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- Subpar U.S. Mint practices encourage speculation, Congress told
- Advice needed re: Gold IRA
- Kicking the Can
- If Crude Oil Is Plentiful, Why Are Prices Rising?
- Australian Dollar to 1.16 and Beyond
- U.S. Gold Corp.: A Study in Junior Mining Leadership
- Why Silver Will Go UP for Years to Come!
- Blythe Retreats, Morgan Silver Ratio Tests Lows
- Another record high for gold
- Gold May Fall on ECB Rate Rise, But Rising Interest Rates Likely to Lead to Higher Prices
- WoW! finally $40. Silver $40.19 actually !!
- World Silver Survey: Investment, Industrial Demand Surge In 2010
- More interesting speculation about gold revaluation
- Embry tells King he's amazed at hedge fund shorts in mining shares
- Silver industrial demand to grow 8% – GFMS
- Spain's tough stance makes it different from the rest
- Deflationists & Blind Eyes
- Dow-Gold Ratio Following Strong Resistance Lower, Will It Continue?
- Gold and Silver... How Do I Own Thee?
- Ground Troops?
- Air From One Bubble Replaces Another
- Dollar goes to ZERO, Silver hits $40
- Is America Becoming The Land Of The Part-Time Job?: Most Of The Jobs That Are Being Created Are Part-Time Jobs And Some Companies Are Going To A “Part-Time Only Policy”
- The Coincidental Rise of Oil and the Monetary Base
| Subpar U.S. Mint practices encourage speculation, Congress told Posted: 08 Apr 2011 12:27 AM PDT Subpar U.S. Mint practices encourage speculation, Congress told Precious metals blanks used to manufacture U.S. Mint silver bullion coins often come from an Australian mint, a fact which upset several members of a House Financial Services subcommittee. Author: Dorothy Kosich Posted: Friday , 08 Apr 2011 RENO, NV - The U.S. Mint was taken to task Thursday before a House subcommittee for outsourcing precious metal coin and bullion blanks outside of the United States, and for its "surly and arrogant attitude" toward the public and industry. While the U.S. Mint's bullion products are considered actually quite profitable, witnesses told the House Committee on Financial Services Subcommittee on Domestic Monetary Policy and Technology that the government agency loses at least one third of their bullion coin sales because they cannot meet demand. This year marks the 25th anniversary of the American Eagle Bullion Coins, considered the world's most successful bullion coin program. The coins minted by the U.S. Mint have become the dominant bullion coins in the global market for physical bullion investment, said Terence Hanlon, president of Gage Metals, a Dallas-based precious metals dealer. "Overwhelmingly, investors chose the American Eagle bullion coins and they do so for three key reasons," Hanlon noted. The coins' weight, content and purity are guaranteed by the U.S. Government. Secondly there is a liquid market for these products because of an established network of authorized dealers that ensure a two way market, he observed. Finally, the exceptional beauty and quality of the coin make it desirable, Hanlon said. However, the four witnesses testifying before the subcommittee agreed that the U.S. has been unable to keep pace with demand due to an insufficient supply of blanks. "The Mint has taken steps to address its supply difficulties by adding additional capacity, but it still struggles to meet demand, particularly for the silver eagle bullion coins," Hanlon told the lawmakers. Ross Hansen, found and CEO of the Northwest Territorial Mint said he was able to acquire the Medallic Art Company, a former primary producer of silver blanks for the Mint, because government officials decided to take their business somewhere else. Currently, the primary supplier of silver bullion blanks is the Coeur d'Alene Mint in Idaho with the First Mint of Australia as back-up. The fact U.S. precious metal coin blanks were being purchased from Australia incensed several members of the subcommittee. Hansen suggested, "It should be made in the United States, not overseas. We're providing American jobs." "We could supply all the blanks the U.S. Mint would ever need," he declared. Beth Deisher, editor of Coin World, told the subcommittee, "The quality of silver, gold and platinum bullion coins produced by the U.S. Mint is exceptional. However, the marketing of these coins is sub-par and is often disruptive to the marketplace." "Most of the Mint's problems in marketing bullion coins are rooted in an ongoing failure to understand who its customers are and why they purchase bullion coins," she observed. "Marketing multi-year bullion coin programs appears to be an arena in which the Mint continues on a self-destruct path," Deisher said, "in which mistakes made in the first year of offering dramatically reduce sales potential for the remainder of the program." "The most current example is the Mint's decision to produce only 33,000 of each design of the 5-ounce .999 fine silver versions of the 2010 America the Beautiful quarter dollars," she noted, adding the program is supposed to be an 11-year investment program honoring five national parks and historical sites annually. Although the program was approved in December 2008 production did not actually begin until Sept. 21, 2010. "Despite the Mint's earlier announcements suggesting 100,000 of each of the five designs would be available to the market, five days before sales to the public were to begin, the Mint disclosed it would instead produce only 33,000 for each of the five bullion designs beating the 2010 date for distribution through its established network of authorized purchasers," Deisher said. "But again, we have low mintages that smack of contrived rarity, without thought or concern about the long-term consequences of these extremely low mintages," she asserted,. Deisher also told the representatives that "every time there is a new collector product offered and you go to the [U.S. Mint] website, people sit there for hours trying to get in and you can't." The situation is so bad "people will pay people who will sit for hours and hours trying to get into the site." "Some people are able to sit by their computer during business work hours and purchase in quantities, thereby shutting out others," she asserted. "Those who successfully obtain the coins race to eBay to sell them at exorbitant prices and high profits." The veteran coin editor suggested the U.S. Mint encouraged the speculation by limiting some coins to one person per household. She quipped that dogs, cats and other beings have acquired their own addresses and households in order to get around the Mint's limits. While her publication covers major mints all over the globe, Deisher said she finds the problem only occurs at the U.S. Mint. Meanwhile, Hanlon suggested, "Congress could give a further competitive edge to the American Eagle bullion products by adjusting the capital gains tax treatment of these investments [from 28% to 15%] to make them on a par with securities." "By lowering the rate, Congress could substantially boost the market potential for the America Eagles," he advised. Hanlon believes bullion sales could easily increase by 30% to 50% to meet investor and collector needs. "I believe investors would welcome the Mint's resumption of the production of the platinum Eagles this year, which the Mint halted at the end of 2008," Hanlon suggested. He feels the anticipated introduce of a palladium American Eagle coin this year will bring a new dimension to the Mint's offering. "It will offer investors an attractive price point in relation to gold and platinum, with different supply/demand factors for the metal." Ranking subcommittee member William Clay, Jr., D-Missouri, noted that no staff members of the U.S. Mint were present at Thursday's hearing. Subcommittee Chairman Ron Paul, R-Texas, said the situation at the Mint is a "reflection of what we are doing to our money," in particular what he termed a "huge debasement of our currency." http://www.mineweb.com/mineweb/view/...tail&id=92730 |
| Posted: 07 Apr 2011 11:45 PM PDT My wife has an IRA that if we try to cash it in, we will get hit with that humongous 20% whack. So, I cannot convince her to take the hit, and buy PM. But SHE came up with a sort of solution, and I need the advice of the knowledgeable folks here! Northwest Territorial Mint has a thingy on their web site: You can convert your IRA to PM, and they will be the custodians of it. This conversion is qualified with the IRS. Several questions leap to mind: 1. I hate the idea of somebody else having possession of my PM and not me. So: Is the risk worth it? I just cannot leave wealth in FRN, and I am sorta stuck from lack of knowledge. 2. Do you guys think this is a good solution? 3. If it is, should I go with silver? Right now I am 2:1 in gold vs silver. I would be about even if I went with silver. Your advice would be extremely helpful. |
| Posted: 07 Apr 2011 10:08 PM PDT Some amazing statistics gathered by Economic Collapse: Feeling Depressed? 27 Depressing Statistics About The U.S. Economy That Will Make You Feel Even Worse If you know someone that believes that the U.S. economy is in great shape, just show that person the following statistics. But please don't show these statistics to anyone that is feeling [...] |
| Posted: 07 Apr 2011 09:37 PM PDT Kicking The Credit Can To Eternity Is Not An April Fool's Joke. Benny and Timmy are hell-bent on printing until the cows come home or, until something economically blows-up. This is the only choice they have left. It also fits perfectly into those plans of the One-Worlder's, seeking total global power using a one world currency. "All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation." John Adams, letter to Thomas Jefferson, August 25, 1787. — The Works of John Adams, ed. Charles Francis Adams, vol. 8, p. 447 (1853). "The maxim of buying nothing without the money in our pocket to pay for it would make of our country one of the happiest upon earth. Experience during the war proved this; as I think every man will remember that under all the privations it obliged him to submit to during that period, he slept sounder, and awaked happier than he can do now. Desperate of finding relief from a free course of justice, I look forward to the abolition of all credit as the only other remedy which can take place." -Thomas Jefferson, letter to Alexander Donald, July 28, 1787. — The Papers of Thomas Jefferson, ed. Julian P. Boyd, vol. 11, p. 633 (1955). The US Dollar and Euro-land's Euro Currency are both weak and going weaker. When the Euro rises, the Dollar sinks on shorter term trading. When the dollar rises; the Euro sinks. Daily perceptions change with the wind confusing traders and markets. We think the Euro tanks first for numerous reasons. Also, the US Dollar is our reserve currency of the world. Moving this market is like altering course on an ocean liner. Our forecast says the Euro sinks into oblivion over time and the US Dollar takes a 50% haircut over 1-3 or 3-5 years. Timing and cycles are very difficult to determine as there are so many affecting factors with the added problem of massive and on-going manipulation. Confidence in paper is the key. When the confidence is lost, so are these values. Fraying is evident.         This posting includes an audio/video/photo media file: Download Now |
| If Crude Oil Is Plentiful, Why Are Prices Rising? Posted: 07 Apr 2011 09:30 PM PDT Jaime Macrae submits: Reading the daily headlines about unrest in the Middle East, restricted if not frozen output from Libya, and a falling U.S. dollar (the currency in which most crude is traded), there isn't much mystery as to why crude oil has been so strong. Year-to-date, crude oil has risen almost 19 percent in the U.S.; overseas, the Brent crude has gone up over 28 percent. While this makes sense in light of recent geo-political developments, a closer look at the local supply situation raises some interesting questions. Abundant Stockpiles Energy traders pay close attention to the Department of Energy's weekly survey of crude oil inventories in the United States. When inventories decline, crude tends to go up as traders infer greater demand or less supply in the market, conversely when inventories rise, the price of crude usually falls. Since 2008, this relationship has shown a strong negative correlation, averaging about -60%. Complete Story » |
| Australian Dollar to 1.16 and Beyond Posted: 07 Apr 2011 09:12 PM PDT Simit Patel submits: A particularly noteworthy currency for forex traders of late is the Australian dollar, which has been on a massive tear, soaring to new all-time highs against the US dollar. The monthly chart of AUDUSD, featured below, illustrates: it shows AUD rising against USD for 9 out of the past 11 months, making an increase of over 24% since June of 2010. Technically, we see strong support at 9882, the swing high imprinted in the market's psychology after tumbling down since it reached that level in July of 2008. The hammer on the March 2008 candle confirms that level is still a point that draws traders in, and is now acting as a support zone. We also see a Complete Story » |
| U.S. Gold Corp.: A Study in Junior Mining Leadership Posted: 07 Apr 2011 09:08 PM PDT |
| Why Silver Will Go UP for Years to Come! Posted: 07 Apr 2011 09:04 PM PDT |
| Blythe Retreats, Morgan Silver Ratio Tests Lows Posted: 07 Apr 2011 09:01 PM PDT Jesse's Cafe |
| Posted: 07 Apr 2011 08:59 PM PDT
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| Gold May Fall on ECB Rate Rise, But Rising Interest Rates Likely to Lead to Higher Prices Posted: 07 Apr 2011 08:48 PM PDT Mark O'Byrne submits: Gold's two consecutive days of nominal record highs have seen some profit taking as oil is flat, the dollar is marginally higher and the euro has fallen. The ECB's 0.25 % interest rate hike may lead to further profit taking today but rising interest rates in an increasingly inflationary environment will be positive for gold as it was from 1965 to 1981 (see charts below). Cross-Currency Table at 1130 GMT Complete Story » |
| WoW! finally $40. Silver $40.19 actually !! Posted: 07 Apr 2011 08:32 PM PDT ....and $1470. Gold. :wub: |
| World Silver Survey: Investment, Industrial Demand Surge In 2010 Posted: 07 Apr 2011 08:27 PM PDT ¤ Yesterday in Gold and SilverGold had another nothing kind of day yesterday. Gold's high, like Wednesday's, came at the London p.m. fix at 10:00 a.m. Eastern time. Volume was light.
Silver had the same kind of day as gold, and although the silver price had a spike up at the London p.m. gold fix...the actual high of the day [$39.72 spot] came around 4:00 p.m. in electronic trading in New York. Volume was also quite light.
The dollar rose about twenty-five points...with the high, such as it was, coming at 9:00 a.m. Eastern time...and then gave up almost all of that gain by the close of trading at 5:15 p.m. Eastern time. All in all it was an uneventful day.
Like Wednesday, the high in the gold stocks was the London p.m. gold fix, then they fell about a percent and hovered just below unchanged for the rest of the New York trading session...with the HUI down a smallish 0.24%. The silver stocks turned in a similar performance.
The CME Daily Delivery Report showed that 72 gold and 2 silver contracts were posted for delivery on Monday. Both ETFs reported receiving metal yesterday. GLD took in a healthy 377,539 troy ounces...and SLV received 975,940 troy ounces. The U.S. Mint reported selling another 44,500 silver eagles...and that was it. On Wednesday, the Comex-approved depositories didn't take any silver into their respective inventories...but shipped out 205,562 ounces. Before I get into my stories for today, here's a graph of the gold break-out that was sent to me by Washington state reader S.A...and it needs no further embellishment from me.
The shorts must eventually buy back or deliver silver, although it is possible that there might be a COMEX default as well. Embry tells King he's amazed at hedge fund shorts in mining shares. More interesting speculation about gold revaluation. U.S. Going Same Route as Greece, Portugal: Economist. ¤ Critical ReadsSubscribeU.S. Going Same Route as Greece, Portugal: EconomistToday's first story is courtesy of reader Scott Pluschau...and was posted over at cnbc.com yesterday. "To me—being in Europe for a few days—the plot in Greece and Portugalsounds an awful lot like the same plot that's going on in the United States. But the characters have different names," said John E. Silvia, chief economist at Wells Fargo, said on Wednesday. There's a story...along with a video clip...and the link is here.  ECB hikes rates, ready to move again if necessaryPresident Jean-Claude Trichet stressed the ECB had not decided that Thursday's move -- a 25 basis point rise in its main refinancing rate to 1.25 percent -- was the first in a series of moves, reassuring markets it was not about to embark on an aggressive tightening policy that could choke the euro zone's struggling periphery. Reader Roy Stephens sent me this Reuters piece yesterday morning...and its well worth skimming. The link is here.  Hidden state debts may push Portugal bailout to €90 billionPortugal's bailout requirement is 20% higher than previously thought, with hidden debt in state companies and private-public partnerships possibly to blame, according to sources in Lisbon. The bailout request would signal deeper debt problems buried inside the Portuguese administration, with economist Nuno Garoupa pointing to both troubled public companies and a lack of reporting on the state of public-private partnerships covering hospitals and roads which will not be revealed until 2013. I thank Swiss reader G.B. for sharing this story out of yesterday's edition of The Guardian...and the link is here.  Portugal prepares for a hangover without having the partyHere's another story about Portugal out of yesterday's edition of The Guardian...and it, too, is courtesy of Swiss reader G.B. "The sad thing for the Portuguese is that, although Ireland and Spain are also suffering debt hangovers, they did at least have parties with a lot of growth over the previous decade," said one foreign real estate investor, pointing to spectacular growth rates over the past decade. "Portugal has the hangover, but it did not have the party first." It's not an overly long read, but well worth it...and the link is here.  Spain's tough stance makes it different from the restOnce Portugal admitted the inevitable, the spotlight was always going to turn to Spain. Since Ireland sought aid in November, the Mediterranean neighbours have been talked of in the same breath as the euro economies next at risk of collapse. Spain has the highest unemployment rate in Europe at 20.3pc. Yet it has done its utmost to differentiate itself from other risky-looking PIGS. This story, posted late last night over The Telegraph, is a must read...and I thank Roy Stephens for sending it along. The link is here.  World Silver Survey: Investment, Industrial Demand Surge In 2010My first two precious metals-related stories are about silver...and the first is courtesy of reader George Findlay. It's an item posted over at Kitco...and it's the Silver Institute's World Silver Survey, as prepared by Gold Field Mineral Services. The sharp jump in silver prices during 2010 was the result of big increases in both investment and industrial-fabrication demand, according to the World Silver Survey 2011 released by the Silver Institute Thursday. Global silver investment rose by 40% last year to 279.3 million troy ounces, said the report, for which data was compiled by the consultancy GFMS. This resulted in a net flow into silver of $5.6 billion, almost double the amount from 2009. Of course there isn't a word in here about the huge bullion bank short positions on the Comex...but it's still a must read anyway...and the link is here.  Silver industrial demand to grow 8% – GFMSThe second story about silver is from reader Matthew Nel...and it's a Reuters piece posted over at miningweekly.com. It's covers the same report, but from a slightly different angle...and it's a much shorter read as well. The picture alone is worth the trip...and the link is here.  Embry tells King he's amazed at hedge fund shorts in mining sharesInterviewed by King World News yesterday, Sprott Asset Management's chief investment strategist, John Embry, was pretty optimistic that the breakout in gold and silver prices is under way. This blog is a must read...and the link is here.  More interesting speculation about gold revaluationFor years I have speculated that the day may come when the central banks of the world may revalue their gold reserves in order not only to save their fiat currencies, but to prevent a devastating deflationary spiral. I'm not the only person on this planet that has written about this...and here's the latest piece on this posted over at zerohedge.com. The story, embedded in a GATA release, is a must read from one end to the other...as are Chris Powell's remarks...and links, which are must reads on this issue in their own right. Click here.  |
| More interesting speculation about gold revaluation Posted: 07 Apr 2011 08:27 PM PDT  For years I have speculated that the day may come when the central banks of the world may revalue their gold reserves in order not only to save their fiat currencies, but to prevent a devastating deflationary spiral. I'm not the only person on this planet that has written about this...and here's the latest piece on this posted over at zerohedge.com. The story, embedded in a GATA release, is a must read from one end to the other...as are Chris Powell's remarks...and links, which are must reads on this issue in their own right. Click here. |
| Embry tells King he's amazed at hedge fund shorts in mining shares Posted: 07 Apr 2011 08:27 PM PDT  Interviewed by King World News yesterday, Sprott Asset Management's chief investment strategist, John Embry, was pretty optimistic that the breakout in gold and silver prices is under way. This blog is a must read...and the link is here. |
| Silver industrial demand to grow 8% – GFMS Posted: 07 Apr 2011 08:27 PM PDT  The second story about silver is from reader Matthew Nel...and it's a Reuters piece posted over at miningweekly.com. It's covers the same report, but from a slightly different angle...and it's a much shorter read as well. The picture alone is worth the trip...and the link is here. |
| Spain's tough stance makes it different from the rest Posted: 07 Apr 2011 08:27 PM PDT  Once Portugal admitted the inevitable, the spotlight was always going to turn to Spain. Since Ireland sought aid in November, the Mediterranean neighbours have been talked of in the same breath as the euro economies next at risk of collapse. Spain has the highest unemployment rate in Europe at 20.3pc. Yet it has done its utmost to differentiate itself from other risky-looking PIGS. This story, posted late last night over The Telegraph, is a must read...and I thank Roy Stephens for sending it along. The link is here. |
| Deflationists & Blind Eyes Posted: 07 Apr 2011 08:20 PM PDT My forecast has been for a powerful Inflationary Recession to occur, a consistently laid out analysis, delivered during the last year or more in clear terms. That has been my call, and continues to be my call. The Deflationist camp is making more noises. They do not know their limitations, which are obstructed by a blind eye toward the monetary inflation. They do not understand it, so they ignore it, and attempt to encapsulate it into a convenient bottle set aside on the margin. Gonzalo Lira will be proved wrong about price inflation showing on the official Consumer Price Inflation index. So what? The prevailing price inflation will ramp past 12% easily as he also predicts. His style is wonderful, even if a mirror is a fixture at his desk. His details in argument are strong and cogent. An anger meter is a fixture at my desk. So what? Since the emergency G-7 Meeting held two weeks ago, the central banks have joined forces in a Global QE movement that will propel the Gold & Silver price much higher and render deep further damage to the USDollar. The Deflationists paid no notice, or did not notice, or did not comprehend the importance. They are a laughing stock crew of half blind shamans. USFED MOUTHPIECE ECHOS The Deflationists fail consistently to measure the flow or pace of inflation, seeming mouthpieces without realization for the USFed and Wall Street itself, whose incessant calls of dreaded deflation have opened the political floodgate for global monetary hyper-inflation. They do not even recognize their compromised subservient support role. The aberrant crowd of Deflationists have a blind eye to the dynamics of inflation, and how it transforms from excessive funds in the financial system, to reaction against the USDollar, to rising commodity prices, to rising cost structure, and finally to extreme pressures for end product prices, including higher wages. They dismiss each step of the way, and do not bother to explain their progressive errors along the pathogenesis pathway. The USFed has passively developed followers like a Pied Piper. They are just lousy economists in the Deflationist camp. A good technical analyst on chart interpretation in no way makes for economist qualification. They cannot integrate complex systems where both asset deflation and monetary inflation coincide, collide, and conspire to produce economic wreckage and price inflation. They act sheepish when what they predict will not happen, actually comes to pass. Recall they have been preaching for three years that crude oil and gold would descend lower in prices. They serve as the bell tower in an empty village. They have also been preaching that end product prices would fall also due to low final demand. They are consistently wrong, but never apologetic. Sadly, most Deflationists cannot adequate even define deflation, even when challenged. It is a catch-word they fixate upon, that permits them to dismiss anything and everything pertaining to the ravaging complex effects of monetary inflation, whose dynamics are beyond their scope of comprehension, perhaps even recognition. Mine are not rants, but detailed arguments with numerous factors fortifying arguments put forth toward a thesis defended on many fronts in broad fashion for over five years. To be sure, my work includes some invective due to overflowing anger at the system having gone so far awry with deep fraud, coordinated media deception, impunity for those responsible, and elevated powers granted to them during reforms. Rants are shallow harangues. Mine is thorough analysis put to paper. These guys should consult a dictionary, as some of their own haughty dismissals fail to address or respond to much of anything my work has put forth. The word rant might invite an accusation of shallow in the mental process. They often argue in a circle under the pretense of confrontation, never addressing important points like the flow of the increased monetary aggregate, and its destinations with strong effects. One analyst in particular should really stick to what he does best, that being technical chart analysis. While the historical economics books of the past are indeed enlightening in theory, little truly applies to explain all that occurs in the profound intervention and rigged financial markets led by a criminal elite class whose main enterprise is clearly war and narcotics, followed by orchestrated chaos designed to permit broad elite powers. Their past excellent work should be kept on the wall for constant reminder of true market forces, true economic forces, all of which are opposed by powerful criminal actions and heavy handed monetary policy. THE BLIND EYE TO INFLATION My main ongoing criticism of the Deflation camp has been their blind eye to the human response to asset deflation. Obvious home prices fell and continue to fall, and related asset backed bonds have fallen progressively into ruin. That is not the point. Their camp has consistently ignored the central bank response with multi-$trillion monetary expansion. In round #1, the excesses were tucked away in the Federal Reserve interest bearing account for the big banks. They were essentially Loan Loss Reserves of those banks, which were removed from the big bank balance sheets only to be relocated on the USFed books. In round #2, the excesses went global with the entire commodity complex exploding upward in price. Purchase of USTreasury Bonds in the hundreds of $billions cannot be contained anymore than herding tiger cats. Most noticeable among commodity price rises was in food & energy. With most food items up 15% to 20% in price in a single year, and gasoline up 25% in several months, the pinch is on with powerful price inflation. But it appears on the cost side, as my analysis has mentioned numerous times. What the Deflationists miss from the start is that the extreme storm conditions come from the falling asset prices and wage effects on the one side to form a low pressure zone, meeting the rising monetary expansion and counter reaction by commodity prices against the debased USDollar in a high pressure zone. Thus the collision and powerful storm vortex, which they miss with blind eyes. Their camp never addresses the storm conditions, ever. The Deflationists show their blind eye by overlooking, or ignoring, or never noticing the storm itself, where natural collapse meets extraordinary monetary aggregate growth in reaction. They never mention multi-$trillion central bank expansion of the money supply, which debases the value of money, even making a total mockery of money, thereby adding to the cost structure in a massive way, pressuring prices and wages. The rising stock indexes serve as evidence of the monetary inflation, which they do not recognize. My point made consistently is that wages will not keep pace with rising costs, even made a national priority to halt the secondary inflation effects on wages. In that sense, my analysis has joined the Deflationists, but only with one foot in their shallow pond of constructs, hardly qualifying as a School of Thought. Since wages do not keep pace with costs, the unemployment will rise and has risen, a point made consistently here. Therefore my work cannot be carelessly labeled as over the top inflationist. Sadly, most Deflationists do not understand how to read my analysis, because they operate with a blind eye to the many sided crisis, too focused on his narrow perspective that cannot adapt to the current complex situation. The Deflationists cannot integrate into their shallow thinking the combination of inflation on the monetary side and deflation on the asset (and wage) side, surely a difficult and extraordinary situation loaded with complexity. They lost my respect long ago, the entire clan. Most of their followers in paid subscription services suffered crippling personal financial losses. A few analyst newsletter writers from their camp have learned nothing and continue their tired saw with shallow analysis and a string of wrong-footed forecasts. So be it! IMPORTANT CRUX OF THE MATTER The heart of the matter is not the outcome, but the path to the end point. If a man and woman are destined to be placed in a cemetery crypt, is that a reason not to marry and enjoy a life together, filled with bliss and human challenge? Of course not. One should hate to be married to one of those Deflation Knuckleheads, a downtrodden and bleak crowd. The pathway is where fortunes are made and lost. The Deflationists have gotten it wrong for a long time. One should not be overly concerned about three years from now if an economic collapse takes place. That is the obvious outcome, not too challenging an issue at all. The Deflationists believe they offer wisdom in such a pronouncement. It is obvious. The wrong-footed Deflationists have focused on for a long time, with precious little elucidation of the path to the end. My concern is the extent to which the cost structure will rise, and then how much the end product & service price system will rise, and how much the wages will rise in compensation upon concerted demand. The Deflationists have ignored the pressure in 2007 and 2008 and never foresaw the entire Quantitative Easing movement, which was forecasted with ease in the Hat Trick Letter. The Deflationists consistently ignore the powerful effects of Quantitative Easing itself. They dismiss the human response to falling asset prices. The only conventional assets rising nowadays are stocks and farmlands. The thesis put forth that DEFLATION WILL PREVAIL BY SNUFFING OUT THE HYPER-INFLATION represents a cavalier avoidance of the entire sequence toward the end, reveals lack of comprehension of the extreme forces in conflict, and attempts to sit above the fray in arrogance beset by ignorance. Of more concern to me, and millions of people, is the important middle portion of the game, that happen from innings three thru eight. The ninth inning calls by wrong-footed blind eyed Deflationists pale by comparison to discussions on whether banksters take global control of governments, how the current monetary system is fracturing, whether new monetary forms are shoved down our throats, or how an alternative oppositional monetary system can overthrow those in regimes in power. They never discuss such lofty but important concepts, since they do not comprehend them, cannot perceive them, and cannot envision them. They retreat from such discussions. The Deflationist themes ignore the Inflation story. The G-7 Meeting to adopt the Yen Selloff Pact was a veiled GLOBAL QE ACCORD. The pact has not even been discussed by the shallow Deflationist camp even though it is the most signficant policy directive since September 2008, more important than the original QE decision in March 2009. That is because it is Global QE, stamped and approved by the major central banks, monetary hyper-inflation gone global. The Deflationists live in a cave, unaware of such events or dismissive of them in arrogance. They instead continue to defend the wrong-footed construct of Deflation. In personal email and telephone exchanges, my habit is to constantly laugh at their pre-occupation with Deflation. On more than 40-50 occasions with certain contacts, my reply is simply WHAT IS DEFLATION?? Shallow responses come in return, unimpressive one and all. We will continue to experience and suffer both deflation of assets and wages, during a massive storm of hyper-inflation from central banks. The inflationary effect is a perverse factor toward the real game on stage. Do not expect wages to keep up with the rising costs. This has been a major point of mine all along, so a massive squeeze will continue. The Deflationists do not understand the reaction to the squeeze, focusing arrogantly on the endpoint. Their work is of little practical value, certainly of zero investment value. The squeeze will render harm to both households and businesses, with lost discretionary spending and lost profit margins. Their debate over which prevails misses the entire point. That is, the Deflation will continue in certain asset classes, especially housing and commercial property, while the Inflation will continue in monetary aggregate, TO MAKE A GROWING POWERFUL DAMAGING GLOBAL HURRICANE. Much end product price inflation will come. More end service price inflation will come. See shipping charges for a start. It seems obvious that the Deflationists ignore the battle and try to describe the outcome in narrow myopic terms. In a sense, they are the flat earth society. ELOQUENCE LACED WITH IGNORANCE Obviously, we cannot have a Weimar-style hyper-inflation. We do live in a credit based global economy. But the reasons why differ since the current global situation is different. The Weimar conditions were local to the microcosm that was Germany. It was enclosed. The current situation has its Weimar elements, especially endorsed by the recent March G-7 Meeting. That is global Weimar by any name, given its global coordination of USTreasury Bond purchase after broad discharge from Japan. The Deflationists cannot comprehend a global Weimar concept. FURTHER REBUTTAL TO THE BLIND EYE To begin with, 12 to 18 months ago the Deflationist camp claimed the price of crude oil and the Gold price would fall and dramatically so. Wrong on both counts. Curiously, the camp avoids defending their wrong-footed points as the months pass, while the crude oil price zips past $120 (Brent that is, since West Texas is the province of paper games), while the Gold price hurtles toward $1500. Have Deflationists not noticed? People are moving rapidly out of quickly debased paper money and into tangible goods. Conversion of USTreasurys has become commonplace among sovereign wealth funds. Have Deflationists not noticed? This is the basis of the commodity price rise and the basis of the precious metals price rise. The USFed has in fact picked up almost the entire slack in USTBond purchase during the massive conversion process. The movement is better observed outside the US Dome of Perception, where foreign USTBond creditiors have openly halted their USTreasury bids, replaced by the USFed printing pre$$ eagerly. Foreign sovereign wealth funds across the globe have openly expressed their dismay over the entire QE initiatives, anger of unilateral monetary policy decisions made in the United States with seeming contempt, and the consequent harsh effect on commodity prices. They have increased their gold (and even silver) purchases in conversion of US$-based assets. They have rebalanced their reserves. They have stopped bidding at USTreasury auctions. Have Deflationists not noticed? Germany's financial collapse took several years. So is the US financial collapse, a long painful process. What began with a subprime mortgage problem in mid-2007 spread to a full blown housing decline, a bank insolvency problem, then a sovereign debt problem, then a monetary inflation solution with severe blowback, and now a monetary system discredit problem. The pathogenesis has so far spanned four years. Have Deflationists not noticed? Anyone who believes the US financial collapse could occur in a single week is a moron. Actually, such an observer would be a blind man and moron. The US banking system in my view suffered a death experience in September 2008. The coroner was overridden by the Financial Accounting Standards Board, thus declaring the corpse permitted to walk with props and to speak from a recorded message, pretending to be alive. After April 1st decree in 2009, the Zombies have roamed the US landscape freely. Have Deflationists not noticed? The big US banks have been operating with an Extend & Pretend policy that their crippled balance sheet overloaded with toxic credit assets will somehow recover in the next year. Instead, the Real Estate Owned (REO) residential homes on the bank books have ballooned to over one million properties. Almost half of all home sales are short sales and foreclosure sales. The entire process has been extended to the extreme over times. Have Deflationists not noticed? Financial assets are indeed being shifted into hard assets, in particular the basic commodities. Nations are building stockpiles. The main focus has been on crude oil to the commecial side and to Gold & Silver on the financial side. But some speculation has come to the copper market (which JPMorgan seems interested in), to the coffee market due to problems in Africa, to the sugar market (which JPMorgan seems fond of), and to the cotton market from broad necessity. Financial mavens, news anchors, and hedge fund managers have all been touting their strategies in response to runaway monetary inflation commanded from the marbled offices of the USFed. They respond to the devaluation of money itself. The migration to hard assets is well along. Have Deflationists not noticed? Did somebody say there was insufficient currency to drive up and power hyper-inflation? Excuse me, but that statement truly misses the 800-pound gorilla sitting at the Deflationist dinner table. The USFed has expanded its balance sheet to over $3 trillion. The USFed has printed over $2.7 trillion in QE programs, with much more to come. That figure does not account for their secretive monetary extensions, like grants without collateral to fellow central bankers and friends of the syndicate. In fact, the QE program will soon be announced as ended, since so offensive, when in fact it will be incorporated and melded completely into routine weekly activity. The Euro Central Bank, the Bank of England, and the Bank of Japan have all joined in the paper confetti production enterprise. Have Deflationists not noticed? The spillover from the banks who hoarded the USTBonds took place and the spilled funds hit the commodity market. The Deflationists claimed it would not happen, no spillover of any kind. They were wrong. The next spillover will be to end product prices, and to some extent wages. The Deflationists will be wrong again. But the wage hikes will not be adequate to manage the higher costs to come. The increase in money supply plays out symptomatically under their noses without much recognition or comprehension. The next phase will be for Cost Push, which will introduce higher prices and smaller packages by vendors. Then come demands for higher wages with high pitched battles. Some will be won, many will be lost, especially given the state government union legislation that has bagun to ban collective bargaining. The workers will lose more than in the 1980 decade, when 10% and 12% salary gains were commonplace. The corporations are supposely flush with these $2 trillion in cash on their balance sheets. Let's see how much are devoted to commodity investments in counter action to the USDollar debasement (not noticed by Deflationists) and how much are devoted to labor concessions under demand of work action (not expected by Deflationists). My preference would be for capital investment and factory revamps, but the United States and its newfound marxism blended with fascism and oppressive regulatory impositions is not a place conducive for corporate expansion. These are some of the dynamics underway, which are not detected by those with blind eyes. The Deflationists prefer to cling to shallow arguments of a move straight to deflation without all the intermediary steps that cannot comprehend. Cash held by the people and investors and hedge funds pension funds and elsewhere is in a massive migration to hard assets. Physical goods & tangible assets are rising in price. Have Deflationists not noticed? Witness the burgeoning demand for USMint coins, resulting in shortages and production shutdowns across the world. Have Deflationists not noticed? Amplifying the USFed money output parade, the troubles in Egypt with associated threats to the Suez Canal, followed by troubles in Libya with interruptions to output, have all contributed to the movement of funds into hard assets like crude oil. Have Deflationists not noticed? As for buyers, right now the only (or primary) buyer for USTreasurys is the USFed itself. Plenty of global funds continue to chase crude oil, industrial metals, grains, farmlands, cotton, coffee, sugar, as well as the King Gold & Queen Silver. Have Deflationists not noticed? The interesting opportunities will continue to be offered for wealth accumulation in defense of the unspeakable abuses of money. These are the middle innings of opportunity when it is still legal to build and hold wealth. Those years might be nearing an end, unfortunately as we near open confiscation after hidden confiscation. The money to bid tangible assets skyward, my blind fools, is from the collective gaggle of central banks which are in a panic printing money without the controls to direct it where they wish. This is not a rant, but rather a directed rebuttal of a shallow discourse laden with blind spots, shallow arguments, and arrogance. Let us gaze at the fool with a blind eye in a purple robe sitting on a self-designed throne, with zero authority and a track record of major missed events. GOLD & SILVER REACTION TO MONETARY DESTRUCTION Acute Silver shortages are in front of our noses, in the news, and point to extreme vulnerability in the USDollar, if not the USGovt debt condition. The USMint in possible illegal manner has at times suspended the production of Silver coins to be minted. They by law are commissioned to continue to meet public demand, which means they must bid up the Silver price if required. The COMEX shortage of Silver is so widespread and in the open, that futures contracts are being settled in cash, after the contract owner signs a waiver to permit the breach of contract itself. A 25% to 30% cash settlement bonus has become the norm. Such actions in policy have lit a fire under the Silver market and lifted its price. Angry from incessant charges of currency manipulation, the Chinese have responded by purchasing large truckloads of Gold & Silver. The real manipulation is by the USFed, whose debt monetization has gone global, whose USDollar effect is undeniable. That is blatant manipulation of not only the sovereign debt, but the currency denominated in it, extending to the entire monetary system. The group of major fiat currencies are all attached like a floating papyrus bound by threads. They are discredited in unison, weighed down by a debt burden and rotten paper. The Euro is rising, despite its crippled condition. The ruse of a higher interest rate set by the Euro Central Bank is really amusing. Maybe they will come through with an inflation beater rate hike of a puny 25 basis points. How irrelevant? Both the US and EU have prevailing inflation rates over 8%. The cost of money remains 7% below the prevailing price inflation, maybe 12% too low for practical commerce. The appeal of the Euro comes from the totally obscene ruinous debased condition of the USDollar. The reverse beauty contest leaves the clownbuck as the gal left on stage seeking a dance partner. The toothless Euro at least has two dancing legs. The USDollar has none, nor teeth. The newest wrinkle in currency flows is the Arab investment in Euros, as they seek anything but USDollars. The US War Machine has targeted Libya, and turned its head from Bahrain. Just this week, Prince Turki of the House of Saud warned his princes that the Saudi Arabians must seek protection from other sources besides the United States. With the Saudis acknowledging security shortcomings, one must bring into focus the Petro-Dollar Standard, the defacto accord between the US and Saudi Arabia. They sell OPEC crude oil in US$ denomination only, and the USMilitary provides security protection for the royals in power as they accumulate great wealth. The accord is slowly disintegrating, with enormous potential impact to the USDollar standing. The US$ DX index is flirting with yet another breakdown below critical support. Each bounce off support is met by fresh selling. It seems military underpinning for the USDollar is slowly fading away like an old soldier after several decades. The Gold breakout is clearly timid, lacking gusto and strong conviction. The Powerz have decided that they must contain the Gold price advance. The factors pushing up Gold are numerous. The sovereign debt decay process has led to lost integrity in the global monetary system organized as major currencies. They are all being debased by mammoth money printing initiatives with the full blessing of the governments and finance ministries. Each paper a |
| Dow-Gold Ratio Following Strong Resistance Lower, Will It Continue? Posted: 07 Apr 2011 07:27 PM PDT Kirk Lindstrom submits: Two months ago I pointed out in a Seeking Alpha article that the Dow-Gold Ratio had reached a level of strong resistance. The Dow-gold ratio is defined as the ratio of the price of the Dow Jones Industrial Average divided by the price of gold. At Thursday's close of 8.51, the Dow Jones Industrial Average, measured in how many ounces of gold it takes to buy the 30-stock Dow, is up 21.1% from its 17-year March 6, 2009 low of 7.03. But, as the chart below shows, the ratio has been in a fairly flat, two-year trading range as it moved from long-term support to resistance. Despite good gains for the Dow since March 2009, the Dow-gold ratio remains just above its March low and 81% below its 1999 peak of 44.77. As my chart shows, the Dow-Gold Ratio has fallen further from 8.96 two months ago to 8.51 Thursday. Complete Story » |
| Gold and Silver... How Do I Own Thee? Posted: 07 Apr 2011 05:00 PM PDT |
| Posted: 07 Apr 2011 03:07 PM PDT
Mercenary Links Roundup for Thursday, April 7th (below the jump).
04-07 Thursday
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| Air From One Bubble Replaces Another Posted: 07 Apr 2011 02:35 PM PDT Yesterday we argued Australia's house-price boom has been detrimental to the long-term health of the economy and our standard of living. Household's who benefited in the early part of the boom certainly felt wealthier. But credit booms distribute the wealth unevenly. When booms driven by credit finally end, you're left with falling asset prices and high debt levels. That's where we are now in the Australian economy. The long house price boom is finally over. But the debt that drove the price increases still remains. Which is why the underlying economy feels so weak for so many of us. We're experiencing the hangover. If not for the mining boom, the headache would be much worse. Today's Australian carries the headline 'Mining hides flatlining economy'. That's hardly news. But did you know that Western Australia, that great resource state, was actually in technical recession for the two quarters to 31 December 2010? A weak housing market and retail sector, as well as declining business investment, were behind the contraction in growth. Mining is indeed carrying the economy. It's the reason behind the RBA's interest rate rises and the expectation there is more to come, despite the poor underlying health of the economy. And it's all because of our booming terms of trade, which the RBA has alluded to in just about every statement and speech concerning interest rates in the past few years. A rising terms of trade means Australia receives more for its exports relative to what it pays for its imports. The way in which the beneficial terms of trade flows through to our economy and how it affects interest rates and the dollar is important to understand. It has implications for your investments now and will certainly do so in the future when today's benign conditions change. The first thing to understand is that a rising terms of trade has a big impact on national income, also known as nominal GDP. While real GDP growth has limped along in a bit of a daze recently, (below 3 per cent growth annualised over the past six months) nominal GDP has been very strong. In the year to 30 June 2010, nominal GDP was 10 per cent. In the year to September 30 2010 it was 9.6 per cent, and in the year to 31 December 2010, nominal GDP came in at a still robust 8.8 per cent. The difference between weak real GDP and strong nominal GDP, or national income, is largely due to the strong terms of trade. A few months ago we asked the RBA for an explanation of how it worked and they came back with the following. It's a bit on the technical side but if you read it a few times it will make sense.
As a result, the RBA keeps a very close eye on nominal GDP growth, as this more accurately reflects the short-term surge in national income, which, if left unchecked, could lead to longer term inflationary pressures. So if you're wondering why the RBA still seems keen to lift interest rates, look to the terms of trade and nominal GDP growth. And if you want to know who influences the terms of trade, look to China. As we've said before, China is a bubble waiting to burst. Nouriel Roubini, the man who gained prominence by loudly predicting the US housing bubble years before it burst, thinks so too. In a recent email to clients, he said:
After 2013 is as good a guess as any. But is Roubini buying too much time? Perhaps being years too early on his US housing bubble call – and enduring the ridicule that caused – is leading him to be too conservative on his China implosion date. The People's Bank of China recently raised interest rates for the fourth time since October. The Chinese economy, more dependent on fixed investment than just about any economy in history, is certainly getting closer to a tipping point…perhaps closer than 2013. Whatever, Australia's future depends on China. Interest rates will remain where they are until China falters. As long as the terms of trade remain high and national income growth strong, there will be a bias to tighten rates. That's why RBA Governor Glenn Stevens is happy to see high savings rates and the rest of the economy in the doldrums. As long as it stays this way, he won't have to increase rates. The Australian economy is very unevenly poised at the moment. The air flowing over the ocean from the China bubble is replacing that coming out of the housing bubble. Signs of prosperity persist. But like the Aussie housing market, the China bubble is built on debt, and so will ultimately prove unsustainable. Meanwhile, the equity market moves relentlessly higher, oblivious to the building risks… Greg Canavan |
| Dollar goes to ZERO, Silver hits $40 Posted: 07 Apr 2011 02:33 PM PDT But I guess this is all a conspiracy against JP Morgan. Maybe they really do have all that metal at the Comex or LMBA? Eat a dick KD. Okay so lets recap from some previous posts of mine on Feb 20th. Click here to Read My February Prophecy So as Israel uses other wars to covertly decimate Gaza under the guise of 'human shields' and 'rockets' I will be here to call what will happen shot by |
| Posted: 07 Apr 2011 12:32 PM PDT 
Whenever a new government jobs report comes out from now on, try to find out how many of the jobs that were created were actually part-time jobs. Most Americans that only have part-time jobs are living around or below the poverty line. The truth is that it is really hard to get by if you are only making a couple hundred bucks a week. As mentioned above, the U.S. economy added 216,000 jobs last month. The Obama administration and the mainstream media heralded that figure as evidence that the U.S. economy is recovering nicely. But is that really accurate? Rebel Cole, a professor at DePaul University's Kellstadt Graduate School of Business, says that when you take the time to do a closer examination of the employment numbers they don't look so good....
Unless you are a teen or a college student or a retired person, most likely you would prefer to be working a full-time job. Most people do not actually have the goal of working part-time. Most part-time jobs pay very poorly and offer very few benefits. Unfortunately, that is why so many big companies like part-time workers and temp workers. There are so many more rules, regulations and laws that pertain to full-time workers. Hiring a bunch of part-time workers is so much easier and so much cheaper. Without a doubt it is definitely more profitable in most situations. Today, there are millions of Americans that have part-time jobs that would love to have full-time jobs. In fact, the government says that there are about 8 million Americans that are currently working part-time jobs for "economic reasons". One such worker named "John" recently left a comment on another article I did entitled "How To Find A Job: Just Be Willing To Flip Burgers And Work For Minimum Wage". John says that the restaurant chain that he works for has implemented a "part-time only policy"....
Of course I would assume that there are perhaps a couple of full-time workers at the restaurant that John works at (such as the manager). But the reality is that we are seeing this kind of thing more and more around the nation. Companies are being careful to keep hours low enough so that the majority of their employees do not qualify for expensive "full-time benefits". Another commenter on that same article said that it is possible to get by on a low wage but that doesn't mean that it is easy....
This is the new "American Dream" for millions of American families. They are learning to scratch and claw to get by on what they have. As I have written about previously, the standard of living of the middle class is being pushed down to third world levels. We have been merged into a "global labor pool", and what that means is that the standard of living of all workers all over the world is going to be slowly equalized over time. Translation: your standard of living and the standard of living of virtually everyone that you know is slated to go way down. Right now America is rapidly losing high paying jobs and they are being replaced by low paying jobs. According to a recent report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth. Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth. So yes, jobs are being created, but most of them are jobs that none of us would really want under normal circumstances. Unfortunately, times are not normal and millions of desperate people are having to take whatever they can get. What makes things even worse is that really bad inflation is coming. There are less good jobs for American families and at the same time the cost of basic necessities is going up. Have you been to the gas pump lately? As I wrote about yesterday, the average price of a gallon of gasoline in the United States is now $3.70. A year ago it was just $2.83. For average American families on a tight budget that is a huge difference. Food inflation is already here as well. During the month of February, the price of food in the U.S. increased at the fastest rate in 36 years. Are you starting to understand why so many American families are feeling squeezed right now? Times are tough and they are going to get tougher. If you still have a good full-time job you should be very thankful, because there are millions and millions of people that would love to trade places with you. So do the rest of you believe that America is turning into "the land of the part-time job"? Please feel free to leave a comment with your opinion below.... |
| The Coincidental Rise of Oil and the Monetary Base Posted: 07 Apr 2011 12:24 PM PDT "High oil prices start to apply the brake on drivers," says a headline in The Financial Times. As predicted, the feds' easy money policies are turning into hard times for the middle and lower classes. Oil prices have gone up with the Fed's balance sheet. For every dollar the Fed added, the price of oil ticked up too. Now, the Fed has three times the monetary base it had before the crisis. And oil is three times as expensive. Of course, you'd be hard-pressed to prove a direct cause and effect linkage. We wouldn't even try. But here's something else. Where's the price of gold? It hit a new record yesterday. $1,458. That's up about 3 times too? What a coincidence! Yeah, just a coincidence. No real connection between the feds pumping up the supply of money and prices going up.... Yeah...just a coincidence. And not a happy one for consumers. The FT article tells us that drivers are driving less. Especially those who are looking for work. They're "home-bound." They're stuck with houses they can't afford to leave. And they're stuck in places where they can't find jobs - distant suburbs built for a different world. America was built on cheap energy. Now that energy is no longer so cheap, a lot of what was built no longer makes sense. That leaves a lot of people in a fix. Many have been unemployed for so long they've stopped looking and the government has stopped counting them. They've disappeared into the vast mortgaged suburbs...the vast edifice of late, degenerate capitalism. Uh oh...but what's this...there's trouble in Zombie City too. Yes Dear Reader, the zombies are getting nervous. They're worried.... "Washington Braced for a shutdown," says another headline in the FT. Experts say a shutdown of the federal government would cost the economy $8 billion per week - much of it in the Washington, DC area. Business leaders have expressed alarm. They're coming up with emergency plans. Zombies are in a state of "high alert," says the news report. While they're worried about a temporary government shutdown, the bigger worry for the zombie world is that well-meaning budget cutters might actually succeed in cutting zombies off from their food supplies. Rep. Paul Ryan, looking either like presidential lumber...or easy-to-burn kindling... has proposed to take $5.8 trillion out of the deficit total over the next 10 years. This is the first serious discussion of reforming federal finances. Could it have serious consequences? The zombies are concerned. But they can sleep comfortably. According to our Daily Reckoning theory of How the World Works, once a system becomes degenerate it will continue to become more and more degenerate until it finally falls apart. Clear thinking, earnest reformers can try to put it right. But can they do it? Can they cut the zombies off the payrolls? Or are they only volunteering for martyrdom and taking their places on the scaffold? We'll see... And more thoughts... If it comes to that, Paul Ryan won't be the first reformer to sacrifice himself in vain. The Gracchi brothers set the pace in the 2nd century BC. Born into a good family at a bad time, the Gracchis tried to reform the Roman economy in 123, which they must have thought was in as bad shape as the US in 2011. They were actually the great grandchildren of Scipio Africanus, hero of the war against Carthage. Older brother Tiberius began by reforming the system of landholdings, so small landowners could earn more money and employ laborers. But a mob caught up with him and killed him. Then, his brother Gaius took over. He was elected Tribune and tried to reform the judiciary...as well as continue his brother's land reforms. He didn't last long either. In 121 BC he was set upon by his enemies...he fled and then committed suicide. Three thousand of his supporters were rounded up and killed. Regards, Bill Bonner |
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