• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Before Header

  • About Us
  • Lexicon
  • Contact Us
  • Our Store
  • ↑
  • ↓
  • ←
  • →

Balloon Juice

Come for the politics, stay for the snark.

I’d try pessimism, but it probably wouldn’t work.

“Can i answer the question? No you can not!”

This blog will pay for itself.

Black Jesus loves a paper trail.

Republicans do not pay their debts.

Today’s GOP: why go just far enough when too far is right there?

Republicans are the party of chaos and catastrophe.

It’s easy to sit in safety and prescribe what other people should be doing.

“Jesus paying for the sins of everyone is an insult to those who paid for their own sins.”

Damn right I heard that as a threat.

You can’t attract Republican voters. You can only out organize them.

Our job is not to persuade republicans but to defeat them.

A lot of Dems talk about what the media tells them to talk about. Not helpful.

Following reporting rules is only for the little people, apparently.

That’s my take and I am available for criticism at this time.

Give the craziest people you know everything they want and hope they don’t ask for more? Great plan.

A consequence of cucumbers

No Justins, No Peace

Sadly, there is no cure for stupid.

Nancy smash is sick of your bullshit.

You don’t get to peddle hatred on saturday and offer condolences on sunday.

The GOP couldn’t organize an orgy in a whorehouse with a fist full of 50s.

Something needs to be done about our bogus SCOTUS.

Second rate reporter says what?

Mobile Menu

  • Winnable House Races
  • Donate with Venmo, Zelle & PayPal
  • Site Feedback
  • War in Ukraine
  • Submit Photos to On the Road
  • Politics
  • On The Road
  • Open Threads
  • Topics
  • Balloon Juice 2023 Pet Calendar (coming soon)
  • COVID-19 Coronavirus
  • Authors
  • About Us
  • Contact Us
  • Lexicon
  • Our Store
  • Politics
  • Open Threads
  • War in Ukraine
  • Garden Chats
  • On The Road
  • 2021-22 Fundraising!
You are here: Home / Economics / C.R.E.A.M. / What is step 2?

What is step 2?

by David Anderson|  November 6, 20158:33 pm| 22 Comments

This post is in: C.R.E.A.M., Republican Stupidity, I Can't Believe We're Losing to These People

FacebookTweetEmail

Via Paul Krugman an article in the Salt Lake City Tribune about a guy with a business model that the Underpants Gnomes look at as incomplete:

Under Jonathan Johnson’s leadership at Overstock.com, the company has socked away $10.9 million in gold and silver and has a three-month food supply for each employee, bracing for a financial crisis that the Republican gubernatorial candidate said is certain to come…
“We expect when there is a financial crisis, there will be a banking holiday,” Johnson, Overstock chairman of the board, told the group. “I don’t know if it will be two days or two weeks or two months. But we have $10 million in gold and silver in denominations small enough … that we can use it for payroll. We want to be able to keep our employees paid [and] safe and our site up and running.”

My wife is the Overstock user in the Mayhew household, but as I understand it, Overstock.com is a fairly typical business to consumer web portal that sells things to people and then ships orders from warehouses to people via either the US Postal Service or a number of private entities. An extremely large percentage of Overstock’s payments from customers are made via credit cards over the web.

Is that an accurate enough description of their business process?

If it is, how does having a Smaugian hoard help Overstock keep their site up and running in a bank holiday scenario?

A bank holiday would only happen if there is extreme doubt about the liquidity of the entire US banking system. It would come as all private short term (1 to 30 day) lending either comes to a halt or has credit card level interest rates attached to it. It would be a massive breakdown of social trust and every single entity that can grab cash is going to hold onto cash for as long as legally (and usually illegally) possible as the lawyers can fight later over contract breaches.

So in that scenario, who is actually going to go on Overstock.com and buy an expandable three piece luggage set?  Sure, Overstock might give their ISP four pounds of gold to keep their connection on as their bank account would be frozen, but their ISP’s bank account would be frozen so the four pounds of gold would be insufficient to keep the ISP’s lights on (which are probably going off shortly anyways as the natural gas power plant is shutting down as their supply is not being delivered unless the power plant can supply physical cash in unmarked, non-sequential twenties instead of a line of credit).

How does having a gold hoard for an online retailer actually help that retailer stay open when the rest of the social and commercial network is shutting down due to the lack of credit?

 

FacebookTweetEmail
Previous Post: « The Keystone Pipeline Is Dead. Thanks, President Obama!
Next Post: Friday Night Fights Open Thread: Aging White Men, Talking Smack »

Reader Interactions

22Comments

  1. 1.

    Gvg

    November 7, 2015 at 8:25 am

    Well I think they have to pay employees even if they can’t sell anything. They may also make a killing buying assets cheap if they are the only ones with liquidity and other companies scramble. their employees can make rent when others can’t.
    If the crisis ends, they will come out ahead compared to others.

    Now is this likely to happen? I don’t think so. They are crackpots. They are probably losing money in opportunity cost due to hoarding instead of investing. They will lose money when they finally sell off the gold they way all the gullible metal hoarders do. If they really were logical about their fears, they would support slightly higher taxes and more regulation monitoring of the financial system plus some anti too big to fail divide up too big companies legislation.

    I have bought from them too, but not lately. They used to have good bargains on not the latest things. Lately they haven’t had anything I wanted at a good price. Either out, or too high a price. I didn’t think anything of it as sales are always kind of luck. Now I wonder if their opinions are inflating their costs preventing their prices from being competative which would eventually put them out of business.

  2. 2.

    Another Holocene Human

    November 7, 2015 at 8:50 am

    @Gvg: Yeah, that’s it. Your first paragraph is the fantasy. There are clearly fapping to it hard. The notion of a liquidity crisis at this point is laughable.

    And you know what? WE ACTUALLY FUCKING HAD ONE IN 2008-2010. Did owning gggooooooolllld make a godt-damnedt difference? Uh, not so much, and gold had been so frothy it actually dipped in value and then danced around some more. Even a shithaid like Dubya wasn’t suicidal enough to destroy the good old American dollar and the Democrats shore nuff weren’t playing either.

  3. 3.

    Enhanced Voting Techniques

    November 7, 2015 at 8:59 am

    So Overstock’s investors are cool on Johnson sitting on $10 million in something that can be easily stolen. I know the Mormons are convinced the rest of the society is going to come and attack them so Is this some kind of Mormon thing?

  4. 4.

    Starfish

    November 7, 2015 at 9:10 am

    The Overstock CEO has always been looney. Oh wait. The chairman of the board is a different looney person at Overstock.

    Maybe there is something in the water there?

  5. 5.

    Gvg

    November 7, 2015 at 9:17 am

    It reads like a book scenario. I actually enjoy that but I don’t think they are coming true. We are raising an 8 year old and have been allowing him to watch a lot of fun stuff but then we ask, was that real or fiction……
    gold bug is an old reoccurring fixation.

  6. 6.

    Starfish

    November 7, 2015 at 9:27 am

    Also, isn’t having some sort of future food supply, a very Mormon thing to do? It is.

  7. 7.

    Matt McIrvin

    November 7, 2015 at 9:30 am

    Maybe they’re not interested in staying in business as Overstock.com. Maybe they’re interested in causing the collapse of civilization and then emerging from their bunker afterward to rule the world.

    You know, like the Manson family. What’s their position on the White Album?

  8. 8.

    Matt McIrvin

    November 7, 2015 at 9:33 am

    In all seriousness, I assume the guy is a Mormon; hoarding supplies for some future Tribulation is a thing they do. It can be actually helpful if the stuff is useful in more mundane emergencies, but hoarding precious metals, not so much.

  9. 9.

    Bobbo

    November 7, 2015 at 10:21 am

    Come on, everyone knows you prepare for a banking crisis by keeping cash in your mattress.

  10. 10.

    pseudonymous in nc

    November 7, 2015 at 10:50 am

    As others have said, this is the corporate equivalent of yer orthodox Mormon having a basement full of dried beans and groats, though having all that GOOOOOOLD at an offsite storage facility seems like it would be less handy come the tribulation.

  11. 11.

    Ken T

    November 7, 2015 at 10:55 am

    This is the thing I’ve always found funny about goldbugs. They’re out there busily preparing for the collapse of society; without ever seeming to be able to wrap their brains around what “collapse of society” actually means. They are all convinced that everything will just keep on operating exactly as before, except for the single fact that paper money will disappear. Which leaves them, with their hoards of gold (or even better, Bitcoins) ruling, because they are the only people with “money”. The reality of course, is that if society collapses, the entire concept of “money” goes along with it. If I have some spare food, and you want some, you’re going to have to offer me something I need in trade. And that’s not going to be shiny metal.

  12. 12.

    BretH

    November 7, 2015 at 11:23 am

    @Ken T:

    My thoughts exactly. I know folks who believe a money crash is imminent (well, it’s been imminent for the 9 years or so that I have been aware of them. Any day now…)

    In any case they advise having gold and other precious metals as a fall back when paper money is worthless.

    My response is: who are you going to sell your gold to? How can your few kruggerands compete against the really big players who can presumably set whatever price they want?

    Furthermore since money and economy are just concepts, it seems more likely to me that some creative restructuring would take place – a “reset” of sorts- to try and preserve as much of the current system as possible.

  13. 13.

    Tripod

    November 7, 2015 at 11:33 am

    How are they going to ship this crap? Is he keeping a fleet of trucks in storage?

    This is just a con. Somebody is looting the company, and framing it in such a way to keep the employees from heading to the doors, and providing a delusional fig leaf for not paying taxes.

  14. 14.

    Dave

    November 7, 2015 at 2:08 pm

    Who the hell is going to take gold as payment? I don’t trust anyone to hand me a nugget of “gold” and assume it’s real. It could be painted lead for all I know. Unless you have weights and measures and a Shit load of other tests to do you don’t know what you’re getting. People that believe gold is intrinsically valuable are out of their fucking minds. Gold is no more valuable than any other metal as payment.

  15. 15.

    Duane

    November 7, 2015 at 2:41 pm

    This is a perfect example why the extremists are so dangerous to our country and the world.

    They want a collapse to happen.

  16. 16.

    Diana

    November 7, 2015 at 4:34 pm

    @Tripod: this

  17. 17.

    The Other Chuck

    November 7, 2015 at 5:39 pm

    How does questing wingnut logic shed light on anything? The guy is planning for black helicopters and you’re attempting to counter with reason?

  18. 18.

    Ken

    November 7, 2015 at 5:42 pm

    @Ken T: Sort of like the Left Behind series, then. In one book there’s a nuclear war, and one of the main characters stops to buy a new car and haggle over the price as the mushroom cloud rises. This is of course after all the world’s children have vanished, which also caused no noticeable changes in anyone’s behavior.

  19. 19.

    Greg

    November 8, 2015 at 10:57 am

    I will accept gold as a paycheck when my local liquor store starts accepting gold in payment for vodka.

  20. 20.

    BruceJ

    November 8, 2015 at 11:26 am

    Well I think they have to pay employees even if they can’t sell anything. They may also make a killing buying assets cheap if they are the only ones with liquidity and other companies scramble. their employees can make rent when others can’t.
    If the crisis ends, they will come out ahead compared to others.

    Here’s the thing, though…Overstock.com, as their name implies, buys odd lots of stuff other companies cannot sell at a considerable discount, so that they can sell it at a lesser discount. When the world’s financial system falls to the ground and dies, I don’t see how they’re going to be able to do any of that, because they’re dependent on an intricate web of electronic communications and physical transportation that simply is not going to be happening. Customers cannot send gold through a website.

    Frankly this sounds more like a scheme the Woot monkey Monte would come up with, much to Mortimer’s amusement.

  21. 21.

    Edward G. Talbot

    November 9, 2015 at 11:06 am

    I’ve had this argument with goldbugs before. @KenT has the right of it. And if the kind of breakdown they’re talking about happens, lead is going to be the most valuable commodity.

  22. 22.

    Ian

    November 9, 2015 at 12:40 pm

    @Ken T: Well, shiny metals that are actually useful could be a passable barter currency. A good ingot of steel, say. But gold is a mystery. [Granted it has plenty of industrial uses today, but those aren’t the sort of things likely to keep going strong post-apocalypse.]

Comments are closed.

Primary Sidebar

Recent Comments

  • Baud on Late Night Open Thread: Unspooling Unschooling (Jun 4, 2023 @ 5:53am)
  • NotMax on Late Night Open Thread: Unspooling Unschooling (Jun 4, 2023 @ 5:51am)
  • raven on Late Night Open Thread: Unspooling Unschooling (Jun 4, 2023 @ 5:48am)
  • The Dark Avenger on Late Night Open Thread: Unspooling Unschooling (Jun 4, 2023 @ 5:41am)
  • Rusty on Late Night Open Thread: Unspooling Unschooling (Jun 4, 2023 @ 5:36am)

Balloon Juice Meetups!

All Meetups
Seattle Meetup on Sat 5/13 at 5pm!

🎈Keep Balloon Juice Ad Free

Become a Balloon Juice Patreon
Donate with Venmo, Zelle or PayPal

Fundraising 2023-24

Wis*Dems Supreme Court + SD-8

Balloon Juice Posts

View by Topic
View by Author
View by Month & Year
View by Past Author

Featuring

Medium Cool
Artists in Our Midst
Authors in Our Midst
We All Need A Little Kindness
Classified Documents: A Primer
State & Local Elections Discussion

Calling All Jackals

Site Feedback
Nominate a Rotating Tag
Submit Photos to On the Road
Balloon Juice Mailing List Signup
Balloon Juice Anniversary (All Links)
Balloon Juice Anniversary (All Posts)

Twitter / Spoutible

Balloon Juice (Spoutible)
WaterGirl (Spoutible)
TaMara (Spoutible)
John Cole
DougJ (aka NYT Pitchbot)
Betty Cracker
Tom Levenson
TaMara
David Anderson
Major Major Major Major
ActualCitizensUnited

Join the Fight!

Join the Fight Signup Form
All Join the Fight Posts

Balloon Juice Events

5/14  The Apocalypse
5/20  Home Away from Home
5/29  We’re Back, Baby
7/21  Merging!

Balloon Juice for Ukraine

Donate

Site Footer

Come for the politics, stay for the snark.

  • Facebook
  • RSS
  • Twitter
  • YouTube
  • Comment Policy
  • Our Authors
  • Blogroll
  • Our Artists
  • Privacy Policy

Copyright © 2023 Dev Balloon Juice · All Rights Reserved · Powered by BizBudding Inc

Share this ArticleLike this article? Email it to a friend!

Email sent!