login or register to post comments Tue, 02/11/2014 - 21:23 | 4426376 Dick Buttkiss Dick Buttkiss's picture

Once the price of gold goes high enough (and it will), governments will sieze the miners thereof and keep it in the ground as their private "vault."

Gold will all the more belong to them not us, in other words, which is why cryptocurrencies are our only hope (with whatever PMs you might have serving as a backup).

Login or register to post comments Tue, 02/11/2014 - 23:03 | 4426744 Prisoners_dilemna Prisoners_dilemna's picture

Gold is not natures bitcoin. I love them both but they are similar and complementary but inherently different.

They have overlapping monetary functions but they are also unique in their own monetary way.

With an incredible amount of respect I gotta say...

"Gold is natures bitcoin" is the worst comment I hope to ever hear the illuminous Mr. Grant utter.

 

 

Gold is natures gold.

Bitcoin is natures bitcoin.

They both exist within the laws of our universe. Both are of nature. But different in nature.

 

And because they are different in the roles they play and their inherent properties, you are correct in saying that gold has failed to End the Fed or measure inflation, Bitcoin will succeed.

"Internet Reformation" Bitchez

 

Login or register to post comments Tue, 02/11/2014 - 23:27 | 4426832 centipede centipede's picture

Cryptocurrencies do not make any sense unless government makes them a legal tender and force you to pay taxes and debt in them. I can create my own cryptocurrency using available technology as everybody else can. And I can create as many as I wish. Some that will have one virtual coin only and nobody will be able to counterfeit any of them. What will be the dollar value of such a coin? Billions of dollars? And if everybody else creates their own coins and many types of them what will be their values. Billions of dollars as well?

Gold can be stolen or confiscated but it will always have a value related at least to the energy needed to produce it and it will be independent of governments.

Login or register to post comments Tue, 02/11/2014 - 23:52 | 4426904 silverserfer silverserfer's picture

dick, I guess you havent heard of the mining mortaratum in california and oregon. no dredging. " beacuse of the fish" already begining.

Login or register to post comments Tue, 02/11/2014 - 23:52 | 4426905 silverserfer silverserfer's picture

dick, I guess you havent heard of the mining mortaratum in california and oregon. no dredging. " beacuse of the fish" already begining.

Login or register to post comments Tue, 02/11/2014 - 21:29 | 4426438 RaceToTheBottom RaceToTheBottom's picture

Dry cells and Excel spreadsheets for the FED!!!!

Login or register to post comments Tue, 02/11/2014 - 22:56 | 4426736 TheMeatTrapper TheMeatTrapper's picture

Very valid point about energy being the prime mover for production and creativity. 

As far as PM's being stolen, after the Civil War most Southern homes of value were looted and burned. Wealth consisted of land, buildings, crops, investments and silver - in the form of household furnishings. 

The buildings were burned to the ground. Investments in Confederate bonds evaporated. Crops were destroyed and the means of production (slaves, machinery, etc) removed. 

That left silver. Candlesticks, forks and magnificent tea sets made in England. I have seen some truly stunning examples. 

This last line of wealth had to be hidden from the Union Army as they burned homes to the ground, threatened women with having their husbands shot, and bribing slaves to give up the hiding places. 

They never found most of them. 

A sack tied in the top of a tree is a damn hard thing to find. Lots of trees in my neck of the woods.

Preppers that are obsessed with burying shit in PVC pipes in the ground simply haven't read history.

We've been through this before.

Login or register to post comments Tue, 02/11/2014 - 20:18 | 4426175 Cacete de Ouro Cacete de Ouro's picture

Disregarding the bow tie, by God, the man might be on to something !

Login or register to post comments Tue, 02/11/2014 - 20:27 | 4426195 Mad Mohel Mad Mohel's picture

Login or register to post comments Tue, 02/11/2014 - 21:12 | 4426383 rosiescenario rosiescenario's picture

...the 'other Jim' sports a bow, too....maybe its some sort of secret society thing?Never saw Greespam or his acolyte in one....

Login or register to post comments Tue, 02/11/2014 - 20:19 | 4426177 blindman blindman's picture

http://www.youtube.com/watch?v=-4qUXcXuMSE
Jim Croce - Greatest Hits - You Don't Mess Around With Jim
.
slim jim !

Login or register to post comments Tue, 02/11/2014 - 20:25 | 4426192 Moe Hamhead Moe Hamhead's picture

Did anybody recognize the idiot who was lost on the set ?

Login or register to post comments Tue, 02/11/2014 - 20:42 | 4426259 XitSam XitSam's picture

Looked like Barney Frank to me.

Login or register to post comments Tue, 02/11/2014 - 21:24 | 4426419 Dick Buttkiss Dick Buttkiss's picture

Pronouced Bwarny Fwank, which is a mouthful that this cocksucking sociopath knows all too well about.

Login or register to post comments Tue, 02/11/2014 - 21:52 | 4426525 Remington IV Remington IV's picture

He was looking for his post 5 bj

Login or register to post comments Tue, 02/11/2014 - 21:52 | 4426526 Remington IV Remington IV's picture

He was looking for his post 5 bj

Login or register to post comments Tue, 02/11/2014 - 20:26 | 4426207 NoDebt NoDebt's picture

Back when I was brand new on ZH somebody posted up the following (paraphrasing as best I can remember):

"Guys, they control the money supply.  They can keep this game going for a LONG damned time."

For some reason, that comment has stuck with me to this day.  Every time I hear about these type of cautions I remember that phrase and, if I had the chance, I would ask Jim Grant the following question:  "Ok, so the Fed has it's finger on the monetary scales.  I agree.  What would ever make them voluntarily take their finger off again?"

 

Login or register to post comments Tue, 02/11/2014 - 20:29 | 4426216 Mad Mohel Mad Mohel's picture

Nooses and guillotines.

Login or register to post comments Tue, 02/11/2014 - 21:12 | 4426385 NoDebt NoDebt's picture

Stop it.  I'm getting all misty.

Login or register to post comments Wed, 02/12/2014 - 00:40 | 4427014 The 22nd Prime The 22nd Prime's picture

Let's get modern. Air compressors and nail guns.

Login or register to post comments Tue, 02/11/2014 - 20:35 | 4426232 Soul Glow Soul Glow's picture

They can keep it going a long time, but not forever.  All central banks have inflated the currency supply and now all that needs to hppen is an invrease in volacity.  It could come any day and in any form - China declares their actual tonnege to the IMF, or China doesn't show up for US Treasury auctions causing the Fed to prime the pumps harder.  In either case price would increase for variable goods.  This would increase volacity.

Login or register to post comments Tue, 02/11/2014 - 20:46 | 4426263 NoDebt NoDebt's picture

True, when it comes, it WILL come from a direction few are looking.

But remember that all the big players involved know the stakes.  Potential monetary "troublemakers" are beeing weeded out with haste and extreme prejudice (for example, potentially disruptive politicians across southern Europe).  They're all being quickly replaced with those who will repeat the lie and keep the ponzi going.  The ponzi-aware "adults in the room" know they're fucked if it all comes crumbling down so they're circling the wagons and protecting their own.  They continue to win, everyone else is slowly pushed underwater and drowned to accomplish that goal.  It sound incredibly unstable, but it's more stable than the numbers indicate because of the small number of people running things, with the same understand and the same goal in all their heads.

Login or register to post comments Tue, 02/11/2014 - 20:36 | 4426234 blindman blindman's picture

perhaps ....?
http://www.silverdoctors.com/gold-and-silver-china-russia-call-the-money...
GOLD AND SILVER – CHINA & RUSSIA CALL THE MONEYCHANGERS’ BLUFF!
FEBRUARY 11, 2014 BY THE DOC

Login or register to post comments Tue, 02/11/2014 - 20:51 | 4426284 NoDebt NoDebt's picture

Thanks, Blindman.  I liked that article a lot.  I posted up a similar thought months ago on ZH where I argued that those who clearly have extensive control across Western (developed) countries get a much chillier reception in places like China, the Middle East, etc. because it's just not a compatible culture to where they gained their power.  The same playbook doesn't work.  I was bombed out of the thread with red arrows.  

Fortunately, I don't count down-arrows.  A little trick I learned from the BLS.

Login or register to post comments Tue, 02/11/2014 - 21:28 | 4426430 blindman blindman's picture

the down arrow crowd is replete with assholes. imho
you can't trust them or value their sentiments, they
do not know the first thing concerning communication.
consider them all agents of ignorance, they know not what
they do...., have pity but put them in their stew for their
own sake and good!
.
PETER SCHIFF TELLS CNBC: GET READY FOR A GOLD MOONSHOT!
FEBRUARY 11, 2014 BY THE DOC
http://www.silverdoctors.com/peter-schiff-tells-cnbc-get-ready-for-a-gol...
.
taper is a head fake to jawbone away the revelation of
the cause of the failed design, structure and fuck-tion.
(the fake fraud, usury, money system)
phony use of mathematics, non-musical, perverted even.
.
one cannot jawbone the leaning tower of
pizza back into a plumb spacial orientation.
.
trusting in a designed and confirmed fraud and lie has a temporal
limitation, inherently unstable and unsustainable.
drama where none is needed, ongoing.

Login or register to post comments Tue, 02/11/2014 - 20:40 | 4426241 LawsofPhysics LawsofPhysics's picture

Just like what happened to the Soviet Union, they can control the money, but they cannot control the supply chain.  When, and only when, essential commodities cannot be delivered (at any "price"), then people will start reclaiming their freedom and responsibilities.

At that time, compensation will return to people who's labor/knowledge is actually worth a shit.  Paper-pushing fucks will find themselves out of luck.

Login or register to post comments Tue, 02/11/2014 - 20:52 | 4426288 NoDebt NoDebt's picture

Agreed, but we're more than just a few years away from that being a problem.

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