Dear Reader,

This week’s musings will be something of a departure from the usual fare, in that much of the content is a lengthy excerpt from a book written in 1955 by Milton Mayer, a reporter who studied the lives and attitudes of ordinary Germans leading up to and through the Hitler regime. 

While one particular paragraph from the book has been widely quoted – you will probably recognize it – the longer excerpt reprinted below provides critical context to how everyday Germans transitioned from a civil society to a truly heinous police state, and did so with hardly a whisper.

I would like to thank fellow La Estancia de Cafayate owner Pete K. for passing the article along as I consider it to be the most powerful and important piece of writing I’ve read all year. The parallels to what happened then and what’s been going on in America and elsewhere recently sent chills down my spine and, I suspect, will do the same to you.

I hope you feel as compelled to forward this email to everyone you can think of, just as I was compelled to publish it in its entirety.

I’ll have some additional thoughts at the end of the excerpt, including on ways to protect yourself, but for now find yourself a comfortable seat and read on…   

"What no one seemed to notice," said a colleague of mine, a philologist, "was the ever widening gap, after 1933, between the government and the people. Just think how very wide this gap was to begin with, here in Germany. And it became always wider. You know, it doesn’t make people close to their government to be told that this is a people’s government, a true democracy, or to be enrolled in civilian defense, or even to vote. All this has little, really nothing, to do with knowing one is governing.

"What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it.

"This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter.

"You will understand me when I say that my Middle High German was my life. It was all I cared about. I was a scholar, a specialist. Then, suddenly, I was plunged into all the new activity, as the university was drawn into the new situation; meetings, conferences, interviews, ceremonies, and, above all, papers to be filled out, reports, bibliographies, lists, questionnaires. And on top of that were the demands in the community, the things in which one had to, was ‘expected to’ participate that had not been there or had not been important before. It was all rigmarole, of course, but it consumed all one’s energies, coming on top of the work one really wanted to do. You can see how easy it was, then, not to think about fundamental things. One had no time."

"Those," I said, "are the words of my friend the baker. ‘One had no time to think. There was so much going on.’"

"Your friend the baker was right," said my colleague. "The dictatorship, and the whole process of its coming into being, was above all diverting. It provided an excuse not to think for people who did not want to think anyway. I do not speak of your ‘little men,’ your baker and so on; I speak of my colleagues and myself, learned men, mind you. Most of us did not want to think about fundamental things and never had. There was no need to. Nazism gave us some dreadful, fundamental things to think about—we were decent people—and kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of the ‘national enemies,’ without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us. Unconsciously, I suppose, we were grateful. Who wants to think?

"To live in this process is absolutely not to be able to notice it—please try to believe me—unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must some day lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head.

"How is this to be avoided, among ordinary men, even highly educated ordinary men? Frankly, I do not know. I do not see, even now. Many, many times since it all happened I have pondered that pair of great maxims, Principiis obsta and Finem respice—‘Resist the beginnings’ and ‘Consider the end.’ But one must foresee the end in order to resist, or even see, the beginnings. One must foresee the end clearly and certainly and how is this to be done, by ordinary men or even by extraordinary men? Things might have. And everyone counts on that might.

"Your ‘little men,’ your Nazi friends, were not against National Socialism in principle. Men like me, who were, are the greater offenders, not because we knew better (that would be too much to say) but because we sensed better. Pastor Niemöller spoke for the thousands and thousands of men like me when he spoke (too modestly of himself) and said that, when the Nazis attacked the Communists, he was a little uneasy, but, after all, he was not a Communist, and so he did nothing; and then they attacked the Socialists, and he was a little uneasier, but, still, he was not a Socialist, and he did nothing; and then the schools, the press, the Jews, and so on, and he was always uneasier, but still he did nothing. And then they attacked the Church, and he was a Churchman, and he did something—but then it was too late."

"Yes," I said.

"You see," my colleague went on, "one doesn’t see exactly where or how to move. Believe me, this is true. Each act, each occasion, is worse than the last, but only a little worse. You wait for the next and the next. You wait for one great shocking occasion, thinking that others, when such a shock comes, will join with you in resisting somehow. You don’t want to act, or even talk, alone; you don’t want to ‘go out of your way to make trouble.’ Why not?—Well, you are not in the habit of doing it. And it is not just fear, fear of standing alone, that restrains you; it is also genuine uncertainty.

"Uncertainty is a very important factor, and, instead of decreasing as time goes on, it grows. Outside, in the streets, in the general community, ‘everyone’ is happy. One hears no protest, and certainly sees none. You know, in France or Italy there would be slogans against the government painted on walls and fences; in Germany, outside the great cities, perhaps, there is not even this. In the university community, in your own community, you speak privately to your colleagues, some of whom certainly feel as you do; but what do they say? They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’

"And you are an alarmist. You are saying that this must lead to this, and you can’t prove it. These are the beginnings, yes; but how do you know for sure when you don’t know the end, and how do you know, or even surmise, the end? On the one hand, your enemies, the law, the regime, the Party, intimidate you. On the other, your colleagues pooh-pooh you as pessimistic or even neurotic. You are left with your close friends, who are, naturally, people who have always thought as you have.

"But your friends are fewer now. Some have drifted off somewhere or submerged themselves in their work. You no longer see as many as you did at meetings or gatherings. Informal groups become smaller; attendance drops off in little organizations, and the organizations themselves wither. Now, in small gatherings of your oldest friends, you feel that you are talking to yourselves, that you are isolated from the reality of things. This weakens your confidence still further and serves as a further deterrent to—to what? It is clearer all the time that, if you are going to do anything, you must make an occasion to do it, and then you are obviously a troublemaker. So you wait, and you wait.

"But the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes. That’s the difficulty. If the last and worst act of the whole regime had come immediately after the first and smallest, thousands, yes, millions would have been sufficiently shocked—if, let us say, the gassing of the Jews in ’43 had come immediately after the ‘German Firm’ stickers on the windows of non-Jewish shops in ’33. But of course this isn’t the way it happens. In between come all the hundreds of little steps, some of them imperceptible, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and, if you did not make a stand at Step B, why should you at Step C? And so on to Step D.

"And one day, too late, your principles, if you were ever sensible of them, all rush in upon you. The burden of self-deception has grown too heavy, and some minor incident, in my case my little boy, hardly more than a baby, saying ‘Jewish swine,’ collapses it all at once, and you see that everything, everything, has changed and changed completely under your nose. The world you live in—your nation, your people—is not the world you were born in at all. The forms are all there, all untouched, all reassuring, the houses, the shops, the jobs, the mealtimes, the visits, the concerts, the cinema, the holidays. But the spirit, which you never noticed because you made the lifelong mistake of identifying it with the forms, is changed. Now you live in a world of hate and fear, and the people who hate and fear do not even know it themselves; when everyone is transformed, no one is transformed. Now you live in a system which rules without responsibility even to God. The system itself could not have intended this in the beginning, but in order to sustain itself it was compelled to go all the way.

"You have gone almost all the way yourself. Life is a continuing process, a flow, not a succession of acts and events at all. It has flowed to a new level, carrying you with it, without any effort on your part. On this new level you live, you have been living more comfortably every day, with new morals, new principles. You have accepted things you would not have accepted five years ago, a year ago, things that your father, even in Germany, could not have imagined.

"Suddenly it all comes down, all at once. You see what you are, what you have done, or, more accurately, what you haven’t done (for that was all that was required of most of us: that we do nothing). You remember those early meetings of your department in the university when, if one had stood, others would have stood, perhaps, but no one stood. A small matter, a matter of hiring this man or that, and you hired this one rather than that. You remember everything now, and your heart breaks. Too late. You are compromised beyond repair.

"What then? You must then shoot yourself. A few did. Or ‘adjust’ your principles. Many tried, and some, I suppose, succeeded; not I, however. Or learn to live the rest of your life with your shame. This last is the nearest there is, under the circumstances, to heroism: shame. Many Germans became this poor kind of hero, many more, I think, than the world knows or cares to know."

I said nothing. I thought of nothing to say.

"I can tell you," my colleague went on, "of a man in Leipzig, a judge. He was not a Nazi, except nominally, but he certainly wasn’t an anti-Nazi. He was just—a judge. In ’42 or ’43, early ’43, I think it was, a Jew was tried before him in a case involving, but only incidentally, relations with an ‘Aryan’ woman. This was ‘race injury,’ something the Party was especially anxious to punish. In the case at bar, however, the judge had the power to convict the man of a ‘nonracial’ offense and send him to an ordinary prison for a very long term, thus saving him from Party ‘processing’ which would have meant concentration camp or, more probably, deportation and death. But the man was innocent of the ‘nonracial’ charge, in the judge’s opinion, and so, as an honorable judge, he acquitted him. Of course, the Party seized the Jew as soon as he left the courtroom."

"And the judge?"

"Yes, the judge. He could not get the case off his conscience—a case, mind you, in which he had acquitted an innocent man. He thought that he should have convicted him and saved him from the Party, but how could he have convicted an innocent man? The thing preyed on him more and more, and he had to talk about it, first to his family, then to his friends, and then to acquaintances. (That’s how I heard about it.) After the ’44 Putsch they arrested him. After that, I don’t know."

I said nothing.

"Once the war began," my colleague continued, "resistance, protest, criticism, complaint, all carried with them a multiplied likelihood of the greatest punishment. Mere lack of enthusiasm, or failure to show it in public, was ‘defeatism.’ You assumed that there were lists of those who would be ‘dealt with’ later, after the victory. Goebbels was very clever here, too. He continually promised a ‘victory orgy’ to ‘take care of’ those who thought that their ‘treasonable attitude’ had escaped notice. And he meant it; that was not just propaganda. And that was enough to put an end to all uncertainty.

"Once the war began, the government could do anything ‘necessary’ to win it; so it was with the ‘final solution of the Jewish problem,’ which the Nazis always talked about but never dared undertake, not even the Nazis, until war and its ‘necessities’ gave them the knowledge that they could get away with it. The people abroad who thought that war against Hitler would help the Jews were wrong. And the people in Germany who, once the war had begun, still thought of complaining, protesting, resisting, were betting on Germany’s losing the war. It was a long bet. Not many made it."

Copyright notice: Excerpt from pages 166-73 of They Thought They Were Free: The Germans, 1933-45 by Milton Mayer, published by the University of Chicago Press. ©1955, 1966 by the University of Chicago. All rights reserved. This text may be used and shared in accordance with the fair-use provisions of U.S. copyright law, and it may be archived and redistributed in electronic form, provided that this entire notice, including copyright information, is carried and provided that the University of Chicago Press is notified and no fee is charged for access. Archiving, redistribution, or republication of this text on other terms, in any medium, requires the consent of the University of Chicago Press. (Footnotes and other references included in the book may have been removed from this online version of the text.)

Man vs. Morlock

David again, with some further thoughts on Mayer’s book excerpt.

For my seventh birthday, my mother loaded up the Chevy and hauled me and a group of friends down to the local theater to see the movie adaption of H.G. Wells' classic, The Time Machine, starring Rod Taylor.

In it, the lead character, playing H.G. Wells himself, invents a machine that allows him to travel to what he assumes will be a Utopian future. On arrival, however, he discovers to his horror that human society has devolved into two distinct forms – a comely race of pacific surface dwellers, and a ruling class of grotesque Morlocks who live in subterranean caverns.

While memory over such a long period of time fades, I distinctly remember going to the movie with no real expectations. It was to be just a typical kid’s movie outing – the movie itself almost didn’t matter. That it turned out to be something out of the norm is evidenced by the fact that, unlike almost any other movie from my young life, it still leaps vividly to mind today.

(Old Yeller, Uncle Walt’s cinematic knife in the emotional gut for all the kids of our generation, would be another.)

As the movie began, I remember being thrilled by the fantastical idea of time travel made “real” in the film. It was, therefore, with great anticipation that we popcorn-munching squids waited to see what Wells would find at the other side of his journey. It is an understatement to say that I was unprepared for what came next, and so was viscerally shocked and disturbed to my little core to learn that the surface dwellers, epitomized by the beatific innocence of the character played by Yvette Mimieux, were being used as meat by the Morlocks.

I was so powerfully affected by what then transpired in the theater, which had been transformed into a grim cavern of doom for me, that for most of my life I was literally repulsed by the sight of blueberries – solely because they reminded me of the gooey purple eyes of the Morlocks. Based on the number of calls my mother received from angry parents following the birthday gore fest, apparently I wasn’t alone.

Now, to be clear, the thing most shocking to my young self was not that the Morlocks fed on human flesh – okay, maybe a little. Rather it was that the humans went along willingly with the scheme, promptly assembling in an orderly manner when the Morlocks rang what was essentially the dinner bell, then proceeding into the nearest cavern for culling.

It just wasn’t natural! I mean, of course monsters are going to try to get a bite of tasty homo sapiens – it’s what monsters do – but said homo sapiens are supposed to resist out of a healthy sense of self-survival, which they didn’t do in The Time Machine.

With the passage of time and the corresponding gain of perspective, I am sure that Wells, an avowed socialist, meant for his book to be a comment on the relationship between the working masses and the dark overlords of capitalism. And in some sense, he got it right.

Where H.G. and I would disagree is the nature of the Morlock. After all, if the Morlocks were true capitalists, they would have no powers to force the masses to do their bidding, let alone order them to step into a line of their own demise. There is only one entity in the human construct that fits that description, and that is government. Whether conscripting teenagers for the trenches of World War I, or legislating the death penalty for being in possession of the “wrong” genes in WWII, or forcing businesses to drain away the job-creating lifeblood of capital in support of the bloated bureaucracy at all times, it is the government alone that should be called to account.

Can corporate leaders influence politicians and sway legislation in their favor? Of course, but so can NGOs and lobbyists from foreign countries looking to keep the valves wide open on American monetary and military aid. The problem is not, therefore, who influences government, or even why – but rather the fact that government policymaking is so malleable in the first place.

And if H.G. Wells thought the Morlocks were bad in his era, he’d be scrambling for cover if he could see how things stand today: the government’s share of GDP in his home country of Britain in 1895, the year his book was published, was 12.52%. In fiscal year 2010, it was 45.5%.

The situation is much the same the world over.

Here in the US, federal government spending in 1895 amounted to only 2.84% of GDP – today it is better than 25%. Throw in state and local government spending and the number again approaches 40%.

Look at the chart here, it’s what a thriving culture of Morlocks looks like.

As to where the money goes, in the latest edition of The Casey Report, out last night, Doug Casey goes through the US federal budget with a fairly fine-toothed comb and draws the only conclusion an honest observer can draw – the US government is bankrupt.

But would the Morlocks ever tell you the truth about the nation’s finances? Explaining as they do that they have squandered and degraded the legacy of free markets that were the foundation of the US economic miracle? Or that if something fundamental doesn’t change, you and your heirs for perpetuity will be little more than tax slaves for the Morlocks?

And not all the Morlocks are found in seats of government: today’s mainstream media is little more than a well-oiled Morlock PR machine. How else to explain that one of the frontrunners in the GOP presidential race, Ron Paul, is all but ignored in the saturated coverage of that race? That’s not the case with any other serious candidate, no matter how far down in the polling they may be – with the sole exception of the other libertarian-leaning candidate, Gary Johnson, who gets no coverage at all.

Yet, all a circus clown like Donald Trump has to do is open his mouth, something he is very good at, and he’s instantly surrounded by cameras and microphones.

It’s all about keeping the Morlocks in charge, no matter how despicable they may be. Case in point, Charles Rangel, despite being busted for tax cheating and other offenses, is still in Congress. And not only that, he’s still calling for a return to slavery in the form of a military draft, which he did again on December 7.

That the Morlocks are a separate species at this point can be seen in the commonly accepted practice of passing political power to the spouse of an incumbent should they die in office. Or passing office down to the next generation, even if the next generation is one tick off being a moronic psychopath capable of being duped into starting a war on the thinnest of pretexts, then laughing at the resulting death and destruction.

Another Morlock archetype can be seen in the person of Robert Kennedy Junior, the heroin-abusing scion of the Kennedy dynasty who, having cleaned up his act, smoothly stepped into the leather loafers and limousines favored by Morlocks everywhere. His credentials entitle him to effortlessly tap into the public trough for his personal bank account.

(As an aside, I made a quick attempt at doctoring the eyes of RFK Jr. in this photo the same way I did with Rangel, but I couldn’t make them seem nearly so lifeless, so gave up).

Then there’s former Senator and Governor John Corzine (now also former head of MF Global, but only because he blew the place up), whose testimony yesterday in front of Congress could be summed up as, “I know nothing!” While one can hope the tribe turns on him, as it recently did to Illinois Governor Rod Blagojevich for shedding unfavorable light on the cellar dwellers, it won’t surprise me in the slightest if he got a free pass. You know, professional courtesy and all that.

I could go on, but I see with a glance at the word count and the clock that I am once again abusing the privilege of our correspondence, so I will attempt to roll into a nearby parking space.

The simple reality is that, as is so well communicated by Milton Mayer, the gap between the humans and Morlocks has rarely been wider. Mayer’s gap can be seen wherever you look. While the evidence locker is filled to overflowing, I would mention just a couple of recent items, starting with the S. 1867 legislation allowing incarceration without trial and sanctions the act of rendition that would send non-convicted suspects to other nations (like Syria) explicitly to be tortured. And I would mention the $7 trillion given to the banks by the Fed at effectively zero interest in order for them to lend back the money to the Treasury at over 3%.

Outside of WWII, the global economy has never been more politicized, nor has the power of the Morlocks over the sheeple been more far reaching.  

And, again, not just here – were you aware that the new head of the European Central Bank, Mario Draghi, was formerly vice chairman and managing director of the Morlocks’ favored bag men, Goldman Sachs International?

Sure, many of us humans are upset by all this, but even so, when the Morlocks’ dinner bell rings on April 15, we will still dutifully line up all the same.

Regretfully, there’s no easy solution to the situation. The Morlocks' grip is just too tight, witnessed by a corruption of the legal system that allows laws to be so broadly rendered as to make almost everything short of breathing a crime. That is especially problematic given the wide adoption of the latest technology that allows them to monitor our every move.

Could some agency already have dropped a keystroke logger on my keyboard without me knowing it, allowing a Morlock in some faraway cave to monitor even what I am writing to you at this moment? You betcha.

While I am doing nothing today, or any day, that should result in my door being kicked in, that doesn’t mean that a year or so down the road these very same words won’t be fed back to me in a dark cell – just as happened to outspoken opponents of Nazism once the tipping point had been reached. Or to Joe Gordon, who this week was sentenced to almost three years in a Thai prison for criticizing Thailand’s king.

When you get right down to it, whether you call it Nazism, communism, fascism, monarchy or democracy, we’re talking about the same thing – a two-tiered society with one group, the Morlocks, in control of the political landscape. Per the GDP data referenced above, today that means directly managing a large share of the economy in addition to exerting control over virtually every other aspect of human activity.

A moment ago, I stated that there is no easy solution to the situation, and there isn’t. In fact, the more the Morlocks are exposed for the callous, self-serving creatures they are – which is the case today thanks to the unstoppable consequences of massive recent missteps – the more dangerous they become. When I say they are capable of any act, no matter how devastating to the rest of us, I am not exaggerating.

That, however, does not mean the situation is hopeless, at least on an individual level. Protecting yourself requires careful thought and perhaps a willingness to move outside of your personal comfort zone, but it can be done. Here are some ideas, most of which you will have heard before.

  1. Diversify internationally. For the time being, there is some protection to be gained by spreading your money across political jurisdictions. This is a topic that we discuss from time to time in our paid services, and which you can read more about at Of course, you need to do careful due diligence in order to connect with only the most reliable providers of your overseas bank, brokerage or gold storage accounts – but there are good people offering said services. Whatever you do, don’t try to hide these accounts – the Morlocks will sniff you out in a moment and drag you down into their cave. Besides, any overseas financial institution that would encourage undisclosed accounts will almost certainly be a fraud.
  2. Own precious metals. Don’t do it stupidly by just dumping a lot of money into gold and silver. There are many different ways to own precious metals at this point, each with its pros and cons, and it behooves you to take the time to learn the difference. Our own monthly BIG GOLD newsletter, along with its attendant special subscriber reports and online resources, is an inexpensive and comprehensive resource, especially if you are just getting started. As with all the Casey Research services, you can try it for three months with no risk or obligation.
  3.  Don’t stop learning. I recently had dinner with an executive of a large insurance company. Over the course of dinner, the conversation turned to the economy, during which he told me that he would never invest in his own company, or any in the insurance industry, because it is the most financially “structured” of all. Yet, even with that dim view, he has worked in the industry for almost two decades – and continues to do so to this day. The disconnect, in my mind, is that while he isn’t willing to risk his money in the company, he is willing to risk his income and retirement prospects by not looking for other opportunities.

    Fortunately, thanks to the Internet and "plug and play" e-commerce engines, anyone with enough passion can learn the skills to start a self-sustaining business. And thanks to the level of international interconnectivity, that business can probably be run from pretty much anywhere. Thus, should the Morlocks in your home country become overly aggressive, or even if your current business goes under due to the meddling, you’ll be able to cross a nearby border and still stay afloat financially. 

As to the darker potential for what lays ahead – the same sort of danger and madness experienced by the Germans in the era studied by Mayer – I am going to be optimistic and assume that that “can’t happen here.”

But knowing that it actually can, I will continue taking at least the basic steps of building a nest, and a nest egg, elsewhere. Especially because even if the current negative trends reverse and the buds of freedom once again blossom, I’ll still have enjoyed the rich experience of becoming part of a different culture, and in a wonderful corner of the world (why would you choose to build that nest in any place not wonderful?).

Meanwhile, having money spread around allows me to sleep considerably better at night… and that is priceless.

Whatever you do, don’t be complacent or a willing victim of the Morlocks – as Mayer’s excerpt makes so clear, the worst can sneak up on you, with extremely unhappy consequences.

Musical Interlude

I have a couple of songs to share that fulfill my penchant for dramatic flourishes, neither of which are of the head-banging sort that has offended the musical sensibilities of some of you dear readers in the past.

One of the songs is from “then” and one from “now” – but both have been taking turns jangling around in my brain all week. The “now” song is Paradise from Coldplay. It’s got almost 20 million views, so it obviously resonates with others and may with you as well.

The second, from “then”, is Come Undone by Duran Duran, in my view the best song they ever did – by far. I’m embarrassed to say that I probably listened to it 30 times over the last couple of days as I finished up The Casey Report, which was sent out yesterday afternoon. I’d be surprised if you don’t like it as well; give it a listen.

And finally, a bonus track – sent to me by Charles A. and eerily appropriate to what’s going on with the fiat currencies today. It’s The Pound is Falling by Paul McCartney. While the music doesn’t really float my boat, the words are great.

Friday Funnies


A little old lady answered a knock on the door one day, to be confronted by a well-dressed young man carrying a vacuum cleaner. 

"Good morning," said the young man. "If I could take a couple minutes of your time. I would like to demonstrate the very latest in high-powered vacuum cleaners–" 

"Go away!" said the old lady. ''I'm broke and haven't got any money!'' and she proceeded to close the door. 

Quick as a flash, the young man wedged his foot in the door and pushed it wide open... 
''Don't be too hasty!'' he said. ''Not until you have at least seen my demonstration…'' 

And  with that, he emptied a bucket of horse manure onto her hallway carpet. 

''Now, if this vacuum cleaner does not remove all traces of this horse manure from your carpet, Madam, I will personally eat the remainder.''

The old lady stepped back and said, ''Well, let me get you a fork, 'cause they cut off my electricity this morning."


A father says to his son, "You have learned almost everything I can teach you in business, but you have one more lesson to learn. Let's go out to the warehouse."

The father instructs his son to go up to the second story, open the big door and jump.

"Dad, if I jump I will get hurt. You've got to be kidding."

"Jump, Benny. I'll catch you. I'm your father."

After much hesitation, Benny jumps. His father steps out of the way and the boy is scraped up.

"Dammit, Dad, you said you would catch me!"

"Benny, that's your last lesson in business: don't trust nobody."

The Legend of Santa Claus

The following is the result of a scientific investigation into the Santa Claus legend.

There are about 2 billion children under 18 years old in the world. Santa doesn't appear to handle Muslim, Jewish, Hindu or Buddhist children, so this reduces his workload by a staggering 81%.

Taking the above reduction into account, this still leaves roughly 378 million children that Santa has to deal with. At an average (census) rate of 4.1 children per household, that's 92.19 million homes. One would presume that there is at least one good child in each home deserving of a visit from Santa!

Utilizing the different time zones, the rotation of the Earth and assuming he travels from east to west, Santa has 31 hours to complete his task. This equates to over 820 house visits per second. In less than the blink of an eye, Santa has to park the sleigh, jump down a chimney, fill the stockings, distribute the remaining gifts, drink the sherry, eat the mince pies, climb back up the chimney, jump back on to the sleigh and move on to the next household.

In the course of his 31 hours of work, Santa will consume 25,000 tons of food and half a million liters of sherry. Not only is this somewhat over the legal limit, but his judgment and enthusiasm will probably be a little stretched long before he has completed his task. If we allowed him a leisurely  1/1,000th of a second at each stop, he would need to travel at 650 miles per second, (3,000 time the speed of sound) to reach the next home in time to keep on schedule. These timings and calculations exclude the inevitable calls of nature inherent in such a binge, but does go some way to explain the legendary "slightly overweight" figure.

By comparison, the fastest man-made craft is the Ulysses space probe that can only manage a paltry 27.4 miles per second. Also, a conventional reindeer can run at 15 mph flat out. The pay load of the sleigh brings another interesting factor. Assuming each child receives nothing more than a medium-sized Lego set, weighing roughly 2 lbs, then the sleigh will need to begin its tour with a payload of 321,300 tons. If we allow that flying reindeer are 10 times more efficient than conventional reindeer who, on land can pull no more than 300 lbs, Santa would need 214,200 reindeer. This has a knock-on effect to the kerb weight, which now totals 353,430 tons (four times the weight of the QEII). Assuming the reindeer are tethered 4 abreast, Rudolph will be at least 62 miles in front of Santa, which poses a serious communications problem (especially when traveling beyond the speed of sound).

The size of the train apart, the dynamics of a vehicle four times the weight of the QEII landing on your roof at 650 miles per second whilst being driven by an inebriated fat slob dressed in a red frock, leaves a lot to be desired!

The investigation concluded that if Santa Claus does exist, he sure is one clever bugger!

That’s It for This Week!

Before signing off, I would like to correct something of an oversight in regards to our flagship newsletter, The Casey Report, the December edition of which was published last night.

Unlike many advisories, The Casey Report isn’t the output of some reasonably intelligent guy working alone at the kitchen table. The world is way too complex for that, in our opinion. As a consequence, each month an entire team of analysts work together to understand the big picture of what’s really going on in the global economy, and how to best position your portfolio to avoid the land mines on the way to making a solid return.

The oversight is that I just realized that we’ve never shared the names of The Casey Report research team before, so I will correct that here and now. The team who worked so hard on this month’s edition included…

  • Doug Casey, working out of Buenos Aires this month, wrote an important article, The Bankruptcy of America.
  • Bud Conrad, working out of California, put an incredible amount of work over a period of several weeks into his special feature The End of the Euro as We Know It (staying up almost all night twice, to my certain knowledge). Terry Coxon, also working out of California, along with our native-German speaking researcher Shannara Johnson, working out of Vermont, assisted with editing and additional analysis.
  • In Corzine’s Upside-Down Cake Terry Coxon picked apart the MF Global failure, and shared thoughts on how readers can mitigate the odds of losing money in a similar failure in the future.
  • The How to Invest and Speculator’s Corner features, where we evaluate the best ways to invest in light of the powerful trends in motion, included a team consisting of the senior editors and a lot of support and number crunching from the Vermont-based group of Olivier Garret, Alex Daley, Chris Wood and Dan Steinhart – and, from New York City, Aaron Bedrick. In addition to following up on our existing recommendations, this month we shared a simple strategy to hedge existing gold positions by playing a renewed downturn in the euro.
  • The Data Farm, an ongoing series of important data we watch for signs of shifts in the economy and markets, is an effort involving me, Vedran Vuk in Houston, and Alena Mikhan, who works out of Belarus.
  • Last but not least, our man in Washington, Donald Grove, monitors the latest developments on the political front, this month examining grumblings from within the Democrat party and pondering if Obama might be A One-Term President?

Naturally, as managing editor, I pitch in with the editing and overall direction of the monthly letter.

All of our services have teams dedicated to them – though not quite so large.

Our business model is unambiguous: we don’t make money by pumping stocks or trying to generate trading commissions – instead we are subscription fee-based, which means that either the subscribers get value well in excess of those fees or they can cancel at any time. And we always allow new subscribers to try a service for three months with a full money-back guarantee. If you aren’t a subscriber to The Casey Report and want to give it a try, do so now while the electronic “ink” is still wet on the latest edition. Here’s the link to learn more and get started with your 3-month trial right away.

And with that, I will sign off for the week by thanking you for reading and for being a subscriber to a Casey Research service.

Until next week, keep a sharp eye peeled for Morlocks!

David Galland
Managing Director
Casey Research