The Fed, the AIG Bailout, and the Rising Price of Lapdances

I've been getting a little worried lately. Maybe I've just been scared by too many paranoid youtube videos... but after hearing out some talk with a few poker buddies and reading some news websites and watching some youtube stuff, it seems to be leading to a couple conclusions. The good news is that we're all going to be millionaires. That's about where it stops.

This all started a couple days ago when I was going off to a buddy about Obama and why I registered to vote this year for the first time. He (my buddy, not Obama) admitted he never voted either. He's the same age as me... 27. But he said this year he was registering and he was going to write in Ron Paul. So we argued a little about how he was throwing away his vote and that Obama could change things like the world's perception of the USA, cure racial inequality, tax the rich and give to the poor, etc. etc. I felt like one of those guys who keeps on calling me asking for another donation.

Honestly, my arguments felt a little hollow even as I was saying them... the real reason I was dead set on voting for Obama in the first place is because it's the first time we'd be able to have something other than old-rich-whitey as President. But now that McCain nominated Palin, and given how old McCain is, there's a pretty good chance the McCain ticket would end up producing a female president which would cure gender inequality and send a loud message to a world that is stoning women in some places.

And as far as taxing the rich and giving to the poor... well, I grew up on welfare. My mom raised two kids and about half the time she was trying to juggle a crummy job at a grocery store bakery or a factory or at the elementary school as a substitute teacher while making just barely more than what she was paying in childcare... so I'm all about helping out the single mothers out there. But where is it written in the constitution that you should get penalized for being rich? Hell, my backers are all hedge-fund managers... they are specifically who Obama is going after. So why should I vote for that?

There is definitely an elitist argument, and yeah it is usually by people who reeeeeeeally liked Atlas Shrugged (I didn't, by the way), that maybe the people who are the best at accumulating resources are the same people who should be allocating them. I mean, Bill Gates, Warren Buffet, Oprah and Paris Hilton have done some cool things for the world! Maybe a two-class system isn't a bad thing, where everyone is either a millionaire or getting $35k a year in welfare checks.

Lets hope it wouldn't be such a bad thing, because it seems that is where we are headed. All this talk was going around about Ron Paul, so I started looking at some videos. And for years he's been like Chicken Little talking crazy talk about how we need to go back to the "gold standard". Up until a few years ago I didn't know what the gold standard was. I never took an economics class in college because it wasn't a required class... you could choose between that or something that sounded a hell of a lot more interesting and easier to get a good grade in. Every economics guru I ever saw on tv didn't exactly seem like a role model to me. I definitely hadn't given too much thought about why a dollar was worth a dollar. So if you don't know I'm going to save you the trouble of looking it up and give you the short version of how I understand it. And if you feel like just going down to the interesting part, click here for my prediction for the future or here for my advice.

The Short Version
See, it used to be that every dollar that was printed represented a little bit of gold. You could take your dollar to Fort Knox or wherever the government kept all the gold and you could get a little bit of gold and take it home to your family and your friends and show them your gold. Coins were made of actual silver, so you didn't even have to make the trip to the fort for silver... you could just melt it down.

But then last century before any of us were born, things got all crazy and the government setup the federal reserve and then actually made it illegal for awhile for people to have gold. And you had to give the government your gold for dollars instead of giving them dollars for gold. If you didn't, you were breaking the law and I guess you'd go to jail.

I always figured it must be the government printing up the money. But it's not. It's some quasi-private entity that isn't even a government agency called The Federal Reserve. They have a lot of power, are super secretive, and they pretty much run the show when it comes to the economics in our country.

These guys can and do print up all the money they want and every time they print a new dollar, since again these pieces of paper aren't based on anything tangible, the value of a dollar goes down. And now that we're in the digital age, they don't even have to print it anymore... it's all electronic and theoretical. It's like the whole system went crazy. The only reason we can convert a dollar into tangible things is because we'll work for them.

So the gold standard refers to linking the value of a dollar to actual gold. It wouldn't have to be the gold standard... it could be the oil standard, or the real estate standard where every dollar would actually entitle you to own a square foot of land somewhere in Alaska, or the olympic standard where you could turn in enough dollars and get front row tickets to a gymnastics event. Basically, any commodity would work... but whatever... gold standard ftw. People have been talking about going back to it for awhile, but probably the most recognizable is Ron Paul.

So all of this is going on during what is the weirdest week in Wall Street that I can remember. CNN has a big story on it called "The week that broke Wall Street". Yeah. The title doesn't exactly inspire confidence.

Anyway, you should read more about what's going on if you haven't. Watch some youtube videos... do a google of federal reserve or aig bailout. I'm going to go finish the article and maybe I'll stop being worried... maybe the scary title is just a trick to get me to read it and it's actually going to be good news. But I'm not optimistic and basically, it seems to me that we're headed into a hyper-inflation where it could come to the point that people simply won't take dollars for tangible things anymore and they're certainly not going to make your McDonald's hamburger or your Starbucks Latte for dollars that won't buy them anything. We won't be able to toke a poker dealer a dollar anymore... we'd have to figure something else to toke them. I don't know what would happen... but this is my prediction.

My Prediction for the Future
If the value of the dollar collapses, I predict all the companies would be forced to pay their employees in product and most people would leave their jobs and work at Wal*Mart. Wal*Mart would probably start building apartment complexes on top of the ground level, and most people would live in a Wal*Mart high-rise condo. And before long, Wal*Mart would build nightclubs and five-star chain restaurants and entertainment centers, so none of the people who lived at Wal*Mart would ever have to leave. And they'd start being called "Wallies".

Then Wallies would open a chain of private schools and they'd send their children to learn about Wal*Mart history, and to a lessor extent American History. And they could take World History as an elective. Wallies would all revere Sam Walton, who started the movement, the same we all revere George Washington and Thomas Jefferson and, well, Paul Revere. They would have their own constitution and hold free elections every sales quarter to determine their corporate leaders, and every year an aging but still graceful Miley Cyrus would win the election and lead the Wallies and they would enjoy prosperity for years.

Meanwhile, the same thing would be happening at Target. Except instead of being called Wallies, they all would be called "Targs". And Targs would hate Wallies.

At first their hatred could be explained away as just arrogance and general disdain. Targs would consider themselves quite a bit more stylish than Wallies, as well as better-educated because they would teach French as a required class every year in their private school. But overtime, this arrogance would lead to some altercations between the two clans, which would eventually lead to both corporations creating a private army and engaging in a long and bloody war.

The Wallies would win at first, because they would be much better armed. But the Targs would adapt and start sending in undercover soldiers to infiltrate the system. A young, brave, intelligent and good-looking checker in the electronics department would be chosen to be one such undercover soldier. He would fit a profile because his parents would have died in the war and he would be a quarter Japanese. He would pose as an exchange student from Sony.

Then, shortly after starting work in the electronics department at an enemy Wal*Mart store, the Targ would fall in love with a beautiful Wallie who would be the daughter of a store manager. She would fall in love with him too, even though she would figure out that he was a Targ, and not a Sony, when he couldn't touch his toes at morning exercises.

After several weeks of passionate love-making, the young beautiful Wallie would die in a tragic Targ terrorist act and the undercover Targ soldier would realize how senseless the war was. The girl's father would find out that the Targ was undercover and try to kill him, but the Targ would escape and would go home and make a documentary film and eventually lead his people to form a truce with the Wallies. Generations later, the Targs and the Wallies would be close allies and would be instrumental in deciding the outcome of World War III, which would also be known as the "Earth Corporate Wars".

My Advice
Here's some advice. Take it for what's it worth.

First, don't keep your money in dollars or large denomination casino chips (small denomination chips are probably ok since a poker chip is actually in a sense a physical commodity... if you don't buy it, go try buying a $1 Stardust chip on eBay). A dollar today buys you a third of the Canadian beers it used to in Montreal. And chips are directly tied to the currency of the country they are in... so if the dollar fails, your Bellagio flags aren't going to be worth a thousand times a redbird. And your savings account is going to be worth less than that.

And don't keep your money in stock, for that matter... Friday saw one of the highest gains in Wall Street history, but that doesn't make me want to go out and buy stock in insurance companies. Honestly, it makes me feel very very anxious. I suspect the reason the price of stock is going up so much is maybe because the value of the dollar is falling so much. Or maybe it's because the Fed is plugging leaks with bubblegum. I'll know more when I finish the CNN article, I guess. But the bottom line is if the dollar fails, a lot of companies are going to fail with it and stocks aren't going to be that great of a thing to be holding (except Wal*Mart stock).

So my advice is to keep your money in commodities and real estate. Silver seems to be a pretty good bet right now, as does gold, and oil, and first-edition copies of Slaughterhouse Five, or paintings by a really talented artist. If you can afford it, buy a bunch of land somewhere in the middle of nowhere far away from the ocean or a highway or a national border (like the Ozarks), and build a great big warehouse where you can keep all your barrels of honey, and boxes of twinkies, and cases and cases of alcohol and wine. And don't forget a few cartons of cigs... even if you don't smoke. I ran out yesterday night and my car wouldn't start so I walked a mile for a camel. I guarantee that if Y2K ever happens again, you'll be able to trade cigarettes for whatever you want.

Second, I really think domain names will continue to prove to be a good investment... they are like a hybrid of commodities and real estate. People think of them as different since there is theoretically an infinite number of domain names... but there's also theoretically an infinite amount of real estate in the universe. Interstellar real estate is at an all-time low right now... you can buy yourself a whole star for $60 online. Obviously, real estate in Manhattan is more valuable than real estate at the bottom of the Pacific or an acre on Betelgeuse 7. But premium virtual real estate is often just as valuable as premium real real estate. Poker.com sold many times for millions, and the last time it was sold for $33 million dollars.

Domain names are first-come first-serve, which means a LOT of good names are long gone. There are over a hundred million registered .coms. There are 676 two-letter .coms (e.g. LA.com, MO.com, UB.com). All taken. There are 17,576 three-letter .coms (e.g. ABC.com). All taken. There are 456,976 four-letter .coms. All taken... the last one was bought up last year for registration fee and now they go for a bare minimum of $15 on eBay, and usually much higher. But there are just shy of 12 million five-letter .com combinations and those are NOT all taken. Additionally, there are thousands of domains that expire every day because the current owner forgets or is otherwise unable to renew them. And there are lots of keyword combinations that come up all the time which make good Internet real estate. For example, this last week AIGBailout.com was still available and was registered on the 13th of September (three days before the announcement on the 16th) by some guy just calling himself "A L" of 666 Greenwhich Street right in the heart of New York. Other examples... TheAIGBailout.com, registered on the 16th, BailoutAIG.com, registered on the 17th. But Aig-Bailout.com is still available as I write this.

If you were so inclined, you could just watch the news and register buzzwords and keyword combinations as they happen. I wish I registered Bloggers.com the first time I ever heard the term "blog"... or OnlinePoker.com the first time I ever played online poker... or VoteForObama.com the first time I heard about him. Or especially BrandonCantu.com the first time I saw Brandon make a final table at the World Series (then some asshole cybersquatter wouldn't be trying to squeeze him for his own name). Incidentally, if you're reading this and DON'T have your own name, you should go get it. And if it's taken, register the .net AND the .org. But don't register someone else's name and try to sell it back to them for a thousand times what you paid for it. That's just an asshole thing to do. And you can get in legal trouble for violating cyber-squatting laws. But owning a dead guy's name like BenFranklin.com is probably just fine.

I really think it's a good idea to at least pick up a little bit of Internet real estate while it's still available at registration fees. For starters, just come up with a few good names for an online poker site and I'll bet a dollar that in ten years they'll be worth a lot more than they are now. And there are so many that are still available to just pick up. Oh look... the first one that came to my head... TokePoker.com. Available. (Not anymore).

Third, learn another language. Or even better yet, learn two. No matter what happens, being bilingual is definitely a marketable skill and will always make it easier to land a job. I can't imagine a scenario where it could be a negative. But if worse ever does come to worst and we go through another big depression, there's a good chance a lot of us will be working for foreign corporations who started up operations here in the US to take advantage of cheap labor and being bilingual could very well mean the difference between working the factory floor or running the factory. Besides, it helps to be able to know how to say "I'm all-in" in other languages if you ever go on the foreign circuit. Incidentally, in Danish you say "Suit Mean Pick" and in Dutch you just say "Hidey Ho!"

Learning a different is a lot easier if you're a poker player. If you're a normal joe schmoe trapped in a 9-5 job, you have to rely on audiotapes like Rosetta Stone and nightclasses. Or maybe you're lucky enough to date a bilingual girl who can teach you some things... that's probably the best option. But as a poker player, you have the freedom and the excuse to actually go to foreign countries and live there for awhile. Macau has recently opened up for poker... one of my LA buddies, Johnny Monnette, is in China right now for who knows how long taking all those poor rich whales who decide to try high-stakes NL holdem instead of losing their fortunes at Pai Gow or video slots. I imagine him living like a rockstar out there for a few months and coming back fluent in Mandarin. He did the same thing in Spain a few years ago when poker started getting more popular there.

Finally, my last bit of advice is to prepare yourself. Not just for a bad economy but for bad things in general. I grew up Mormon... I'm actually still a Mormon, although obviously a Jack Mormon since they've made it pretty clear that playing poker is considered a sin just like any other form of gambling. And they don't much approve of smoking, toking, drinking, or being in love with a stripper, either.

I don't subscribe to everything they pushed down our throats in seminary, but I definitely believe in a lot of their stuff. Like emergency preparedness. They tell all their members to store up a three-day emergency supply of food/water/gas/etc. It's not just a friendly suggestion... it's like a commandment. And it's a really good idea.

If the shit hits the fan, you don't want to be one of those poor saps who dies of dehydration because the water stops running. So instead of throwing out your empty gallons of milk, rinse 'em out real good and fill them with tapwater and fill up a closet. Take it a step further, even, and buy a tent and go camping a few times or take some wilderness survival classes from a younger version of Devo. Remember what a stud Richard Hatch was in Survivor when he was the only one who could fish and start a fire? If only Jean-Robert had been a boyscout...