Gold World News Flash |
- Gold Marks a New Record High, Crude Further Retraces and Risk Trends Light
- Hourly Action In Gold From Trader Dan
- In The News Today
- Central Banks Dump $57 Billion Of US Agency Debt
- Daily Dispatch: How High Will Gold Gold This Fall?
- The Ominous Silent Canary
- When Japan Collapses
- Atlas just shrugged
- Private Sector to Play “Atlas” in “The Debt Repayment Story”
- Has Housing Hit Bottom?
- Gold Makes another High
- Fiat Money Has No Place To Go But Gold: Alan Greenspan
- LGMR: Gold Hits New USD Record, Silver Breaks 3-Decade Top in Euros
- Grandich Client Evolving Gold – Cross Everything You Can
- Jim?s Mailbox
- International Demand For Gold Evident
- Crude Oil Dips on U.S. Rhetoric, Gold Investor Appetite Pauses
- Crude Oil Awaits Inventory Data, Gold’s First Test of Records Unsuccessful
- 2010-09-16 Gold prices set record high, gold traded at $1,279.50
- AAII Investor Update: Dividends and Buybacks- A Good Use of Corporate Cash?
- How High Can Gold Go During the Current Upleg?
- The Debt Crisis: What it All Comes Down To
- Investing in Gold and Farmland
- Investor Sentiment Cycle: A Survey
- Food Inflation Coming to the U.S.?
- Top 3 Reasons Yesterday's Markets Were Up
- Gold Prices Scored Again. Will The Rally Persist?
- Why the Price of Gold Goes Up in a Struggling Economy
- Is Copper the New Red Gold?
- What's Going On In The Gulf?
- Guest Post: Atlas Just Shrugged
- Brett Arends: The 10 biggest myths about gold
- Gold, Silver, Oil and SP500 Are Popping and Dropping?
- Why The Mutual Assured Destruction Of Global Protectionism Could Very Well Be Upon Us
- Government vs. Gold
- M1+M2 Update, Or Does The Deflation/Hyperinflation Debate Hinge On The Propping Of Shadow Monetary Aggregates?
- Gold and Silver Daily Chart
- Watch for $21 silver and mining company acquisitions
- The US Does Not Own Or Control Its Money System
| Gold Marks a New Record High, Crude Further Retraces and Risk Trends Light Posted: 16 Sep 2010 07:33 PM PDT courtesy of DailyFX.com September 16, 2010 04:08 PM The capital markets have generated little risk-based momentum. In fact, sentiment has failed to generate any meaningful shift in investment capital this week. That being said, both gold and oil haven’t lacked for meaningful drives through Thursday’s session. North American Commodity Update Commodities - Energy A Growing Divergence Between US and UK Crude Exposes Particular Fundamental Drivers Crude Oil (LS Nymex) - $74.57 // -$1.45 // -1.91% There wasn’t much guidance from either equities or FX markets Thursday; but that wouldn’t prevent a significant move from developing for US-based oil. Crude marked its sharpest decline in 11 active trading days and subsequently bumped up its worst string of losses since the commodity pulled out of its aggressive tumble through most of August. Taking stock of this market’s performance since hitting that low, it is clear that developing a decisive balanc...
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| Hourly Action In Gold From Trader Dan Posted: 16 Sep 2010 07:33 PM PDT View the original post at jsmineset.com... September 16, 2010 10:08 AM Dear CIGAs, Yesterday's pause in gold gave way to renewed buying this morning as fund money came pouring back into the market driving it past its recent record high price posted in this Tuesday's trading. The result was another record high settlement price! Enthusiasm to own the metal is evident in the price action which is getting an additional boost by the continued strong showing of silver which seems intent on challenging $21 soon and posted yet another all time high when priced in terms of the Euro. It certainly appears that Europeans are stocking up on silver. Weakness in the Dollar also contributed somewhat to the buying in both metals even in the face of a lower equities market which until just recently has seen money going into the Dollar. It has to be a bit troubling to Dollar bulls that even a bout of selling in the broader stock market is not attracting any substantial buying of the greenback which is...
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| Posted: 16 Sep 2010 07:33 PM PDT View the original post at jsmineset.com... September 16, 2010 10:10 AM Trader Dan's Commentary Note the conclusion drawn to this bit of news – "preparation for a long period of yen-selling intervention," That is indeed correct as Japan's monetary and political leaders are under increasing pressure to derail the Yen rally as it has sucked the life out of their export sector, a sector that I might add is essential to the moribund Japanese economy. Here comes another round of the "debase your currency" wars as each nation seeks an advantage for their products and businesses on the world market. Is there any question remaining why gold is surging into new highs or challenging all time highs priced in various currency terms? The investing world has awakened to the games being played by the Central Banks and monetary authorities around the world. Gold is the only currency that cannot be debased, debauched, polluted or defiled by men. It is, always has been, and always will be, a stor...
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| Central Banks Dump $57 Billion Of US Agency Debt Posted: 16 Sep 2010 07:33 PM PDT View the original post at jsmineset.com... September 16, 2010 03:29 PM Dear Friends, Although I have not posted any charts of the Custodial Holdings at the New York Federal Reserve in some time, I have been monitoring it for any signs that foreign Central Banks are balking at buying US government or government-sponsored debt. Such a development would have a big impact on US interest rates not to mention the home mortgage industry. This week a big development took place which bears further scrutiny. It occurred in the Agency Debt category where Central Banks dumped $57 billion worth of US agency debt. That is the largest one week drop that my records going back six years show. They are now at the lowest level in three years. The drop is so extreme and so severe that I am wondering if it might be a clerical error that will be corrected next week. If not, it could well be that we are seeing signs that foreign Central Banks are getting serious about diversifying their reserves away fr...
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| Daily Dispatch: How High Will Gold Gold This Fall? Posted: 16 Sep 2010 07:33 PM PDT September 16, 2010 | www.CaseyResearch.com How High Will Gold Gold This Fall? Dear Reader, Chris here. David is busy with other things, so I’m with you for today’s Dispatch. We have lots of great stuff from other members of the team today, but I want to start off with a couple cool recent advancements in the tech world. So, let’s get to it… Scientists Close to Curing Aging? By its name, you probably wouldn’t think TA-65 were anything special. It’s just a chemical compound that activates an enzyme in the human body. Yawn. But what makes it exciting is the particular enzyme, called telomerase, that the compound activates. You see, telomerase activation is thought to be a keystone of future regenerative medicine and a necessary condition for clinical immortality. Here’s some background: At the end of a chromosome, there’s this region of repetitive DNA ...
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| Posted: 16 Sep 2010 07:33 PM PDT by Jim Willie CB September 16, 2010 home: Golden Jackass website subscribe: Hat Trick Letter Jim Willie CB, editor of the “HAT TRICK LETTER” Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy. Alan Greenspan had full knowledge of his betrayal to the principles of sound money. He wrote early in his career about the only...
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| Posted: 16 Sep 2010 07:33 PM PDT Only a partisan economist/liberal rag columnist from an Ivy League University with a Nobel Prize could look at the following two charts and conclude that the Japanese Government failed to revive the Japanese economy over the last twenty years because they spent far too little on fiscal stimulus. Japanese government debt as a percentage of GDP was 52% in 1989, prior to their real estate and stock market crash. Today it stands at 200% of GDP. Current budget projections show the debt reaching 250% of GDP by 2015. Meanwhile, Japanese consumers and corporations have been reducing their debt for the last 16 years. The net result has essentially been a 20 year recession. The pundits who never see a crisis on the horizon point to the fact that Japan has not collapsed under the weight of this debt as proof that the U.S. debt level of 90% of GDP has plenty of room to grow without negative repercussions. This is the same reasoning “experts” used in 2005 when they proclaim...
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| Posted: 16 Sep 2010 07:33 PM PDT Thursday, September 16, 2010 On September 15 former Federal Reserve Chairman Alan Greenspan made a speech to the Council on Foreign Relations. Some very interesting comments he made with respect to gold in response to a question were reported in an editorial in yesterday's New York Sun, "Greenspan's Warning on Gold": Greenspan’s Warning on Gold - September 15, 2010 - The New York Sun On this occasion Greenspan, who has been famous for gobbledygook that leaves the audience guessing what he meant, did not mince his words. He said, "Fiat money has no place to go but gold." He further commented that "if all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it." Greenspan was a close friend of the writer Ayn Rand and he reportedly read drafts of her novel "Atlas Shrugged" before it was published and even had a...
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| Private Sector to Play “Atlas” in “The Debt Repayment Story” Posted: 16 Sep 2010 07:33 PM PDT One of the Big Freaking Problems (BFP) created when the treacherous Federal Reserve creates So Freaking Much Money (SFMM), so that the despicable Congress can borrow that SFMM and deficit-spend that selfsame SFMM, is that after awhile you get a serious mal-distribution of wealth: a very few people who are very rich, and a very huge majority of people who are very poor, with everyone who is not rich getting poorer. LewRockwell.com posted an essay by the Economic Collapse Blog which notes that, astonishingly, "Today, 10,000 people get 30% of the total income in the United States"! Wow! Talk about mal-distribution of wealth! Not to be outdone, I find in my notes that Emmanuel Saez, an economic professor at Berkeley, concluded that "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007," and, between 2002 and 2007, "the top 1 percent captured two thirds of income growth." And all that glorious, wonderful money accumulated by the rich came from ...
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| Posted: 16 Sep 2010 07:33 PM PDT The 5 min. Forecast September 16, 2010 12:01 PM by Addison Wiggin [LIST] [*]The old “magazine cover as contrary indicator”… Is the housing bust really over? [*]Examining the “You Are Here” housing chart… revised and updated [*]Why the housing slide has at least three years to go… and how to play it now [*]German, British militaries ponder an irreversible decline in oil production, starting now [*] Readers write: Soaring silver, rocky refinances, 401(k) follies [/LIST] It says something about the growing irrelevance of print media that this cover of Time magazine, sitting on newsstands in late August, came to our attention only this week… We can imagine the thought crossing the minds of at least a few readers: “Wow, maybe we really have hit bottom in housing.” You know, magazine covers as contrarian indicators -- including the all-time classic… Today, that cover stands as a monument to ba...
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| Posted: 16 Sep 2010 07:33 PM PDT courtesy of DailyFX.com September 16, 2010 10:01 AM Daily Bars Prepared by Jamie Saettele Gold has traded to a new high, which negates the bearish implications and sets sights on round figures such as 1300, 1400, 1500, etc. Last week’s breakdown was of the false variety. Watch channel resistance going forward. The line is at 1295 today and increases about $3 a day....
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| Fiat Money Has No Place To Go But Gold: Alan Greenspan Posted: 16 Sep 2010 07:33 PM PDT Bank of Japan currency intervention creates shockwaves world wide. Yen Intervention Fans Flames of Anti-Japanese Rage Across China. Inflation/hyperinflation on the rampage in Argentina? Alan Greenspan says "BUY GOLD"... and much more! YESTERDAY IN GOLD AND SILVER Well, dear reader, you'll notice that there have been a few changes to this column... and there are a few more to come before it's all done with. The changes are due largely to reader feedback... and the computer geniuses behind the scenes doing all this stuff, hope you like it. First off, I'd like to draw your attention to the "Feedback" link located on the far right hand side of the page. This feedback link is only available [and visible] in the 'on-line' version of this column... so you'll have to go there to say what you think... and the Casey Research computer wizards would appreciate hearing from you. Coming soon will be the ability for all readers of this column to submit comments on ...
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| LGMR: Gold Hits New USD Record, Silver Breaks 3-Decade Top in Euros Posted: 16 Sep 2010 07:33 PM PDT London Gold Market Report from Adrian Ash BullionVault 08:40 ET, Thurs 16 Sept. Gold Hits New USD Record, Silver Breaks 3-Decade Top in Euros THE PRICE OF GOLD jumped once again for Dollar investors on Thursday, hitting fresh record highs at $1278 an ounce as world stock markets slipped – and government bonds rose – ahead of key US inflation data. "This is a period of great uncertainty, so nothing is safe," said hedge-fund legend George Soros in an interview with Reuters late Wednesday."Gold is the only bull market, apparently; it just made a new high. That may continue [but] I call gold the Ultimate Bubble because it may go higher, but it's certainly not safe and it won't last forever." Latest US filings show the Soros Fund held some 5.2 million shares of New York's SPDR gold ETF trust fund on 30th June – a position now worth $644 million. "We're seeing a bit of consolidation before gold gets some momentum and continues on its upward trend," said one Singapore deal...
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| Grandich Client Evolving Gold – Cross Everything You Can Posted: 16 Sep 2010 07:33 PM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! September 16, 2010 06:11 AM Despite ownership of two potential world class projects, Evolving Gold has not been much fun. However the technical picture is improving and a close above the 200-Day M.A. shouldn’t hurt. Fingers, toes and whatever else I can cross has been in place for awhile now. Here’s to better days ahead! [url]http://www.grandich.com/[/url] grandich.com...
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| Posted: 16 Sep 2010 07:33 PM PDT View the original post at jsmineset.com... September 15, 2010 08:46 PM Jim Sinclair’s Commentary China is in charge of rare earths, strategic metals and materials. They have a 100 year economic plan. The West does not have a viable economic plan for tomorrow. The entity that has no plan is the most creative of all because it gets exactly what it wants – NOTHING. Jim, Here is a chart on rare earth elements and gold. Check out the trend energy surge CIGA Eric Jim, The US dollar can certainly hit .72 by January. In fact .76 by October would not be out of the question, followed by a bounce, then a downward move toward 72. There is an immediate death cross in play with the 50 day moving average about to cross the 200 day to the downside. Hope you are enjoying your trip. CIGA Dr. Bob Jim, Can you believe AngloGold is just now getting around to cancelling their gold hedges at a cost of $1.37 billion! Their hedging contracts were set at an average go...
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| International Demand For Gold Evident Posted: 16 Sep 2010 07:33 PM PDT View the original post at jsmineset.com... September 15, 2010 09:50 PM Dear CIGAs, I just arrived in Dubai and am expecting to attend a meeting later today only one inviting hour from Oman. It is 7am and already the gold store here is three deep with clients. The demand for gold is international with a superior understanding of its status as the currency of last resort. The ability of the paper gold exchanges to be the playground of gold banks is now quite limited in time. Gold’s break to a new high, regardless of the machinations of the manipulators, indicates that ballistic move to $1650 is now within easy reach, as was $887.50, the true high for gold in 1980. Those persistent little buggers short of gold shares are about to have the spiritual payback experience for what they gave us. It is time when fabrication, manipulation, and pretend and extend no longer control markets and influence economics. Confidence in an all powerful Federal Reserve is about to implode. I sen...
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| Crude Oil Dips on U.S. Rhetoric, Gold Investor Appetite Pauses Posted: 16 Sep 2010 07:33 PM PDT courtesy of DailyFX.com September 15, 2010 10:51 PM Though the U.S. petroleum inventory surplus declined for the first time in nine weeks, crude couldn’t catch a break, as prices fell for a second day. Gold paused right near the record closing high, while silver continued to power higher. Commodities – Energy Crude Oil Dips on U.S. Rhetoric Crude Oil (WTI) - $75.35 // $0.67 // 0.88% Commentary: Wednesday was another down day for crude oil with the commodity shedding $0.78, or 1.02%, on the day. Prices are down another 0.88% in overnight trade, as the U.S. ratchets up the rhetoric with regard to China’s currency policy. Any hint of a trade dispute between the two largest oil consumers is obviously a bearish factor for crude oil prices. Typically cooler heads prevail in such situations, however, thus the odds of any real impact on trade, and thus growth, is low. Turning back to Wednesday’s session, we saw crude oil weak throughout the day as traders ...
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| Crude Oil Awaits Inventory Data, Gold’s First Test of Records Unsuccessful Posted: 16 Sep 2010 07:33 PM PDT courtesy of DailyFX.com September 08, 2010 10:51 PM Crude oil is little changed in overnight trade as the commodity awaits a much-anticipated report on U.S. petroleum inventories on Thursday. A larger-than-normal build will may lead to more underperformance by oil, while a bullish surprise may lead to a breakout. Commodities – Energy Crude Oil Awaits Inventory Data Crude Oil (WTI) - $74.69 // $0.02 // 0.03% Commentary: Crude oil reversed all of Tuesday’s losses on Wednesday, rising $0.58, or 0.78%. The commodity remains hamstrung. however, as inventories remain elevated and economic worries persist. Thursday brings the release of U.S. petroleum inventory data from the government; traders will be watching to see whether stocks have begun to fall from multi-decade highs. If the API survey is any indication, that may be the case. The less-authoritative industry report showed a 7.3 million barrel draw in crude oil stocks, a 654,000 barrel build in gasoline stocks, a...
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| 2010-09-16 Gold prices set record high, gold traded at $1,279.50 Posted: 16 Sep 2010 06:52 PM PDT Gold traded at record $1,279,50 on Thursday, September 16 as weak job market, dollar falling vs. major currencies and the underperforming stock market drew even more investors to park their money in the yellow metal.
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| AAII Investor Update: Dividends and Buybacks- A Good Use of Corporate Cash? Posted: 16 Sep 2010 06:39 PM PDT AAII submits: The best use of corporate cash is a subject being pondered by shareholders of Cisco Systems, Inc. (CSCO) and Microsoft Corporation (MSFT). Earlier this week, John Chambers, CEO of Cisco, announced his intention to initiate a dividend with a yield of 1% or 2% during the company's current fiscal year. Bloomberg reported that Microsoft was planning a debt offering to fund additional dividends and stock buybacks. The question facing shareholders is whether such moves are in their best interests. Complete Story »
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| How High Can Gold Go During the Current Upleg? Posted: 16 Sep 2010 06:24 PM PDT Gold fever is converting an increasing number of mainstream investors into gold bugs. Newbies who were fortunate enough to buy gold at any point during this year are no doubt celebrating their gains. And many are looking to take profits now that gold has made another record (nominal) high at $1,279. After all, the gold price has enjoyed an advance of nearly $100 during the past month and we are probably facing some profit taking and correction, right?
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| The Debt Crisis: What it All Comes Down To Posted: 16 Sep 2010 06:23 PM PDT The thing I value the most in life is freedom- the freedom to do as I choose (as long as I don't infringe on anyone else's freedom) and the freedom to think independently. People often ask me why I don't want to work in the financial industry. My reply is that I relinquish my freedom as soon as I walk through those doors and don't be surprised if my analysis deteriorates to the level of the average analyst. Doing this is far more rewarding; I can say as I please and don't have to answer to anyone.
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| Investing in Gold and Farmland Posted: 16 Sep 2010 06:22 PM PDT In order to invest successfully in areas like these, you have to be patient, wait for a good entry point to catch the uptrend, and then ride it for all their worth. It may be a bit early for Michigan real estate, but now is the time for gold and agriculture.
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| Investor Sentiment Cycle: A Survey Posted: 16 Sep 2010 06:12 PM PDT  Jeff Miller submits: Charles Kirk has many innovative ideas that help us all think about the market in new and constructive ways. This week he conducted a private poll including 100 top professionals. To get the maximum benefit from this exercise, I encourage readers to make their own answer to the following question: Where do you think we are in the investor sentiment cycle and why? Choose a specific answer from the figure below (click to enlarge). Complete Story »
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| Food Inflation Coming to the U.S.? Posted: 16 Sep 2010 05:58 PM PDT Cullen Roche submits: The inflationistas are increasingly latching onto the global food inflation theme as “proof” of the impending hyperinflationary demise of the developed world. In general, you see charts of wheat and corn or other food products plastered all over the place with slogans such as “this is deflation?” With global food prices doubling in the last decade surely we must be on the verge of some sort of disastrous hyperinflationary debacle, right? Not so fast. Let’s actually look at the facts. Is there global food inflation? Yes. I noted it yesterday. Food prices have doubled in the last 10 years. It’s been a nearly unprecedented increase in food prices. Is it happening in the USA? Yes, but to a far lesser degree. Food prices in the USA are up 33% in the last 10 years. Surely that’s inflationary, but not catastrophic and definitely not hyperinflationary. All in all, inflation in the USA remains very low. 42% of the consumer pay stub goes to housing costs which are near record lows. Food accounts for roughly 15% of total US household costs. It’s much higher in emerging markets (30%+ on average) and therefore the food inflation is far more impactful in those economies. In the USA where home ownership is nearly 70% the cost of housing FAR outstrips the cost of food. In general, a developed nation doesn’t worry about putting food on the table, however, they do worry about putting a roof over their heads. An emerging economy, however, worries more about putting food on the table than putting a roof over their heads. Part of the luxury of being wealthy(ier) is that you don’t worry about starving to death. The inputs in the inflation story, therefore, are dramatically different. Complete Story »
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| Top 3 Reasons Yesterday's Markets Were Up Posted: 16 Sep 2010 05:28 PM PDT Wall Street Cheat Sheet submits: Markets closed up on Wall Street: DJI +0.21% SP500 -0.03% Nasdaq +0.08% Gold +0.63% The markets were up because: Complete Story »
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| Gold Prices Scored Again. Will The Rally Persist? Posted: 16 Sep 2010 05:16 PM PDT seekinGold submits: Strong investment demand overpowered the diminishing jewelry demand and sent gold prices to another record high yesterday. Gold prices saw $1,279.50 per ounce as global economic worries sent the investors to safe haven. Silver reached a new high as well, approaching $21 an ounce. The falling US dollar is helping the metal prices as well. Complete Story »
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| Why the Price of Gold Goes Up in a Struggling Economy Posted: 16 Sep 2010 04:44 PM PDT We're not exactly in Las Vegas. Not yet. But we're on our way. Yesterday, we had a funeral in Paris. Today, we have a speech to give in Las Vegas. This is not the way we planned it. It's just the way things work out. Yesterday was a bit of a letdown. After having hit a new record high on Tuesday, gold decided to take it easy on Wednesday. The price slid $3. Stocks, meanwhile, showed a little progress. Not much. So we still have no clear trend. We wait. We wait. For a while it looks like the next leg down has finally begun. Then, it looks like we're in for another rally. The only sure thing, so far, is that gold goes up. Even that is not really sure...but it is surer than just about everything else. Our dear readers who bought gold back in 1999 have made about 4 times their money. This year alone it is up 15% - a very respectable return. Most of that has come as a result of paper currencies going down. Investors are buying gold to protect themselves. They may also be getting a little insurance from a much more serious level of inflation which many think is coming. We think it is coming too. But in our view it looked like it would be awhile before it showed up. We're in a major de-leveraging. You don't get the normal cost-push or demand-pull inflation in a de-leveraging cycle. You get something else...something much more violent and dangerous. But, heck, we wouldn't rule out anything. We made money on gold over the last 10 years simply because gold was cheap when we bought it. We were betting on regression to the mean. Nine times out of ten, when you bet on regression to the mean, you'll make money. Can you make money buying gold now? Yes, but now you're betting on a different phenomenon. Actually, to hear the analysts tell the story, you've still got a good chance of making money. If the economy picks up, inflation will likely pick up too - ergo, higher gold prices. If the economy sinks into deflation, gold still goes up. Why? Because deflation is sure to bring worry, doubt, and trouble. Then, there are those who think we're headed to hyperinflation. If so, you ain't seen nothing yet as far as gold is concerned. The price could get to $5,000 an ounce...and beyond. What do we think? Well, we agree with them all, more or less. The best bet is probably that we'll stay in a Japan-like trance for a while longer. This is not necessarily good for gold. And not necessarily bad. Most likely, the yellow metal will meander around...generally headed upwards. On the other hand, who knows? The trouble with this market is that there are too many people who think they know. Many are saying that gold is a "can't lose" investment. Maybe they're right. But we don't like the sound of it. And more thoughts... After the church service, the black-clad, downcast group made its way a few blocks to one of the main entrances to Père Lachaise cemetery - probably the most famous cemetery in the world. It's the largest cemetery intra-muros in Paris, laid out by the same person who designed the stock exchange. We followed the casket...up over the cobble-stoned streets between the large sycamore trees to its final resting place. At first Père Lachaise was thought to be too far from the heart of the city, so its sponsors began a marketing campaign. They advertised that they were moving the bones of a few famous people to the cemetery. Pretty soon, people couldn't wait to be buried there; they must have figured since they would be there for a long time they might as well enjoy the neighbors. Now there are over 300,000 people buried in Père Lachaise, including Sarah Bernhardt, Georges Bizet and Jim Morrison. But one of the most interesting internees is probably Judah P. Benjamin. Here's a question for you, dear reader. Who was America's finest president? Chester Arthur? William Henry Harrison? No, Jefferson Davis! We're not really serious about that. The War of Secession was a disaster for the South. Davis should have done more to avoid it. A campaign of non-violent resistance, a la Gandhi, for example, might have been more successful. But who knows. When people get their blood up they'll do any fool thing you can imagine. A president has to follow them. Because he's their leader. So who was America's best Secretary of State? Maybe it was Judah P. Benjamin. Benjamin was an accomplished lawyer and planter. Then he became the second Jewish senator in American history and later took the role of Secretary of State of the Confederate States of America. He was invited to join the US Supreme Court twice. Both times, he refused. Once in the US Senate a fellow senator referred to him as a "Hebrew with Egyptian Principles." Benjamin replied: "It is true that I am a Jew, and when my ancestors were receiving their Ten Commandments from the immediate Deity, amidst the thundering and lightnings of Mt. Sinai, the ancestors of my opponent were herding swine in the forests of Britain." And when they drove Ol' Dixie down, Benjamin fled to Britain, where he had another successful legal career. In some ways his personal life is more curious. He married a woman from a great Creole family in New Orleans. They had one daughter. But his wife decided she'd rather live in Paris, so she took the daughter and left. She spent the rest of her life in Paris, where Benjamin came to visit every summer. Then, at the end of his career, Benjamin rejoined his family, died in Paris and is buried at Père Lachaise. Regards, Bill Bonner
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| Posted: 16 Sep 2010 04:34 PM PDT
Federal detention centers in the San Francisco Bay area are slowly filling up with a new type of criminals. Illegal immigrants and petty drug dealers are being joined by a rising tide of copper thieves raiding abandoned government facilities for their heavy gauge copper electrical wire. At current prices a decent night’s haul can net crooks up to $20,000 at recycling centers. Long known as “Dr. Copper”, because it is the only commodity with a PhD in economics, the red metal has long been an excellent forecaster of economic activity around the world. Hedge fund managers have been impressed by copper’s ability to hold up, and even advance in the face of “double dip” threats from the US economy. While demand for American home construction remains in the basement, this weakness is more than offset by surging demand from China, whose own construction industry remains on a tear. It also helps that they’re not making copper anymore. Some of the world’s largest mines are reaching the end of their useful lives, with increasing amounts of capital being poured into ripping a declining grade of ore from the earth. Global production has fallen 12% during the first half of this year. This is a problem because the opening of a new mine can take as long as 15 years, once the time required for government approvals, infrastructure, water supplies, transportation, and yes, bribes, is added in. What’s in the pipeline is all there is for the next five years. Copper is also benefiting from its accelerating “monetization.” International investors, disgusted with the choices available in global stock and bond markets, are increasingly diversifying into the red metal, as well as other “hard” assets like gold, silver, coal, oil, nickel, iron ore, and others. This is one reason why the big metals exchanges are finding their inventories at a low ebb. It’s anyone’s guess, but perhaps half of the current $4.40/pound in the copper price is accounted for by investor, as opposed to end user demand. The obvious plays here are in the dedicated copper ETN (JJC), and the base metal ETF (DBB). Another candidate is Chile’s ETF (ECH), which has tacked on a blistering 13% since I recommended it a month ago (see “Chile is Hot” at http://www.madhedgefundtrader.com/august-2-2010.html ). And you can look at Freeport McMoran (FCX), the world’s largest publicly listed copper producer. And yes, you can even buy .999 fine copper bullion bards at Amazon by clicking here at http://www.amazon.com/Morgan-Copper-Bullion-SGS-Certified/dp/B003QASIR8/ref=sr_1_11?ie=UTF8&s=miscellaneous&qid=1283375380&sr=8-11 . I have some hedge fund friends who have discretely stashed thousands of copper bars in warehouses around the country, expecting the red metal to hit $6/pound within the next three years. If the doesn’t work out, I guess they can always ea their inventory by pursuing a new career as an electrician. Hey, a good union and a steady $70/hour paycheck, what’s so bad about that? To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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| Posted: 16 Sep 2010 04:29 PM PDT
BP and the government decided that millions of gallons of dispersants should be dumped into the Gulf to sink and hide the oil. They succeeded in sinking it. As ABC, CBS and NPR note, huge quantities of oil are blanketing the ocean floor, killing virtually all of the sealife which lives there. And giant new underwater plumes have been found in the water column itself. But officials don't want to hear about them. As one member of the oil spill recovery team said:
But the oil is not staying underwater. Oil is suddenly emerging in many parts of the Gulf. Oil "patties", 1 to 3 inches across, have been discovered floating along the seawall in Alabama. 16 miles of beaches in Louisiana have been hit. And scientists say that the oil will arise and wash ashore in pulses, and will hit sensitive areas like coastal marshes. As the Christian Science Monitor notes, oil can remain hidden under sand for decades:
Indeed, workers are just doing cosmetic clean-ups. They are pressure washing rocks with hot water so they look clean, just as they did with the Exxon Valdez spill. And the government's targets for "cleaning up" beaches is very lax:
Oil that's left in the environment can also seep into groundwater used for drinking by Gulf coast residents. As CNN reports, we might be facing a worst-case scenario in Florida:
While the government denies that they are connected with the oil spill, there have been massive fishkills in Louisiana. Oil can be seen at fishkill sites, and the EPA has discovered high levels of nickel near the biggest fishkill. There have also been kills of starfish and other sea animals, including whales and dolphins:
A marine biologist warns that in a worst-case scenario - the effects on the Gulf could be catastrophic:
Instead of admitting that there is a problem, BP and the Coast Guard's spin doctors have come up with code words for oil: instead of “oil sheen”, they call it “fish oil”; instead of "oil mousse", they call it “algae”. And alot of black oily substances are just labeled "mysteries". And fishermen, shrimpers and crabbers are still catching contaminated seafood, although the authorities don't want to hear about it. There have also been reports of continuing health problems in Gulf coast residents. See this and this. But at least BP has stopped spraying dispersant in the Gulf ... right? Unfortunately, numerous vessel of opportunity program participants have said it is still being sprayed (see this and this). And there allegations have been confirmed by chemists and photographers. Okay, but at least the well has been capped, so that no new oil flows into the Gulf ... right? Its hard to know. BP has shut off 16 out of 17 of its underwater cameras. The only remaining camera shows a small - but continuous - stream of leaking materials: There are still problems with the well. See this, this, and this, and Admiral Thad Allen is now saying that the relief well might not be completed until October. But remember, one of the world's top oil industry accident experts says that the well may never be killed. I hope and pray that the relief well is successful. But if there were insurmountable problems in capping the well, do you think we would hear about it before the November elections?
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| Guest Post: Atlas Just Shrugged Posted: 16 Sep 2010 04:11 PM PDT
Submitted by Adrian Douglas of GATA Adtlas Just Shrugged On September 15 former Federal Reserve Chairman Alan Greenspan made a speech to the Council on Foreign Relations. Some very interesting comments he made with respect to gold in response to a question were reported in an editorial in yesterday's New York Sun, "Greenspan's Warning on Gold":
When one juxtaposes Greenspan's views from 1966 with those of 2010, it is clear that he has a good understanding of the central role gold plays in the monetary system and that unbacked fiat currency is intrinsically worthless. So one would have to conclude that between these two reference points, when Greenspan was Federal Reserve Chairman for 19 years, he knew he was part of an elaborate charade to continue the "shabby secret" of the welfare statists. Perhaps most of the central banks Christian has advised were also successful in keeping this "shabby secret" from him. That is in stark contrast to GATA, which has been shining a light on the dark world of gold for more than 10 years and showing that the organization's officers and consultants are more knowledgeable about the gold market than any of the bought-and-paid-for anti-gold cartel apologists who purport to be experts. I expect that in the days and years ahead the remark "Fiat money has no place to go but gold" will resound around the world and will be a stake through the heart of the blood-sucking vampire we call central banking. If you weren’t paying attention, you need to know that Atlas just shrugged.
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| Brett Arends: The 10 biggest myths about gold Posted: 16 Sep 2010 04:01 PM PDT By Brett Arends http://online.wsj.com/article/SB1000142405274870439470457549620066194789... Gold has been the investment phenomenon of the past decade. It hit a new high of $1,278 an ounce this week. In the past 10 years, investors in gold have made nearly five times their money. Over the same time, Wall Street has gone sideways. But few investments seem to attract more myths and hokum than gold and other precious metals. At the risk of inflaming those on both sides of the issue, here are 10: 1. "Gold is overvalued." How can anyone know this? Nobody even knows what gold is worth, so it's impossible to say with any confidence that it's overvalued (or undervalued, for that matter). Some perfectly intelligent people, such as Dylan Grice, a strategist at SG Securities, argue that when compared to the ballooning money supply, gold is still low by historic standards. And even if gold is in a bubble today, it may have a long way to go. As I've pointed out earlier this year, as our accompanying chart shows, at a comparable stage Nasdaq (1998) and real estate (2003) still had a couple of years to run. ... Dispatch continues below ... ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php 2. "The smart money got out of gold a long time ago." Really? People have been saying that for at least five years. Yet hedge-fund honcho John Paulson has got nearly $4 billion of his firm's money in the SPDR Gold Trust exchange-traded fund. George Soros has $650 million in the ETF. Every month Bank of America/Merrill Lynch conducts a survey of the world's top fund managers. About six years ago, when gold was around $400 an ounce, I suggested they started asking the money managers about gold. Initially they got few responses. Few cared enough even to venture an opinion. More recently, while interest has risen, the skepticism has remained. For the last two and a half years, apart from a brief moment in early 2009, money managers have pretty consistently told the interviewers that gold was overvalued, and usually by a wide margin. During that time it's risen from around $850 an ounce to nearly $1,300. 3. Gold is a "safe haven." Remind me never to buy life insurance, or a new set of brakes, from someone who thinks this metal is "safe." From 1980 to 2000, it lost more than four-fifths of its purchasing power. During the 2008 crash, it fell by nearly a third. If that's safe, I'd hate to see volatile. Gold is just an asset, like anything else. 4. "Gold is 'real' money, while money created by government or society is just paper or 'fiat' money." What nonsense. The only thing that makes anything "money" is that other people—meaning "society"—accept it as such. A fund manager was recently telling me about someone she knew who bribed his way out of a crisis in Africa with bottles of liquor. She pointed out that, if society really fell apart, the best "money" would be the things people need—like food, cigarettes, and liquor. (My tip for Armageddon? Stock up on Charmin Ultra Soft. You'll be amazed how valuable it becomes when we're down to leaves.) 5. "Gold stocks are a more profitable way to invest in gold than the metal." The most dangerous tense on Wall Street is the perpetual present. The reality: Gold stocks are sometimes more profitable, and sometimes less so. It all depends on the price you pay. For years, many big mining stocks were overvalued. The metal was a better bet. But during the 2008 crash, gold stocks plummeted even further than the metal. That left them an absolute steal. Anyone who bought the big miners at the lows has more than doubled their money in two years, and anyone who bought the small ones has quadrupled it. 6. "Small gold-mining stocks are risky." Sure, any individual mining stock is very risky. (Even one like NovaGold Resources, which I recommended earlier this year. Proceed with caution.) But a broad basket of small mining stocks—such as that tracked by the Market Vectors Junior Gold Mine ETF—will be much less so. And indeed, depending on the price you pay, small miners will at times offer a much better bet than bigger companies or the metal. (See point 5, above.) Knowing the way the fund industry works, in a gold boom the small fry will probably be the last ones to get scooped up—suggesting they offer a leveraged play. 7. "Gold is a much better investment than other precious metals." Really? Why? Once again, it all depends on the price. Over long periods, silver and platinum seem to have marched in the same direction as gold. Over 20 years, silver has beaten gold by 25%, platinum by 5%. But it hasn't been a steady move. At different points one metal has risen much higher, while another has been left behind. You could have made much better money taking advantage of these moves. There are now ETFs that invest in silver (iShares Silver Trust) and platinum (Physical Platinum Shares). You aren't always stuck with just gold. 8. "Gold is a great investment because it has kept its purchasing power over thousands of years." Bah. It's hard to believe serious people repeat this. We can't even get reliable information from 50 years ago, let alone from ancient Rome. Did a toga under Caesar really cost one ounce of gold, the same as a man's suit today? Some claim it did. But what kind of toga? And what kind of suit? I can buy a suit for $300. There is a widely circulated claim that in the Bible an ounce of gold bought "300 loaves of bread." One hesitates to assert a negative, but I have looked, and I have asked informed sources, and no one has so far been able to produce the relevant Biblical reference. If anyone has it, please forward it to me. Furthermore, even if gold had "kept its purchasing power over 3,000 years," that would merely mean it produced a real, inflation-adjusted return of 0%. Inflation-protected government bonds will give you inflation plus 2%. 9. "Gold mutual funds are pretty much the same." Not a chance. You need to look under the hood. Vanguard Precious Metals & Mining isn't even a gold fund anymore; Morningstar moved it to the "natural resources" category, because it invests in general mining and related activities as well. Most "gold" mutual funds don't even invest in gold itself, just the equities of mining companies—further evidence that gold is scarcely over-owned. Morningstar analyst Janet Yang says that two which invest in both stocks and metal are First Eagle Gold and Fidelity Select Gold. Other funds also vary in style. Oppenheimer Gold & Special Minerals, for example, tends to own a lot of smaller mining stocks, and to invest in silver and platinum miners as well as gold. U.S. Global Precious Minerals Fund focuses on smaller mining stocks. 10. "You should always have 7% of your portfolio in gold for security." This has become a shibboleth. But why 7%? If the other 93% of your portfolio collapses, that 7% isn't going to help much, even if it, say, doubles in price. As usual, these things depend on the price you pay. Personally, if I thought the gold boom were going to continue, I'd rather bet by risking a smaller amount in high-octane, out-of-the-money call options on the SPDR Gold ETF or maybe the Market Vectors Junior Gold Mine ETF. Those give you the right to buy into the fund later at a fixed price if it booms. You only have to put a limited amount down. If prices don't move, or fall, you will lose that small stake. But if prices skyrocket, you can make many times your bet. As an illustration: SPDR Gold Trust is at $125 a share. The $150 call options, good until January 2012, cost $6.50 per share. Your downside is limited. Join GATA here: Toronto Resource Investment Conference The Silver Summit New Orleans Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth
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| Gold, Silver, Oil and SP500 Are Popping and Dropping? Posted: 16 Sep 2010 04:00 PM PDT
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| Why The Mutual Assured Destruction Of Global Protectionism Could Very Well Be Upon Us Posted: 16 Sep 2010 03:55 PM PDT
We are at a point in the September beta ramp, when the market seems to go up on all news: good, bad, worse, worst, and completely irrelevant. After all there are just 10 more trading days in which funds needs a market rise of at least another 5% before they can sleep confident that tomorrow their largest LP won't send in that dreaded redemption notice. Yet there is still one potential gray swan that the market appears to not have factored in - the emergence of full blown protectionism, which will impact the core game theory relationship between the US and China at its very foundation, and begin a process of ever-escalating defection between the two fiat system dilemmatic prisoners. What could bring this disastrous development to the fore? Why Washington, D.C. of course. And if you are about to say that there is no chance of something like that happening in the nearest term, especially before the mid-terms, not so fast. Here is Goldman's Alec Phillips explaining why the passage of a protectionist law in the next few weeks is not only possible but probable. From Goldman Sachs The congressional focus on China’s exchange rate policy has increased significantly ahead of the upcoming midterm election, and at this point legislative action is a more serious risk than it has been since Congress first took up China-focused tariff legislation in 2005. In response to this rising pressure, the US yesterday filed two complaints in the WTO regarding Chinese trade practices, and Treasury Secretary Geithner took on a somewhat more aggressive posture in today’s congressional hearings. Activity on this front seems likely to escalate further over the next few weeks. There is a clear possibility that the House of Representatives will take up legislation that would allow for tariffs on certain imports from China. But while House passage would represent an important escalation of the debate, the more important issue is whether the Senate will act on the issue, and ultimately whether a new tariff regime could become law. We think that the risk that such legislation is enacted this year is still fairly low. There is little time left on the legislative calendar, and not yet a clear legislative strategy. That said, we also don’t expect this issue to disappear after the election, given that the current political reaction is driven by the weak economy and labor market as much as it is by the political cycle. Congress has ramped up its focus on US-China economic relations, driven by the upcoming election as well as the sluggish economic recovery. At this point legislative action is a more serious risk than it has been since Congress first seriously took up tariff legislation in 2005. Over the last week, we have seen several developments in US-China economic relations:
From here, we expect the political risk around this issue to increase further over the next few weeks and expect it to recede only gradually thereafter:
Alec Phillips, Goldman Sachs
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| Posted: 16 Sep 2010 02:32 PM PDT Right now, many citizens are turning to gold because it is a good way to diversify oneself when "paper assets" such as bonds, stocks, mortgages and ...yes...currencies...are growing more suspect. But when government encroaches on the ... Read More...
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| Posted: 16 Sep 2010 01:39 PM PDT
Together with the Fed's balance sheet, we are now convinced that the second most important developing metric for the economy is a granular analysis of the key public monetary aggregates: M1+M2. Within a month we also hope to develop our own definition of M3, to supplement such work elsewhere, in order to provide an independent opinion on what the true monetary growth is, now that increasingly more people are discussing the threat of outright hyperinflation. But before we get there, here is our first breakdown of M1 and M2 data. As a reminder, M1, or the monetary base, consists of the i) Currency in Circulation, ii) Demand Deposits, and iii) Other Checkable Deposits (technically it also includes roughly $5 billion worth of Travellers Checks each week, but this is merely a remnant of a bygone era and it rarely if ever changes). In the most recent week, total M1 was $1,700.7 billion, a modest decline from the prior week mostly due to a $12 billion drop in Other Checkable Deposits. Beyond pure M1, there are also i) Savings Deposits at Commercial Banks, ii) Savings Deposits at Thrifts, iii) Total Small Denomination Time Deposits and iv) Retail Money Funds. All these, in addition to the items listed under M1, make up M2, which closed the week ended September 8 at just over $8.7 trillion for the first time in history. For those who look at M2 as an indication of just how much liquidity is sloshing in the system, and use it as a proxy for inflation, the attached chart must be rather troubling.
The next chart shows the historical change in M1 and M2 by sub-components.
Of the non-M1 metrics, the biggest YTD move is in Savings Deposits at Commercial Banks (which includes money market deposit accounts), which despite the pleadings of Huffington Post's "move your money" campaign has grown from $3,999.1 billion to $4,287.5 billion. The comparable increase in Thrifts is much smaller, or only $44.6 billion. On the other hand, total small denomination time deposits have dropped substantially since the beggining of the year, or a total of $150.6 billion, split between a decline of $120 billion at commercial banks, and the balance from Thrifts. In other words, smaller deposits (under $100,000) have been withdrawn from the system, even as nearly double the amount was put right back in. Somehow we don't think banks will be too concerned about any more Pull Your Monay Compaigns (as for pull your stock trades, well, that's another matter altogether). For those curious about the rate of weekly change by the various components, we present the following chart which shows the change in the 7 key M1+M2 categories.
Altogether, the M2 change since the beginning of the year amounts to $168 billion. Yet the biggest drop has been recorded in the Institutional Money Funds category, which declined by just under $300 billion YTD, yet which is not included in either M1 or M2 (oddly, as Retail Money Funds are part of M2). Obviously this, together with various other shadow banking components, such as Asset-backed Commercial Paper, which Russell Napier will excuse us, but just plunged to nearly the lowest reading in the past decade at $399 billion, all appear to be plunging. In other words, as we have highlighted before, the debate over hyperinflation vs deflation will most likely revolve around just how effective the Fed will be to prop up the traditional monetary aggregates, in the form of M1 and M2, but rather the shadow banking aggregates, such as ABCP, which are plunging (and which as we pointed out previously, had a record drop of $1.3 trillion in Q1). We will continue keeping a track of this data, and hope to expand into other additional monetary tangents in time. For the time being, M2 is at a record, yet this is offset by collapsing money aggregates elsewhere. If and when that collapse is stabilized, then run for the hills.
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| Posted: 16 Sep 2010 12:57 PM PDT |
| Watch for $21 silver and mining company acquisitions Posted: 16 Sep 2010 12:54 PM PDT 8:53p ET Thursday, September 16, 2010 Dear Friend of GATA and Gold: At the King World News blog tonight, GoldMoney founder and GATA consultant James Turk says $21 silver should be the trigger for the precious metals explosion. The interview with him is headlined "James Turk -- Here We Go Again" and you can find it here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/16_Ja... Meanwhile King World News founder Eric King writes that mining company acquisitions and combinations are likely to increase sharply as rising prices outpace new mine development. King's commentary is headlined "Gold and Silver Takeovers Heating Up" and you can find it here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/16_Go... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Sona Resources Expects Positive Cash Flow from Blackdome, On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia. Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013." For complete information on Sona Resources Corp. please visit: www.SonaResources.com A Canadian gold opportunity ready for growth Join GATA here: Toronto Resource Investment Conference The Silver Summit New Orleans Investment Conference * * * Support GATA by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: * * * Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Prophecy to Become Coal Producer This Year Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen. For Prophecy's complete press release about its production plans, please visit: http://www.prophecyresource.com/news_2010_may11.php
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| The US Does Not Own Or Control Its Money System Posted: 16 Sep 2010 12:48 PM PDT
What is money?
Most of our adult lives are devoted to making this stuff. Next to food, water, and sleep it’s the #1 concern for most human beings in the US. Nearly 80% of divorced couples cite financial difficulties as a reason for the divorce. And the American Psychological Association reports that 73% of Americans cite money as a source of significant stress.
And yet, despite being the medium for every economic transaction in our financial system, few if any individuals actually understand what money is and how it works in today’s Federal Reserve banking system.
So I ask again, what is money?
The common answer is: Dollar bills or coins.
The common answer is wrong.
The US monetary system is in fact entirely backed-by debt. Dollars are not actually assets, they are debt-backed instruments produced by the Federal Reserve. I realize this is difficult to swallow, but have a look at the Dollar bill itself.
Note the top of the bill does NOT read “US Dollar” or “official currency of the United States.” Instead it reads “Federal Reserve Note.”
So this bill is in fact, NOT produced or controlled by the US Government. . Instead, it’s a note issued by the Federal Reserve.
The confusion continues if you look around the rest of the Dollar’s front. Nowhere does it state that the bill was produced by the US Government or was generated in a Federal facility. Instead you see a black circle on the left that reads “Federal Reserve Bank of San Francisco,” indicating that this particular note entered circulation via the Federal Reserve Bank of San Francisco.
But surely this is just a round about way of saying the Dollar is the US’s currency, right? After all, the Federal Reserve is a branch of the US Government.
Wrong. The Federal Reserve is in fact a privately held organization. If you go to the Federal Reserve’s website you will see that while it IS a .gov web address (http://www.federalreserve.gov/), the site itself is for “The Board of Governors of the Federal Reserve System,” or the management of the Federal Reserve, NOT the Federal Reserve System itself.
Nowhere does this site state what the Fed really is, who owns it, or how it even operates. Instead, all you see are profiles of the various members of the Board of Governors (including current Fed Chairman Ben Bernanke) and articles detailing the data the Fed tracks and the policies it enacts.
Imagine if General Motors’ website made no mention of cars or trucks but simply focused on GM’s management team and the policies they employ at the company. THAT’S the equivalent of the Federal Reserve’s website.
Now, the Federal Reserve DOES maintain another website that focuses more on the Federal Reserve Banking System’s services, however this website is NOT a .gov site, but a .org site: http://www.frbservices.org/, meaning it has NO involvement with the US Federal Government/
Which brings me to shocking truth #1: The US Government neither owns nor controls the US Federal Reserve. At best, the US Federal Reserve is a quasi-governmental organization.
The President of the United States does choose the Chairman of the Federal Reserve’s Board of Governors. However, even this setup is a farce as the Fed presents candidates from whom the President can choose from. Moreover, the confirmation of a Fed Chairman takes place in Congress, whose members receive incentives both monetary and other from Fed lobbyists as the below quote attests:
"I was advised that rejecting [Bernanke's] nomination would cause markets to nose dive, which would hurt retirees and families saving for their future. I am not enthusiastic in my support. " - Senator Barbara Mikulski (D- MD)
Thus, even the Government’s appointment of the Chairman of the Board of Governors of the Federal Reserve is a farce. It is at best a dramatic gesture meant to instill the notion that the Fed is somehow affiliated with or controlled by the US Federal Government.
However, in reality the Fed is a totally separate entity, a privately held organization controlled by the most powerful people on the planet. To put it plainly, the Fed is a cartel permitted to operate and control the US monetary system with the approval of the US Government.
This is why the US Dollar states “Federal Reserve Note” instead of “Currency of the United States” or “Produced by the US Government for the Citizens of the United States of America” or some such thing.
The US Government didn’t create the US Federal Reserve system, all it did was give the latter its seal of approval metaphorically (by passing the Federal Reserve act of 1913 which created the Fed as a legal entity and gave it control of the US monetary system) AND literally (by placing the US Treasury Seal on every Federal Reserve Note the Fed produces):
It’s one of the best hidden secrets in the world… and yet it’s staring all of us in the face. How many Americans realize this? Better yet, how many Americans realize that our entire money system is in fact backed by debt?
1 in 100,000?
1 in 1,000,000?
Best Regards
PS. If you’re worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.
I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).
Again, this is all 100% FREE. To pick up your copy today, www.gainspainscapital.com and click on FREE REPORTS.
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