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Gold, Schmold! It’s Mattresses That Will Appreciate

By Rick Ackerman Posted on December 2, 2011, 5:01 am EST Last Updated December 1, 2011, 6:02 am EST

[Ever consider stuffing money in your mattress to guard against a banking collapse? Here’s a guest editorial from our friend Erich Simon that suggests you might be better off taking your nest egg and buying…a bunch of mattresses. We’re not sure whether Erich’s point is being made tongue-in-cheek, but we are convinced, after an exchange of several e-mails, that he is a true connoisseur of bedding and accessories.  RA]

I just shelled out $2,400 for a traditional, coil-spring twin XL mattress set. Apparently I am not alone with mattress horror stories. Is the new mattress worth $2,400? I don’t know, but it’s got a 10-year warranty. Only problem with that is a $2,400 replacement mattress in ten years will be a smidgen of what I just received.  Adjusted for Net Present Value and the ongoing bleed of “quality metric,” probably a lot less, so for all intents and purposes my purchase will have depreciated down to sub-zero. Of course, if I were buying the hedonic of a new computer ten years out I would no doubt improve on existing “capacity.”

A mattress is a better barometer than a computer or a traditional store of value, including gold. Mattresses consume scarce resources like cotton and petroleum. Mattresses are something everybody needs, and they wear out and have to be replaced. Mattresses are not purely “frivolous tangibles” and speak to the Means of Production (MOP) in our factoried society. They are price-pointed to exhaustion on the demand side. Labor costs, like everything else, while in the short term can fall from layoffs, will only continue to rise as increases in the minimum wage are passed through the pipeline.

Acquiring 20/20 economic vantage starts by ranking each of the millions of products and services on a “necessity-luxury” scale and regularly updating the ratings to reflect changing social conditions, such as diminishing scarce resources due to over-crowding. For example, “fishing” might be a necessity to supply food, whereas artwork, a luxury. Artistry is likely to be a lost profession in any overcrowded Brave New World. Factor society’s remaining credible MOP, and all of this speaks to the collapse of cultural diversity and transition into monoculture (the birth of global Empire states, wherein the military society is the penultimate monoculture). Add to this Technological Advance and you could gauge price-arbitrage opportunities across the gamut of products and services. You could also anticipate prices for store-of-value assets like gold, based on overall supply as well as the economic future of society.

High-End Only

The reason I finally went high-end on a mattress was my fear of being left behind, and my knowledge that mattresses are hollowed out junk – toxic, even — and unless you pay up, you’ll never find anything decent in this day and age. And in a year’s time, the thing will already be ragged and sagging, and when you finally get reimbursed via warranty the replacement will be priced comparatively but of little quality and substance. And that’s if the manufacturer or dealership hasn’t closed their doors in bankruptcy, such as happened to the Lemoyne Sleeper Mattress Company, a stalwart out of Harrisburg, PA. At this rate, “quality” anything will be reserved for the upper tenth of 1%, not mere 1%-ers, and a mattress like the one I’ve got will cost $10,000.

This speaks to the dynamic at play and provides insight into the grinding poverty and collapse of money that are attributable to overpopulation and ultra-competitiveness for the remaining goods of substance. As for gold, Fed manipulation always keeps the gold price second, and lagging, the appreciation in prices of necessities and unbridled money printing.

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  • gary leibowitz December 4, 2011, 8:44 pm

    I can’t understand how the Republican Party gained control of all branches of Government when they have a field of clowns vying for the presidential nominee?

    Why do they insist upon using Murdoch as their spokesman? Surely explaining how unions, the lazy poor, and whinning middle class is the problem isn’t going to win elections. Let’s not forget the 10,000 pound elephant in the form of huge tax cuts for the very wealthy.

    I just don’t get it!

  • mava December 4, 2011, 8:41 pm

    Mercurious,

    LOL, and YES!!!

    F. Beard,

    I used to understand you points in a certain way, may-be too presumptuously. I don’t know where you stand for sure. I used to take you in a way that the government should be shackled by the paper money no one wants to accept, and rendered powerless, denied the use of real money, thus “allowed” to exist and yet, forced to be literally nothing. I am not sure this is your plan.

    Why don’t you say exactly why you think government should be restricted to use “inexpensive fiat” only?

    • F. Beard December 5, 2011, 3:36 am

      Why don’t you say exactly why you think government should be restricted to use “inexpensive fiat” only? mava

      Because government money is backed by force; taxes are required to be paid in government money. Government money needs no other backing.

  • Mercurious December 4, 2011, 5:36 pm

    As always, I’m late to this party. Two things you might want to know, or recall if you’ve forgotten them: 1) Jacob used a stone for a pillow and his name is still remembered [see above] and 2) a good futon just gets better over time. I’ve had two in about 18 years and jump out of bed every morning, ready to face the world. I walk upright unaided. Another distinct advantage is that, due to how it conforms to your body, I could tell if another man had been in bed with my wife…if she was that kind of a woman and if I had a wife.

  • F. Beard December 4, 2011, 3:50 am

    Look, constitution was already prohibiting paper money issued by the state, and bills of credit. mava

    Inexpensive fiat is the ONLY ethical money form for government money. That said, purely private money supplies (for the payment of private debts only) should be allowed to preclude the “stealth inflation tax”.

  • mava December 3, 2011, 9:04 pm

    Oh, LOL… I just finished posting the above, and went off to read some news. Here is what I stumbled upon. Tell me if I wasn’t obviously correct in saying that the majority is stupid and lazy.
    ===============================
    http://news.yahoo.com/blogs/ticket/republicans-being-taught-talk-occupy-wall-street-133707949.html
    ===============================
    Frank Luntz, a Republican strategist and one of the nation’s foremost experts on crafting the perfect political message teaches Republicans how to talk to the people (and I think he is absolutely right – mava):

    1. Don’t say ‘capitalism.’

    “I’m trying to get that word removed and we’re replacing it with either ‘economic freedom’ or ‘free market,’ ” Luntz said. “The public . . . still prefers capitalism to socialism, but they think capitalism is immoral. And if we’re seen as defenders of quote, Wall Street, end quote, we’ve got a problem.”

    2. Don’t say that the government ‘taxes the rich.’ Instead, tell them that the government ‘takes from the rich.’

    “If you talk about raising taxes on the rich,” the public responds favorably, Luntz cautioned. But “if you talk about government taking the money from hardworking Americans, the public says no. Taxing, the public will say yes.”

    3. Republicans should forget about winning the battle over the ‘middle class.’ Call them ‘hardworking taxpayers.’

    “They cannot win if the fight is on hardworking taxpayers. We can say we defend the ‘middle class’ and the public will say, I’m not sure about that. But defending ‘hardworking taxpayers’ and Republicans have the advantage.”

    4. Don’t talk about ‘jobs.’ Talk about ‘careers.’

    “Everyone in this room talks about ‘jobs,'” Luntz said. “Watch this.”

    He then asked everyone to raise their hand if they want a “job.” Few hands went up. Then he asked who wants a “career.” Almost every hand was raised.

    “So why are we talking about jobs?”

    5. Don’t say ‘government spending.’ Call it ‘waste.’

    “It’s not about ‘government spending.’ It’s about ‘waste.’ That’s what makes people angry.”

    6. Don’t ever say you’re willing to ‘compromise.’

    “If you talk about ‘compromise,’ they’ll say you’re selling out. Your side doesn’t want you to ‘compromise.’ What you use in that to replace it with is ‘cooperation.’ It means the same thing. But cooperation means you stick to your principles but still get the job done. Compromise says that you’re selling out those principles.”

    7. The three most important words you can say to an Occupier: ‘I get it.’

    “First off, here are three words for you all: ‘I get it.’ . . . ‘I get that you’re angry. I get that you’ve seen inequality. I get that you want to fix the system.”

    Then, he instructed, offer Republican solutions to the problem.

    8. Out: ‘Entrepreneur.’ In: ‘Job creator.’

    Use the phrases “small business owners” and “job creators” instead of “entrepreneurs” and “innovators.”

    9. Don’t ever ask anyone to ‘sacrifice.’

    “There isn’t an American today in November of 2011 who doesn’t think they’ve already sacrificed. If you tell them you want them to ‘sacrifice,’ they’re going to be be pretty angry at you. You talk about how ‘we’re all in this together.’ We either succeed together or we fail together.”

    10. Always blame Washington.

    Tell them, “You shouldn’t be occupying Wall Street, you should be occupying Washington. You should occupy the White House because it’s the policies over the past few years that have created this problem.”

    BONUS:

    Don’t say ‘bonus!’

    Luntz advised that if they give their employees an income boost during the holiday season, they should never refer to it as a “bonus.”

    “If you give out a bonus at a time of financial hardship, you’re going to make people angry. It’s ‘pay for performance.'”

    ==============================

    This would be so funny if it wasn’t so true.

  • mava December 3, 2011, 8:50 pm

    F.Beard,

    Yes, they can not afford good quality. Why not? Because the government has taken their purchasing power through paper money, and spent it.

    But, I doubt anything will be done to fix it. Because the problem is, the people are just too stupid to stay whole.

    This was already given to them, by the founding fathers. But no sooner the founding fathers dies, than the people established Federal Reserve. You see?

    You can give your child whatever, but if he is too stupid to know what he has, and too lazy to even read about what he has in a shortest of books you left for him, then there is no way you can insure he’ll be ok.

    We are working against the nature here. That nature says the fool and the lazy must be separated from their money, and they will, whether it will be by socialism or capitalism. Unlike capitalism, the socialism will simply insure that this separation lasts for several generations, while capitalism is willing to turn the fate around as soon as there any change.

    But, I do want your bailout. I wish it does happen. Except, I don’t want the universal one, I want only the debtors to be forgiven. (This is because I have already decided that this is what will happen, and have aligned myself appropriately).

    The majority always gets what it wants. The majority is lazy and stupid. They are in debts. The want a bailout. The minority are savers. They say if there is a bailout, then it needs to be the universal one.

    But!

    If universal bailout does happen, then the debtors will be less wealthy than the creditors again, after the bailout! This simply shifts their debts into positive numbers, but does not equalize them with the savers.

    This would be honest. But the stupid and lazy majority is not honest. What they would like is something that would wipe off the history of them being stupid and lazy for years, and make it as if they have been always been prudent. Majority always gets what it wants.

    So, this is why I expect a non-universal bailout. It may be called a universal bailout, but the reality will undoubtedly (to me) show that it is non-universal.

    We will see if I am right or wrong.

    As for leverage restrictions on the bank… Come on… Are you kidding me? You are going to give a helmet to the stupid. Ha-ha-ha. You think that would save the stupid? Nope, it never does.

    Why did the people suffered from over-leveraged banks?
    -The ignore the constitution
    -They trust paper money
    -They are thieves, they want others to pay for them,
    and so they enable the government to take
    the property of their neigbors, which in the end
    government uses against them too!
    -They are too lazy to read something useful,
    while they lie that they are too busy.
    -They all watch TV brainwashing, and pay for it.
    -They should have never allowed the government
    to dilute their money, by not keeping any fiat in
    their hands.

    But, for above mentioned reasons they did. So, now you enable some rule that supposedly would protect them? Nope. They will remain stupid and lazy, and they will give the government whatever powers to rob the neighbor, and they will remain ignorant of what they should do to protect themselves.

    Leverage, as exercised today was the name of the game, tomorrow it will be something else. You always be able to defraud the foolish and the dishonest, because they will help you do it.

    -For the foolish, you will tell them a story.
    -For the dishonest you will promise them what they did not earned.

    No regulation will ever work.

    • F. Beard December 3, 2011, 9:29 pm

      This was already given to them, by the founding fathers. mava

      Wrong. Alexander Hamilton stabbed the US in the back by promoting a national debt. That made the US the usury collecting agent for the rich instead of a government for all the people.

    • mava December 4, 2011, 2:50 am

      Wrong. We didn’t have to follow the traitor. Jefferson had already told us everything we needed to know. You are pointing at the earliest example of American people making a wrong choice even when supplied with superior information.

      You are basically confirming that there can be no helping those who just don’t care to know. Hamilton et all, then the long chain of traitors including Lincoln and FDR. In every case, all those tyrants would be completely helpless if we weren’t stupid and dishonest, i.e. if we never cared to believe in magic or to steal from others. We would simply ignore the them. But, due to our nature we can’t.

      A regulation will not help to replace the human nature. Because a regulation has to prohibit a particular action, not the bad outcome. Look, constitution was already prohibiting paper money issued by the state, and bills of credit. That is regulation, don’t you think?

      And how was it dealt with? Simple, it was ignored, because some of the people wanted to steal, and others were to dim to see it through. So, what would make any other regulation work?

  • F. Beard December 3, 2011, 6:54 pm

    The decline in quality is not because of overpopulation and scarce resources but because of scarce money. Companies have to cut corners because their customers are broke and can’t afford quality.

    And the scarce money is a result of people having been driven into onerous debt via what is essentially a government backed/enforced counterfeiting cartel.

    Steve Keen has recently advocated a universal bailout, including savers, that would fix everyone from the bottom up and leverage restrictions on the banks to prevent the problem from occurring again. Here’s a link: http://www.guardian.co.uk/business/economics-blog/2011/nov/20/recession-sovereign-private-debt-recovery

  • Steady Eddie December 3, 2011, 4:52 pm

    and flip over your mattress every six months!

  • Steady Eddie December 3, 2011, 4:49 pm

    Just sleep on a bed of hay with a blanket over it. Toughen up!

  • rickj December 3, 2011, 7:14 am

    Cam; Fed is lending to Europe only to save their own banks’ credit default swaps. Derivative total value is a geometric function. No system can provide the protections derivatives pretend to give. Banks will not give up this huge money maker (theirs)/disaster (ours) until it is taken away from them by whom? Fraud has never been legal in USA but can fraud be successfully prosecuted? If so, why is it not being done?
    It would be far more cost effective and stimulative, to have simply mailed Americans cheques totalling $15 trillion over several years than to try and bail out fraudulent enterprise, and that might have helped the citizenry and also banks that were banks in the old sense, that is actually lenders of credit and takers of deposits. But the repeal of Glass Steagal together with a lack of basic securities enforcement created too big a monster, one that did not need the American people to be a continuing success story. The controllers of the money know no nationality.
    There is no effort being made to stimulate the domestic economy. Saw Kissinger explaining in a rare moment of truth, that globalization would provide a more equitable distribution of goods but that some citizens in some countries would actually lose out in the process.
    Welcome to Loserville.

  • Les December 3, 2011, 6:39 am

    Yeah, but I can get a used mattress cheap, there’s no discount on used gold.

    • Robert December 3, 2011, 6:01 pm

      Wow…

      Does that little tidbit not demonstrate irrefutable evidence that price stability need not be a function of beauracratic policy making…. ?

      There should be an “APPLAUSE” sign flashing over Les’ most basic, and succinct, reflection of uncorruptable reality.

  • gary leibowitz December 3, 2011, 3:29 am

    Like I have stated many times here, the EU and China slowdown will kill earnings. No way inflation hits when we all sink together. The irony of it all is that as we have started to enjoy some signs of economic traction the rest of the world is sinking like a stone.

    This time around the FED , IMF, World Bank, will be unable to pull another rabbit out of its hat.

    Interesting to see if the market ignores these very public estimate reductions for the coming quarter and decides to bid the market up anyway.

    Live and learn. I would have thought the market reaction would have been immediate and dramatic given the hype and good cheer from some economic data. I suspect if it hold up next week, then we are sure to see a continued rally nearing the end of the year. It would also be a great time to bet the crash scenario again right after Christmas.

    Here is an article just posted from Reuters:

    NEW YORK (Reuters) – Earnings season is just over a month away, but the early signals are not comforting.

    Companies cutting forecasts outpace those raising estimates by the greatest ratio in 10 years, and some sectors, such as materials, have seen a dramatic fall in expectations for the soon-to-be ended fourth quarter, according to Thomson Reuters data.

    It is a stark reminder that even as U.S. economic data has improved in recent weeks, the euro zone debt crisis and concerns about slowing growth in China still cast a long shadow.

    Estimates for fourth-quarter S&P earnings growth have tumbled over the past two months as global macroeconomic headwinds prompted analysts to slash forecasts.

    The S&P is now seen posting earnings growth of 10 percent in the fourth quarter, down from a forecast for 15 percent growth on October 3.

    • Cam Fitzgerald December 3, 2011, 4:04 am

      Is that the whole article Gary? And you fell for it? No numbers, no data, no comparisons, no quotes…….it all adds up to “no content”. Thanks for posting it but that is one of the most worthless articles I have read in a long time. I do not base my projections or estimates on that kind of drivel from the press that usually amounts to no more than turkey stuffing on a slow day.

      You must realize by now….some news reporters are idiots.

    • gary leibowitz December 3, 2011, 4:28 am

      http://finance.yahoo.com/news/analysis-earnings-outlook-may-deteriorating-232908720.html

      Front page of finance.yahoo

      It’s ligit. Sorry but Reuters does not make a habit of getting its sources wrong. Not on this type of easily verifiable data. Not on economic data. It makes sense since I was touting the very same thing (lol). In fact it has to be right since i am always right.

      Seriously, a dramatic revision like that will be a great catalyst for a dramatic crash. It fits my time table. Well, sort of. I had hoped this type of news would wait till after Christmas. Now it makes it harder to believe we rally till then. But the human psyche clings to hope and denial till stark reality is shown. Hoping we follow that pattern.

  • david casciano December 2, 2011, 9:51 pm

    Waste of time discussion.Stick to more far reaching topics.

  • Tom December 2, 2011, 9:09 pm

    I bought a queen (for the guest room)and a king tempurpedic type mattress from Overstock for $400 and $500 two years ago and sleep soundly and no back ache. Store your gold, gold mining shares, canned tuna, and cases of toilet paper under the bed and you’ll be just fine.

    • Robert December 3, 2011, 2:09 am

      heheheh

      My wife came home from costco last night and I chewed her out for forgetting the bulk size package of TP…

      She said “we’re not out”, and I said “We would be 3 days after the crash….”

      TP is one thing you can never have too much of, that’s for sure. I might just fill the shed with it, and then set up a claymore perimeter around it. 🙂

  • Mercury December 2, 2011, 8:52 pm

    This is why I use futons. Cheap(if you shop smart), firm, portable, disposable.

  • C.C. December 2, 2011, 8:13 pm

    $2400…? C’mon good man, step that up a little… My brother paid $3k – for a Queen about 5 years ago, long about when the purchasing power of the $ was what – about 10%+ higher than it is today…?

    But you know what – you can tell just by sitting on it that it’s quality that will last. And it is built a section at a time, in the manner of an ‘artisan’. He tells me there’s nothing like it.

    If you’re by chance looking for something that will do the trick, at a much lower price however, try this out:

    Q31 HRF

    It is a type of high-density foam. Very heavy, very ‘springy’ and supportive. 8″ of that in a King will run you about $800. And if you have back/joint/support issues, it will likely eclipse any standard spring/foam/wool mattress out there, no matter the cost.

  • Robert December 2, 2011, 7:35 pm

    This is why I bought a sleep number bed… 🙂

    Regarding monoculture- fantastic point. Takes me back to my sermon about humanity becoming “terrestrial dolphins” a few weeks back.

    Frankly, if it happens, it’s not gonna last. Every episode of cultural homogenization has ended with a brilliant , explosive creative renaissance.

    Why? Because creativity and ambition are the only sentiments that pave the way forward.

    Monocultured, Terrestrial dolphinhood is a dead end. Some (many?) will hit this wall, and their lack of inbred drive will only allow them to hunker down and eventually die at the base of the wall…

    Others will climb; and some of the climbers will be dragged back down (oppressed) by those too fearful (or to lazy) to climb…

    But eventually, the non-climbers will all be dead, and the only ones left will be those who are climbers by nature, and they will endure, collaborate, and overcome that wall.

    Nature and time teach us that there is only one valid direction of sustained momentum…. forward.

    The barriers along the way are only what you make of them.

    Burning the last drop of oil will not be the end of humanity…. not by a long shot.

    • BDTR December 2, 2011, 10:15 pm

      That’s the kind of determined optimism, Robert, resulting a rested mind.

      Too bad that there’s not a federal regulation for adjustably inflatable mattress quality. Maybe we’d see a similarly transformed national psyche with some priority other than just being one up your neighbor, or, like Dylan said; …”bent out of shape from society’s pliers, cares not to come up any higher but rather get you down in the hole that he’s in.”

      Keep it up.

    • Robert December 3, 2011, 2:03 am

      BDTR-

      LOL

      Yeah- the improved rest factor with the sleep number bed certainly has to be a contributing factor. Thanks for the Friday laugh.

      The determined optimism comes from some simple facts about competition in general:

      1) Winners know how to win – they hate losing.
      2) Losers don’t know how to win – They may not like losing, but they have no grasp of how to achieve the alternative.
      3) Some losers LEARN how to win, and in so doing, they simultaneously learn how to hate losing.

      Now, the fundamental kicker to the entire thesis:

      4) You can NOT teach a winner how to lose, nor can you ever teach a winner to overcome his hatred of losing.

      To extend this logic to the point of common sense- the process of open minded learning is the process of winning. Open mindedness and absorbtive cognition are basic, inbred tools of our competitive being, but they require energy, and other components of our mindset stimulate us to conserve our energy – it’s part of our survival instinct.

      This is why (I beleive) that societal largesses has yielded a sloth and laziness in the average person- they are simply conserving energy in accordance with thier basic instinct. Societal decadence has enabled casual indifference.

      Our opportunity as a society is to concentrate on how to stimulate a general adherance to concept number 3 above, instead of concept number 4.

      Boy, now I’m tired again- 🙂

      BTW… I’m a level 40, how about you?

    • BDTR December 3, 2011, 1:05 pm

      On 20, …usually. Old softy, mostly.

  • Piperflyer December 2, 2011, 6:31 pm

    Don’t forget the “babyboomers”. As we age, all we’ll want to do, is to snooze all day long. The kids still use matresses for recreation (re-creation?), and us babyb’s need seperate bedrooms cuz we can’t stand our snoring spouse. He’s right, watch for a spike in matt.ress futures

    • mario cavolo December 2, 2011, 7:14 pm

      Hey piper, throughout my darling wife,s pregnancy her nose was stuffed and she snored like a goat, baby born
      , stuffed nose and snoring magically gone…plus a fabulous baby boy! Cheers

  • Rich December 2, 2011, 5:32 pm

    PPS The current chain saw choices were dull nicked burned chainsaws on EBay, a new $150 Poulan Pro, an American Company since 1912, owned by Electrolux/Husqvarna since the 1970s, at Walmart in stock with oil and gas, or a new $400 Husqvarna plus shipping from EBay.
    Not a difficult decision.
    For $20 there was a two-year warranty, like buying an option, we declined it.
    WMT targeting +38%…

  • Larry D December 2, 2011, 5:21 pm

    Just don’t cut off the tag – if you do, they won’t honor the warranty.

    I know this.

  • rootman December 2, 2011, 5:20 pm

    Bah.
    Local made generic firm mattress.. add “super” foams till it is right..
    Overpopulation is a myth..
    We have more of everything…
    http://rootman.dyndns.info/peak.html
    …than we can use.. especially idiots… like the author..

    • Carol December 2, 2011, 6:24 pm

      Agreed wholeheartedly.

      Take every person on earth at this time and put them in one area giving EACH person a 5 foot by 2 foot spot (10 sq feet). Now how much land would this take…..

      7 billion people times ten sq feet each and you would be want to fill up a whole typical COUNTY (not country county). This over population myth is used to push the eugenicist agenda forward that is all it is for.

    • Robert December 2, 2011, 7:44 pm

      Agree, Carol

      Overpopulation is the fallacy that disguises the fact that so many simply live irresponsibly within their immediate environment.

  • Richard Landwirth December 2, 2011, 5:19 pm

    I agree totally…most mattresses are junk…but for the price u paid-$2400–some of the better companies have excellent non-coil mattresses.

    I am lucky-I live near the Bloomingdale furniture outlet store. I bought a Kluft mattress for $1800-it retails for $7500-$8500-I had never heard of them before. They are excellent! I anticipate keeping this one for 20-30 yrs…no coils, of course.

  • Rich December 2, 2011, 5:17 pm

    Aloha All
    Interesting to note the deflation/inflation argument continues to simmer.
    I resolved it realizing some things inflate, some deflate, this changes according to supply and demand.
    This great essay reminded me my first marriage bed was a showroom deal for cash from a guy closing his store and wanting to dump inventory rather than move it. Price for a California King: $100. Good sleeping for decades. Still have it and others in storage.
    Another area relevant to “free” heat in Tahoe is dead wood for the Country Stove. For $10, a chain saw, splitter, used truck and the labour to move and stack it, we can heat our home cozy all winter, plus have a beautiful Christmas tree custom sized for the deck, where it lasts longer and the birds perch for the feeders.
    Sir John Templeton said he always saved half their income, from the time he and his wife made $145 a month in 1930, and bought secondhand everything at bargain prices for cash, including clothes, furniture and appliance, mostly at moving sales.
    By applying this principle of thrift, he became a billionaire.
    Regards All
    PS As the CNBC Million Dollar Challenge winds to an end today, we are still long and strong despite/because of all the pessimism puts, in agreement with Rick’s trades and a few others: AGQ, FAS, QLD, TNA and NZD/USD.
    As always, we let Trailing Stops get us in and out, We learned we cannot predict the markets, only follow them, and that is hard enough, because it requires independent observation and action…

  • Mike Schurr December 2, 2011, 4:26 pm

    I’m about to make all of you feel better. My wife is 100% focused on organic everything and about 6 months ago she dragged me to a small boutique mattress store in Doylestown, PA so I could test out the ultimate in organic bedding. Yes folks, there really is such a thing as and organic mattress. If you think $2000 is a lot of money for a traditional mattress…you aint seen nothin! I wont bore you with the details so I will cut right to the chase. For the last 6 months I have been sleeping on a $7000 piece of foam.

    I would tell you that I do sleep better but what keeps me up at night is the fact that I dropped $7000 on a f’in mattress. This is NOT a joke and if you dont believe me just Google “organic mattress.”

    I buy gold and lead my wife buys organic…a match made in heaven!

  • RichardB December 2, 2011, 3:44 pm

    I laughed at this article until I realized that my wife and I have four already and they are all queen sized! So apparently I am already accumulating.

    Is there any truth to the rumors that there is a cartel shorting mattresses to keep the prices down? With mattress inflation, we are all going to have to become midgets to get a decent nights sleep! I am praying for mattress deflation since I am 6 feet tall.

    • BDTR December 2, 2011, 4:01 pm

      Mattress inflation is quite literally the name of the game for me, sleeping as I do on a pressure adjustable Sleep Number bed.

      ZZZZZ’s have never been more easily achievable with manipulable inflation/deflation of a given night’s comfort zone. A kind of Fed bed.

      For those of you still relying on conventional support of a stuffed variety involving wads of cash or lumps of metal, creating comfort out of thin air is really where it’s at.

      Just ask Ben and da boyz.

    • Robert December 3, 2011, 3:34 am

      “Fed bed.

      For those of you still relying on conventional support of a stuffed variety involving wads of cash or lumps of metal, creating comfort out of thin air is really where it’s at.

      Just ask Ben and da boyz.”

      – I’m still laughing at this analogy….

  • martin schnell December 2, 2011, 3:26 pm

    Let’s face it, most folks don’t even have money to put in a mattress. For them, and really for most of us, the wages that we earn are the more important factor in how comfortable we are in life. (the income stream is what supports our lifestyle)

    I submit that we will also see a split in how people do, based on what they do, and that this will also change from the current situation.

    So if you are a cop or a firefighter … your days of nice wages and benefits are coming to an end. The cities can no longer afford you. You will soon be lucky to get a 0% increase.

    For university profs at public universities/colleges … same thing.

    For doctors and dentists, your union (restricted supply) has reached its limit. Rates will have to come down (talk about overpaid professions, these guys and gals are near the top), as insurers demand lower rates for business (as a public we have not seen the flow through benefits that technology has given these professions).

    Who will do well? Mechanics, plumbers etc. Those folks you can not do without.

    For the future, focus on how you can protect your income stream and help it to rise ahead of inflation.

    • gary leibowitz December 2, 2011, 4:29 pm

      The recent data shows wages went negative this last month. I guess employees decided to give everyone a turkey instead of cold cash this holiday. As for inflation I must repeat myself as I have for the last 5 years. Not only will inflation not be a problem, the ability to buy the deflated prics of cars and houses will be the bigger problem.

      Once China and the third world’s insatiable desire to follow the american way fades, so will commodity spikes. In fact there already seems to be a contraction in China at the exact moment the EU is imploding. This will affect American profits and do so almost immediately.

      The notion that credit can forever expand and replace cash is gone. The notion that wages will keep up with the commodity price spikes is also an illusion. Somethings got to give. It certainly will not be from the altruistic corporations in the form of higher wages and lower profits.

      The end is very near. An impulsive surge like the one we are having is not the start of a new bull market, but rather the final climax. The next time we have a topping-off the swoon should be dramatic.

    • mario cavolo December 2, 2011, 4:43 pm

      Hi Gary, compelled to jump in ….

      Once China and the third world’s insatiable desire to follow the american way fades…

      NOT going to happen my friend, China is just getting started on what will be the next 50 years of learning to enjoy inflationary consumerism.

      Ditto your comment about the end is near…nonsense….central banks are just getting started, you ain’t seen nothin’ yet. The world’s economy will go from 60T to 200T in the next forty years says the Pepsi CEO…that’s a lot of sodapop and diabetes, eh?

      Cheers, Mario

    • gary leibowitz December 2, 2011, 5:28 pm

      Mario,

      I agree that over time China will become a dominat capitalistic country (assuming politial change doesn’t happen). It will take years, decades to see this happen. In the short run they will succomb to excesses followed by contraction. All capitalist countries follow the same problem. They have over extended and their housing bubble must be reigned in. They are right now showing signs of contraction. The EU is beyond redemption anytime soon. It will takes years of pain and a deep recession before they emerge.

      As fo the notion that central banks can somehow ignite growth at the same time they are trying to entice bondholdes from not fleeing is a high wire act that will fail.

      You can’t just pretend the global debt crisis has gone away. You also can’t assume that the governments can just print money or create laws that wipe away this problem. There is only one way to cure the uncollectable debt. Allow the free markets to clear it out on its own. That will mean a global depression. There is no other way. The Fed and Uncle Ben, along with the IMF can come up with scheme after scheme but so far all its’s done is put a coating over the problem. It will not go away. Case in point: After 3 years of this debt implosion has anything actually gotten cleared up? Banks unresolved debt, government overspending and increased debt, consumers continual slip from the middle class, continual lost wages over inflation, huge population with negative equity. Sorry but govenments can’t cure these structural problems with the printing press. It hasn’t workde yet and it will only backfire with the excess money flowing into unproductive hands causing more speculation and excesses.

    • mario cavolo December 2, 2011, 6:19 pm

      Hey gary, mmm I was reading your reply thinking yea yea yea , until I got to your last statement which hit the Mark so well… Cheers, M

    • gary leibowitz December 2, 2011, 6:31 pm

      Mario,

      Speculation and excesses does not cause inflation. It will if it was placed into the mainstream. Its like the housing bubble. That excess did create inflation but it was contained in just real estate prices. The result of that type of inflation is alsways bust and deflation.
      You can’t print money without the need for that money. If lenders and borrowers don’t cooperate then that money isn’t going to cause sustainable inflation. The proof of this experiment is the last 3 years. Without external forces, third world countries, we would already be in a massive deflation cycle. All the pressure on inflation is due to commodity increases. Domestically we certainly didn’t increase our consumption over the last 3 years.

    • Cam Fitzgerald December 3, 2011, 1:58 am

      You forgot farmers Martin. As crazy as it sounds now, farming is one of the very best bets going forward. It is a goldmine of opportunity.

      Forget the office and sitting in front of a computer. The real money is already coming right off the land. Brokers and financiers might be little more than chauffeurs for the new rising class of farmers and 21st century land barons. Missing out on this trend is to miss one of the biggest shifts in society in decades.

      Who might have ever guessed that beekeeping would one day be better than banking? That time is here. Get ready.

  • mario cavolo December 2, 2011, 9:34 am

    Gold…mattresses…extra virgin olive oil…pork…a bowl of street noodles…other than U.S. housing…prices will continue to go up, the economy of the world will continue to expand in an inflationary manner. The Central Banks of the world are just getting warmed up and more than ever I agree with Ms. CEO of Pepsi that the world economy will grow from 60T to 210T over the next forty years…

    Everyone needs to understand that “price” and “value” are relative concepts which are distorting our sense of reality regarding as we compare the relative value of assets. The “price” of entry for a 20 minute emergency doctor visit at a major hospital in Shanghai is $5, in Los Angeles it is $1000. The “price” of a 7-Eleven store bottle of water or soda is $.20 vs $1, a car wash $2 vs. $10, a mattress $500 vs. $2500. Even the cost of a full kitchen in your new home… $1200 for mine in China vs. $12,000 for the same in the West. Yet department store items in China and the cost of an apt have now become priced EQUAL to western prices. So then, where to put one’s assets?

    Here’s the only thing we really do know if we did not believe it before; the central banks of the world will continue injecting capital into the system however and whenever they need to, to recapitalize and stabilize the financial system as best they can to avoid a collapse, and that they will certainly do. Because EVERY time the NEXT time there is a moment when some bank or country somewhere is on the financial edge to hell, they will cover it again, and hence Ms. Pepsi CEO’s 210 T economy forty years down the line…its a DONE DEAL folks and frankly, as a hard working entrepreneur struggling to provide for my family’s future, that is exactly what I hope they WILL do. I WANT them to come to the rescue, I WANT an expanding inflationary economy to sell my products and services into much much more than I want a collapse that ruins my life, my career, my company, causes my client orders to get cancelled, and destroys my ability to even earn a living or replace my job. And everyone who reads this ought to be intelligent enough to want the same thing. If only along the way, the rich, self-serving elite A&^%$*s politicians and bankers and lobbyists and everyone else associated with them at that level weren’t bleeding the system dry, lining their own greedy, corrupt pockets along the way with millions, we wouldn’t really have anything to complain about would we? So then we can conclude that just about every govt and its financial system is so systemically corrupted that they have ruined the financial system of the world; akin to saying their tank is out of gas, ok then they will refill the tank as needed. Say thank you when they do, because you do NOT want a collapse as anything that remotely resembles what could be called a start over solution. And while we’re at it, let’s be like bankers, create a reasonable looking reason to the banks to borrow as much as you can and then default on the loans sans a shred of guilt; its just business!

    Cheers, Mario

    • Robert December 2, 2011, 7:38 pm

      “other than U.S. housing…prices will continue to go up, the economy of the world will continue to expand in an inflationary manner. ”

      Mario- you could have just stopped right there and said ” Thank you- goodnight” …. you nailed it.

      But as a courtesy, I went ahead and read the rest of your post anyway 🙂

    • rmsimc December 2, 2011, 7:42 pm

      Mario,
      I couldn’t agree more! I am an industrialist by trade… a capitalist by nature… an austrian in economic theory… and finally, a patriot at heart. But, the central banks and pols can’t/won’t hit the “reset” button on this thing we call a financial system…

      AND THANK GOODNESS!!!

      This financial mess is at least seven decades in the making and has grown too interwoven into our very existence. Financial collapse would be a devastating hell for the entire planet… A generational “dark age.” Anyone who thinks otherwise is simply diluted (no offense “just the facts, ma’am”). The best we can hope for is a concerted effort by all govt’s to paper over the huge sucking sound that is emanating from the black hole that our post WW2 profligacy has created.

      As I posted here before… Do nothing, and its game over. The patient dies a horrible, prolonged death… Do something, such as print like hell, and we’ll run the risk of hyperinflation which may or may not eventually come. Inflation, in such a scenerio, is inevitable; but hyperinflation is not… as it requires a much, much higher velocity of money. Such a high V this decade seems a rather remote possibility given the poor state of credit quality the world over. (…and, yes Mario, that includes China).

      Yes, the financial system does need serious structural changes; an outright overhaul. But the changes that many of us smarter, more-engaged thinkers are proffering would most certainly kill us from the “g-forces” produced by allowing a collapse. Please understand that we need to undo this mess over time and with intent. Many well-intentioned people espouse many of the ideals I personally cherish when it comes to economics, finance and fractional banking (read Ron Paul)… But such immediate reactions would end in immediate ruin. Anacharchy and starvation would be the inevitable unintended consequence.

      So… I am hoping and praying that the world’s leaders finally hit this thing with a nuke (methaphorically speaking of course) once and for all …rather that this constant barrage of spitballs.

    • Cam Fitzgerald December 3, 2011, 1:32 am

      As I often like to say “first the pain, then the medicine”. When the public (and investors) beg for direct intervention we will get the solutions we need.

      Recall that during the Financial Crisis the actions taken came as a body blow to investors everywhere. Few caught on to what was happening. A whole new lexicon of terms entered our vocabulary and the ideas of monetization, bank bailouts, the QE’s etcetera have since been discussed and dissected into very small parts.

      But few were ready. The Fed, the government and a chorus of Central Bankers around the globe acted decisively before the public had even wrapped their head around the extent of Lehmans collapse. The problem was solved before we had real consequences. The actions came to be seen as premature, even a manipulation of public funds. Effigies hung everywhere for both the saviours and the saved.

      Seems many hated banks in unison. Confidence was lost and investors withdrew their heads and legs from markets like scared turtles. Yet here we are….finally asking for the same help that terrified so many just two short years ago.

      Acceptance has arrived.

      Over the past few months there has been an avalanche shift in thinking about the nature of Central Bank intervention. We can all recall that not so very long ago almost every post on any economics website or blog you care to mention pilloried the efforts of Ben Bernanke and the Fed.

      And yet here we are. It is like a new world. Ramping up the printing presses is being openly called for even by notable writers and economists. We now feel certain that Europe will fail if the ECB is not granted full authority by all the member states to monetize as it sees fit. Just like the Fed has done.

      We are finally prepared to accept that the price of recovery at this stage may indeed be inflation and acknowledge that sometimes going deeper into debt actually does bring the needed relief. So much for digging a deeper hole to get out of a hole. We are buying our way out of our troubles so much as we are praying that stimulants take and a real recovery emerges.

      Right? That is what we wanted all along. A recovery. And recoveries really do cost money as it turns out. Any business minded person should understand that.

      If I own an Orchard and a third of the trees start dying from a lack of water due to drought then how can it possibly improve my business by cutting off my water to save money on the bills?

      All of you get that. We do need stimulus. We will inflate.

      Perhaps we are even secret Krugmanites at heart (and especially when our own interests are in imminent danger). Indeed, almost nobody that I can think of wants to see a depression and widespread bank failures. Nobody wants to live in fading town inhabited only by crickets.

      The financial/economic reset idea that gets bandied about is simply not an option. A collapse would utterly destroy many businesses, families….even countries. We cannot allow it. The very idea that much of America might again be standing in bread and soup line-ups like they did during the Dirty Thirties is simply incomprehensible (and ridiculous).

      I think your post conveyed many of the concerns we all have Mario and I appreciated it. I have an absolute certainty too that Europe will ultimately decide to print and reflate. A decision is closer than you think and being positioned when that moment arrives will provide a terrific payoff.

      Betting on deflationary outcomes is the wrong bet now.

    • BDTR December 3, 2011, 2:59 pm

      What’s being bought with trillions of ever depreciating $’s, Cam, is a just a bit of time to keep the game going.

      There’s no sustainable solution therein, nor does there appear to be any inkling of systemic structural reform, or countertrend for the prevailing mindset to defraud.

      However tongue in cheek may be Mario’s last sentence, it accurately depicts an effect of failed confidence, as in suspending mortgage payments on underwater investments by those still quite capable of making them. Hey, it’s just business,… as usual, as what got us here.

      Think back to the dark, dirty and violent streets of Manhattan in the 70’s, French Connection days, for a sense of impact to addiction and social imbalance. That’s the near future that we’re buying with unsustainable debt, with eventual absolutes of economic and social disintegration governed by the expansive police state of empire in decline.

      Like every junkie at ‘well’ time, the delusion of ‘reasonable looking reason’ precludes the hard reality and discipline required to reform from the inevitable overdose in hyper terms. Weimar looms with all the attendant trimmings.

      Religion of any sort, propaganda, wishful thinking, willful delusion or chemical hallucination will never trump physics in this existence. You play, you pay, now or later, but in this instance, not much later and in full.

      This is our legacy to our children, and may providence help them.

  • mava December 2, 2011, 8:33 am

    This is something my friends point me at. My mattresses. I buy them from craigslist, used, dirt cheap. It doesn’t have to have a baby pee stains to be dirt cheap. Usually, it is the mistake of buyer, overestimating his productive ability and “settling up” right before getting laid-off.

    $100 for a quality mattress, and I will pick it up. Furniture is the same deal for me. I don’t pay new price, and my excuse is “I know what kind of crap you selling better than that”. Everything made today, unless it is as Erich says 1% of 1% is outright junk. Take the beautiful dinner table I got from CL. Oak, solid oak, and it has been holding for many years, and it will hold for many years more. Why should I pay thousands for junk when I can pay $50 plus a trip on Suburban for real thing?

    I find almost no reason to buy new. Cars? Please, take few years off and it’s half price. Now, if you know how to buy a car, you will get a reliable machine for a song. Why should a dealer get that and not me? (I never ever pay dealers, or sell to them).

    There is literally so much stuff in this country, that there is a zero need for stores. I always try to have someone else to pay my premiums. I build my computers too.

    Now, is this because I am cheap? I just paid $397 for my kitten’s x-ray. Why? Because in the clinic I go to, they are all MDVs with degrees from UCI, no less. But I don’t understand much in medicine. So, I guess my point is I won’t pay premium for what has nothing to do with premium quality. But I will and gladly do pay if the good or service is a premium quality, and where it matters. Life and death kind of stuff. Not cars, not mattress.(I actually prefer to sleep on a hard board, a habit, I guess.)
    Look, even BMW is not premium quality anymore, they give you plastic fantastic “design” and think you’re stupid.

    Be more prudent, folks. Just because there are a lot of jokers selling jokes, doesn’t mean that we must buy them.

    As far as inflation goes, however, Erich is right. Mattresses will hold better than cash in them. I should know. My first hyperinflation I had everything in cigarettes, and because of that I didn’t have to care for the new to old currency exchange limit. Smokes fared far better than many other so-called “assets”. Gold, on the other hand, will do better still, but only gold you can hold.


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