Dear Reader,
John F. Kennedy is known for his famous speeches and quotes, but my favorite piece has to be his Harvard admission application essay. One can’t even call it an essay… rather, it’s a paragraph. Here it is:
The reasons that I have for wanting to go to Harvard are several, I feel that Harvard can give me a better background and a better liberal education than any other university. I have always wanted to go there, as I have felt that it is not just another college, but is a university with something definite to offer. Then to[?], I would like to go to the same college as my father. To be a 'Harvard man' is an enviable distinction, and one that I sincerely hope I shall attain.
There’s no fancy speech-writing here and no over-idealized vision of the world. It’s so simple and honest that it’s almost bad. Many pundits have commented that Kennedy would never have been accepted by today’s admissions team. My question is, “Why not?” What’s so wrong with his essay? Kennedy states that Harvard has a distinction unlike any other college, and it can offer him the best education. Furthermore, his father attended the school and the experience obviously worked for him.
What’s wrong with the honest truth? Imagine this application to a college:
My dream is to have a steady, good-paying job so that I can provide for my own family one day. Your college offers me the best opportunity to achieve this goal.
In my opinion, colleges get it wrong before a student even starts classes. Every entrance essay has to be filled with some sort of high-minded idealism. Either one has to write about working for a charity over the summer or a desire to change the world. The better the twist one can spin on these common themes, the higher the chance of acceptance. Yet this is the complete opposite of the real world.
First of all, one doesn’t need to be an idealist. When a young kid applies for a first job at an auto mechanic shop, does anyone ask him to write an essay? What about someone who is training to be a plumber? Does anyone ask would-be plumbers to write an essay on the goodwill that will surely arise from a plumbing career? Of course not… but they could. The young auto mechanic could dazzle an admissions department with promises to fix cars for the poor, and the plumber could offer pro bono work for the impoverished.
Second, admissions essays make liars and hypocrites of almost all graduates. After graduation, few students actually carry out their promises from those essays. I see many college graduates in the world making a decent living on the 9-to-5 schedule. I see very few of the “saints” and “angels” one would expect from their admissions essays.
Actually, the hypocrisy starts much earlier than at a real-world job. As soon as school begins, the students aren’t hunkering down for classes and searching for local charities – they’re busy perfecting their keg stands and pickup lines for the four-year party ahead.
Third, the entrance essays are almost always misguided. After all, most 18-year-old kids are clueless about the world. The entrance essays will favor some sort of big government intervention or redistribution. I don’t know about every reader’s high-school education, but if it was anything like mine, then FDR saved us from the Great Depression and the words “free market” might as well have been a foreign language. And of course, every U.S. president was a hero in history class, and every huge government program was “progress.”
Lastly, the current admissions process often rewards the wrong people. There are two types who benefit most from these idealized essays: the true idealists – a very small minority; and those who are the most full of it. The students who can best lie about their future altruistic plans or about changing the world often receive the most prestigious scholarships and acceptances.
In my opinion, this attitude is unfortunately at the heart of our political process – and the exact same folks are rewarded there as well. A few idealists rise to the top, but for the most part it is the biggest liars who get the most votes. The voters aren’t much better either. In our personal lives, most of us aren’t altruistic do-gooders.. Even those who volunteer at charities give only a few hours per week; and even the most generous among us often give less than 5% of their income.
Yet bring up universal health care, the Third World, or even unemployment and suddenly every armchair Mother Teresa offers an opinion about helping others.
The college admissions essay should be either transformed or completely eliminated. Reward students for honesty. There’s nothing wrong with simply desiring a good career and a decent living. In some ways, there’s a lot of irony in Kennedy’s admissions essay. He honestly lays out his reason for attending Harvard. There’s no idealism, no grand thoughts of shaping the world, and yet he became the president of the United States – so much for those college essays predicting a student’s future.
Next, we have an article from Alena Mikhan on Chinese demand for gold. In comparison to other countries around the world, China almost holds no gold reserves, but that could change very soon.
By Alena Mikhan
In broad strokes, today’s investment world seems to be divided into two large groups – gold optimists who expect the metal price to keep ascending, and skeptics concerned about a near end to the gold bull market. In this brief overview we present another reason why the former group may be closer to the truth – Chinese demand.
Look at the top gold-holding countries in the table below:
| Rank | Country | Tonnes | Percent of total reserves |
| 1 | US | 8,133.5 | 73.8% |
| 2 | Germany | 3,401.0 | 69.8% |
| 3 | IMF | 2,814.0 | n/a |
| 4 | Italy | 2,451.8 | 68.0% |
| 5 | France | 2,435.4 | 64.8% |
| 6 | China | 1.054.1 | 1.6% |
| 7 | Switzerland | 1.040.1 | 17.4% |
Source: World Gold Council’s World Official Gold Holdings, March 2011
China’s gold holdings aren’t the largest by volume, but they stand out when compared to its percent of total reserves – they amount to only 1.6% (around $55 billion at current prices) of the country’s total reserve assets of $3 trillion.
There seems to be a lot of room to grow. Recently, opinions of Chinese economists and advisers started emerging, suggesting that the country’s central bank should increase its gold reserves as a hedge against the falling values of other currencies. In the annual report by the People’s Bank of China, their own analysts expressed an interest in expanding the country’s gold reserves. In brief, there seems to be a growing weight of opinion among Chinese decision-makers to add to the country’s official gold holdings. This process is already taking place – but as an unstated current in the gold market, so as not to impact prices significantly. There is a precedent for this, if you recall: In April 2009, Chinese officials announced increased reserves, but the purchases had been done in the preceding years in what we would characterize as “stealth mode.”
Official demand is only part of the story. What we believe will change the picture is the fact that China’s appetite for gold has been increasing by 14% a year on average since the market deregulation that took place in 2001. If this average pace is preserved, China will be consuming more than 1,000 tonnes yearly by 2015. Have a look at the trends for gold in China:
(Click on image to enlarge)
There are plans to further liberalize the gold market, according to the In Gold We Trust report: “[W]ith numerous banks granted access to the Shanghai Gold Exchange[, t]his could facilitate the purchase of gold for millions of Chinese bank customers.” (p. 51) Taking into consideration the Chinese savings ratio of 35%, a growing middle class with more disposable income, high inflation, and an overheated property market, there seems little doubt that the flow into gold will continue, and may well increase.
The interest in gold savings deposits for example is enormous. Industrial and Commercial Bank of China introduced this form of savings product in December 2010, and since then 1.5 million accounts have already been opened. Last year the World Gold Council expected the Chinese gold demand to double by 2020. Now the organisation believes that it could double sooner than that. (In Gold We Trust, p.59)
2011 may well be the first time that China surpasses India as the world’s largest gold consumer. This has clear and huge implications for investors; and that’s why we continue focusing on gold as a central feature of our investment strategy.
[If China goes big for gold, you can be sure that BIG GOLD will keep ahead of developments, helping its readers select the likeliest winners to invest in. A ninety-day trial subscription is risk-free: check it out today.]
Swiss Parliament to Discuss Gold Franc (MarketWatch)
The Swiss are considering the creation of a gold franc as a parallel currency to the prevailing fiat franc. The article makes a good point: It’s hard to argue against the initiative. What could it really hurt? The franc has seen gains in the past two years, but largely due to its safe haven status. In some ways, the Swiss central bank reminds me of the Fed. It has kept extremely low rates, and only a historical reputation for safety keeps both currencies from sliding from their current positions.
Kitco Moves Into Creditor Protection (The Vancouver Sun)
Faced with tax claims of more than $300 million from Revenu Quebec, embattled Montreal-based gold trader Kitco Metals Inc. now is officially in creditor protection, until July 27.
Superior Court Judge Mark Schrager this week granted the application by the company and its monitor, RSM Richter.
It's now spared from any legal proceeding until it submits an offer to creditors, the largest of which is Revenu Quebec, which has outstanding assessments against it of $227 million and $85 million.
Office & Professional Employees International Union (OPEIU website)
Want to send a thinly veiled threat to your boss? Just e-mail him the Office & Professional Employees International Union link. If there’s a single auto factory in town, maybe a union makes some sense. However, the argument seems hard to make for an office environment. I have several friends who are unhappy in their current office jobs. Are they forming a union? No, they’re looking for a better job. OPEIU makes me chuckle. Come on. Is this really necessary?
That’s it for today. Thank you for reading and subscribing to Casey Daily Dispatch.
Vedran Vuk
Casey Daily Dispatch Editor