saveyourassetsfirst3 |
- September's ETF Studs: 5 Funds That Thrived During A Wild Month
- 5 George Soros' Stocks Trading Under $10
- WATCH – Marion Muellet talks with James Turk
- Gold, Silver And The US Dollar
- Peak Silver Revisited: Impacts of a Global Depression, Declining Ore Grades & a Falling EROI
- Golden Predator Insiders Sheriff, Legg Buying
- Dexia rescue: Belgium Nationalizes Troubled Bank
- Gold at a Major Crossroads
- Jim Rogers warns about a U.S.-China currency war
- Gold is approaching a "major crossroads"
- WATCH: Gold and Silver News 10.10.11
- Silver Bulls Encouraged By Latest COT Report
- Advice to the G20 leaders: The G20’s three strategic priorities in 2012/2014 to avoid a « tragic decade »
- Goldman bullish on gold price
- Own Treasuries or Gold and Silver
- Conseils aux leaders du G20 : Les trois priorités stratégiques du G20 en 2012/2014 pour éviter une « décennie tragique »
- Dutch government comes half clean on gold reserves
- Fekete on Sprott and Silver
- Gold & Silver Market Morning, October 10, 2011
- We have liftoff
- Gold and Silver Prices Set Up To DROP
- WATCH: Max Keiser and David Morgan talk Silver
- James Turk talks to Dominic Frisby
- The U.S. Dollar: Orthodoxy and Heresy
- Silver Market Update
- Gold producers adding to their hedges
- Gold Market Update
- The Nightmare German Inflation
- Vietnam lets banks restart offshore trading to push local gold price down
- No Return on Government Investments
| September's ETF Studs: 5 Funds That Thrived During A Wild Month Posted: 10 Oct 2011 06:10 AM PDT By Michael Johnston: September was one of the worst months in years for global equity markets. Volatility swept throughout every corner of the financial markets as escalating Euro zone debt woes worried investors of an impending crisis. Investor confidence has been slowly eroding given the concerning global economic outlook, prompting many to pull out of the markets all together. Fear took charge in September as volatile range-bound trading spooked investors, leading to violent sell-offs across all asset classes, especially emerging market stocks. Broad equity indexes were humbled this past month, with SPY down 7.4%, while emerging markets, as tracked by EEM, were down 17.9%. Even safe havens struggled amidst the market turmoil; GLD was down just over 10% on the month. While the vast majority of ETFs lost ground in September, a handful of products–beyond inverse and leveraged funds–managed to turn in some impressive gains. Below we have highlighted some impressive performances during Complete Story » |
| 5 George Soros' Stocks Trading Under $10 Posted: 10 Oct 2011 05:58 AM PDT By Vatalyst: I took a look at stocks under $10 that George Soros has been accumulating, and, while some of these stocks carry the inherent risk of a cheap stock, others should not be looped into that category at all. My analysis is focused on the investments themselves and metrics useful to intermediate-term investors, rather than on George Soros' historic trades. Here is what I found to be most useful: Hecla Mining Company (HL): In an economic downturn, gold has always been a safe haven for investors but its use as a practical commodity is really nonexistent and investors have been turning to other metals such as silver as a refuge. Hecla Mining Company is good example of such a bolt hole and the company has just implemented a new dividend policy that makes it even more attractive. Hecla Mining Company will link dividend payments to Hecla's average quarterly realized silver price Complete Story » |
| WATCH – Marion Muellet talks with James Turk Posted: 10 Oct 2011 05:46 AM PDT Marion Mueller of oroyfinanzas.com, and James Turk, Director of the GoldMoney Foundation talk about: inflation, fiat currency and the importance of sound money and how it creates a level playing field allowing everyone to participate in economic activity. They talk about the Bundesbank's Money Museum in Frankfurt and the lessons it teaches about inflation. They talk about how to educate and spread the message of sound money. They talk about the dire economic situation in Spain, with extremely high youth unemployment and street protests. They also talk about the easy credit times of the housing boom and the tough times ahead. They talk about the need for a new monetary system based on hard money, simple rules and transparency. Marion explains oroyfinanzas' international readership from a number of Latin American countries, including Argentina, Mexico, Venezuela, etc. They talk about hyperinflation in Argentina which James visited in 1991 to learn more about inflation. They talk about how despite the amount of gold produced in Latin America there is little appreciation about gold and silver's monetary role. This interview was recorded in August 2011 in London. |
| Gold, Silver And The US Dollar Posted: 10 Oct 2011 05:16 AM PDT Last week, we wrote that gold and gold stocks could be at – or very close to – a bottom. So far so good, as the miners rallied out of oversold conditions. Gold found support at the 35 weeks Exponential Moving Average, and RSI held above 50. That's a good sign so far:
Sentiment in Gold is back at very low levels, which should be bullish for Gold (although it could always drop some more):
However, when we look at the daily chart, we can see a bear flag forming right now, and the move out of oversold conditions is accompanied by decreasing volume. That's a negative sign, and it looks like the Bear Flag could be taken out to the downside anytime now. That would cause both the RSI and MACD to turn down again.
Sentiment in the mining companies, as measured by the Bullish % Index is also at historically low levels, indicating that miners are severely oversold.
That brings us to silver. Here we can see that sentiment reached extremely low levels (30.03%), which COULD bode well for silver prices going forward.
When we look at patterns of "higher highs / higher lows" and "lower highs / lower lows", we can see that sentiment is a good indicator of what will happen to silver:
In the chart below, we can see that Silver recently retraced exactly 50% of the move from 3.50$ (the 1993 low) to the top of $49.82. The next Fibonacci Support level comes in at $21.18
Although the low $20′s might seem unlikely now, it's definitely something we have to keep an eye on. Even if silver drops towards the low $20 (or even slightly below), it would not harm the long term uptrend at all, as can be seen in the following chart (the yellow pattern is based on the price action of 2008):
When we look at the CFTC COT reports for silver, we can see that the Commercials A.K.A. "Smart Money" have reduced their net-short positions substantially, to bull-market lows.
However, perspective is everything. Of course we are in a bull market (since the early 2000′s), but if we look at the COT reports going back to 1986, we can see that the Commercial Net Short positions have been this low on several occasions, and it didn't always mean higher prices:
However, as the Open Interest fluctuates, it might be better to look at Commercial Net Short Positions as a Percentage of Open Interest (CNSPOI).
We think that everything comes down to the US Dollar. When the US Dollar falls, metals generally rise, and when the US Dllar rises, metals generally fall. We can see that the USD Sentiment is very positive, meaning we could see a pullback. However, the fact that we had a lower high in Price early 2011 combined with a higher high in sentiment, was foretelling us that something was going on in the USD market, just like in 2008 & 2009:
One last thing: when we compare FXI (a China ETF) with the Nasdaq Bubble, we can see that FXI is imitating the Nasdaq Index:
If China drops a bit more, it might be time to buy China and everything China-related (read: COMMODITIES)
|
| Peak Silver Revisited: Impacts of a Global Depression, Declining Ore Grades & a Falling EROI Posted: 10 Oct 2011 03:18 AM PDT The world is about to peak in global silver production. This will not occur due to a lack of silver to mine, but rather as a result of the peaking of world energy resources, declining ore grades, and a falling Energy Returned On Invested – EROI. The information below will describe a future world that very few have forecasted and even less are prepared. |
| Golden Predator Insiders Sheriff, Legg Buying Posted: 10 Oct 2011 03:03 AM PDT We've noted that the buyer's strike in small junior explorers, developers and miners continued into the first week of October. Super-negative liquidity has clobbered many of the companies we track, even some of the most promising of explorers on our radar screen. However, the recent sharply lower prices have stimulated insider activity in some of the companies, such as in the Vulture Bargain Candidate of Interest below.
Insiders sell shares of their own companies for a variety of reasons, including to pay taxes, to buy something, for college tuition for their children, to make donations, and of course, if they believe the near to mid-term future for their company is less than robust. Insiders buy shares of their own companies using their own hard-earned after-tax money for only one very important reason. They buy shares when they think the market price is too low and is likely to advance materially in the future. It goes without saying that when insiders buy, and buy in size, it is a clear and compelling vote of confidence by that individual.
|
| Dexia rescue: Belgium Nationalizes Troubled Bank Posted: 10 Oct 2011 01:46 AM PDT The European banking crisis claimed its first victim on Monday: The Dexia group will be broken up. The Belgian government is paying 4 billion euros to acquire the company's operations in that country. Meanwhile, the Belgian, French and Luxembourg governments all plan to provide billions in guarantees. The first major European bank appears to have become the victim of the second wave of the global financial crisis that first hit after the September 2008 collapse of Lehman Brothers. The Belgian-French Dexia bank is slated to be dismantled, with the government in Brussels assuming control of 100 percent of the company's Belgian operations, Prime Minister Yves Leterme said on Monday in Brussels. Earlier, the bank's board had accepted the government's offer... Read |
| Posted: 10 Oct 2011 01:40 AM PDT Gold Scents |
| Jim Rogers warns about a U.S.-China currency war Posted: 10 Oct 2011 01:36 AM PDT From Bearish News: U.S. politicians from both sides of the aisle are lining up to support possible trade sanctions and tariffs on China. Apparently, the enthralled ignorami we call our "representatives" are reacting to China's currency manipulation (as if Tim G. and the gang are helpless bystanders in the global currency wars). Rogers warns against such economic blunders, noting, "We had a trade war in the 1930's... It led to the Great Depression." Shortly after that bludgeoning remark, Rogers adds... Read full article (with video)... More from Jim Rogers: Jim Rogers: This is what QE3 will do Jim Rogers: The U.S. dollar is not a "safe haven" Jim Rogers: Bernanke and Geithner are sending us to "fiscal Armageddon" |
| Gold is approaching a "major crossroads" Posted: 10 Oct 2011 01:35 AM PDT From Gold Scents: I think next week will mark a major turning point in the gold market. Depending on whether the dollar continues higher or turns back down, we will either see a resumption of the D-Wave decline or this will just turn into a normal run-of-the-mill intermediate degree correction, followed by another leg up in this 2 1/2-year C-wave advance. First the pros: The COT report has now reached a maximum bullish level on the commercial contracts. In the past, this has always marked major bottom turning points. Sentiment and breadth have reached extreme bearish levels (contrary indicator)... Read full article... More on gold: This is the cheapest place in the world to buy gold today Reports say billionaire George Soros has dumped all of his gold Gold MANIA: Why we could be on the brink of the biggest bubble in history |
| WATCH: Gold and Silver News 10.10.11 Posted: 10 Oct 2011 01:27 AM PDT Gold and Silver's Christian Garcia with your Monday morning 10.10.11 Gold and Silver news. ~TVR |
| Silver Bulls Encouraged By Latest COT Report Posted: 10 Oct 2011 01:22 AM PDT From GoldMoney NewsDesk: That said, volatility and uncertainty remain the hallmarks of commodity and equity markets at the moment. Any remotely bearish news on Europe will immediately result in selling in commodity and equity markets, and renewed strength in the US dollar (which has moved lower today as a result of increasing – albeit fragile – confidence in Europe). As far as gold and silver prices are concerned, both of these metals are continuing to consolidate. $1,680 per ounce remains a key resistance level for gold at the moment, with strong buying support evident around $1,600. Silver is well supported below $30, but keeps stalling on attempts to reach $33. Open Interest in Comex gold and silver futures has declined notably in the last few weeks, which as Dan Norcini notes in his latest King World News interview is indicative of the volatility affecting these markets at the moment, which has scared many small and even large speculators out of the market.
What does this mean for the silver price in the short-term? Anything is possible – more bad news from Europe (possibly linked to the Slovak parliament not agreeing to increase funding for the European Financial Stability Facility, something which needs agreement from all eurozone parliament's could once again derail silver's advance, and send it back below $30. But as the GotGoldReport states – and the key takeaway for silver bulls from these very low net-short positions: "As of Tuesday, the largest, best funded and presumably the best informed commercial traders of silver futures continued to get much "smaller" in their net short positioning for silver futures. There can be no doubt that the commercials view the current downdraft for silver as a silver plated opportunity to very strongly reduce their short bets in the leveraged paper silver contracts." That is, the largest and best-informed players in the silver futures market think that there's not much downside to the silver price from here. Those people still holding net-short positions in silver futures may be in for an unpleasant surprise before too long. Read more @ GoldMoney.com |
| Posted: 10 Oct 2011 01:14 AM PDT - Exceprt GEAB N°57 (September 16, 2011) -  On March 29, 2009, Franck Biancheri signed an open letter in the Financial Times international edition from LEAP/E2020 to the G20 leaders who were going to meet in London the next week. In its introduction, this text predicted that if the three recommendations it contained were not implemented as soon as possible, rather than a crisis of three to five years, the world would sink into a crisis for more than a decade. Here we are two and a half years later and, alas, it is now clear that not only has the crisis revealed in 2008 not been resolved (1), but is getting worse instead now combining loss of confidence in paper currencies and the Western banking system (2), relapse of the world economy into recession, permanent rise in Western unemployment, explosive public debt in Western countries and growing unease of the emerging powers in front of an old order that refuses to think of its' succession. In 2009, LEAP/E2020 gave three pieces of strategic advice to the G20 leaders: . in priority, create a new international reference currency to replace the US Dollar, which is now unable to hold the role of the pillar of the global monetary system . at the same time ensure that the public authorities take control of the major banks which have become real "black holes" of liquidity, either by nationalization or other methods . finally, carry out via the IMF, a thorough audit of the American, British and Swiss financial systems at the heart of the financial world. Without these essential reforms and their rapid implementation in the six months following the G20 summit in London, we indicated that the "window of opportunity" would close for several years. To complete these recommendations, the open letter stressed the importance of publishing a statement from the G20 which should be brief and easily understood by world public opinion in the absence of the power to curb people's fears. Today everybody realizes that almost three years have been lost since the same problems remain a burning issue (3). But political anticipation is not a school of regret, but an instrument to help decision-making. For LEAP/E2020 it is time, therefore, on the eve of the new G20 summit to be held in Cannes on 3-4 November 2011, to continue the effort begun in 2009. This effort is intended to prevent the world plunging into what Franck Biancheri calls "the tragic scenario for the 2010-2020 decade " (4). And the time seems particularly favourable since, according to our team, a new "window of opportunity" will open in 2012, for a maximum period of two years. A new window of opportunity for action by the G20 opens in 2012 In effect, during 2012, the leaders of almost half the G20 countries will be replaced. This will be the case for Mexico, South Korea, the United States, China, Russia, India, France, Italy and probably Germany (4). From the end of 2012, the G20 Summit will, therefore, bring together political leaders mainly elected "in the crisis", and not before the crisis as is now the case. On this basis, the preparation of summits for 2012, 2013 and 2014 will no longer be paralyzed and / or interfered with by the many "taboos", "impossibilities" or, on the contrary, "now obsolete certainties" or "the obvious which is no more" belonging to the world before the crisis. In any case, this new generation of leaders will not be able to pretend they have discovered a situation for which it has not been prepared; and to paraphrase the conclusion of our 2009 open letter, it won't be able to pretend either not to have been advised of the available opportunities to take the planet on a path of peaceful transition to the world after the crisis. At the same time, the recent widespread awareness (since the beginning of the second half of 2011) of the fact that that everything remains to be done to try to overcome the global systemic crisis created, for a year or two at most, a situation conducive to political audacity. Exhausted by the consequences of the crisis and alarmed by the inefficiency of the steps taken to resolve it, public opinion everywhere is now ready to support or go along with major upheavals in the order that has prevailed in recent decades, both in socio-economic and geopolitical terms. But here also, keep in mind that this state of mind will only be positive if it is exposed to proposed ambitious solutions reflecting the interests of the vast majority and that otherwise, from 2013, it will metamorphose into destructive anger everywhere, targeting existing systems and leaders. Having defined the conditions for the exercise of a first effective power by the G20, LEAP/E2020 advises the G20 leaders to focus on three strategic priorities in 2012/2013. We emphasize the importance of a tight agenda, refusing dissemination over a wide variety of subjects. In fact, the complexity of the problem, namely the emergence of a new global governance, like the need to communicate to convince public opinion consisting of several billions of citizens in very diverse political, social, cultural, economic contexts, requires focus on the essentials. The G20's three strategic priorities for constructing the future from 2012/2013 And for LEAP/E2020, the essentials are contained in these three strategic priorities that fundamentally determine all the future architecture of global governance and, at the same time, purify the dangerous areas of the current system. Simply put, it's a case of building the future whilst defusing the present from the bombs of the past. First priority: From 2012 (at the latest) launch the process for creating a new global reserve currency. At this stage the simplest method would be to turn SDRs into this new global monetary instrument giving it a more "sexy" name of course, and retaining the currencies of the major economies in the basket defining its value: US Dollar, Euro, Yen, Yuan, Real, Ruble, the Gulf currency (if it emerges by then), South African Rand, and possibly gold, which de facto has once again become a safe haven currency. It's a case of restructuring the world monetary system on the real economy, then exiting the "financial" currencies such as the Pound sterling or the Swiss Franc. Technical problems do not exist. The expertise exists within the international institutions to carry out all the work required to create such a currency within a year. The difficulty exclusively arises, therefore, from the emergence of a determined political will from the G20 to keep to a schedule of two years to create and launch this new currency. This willingness, and the decisional weight necessary and sufficient to bring it to fruition, will potentially exist in a subgroup of the G20 consisting of Euroland, the BRICs, and several other emerging countries. The political changes at the head of the main Euroland countries like the current growing confrontation between Euroland on the one hand and Wall Street and the City on the other will create, in the next 12 months at most, the perfect conditions for a Euroland-BRICS convergence on such an agenda. It's starting with this "creative" core that the G20 summit's agenda in late 2012 must be prepared which will include of course, otherwise nothing will happen, a radical reform and with immediate effect of the composition of the capital and caucus of the major global organizations (IMF, World Bank, WTO, UN Security Council) (6). At the rate of evolution of the crisis, in 2012, neither Washington nor London will no longer be able (even if they still wanted to (7)) to oppose the creation of this new global reference currency. The vision and determination of Euroland leaders (8), the BRICs and other emerging countries in the G20 will be the only factors of the success or failure of this fundamental reform without which the current international monetary system will continue to sink into increasing chaos year after year, producing terrible setbacks for world trade, the global economy and international cooperation, all whilst fueling the rise in unemployment and the impoverishment of Western middle classes, and considerably slowing down the development of emerging economies. Without a "reliable standard" there is no stable economic and financial system. It's here that this priority is strategic: without it, nothing significant or lasting can be done since any measure is corrupted by a standard (the US Dollar) which has become weak, elastic and unpredictable. Second priority: Put all the world's major financial institutions under public tutelage, wholly or partly, from the beginning of 2013 at the latest. The list is known already since it's those that, at the request of the G20, the Financial Stability Board qualify as carrying systemic risk. To which should be added the BRICs and emerging countries' major institutions because it is obvious that many of them will become "systemic" in the next five years. The objective in this area is twofold: first to ensure that these institutions resist speculative temptations - although we already know that it isn't possible to trust their leadership and / or private shareholders in this area; second, to organize a "gentle deflation", which doesn't break the real economy, of the virtual economy. Any country refusing such a policy will have their establishments concerned blacklisted, just like what has been tried unsuccessfully for tax havens. Without success, because there was no determined political will on the subject, and especially because it's not the tax haven that speculates ... it is the major bank that uses it. This time, the G20 has no room for error: neither mistaking the target, nor the method. Third priority: At the end of 2012 launch a huge ten-year public infrastructure programme on a world scale. In the term "infrastructure", LEAP/E2020 particularly includes all essential public services such as education, access to medical care and basic services (water, electricity, telecommunications) and some symbolic science programs (medicine, space and energy). Through this bias of supporting effective and sustainable (9) global growth by the best and safest (10) use of the current imbalances in financial resources: the countries benefiting from substantial surpluses finding a useful and safe means of recycling them. It's also, in our opinion, the only way to put a stop to the accelerated evaporation of trillions of US dollar assets generated by the current financial crisis and economic recession. Imagine a budget of one trillion Euros (a symbolic figure in communication terms) split into two geopolitical envelopes: one for infrastructure or projects involving many regions of the world; the other focused on a single region or one country. Western countries should also benefit because otherwise we remain in the logic of the world before the crisis and their economies and because their economies also need a big hand (especially the United States as regards infrastructure). To conclude this second piece of advice to the G20 leaders in less than three years, LEAP/E2020 wishes to draw their attention to a fundamental methodological point. The content and form are closely related, it is essential that from the end of 2012 the world should be able to see a radical change in the process of the geographic location of the G20's work, and beyond, from 2013, global governance. The urgency and complexity of the G20's work in this period justifies the holding of two G20 summits per year. After that planned in Mexico mid-2012, it is necessary to make provision for one in the last quarter of 2012 so that all the new leaders elected during the year can begin to bring their weight to bear on the institution's work and agenda. In addition, from this date, it would be desirable, for obvious reasons of global credibility, that the summits leave the Atlanticist fold (11) to be held with the emerging powers: China, Brazil, India and Russia seem obvious choices, to show that the G20 is not a G7 decorated with invited countries. No doubt this will help to radically progress the agendas, an indispensable condition for overcoming the crisis. Finally, in this sense, it is inevitable that from 2013/2014 the discussion will start on the relocation of major international institutions to ensure that the geography of global governance after the crisis reflects the real world and not that of 1945. Far from being details, these changes go to the heart of the decision making process and will be tremendous assets in convincing public opinion so it really feels that there is indeed an historic change taking place in the minds of those who lead them and not just in their meetings' press releases. Speaking of method, we have to explain to our subscribers what we have chosen for this "G-20 2011Action" (12). This year LEAP/E2020 has chosen a very different approach from that adopted in 2009. There will be no open letter published in the Financial Times or any other international newspaper: first, because LEAP/E2020' audience today is wide enough to no longer need an intermediary (13). Secondly, because it's time to no longer depend on the Anglo-Saxon media, whose international coverage reflects "the world before the crisis", to communicate such messages aimed at preparing "the world after the crisis". Thus we reaffirm by example that the content and form are closely linked to ensure coherent action and discussion, thus ensuring maximum effectiveness for the effort undertaken. This advice will, therefore, be distributed to GEAB subscribers initially then exceptionally (14) posted publicly on the website in mid-October, two weeks before the Summit in Cannes. Meanwhile, for the last six months, in partnership with LEAP and Anticipolis editions, Franck Biancheri, LEAP/E2020 Director, has begun an operation to distribute the international edition (15) of his book "The World Crisis: The Path to the World Afterwards" and LEAP/E2020's work with diplomats and special advisers from all countries participating in the G20 summit in Cannes (16). Moreover, we can only praise the very positive welcome received to date by almost all the countries concerned. This awareness work will continue right up to the summit itself in early November. Read PDF --------- Notes: (1) Contrary to what the majority of the political, financial and economic leaders have unceasingly maintained during these last two years. (2) Of which gold's return to the forefront as a safe haven is the best indicator. (3) In addition, LEAP/E2020 recommended that the Eurozone leaders, from 2007, establish a Euroland governance as soon as possible. We recall here that the term Euroland, which has become very fashionable, was created by Franck Biancheri and used for the first time in an article entitled "2004 or the birth of Euroland", published the 02/11/2004 in NewropMag. (4) Where the prospect of early elections is very likely. (5) In his book « World crisis: The Path to the World Afterwards » published at the end of 2010 by Editions Anticipolis. (6) If the G20 wants to be at the heart of global governance, the leaders who participate must act as political leaders on a scale that addresses and resolves the major issues, and not as managers discussing technical issues. (7) Which would be the proof for LEAP/E2020 that their leaders lack vision for their countries' medium and long term interests; because, anyway, the developments in this area are inevitable. The only question to ask is: will this be done as part of a peaceful and controlled process or via a decade of all sorts of conflict? (8) And their advisors. (9) By means of a decennial programme taking into consideration the requirements in terms of energy savings . (10) The other option consists of seeing their surplusses continue to lose value due to the crisis. (11) Since the end of 2008 summits have been held in Washington, Pittsburgh, Toronto and Seoul. The next will be held in Cannes and the following in Mexico. These are very American-centred locations. Source: Wikipedia. (12) And this is especially true since many of you ask us how we can share our analyses at the highest level. (13) See the information on LEAP/E2020 site traffic, which has become the site on the global crisis benefiting from the largest global audience. Source: LEAP, 08/21/2011. (14) We are sure that GEAB subscribers will understand this bending of our rule of waiting three months before eventually putting any excerpts from a GEAB issue in the public domain. (15) English, German, Spanish and Italian versions. (16) Who will, of course, receive the advice formulated here by LEAP/E2020. |
| Posted: 10 Oct 2011 01:00 AM PDT The decision by European central banks to expand their "financial easing" programmes could provide good support for gold and silver prices in the foreseeable future. After the Bank of ... |
| Own Treasuries or Gold and Silver Posted: 10 Oct 2011 12:53 AM PDT From Investing Advice By George: The drop in price of gold and silver is because they are considered to be in a bubble. In my opinion a bubble is when the underlying asset trades in high volumes at prices that are inflated to their true values. There are economists that assert that asset prices often deviate from their intrinsic values. Because it is often difficult to determine what the intrinsic value of an asset is bubbles are often seen in retrospect like when sudden drops in prices appear. They are seen as a crash or a bubble burst. It is important to recognize that prices of a bubble can fluctuate erratically and make it impossible to predict from supply and demand alone. The new safe havens are perceived as the dollar and US Treasuries. To prove this point the media points to that fact that gold and silver have sold off. They pointed to the strengthening of the dollar and reported that the safe haven was US Treasuries. Please see the chart of the TLT below. CLICK IMAGE FOR A LARGER VIEW
here are too many very smart people who couldn't care less about gold and silver. Who am I to say they're wrong? They chose to invest in high yielding, large cap stocks and are content to trade their positions (buy on the dips and sell on the rips) and collect their yields while they wait. In all honesty, half my portfolio is a diversified collection of these stocks. The other half however is more risky. I like SPXU and UPRO, which are plays on the S&P. Read More @ InvestingAdviceByGeorge.Blogspot.com |
| Posted: 10 Oct 2011 12:43 AM PDT - Extrait GEAB N°57 (15 septembre 2011) -  Le 29 Mars 2009, Franck Biancheri signait dans l'édition mondiale du Financial Times une lettre ouverte de LEAP/E2020 aux dirigeants du G20 qui allaient se réunir à Londres la semaine suivante. Ce texte prédisait dans son introduction que si les trois recommandations qu'il contenait n'étaient pas mises en œuvre au plus vite, au lieu d'une crise de trois à cinq ans, le monde s'enfoncerait dans une crise de plus d'une décennie. Nous sommes deux ans et demi plus tard, et hélas, il est évident désormais que non seulement la crise révélée en 2008 n'est pas réglée (1), mais qu'elle est au contraire en train de s'aggraver mêlant désormais perte de confiance dans les devises papiers et le système bancaire occidental (2), rechute de l'économie mondiale dans la récession, hausse continue du chômage occidental, endettement public explosif des pays occidentaux et malaise croissant des puissances émergentes devant un ordre ancien qui refuse de penser sa succession. En 2009, LEAP/E2020 donnait trois conseils stratégiques aux dirigeants du G20 : . en priorité, créer une nouvelle devise internationale de référence en lieu et place du Dollar US désormais incapable de tenir le rôle de pilier du système monétaire mondial . parallèlement, faire en sorte que la puissance publique prenne le contrôle des grandes banques devenues de véritables « trou noir » à liquidités, que ce soit par la nationalisation ou d'autres méthodes . enfin, faire réaliser par le FMI un audit en profondeur des systèmes financiers américain, britannique et suisse au cœur de la planète financière. Sans ces réformes essentielles et leur mise en œuvre rapide dans le semestre suivant le sommet du G20 de Londres, nous indiquions que la « fenêtre d'opportunité » se refermerait pour plusieurs années. Pour compléter ces recommandations, la lettre ouverte soulignait l'importance de publier un communiqué du G20 qui soit bref et facilement compréhensible par les opinions publiques mondiales faute de pouvoir enrayer les craintes des populations. Aujourd'hui tout le monde se rend compte qu'il y a bien eu près de trois années perdues puisque les mêmes thématiques restent d'une actualité brûlante (3). Cependant l'anticipation politique n'est pas une école du regret, mais un instrument d'aide à la décision. Pour LEAP/E2020 il est donc temps, à la veille du nouveau sommet du G20 qui se tiendra à Cannes les 3-4 Novembre 2011, de poursuivre l'effort initié en 2009. Cet effort a pour but d'éviter que le monde plonge dans ce que Franck Biancheri appelle « le scénario tragique pour la décennie 2010-2020 » (4). Et le temps nous paraît particulièrement propice puisque selon notre équipe une nouvelle « fenêtre d'opportunité » va s'ouvrir en 2012, pour une durée de deux ans maximum. Une nouvelle fenêtre d'opportunité pour l'action du G20 s'ouvre en 2012 En effet, au cours de l'année 2012, les dirigeants de près de la moitié des pays du G20 vont être renouvelés. Ce sera le cas pour le Mexique, la Corée du Sud, les Etats-Unis, la Chine, la Russie, l'Inde, la France, l'Italie et probablement l'Allemagne (5). A partir de la fin 2012, le sommet du G20 réunira donc pour l'essentiel des leaders politiques élus « dans la crise », et non pas avant la crise comme c'est le cas actuellement. De ce fait, la préparation des sommets pour 2012, 2013 et 2014 ne sera plus paralysée et/ou parasitée par nombre de « tabous », d' « impossibilités » ou à l'inverse de « certitudes désormais obsolètes » ou d' « évidences qui n'en sont plus » appartenant au monde d'avant la crise. En tout état de cause, cette nouvelle génération de dirigeants ne pourra pas prétexter découvrir une situation à laquelle elle n'a pas été préparée ; et pour paraphraser la conclusion de notre lettre ouverte de 2009, elle ne pourra pas non plus prétendre ne pas avoir été prévenues des opportunités à saisir pour faire prendre à la planète un chemin de transition pacifique vers le monde d'après la crise. Parallèlement, la récente prise de conscience générale (depuis le début du second semestre 2011) du fait que tout reste à faire pour tenter de surmonter la crise systémique globale crée pour un an ou deux maximum une situation propice à l'audace politique. Epuisées par les conséquences de la crise et effrayées par l'inefficacité des actions entreprises pour la résoudre, partout les opinions publiques sont désormais prêtes à soutenir ou accompagner des bouleversements majeurs de l'ordre qui a prévalu ces dernières décennies, tant au niveau socio-économique qu'en termes géopolitiques. Mais là aussi, il faut garder à l'esprit que cet état d'esprit ne sera positif que s'il est exposé à des projets de solution ambitieux et reflétant l'intérêt du plus grand nombre ; et que sinon, il se transformera partout dès 2013 en colère destructrice, ciblant les systèmes et dirigeants en place. Les conditions de l'exercice d'un premier pouvoir effectif du G20 ainsi définies, LEAP/E2020 recommande aux leaders du G20 de se concentrer sur trois priorités stratégiques au cours des années 2012/2013. Nous insistons sur l'importance d'un agenda resserré, refusant la dispersion sur une multitude de thèmes. En effet, la complexité de la problématique, à savoir l'émergence d'une nouvelle gouvernance mondiale, comme la nécessité de communiquer pour convaincre des opinions publiques comptant plusieurs milliards de citoyens dans des contextes politiques, sociaux, culturels, économiques très divers, imposent de se concentrer sur l'essentiel. Les trois priorités stratégiques du G20 pour construire l'avenir dès 2012/2013 Et pour LEAP/E2020, l'essentiel tient à ces trois priorités stratégiques qui déterminent fondamentalement toute future architecture de la gouvernance mondiale et assainissent à la fois les zones dangereuses du système actuel. En termes simples, il s'agit de construire l'avenir tout en dépiégeant le présent des bombes du passé. 1° priorité : Lancer dès 2012 (au plus tard) le processus de création d'une nouvelle devise de réserve mondiale. La méthode la plus simple serait à ce stade de transformer les DTS en ce nouvel instrument monétaire mondial en lui donnant un nom plus « sexy » bien entendu et en retenant les devises des principales économies mondiales dans son panier de définition de valeur : Dollar US, Euro, Yen, Yuan, Real, Rouble, devise des pays du Golfe (si elle émerge d'ici là), Rand sud-africain, et peut-être l'or qui est redevenu de facto une devise-refuge. Il s'agit de refonder le système monétaire mondial sur l'économie réelle, donc exit les devises « financières » comme la Livre sterling ou le Franc suisse. Les problèmes techniques n'existent pas. Le savoir-faire existe au sein des institutions internationales pour effectuer en une année tout le travail nécessaire à la création d'une telle devise. La difficulté vient donc uniquement de l'émergence au niveau du G20 d'une volonté politique déterminée à tenir un calendrier de deux années pour créer et lancer cette nouvelle devise. Cette volonté, et le poids décisionnel nécessaire et suffisant pour la concrétiser en actes, existera potentiellement dans un sous-groupe du G20 composé de l'Euroland, des BRICS et de plusieurs autres pays émergents. Les changements politiques à la tête des principaux pays de l'Euroland comme l'actuelle confrontation croissante entre d'une part l'Euroland et d'autre part Wall Street et la City vont créer d'ici 12 mois au maximum les conditions parfaites d'une convergence Euroland-BRICS sur un tel agenda. C'est à partir de ce noyau « créatif » que devra se préparer l'agenda du sommet du G20 de la fin 2012 qui comprendra bien entendu, sinon rien ne se fera, une réforme radicale et d'effet immédiat, des compositions du capital et des instances dirigeantes des principales organisations mondiales (FMI, Banque Mondiale, OMC, Conseil de Sécurité) (6). Au rythme d'évolution de la crise, courant 2012, ni Washington ni Londres ne seront plus en mesure (s'ils le souhaitent encore (7)) de s'opposer à la création de cette nouvelle devise globale de référence. La vision et la détermination des dirigeants (8) de l'Euroland, des BRICS et d'autres pays émergents au sein du G20 seront les seuls facteurs de succès ou d'échec de cette réforme fondamentale sans laquelle le système monétaire international actuel continuera année après année à sombrer dans un chaos croissant, portant des coups terribles au commerce mondial, à l'économie globale et à la coopération internationale, tout en alimentant la hausse du chômage et l'appauvrissement des classes moyennes occidentales, et en ralentissant considérablement le développement des économies émergentes. Sans un « étalon fiable », il n'y a pas de système économique et financier stable. C'est en cela que cette priorité est stratégique : sans elle, rien ne peut se faire de significatif ou de durable puisque toute mesure se trouve pervertie par un étalon (le Dollar US) devenu fragile, élastique et imprévisible. 2° priorité : Mettre sous tutelle publique partielle ou complète dès le début 2013 au plus tard l'ensemble des principaux établissements financiers mondiaux. La liste est connue désormais puisque ce sont ceux qu'à la demande du G20, le Financial Stability Board qualifie de systémiques. Il faudrait y ajouter les principaux établissements des pays BRICS et émergents car il est évident que plusieurs d'entre eux deviendront « systémiques » d'ici cinq ans. L'objectif en la matière est double : d'une part s'assurer que ces établissements résistent aux tentations spéculatives - or nous savons désormais qu'il ne peut pas être envisageable de faire confiance à leurs dirigeants et/ou actionnaires privés en la matière ; d'autre part, organiser un « dégonflage en douceur », qui ne casse pas l'économie réelle, de l'économie virtuelle. Tout état se refusant à une telle politique verra ses établissements concernés mis sur liste noire, à l'image de ce qui a été tenté sans succès pour les paradis fiscaux. Sans succès, car il n'y avait pas de volonté politique déterminée sur le sujet ; et surtout car ce n'est pas le paradis fiscal qui fait la spéculation … c'est la grande banque qui l'utilise. Cette fois-ci, le G20 n'a plus le droit à l'erreur : qu'il ne se trompe pas de cible, ni de méthode. 3° priorité : Lancer fin 2012 un vaste programme décennal d'infrastructures publiques à l'échelle mondiale. Par le terme « infrastructures », LEAP/E2020 intègre notamment l'ensemble des services publics essentiels comme l'éducation, l'accès aux soins et aux services de base (eau, électricité, télécommunication) et quelques programmes scientifiques emblématiques (médecine, spatial, énergie). Il s'agit par ce biais de soutenir efficacement et durablement (9) la croissance mondiale en utilisant au mieux les déséquilibres actuels en matière de ressources financières : les pays bénéficiant de considérables excédents trouvant ainsi un moyen utile et sûr (10) de les recycler. C'est aussi à notre sens le seul moyen de mettre fin à l'évaporation accélérée de milliers de milliards de dollars US d'actifs générée par la crise financière et la récession économique en cours. On peut imaginer un budget de mille milliards d'Euros (chiffre symbolique en termes de communication) partagé en deux enveloppes géopolitiques : d'une part les infrastructures ou projets impliquant plusieurs régions du monde ; d'autre part, ceux centrés sur une seule région ou un seul pays. Les pays occidentaux doivent aussi faire partie des bénéficiaires car sinon on reste dans la logique du monde d'avant la crise et car ce sont leurs économies qui ont aussi besoin d'un grand coup de main (en particulier les Etats-Unis en ce qui concerne les infrastructures). Pour conclure ce deuxième exercice de conseil aux leaders du G20 en moins de trois ans, LEAP/E2020 souhaite attirer leur attention sur un point méthodologique fondamental. Le fond et la forme étant étroitement liés, il est essentiel que dès la fin 2012 le monde puisse constater un changement radical dans le processus de localisation géographique des travaux du G20, et au-delà, dès 2013, de la gouvernance mondiale. L'urgence et la complexité des travaux du G20 dans cette période légitime la tenue de deux sommets du G20 par an. Après celui prévu au Mexique mi-2012, il faut donc en prévoir un au quatrième semestre 2012 afin que l'ensemble des nouveaux dirigeants élus au cours de l'année puisse commencer à peser sur les travaux et l'agenda de l'institution. Par ailleurs, dès cette date, il serait souhaitable, pour d'évidentes raisons de crédibilité globale, que les sommets quittent le giron atlantiste (11) pour se tenir dans les puissances émergentes : Chine, Brésil, Inde, Russie paraissent des choix évidents pour montrer que le G20 n'est pas un G7 agrémenté de pays invités. Nul doute que cela aidera les agendas à évoluer radicalement, condition sine qua non pour surmonter la crise. Enfin, dans cette logique, il est inévitable qu'à partir de 2013/2014 s'ouvre le débat sur la relocalisation des grandes institutions internationales afin de s'assurer que la géographie de la gouvernance globale d'après la crise reflète le monde réel et non plus celui de 1945. Loin d'être des détails, ces changements touchent au cœur du processus décisionnel et seront de formidables atouts en termes de conviction des opinions publiques, pour qu'elles sentent bien qu'il y a effectivement un changement historique en cours dans la tête de ceux qui les dirigent et pas seulement dans les communiqués de leurs rencontres. En parlant de méthode, il nous paraît nécessaire d'expliciter à nos abonnés celle que nous avons retenue pour cette « Action G20 2011 » (12). LEAP/E2020 a ainsi choisi cette année une approche très différente de celle retenue en 2009. Il n'y aura pas de lettre ouverte publiée dans le Financial Times ou autre journal international : d'une part, parce que l'audience de LEAP/E2020 aujourd'hui est suffisamment globale pour ne plus avoir besoin d'intermédiaire (13), d'autre part, car il temps de ne plus dépendre des médias anglo-saxons dont l'envergure internationale reflète « le monde d'avant la crise » pour communiquer ce type de messages qui vise à préparer « le monde d'après la crise ». Nous réaffirmons ainsi par l'exemple que le fond et la forme sont étroitement liées pour assurer la cohérence de l'action et du discours, et assurer ainsi une efficacité maximale à l'effort entrepris. Ces conseils seront donc diffusés aux abonnés du GEAB dans un premier temps, puis exceptionnellement (14) mis en ligne publiquement mi-Octobre, soit deux semaines avant la tenue du Sommet de Cannes. Parallèlement, depuis six mois, en partenariat avec LEAP et les éditions Anticipolis, Franck Biancheri, directeur de LEAP/E2020, a entrepris une opération de diffusion de l'édition internationale (15) de son livre « Crise mondiale : En route pour le monde d'après – Europe et monde dans la décennie 2010-2020 » et des travaux de LEAP/E2020 auprès des diplomates et conseillers spéciaux de tous les pays participant au sommet du G20 de Cannes (16). Nous ne pouvons d'ailleurs que nous féliciter de l'accueil très positif reçu à ce jour par la quasi-totalité des pays concernés. Ce travail de sensibilisation continuera jusqu'au sommet lui-même début Novembre. Lire PDF ---------- Notes: (1) Contrairement à ce que n'ont cessé d'affirmer la plupart des responsables politiques, financiers et économiques au cours de ces deux dernières années. (2) Dont le retour au premier plan de l'or comme valeur-refuge est le meilleur indicateur. (3) LEAP/E2020 avait par ailleurs recommandé aux dirigeants de la zone Euro dès 2007 de mettre en place au plus vite une gouvernance de l'Euroland. Nous rappelons à ce propos que le terme Euroland, devenu très à la mode, a été créé par Franck Biancheri et utilisé pour la première fois dans un article intitulé « 2004 ou la naissance de l'Euroland » publié le 11/02/2004 dans NewropMag ). (4) Dans son livre « Crise mondiale : En route pour le monde d'après » publié fin 2010 aux Editions Anticipolis. (5) Où la perspective d'élections anticipées est très probable. (6) Si le G20 veut être au cœur de la gouvernance planétaire, les leaders qui y participent doivent agir en leaders politiques d'envergure qui abordent et résolvent les grandes questions ; et non pas en gestionnaires qui débattent de questions techniques. (7) Ce qui pour LEAP/E2020 serait la preuve que leurs dirigeants manquent de vision des intérêts de leurs pays à moyen et long terme car de toute façon l'évolution en la matière est inéluctable. La seule question à se poser est : cela se fera-t-il dans le cadre d'un processus contrôlé et pacifique ou via une décennie de conflits en tous genres ? (8) Et de leurs conseillers (9) Par un programme d'une décennie intégrant notamment les exigences d'économie d'énergie pour les projets soutenus. (10) L'alternative est de voir leurs excédents continuer à perdre de leur valeur du fait de la crise. (11) Depuis fin 2008, les sommets se sont en effet tenus à Washington, Londres, Pittsburgh, Toronto, Séoul. Le prochain est à Cannes et le suivant à Mexico. C'est une localisation très américano-centrée. Source : Wikipedia. (12) Et cela est d'autant plus vrai que vous êtes nombreux à nous demander comment nous pouvons faire partager nos analyses au plus haut niveau. (13) Voir les informations sur le trafic du site LEAP/E2020, devenu le site sur la crise globale bénéficiant de la plus importante audience mondiale. Source : LEAP, 21/08/2011 (14) Nous sommes certains que les abonnés du GEAB comprendront cette entorse à notre règle consistant à attendre trois mois avant de mettre éventuellement des extraits d'un numéro du GEAB dans le domaine public. (15) Versions anglaise, allemande, espagnole et italienne. (16) Qui recevront bien entendu les conseils formulés ici par LEAP/E2020. |
| Dutch government comes half clean on gold reserves Posted: 09 Oct 2011 11:00 PM PDT |
| Posted: 09 Oct 2011 09:22 PM PDT I missed this piece dated 6 September 140 Year of Silver Volatility where Fekete picks up on Bob Moriarty's Facts on Silver from 25 April with this cutting comment: "Beware of the fund manager, crying from his rooftop that the paper silver market is a joke, while down there under the roof he is selling paper silver at a 25% mark-up." Also worth reading Bob's article with these five facts on silver: 1. When charts go parabolic, it ends badly. 2. The actual ratio of silver to gold in the earth's crust is not 16 to 1. 3. There is no shortage of silver. There never has been a shortage of silver. Until the laws of supply and demand are repealed, there never will be a shortage of silver. 4. The most illogical thinking and worst use of "facts" is common among the silver uberbulls and the parrots that follow them. 5. There cannot be a run on Comex. The rules do not allow the chance for a run. By the way, Bob is certainly in the "Repeat of 1980" category with comments like "You can't profit if you don't sell and all the permabulls are screaming "Buy, buy, buy." As they will at every top." PS I missed the Schoon and Morairty posts because those sites don't run RSS feeds, which I think are essential. I've got around 100 feeds giving approx 250 posts a day to get through, just not possible to include manual site visits in that.  |
| Gold & Silver Market Morning, October 10, 2011 Posted: 09 Oct 2011 09:00 PM PDT |
| Posted: 09 Oct 2011 08:56 PM PDT  this is gonna be a good day. |
| Gold and Silver Prices Set Up To DROP Posted: 09 Oct 2011 08:53 PM PDT From Cilve Maund: On gold's 4-month chart it is now apparent that a bear Pennant has been forming since the panic bottom, with the weak upside volume portending an imminent breakdown and steep drop. A reader pointed out to me during last week that gold's panic lows occurred in thin trading on the Hong Kong market, and for this reason we do not have to factor in the tail of the hammer candlestick when deciding where to draw the boundaries of the Pennant. The measuring implications of this Pennant call for a drop at least to the vicinity of the intraday lows of the Reversal Hammer and possibly somewhat lower towards the $1520 area – at this point the decline should have completely run its course and we will be looking to buy aggressively. If we look carefully we can see that a small "bearish engulfing pattern" has formed in gold over the past 2 trading days, implying that breakdown from the Pennant and the expected steep drop that will follow is imminent. A reason why this next drop should end the decline is that gold is already deeply oversold as shown by its MACD indicator, and it will of course be even more so after this impending decline. Those interested in going long gold investments in the near future should "keep their powder dry" but stand ready to wade in big time if gold drops into the bright green "aggressive accumulation zone" shown on our chart. CLICK IAMGE FOR A LARGER VIEW
Other reasons why the imminent sharp drop expected should mark the end of gold's reactive phase are to be seen on its 1-year chart. On this chart we can see that a decline to or below its recent panic lows will take it deep into strong support near to its rising 200-day moving average, the classic point for a major reaction in an ongoing bullmarket to end. CLICK IAMGE FOR A LARGER VIEW
Read more @ CilveMaund.com |
| WATCH: Max Keiser and David Morgan talk Silver Posted: 09 Oct 2011 08:47 PM PDT In this edition of the show Max interviews David Morgan from Silver-Investor.com. He will talk about the new law implemented in the state of Utah making gold and silver legal tender. So from now on the merchants in the state of Utah will start accepting gold and silver coins on a voluntary basis. There is a depository that was set up where people can put their gold and silver into and are being issued a debit card which makes the whole transaction process pretty transparent. And now you can walk to any store and buy whatever you want to buy with your debit card. ~TVR |
| James Turk talks to Dominic Frisby Posted: 09 Oct 2011 08:15 PM PDT In this first ever GoldMoney Foundation Podcast Show, Dominic Frisby interviews James Turk, of the GoldMoney Foundation. They talk about the recent correction in the price of gold from all time ... |
| The U.S. Dollar: Orthodoxy and Heresy Posted: 09 Oct 2011 07:00 PM PDT Resource Insights |
| Posted: 09 Oct 2011 05:49 PM PDT |
| Gold producers adding to their hedges Posted: 09 Oct 2011 05:41 PM PDT |
| Posted: 09 Oct 2011 05:38 PM PDT |
| The Nightmare German Inflation Posted: 09 Oct 2011 04:45 PM PDT USA Gold |
| Vietnam lets banks restart offshore trading to push local gold price down Posted: 09 Oct 2011 04:18 PM PDT |
| No Return on Government Investments Posted: 09 Oct 2011 03:10 PM PDT The news was good yesterday. Investors heard that Europe had its problems under control. Then, Obama told them that he was going to give the economy a jolt. Investors breathed a little easier. The feds were on the case. The Dow rose 183 points. Meanwhile, bonds went down, with the yield on the 10-year note rising to almost 2%. Oil rose too, and ended the day trading over $80. Even gold went up — $11. Here's The New York Times' report on Obama's press conference:
In perhaps his most sober remarks about the economy this year, President Obama on Thursday described the weakening economy as "an emergency" and made the case for his jobs bill as "an insurance policy against a possible double-dip recession." Mr. Obama proposes to spend $447 billion to reduce joblessness. He doesn't have $447 billion, of course. So the money has to come from elsewhere. Remind us how that works. You take $447 billion from people who are investing and spending...so you can give to other people. Why? So they can invest and spend! We must be missing something. Wait! Here is it...the NYT continues...
To allay the concerns of Senate Democrats, Mr. Obama said that he could support their proposal to pay for the jobs plan by imposing a 5.6 percent surtax on individual taxpayers' income above $1 million. Oh...that must be it. The millionaires don't need the money. They don't spend it. But don't they invest it? Of course they do. The Obama plan is just another redistribution scam. You take money from one group of people and you give it to another group. Corrupt, degenerate and ineffective, right? Wrong. It's actually worse. Because government is a notoriously bad spender. It takes resources and wastes them. Its wars...its welfare programs...its prisons...its education...its subsidies and boondoggles — more often than not, these investments of capital are not just stupid and larcenous. They also destroy wealth. You put a dollar in. You get 50 cents back, if you're lucky. Federal spending on education has soared over the last 40 years. Guess how much higher test scores have gone. Go ahead, take a guess. Well...the answer is zero. Billions and billions invested. No return. Nada. Zilch. You're probably thinking...well...it may not pay off overall, but at least it pays for the student, right? Wrong. Guess how much the typical college graduate's income has gone up in real terms over the last 40 years. Go ahead, take a guess. Zero! Or how about spending money to fight drugs? Guess how effective that has been. Never mind...you know the answer. Or take spending on health care. The US spends far more on health care — both in terms of raw numbers and in terms of its GDP — than anywhere else. Compared to a nation such as Chile, for example, it spends more than twice as much. But do Americans live twice as long as Chileans? Nope. The Chileans live longer than Americans. What's the rate of return on all those extra billions we spend? Zero. Well, there's always national defense and police protection. That's where government knows what it is doing. "Political power comes out of the barrel of a gun," said Mao. So they must know what they're doing with guns, right? That's where we get our money's worth...a good return on our investment, right? Are you kidding, dear reader? We spend about as much as the entire rest of the world combined... but are we safer? Not a bit. At home, our crime rates are as high as almost any other country you care to look at — even though we keep a far larger percentage of our population behind bars. As for being protected from terrorism, US military spending probably brings a negative return; terrorists are more likely to target Americans because the Pentagon sticks its nose into everybody's business all over the planet. In short, government spending kills capital. It makes a nation poorer. It doesn't matter whether the money is taxed from the rich...or from the poor, the result is the same. Resources...real things of real value...are destroyed, used up, consumed...with little or no pay back. You ask...why is the US economy growing so slowly? Why can't it recover? Why do we seem to lurch from one crisis to another? Here's an answer: because more and more of the economy's resources are controlled — mismanaged...and misallocated — by the government. Some are directly misallocated — spent by the government itself. Others are indirectly misallocated — tricked into bad investments by the Fed's low interest rates, tax policies, regulations and subsidies. (For example, there has been an explosion in student debt since the crisis of '07-'09 began — up 300%. The government invests in a lot more "education." What is the return on investment?) Result: the economy stalls. The middle class is gradually ruined. The empire stumbles toward its eventual collapse. And more thoughts... "Five million dollars!?" We couldn't believe it. "No, if this apartment were sold it would probably bring five million euros." We share a modest office on the Boulevard Raspail in a nice part of town, not far from Montparnasse station. It is in what used to be an apartment and is now used as offices. About 2,300 square feet in total. "How is that possible? Who can afford to pay that much?" we wanted to know. Europe may be on the edge of a nervous breakdown...or a banking collapse. But the restaurants are still full. Prices are still high. And the euro is still at $1.34. Not only that, while prices of real estate fall in the US, they rise here. Go figure. "Well, the French don't trust banks or stocks," explained our co- locataire. "So they tend to put money into property. People with money...no matter where they are from in France...like to have an apartment in Paris." The French know what can happen to paper assets. Many people remember when the 'old franc' was replaced by 'new francs' at a rate of 100 to 1. Old people still quote prices — occasionally — in terms of old francs, even though it has been gone for half a century. And almost everyone remembers when the franc gave way to the euro a decade ago. It was supposed to be an even exchange; no one was supposed to lose money on the deal. But shoppers soon realized that prices had risen. Merchants rounded prices upwards...and then added on a few centimes for good measure. Currencies come. Currencies go. You can't trust them. So, people buy things they can trust. And an apartment in Paris is something you can trust. It may go up in price. It may go down. But it won't go away. Not unless there is something much bigger to worry about! *** We have given up trying to follow the European debt crisis story. There are too many plots and subplots...in too many languages; we can't keep up with them. So, we turn to The New York Times for an update:
Despite the fact that economists and bank analysts now widely expect that Greece will have to default on its debt, no European leader will say so, at least for the record. Instead, the countries in the euro zone are continuing to act as if measures agreed to in July to shore up Greek finances, and that slow-moving European parliaments have yet to fully approve, are sufficient to contain the crisis... Europe may be on the rim of a volcano...but no one seems to care. *** We wonder why we bother to rent an office at all. When we are in Paris we spend much of our time working in cafes. Our current favorite is the Café Vavin, just a block from the office. Like Sartre in the Café de Flore, we buy a cup of coffee and sit for hours, happily working...and observing. Sartre didn't have a laptop computer. He wrote with pen and paper. Someone should have stopped him. The Café Vavin is a pleasure. It is on a corner. We see people walking by in 4 directions. And then, when things are slow, the bartender opens his mouth and lets go with a baritone line from an Italian opera. But generally, there is a lively crowd at the bar...reading newspapers...chatting...laughing...drinking coffee. Later in the day they switch from coffee to beer and wine. But we are usually on our way home by then. Regards, Bill Bonner,
|
| You are subscribed to email updates from Gold World News Flash 2 To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment