Oh, joy! The stock market is up! Everything is rosey!
In 'A Connecticut Yankee in King Arthur's Court,' the journeying Yankee encounters a man from a distant land who brags that everyone in his kingdom is rich because everyone is paid double what they are in the Yankee's. When the Yankee asks about PRICES, he finds that everything is MORE than twice as expensive. He tries explaining the fallacy in the logic to the man, but the complexities of it are well beyond the numbskull's grasp:
"Oh, great Scott, isn't it possible to get such a simple thing through your head? Now look here -- let me illustrate. We pay four cents for a woman's stuff gown, you pay 8.4.0, which is four mills more than DOUBLE. What do you allow a laboring woman who works on a farm?"
"Two mills a day."
"Very good; we allow but half as much; we pay her only a tenth of a cent a day; and --"
"Again ye're conf --"
"Wait! Now, you see, the thing is very simple; this time you'll understand it. For instance, it takes your woman 42 days to earn her gown, at 2 mills a day -- 7 weeks' work; but ours earns hers in forty days -- two days SHORT of 7 weeks. Your woman has a gown, and her whole seven weeks wages are gone; ours has a gown, and two days' wages left, to buy something else with. There -- NOW you understand it!"
He looked -- well, he merely looked dubious, it's the most I can say; so did the others. I waited -- to let the thing work. Dowley spoke at last -- and betrayed the fact that he actually hadn't gotten away from his rooted and grounded superstitions yet. He said, with a trifle of hesitancy:
"But -- but -- ye cannot fail to grant that two mills a day is better than one."
Shucks! Well, of course, I hated to give it up. So I chanced another flyer:
"Let us suppose a case. Suppose one of your journeymen goes out and buys the following articles:
"1 pound of salt; 1 dozen eggs; 1 dozen pints of beer; 1 bushel of wheat; 1 tow-linen suit; 5 pounds of beef; 5 pounds of mutton.
"The lot will cost him 32 cents. It takes him 32 working days to earn the money -- 5 weeks and 2 days. Let him come to us and work 32 days at HALF the wages; he can buy all those things for a shade under 14 1/2 cents; they will cost him a shade under 29 days' work, and he will have about half a week's wages over. Carry it through the year; he would save nearly a week's wages every two months, YOUR man nothing; thus saving five or six weeks' wages in a year, your man not a cent. NOW I reckon you understand that 'high wages' and 'low wages' are phrases that don't mean anything in the world until you find out which of them will BUY the most!"
It was a crusher.
But, alas! it didn't crush. No, I had to give it up. What those people valued was HIGH WAGES; it didn't seem to be a matter of any consequence to them whether the high wages would buy anything or not. They stood for "protection," and swore by it, which was reasonable enough, because interested parties had gulled them into the notion that it was protection which had created their high wages. I proved to them that in a quarter of a century their wages had advanced but 30 per cent., while the cost of living had gone up 100; and that with us, in a shorter time, wages had advanced 40 per cent. while the cost of living had gone steadily down. But it didn't do any good. Nothing could unseat their strange beliefs.
Well, I was smarting under a sense of defeat. Undeserved defeat, but what of that? That didn't soften the smart any. And to think of the circumstances! the first statesman of the age, the capablest man, the best-informed man in the entire world, the loftiest uncrowned head that had moved through the clouds of any political firmament for centuries, sitting here apparently defeated in argument by an ignorant country blacksmith! And I could see that those others were sorry for me -- which made me blush till I could smell my whiskers scorching. Put yourself in my place; feel as mean as I did, as ashamed as I felt -- wouldn't YOU have struck below the belt to get even? Yes, you would; it is simply human nature. Well, that is what I did. I am not trying to justify it; I'm only saying that I was mad, and ANYBODY would have done it.
http://www.literature.org/authors/twain-mark/connecticut/chapter-33.html
Twain's book was intended to be COMEDY, btw. When I read it as a kid, oh, how this chapter made me laugh! Today, though, note the article below. It's obviously real life, too.
Currencies are crashing, but the stock market is up! Clearly, everything is good! "It's been very beneficial," they say!
Hah.
See? The stupidity of it all makes me laugh even now.
Worst Currency Lifts South African Exporters
By Robert Brand and Stephen Gunnion - Dec 29, 2011 3:08 AM ET
Bloomberg.com
The world’s biggest major-currency decline is benefiting South Africa’s largest companies as export earnings in dollars rise and commodity producers from AngloGold Ashanti Ltd. (ANG) to Sasol Ltd. (SOL) beat peers in the stock market.
The rand has fallen 19 percent this year to trade at 8.30 per dollar, the biggest slump among the 12 most-traded currencies tracked by Bloomberg, as Europe’s sovereign debt crisis led to a selloff in riskier assets. It may retreat 3.7 percent to 8.50 per dollar by the end of the first quarter, according to the median estimate of 25 analysts surveyed by Bloomberg.
South Africa’s Reserve Bank let the rand sink 15 percent against the dollar in the past four months after the currency’s advance to a four-year high in April led Trade & Industry Minister Rob Davies to say it was “overvalued’ and ‘‘debilitating’’ for manufacturers. Gold producer AngloGold Ashanti gained 8.3 percent since Sept. 1 as the rand’s drop increased the local-currency value of gold. Sasol shares rose to a 40 percent premium to the FTSE 350 Oil & Gas Producers (F3OILG) index.
‘‘It’s been very beneficial for these types of companies, like Sasol, where the rand oil price is the big driver,” Greg Katzenellenbogen, a director of Sanlam Private Investments in Johannesburg, which manages $7.5 billion, said in a Dec. 14 phone interview. “For shareholders, certainly from an earnings point of view, it can lessen the pain that a weaker currency brings in other aspects of life, such as higher inflation.”
Full article: http://www.bloomberg.com/news/2011-12-28/worst-currency-boosts-south-african-exporters-as-inflation-slows-economy.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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