Tuesday After Lunch Money Memo 01-21-09: Edgar Allen Poe, Gold Bug

"We should bear in mind that, in general, it is the object of our newspapers rather to create a sensation - to make a point - than to further the cause of truth."                  The Mystery of Marie Roget, by Edgar Allen Poe

This week marks the beginning of the year long celebration of the birth of Edgar Allen Poe, born January 19, 1809.  We're talking one of the few genuine 200 year anniversaries available here in youthful America, and every burg that had a few weeks of Edgar's time is prepping to cash in.  Boston, New York City, Virginia, West Point, Philadelphia, and certainly Baltimore all claim Poe as some sort of home town antihero.  Hey, maybe Fresno should put up a plaque or something.

Edgar's real father walked away from the family when Edgar was 1.  His real mother died at 2.  His adopting father spoiled him or beat him, and then shipped him off to boarding school at age 6, and later disowned Edgar altogether.  Edgar's wife died of tuberculosis.  His older brother died of alcoholism.  Most of Poe's publishers paid him a pittance for his poems or stories, and a few didn't pay him at all.  Furthermore, Poe's drinking caused problems for the few magazines that periodically did hire… and fire him.

Predating Jerry Lee Lewis by over 150 years, Poe married his 13 year old cousin.  (She called him "Eddie.")  After a tough life, even his death is messy.  He was found wandering on the streets of Baltimore one afternoon in October of 1849 totally weirded out wearing somebody else's clothes.  He died 4 days later in a hospital without ever becoming coherent.  The cause of his death has been miscellaneously attributed to alcohol, brain congestion, cholera, drugs, heart disease, rabies (?), tuberculosis, or "other.  Dude was a partyer.  Dead at 40.  "Evermore," my ass.

So, 19th century guy, dark, drunk, troubled, creates interesting poems, literary criticism, sci-fi, and horror stories, all from a dark heart, broken by a horrible home life.  What's not to like here?  He set a standard for artistic self indulgence that Hemmingway, Faulkner, Fitzgerald, Jackson Pollock, Hunter Thompson, and even Amy Winehouse couldn't match.  Next to Poe, a writer's life today is cupcake city.  But the man could write.  Look at his legacy:

The Mystery Writers of America named their annual award for detective fiction the Edgar in his honor.  He created the first detective, C. Auguste Dupin.

Poe penned the classics of the horror story genre with The Murders in the Rue Morgue, The Fall of the House of Usher, and The Pit and the Pendulum, and the slightly less popular, Never Bet the Devil Your Head.

In the 1840s, fellow critic James Russell Lowell called him "the most discriminating, philosophical, and fearless critic upon imaginative works who has written in America."  http://en.wikipedia.org/wiki/Edgar_Allan_Poe.

AND he wrote the famous story, The Gold Bug, that economic snots have been using for over 100 years to smear believers in gold.  Published in 1843, The Gold Bug, was entered in a Philadelphia newspaper contest, which it won.  Edgar collected the $100 first prize, probably the most he was ever paid for writing. (The story can be found at http://poestories.com/text.php?file=goldbug)

The story of The Gold Bug (two words, not one) was apparently an exercise in cryptography.  Poe had become fascinated with the code writing and breaking, and created a story around deciphering as well as the popular myth of the buried fortune of Captain Kidd.  The protagonist, William Legrand, formerly of a good and wealthy family, had fallen on hard times and was living out on Sullivan's Island, near Charleston, South Carolina.  Legrand found a scarabaeus beetle that was gold colored.  Legrand believed that the beetle had been ingesting the gold of buried treasure somewhere.  Then Legrand finds a paper with numbers written on it, apparently in code.  Poe demonstrated his cryptography skills by having Legrand correctly substitute letters for numbers, and then follow the directions to the buried treasure.  Poe said the chest of gold was worth $14 million dollars. And in those days and ours today, that's still considered a lot of actual money.

The Gold Bug tale lingers on for more than cryptography reasons today.  Silly government economists have labeled believers in gold money as some sort of ignorant insect.  Why?  What exactly is the problem with specie-backed money?  No country anywhere has ever had a hyperinflation with gold backed money.  Hundreds of countries have had fiat money collapse with paper promises.  ("Zimbabwe, it's not just crooked politicians anymore…")  Wouldn't the avoidance of monetary collapse be a good enough reason to stick with gold backed money?  And wouldn't getting excited about gold, perhaps shouting about it, and buying some gold these days, given our financial "issues" be a good idea?

If so, then the bankers and their newspaper shills using Poe's story title as an insult to intelligent folks in order continue their selfish, fiat money machinations, would fall on deaf ears.

Perhaps change we can believe in is on the horizon.  Maybe folks are waking up.  Mighty Merrill Lynch has recently discovered that Gold Buggy beliefs still abide in the populace.  On January 9, 2009, the London Telegraph noted that many of Merrill's customers (probably the insectival ones) suddenly want genuine gold metal.  These buyers are not quite so willing to buy "silver accounts" that have no silver, or buy shares of a bullion ETF with gold allegedly held in custody somewhere by the buddies of Bernie Madoff.  See  http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4177766/Merrill-Lynch-says-rich-turning-to-gold-bars-for-safety.html

Sheesh, people buying gold.  It's like the former Dollar Bugs awoke from a coma.  Good investors are starting to think, like the Europeans or the Chinese or the Rothschilds, that owning physical monetary metal could be a good thing.

Hmmm.  If 2009 is anything like 2008, the idea of having a little actual monetary metal could become downright popular.  For those of you who are gold bulls, maybe admitting to a touch of "Gold Bugness" in front of your family and friends (and your financial advisor?) could be an educational thing too.

Happy 200th to Edgar Allen Poe, a troubled guy, a guy who deciphered the codes of his day, and also a guy who respected the value of gold.  We could do worse.