Good-Bye, Ruby Tuesday

Nothing stirs up memories quite as much as music – a certain song or a certain band can take you back to a different time, place or part of your life. For Bill Bonner, that band is The Rolling Stones, and the year is 1965…

Today, we write about the difference between price and value…and about an amazing summer 40 years ago.

Forty years and two days ago, Lyndon Johnson opened a new phase of the war in Vietnam. Instead of observing, training, advising and protecting…U.S. soldiers were to go on the offensive. It was already nearly a half-century after Woodrow Wilson had put America into the empire business; still, the country was just getting the hang of it. But in a matter of months, there would be more than half a million U.S. troops in that steamy hellhole. Their mission was to protect Western democracy from the communist menace. That they were on a fools’ errand, sent by imbeciles and commanded by blockheads was apparent then, as now, to anyone who took a minute to think about it. But only a philosopher with a stone heart could do so; almost everyone else went along – believing what they had to believe.

People think the most preposterous things. But the most preposterous thing they think is that they think at all. We have come to that conclusion after much observation, reflection and experience. Practically every stance any man ever took can be traced not to his head…but down to his feet…to the circumstantial rocks and sand upon which he stands.

The Summer of 1965: America’s Ascent

When America was a humble republic, with neither the means nor the will to play a part on the world’s great stage, its leaders were content with minor, supporting roles. “Mind your own business,” was practically engraved on the nation’s currency. Then, when its economy became the world’s largest, in 1910, and its ambitions grew, it stepped out under the proscenium arch with the cautious confidence of a young Booth or Barrymore. It knew even then that it was destined for a long career before the limelight. So, it adjusted its ideas. It found that it had to “make the world safe for democracy.” Because democracy was what it had. For reasons that are still largely inexplicable, it decided that Germany, rather than England, represented a threat to democracy. As a matter of logical thinking, it made no sense. But thoughts are always subordinate to circumstance. Britain was in decline and ready to hand over the imperial baton to America. Germany, on the other hand, was an ascendant industrial power. It was Germany that had to be defeated in order for the U.S. imperium to rule the world.

In this instance, as in so many others, America may have miscalculated. In defeating Germany, she gave rise to another competitor – the Soviet Union. And by the summer of 1965, this new empire – with its comic creed and suicidal tendencies – had taken over the half the world. So it appeared to the empire builders in Washington that they couldn’t afford to lose another square meter to the red menace.

They did not know it, but communism had reached a peak. It was overpriced and overbought. A quarter of a century later, it would be history, probably whether a shot was fired or not.

If that were all that had happened in the summer of ’65, it would have passed in through these Daily Reckoning pages as just another warm spell of fraud and claptrap. But something important happened that year too.

The Summer of 1965: The Rolling Stones

Earlier in the year, Keith Richards, was staying in a motel in Clearwater, Florida, with a guitar and a tape recorder by his side. He was 21 years old. Having a hard time sleeping, perhaps jet lagged, he worked on a riff modeled after something by Chuck Berry.

The year before, The Stones had done their first tour of the United States. Unlike The Beatles, they were received poorly. Dean Martin mocked them. Ed Sullivan was cold and reserved. But their popularity was growing. In 1964, their manager, Andrew Loog Oldham, had practically locked Richards and Mick Jagger in an apartment in Chelsea. They had to write some songs, he told them. What they wrote was the tender, As Tears Go By.

Readers may wonder why we are writing about The Rolling Stones. We answer: first, because we have been thinking about the difference between price and value. We find the subject sticks in our brains, like a melody. We remember when “As Tears Go By,” came out. That too haunted us like a ghost – it was there when we went to bed. It was still there when we woke up in the morning. It was a sound track in the back of our brains. We never new exactly when we would hear it…or when it would be silent.

That is the way good music is. Whether it is popular or classical…it sticks with you. Somehow, without passing through the logical, word-processing, humbug-churning part of the brain, it goes into the mind and furnishes the sentiments. It has value -a value you can’t put a price on. You can hear music for nothing. In the summer of ’65, some of the best music ever produced by man came out. For some extraordinary reason, the world was flush with political claptrap for which it paid a high price, but high value popular music you could get for free. All summer long, the Stones’ new hit – “Satisfaction” – was on the radio.

We are not music critics. But we can’t help but notice that most of the music played by most of the world’s people most of the time is bosh. We do not know how it works; it does not appeal directly to the intellectual faculties. There is no rational way to judge it; still it seems as stupid and puerile as a Senate speech. The ideas, sentiments, and musical combinations themselves are worn out. They sound like humbug set to music. This true of all musical genres. You’re as likely to find it in high-brow opera houses of Paris as in the low dives of the Tennessee backwoods…in the avante garde, as in the traditional.

Against this backdrop of lame mediocrity in the early ’60s came an exceptional group of fresh and talented musicians; in the summer of 1965, they reached a kind of bull market peak. There was Bob Dylan with his “Like a Rolling Stone.” The Beatles came out with “Yesterday.” The Who produced “My Generation.” And the Beach Boys classic, “California Girls,” also came out that year.

Each had its own sound. Each left tunes in your mind that stayed for days…weeks…months – like an immunization against tetanus, some remained in the blood for years. Many are still there…40 years later…coursing through our vessels, pumping through the old heart valves, occasionally spraying up in our brains, too, like happy memories, for no apparent reasons. We recall when we first heard them. It was as if we had done more than merely listened to music. We thought we had lived through something special, something important. It was if we would never be the same, never able to go back to our work in quite the same way…or to look at things in the same way.

They say that great artists are tortured…that they feel pain more acutely and are able to express it more eloquently than most people. “My compositions,” said Schubert, “spring from my sorrow.” Beethoven’s genius was traced to Guileta Guicciardi. The Beach Boys had no shortage of California girls to provide inspiration and suffering. The Stones were no exception; they shared models and mistresses. They had their Ruby Tuesdays who could not be tamed. But they also had plenty of women “under my thumb.”

That was the nice thing about the Rolling Stones; they were able to turn the conventions around. They were raw, but still refined. They were tortured, but they were torturers, too. They could dig around in the mud of man’s eternal tragedy, but they could have fun doing it. They appeared to trashy, cheap, layabout drug addicts, but it they were imposters; they were far more than they appeared to be. Their music rested on the work of Berry, Muddy Waters and Bo Diddly, but they added some delightful nuance that the old rockers couldn’t manage. “When Blue Turns to Gray,” “I’m Still Sittin’ On a Fence,” as well as “Ruby Tuesday” were not just songs of disappointment and disillusion. They have a kind of elegant sweetness that surpass the genre.

In “Satisfaction,” Keith Richards began by borrowing from Marvin Gaye, but he worked on it and gave it more life. In a Los Angeles studio, he worked with a collaborator of Phil “Wall of Sound” Specter and the sound engineer David Haslinger. They managed to fill it out – and give it that distinct distortion that makes the opening of ‘Satisfaction’ sui generis.

By mid-summer, the song was a #1 hit in practically the entire world. Young American boys listened to it on their way to getting themselves killed in the rice paddies and jungles of Vietnam.

Some things have no value. Others have no price. A young man tends to focus on prices. But a middle aged man, sitting around in the French countryside, listening to old Rolling Stones tunes, in the summer of 2005, wonders more about value. He sees more life behind him than in front of him, like a man down to his last dollar wondering how to get the most of it.


Bill Bonner
The Daily Reckoning

July 15, 2005 — Ouzilly, France

What a delightful summer day…this ides of July…this mid-summer idyll…this day after Bastille Day…

Birds are singing in the trees, a gentle breeze stirs the leaves, the cat is lying on his back in the driveway, his legs sticking up as though he were dead…

We have 10 children with us…last night, the older boys took a small rifle and a flashlight out to the pond to hunt “ragondins,” otherwise known as nutria. What are they doing this morning? Climbing trees…splashing in the pond…chasing grasshoppers… playing on the farm equipment…

“It’s best not to look,” warned Elizabeth.

How we love this warm, sunny fin de bubble era…

When we continue to enjoy the sweet fantasy of getting rich without actually doing anything to deserve it! Last year, for example, the average American took more “equity” out of his house than he got in pay increases – a total of $700 billion. A house down the block sold for 10%, 20% -even 30% more than it did the year before. So, the guy figured his house was worth more too. Why not spend some of it? But what about the value of the house? And how is he going to pay it back?

It’s best not to look.

Ludwig von Mises once remarked that you could burn the dining room furniture and get passably warm. But you mustn’t mislead yourself about what you are doing. The next time you go to sit down you might wish you had gone out and chopped wood. At some point Americans are likely to regret having borrowed so much against their bedrooms and kitchen appliances…but that point may still be many months in the future.

*** “In some countries, such as Australia and the UK, prices have hit an affordability barrier relative to earned incomes and to rentals. But that is not yet true in the US, where affordability is even starting to experience some support from rising incomes,” our old friend, Martin Spring tells us.

“The residential property boom is almost certainly already over for Brits and Aussies. But Americans could continue to experience the heady joys of cheap-money-fuelled capital gains for another year or so.”

Oh ye great gods of hallucination and delusion! What tricks ye play on we poor mugs…

“Wealth creation,’ is the prevailing euphemistic American interpretation,” writes Dr. Kurt Richebächer. “According to reports, American households are amassing wealth in this way as never before, vastly outpacing their soaring debt growth. For us it is scandalous that policymakers and economists can propagate this nonsense without a single voice of protest… This unmistakably qualifies as ‘house-prince inflation’ not as ‘wealth creation.'”

The bank of Alan Greenspan lends money below the inflation rate…which sets in motion a boom in real estate.

Our houses go up in price so, mistaking it for an increase in value, we take some of it to spend. The additional spending creates the impression of a healthy, growing economy – which gives us confidence to borrow more. Our houses rise again…we borrow more again…and again…and again…until the imperial nation owes a total of $36.2 trillion…with an annual debt service bill of about $1.8 trillion.

We do not earn enough money to pay the $1.8 trillion, so we borrow it too! And now our debts rise on their own…until…finally, the “fin” of the bubble arrives. Will it end in a whimper or a bang? We don’t know. But we have no doubt that it will end.

Until then, we continue to enjoy this delicious delusion….

*** Gold is now well below our $425 buying target. Buy. And if it keeps going farther below our buying target, please forget we said anything.

*** A horse is a horse, of course…unless it’s a burger.

A New Zealand restaurant is offering a chargrilled horsemeat dish called, perhaps a bit morbidly, “Mr. Ed is Dead.” Although restaurant owner David Kerr has gotten quite a few abusive phone calls about the new addition to his menu, some customers can’t wait to try horsemeat.

Well, dear reader, it certainly gives new meaning to the phrase: “I’m so hungry I could eat a horse.”

*** “I don’t have time for breakfast,” Elizabeth explained this morning. “I’ve got to take the kids to their meeting with the Spanish exchange students…and Christine is coming to give French lessons to my sister’s children…then Maria and I are going into town to get our hair done…and then we’ve got to pick up Jennifer and Amber at the train station…and then Catherine and Edward have their tennis lesson…and we have to go to Poitiers to pick up Foucauld…and I’ve got to call the plumber because the hot water heater seems to be on the fritz…and, right now, we’re going riding!”

Ahh…a lazy, relaxed summer holiday. Just what we needed!

The Daily Reckoning