Investment Biker Page 15

  This stock or these acres become vastly overpriced. The smart guys who bought early, who bought because their family had lived in Smith-town for a hundred years, they start selling. They realize that this is becoming unsound. It turns out it’s not economical to put yet another General Motors factory here, so new people don’t buy land. The demand tapers off.

  For sound economic reasons the price starts coming down. Now we have passed the peak. There are now sound economic reasons for manufacturers to put their factories in Taiwan instead of Smithtown. The price of land goes down and goes down—all for sound economic reasons.

  Now comes the time when people start selling because the price is going down. People look back and say, “Everybody knows you shouldn’t own land in Smithtown. It’s been going down for five years.”

  Everybody now sells because it’s the only thing to do. Before there was a buying panic; now there’s a selling panic. People scream, “I don’t care if land is cheap in Smithtown and I can have a mansion there for virtually nothing. Everybody knows it’s a bad place to invest. Get me out!”

  Prices collapse. Everybody knows the price is going to nothing. Panic, the crescendo—that’s when you buy, because then it’s all over. It’ll be a while before things start to come back, but come back they will.

  Well, this happened to gold—as well as to virtually every other commodity in the history of the world.

  As I said earlier, back in 1980 learned scholars could show any fool why oil had to go to a hundred dollars a barrel. There was no way it couldn’t. Mathematically, scientifically, historically, it just had to happen. They ignored one important thing, however. In 1978 and 1979, for the first time in years, the world production of oil exceeded its demand. For years, it had looked as if the world was running down oil reserves since we had been consuming more than we had been discovering. But in 1978 and the beginning of 1979, alert investors saw that production and reserves were coming up strongly—which was perfectly in accord with classical economic theory. Whenever you have a high price, you get supply. As supply came back into balance with demand and then exceeded demand, oil made its peak in 1981 rather than going to one hundred dollars a barrel.

  To finish the gold story, if you get out your commodity chart book, you’ll see that starting in 1980, for the first time in forty-five years, gold production started up worldwide. Every year since 1981, the world has produced more gold than in the year before. Remember, it takes a long time to bring a gold mine on stream. First, somebody’s got to decide to look for gold. After he’s found it, he has to rustle up the money to open his mine. It takes years to gear up. Now, look at the projections and you can see, with the number of mines coming on stream today, that the production of gold is going to continue to go up until at least 2000.

  More supply.

  Gold will have its day again, and that day is getting closer, but it’ll be based on supply and demand—not hope or mysticism. Prices have been down for fourteen years. Ultimately the process will be reversed, and if given a kick by a currency or inflationary crisis, gold could soar.

  Some people want to say, “No, it’s supply, demand, and price.” But they have to understand that price is supply and demand. Price describes where supply and demand hang out, the place they meet.

  Forget the gold fanatics, forget everything else. Figure out supply and demand and you’ll get extraordinarily rich. It’s astonishing how many people cannot grasp this.

  Finally the rim and tires came in. The moment of truth for Tabitha and me arrived, the moment I had been dreading.

  “I wish you wouldn’t go,” I said.

  “I want to go and I want to stay,” she said.

  “We’ll take it easier,” I said. “You want to rest more, we’ll rest more.”

  “The roads, Jim. Riding over them is like wrestling with an alligator. It’s not fun.”

  “They’re bound to get better as we move west.”

  “West is a long way off—four thousand miles.”

  “Please,” I said. “I’m going to miss you so much.”

  “Let me think about it,” she said.

  We went through the business of getting the tires and the rim. I was excited. I sensed I had a chance with her.

  “Look, I’ll go on some more,” she said, “but this doesn’t mean I’m going all the way. I may still fly back at some point. This whole trip is still more your dream than mine.”

  “Wonderful,” I said. “But remember, if I read this map correctly, there’s not an airport for the next two thousand miles.”

  That gave her pause and she nodded, but she had made up her mind. She was coming. I felt whole again, relieved, as we set out once more.

  On the way to Birobidzhan I dropped my bike three times, Tabitha none. She was getting much better now, navigating the mud, potholes, gravel, and boulders in these awful roads with the strength, endurance, and cunning of a pro. Maybe even better than me.

  Hmmm, I wondered, was the strength and adaptability of youth trouncing experience and wisdom?

  To our surprise, Birobidzhan turned out to be the capital of the Jewish Autonomous Region.

  Back in the twenties, Jews in European Russia were faced with such severe poverty that many wanted to emigrate. To solve this and several other political problems, Stalin declared he would establish a “home-land” here for Jews, a region that would govern itself. Naturally, making real this age-old dream created worldwide euphoria in Jewish circles. This would be the first homeland for their people in nearly two thousand years.

  For more than a hundred years the Russian leadership had wanted to develop Siberia. Stalin searched for a sparsely populated area for this homeland, so there wouldn’t be much of a local protest. He chose this far-eastern portion of Siberia, thirty-six thousand square kilometers, on the Bira and Bidzhan rivers. Like the Chinese encouraging the Han to move west near the Central Asian Republics, moving the Jews here had the advantage of providing Stalin a human buffer against his traditional enemies, the Japanese.

  News clips of that era show joyous Jews arriving from all over the world. The Communist Party and Stalin garnered immense goodwill, which they would sorely need when news of the purge trials hit the Western press.

  We went to see a member of the national parliament from the region, Leonid Skolnik, the equivalent of a United States congressman, who was in fact Jewish.

  Yes, Leonid confirmed, Jews had moved here from around the world, including France and Italy, but few had stayed. Unfortunately for the new arrivals, this part of Siberia had been full of swamps and bugs, the soil poor, and the winter temperatures would go down to –10 to –20 degrees Fahrenheit. Not only had building a life on this frontier been an agonizing experience, but the Communist system hadn’t worked. He thought the region’s eleven thousand remaining Jews accounted for about 5 percent of its population.

  To my surprise, remembering how much anti-Semitism there was in the Soviet Union, everybody we ran into here with any power was Jewish, as if arriving all those years ago had enabled them to become well established.

  Leonid said everybody in power was elected. He, too, was a member of the Communist Party, but as it happened he was resigning from the Party this very day. He explained, “The Party has lost its link with the people. We have to rebuild the Soviet Union on a new political, social, and economic basis.”

  There might be anti-Semitism in the Soviet Union, but Leonid certainly wasn’t hiding the fact that he was Jewish, not with a flag displaying the Star of David hanging right there in his apartment.

  Just as in the Muslim areas through which we passed, a religious revival was going on here. People were going to the synagogue more. They had started a pedagogical institute, a Hebrew language school, and a teaching school where the main language being taught was Hebrew. There were Hebrew summer camps.

  To my amazement, in these hard times Moscow was budgeting a huge amount of money, millions of rubles, to build that teaching institute, to aid the revival of J
ewish culture.

  I figured the Soviets had several motives in spending so much: to stop the brain drain westward, to give themselves good press, and to build up the population here. In spite of this and a proposed increase in the housing stock, Leonid said many Jews were leaving for Israel.

  We reached Obluch’ye at midnight, which wasn’t as bad as it sounds because during the Southern Siberian summer, daylight lasts till eleven o’clock.

  The hotel had a dozen rooms. We paid two dollars for ours, the foreign traveler’s rate and ten times what the Russians paid. At the black-market exchange rate the cost to us was a dollar. I continued to be amazed that the Russians never changed a price.

  We might have been in a slum. This building had been built twenty years before, but it had gone downhill so far it might have been built a hundred years before and never maintained. We had a sitting room, a small bedroom, and a bathroom with the standard Western appliances, but no water. As in the Central Asian Republics, in this and the other Siberian hotels, the beds were unmade, the bed linens folded at the foot of the bed.

  Naturally, since there were no other travelers, there was no restaurant or food. Tonight we cooked our meal, the vegetables, bread, and cans of meat we carried with us, in the kitchen downstairs.

  I love to sample the nightlife wherever I travel, but the nightlife here was watching the stars.

  The next day the roads—gravel, dust, and loose dirt, immensely difficult to bike through—were so broken up and muddy it took us eight hours to travel 130 miles. While Tabitha still hated the roads, she was definitely getting better at handling her bike.

  “I’ve gone from fear and dread to anger,” she told me with a grim smile. “I take the mud wallows and gravel as a personal affront and attack them with a vengeance.”

  I was proud and a little in awe of her. This was on-the-job training in becoming a world-class motorcyclist. I was witnessing a true transformation of spirit, someone coming into her own through willpower and discipline.

  The maps were certainly right: There were few paved roads in eastern Siberia. It reminded me of the Yukon, which when I passed through it years before contained only twenty-one thousand people in a territory the size of California and New York State combined. This was the Russian frontier, I decided, the wild land that had yet to be tamed.

  Back in the Alabama of my youth, a familiar feature of the countryside was a county road scraper maintaining the gravel roads. If your stretch of road became too muddy or rut-riven, you called up the commissioner, whom you knew personally, and got him to send over a scraper.

  Here, nobody took care of the public roads. In winter they put sand and gravel on the ice, and in the spring, after the ice melted, the sand and gravel fell onto the road, four and five inches thick. This loose sand and gravel slid out from under our wheels, tossing us into gentle yet still unsettling spills. We sometimes took the outside of the curve, but that threw us into the path of oncoming traffic. Fortunately there wasn’t much traffic, maybe thirty short-haul trucks in a day, almost no cars.

  The more towns through which we passed, the easier it was to see why no one traveled. Ussuriysk had no more goods than Spassk-Dal’niy, which had none at all; nor had Aunt Milly left Svobodny for a better job in Shimanovsk. In addition, people thought too much of their cars to drive them out here. Only knuckleheads like us went any distance on this road. When a sensible Russian wanted to go a thousand miles he took the Trans-Siberian Railway.

  The sights around us, however, always lifted our spirits.

  The skies and clouds were amazing, much like the Big Sky country of Montana and the Yukon, and yet in some strange way even larger. The enormous, billowing clouds were like none I’d ever seen in shape, color and texture. Why any one bowl of sky should seem larger than another was a mystery to us, but here the heavens felt vaster than any others under which I’d ever traveled.

  Broad plains of flowers often stretched away from us, irises and lilies and daisies and phlox—purple, yellow, red, white, blue, every conceivable color—fields covered with them. Nobody owned any of it; it was all wild.

  Ghostly mist rose as the sun set and the mountain streams meandered down to warmer levels. Hills ascended to our right and left, one thousand or two thousand feet high, covered with birch trees and flowers.

  Sometimes we were treated to vast, jagged flashes of lightning, gorgeous, chaotic latticeworks of crisscrossing bolts filling entire regions of the sky with disorganized and frenzied electric webs, the power roaring and crackling overhead.

  The few hotel restaurants out here—never more than one to a town; that would be competitive and wasteful—nearly always had a live band that played so loud no one could talk.

  We were always hard-pressed to get a table because the locals reserved spaces weeks ahead to celebrate birthdays and anniversaries. Most of the people on the dance floor were women, and nobody seemed to be having any fun. This summer the lambada was two or three years out of fashion in the West, but in Siberia it was hot. In every hotel restaurant they played it along with the same three or four other songs—and that was all. Everywhere the same music, as if some central music committee in Moscow had decreed what had to be played this summer in hotel restaurants.

  If there was alcohol, it was almost always vodka. To our astonishment, one night we were served dry Hungarian red wine. We still went into the kitchens to see what was available. Usually it was tomatoes, cucumbers, cabbage, potatoes, rice, and dumplings in a soup with a crust on the top, and one kind of meat.

  Always such big kitchens and so few choices!

  As we traveled along the Amur River, which separated China from Siberia, we often saw barbed wire on both sides and armed guards facing each other across a few hundred yards. Here we were next to the Trans-Siberian Railroad, which the czars foolishly had built too close to China, creating a security risk.

  In Blagoveshchensk, an industrial city and a regional capital, we learned that every day a boat came across from China with Chinese merchants and traders, and the Russians went over there to sell goods to the Chinese. The Chinese brought over cosmetics, clothes, and textiles. All I could figure the Russians had of value to trade were timber and vodka, as there was a Stolichnaya vodka factory here. Certainly no sensible Chinese wanted the collapsing ruble.

  This vodka was manufactured for export, we learned. Citizens could obtain vodka only from state stores, and they were allowed only two coupons a month with which to buy two bottles, which meant it was in severe shortage. We weren’t allowed to buy alcohol in the state stores.

  I found the story of Blagoveshchensk fascinating, as the city had belonged to both sides during its long history. Founded in 1644 as a military outpost by the Cossacks, it was taken by the Manchurians in 1689. In 1856 the Cossacks recaptured the city. Then, in 1900, to avenge the European deaths in the Chinese Boxer Rebellion, the Cossacks killed every Chinese in the city, thousands of them.

  And yet despite this bloody history, trade flourished between the two peoples.

  To our amazement, in the vodka factory we found North Korean workers, and on a state farm, Chinese laborers who lived in bunkhouses. In another factory Vietnamese girls in their late teens and early twenties spun cotton into cloth. When I thought about it, it made sense. The Soviets out here had little labor, so they imported it.

  We met the head man of the textile factory, a Vietnamese called Mr. Trang. We dodged around the subject of our war with his country, but Mr. Trang dismissed the entire thing as of no importance. The women, he said, brought up big containers of goods from Vietnam—shirts, blouses, matches, cigarettes, and canned fruit—which they sold on the Soviet market, making their trip even more profitable.

  At Muchino the transcontinental road became a couple of meager trails through grass. We drove along them gamely, but finally even they ended in a gigantic swamp. There was no road west, and the locals avowed there had never been one. The only way across the vast swamp was the Trans-Siberian Railroad. We had to ba
cktrack fifty miles to the last station to ask the stationmaster for help.

  For the equivalent of twenty-five dollars he sold us the right to ride a freight train westward, to have a nine-by-forty-four-foot flatcar to ourselves.

  “What about food?” Tabitha asked. “Water?”

  “He says we’ll only be on it a few hours.”

  The yardmen helped us load and tie down the bikes. We had the last car on a seventy-car freight train. What a hoot! We were glad the road had ended. Hopping a flatcar is to railroading what motorcycling is to motoring: roughing it. The rail-yard crews in the scattered crossings through which we passed were stunned to see Westerners and motorcycles on a flatcar.

  Tabitha was glad for the respite, and I, too, chuckled with delight. The wind blew in our hair, the breathtaking Siberian forests, fields, and hills sailed by, and the clouds presented their dazzling aerial stunts. This glorious ride could never happen at any price in the United States. Everybody connected with sanitation, food, unions, they’d all go berserk. The insurance company would have put us in jail. But there was no road in this part of Siberia, so here we were.

  There was also no conductor to come through and say the next stop is Trenton, or that we’d be stopping here in Vostok for twenty minutes. We’d dash off at stops to relieve ourselves behind bushes, hoping to scramble aboard before the train pulled out. Usually we had to wait two hours for it to leave.

  Freight trains passed every fifteen minutes carrying everything imaginable, often duplicating what was going the other way. Logs passed going east, yet we saw logs of the same type heading west.

  We were on the flatcar longer than the stationmaster’s “few hours.” Night came. We were forced to buy potatoes, blueberries, onions, and bread from the babushkas who met the train to earn a few kopecks, the only vendors at stations. We had a bottle of vodka to wash down dinner. Occasionally it rained, but nothing our slickers couldn’t handle. At night we rolled up in our tiny Japanese sleeping bags and went to sleep. Dawn arrived and we made tea on our butane stove.