Shorting Government As Investment Strategy

The best reason I know for purchasing precious metals is that it is a way for ordinary citizens to short government.  There are not many sure bets in the world, that is as sure as they get.  The fact that someone is willing to lose so much $ to keep the price of gold low is icing on the cake.

If you have serious money and a devious mind, there are more routes available, e.g. Kyle Bass’s approach.

Bass’s approach is also exploiting the weaknesses of government and the structures it enables.  In that case, he finds new drugs that have fueled a rise in the stock price of the company that owns them, yet have poor patent protection for the drug.  He shorts that stock and files to invalidate the patent.  This works because the patent system makes it easy to patent drugs which do not qualify for patents and the pharma cartel is an insider scam levitating drugs and stock prices on mostly-unreliable evidence. The CDC and FDA, nominally independent regulatory agencies, are part of the cartel, kept there by constant movement of executives one to another.  Kyle’s suits to invalidate drug patents often win, and result in his shorts profiting when the stocks fall.   The process illuminates complicity between patent office and other parts of the federal bureaucracy and medical cartel.

So Blass has become an interesting sort of private law enforcement, judge and jury, executioner while working a combined arms attack on a power structure.  Very clever, innovative. The man is reining in the Big Pharma component of our medical cartel and making money to compensate for his effort.

To the extent that Big Pharma and the FDA slow their predations on US citizens, Kyle Blass is both a winner and is doing us all some good.  Otherwise, he is making some money, but tried, good effort.

That is a good story, my interpretation I just made up, I hope it is true.  But whatever the motives, it is certainly the effect.

I think there will be few parallels.  As a lever, the patent system has the big advantage that the documentation is all public.  In every other area, you would have to sue for most of the interesting documents.  Goldman Sachs spent $3.2B on legal fees a few years back, I believe that + fines have gone up every year since.  Clearly, it would take $Bs in legal fees to privately RICO the banksers, for example, much less Congress.  Kickstarter accounts don’t have that many decimal places.

Our oligarchy has protected their minons from harm anywhere.  Give them another few years, they will get the patent system fixed.

Found this later, he isn’t the only one using the strategy.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s