Groups and Gangs, Leadership Quality and Ourselves

Sun, Jun 22, 2014 - 2:56pm

In the alternative investment media I read a lot of criticism of the leaders of countries, and corporations, and also banks. There seems to be a view that leadership is lacking, or should I say good leadership is perceived to be lacking. On the other hand, bad leadership is in common supply. So what is going on?

The person who rises to the top of a large organization, like a multinational corporation or a nation surely can not get there without being good at something. So either the people who choose the leaders are unwise or uninformed, or simply a bad judge of these things, or it’s a fix, and the leaders rise through the ranks against the opposition and competition of their peers because they have an invisible supporting sponsoring power acting on their behalf. They have “pull”.

I think it’s actually a bit of both.

For example, it is often said that the elected leadership are - let us say - not the sharpest tool in the box. Comedians make a good living about putting this across in a pithy and humorous way, and I rarely see someone get up to heckle such a tirade act.

So is it true? Well the same alternative media tend to comment about the lack of awareness of many of the population … the “sheeple”. Isn’t it possible that the sheeple have gotten politicians who represent them exactly? That is, the political leaders are merely senior rank sheeple?

But if we look into this it does not take long to discover that many of the leaders have had interesting pasts, like careers in intelligence, or the military, or they have law degrees which I am sure do not get handed out willy nilly. So what gives? One possible explanation is the wolf in sheeple’s clothing. (I apologize for bastardizing the classic fairy tale story by either or both Charles Perrault and The Brothers Grimm.) But I think this has merit. The ruthless either (A) wish to be seen as almighty and feared and (thus) respected, or (B) they wish to hide and masquerade as the best friend to be trusted(which of course provides them with opportunity and a ready supply of fresh meat to work on). This is plausible.

Now if we add the requirements of democracy, the need to acquire votes rises in importance. The ruthless leader gets elected when the sheeple desire his cruel-power qualities, maybe during wartime, and during the rest of the time the winning leaders look like that avuncular father-grandfather figure who has broad appeal, in a similar way that presenters of evening family shows do.

So the masses choose. They actually select out from the pack, and vote into power, ruthless smooth talking liars who look friendly. What a surprise that world affairs turn out the way they do!

Now this brings in the idea that we all already have the leader we desire, or that we deserve, or a personality whom we wish we were more like ourselves. And it is a sad statement about modern society, that we only get that far in the thought process of choosing leaders who will have control over our futures and our lives.

But be that as it may, there is another leader who has followers and disciples and representatives, that I would like to discuss. But this leader is a thing rather than a person. I am referring here to the price of our investment assets.

Cast your mind back to last week, when the price of gold and silver made a nice jump upwards. The prices of these assets broke upwards through a longstanding downtrend line, under which they has been confined, and been reduced for a year and a half.

Now some people look at charts and other people don’t. Some people read the news, others watch audio-visual news. We all have our different sources, upon which we receive the information and consider the state of the world as we see it.

So here is the 64,000 dollar question: When gold and silver rose in price, did you become more optimistic, and more positive after?

Be honest. It’s important so I'll wait....

Read on when you have answered to yourself as honestly as you can.

If you did, then your psyche took leadership from the price of silver or gold, and that altered your view of the world. The price became, for a while, your leader, and controlled your thoughts and judgment.

Maybe you use technical tools to evaluate the market, and you reply “I am not controlled by anything. I have no judgment in my trades my trading system does it for me!” Well maybe it does, but when price moved above your favourite moving average, or when your “system” was triggered by the price moving up, what exactly happened? The price instructed the system, and the system instructed you, and you accepted the orders from above.

Leader = guide = master of a group to whom decisions are delegated. That group could be the Republicans or the Democrats, but it can also be the Bulls or the Bears in the markets you trade.

So are you totally sure there is no “Pied Piper” playing a seductive tune for your subconscious? This requires to be rechecked often, because the worst weaknesses always come back when you stop looking for them.

From Tony Plummer’s excellent "Forecasting Financial Markets the Psychology of Successful Investing" (now in it’s 6th edition) have a read of this:

Energy and self-knowledge, in turn, contribute to the crowd’s ability to be self-organizing. Self-organization involves the control of the crowd’s members, and this enables the crowd to maintain its autonomy as well as to learn, adapt and evolve. In somewhat technical language, we have described the behavioural haracteristics of Le Bon’s ‘crowd’.

Aha! He just mentioned LeBon. The author of “The Crowd”.

Le Bon was one of Adolf Hitler’s favourite authors I believe. But please do not hold this against him. Hitler probably read everything there was to read about crowds and their motivation and control, so that's not Le Bon's fault!

His book was written rather a long time ago. Gustave LeBon was born in 1841 and died in 1931.

But given the “crowd – leader – individual” hierarchy I have described above, for a trader who values the power of independent thinking it might be a good idea to look at what he wrote in “THE CROWD A STUDY OF THE POPULAR MIND” .

Here is a sample:

“When, however, a certain number of these individuals are gathered together in a crowd for purposes of action, observation proves that, from the mere fact of their being assembled, there result certain new psychological characteristics, which are added to the racial characteristics and differ from them at times to a very considerable degree.

Organised crowds have always played an important part in the life of peoples, but this part has never been of such moment as at present. The substitution of the unconscious action of crowds for the conscious activity of individuals is one of the principal characteristics of the present age.

I have endeavoured to examine the difficult problem presented by crowds in a purely scientific manner—that is, by making an effort to proceed with method, and without being influenced by opinions, theories, and doctrines. This, I believe, is the only mode of arriving at the discovery of some few particles of truth…….. To belong to a school is necessarily to espouse its prejudices and preconceived opinions.

……. why, for instance, after noting the extreme mental inferiority of crowds, picked assemblies included, I yet affirm it would be dangerous to meddle with their organisation, notwithstanding this inferiority.

The reason is, that the most attentive observation of the facts of history has invariably demonstrated to me that social organisms being every whit as complicated as those of all beings, it is in no wise in our power to force them to undergo on a sudden far-reaching transformations. …….which explains how it is that nothing is more fatal to a people than the mania for great reforms, however excellent these reforms may appear theoretically. They would only be useful were it possible to change instantaneously the genius of nations.

…… Men are ruled by ideas, sentiments, and customs—matters which are of the essence of ourselves. Institutions and laws are the outward manifestation of our character, the expression of its needs. Being its outcome, institutions and laws cannot change this character.

The study of social phenomena cannot be separated from that of the peoples among whom they have come into existence.

Given that something as simple as a price, can take leadership of real people and their investing purchasing power, any book which has chapters entitled: THE IDEAS, REASONING POWER, AND IMAGINATION OF CROWDS or THE LEADERS OF CROWDS AND THEIR MEANS OF PERSUASION is likely to make mighty interesting reading. But only if you honestly admitted that you are just as easily hooked as everyone else! It’s difficult to improve on perfection! Me? I know I’m a mere mortal …..

So the next time you hear your mouth or keyboard criticize the leadership’s ineptitude, foolishness, or evasive ethics, take a quick look at your peers, look at your motivations, including things as seemingly innocuous as the price of silver or gold or the stock market, then look inside. Are you "fitting in?" Is your thinking really all that independent as it appears to be? If not, then what things outside are being judged incorrectly right now, and in the past?

Here is a starting point:

Crowds, when they lose a leader, get disorientated, feel lost, and confused, and may mill about aimlessly, paralyzed from taking action. If you are a bull, and long something like let’s say, gold, and the price falls, then the bull crowd leader has gone absent for a period while that happened, right?

Well, did you, the member of the bull crowd, feel any of the above emotions inside the last time that happened? If you did, you’re human! But you do have a Pied Piper that can lead you astray in the future if not safeguarded against. Prepare and take countermeasures!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.


Author's comment: if you look Plummer's book up on Amazon, there are a couple of bad reviews. Don't let them put you off! They are, in my opinion, ill advised "Pied Pipers", who don't recognize this insightful source for what it is. His latest book is very advanced and specialized for Gann students, and not like Forecasting (discussed above) which has broad appeal, and I'll review that separately.

About the Author


· Jun 22, 2014 - 2:59pm
treefrog · Jun 22, 2014 - 3:14pm


in the out-crowd - never been much of a "joiner."

gold slut · Jun 22, 2014 - 3:27pm

Wonderful post Argentus. 

Wonderful post Argentus. Thought about this a lot myself as someone with limited dry powder has to. To be a truly gifted stacker, you need to be a Vulcan, myself, I am a rubbish Vulcan, but at least I am a stacker!

DeaconBenjamin · Jun 22, 2014 - 3:41pm

Gold climbs to fresh 1-month high

21 Jun, 2014, 03.47PM IST NEW DELHI: Gold prices today jumped up by Rs 100 to trade at a fresh one-month high of Rs 28,725 per 10 grams in the national capital on increased buying by stockists and investors. Silver, however, held steady at Rs 44,900 per kg in restricted buying at prevailing levels. Marketmen said increased buying by stockists and jewellers to meet wedding season demand, mainly attributed persistent rise in gold prices but a weak trend overseas, capped the gains. A weak rupee against the dollar, making gold imports costlier also influenced prices, they said. In Delhi, gold of 99.9 and 99.5 per cent purity advanced by Rs 100 each to Rs 28,725 and Rs 28,525 per 10 grams respectively. Yesterday, it had recorded its biggest single- day rise of Rs 605 this year. Sovereigns held flat at Rs 24,900 per piece of eight grams. On the other hand, silver ready ruled steady at Rs 44,900 per kg, while weekly-based delivery gained Rs 190 to Rs 44,570 per kg on scattered support. Silver coins, however, lacked necessary follow up support and plunged by Rs 2,000 to Rs 78,000 for buying and Rs 79,000 for selling of 100 pieces.

DeaconBenjamin · Jun 22, 2014 - 3:57pm

When gold and silver rose in price, did you become more optimist

Yes and No. Yes, it was an encouraging move.
No, we have been higher than this fairly recently.
No, I have some dry powder coming at the end of the week, and I was already planning to use it. Which is not to say that we may not have given up some of this move up by then.

· Jun 22, 2014 - 4:06pm

Wow! How about this?

When have you ever seen the term "petrodollar" used in mainstream media??

Tehran (AFP) - Iran's President Hassan Rouhani warned on Sunday that Muslim states which funnel petrodollars to jihadist Sunni fighters wreaking havoc in Iraq will become their next target.

Rouhani did not name any country, but officials and media in mainly Shiite Iran have hinted that insurgents from the Islamic State in Iraq and the Levant (ISIL) are being financially and militarily supported by Saudi Arabia and Qatar.

"I advise Muslim countries that support the terrorists with their petrodollars to stop," Rouhani said in remarks reported by the website of Iran's state broadcaster.

Bollocks · Jun 22, 2014 - 4:19pm


Wow! Public faith in Congress drops to record low 7%, lowest level Gallup has recorded for any institution in 41 yrs.

Blythesshrink · Jun 22, 2014 - 4:25pm

Re: Wow! How about this?

Got to get the masses used to the term if the war in the MIddle East will bring it to an end. I definitely think the ISIS forces in Iraq are dangerously close to Saudi now. I'm not convinced the Saudi Royal family will be able to control these groups when push comes to shove. Basically if/when Baghdad falls, look out Saudi.

DeaconBenjamin · Jun 22, 2014 - 4:35pm

Renegade Libyan general urges Turks, Qataris to leave east Libya

A Libyan renegade general has called on all Turks and Qataris to leave volatile eastern Libya, accusing the two countries of supporting “terrorism,” his spokesman said June 22. Retired General Khalifa Haftar has declared war on Islamist militants in eastern Libya, part of growing turmoil in the oil producer where the government is unable to control armed groups which helped oust Muammar Gaddafi in 2011 but now defy state authority. The Tripoli government says Haftar has no authority to act but its orders are routinely ignored in much of the oil-producing country, especially in the east where Islamists, tribes and militias vie for control. “All citizens of Turkey and Qatar should leave Libya within 48 hours. The deadline started last night,” Haftar’s spokesman, Mohamed El Hejazi, said. “They should leave the part of Libya from Imsaid [at the Egyptian border] to Sirte [in central Libya] and we are not responsible for these two nationalities on the Libyan land.” A Turkish embassy official declined to comment. Turkey moved staff of its Benghazi consulate to Tripoli this month. Qatar’s mission could not be immediately reached for comment. Turkey and Qatar both have supported the Muslim Brotherhood, an Islamist movement which has been declared a “terrorist” organization by Egypt and Gulf countries such as Saudi Arabia. There has been speculation among analysts that Haftar has the support of neighboring Egypt and of Gulf states such as the United Arab Emirates, which like the West are worried about Islamist militants exploiting the chaos in Libya. Haftar had last week accused Qatar of supporting armed militias in Libya. The latest fighting in Libya comes days before a parliamentary election that ordinary citizens hope will ease the chronic political infighting that has paralyzed decision-making since the last vote in the summer of 2012.

cliff 567 TF · Jun 22, 2014 - 4:49pm

Thought provoking AM, thanks

In answer I was psyched as I NEED to sell now, stupid brain. Doh!

​I do think the rise is a trap thou.

Barfly · Jun 22, 2014 - 5:02pm

If I looked

Only at the price rise of the chart for leadership over the past 3 years, I wouldn't have been stacking, would I?

lakedweller2 · Jun 22, 2014 - 5:24pm

Who Are The 7%

Must be Congress and their mothers

DeaconBenjamin lakedweller2 · Jun 22, 2014 - 5:41pm

Who Are The 7%

Don't forget the lobbyists and special interests.

stackaloha · Jun 22, 2014 - 6:07pm

Very interesting AM

Another thought provoking piece, thanks for your thoughts! I'm definitely not a follower or someone you find in the crowd often.

Physically speaking, I only enter crowds at a great rock n roll show or occasionally a theater. 

In appearance, I started getting tattooed in mid 80 's when it actually WAS rebellious and quite the statement. Now I wish I hadn't because I didn't realize everybody and their little sister was going to make it the new trend...... UGH. I just moved back to the mainland usa and realized how many people have beards these days, so my beard is now gone although I have enjoyed growing and shaving my beard off for about 20+ years...

politically, I've been bitching about the dollar sham (albeit ignorantly) and the faults of the democrats and republicans and corporations since I was a young 15 year old homeless skater punk tearing up Portland Oregon mid 80's. I have voted only once, that was in 92 for Ross Perot. 

I could go on and on but I rest my case... Rebelliously tyvm! ;-)

Edit: actually I guess it's more accurate to say that I'm being followed by these pesky sheeple... Where's my crooky sheeple stick! Hehe

​keep stacking!

SaratogaPrepper · Jun 22, 2014 - 6:33pm

When AG & AU rose last week

I did not become more optimistic.

I ordered another set of Berkey filters. I now have enough for 4 people for 2 years.

Ordering a new Heller Aller Amish made pitcher pump with any OT money in the coming weeks.

If the price drops, I'll get another roll of Franklins also.

cliff 567 · Jun 22, 2014 - 6:53pm

is that all there is?

As above, So Below baby.


that's it?

Get my money, I quit.

· Jun 22, 2014 - 7:32pm

Brilliant!Having been around


Having been around enough leaders of multinational corporations and political types , I've both witnessed and experienced the effect of charismatic personalities upon the workers and/or their constituency. I'm not exempt from those forces nor do I believe most people are.. Often, they are intelligent. In some cases extremely so. In the case of the leadership I worked with, some had photographic memories, some had amazing writing or verbal skills and almost always incredible people skills ie finding a way to make you like them. If you've been in a room with more than a few of these type of personalities, you can feel swagger in the air. Combined with the crowds adoration, it is difficult to NOT be effected by their "personal force" Their ability to influence you is different but feel their effect, for sure. The ability to influence would relate to how much you aware of what is occurring, the energetic dynamic.

 It is not reason in which they capture loyal followers but their ability to impress images upon the imagination. The leader with the greater ability to stir your imagination will be the most powerful leader.

When you are in the room with Eric Sprott, Rick Rule, and Santa along with a group of the top mining personalities, it is no different. It's a strong force. Plus the fact they are all wealthy men with extremely strong personalities and a 1000 people vying for their attention. A simple question to Rick who has a brain like a supercomputer (which is impressive in and of itself), can yield a 15 minute reply with an overwhelming amount of information. The brain can make the conclusions especially when you are in their presence that they KNOW. However, men, in corporations, politics, or metals who have extraordinarly oversized left brains often have a fatal flaw. (of course, all men do, myself included)

Unless you are the Buddha (pick your favorite enlightned being), you are the unconscious effect of something. Yeah, I know, you all march to your own drummer. Go back and read's Plato's work on forms or Jung's work on archetypes to really understand how much you are the effect of invisible forces in the world. No matter your degree of intellegence, your unconscious picks up message no better or worse than a stupid person. And there are messages everywhere, the moment you step outside the door, turn on your computer. The subconscious is capable of processing something like a billion pieces of information (who knows the real number) compared to your ability to consciously notice 3 or 4 bits of information.

Man interprets Socrates famous saying "know thyself" thinking that if he knows what he wants for dinner, what color clothese he prefers, and what kind of woman he prefers, that he knows himself. Those are mere ego preferences that have nothing to do with what Socrates meant when he said "Know thyself" Every action, thought, behavior, emotion has a cause. So the fact that you like your toilet paper hanging so the last paper you pull is inside, and not outside stems from an unconscious source. Or you have a fit if your meat and potato's are on top of each other. Dogs don't care, why do you humans?

The difference between men is less how much they are effect of programming (and that does vary for if you don't know how it works you are invariable the effect of just about everything) as it is the ability to be "senior" to that program. Neutrality, objectivity, non-reactive, or sometimes said detached (not to be confused with indifference or apathy" So can I not be the effect of high profile, charismatic metal analysts and not make rash decisions over volatile price movements either up or down? Yeah. Because AM taught me better. I definitely owe that to him. Two years of reading his stuff and you either decide you like it, internalize it, make it yours, or let it go in one ear and out the other.

A side note, you always hear the phrase, gold has intrinsic value. Vs. it's extrinisic value. But nobody ever can really tell you much about it's intrinsic value. And I'm not talking about it's value derived from the faith of investors. that's not really it's true intrinsic value. Because where is that faith born from? without much explanation, gold teaches you about neutrality. Interesting that would be one of the so called "esoteric" properties of the metal. It teaches alot more. But you'll have to find a shaman to tell you the rest. Gold becoming fashionable once again might have another message to humanity more than sound money. As above, So Below baby.

AlienEyes · Jun 22, 2014 - 7:48pm

Good Work, AM.

"Crowds, when they lose a leader, get disorientated, feel lost, and confused, and may mill about aimlessly, paralyzed from taking action."


Sounds like the Mexican army. laugh

· Jun 22, 2014 - 7:50pm

crowd behavior

I had a sociology prof back in the 90s who was an expert in crowd behavior. I recall that she taught us a couple of simple things about crowds that seem to apply equally to investors.

First that there is not a "collective consciousness" that comes together in a crowd. People are still individuals, making individual decisions based on incomplete data and a hazy future. But why do they do the wrong thing, like trample people or push them against a wall so that 20 die at a soccer game. Well the second thing she taught was that all these individuals look at the same data and make the same decision, at the same time, not realizing the effects of their individual decision on the larger community. In the case of the soccer crowd, a brawl broke out and a section of the stadium all stood up and began to move away from the brawl. The poor people sitting by the wall to the stadium entrance ramp were crushed as the others all pressed their way, their breath squeezed out, because they had nowhere to go.

When the bulk of investors see others headed to the exits, they will decide to exit as well. In fact, I bet the individual stop loss orders are already set and waiting. Good luck to the FED to try to prevent a severe flash crash once it starts.

I wonder if many of us have stuck around here because this charismatic leader, Turd, did not disappear in May of 2011 and April of 2013 and helped us to keep a long-term perspective, thus making a different decision than those who stayed away?

I Run Bartertown · Jun 22, 2014 - 7:58pm

I tried

to be part of the crowd.

I decided to watch US vs. Portugal.

Hours later...a tie?!? WTF?!?

At least I think it's over. The only channel that had it is in Spanish.

And they still wonder why it's not so popular here...

SaratogaPrepper · Jun 22, 2014 - 8:11pm

Grown men

kicking a ball around.

achmachat · Jun 22, 2014 - 8:13pm

I Run Bartertown

...because Baseball is more eventful? cheeky

I actually just watched the Red Sox, my first baseball game ever (really). Not only did I almost fall asleep, but after the supposed last inning they also tied, so they just had to play an additional inning?

I Run Bartertown · Jun 22, 2014 - 8:20pm


Baseball is also painful to watch. But, as you mention, at least they play to a conclusion.

achmachat I Run Bartertown · Jun 22, 2014 - 8:21pm

playing to a conclusion...

if it makes it any better, I think from the 8th or quarter finals onwards, they also play to a conclusion.

extremely dramatic penalty shots where the team with the better nerves wins in the end.

Bollocks · Jun 22, 2014 - 8:23pm

cliff 567

"is that all there is?"

Quit then. And good riddance.

You obviously didn't read Green Lantern's post, or if you did you're just here to focus on a few words - having not understood it - and have then decided to summarise it as trash.

Say something critically important if you feel the need to, because that's one of the things that makes Turdville great.

Or say nothing at all. Better still, just leave. You're parading your ignorance without showing any desire to discover more.

foggyroad achmachat · Jun 22, 2014 - 8:24pm

Great Post AM

I am always learning, I know less than I thought I knew.


achmachat wrote;

"Not only did I almost fall asleep"

I think that is what is supposed to happen, I think it is part of the beauty of the game, jmho.

silver66 Doctor J · Jun 22, 2014 - 8:46pm

Dr J-- crowd behaviour

Good points, i could not help but think of this scene when i was reading your post. Bruce W figured out the other dogs don't fight if the top dog is done.

It seems to me that when people snap out of the trance of the top dog or crowd they don't put up much of a fuss. We have seen this time and time again when at the end of a corrupt regime the police or military no longer follow the orders of a despot

Video unavailable


57Goldtop · Jun 22, 2014 - 9:45pm

Baseball and soccer fans calling each other's sport boring

Sounds like the punch line to a great joke. 

Box Lacrosse Highlights NLL
Bugzy · Jun 22, 2014 - 10:12pm


I suspect he he was referring to the self which is not the ego self.

That is the self which one should know.

Regarding the appreciation of sports. The more one understands the complexity of the game, the more one can appreciate its subtleties and hence beauty.

A skillful game of and intricate dance and changing shapes. The players on and off the ball; with their own gravitational forces, distorting the pace and rhythm for the good of the whole.

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