Gold World News Flash |
- V ALERT: Shutdown Charade — Dollar Survival
- Silver and Gold Prices Have Not Ended Their Long Bull Market
- Silver and Gold Prices Have Not Ended Their Long Bull Market
- I am not We
- The ENGINEERED Welfare State Collapse
- China Gold & The New World Reserve Currency
- Hinde Capital: “Why Gold Production Is Going To Go To Zero”
- The Coming Food Stamp RIOTS
- Central bank and hedge fund bear raids push gold from West to East, Rickards says
- Born Libertarian: Doug Casey On Ron Paul And The Price Of Freedom
- Brazil Is Going To Block The NSA
- COMEX Gold Warehouses Continue to Bleed Out As 'Owners Per Ounce' Climbs Back Over 53
- COMEX Gold Warehouses Continue to Bleed Out As 'Owners Per Ounce' Climbs Back Over 53
- The Nobel Prize: Do We Have to Agree?
- Peter Grandich--The More Things Change-The More They Rig The Gold Market 30.Sep.13
- Insurance in Wonderland
- Silver’s Summer Rally Fizzles Out
- The Bullion Market's Big Issues, Part 2
- 4-Year Silver Cycle Suggests Silver High Around 2016
- China could control financial system with gold-backed currency, Leeb says
- The Saviors of the Republic
- Mark Mahaffey: Why gold production is going to go to zero
- Bitcoin Now Used by “the Google of China”
- Gold Rebounds After Dollar Declines, Commodities Advance
- Gold Daily and Silver Weekly Charts - Bart Takes a Bow - Capital Controls
- Gold Daily and Silver Weekly Charts - Bart Takes a Bow - Capital Controls
- The Daily Market Report
- Gold, Trust & Independence, Part 2
- Gold, Trust & Independence, Part 2
- Gold, Trust & Independence, Part 2
- Silver: 4 Cycles in 12 Years
- Silver Price 4 Cycles in 12 Years
- Gold Jumps 2.9% on US Debt Downgrade Risk
- More Evidence of Gold Price Manipulation
- Gold Standard – Bad for the Middle Class?
- Gold Standard – Bad for the Middle Class?
- Peerless Gold Mining Stocks
- Peerless Gold Mining Stocks
- Yellen at the Fed!
- Yellen at the Fed!
- Canada’s Northwest Territories seeks to raise debt ceiling
- Gold to have another go at overhead resistance
- Forget the short term – gold is for the long run
- Hinde Capital: “Why Gold Production Is Going To Go To Zero”
- Goldrunner: Here’s My Take On All That Debt Ceiling Crap
- 10 Ominous Warnings Of What Will Happen IF There Is An Extended U.S. Debt Default
- Gold Surged 17% In 15 Trading Days After Last Debt Ceiling Extension In 2011
- OBAMACARE – ALL THE EFFICIENCY OF THE DMV WITH THE COMPASSION OF THE IRS
- Gold Holds Above Three-Month Low as Talks Resume on Debt Impasse
- Gold better at 1380.50 (+5.31). Silver 21.23 (+0.08). Dollar retreats. Euro higher. Stocks called higher. US 10yr 2.71% (-1 bp).
V ALERT: Shutdown Charade — Dollar Survival Posted: 16 Oct 2013 08:23 PM PDT by V, Steve Quayle: Let me start by first reminding all of you what I have said before, this is a dollar supremacy move. What I mean by that is this: The theatrics and social upheaval that is being played out right in front of our eyes is to ensure the survival of the dollar’s world reserve currency/petro dollar hegemony. The recent headlines made by harassing veterans at war memorials and the “glitch” with EBT was not mere happenstance. It was carefully orchestrated with the sole intent of creating chaos in the markets. The EBT glitch that occurred over the weekend in 17 states was done on purpose to be another headline grabbing event with the sole design to create fear and confusion in the system. During the course of the past fourteen days some very beneficial (to the banksters) events, have been occurring in the midst of all this social and political distractions. Now do not be distracted, the real default is NOT the 17th….It is between the 23rd and the 30th of October that is when we run out of money. So expect these banksters to even let the chaos run past the October 17th dead line. |
Silver and Gold Prices Have Not Ended Their Long Bull Market Posted: 16 Oct 2013 08:10 PM PDT Gold Price Close Today : 1282.00 Change : 9.00 or 0.71% Silver Price Close Today : 21.320 Change : 0.174 or 0.82% Gold Silver Ratio Today : 60.131 Change : -0.069 or -0.11% Silver Gold Ratio Today : 0.01663 Change : 0.000019 or 0.12% Platinum Price Close Today : 1395.20 Change : 14.80 or 1.07% Palladium Price Close Today : 712.55 Change : 7.25 or 1.03% S&P 500 : 1,721.54 Change : 23.48 or 1.38% Dow In GOLD$ : $247.90 Change : $ 1.59 or 0.65% Dow in GOLD oz : 11.992 Change : 0.077 or 0.65% Dow in SILVER oz : 721.10 Change : 3.80 or 0.53% Dow Industrial : 15,373.83 Change : 205.82 or 1.36% US Dollar Index : 80.507 Change : 0.054 or 0.07% Mostly I am wondering how silver and GOLD PRICES will take the news of the debt ceiling "settlement" (the quotation marks indicate that the so called deal only pushed the crisis forward to January). In the aftermarket both were stronger. That's not all. Both silver and gold prices made key reversals yesterday on the End of Day charts. Both remain in falling wedges, which usually but not always resolve with an upside breakout. If silver and gold prices are going to make good that upside down Head and Shoulders that appears on their charts, tomorrow would be a meet day for rallying. Once again, the GOLD PRICE must hold $1,272 and the SILVER PRICE 2090c on a closing basis, otherwise they will plumb the depths of the June lows again. Premiums on gold coins, usually very stable, are rising, especially on the normally low premium Krugerrands (up from 1 to 1.5% to 2.05% at wholesale buy) and American Eagles (up from 2.5% to 2.9% at wholesale buy). That suggests relentless buying pressure on physical gold. I don't like uncertain trumpets, and mine has probably been tooting pretty low-toned in recent months. I don't like this bumping along the bottom and waiting any more than y'all do, but get this much clear: silver and gold have NOT ended their long bull market, and are nearing a final and positive end of the 2011 - 2013 correction. Every day brings us closer, and when it happens all those goofs now touting stocks will be clueless why metals are rallying. Also, stocks within the next 3 -4 months will hit the final top of a 300 year primary trend. Blood will copiously flow when that collapse begins. Make sure it's not yours. Did I say, "Get out of debt"? That, too. I have to wonder, if the rumor of a deal on the debt ceiling ran stocks up today, what the news will do tomorrow. Whence will the next emotional high arise to send stocks higher? Both reversed upward today strongly. Dow added 205.82 or 1.36%, closing at 15,373.83. S&P500 gained 23.48 (1.38%) to end the day at 1,721.54. Eye-catching how the Dow is lagging the S&P500. S&P500 is only 4.5 points (0.26%) away from its 18 September 2013 all-time high of 1,725.52. From its 18 September high at 15,676.34 the Dow languishes 302.51 points or 2% below. S&P500 also draweth nigh to its all time intraday high at 1,729.86 in September, as well as its top trading channel line, which actually is the top line of a rising wedge. Not so the Dow. None of this says stocks can't go higher, and they probably will. It only warns that their days are numbered. Stocks gained lots in nominal terms, but not so much compared to gold and silver. Dow in gold rose 0.65% to 11.992 oz (G$247.90 gold dollars), still a half ounce below its June 12.514 oz high. Dow in silver's close today at 721.10 oz was 0.53% higher than yesterday's and a long was from its June 816.77 oz. high. US dollar index closed 80.57, up 0.04%. Euro rose, but can't get above its 20 DMA. Yen fell out of bed -- again. No clarity here, because the seeming week won't break down, and the seeming strong won't make good their threat. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. |
Silver and Gold Prices Have Not Ended Their Long Bull Market Posted: 16 Oct 2013 08:10 PM PDT Gold Price Close Today : 1282.00 Change : 9.00 or 0.71% Silver Price Close Today : 21.320 Change : 0.174 or 0.82% Gold Silver Ratio Today : 60.131 Change : -0.069 or -0.11% Silver Gold Ratio Today : 0.01663 Change : 0.000019 or 0.12% Platinum Price Close Today : 1395.20 Change : 14.80 or 1.07% Palladium Price Close Today : 712.55 Change : 7.25 or 1.03% S&P 500 : 1,721.54 Change : 23.48 or 1.38% Dow In GOLD$ : $247.90 Change : $ 1.59 or 0.65% Dow in GOLD oz : 11.992 Change : 0.077 or 0.65% Dow in SILVER oz : 721.10 Change : 3.80 or 0.53% Dow Industrial : 15,373.83 Change : 205.82 or 1.36% US Dollar Index : 80.507 Change : 0.054 or 0.07% Mostly I am wondering how silver and GOLD PRICES will take the news of the debt ceiling "settlement" (the quotation marks indicate that the so called deal only pushed the crisis forward to January). In the aftermarket both were stronger. That's not all. Both silver and gold prices made key reversals yesterday on the End of Day charts. Both remain in falling wedges, which usually but not always resolve with an upside breakout. If silver and gold prices are going to make good that upside down Head and Shoulders that appears on their charts, tomorrow would be a meet day for rallying. Once again, the GOLD PRICE must hold $1,272 and the SILVER PRICE 2090c on a closing basis, otherwise they will plumb the depths of the June lows again. Premiums on gold coins, usually very stable, are rising, especially on the normally low premium Krugerrands (up from 1 to 1.5% to 2.05% at wholesale buy) and American Eagles (up from 2.5% to 2.9% at wholesale buy). That suggests relentless buying pressure on physical gold. I don't like uncertain trumpets, and mine has probably been tooting pretty low-toned in recent months. I don't like this bumping along the bottom and waiting any more than y'all do, but get this much clear: silver and gold have NOT ended their long bull market, and are nearing a final and positive end of the 2011 - 2013 correction. Every day brings us closer, and when it happens all those goofs now touting stocks will be clueless why metals are rallying. Also, stocks within the next 3 -4 months will hit the final top of a 300 year primary trend. Blood will copiously flow when that collapse begins. Make sure it's not yours. Did I say, "Get out of debt"? That, too. I have to wonder, if the rumor of a deal on the debt ceiling ran stocks up today, what the news will do tomorrow. Whence will the next emotional high arise to send stocks higher? Both reversed upward today strongly. Dow added 205.82 or 1.36%, closing at 15,373.83. S&P500 gained 23.48 (1.38%) to end the day at 1,721.54. Eye-catching how the Dow is lagging the S&P500. S&P500 is only 4.5 points (0.26%) away from its 18 September 2013 all-time high of 1,725.52. From its 18 September high at 15,676.34 the Dow languishes 302.51 points or 2% below. S&P500 also draweth nigh to its all time intraday high at 1,729.86 in September, as well as its top trading channel line, which actually is the top line of a rising wedge. Not so the Dow. None of this says stocks can't go higher, and they probably will. It only warns that their days are numbered. Stocks gained lots in nominal terms, but not so much compared to gold and silver. Dow in gold rose 0.65% to 11.992 oz (G$247.90 gold dollars), still a half ounce below its June 12.514 oz high. Dow in silver's close today at 721.10 oz was 0.53% higher than yesterday's and a long was from its June 816.77 oz. high. US dollar index closed 80.57, up 0.04%. Euro rose, but can't get above its 20 DMA. Yen fell out of bed -- again. No clarity here, because the seeming week won't break down, and the seeming strong won't make good their threat. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. |
Posted: 16 Oct 2013 07:40 PM PDT by Puck T. Smith, TF Metals Report: I am not “we.” I did not incur the debt. I do not owe one single cent of it. My signature is on none of their fraudulent instruments. It is their problem and they are trying to fix it by destroying what little value is left in the US dollar–and all other currencies for that matter. There is nothing you nor I nor anyone else is going to be able to do about it. Call me a doomsayer, but I am convinced it is at most a matter of a few months before shit is really going to start coming unglued. This is the culmination of 100 years of either colossal ignorance or diabolic intent (or some malignant symbiosis of the two). There is no one in any position of power who has any clue about how to manage the Frankenstein clusterfuck of fractional reserve central fiat banking at the exponential culmination of compound interest. |
The ENGINEERED Welfare State Collapse Posted: 16 Oct 2013 07:29 PM PDT [Ed. Note: We agree with what's being said here. Because of this government "shutdown" we have been able to see over the edge of the precipice and what we see below scares the hell out of us. It's going to get very, very ugly.] from TheAlexJonesChannel·: Alex expresses his true concern for America as he breaks down the information surrounding the announcement that Chase Bank has begun limiting wire transfers and international transfers…the beginnings of full economic control in America by the New World Order and the removal of private liberties. |
China Gold & The New World Reserve Currency Posted: 16 Oct 2013 07:24 PM PDT by MRH, SGT Report.com: China has mined approximately 8% more gold in the first eight months of 2013 than in the first eight months of 2012. So far this year China has mined 270.167 tons of the yellow monetary metal. In July alone China dug up an amazing 39.367 tons (annualized that equals 472.404 TONS). Where is it all going? Well, we know from Koos Jansen and Jan Skoyles outstanding work that most, if not all of it is going through the Shanghai Gold Exchange and into one of two vaults; either the vault at the People’s Bank of China or private individuals vaults in China. Not one gram is leaving the country. How can I say this with such confidence? Well, let’s look at the numbers. So far this year China has imported 598 tons from Switzerland alone! This does not count any of the gold they have siphoned out of the Comex during the almost daily beat-downs in the paper gold market. This does not count any gold the Chinese may be importing through India’s gold black-market or through individual agents that are scattered around the globe to purchase gold for the PBOC. If you just add what is listed above we are talking about over 1,000 tons of gold going directly to China and we still have nearly three months of accounting before the year is up.
What is the plan for all the gold that China is acquiring? How many tons is enough? These questions are difficult to answer at this point. We do know that China seeks to “de-Americanize the world“, because they’ve said so. Does that mean an end to the US Dollar as the world’s reserve currency? One would have to believe that is part of the overall objective. We know the Chinese are working very closely with Russia, which is also mining as much gold as possible, and keeping every gram in and FOR Russia. And the Russians are a little more forth coming about their golden dreams than the Chinese are. The Russians are quite open about their gold holdings and the sources from which their PHYSICAL gold originates; be it from the global market or from internal mining. China and Russia are by far the largest economies of the five BRICS nations. The BRICS have been discussing for at least a year now, how to create a “work-around” regarding the US Dollar. The Chinese have been quiet successful in creating more than 25 direct currency swap lines with some of the largest economies on the planet: Japan, Australia, Brazil, most, if not all of, South East Asia and most recently a three year open line with the United Kingdom. Is this the ground work for a BRICS basket of currencies as the NEW world reserve currency? Or will it be the Chinese Yuan as the new world reserve currency? We still hear musings that it will be a product of the criminal-cartel-controlled IMF or Bank of International Settlements whose SDR’s are already in play. Only time will tell how this will all play out as the Chinese will most certainly continue playing their hand close to the vest. But one thing is certain: The end of our easy, ever-expanding debt way of life here in the United States will soon be over as the US Dollar takes it’s place in the dustbin of fiat currencies history. Please, prepare. |
Hinde Capital: “Why Gold Production Is Going To Go To Zero” Posted: 16 Oct 2013 07:20 PM PDT by Tekoa Da Silva, Bull Market Thinking: In an excellent new piece entitled, "The growing 90% club and why gold production is going to go to zero", Hinde Capital's Co-Founder and CFO, Mark Mahaffey, asserts that it's only a matter of time before world gold production goes to zero. That end-point is approaching quickly he implies, as the cost to pull an oz. of gold out of the ground is growing faster than ever before. Here is an excerpt from Mark's piece: "If gold prices stay at the current levels for a prolonged period of time, do not be surprised if gold production falls much closer to zero. From an investor's perspective it is a treacherous minefield. Of course, there are companies who really do have high grade ore reserves who can really claim to mine at $800/ ounce but these are very rare, maybe less than 5% of the 2000 quoted companies. The Northern Miner writes that out of their survey of 1400 Toronto listed firms, 721 currently have less than $200k cash in the treasury. |
Posted: 16 Oct 2013 07:03 PM PDT by Michael Snyder, Economic Collapse Blog: It may not happen this month, or even this year, but food stamp riots are coming to America. In fact, we got a small preview of the coming food stamp riots this past weekend when a “temporary system failure” caused food stamp cards to stop working in 17 U.S. states. Within hours, there were “mini-riots” at Wal-Marts and other retailers that rely heavily on food stamp users. So what would happen if food stamp benefits were cut off or reduced for an extended period of time? As you will see below, if Congress had not pushed through a “deal”, the USDA would have started cutting off food stamp benefits on November 1st. Considering the fact that 47 million Americans are on food stamps and more than 100 million Americans are enrolled in at least one welfare program run by the federal government, that could have sparked massive rioting. So the good news is that the coming food stamp riots will probably not happen in November. The bad news is that the “deal” in Congress only delays the political fighting until after Christmas. In just a few months we will be dealing with a potential “government shutdown” and a debt ceiling deadline once again. |
Central bank and hedge fund bear raids push gold from West to East, Rickards says Posted: 16 Oct 2013 07:02 PM PDT 1p AEST Thursday, October 17, 2013 Dear Friend of GATA and Gold: Central bank and hedge fund bear raids have knocked gold futures prices down in the West only to increase demand for real metal in Asia, fund manager and geopolitical strategist James G. Rickards tells Bloomberg News in a video interview this week. It's posted at GoldSilver.com here: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT You Don't Have to Wait for Your Monetary Metal: Many investors lately report having to wait weeks and even months for delivery of their precious metal orders. All Pro Gold works with the largest wholesalers that have inventory "live" -- ready to go. All Pro Gold can ship these "live" gold and silver products as soon as payment funds clear. All Pro Gold can provide immediate delivery of 100-ounce Johnson Matthey silver bars, bags of 90 percent junk silver coins, and 1-ounce silver Austrian Philharmonics. All Pro Gold can deliver silver Canadian maple leafs with a two-day delay and 1-ounce U.S. silver eagles with a 15-day delay. Traditional 1-ounce gold bullion coins and mint-state generic gold double eagles are also available for immediate delivery. All Pro Gold has competitive pricing, and its proprietors, longtime GATA supporters Fred Goldstein and Tim Murphy, are glad to answer any questions or concerns of buyers about the acquisition of precious metals and numismatic coins. Learn more at www.allprogold.com or email info@allprogold.com or telephone All Pro Gold toll-free at 1-855-377-4653. Join GATA here: The Silver Summit http://www.cambridgehouse.com/event/silver-summit-2013 Mines and Money Australia New Orleans Investment Conference https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
Born Libertarian: Doug Casey On Ron Paul And The Price Of Freedom Posted: 16 Oct 2013 06:52 PM PDT Via The Gold Report of Doug Casey Research, The Gold Report: Doug, we are at your conference in Tucson, Arizona, the day after former Congressman and presidential candidate Dr. Ron Paul gave the keynote speech to a sold-out crowd. How did you two first meet? Doug Casey: It was about 30 years ago. Ron used to attend my Eris Society—named after the Greek goddess of discord—meetings in Aspen, Colorado. Everyone from Sonny Barger of the Hells Angels motorcycle club to Burt Rutan, inventor of SpaceShipOne, would meet to discuss ideas. TGR: In those 30 years, have Ron Paul's ideas changed much? DC: Ron believes he was born a libertarian. He's right. I believe in Pareto's law—the 80-20 rule. I prefer to think that 80% of humans are basically decent, which is to say that they were born libertarian oriented. But it takes a while to crystallize what that means. Ron and I, and many others, have moved beyond gut libertarianism to a structured, intellectual libertarianism. Some people see the same things we see through a totally different lens, however. Those people tend to be the other 20%, or perhaps 20% of that 20%, or even 20% of that 20% of that 20%. They range from being wishy-washy on ethical subjects to being sociopaths or even outright criminals. These people are at the opposite end of the spectrum from us in every way. TGR: One of the things Ron Paul mentioned last night is that a true libertarian advocates for the freedom of everyone to do what he or she wants as long as it's not hurting someone else. This includes people who don't agree with your views. DC: Exactly. As opposed to busybodies who want to tell everybody else what to do. They think they know best and are perfectly willing to put a gun to your head to make sure that you do what they think is right. TGR: We are meeting in the midst of a government shutdown. Ron Paul called it a paid holiday for federal workers. Are we doomed to an endless cycle of these manmade crises? DC: I would like nothing better than to see the shutdown go on forever, but unfortunately the government is only shutting down things that inconvenience people, like monuments and national parks—things that should not be owned by the government to start with. I wish they would shut down all their praetorian agencies, like the FBI, the CIA, and the NSA. Shut down the IRS. I am much more concerned about Silk Road being shut down than I am the US government being shut down. TGR: Do you think regular people care whether government is shut down or not? DC: Over half of Americans are living off the state, receiving more from the state than they're putting into it, which makes them receivers of stolen property. They see the government as a cornucopia and therefore a good thing so they want it to be open and sending them checks. The situation is fairly hopeless at this point, and it's likely to get a lot worse before it gets better. Trends in motion, in whatever direction, tend to stay in motion until they hit a crisis, at which point they transform into something else. This trend is not only in motion, but it's accelerating in the wrong direction. TGR: Ron Paul said that the charade on the American people is that the two parties are different, that actually it's not that we need a third party, but we need a second party. Your presentation compared the end of the Roman Empire to the state of the US today. Is the current political system doing a better or worse job of protecting freedom and liberty in the US compared to ancient Rome? DC: The founders consciously modeled the US after Rome, everything from the way government buildings look to having an assembly and a senate. We are similar right down to the Latin mottos. When you model yourself after something, you eventually tend to resemble it. That partly explains why we are on the slippery slope of constant wars, less freedom, more power for the executive, destruction of the currency, and barbarians at the gate. Another part is the natural tendency of all empires to reach their level of incompetence and then decline. It's to be expected. Entropy dictates all things wind down and degrade. As I pointed out in my speech, America has gone through periods of what paleontologists call "punctuated disequilibrium." Things evolve gently in one direction and then experience massive change very quickly. I'm afraid that the US might be approaching a phase similar to the one the Romans experienced before Diocletian made himself emperor. He completely changed the character of Rome; he believed that in order to save Rome, he had to destroy it. As we go deeper into this crisis—of which we're just currently in the early stages—there's every chance that the American people are going to look for a savior, a strong man, probably a military person because Americans love and trust their military for some reason. I see the military as not much more than a heavily armed version of the post office, but I suspect that we'll find someone who is the equivalent of Diocletian, who will change the whole nature of society radically in the wrong direction. TGR: Do you believe in changing from within the system, or just getting out from under the system? Would you ever run for public office? DC: I think the situation is beyond retrieval at this point. People generally get the government they deserve. At this point, Americans are much more interested in freebies than they are in personal freedom. They are like scared little rabbits. They're much more interested in safety than they are in personal liberty. I think they're going to get what they deserve good and hard over the years to come. I would much rather watch what goes on in the US on my widescreen TV in the lap of luxury in another country than be in the epicenter of things here. The system is beyond the point where it can be reformed. And, no, I have zero desire to run for office. Plus, anyone who runs for office disqualifies himself for being in a position of power by the very fact that he wants to be in that position. My friend Harry Browne always used to say that when he ran for president on the Libertarian ticket, the first thing he'd do if he were elected would be to quit—at least after rescinding all outstanding Executive Orders and recalling all the troops. Anyway, even if Ron Paul had been elected president and if he tried to make the necessary changes, the public would have rioted, Congress would have impeached him, and the heads of the CIA, FBI, and the military would have sat him down and subtly intimated that they have the power, and he shouldn't do anything they don't want done—or undone. I don't think a change can be made at this point. I'm just interested in seeing what happens when we really get involved in a really big crisis, which I think is going to happen in the next couple of years, as we go back into the trailing edge of the economic hurricane that started in 2007. TGR: One of the things that has come up as part of the shutdown debate is health care. Do you have health insurance? And, how would you control healthcare costs? DC: First of all, I don't call it health insurance because it doesn't insure your health. That's something that you're personally responsible for, not some third party. I call it medical insurance. Just as I call the FDA the "Federal Death Authority," because it probably kills more people every year than the Department of Defense does in a typical decade by slowing down the approval and hugely raising the cost of new drugs and technologies. Getting to back to your question, no, I don't have medical insurance. If anything goes wrong with my body, I'll treat it as I would if something goes wrong with my car. I'll find the best doctor elsewhere in the world where medical costs can be 20% of what they are in this country. I'll pay for it in cash. I don't want to have to fight with an insurance company, or the government, about what's covered or not. The whole idea of everybody having medical insurance is a corruption that arose during World War II when companies used insurance to attract workers. Then we had Medicare and then Medicaid. These are the reasons costs have escalated. In a free-market society, medical costs should have collapsed and gone down in the same way as the cost of computers has collapsed and gone down even as they've gotten vastly better. People think they need the government in medicine, but it's been totally counterproductive. It's done the opposite of what was intended. TGR: One of the things Ron Paul mentioned is that his speeches on college campuses, including UC Berkeley, have been some of the most well received. Do you have hope for the next generation? DC: Yes, there is reason for hope over the longer term. Generally, older people in this country have voted all these "benefits" for themselves, and they don't want to have their rice bowls broken. The younger people are being turned into indentured servants to pay for these benefits. Young people are figuring this out. Another worrisome thing is that a lot of young people have indentured themselves by taking on huge amounts of college debt; $1.2 trillion is the current number. They can't even discharge it through bankruptcy, although many are unable to pay it. More and more are deciding that doing four years in a college to experience indoctrination from wrongheaded professors is a complete misallocation of both their time and their money. If I had to do it again, I definitely would not go to college. I recommend others skip college, unless they need to learn a specific technical set of skills, such as doctoring or lawyering or engineering or a science where you need lab work. Most kids today, however, are going off to college for things like gender studies, political science, and English. These are things you should learn on your own, on your own time, at no cost. Meanwhile, avoid the indoctrination of the creatures who hang out in university faculty rooms who teach because they are incapable of doing anything else. TGR: Ron Paul intimated that we're in a middle of a revolution. You said that the solution to our problems would be less command and control and more entrepreneurs. Are the small business owners the real revolutionaries? DC: They could and should be, but it is becoming increasingly difficult to start a business because of the regulatory and tax environment in the US. Smart people are leaving in droves. There just aren't enough left to change things. I'm afraid we're just going to have to let things take their course. The main function that Ron Paul has served is educating people, which is necessary and laudable. But the odds of him succeeding in changing things are close to zero. TGR: You talked about the role of education, and Ron Paul mentioned the power of the Internet to circulate new ideas based on the theory that ideas have consequences. Your ideas are having an impact thanks to the power of the Internet. Does that bode well for the future? DC: It does. The Internet is the best thing that's happened since Gutenberg invented movable type and the printing press; it's a marvelous thing. That's exactly why the government wants to regulate the Internet. It sees it as a huge danger. TGR: Does suppressing ideas ever work? Is it working in China? DC: Actually, in many ways China is freer than the US, but that's not one of them. If you are a businessman and you keep your nose out of politics, it actually is freer. You'll have less taxes, less regulation in China than you would in the US. But instead of emulating the free part of China, the US government is trying to copy the Internet restrictions because it sees the Internet as a danger to the existing order. And they're right. TGR: But didn't the governments of Middle Eastern countries find out that ideas have a life of their own, and they find a way to spread despite attempts to shut them down? DC: They do, so let's hope for the best. TGR: Finally, Ron Paul said that things are worse than the government will admit, and the idea of economic growth this year is a dream. He said we need to be serious, but not despondent. Make financial plans, but have fun doing it. Do you agree, and are you having fun yet? DC: I am having fun. I'm doing this not because I need the money, but because it's amusing and it's good karma to sow dissention in the ranks of the enemy. TGR: Thank you for sharing your thoughts. DC: Thank you. This interview highlights why Doug Casey has long been a highly sought speaker: he speaks his mind clearly, and has interesting ideas worth sharing. So it's no wonder that Casey Research Summits follow suit… and are sold out every year. Following Doug's lead, the company has a proven record of bringing together interesting and successful individuals, from investing to economics to technology and politics. The Summit that recently concluded was no different. With experts such as Rick Rule, James Rickards, Chris Martenson, Lacy Hunt, Catherine Austin Fitts, and many more joining keynote speaker Ron Paul, attendees at the sold-out event were treated to presentations unthinkable to those who follow the mainstream… from how to survive Obamacare to navigating shifting geopolitical trends to internationalizing one's wealth and more. Those who weren't able to make it to Tucson can rest easy, though. Every minute of each presentation was recorded, and they're being put together right now into an invaluable package: the Casey Summit Audio Collection. Every talk, every Q&A, every panel discussion—even all the audiovisual aids the speakers used—will be part of this collection, available on CD or in the convenient MP3 format. In addition to the incisive commentary as exemplified above, you'll get specific, actionable investment advice intended to help you thrive during these unsteady conditions. 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Brazil Is Going To Block The NSA Posted: 16 Oct 2013 06:40 PM PDT by Jeff Berwick, Dollar Vigilante: General Keith Alexander has admitted that Edward J. Snowden’s revelations have caused "significant and irreversible damage" to the US’s national security, and that national governments and terrorist organizations now know how to get around US spying. He seems to underestimate the real damage: The NSA revelations are but another smear against brand USA in the global psyche, having done potentially as much damage as the Middle East wars started under President George W. Bush. Even US allies are implementing mechanisms by which to keep the US from eavesdropping. |
COMEX Gold Warehouses Continue to Bleed Out As 'Owners Per Ounce' Climbs Back Over 53 Posted: 16 Oct 2013 06:03 PM PDT |
COMEX Gold Warehouses Continue to Bleed Out As 'Owners Per Ounce' Climbs Back Over 53 Posted: 16 Oct 2013 06:03 PM PDT |
The Nobel Prize: Do We Have to Agree? Posted: 16 Oct 2013 06:00 PM PDT Click here to follow ZeroHedge in Real-time on FinancialJuice Once upon a time the person that ended up with the Nobel Prize for whatever it might have been was always the single person to be left standing on the podium in the number one position. Then in 1974, the Nobel Prize for Economics became the only prize in the world where two people could get it and to boot they didn't even have to agree with each other (Gunnar Myrdal and Friedrich August von Hayek "for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena"). The subscript and bumph about the reason why they got the prize had to be sufficiently long-winded to lose everyone along the way and broad enough to cover almost any eventuality in the field of economics. Then, there were prizes that were dished out to groups of people and to organizations even though it was clearly stipulated in the regulations for the awarding of the prize that it should be a single person and not an entity or organization or association of people. Now, the Nobel Prize Committee hasn't had enough with just two people that disagree with each other. They have given it to three that have never agreed on their respective theorizations about how the economy works. But, as they stand on their podium jostling for a place, vying for coverage by the media at the press conference, all three smile demurely and make out that they are a trio that has been soldered together with some financial market alloy and a bit of economic putty around the edges. 2013 PrizeThis year on October 14th 2013 the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was attributed to Eugene F. Fama, Lars Hansen and Robert J. Shiller for "their empirical analysis of asset prices". So, the much-coveted (at least, by those that get given it or that are in the running for it) prize has been awarded to three people for their analyses of the way the financial markets fluctuate. While Fama, Hansen and Shiller were all three obviously named as potential winners, nobody might have imagined that they were going to get given the prize together. Now, awards get given to people for disagreeing with each other. We all deserve a prize then.
But, it was this type of belief in a rational market that reacts according to information rather than also incorporating irrational decisions and effects that was the cause of the financial crisis that knocked the world's economies for six.
That in itself is a fundamental difference between Fama and Shiller. One believes that the markets are rational. The second believes that they are not. But what makes it worse is that the two are in total contradiction. Shiller announced in 2005 that there was going to be a housing bubble and an ensuing crisis in the world. He suggested that the stock market would fall by 40%. Even today Fama believes that the housing bubble never existed. He declared "I don't even know what a bubble means" this year. By giving them both the Nobel Prize the comittee has openly admitted to what is tantamount to saying that nobody can safely say how markets work. No Great Economists LeftBeyond the fact that there are three economists that have been awarded the Nobel Prize; beyond the surprise that they do not agree with each other there is one nagging question that should come to mind as the three sit there in front of the flashing cameras and the questions savoring their award: how is it possible that only five years after the financial crisis that brought our economies down has the Nobel Prize been awarded to anyone that is remotely connected to the financial markets? Maybe there are no good economists left or maybe there's a message to the people in there somewhere. Either the committee for the Nobel Prize is much more courageous than we might have thought in doing such a thing, or they are downright in need of another brain transplant. The fact that they have had to attribute the Nobel Prize to three means that none of them was good enough to get it on their own. The fact that they disagree with each other is even more telling of the complexity of the financial markets. But, it is also very revealing that perhaps there are no more great economists left in the world that can go it alone. Where did the greatness go?Originally posted: The Nobel Prize: Do We Have to Agree?
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Peter Grandich--The More Things Change-The More They Rig The Gold Market 30.Sep.13 Posted: 16 Oct 2013 03:34 PM PDT www.FinancialSurvivalNetwork.com presents We've had twelve good years of a precious metals bull market. What's a year or two of correction? Peter sees today's action in the precious metals... [[ This is a content summary only. Visit http://goldbasics.blogspot.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]] |
Posted: 16 Oct 2013 03:16 PM PDT A review of NFTRH's big picture stance on gold vs. various assets positively correlated to the global economy. Specifically, the previous segment concluded that yes, the NFTRH big secular view is under threat by a technical analysis ... Read More... |
Silver’s Summer Rally Fizzles Out Posted: 16 Oct 2013 03:06 PM PDT The euphoria that heralded the summer rally in silver prices has now dissipated and is as good as dead as silver prices drift lower. Silver made a valiant attempt to breach the $25.00 level in August but could not maintain its momentum and has since drifted lower to trade at around $21.00/oz today. Its big sister, gold, has also ran out of steam having peaked at around $1420/oz, it is now struggling to get above $1300/oz level. Since the heady days of almost $50.00/oz, silver has suffered through a number of false dawns |
The Bullion Market's Big Issues, Part 2 Posted: 16 Oct 2013 02:55 PM PDT Remember when gold reserves were all the rage for central banks? Putting gold into your investment portfolio typically signals a lack of faith in other people. Or at the very least, a healthy question mark. Read More... |
4-Year Silver Cycle Suggests Silver High Around 2016 Posted: 16 Oct 2013 02:35 PM PDT Silver cycle analysis and historic silver prices suggest that the silver price could be in a bottoming process here. The previous four cycles – from crash low to high – have taken between 1.75 and 2.5 years. If this cycle was to repeat, it would suggest an upcoming high sometime in 2015 – 2016. The last four cycles – from crash low to launch low - have taken a bit more than a year on average. It would suggest an upcoming launch low sometime in 2014. The launch lows resulted in highs approximately 0.5 to 1.2 years later, which would suggest a high sometime in 2015 or 2016. Obviously this is no prediction; it is rather a projection based on historic data which have been surprisingly similar in the past 12 year. A closer look to these prices brings up an interesting pattern. The following article reveals the calculation. It also challenges the idea of silver having topped out at $50 in April 2011. During the past 12 years silver prices have bottomed, rallied sharply, collapsed, and then languished for a year or more. The patterns are not identical, but there are obvious similarities as shown in the following chart. (Note that it is a weekly line chart, from close to close, log scale, with high and low bars not shown. For example, silver might have bottomed on a Wednesday but only the Friday close is plotted.)
Since the bottom in November 2001 at a weekly close of $4.03, silver has had four launch lows, breakouts, highs, and crash lows. We await the next launch low, subsequent breakout and a new high in the 5th cycle. Based on the chart, the high in April 2011 was quite high, the subsequent low in July 2013 was an unusually deep correction and substantially delayed compared to previous cycles. I interpret this extended and deep low as a reaction to the huge rally from about $18 in mid-2010 to nearly $50 in April 2011. High Frequency Trading and massive intervention since the crash of 2008 have pushed the prices for gold and silver much higher and much lower than in previous cycles. They have also made the timing projections less reliable, but certain parallels are clear. The last four cycles from crash low to high have taken from 1.75 to 2.5 years. That suggests an upcoming high sometime in 2015 – 2016. The last four cycles from crash low to launch low have taken 1.0 to 1.3 years. That suggests an upcoming launch low sometime in 2014. Following the launch lows, highs occurred approximately 0.5 to 1.2 years later. That suggests a high sometime in 2015 or 2016. We will wait and see. But what if the market has fundamentally changed and the April 2011 high near $50 was a long term top that might not be repeated for another decade or so? I doubt it, but reputable forecasters such as Harry Dent believe that gold will drop to about $750 during the long term commodity bear market that he sees this decade. To address the possibility, consider this table: We could add many more rows to this table, but they would tell essentially the same story: increasing debt, increasing money supply, weaker economy, and QE-forever that is necessary to enable government deficit spending. We don't foresee declining gold and silver prices unless we fall into a deflationary collapse. The Fed has made it clear – no deflation! The US congress and the President have made it clear; they want to spend, spend, spend! Accidents do happen, but "Don't Fight The Fed." Expect money printing, inflation, increased debt, and higher prices. CONCLUSIONSSince 2001 the silver and gold markets have gone up substantially as a reaction to the 20 year precious metals bear market from 1980 – 2000, massive increases in military spending, weakening global economies that REQUIRE Quantitative Easing to avoid deflation, the rise of competing currencies that weaken the dollar's trading status, excessive debts in Europe, Japan, the United Kingdom, and the United States, and so much more. We should also learn from the past 12 years of silver cycles: a high, crash low, launch low, and breakout, will repeat until the global monetary system fundamentally changes from unbacked debt based paper money and returns to some form of a gold backed currency, whether it is the dollar, an IMF currency, or another hybrid currency. Unless the world jumps off a cliff into a deflationary collapse that fundamentally changes our world, we should expect more government expenses, more QE, increasing debt, higher consumer prices, more expensive wars, and higher precious metals prices. We should expect an upcoming launch low, breakout, and high in the silver (and gold) market. The "gravy train" of government expenditures must continue rolling – powerful vested interests are everywhere and cannot be ignored – and few, if any, government programs will be reduced unless such reductions are forced by absolute necessity. If this view is more or less accurate, precious metals, and silver in particular, will perform better than bonds, stocks, and most other investments available to those outside the upper 1% – the financial and political elite.
Additional Reading: The Smell of Collapse Is In The Air | Gold, Silver, and the Sins of the Past GE Christenson | The Deviant Investor |
China could control financial system with gold-backed currency, Leeb says Posted: 16 Oct 2013 02:06 PM PDT 8a AEST Thursday, October 17, 2013 Dear Friend of GATA and Gold: Interviewed by King World News, fund manager Stephen Leeb muses on a point raised a few years ago by fund manager and geopolitical strategist James G. Rickards -- that a nation that recognized gold formally as money could control the world financial system. Rickards raised the point in respect to Russia and the oil trade. Leeb raises it in respect to China. "The Chinese," Lee says, "could propose a basket of currencies that are convertible into gold, and the renminbi would be there as a major currency, much more important than the dollar. What you would then see in this country" -- that is, the United States -- "is major commodities, as well as other items, priced in units of gold. "The Chinese are probably not ready yet. They probably don't have enough gold on hand. But we are certainly making it easier for them in the gold market. The United States is intervening in the gold market to try to keep the U.S. dollar index above 80." An excerpt from Leeb's interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/16_C... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Don't Let Cyprus Happen to You Depositors at the Bank of Cyprus lost 47.5 percent of their savings. So to preserve your wealth, get some of it outside the banking system into physical gold and silver. Worldwide Precious Metals (Canada) Ltd., established in 2001, specializes in physical gold, silver, platinum, and palladium. We offer delivery or secure and fully insured storage outside the banking system in Brinks vaults. We have access to gold and silver from trusted worldwide refineries and suppliers. And when you have an account with us you have immediate access to it for buying and selling your stored bullion. For information on owning physical precious metals in your portfolio, visit us at: www.wwpmc.com. Join GATA here: The Silver Summit http://www.cambridgehouse.com/event/silver-summit-2013 Mines and Money Australia New Orleans Investment Conference https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
Posted: 16 Oct 2013 01:59 PM PDT Most people have no idea that America by itself spends as much on its military as… the next 14 nations combined. Twelve of these nations are reliable U.S. allies. The other two, China and Russia, have continents of their own to protect and can in no way afford, or even flirt with the prospect of, going mano a mano with the United States. By some credible accounts, America spends as much on its military as the rest of the world combined. Why are we allowing our government to spend so much? We allow it because there is a lag between events and their popular recognition. As this columnist wrote at Forbes:
Eight times more than the next guy for guns is a lot of money. It is a lot more than the people think we are, or should be, paying. War costs a fortune. The New York Times reports that it costs us about $1 million per year to keep one soldier in the field in Afghanistan. It costs about $400 per gallon to deliver gasoline to the theater of operations. Sure puts $4 per gallon into perspective. Winding down American overkill capability will make us and the world safer, not more dangerous. Meanwhile, outside the ken of the megastate and its handmaidens — big banks, big business and the state-controlled media — peace and prosperity are sure enough dawning. With a lag, citizen recognition of the peace also is dawning. The circumstances that persuaded us, the people, to create the Big Government no longer exist. We won. Time to wind it down. The justification for Big Government is entirely gone. This sentiment is not limited to the right, the Tea Party, or the left, the Occupy movement. It is across the board. It is existential, rather than ideological. Our nice big government won the war. Well done. Mission accomplished. Now we want our power — to direct the government — back. We want our money — yes, trillions — back. And since much of it's spent… stop taxing, borrowing and printing. No, really. We insist. The circumstances that persuaded us, the people, to create the Big Government no longer exist. We won. It's time, for example, to restore the classical gold standard. The gold standard, which is the gold standard of monetary integrity, always is an early casualty of big war. But it is a fundamental building block of a Golden Age. Don't you want your dignity back? Dignity is an important word. It means "deserving of respect." From the Declaration forward, the federal government's legitimacy has been predicated on two factors: First, the government's legitimacy truly does rest on "the consent of the governed." Second, the government's legitimacy is based on its charter: that we are endowed by our "Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted…." We create government to secure, not infringe on, our rights. Including our inalienable right to pursue happiness. Oh, Government? Respect our constitutional rights and civil liberties. No, really. We insist. It's a matter of sacred honor. At the end of the Constitutional Convention, someone approached delegate Ben Franklin and asked what they had given us. He replied, "A republic, if you can keep it." It is up to us, the citizens, to keep America a classical liberal republic. This is a nondelegable duty. (If you're shirking it, shame on you, and expect no sympathy from me.) We, the citizens, possess the ultimate power — shareholders, if you will, in the mega-corporation that is the government of the United States. We have the power. And ultimately, we will use it. For very good reasons, we exercised that power to build a big government. For very good reasons, we now are exercising that power to dismantle it and replace it with liberal republic again. Citizen? Do your part. Or forfeit your bitching rights. Americans are not by nature imperial. Americans have among the lowest PDI — power distance index — in the world. That means that Americans view each other — including our elected officials — existentially as equals. Without the predicate of total war… sooner or later… it's curtains for the imperial state. The wartime presidents and politicians had a good run. (We'll write splendid history books about you and build you a few statues. Maybe. No hard feelings.) "A republic, if you can keep it." If you engage, dear reader, you will enjoy your participation — it's better than Call of Duty or Halo — and you will grow in stature and dignity. So be a player. This columnist — indeed, probably The Daily Reckoning itself! (Addison? How about it?) — serenely can afford to offer you a 100% money-back guarantee if you are not 100% satisfied. The price tag on the exercise of your constitutional power and constitutional rights is zero, so the downside risk of a guarantee, to us, is low. The downside to you, however, for not engaging is high. If you don't engage, you're just a kibitzer. Not much dignity there. So… player? Or kibitzer? It's up to you. But remember, kibitzers don't have bitching rights. Don't look to this writer to tell you how to play your role. Doing that would be defaulting into the old command-and-control model. Yes, the Big Government model. Which you supposedly abhor. Use your own native resourcefulness. You surely have this in abundance. Here's just one tip on how to get started. Mark your calendar. June 28, 2014, will be the most important commemorative date of your or my lifetime. Prepare to celebrate it in a big way. Throw a Victory Day party. Your life and the lives of your children and your children's children are changing. Your fortune depends on understanding the implications. One hundred years ago that day, a century of total warfare, guerre a outrance, burst upon the world. Now, finally, the 100-year war is over. Peace and prosperity have broken out. Novo ordo seclorum — a new order of the ages. Time to celebrate our Victory Day. Begin by holding a party. I take my whiskey, like my politics, straight up. Single malt? I just might show up. Regards, Ralph Benko Side Note: We hope Mr. Benko's right… but we're not betting on it. In fact, what’s around the corner could be much worse for you and your family. In today’s Daily Reckoning email edition, readers were given access to a short one minute video that explains the coming threat and how you can go about protecting yourself. If you didn’t get it, sadly you only got half the story. But not to worry. You can sign up for FREE, right here, and ensure that you never miss another opportunity just like this one. Stay ahead of the tape on all of the most important developing stories that threaten your wealth, your life and your happiness. Sign up for The Daily Reckoning, for FREE, right here. |
Mark Mahaffey: Why gold production is going to go to zero Posted: 16 Oct 2013 01:54 PM PDT 7:53a AEST Thursday, October 17, 2013 Dear Friend of GATA and Gold: Without much higher gold prices the gold mining industry is dead, Hinde Capital co-founder and Chief Financial Officer Mark Mahaffey writes this week, noting that the shares of many gold mining companies are down as much as 90 percent because the cost of production is higher than the metal's declining price. On the other hand, if the world continues to find a piece of paper labeled "gold" as useful and reliable as the metal itself, and if the gold mining industry concurs in that judgment and has no clue about the monetary nature of its product and the surreptitious suppression of its price by Western central banks, who needs the gold mining industry? The paper industry will substitute just fine. Mahaffey's commentary is headlined "The Growing 90% Club and Why Gold Production Is Going to Go to Zero" and it's posted at the Hinde Capital Internet site here: http://www.hindecapital.com/blog/the-growing-90-club-and-why-gold-produc... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Gold Investment Symposium 2013 The Silver Summit http://www.cambridgehouse.com/event/silver-summit-2013 Mines and Money Australia New Orleans Investment Conference https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT How to profit with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... |
Bitcoin Now Used by “the Google of China” Posted: 16 Oct 2013 01:51 PM PDT The Chinese web company Baidu, also known as the “Google of China,” is now accepting Bitcoin payments for Jiasule, its anti-DDoS (distributed denial of service) and firewall security product. Baidu is the fifth most trafficked site in the world, according to it’s ranking at Alexa.com. It is also the most trafficked website in China. “This is encouraging news, even more so since it is from China and with a NASDAQ-listed company,” John Matonis, Bitcoin Foundation's executive director, told Mashable.com in an email. “I am confident that as more companies see the benefits of frictionless payments with low fees, immediate settlement and zero chargebacks, they will want to accept Bitcoin simply to remain competitive,” he said. The Motley Fool declared back in April that Bitcoin was “doomed to fail.” They claimed it was too volatile, had “no fundamentals beyond the news cycle” and was held by a small number of hoarders. Baidu, which has a market cap of $53 billion, appears to disagree… at least enough to experiment with the new currency. One wonders if this has anything to do with China’s recent bellowing about ending the dollar’s status as the world reserve currency. Either way, the U.S. government seems hell-bent on achieving that all by itself. Click to enlarge the infographic below on the growing digital challenge to the government’s money monopoly. Courtesy of The Real Asset Co. (via @tkinder on twitter) You can also see our video tutorial on Bitcoin here. You can also join the conversation and follow us on twitter @dailyreckoning. P.S. Curious about Bitcoin? Check out our brief video tutorial here. You can also subscribe to The Daily Reckoning email edition and receive our free report on the digital money revolution. Click here.
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Gold Rebounds After Dollar Declines, Commodities Advance Posted: 16 Oct 2013 01:33 PM PDT 16-Oct (Bloomberg) — Gold futures rebounded as the dollar's drop boosted demand for the precious metal and commodities as alternative investments. The Standard & Poor's GSCI Index of 24 raw materials jumped as much 1.2 percent and the greenback fell as much as 0.2 percent against a basket of 10 major currencies after Senate leaders reached an agreement that would end the fiscal impasse and increase U.S. borrowing authority, a day before it lapses. The Senate and House may vote on the accord as soon as today. "The dollar's weakness is helping gold," Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. "Also, higher metal and energy prices are helping." [source] |
Gold Daily and Silver Weekly Charts - Bart Takes a Bow - Capital Controls Posted: 16 Oct 2013 01:12 PM PDT |
Gold Daily and Silver Weekly Charts - Bart Takes a Bow - Capital Controls Posted: 16 Oct 2013 01:12 PM PDT |
Posted: 16 Oct 2013 01:09 PM PDT The Debt-Ceiling is More a Debt Target
The Senate has apparently cobbled together a deal that will end the government shutdown and boost the debt ceiling until sometime in early 2014. At which point, the debate will start all over again. Sure they could come up with a bigger deal between now and then, but the record suggests that compromise can only happen when total catastrophe is close at hand. Our friends at GoldCore reminded us this morning what happened to gold after the 2011 debt ceiling deal was struck:
Why did gold rally, when the threat of a default was gone? It’s because the statutory debt ceiling is more a target than any real cap on debt. On August 3, 2011 the national debt of the United States surged $238 bln. It was the largest one-day increase in the history of the United States, sending the debt to GDP ratio over 100% for the first time since World War II. In a day, 60% of the new debt ceiling clearance was already gone. On August 5, Standard & Poor’s lowered the credit rating of the United States from AAA to AA+. The Budget Control Act of 2011 allowed the debt ceiling to rise in three incremental steps. The first was a $400 bln increase that began with presidential certification of the BCA. The second $500 bln increase occurred on September 22, 2011 and the third increase of $1.2 trillion on January 28, 2012 gave us a debt ceiling of $16.394 trillion. There was a brief suspension of the debt ceiling between February and May of 2013 as part of the No Budget, No Pay Act of 2013. When the debt ceiling was reinstated, it had to be raised to the current $16.699 trillion level to accommodate debt accumulated during the suspension. So here we are, butted up against the debt ceiling once again. And I don’t know of anybody that’s surprised by this reality. Whatever the deal is that ultimately gets signed by the President, we’ll have our new debt ‘target’. And sure as God made little green apples, we will one day meet and exceed that ‘target’ as well. |
Gold, Trust & Independence, Part 2 Posted: 16 Oct 2013 12:51 PM PDT Buying gold was all the rage for central banks net-net during the crisis. But now...? BUYING GOLD typically signals a lack of confidence in other people, writes Adrian Ash at BullionVault. (Read part 1 of this little series on the LBMA 2013 conference here...) Yet even as governments everywhere give investors and central banks new reasons to lose trust, the trend is no longer for central banks to keep buying. Not according to analysis of the latest IMF gold data. "Central bank activity in 2013 suggests the appetite for buying gold has been whetted," notes Blu Putnam, chief economist at CME Group, in his latest Markets Insights on Gold. More than that, says the commodities team at French investment bank and bullion dealers Natixis, central bank gold buying – "which two years ago was the driving force behind the price of gold – has not only slowed but actually turned to net selling", albeit of 20 tonnes from this spring's 10-year record aggregate holdings of 31,940 tonnes. And little wonder... Rather than buying gold, as the CME's chart shows, central banks as a group were net sellers for two decades starting in the late 1980s. Asian and other emerging-market banks then raised their demand as prices rose (and the US Dollar fell). Former sellers in Western Europe then paused their divestment, as the global financial crisis bit hard. Now, in contrast, "We don't feel comfortable with gold's volatility," said Juan Ignacio Basco, deputy general manager at the Central Bank of Argentina, at this month's London Bullion Market Association conference in Rome. "Even though it's only a small part of the [reserves] portfolio." This year's volatility in prices has "definitely changed" attitudes, Basco went on, amongst central bankers towards buying gold. Argentina's experience makes a signal example. Basco's central bank cut its gold bullion reserves as prices fell in the 1990s from 120 tonnes to pretty much zero. But as prices rose, Argentina then bought back some 62 tonnes. The last 8 tonnes were bought at gold's all-time highs in late summer 2011. Since then? Buying gold at $1800 per ounce has resulted in a 30% loss over the last two years. Spring 2013's waterfall price drops represented "greater than two standard deviation" moves, said Basco. So "we're using options to smooth volatility," he went on. Because with gold so volatile, but falling instead of rising, "We have to do something." This little titbit – plus a comment from Banque de France director Alexandre Gautier on the same panel – would seem to confirm a point which Natixis flagged 6 months ago, before gold's first sharp decline in April. Which was that, after buying gold to achieve their desired allocation whilst prices were rising, many smaller central banks "have become hedgers rather than accumulators, selling at higher gold prices and buying at lower prices in order to maintain gold holdings within their target benchmark ranges." Such activity – known to financial wonks as "dynamic hedging" – involves options and other derivatives contracts. No metal is being added, even as prices fall. Because those falling prices, plus the achievement of target levels at the peak in 2011, have spooked emerging-market central banks from buying more gold bullion in 2013. Paper contracts will do nicely, thank you, for fine-tuning the portfolio's allocation to gold. Hard times can make dynamic hedging less urgent, however. Because as IMF data gathered by the World Gold Council show, Argentina's official gold holdings have remained pretty constant as a proportion of its total foreign reserves. Sticking around 6.5% by value, gold has held steady even as prices fell thanks to the Latin American basket-case's latest economic crisis, which has seen it sell other currencies in a bid to buoy the Peso on the international currency markets. Even so, the Banque de France – reputedly a big player in the gold sector's lending, hedging and forward selling of the late 1990s – is now "active [again] for other central banks and official institutions" the LBMA conference learnt from M.Gautier. Certainly, European central banks are sitting tight on their hoards. So those government bodies now keeping the Banque busy, and whether buyers, sellers or hedgers, must be elsewhere. The big issue, then? China. If only because it stood out by its absence. For the first LBMA conference in five, in fact, China's gold reserves weren't a hot topic of debate in Rome this month. Perhaps because everyone just assumes more gold buying by the People's Bank is par for the course. China hasn't reported its official gold reserves to the world since 2009. That update added 450 tonnes to the 600 tonnes already declared. Within 6 months, near neighbor and arch-rival for Asian leadership India snapped up 200 tonnes, buying gold from the International Monetary Fund at what soon looked like a bargain price of $1050 per ounce. And while India's private gold demand has since helped tip its trade deficit into a tailspin – leading the government to put a ban on gold imports in all but name – China's demand has continued to surge. The world's largest gold-mining producer, China's gold buying is likely to overtake India as the largest consumer in 2013 as well. Add up the numbers, and the gap between supply and private demand looks so huge, it's hard not to put the People's Bank right in the frame as the world's gold buyer of last resort today. Why might that be? Freer to speak than the West European central bankers on the LBMA's panel in Rome, Argentina's Basco still agreed with the Bundesbank and Banque de France's key point. Even if a little less diplomatically. "Gold is a strategic matter, okay?" he told the conference. No doubt he meant from a portfolio view. But politically, gold is plainly highly strategic as well. Beijing knows it. So does the Indian government. Yet this year's key themes at the LBMA conference – of trust and confidence – were most yoked together by Indian households, weirdly absent from the discussion even as they presented the hottest topic for the 700-odd market professionals gathered in Rome. Third and final part to come... |
Gold, Trust & Independence, Part 2 Posted: 16 Oct 2013 12:51 PM PDT Buying gold was all the rage for central banks net-net during the crisis. But now...? BUYING GOLD typically signals a lack of confidence in other people, writes Adrian Ash at BullionVault. (Read part 1 of this little series on the LBMA 2013 conference here...) Yet even as governments everywhere give investors and central banks new reasons to lose trust, the trend is no longer for central banks to keep buying. Not according to analysis of the latest IMF gold data. "Central bank activity in 2013 suggests the appetite for buying gold has been whetted," notes Blu Putnam, chief economist at CME Group, in his latest Markets Insights on Gold. More than that, says the commodities team at French investment bank and bullion dealers Natixis, central bank gold buying – "which two years ago was the driving force behind the price of gold – has not only slowed but actually turned to net selling", albeit of 20 tonnes from this spring's 10-year record aggregate holdings of 31,940 tonnes. And little wonder... Rather than buying gold, as the CME's chart shows, central banks as a group were net sellers for two decades starting in the late 1980s. Asian and other emerging-market banks then raised their demand as prices rose (and the US Dollar fell). Former sellers in Western Europe then paused their divestment, as the global financial crisis bit hard. Now, in contrast, "We don't feel comfortable with gold's volatility," said Juan Ignacio Basco, deputy general manager at the Central Bank of Argentina, at this month's London Bullion Market Association conference in Rome. "Even though it's only a small part of the [reserves] portfolio." This year's volatility in prices has "definitely changed" attitudes, Basco went on, amongst central bankers towards buying gold. Argentina's experience makes a signal example. Basco's central bank cut its gold bullion reserves as prices fell in the 1990s from 120 tonnes to pretty much zero. But as prices rose, Argentina then bought back some 62 tonnes. The last 8 tonnes were bought at gold's all-time highs in late summer 2011. Since then? Buying gold at $1800 per ounce has resulted in a 30% loss over the last two years. Spring 2013's waterfall price drops represented "greater than two standard deviation" moves, said Basco. So "we're using options to smooth volatility," he went on. Because with gold so volatile, but falling instead of rising, "We have to do something." This little titbit – plus a comment from Banque de France director Alexandre Gautier on the same panel – would seem to confirm a point which Natixis flagged 6 months ago, before gold's first sharp decline in April. Which was that, after buying gold to achieve their desired allocation whilst prices were rising, many smaller central banks "have become hedgers rather than accumulators, selling at higher gold prices and buying at lower prices in order to maintain gold holdings within their target benchmark ranges." Such activity – known to financial wonks as "dynamic hedging" – involves options and other derivatives contracts. No metal is being added, even as prices fall. Because those falling prices, plus the achievement of target levels at the peak in 2011, have spooked emerging-market central banks from buying more gold bullion in 2013. Paper contracts will do nicely, thank you, for fine-tuning the portfolio's allocation to gold. Hard times can make dynamic hedging less urgent, however. Because as IMF data gathered by the World Gold Council show, Argentina's official gold holdings have remained pretty constant as a proportion of its total foreign reserves. Sticking around 6.5% by value, gold has held steady even as prices fell thanks to the Latin American basket-case's latest economic crisis, which has seen it sell other currencies in a bid to buoy the Peso on the international currency markets. Even so, the Banque de France – reputedly a big player in the gold sector's lending, hedging and forward selling of the late 1990s – is now "active [again] for other central banks and official institutions" the LBMA conference learnt from M.Gautier. Certainly, European central banks are sitting tight on their hoards. So those government bodies now keeping the Banque busy, and whether buyers, sellers or hedgers, must be elsewhere. The big issue, then? China. If only because it stood out by its absence. For the first LBMA conference in five, in fact, China's gold reserves weren't a hot topic of debate in Rome this month. Perhaps because everyone just assumes more gold buying by the People's Bank is par for the course. China hasn't reported its official gold reserves to the world since 2009. That update added 450 tonnes to the 600 tonnes already declared. Within 6 months, near neighbor and arch-rival for Asian leadership India snapped up 200 tonnes, buying gold from the International Monetary Fund at what soon looked like a bargain price of $1050 per ounce. And while India's private gold demand has since helped tip its trade deficit into a tailspin – leading the government to put a ban on gold imports in all but name – China's demand has continued to surge. The world's largest gold-mining producer, China's gold buying is likely to overtake India as the largest consumer in 2013 as well. Add up the numbers, and the gap between supply and private demand looks so huge, it's hard not to put the People's Bank right in the frame as the world's gold buyer of last resort today. Why might that be? Freer to speak than the West European central bankers on the LBMA's panel in Rome, Argentina's Basco still agreed with the Bundesbank and Banque de France's key point. Even if a little less diplomatically. "Gold is a strategic matter, okay?" he told the conference. No doubt he meant from a portfolio view. But politically, gold is plainly highly strategic as well. Beijing knows it. So does the Indian government. Yet this year's key themes at the LBMA conference – of trust and confidence – were most yoked together by Indian households, weirdly absent from the discussion even as they presented the hottest topic for the 700-odd market professionals gathered in Rome. Third and final part to come... |
Gold, Trust & Independence, Part 2 Posted: 16 Oct 2013 12:51 PM PDT Buying gold was all the rage for central banks net-net during the crisis. But now...? BUYING GOLD typically signals a lack of confidence in other people, writes Adrian Ash at BullionVault. (Read part 1 of this little series on the LBMA 2013 conference here...) Yet even as governments everywhere give investors and central banks new reasons to lose trust, the trend is no longer for central banks to keep buying. Not according to analysis of the latest IMF gold data. "Central bank activity in 2013 suggests the appetite for buying gold has been whetted," notes Blu Putnam, chief economist at CME Group, in his latest Markets Insights on Gold. More than that, says the commodities team at French investment bank and bullion dealers Natixis, central bank gold buying – "which two years ago was the driving force behind the price of gold – has not only slowed but actually turned to net selling", albeit of 20 tonnes from this spring's 10-year record aggregate holdings of 31,940 tonnes. And little wonder... Rather than buying gold, as the CME's chart shows, central banks as a group were net sellers for two decades starting in the late 1980s. Asian and other emerging-market banks then raised their demand as prices rose (and the US Dollar fell). Former sellers in Western Europe then paused their divestment, as the global financial crisis bit hard. Now, in contrast, "We don't feel comfortable with gold's volatility," said Juan Ignacio Basco, deputy general manager at the Central Bank of Argentina, at this month's London Bullion Market Association conference in Rome. "Even though it's only a small part of the [reserves] portfolio." This year's volatility in prices has "definitely changed" attitudes, Basco went on, amongst central bankers towards buying gold. Argentina's experience makes a signal example. Basco's central bank cut its gold bullion reserves as prices fell in the 1990s from 120 tonnes to pretty much zero. But as prices rose, Argentina then bought back some 62 tonnes. The last 8 tonnes were bought at gold's all-time highs in late summer 2011. Since then? Buying gold at $1800 per ounce has resulted in a 30% loss over the last two years. Spring 2013's waterfall price drops represented "greater than two standard deviation" moves, said Basco. So "we're using options to smooth volatility," he went on. Because with gold so volatile, but falling instead of rising, "We have to do something." This little titbit – plus a comment from Banque de France director Alexandre Gautier on the same panel – would seem to confirm a point which Natixis flagged 6 months ago, before gold's first sharp decline in April. Which was that, after buying gold to achieve their desired allocation whilst prices were rising, many smaller central banks "have become hedgers rather than accumulators, selling at higher gold prices and buying at lower prices in order to maintain gold holdings within their target benchmark ranges." Such activity – known to financial wonks as "dynamic hedging" – involves options and other derivatives contracts. No metal is being added, even as prices fall. Because those falling prices, plus the achievement of target levels at the peak in 2011, have spooked emerging-market central banks from buying more gold bullion in 2013. Paper contracts will do nicely, thank you, for fine-tuning the portfolio's allocation to gold. Hard times can make dynamic hedging less urgent, however. Because as IMF data gathered by the World Gold Council show, Argentina's official gold holdings have remained pretty constant as a proportion of its total foreign reserves. Sticking around 6.5% by value, gold has held steady even as prices fell thanks to the Latin American basket-case's latest economic crisis, which has seen it sell other currencies in a bid to buoy the Peso on the international currency markets. Even so, the Banque de France – reputedly a big player in the gold sector's lending, hedging and forward selling of the late 1990s – is now "active [again] for other central banks and official institutions" the LBMA conference learnt from M.Gautier. Certainly, European central banks are sitting tight on their hoards. So those government bodies now keeping the Banque busy, and whether buyers, sellers or hedgers, must be elsewhere. The big issue, then? China. If only because it stood out by its absence. For the first LBMA conference in five, in fact, China's gold reserves weren't a hot topic of debate in Rome this month. Perhaps because everyone just assumes more gold buying by the People's Bank is par for the course. China hasn't reported its official gold reserves to the world since 2009. That update added 450 tonnes to the 600 tonnes already declared. Within 6 months, near neighbor and arch-rival for Asian leadership India snapped up 200 tonnes, buying gold from the International Monetary Fund at what soon looked like a bargain price of $1050 per ounce. And while India's private gold demand has since helped tip its trade deficit into a tailspin – leading the government to put a ban on gold imports in all but name – China's demand has continued to surge. The world's largest gold-mining producer, China's gold buying is likely to overtake India as the largest consumer in 2013 as well. Add up the numbers, and the gap between supply and private demand looks so huge, it's hard not to put the People's Bank right in the frame as the world's gold buyer of last resort today. Why might that be? Freer to speak than the West European central bankers on the LBMA's panel in Rome, Argentina's Basco still agreed with the Bundesbank and Banque de France's key point. Even if a little less diplomatically. "Gold is a strategic matter, okay?" he told the conference. No doubt he meant from a portfolio view. But politically, gold is plainly highly strategic as well. Beijing knows it. So does the Indian government. Yet this year's key themes at the LBMA conference – of trust and confidence – were most yoked together by Indian households, weirdly absent from the discussion even as they presented the hottest topic for the 700-odd market professionals gathered in Rome. Third and final part to come... |
Posted: 16 Oct 2013 10:43 AM PDT During the past 12 years silver prices have bottomed, rallied sharply, collapsed, and then languished for a year or more. The patterns are not identical, but there are obvious similarities. Read More... |
Silver Price 4 Cycles in 12 Years Posted: 16 Oct 2013 10:41 AM PDT During the past 12 years silver prices have bottomed, rallied sharply, collapsed, and then languished for a year or more. The patterns are not identical, but there are obvious similarities as shown in the following chart. (Note that it is a weekly line chart, from close to close, log scale, with high and low bars not shown. For example, silver might have bottomed on a Wednesday but only the Friday close is plotted.) |
Gold Jumps 2.9% on US Debt Downgrade Risk Posted: 16 Oct 2013 10:20 AM PDT LONDON GOLD moved in a $10 range Wednesday morning around $1281 per ounce – the early August low, down more than 10% from that month's peak – as both the US House and Senate were due to meet in what headline writers called "a last ditch attempt" to resolve the government's debt-limit deadline, set for tomorrow. US debt will likely be downgraded from its AAA status, the Fitch ratings agency warned yesterday, if the government hits a technical default when it reaches the current debt ceiling of $16.7 trillion on Thursday. |
More Evidence of Gold Price Manipulation Posted: 16 Oct 2013 10:17 AM PDT Michael Lombardi writes: While I avidly follow the actions of central banks to see where the gold bullion prices may be headed next, when I look at them today, their actions are speaking louder than words. Central banks have pretty much stopped selling gold bullion, which is very important. In 1999, a number of central banks in Europe formed an alliance and agreed that they would not sell more than 400 tonnes of gold bullion per year. The agreement was called the Central Bank Gold Agreement (CBGA). In 2004, the CBGA was renewed again; this time the limit was 500 tonnes. Once again, it was renewed for another five years in 2009, and the limit is back to the sale of no more than 400 tonnes of gold bullion per year. |
Gold Standard – Bad for the Middle Class? Posted: 16 Oct 2013 09:39 AM PDT How the middle class would benefit from a Gold Standard monetary system... RECENTLY, Ralph Benko began to dig at the question: Is a gold standard system bad for the middle class? writes Nathan Lewis on his New World Economics blog. First: the obvious. The US middle class reached its peak of prosperity at the end of the 1960s. The typical one-income family could afford a house, car, decent healthcare and a college education, and still have enough left to maintain a 10% savings rate. Yes, they had vacuum-tube television sets in those days, instead of watching TV on their telephones. But, as most anyone who was an adult at that time will attest, things were generally better. Former president Jimmy Carter said recently that, "the middle class has become more like poor people than they were 30 years ago. So, I don't think it is getting any better." (I think he means more like forty-five years ago.) The United States had a gold standard policy from 1789 to 1971. At the end of that 182-year period, the US middle class was the broadest and wealthiest in the history of the United States, and indeed the world. If a gold standard system is bad for the middle class, then how is it that, after nearly two centuries of a gold standard policy, the middle class was the best-off it has ever been? For some reason, people never think of these things. Benko responded to some comments by Charles Postel, author of The Populist Vision, accusing a gold standard system of being a tool for rich bankers, at the expense of the middle class. This is an accusation that dates at least as far back as the 1890s, when the Democratic Party wanted to devalue the Dollar by approximately 50%, via "free coinage of silver." (It was sort of like the "platinum coin" argument of today.) Democrats apparently wanted to relieve farmers who were momentarily caught in a situation of heavy debts and sinking commodity prices. The 1896 presidential election became a referendum on "free coinage of silver" (devaluation). The voters (most all of them working class) chose the Republican candidate William McKinley, who promised to keep the Dollar "as good as gold." Did the voters make the right choice? The next seventy-five years of US history tells the answer. In 1896, per-capita GDP in terms of ounces of gold was 10.63 ounces. At the $20.67/ounce gold parity of the time, it was the same as $219.74. In other words, per-capita GDP was equivalent to about eleven $20 "double eagle" gold coins, as they were minted in 1896, and formed a regular part of the currency system. Each had a little less than an ounce of gold. In 1970, just before the US left the gold standard and devalued the Dollar beginning in 1971, the US per-capita GDP was 146 ounces of gold – the highest this measure has ever reached. It was equivalent to one-hundred-and-fifty-one $20 gold coins, as minted in 1896. The per-capita GDP of the US citizen increased by fourteen times over that 75-year period – as measured in "1896 Dollars." Was that good for the "working class"? Is 151 > 11? It must be a difficult question, because even sophisticated academics can't seem to figure it out. The Stable Money vs. Funny Money debate has been going on for centuries, indeed millennia. The Greek philosopher Plato and his student Aristotle disagreed over this point. Since then, we have had many, many experiments with both options. What we find is that the world's greatest success stories are universally based on Stable Money – in practice, a system based on gold (or, in the past, silver). Aristotle's student Alexander of Macedonia conquered the known world, and unified it under a silver-based monetary system according to Aristotle's principles. Plato apparently tried to put his funny-money ideas into use in the state of Syracuse in 387 B.C. It went so badly that, historians say, the king of Syracuse sent Plato to be sold at the slave market in Corinth. Rome's height of glory, under Octavian, was also the time when Rome used reliable gold and silver-based money. In the sixteenth century, the Bank of Genoa's gold-based bonds traded at a 3% yield and infinite maturity, for nearly a hundred years, forming the commercial basis of Italian prosperity during the Late Renaissance. In the seventeenth century, the Bank of Amsterdam's reliable gold-based guilder enabled Holland to become the wealthiest country in Europe, with an empire that spanned the globe. After Britain dropped its funny-money policy at the beginning of the 18th century, it soon replicated the Dutch miracle on a larger scale. Britain became the birthplace of the Industrial Revolution, and its empire soon eclipsed Holland's. Thus, it should be no surprise that the United States, the most successful country of the 19th and 20th centuries, also had a Stable Money policy during that time. Today, Funny Money remains ascendant in US politics, as it has since 1971. In time, the age-old lessons will be learned again. But, perhaps, not by us – the US (perhaps known by then as the "FUS") may serve as a cautionary example for others elsewhere. |
Gold Standard – Bad for the Middle Class? Posted: 16 Oct 2013 09:39 AM PDT How the middle class would benefit from a Gold Standard monetary system... RECENTLY, Ralph Benko began to dig at the question: Is a gold standard system bad for the middle class? writes Nathan Lewis on his New World Economics blog. First: the obvious. The US middle class reached its peak of prosperity at the end of the 1960s. The typical one-income family could afford a house, car, decent healthcare and a college education, and still have enough left to maintain a 10% savings rate. Yes, they had vacuum-tube television sets in those days, instead of watching TV on their telephones. But, as most anyone who was an adult at that time will attest, things were generally better. Former president Jimmy Carter said recently that, "the middle class has become more like poor people than they were 30 years ago. So, I don't think it is getting any better." (I think he means more like forty-five years ago.) The United States had a gold standard policy from 1789 to 1971. At the end of that 182-year period, the US middle class was the broadest and wealthiest in the history of the United States, and indeed the world. If a gold standard system is bad for the middle class, then how is it that, after nearly two centuries of a gold standard policy, the middle class was the best-off it has ever been? For some reason, people never think of these things. Benko responded to some comments by Charles Postel, author of The Populist Vision, accusing a gold standard system of being a tool for rich bankers, at the expense of the middle class. This is an accusation that dates at least as far back as the 1890s, when the Democratic Party wanted to devalue the Dollar by approximately 50%, via "free coinage of silver." (It was sort of like the "platinum coin" argument of today.) Democrats apparently wanted to relieve farmers who were momentarily caught in a situation of heavy debts and sinking commodity prices. The 1896 presidential election became a referendum on "free coinage of silver" (devaluation). The voters (most all of them working class) chose the Republican candidate William McKinley, who promised to keep the Dollar "as good as gold." Did the voters make the right choice? The next seventy-five years of US history tells the answer. In 1896, per-capita GDP in terms of ounces of gold was 10.63 ounces. At the $20.67/ounce gold parity of the time, it was the same as $219.74. In other words, per-capita GDP was equivalent to about eleven $20 "double eagle" gold coins, as they were minted in 1896, and formed a regular part of the currency system. Each had a little less than an ounce of gold. In 1970, just before the US left the gold standard and devalued the Dollar beginning in 1971, the US per-capita GDP was 146 ounces of gold – the highest this measure has ever reached. It was equivalent to one-hundred-and-fifty-one $20 gold coins, as minted in 1896. The per-capita GDP of the US citizen increased by fourteen times over that 75-year period – as measured in "1896 Dollars." Was that good for the "working class"? Is 151 > 11? It must be a difficult question, because even sophisticated academics can't seem to figure it out. The Stable Money vs. Funny Money debate has been going on for centuries, indeed millennia. The Greek philosopher Plato and his student Aristotle disagreed over this point. Since then, we have had many, many experiments with both options. What we find is that the world's greatest success stories are universally based on Stable Money – in practice, a system based on gold (or, in the past, silver). Aristotle's student Alexander of Macedonia conquered the known world, and unified it under a silver-based monetary system according to Aristotle's principles. Plato apparently tried to put his funny-money ideas into use in the state of Syracuse in 387 B.C. It went so badly that, historians say, the king of Syracuse sent Plato to be sold at the slave market in Corinth. Rome's height of glory, under Octavian, was also the time when Rome used reliable gold and silver-based money. In the sixteenth century, the Bank of Genoa's gold-based bonds traded at a 3% yield and infinite maturity, for nearly a hundred years, forming the commercial basis of Italian prosperity during the Late Renaissance. In the seventeenth century, the Bank of Amsterdam's reliable gold-based guilder enabled Holland to become the wealthiest country in Europe, with an empire that spanned the globe. After Britain dropped its funny-money policy at the beginning of the 18th century, it soon replicated the Dutch miracle on a larger scale. Britain became the birthplace of the Industrial Revolution, and its empire soon eclipsed Holland's. Thus, it should be no surprise that the United States, the most successful country of the 19th and 20th centuries, also had a Stable Money policy during that time. Today, Funny Money remains ascendant in US politics, as it has since 1971. In time, the age-old lessons will be learned again. But, perhaps, not by us – the US (perhaps known by then as the "FUS") may serve as a cautionary example for others elsewhere. |
Posted: 16 Oct 2013 09:34 AM PDT Introducing Tom Szabo's Peerless system for picking gold mining stocks... TOM SZABO is co-chief analyst of Metal Augmentor, an investment research service focused on metals and mining. Szabo has co-founded several precious metal related businesses and investment funds. Tom Szabo does not believe that you can judge all gold mining companies the same. In this interview with The Gold Report, Szabo uses the Peerless concept to rank companies qualitatively, but dynamically as their circumstances change. The Gold Report: In a July gold mining research report, you wrote that the ongoing decline from the all-time high in the gold price may represent a correction of the last large up leg, which some say began in 2009 or mid-2008. Or it may represent a correction of the entire 1999-2011 advance in the gold price. Which is it? And has that correction run its course? Tom Szabo: We are in a correction of the 2008-2011 rally and it is ongoing. Big picture, the gold price needs to drop below $1155 per ounce and then subsequently below $1067 per ounce before this would represent a correction of the entire gold cycle that goes back to 1999. We haven't seen such a decline at this point so we can't conclude that it's a larger correction. TGR: We've seen modest upward momentum in the gold price since the lows of April. Is there enough momentum to invest in gold mining equities? Tom Szabo: There are smaller cycles within a correction. So long as investors select the right gold equities they can do well. A lot of projects are viable at this gold price. A lot of discoveries are going to become mines at this gold price. TGR: What's your near- and mid-term forecast for silver and gold prices? Tom Szabo: I suspect we will see a secondary low for gold, perhaps near the low that we reached this past summer, before this entire corrective wave is over. Potential lows are $1155 per ounce and $1067 per ounce. Longer term, about three years or less, I suspect that gold will again challenge its 2011 high. TGR: Is silver going to follow suit? Tom Szabo: Silver will follow gold, especially during the initial phase of a rally. As a rally progresses, silver has the distinct ability to overshoot expectations. I easily see it exceeding $50 per ounce and spiking to a $70-80 per ounce level before settling to a low in the $30-40 per ounce range. TGR: What is the sweet spot right now: explorers, developers or producers? Tom Szabo: In this market, it has to be about growth, which is a concept that can be applied to all of those categories. Explorers make discoveries and grow the resource. Developers grow by taking a project into operation. Producers grow by adding capacity, upgrading or bringing additional projects into development. TGR: MetalAugmentor.com uses the Peerless system to rank the quality of companies. How does that system work? Tom Szabo: The Peerless system is a subjective determination that is based on quality. We consider the factors that point to the success of a silver or gold mining enterprise. Success can be measured in different ways and means different things depending on the development stage of a company and its projects. We use different criteria for an explorer versus a producer versus a developer. It is also a binary rating where a company is either peerless or not. We don't rank a level of peerlessness, although we do keep track of potential peerless candidates that don't quite have all of the pieces together yet. We keep our eyes on prospective peerless companies as they develop because we think they could have it in them to be successful. These are generally more risky, have some blemish or perhaps a past history that doesn't scream quality or the highest level of investor confidence. Nonetheless, we think they could be on a path to becoming peerless. TGR: Some companies begin prospecting with a program of community engagement to let the locals know their intentions and potential outcomes. Other companies prefer to avoid this and just get down to business. Is there any evidence that suggests investors are better served by one approach versus the other? Tom Szabo: We've looked at why companies fail to develop or continue on to development and one of the things that comes up is local stakeholder resistance. There are some cases where a company simply will not be able to mine in a particular area. There's so much resistance to mining that it's not going to happen. But in most areas, if a company faces a lot of resistance or has really strong opponents, it's often because the company has not properly addressed the opposition. TGR: What do you make of companies that are "high-grading", which is mining the highest grade zones early on to pay back debt or get early profits? Tom Szabo: High-grading is just a way to pick the low-hanging fruit. Historically, where mining was very labor intensive, it was usually the only way to mine profitably. In modern mining, to attempt to recover the initial cost of the mine or pay off the project loan quickly, it's almost necessary. I don't find it very controversial. What's controversial is high-grading based on the metal price, which I actually think has some merit. Companies should high-grade when prices are near historic lows and highs. When prices are stable, they should mine the design grade. The reasoning is pretty obvious and simple. When prices are high, deliver as much metal through the plant as possible in order to build up your cash position. When prices are really low there's usually no other option. If a company doesn't go after the highest grades or the most prospective portion of the mine, it may have to shut down. An extension to that, for example, would also be locking in a price spike via short-term hedging. When silver prices momentarily reached $50 per ounce, it would have served the silver producers very well to lock in the price on a quarter or two of production yet none of them did that. They could have generated millions in additional cash flow with minimal risk. TGR: Could you leave our readers with a tidbit of insight that could serve them well this autumn? Tom Szabo: I would caution your readers to be aware of where we are in the market cycle and what type of companies they want to own and why. In a situation where not all boats are rising, only a select few are going to succeed. In this environment, investors need to have some growth stories. I don't think investors are going to be well served for the time being by simply investing in companies that are sitting on huge low-grade deposits but aren't doing anything to expand their potential, increase production or acquire projects to grow. There may be times when the companies with the biggest resource are the ones to own, but not now. Investors have to match strategy with the market reality. Investors should also be aware of what stage the company is in. Unless investors are going to own an explorer from the first drill hole to production, there are factors investors probably don't need to worry much about early on. An investor should care about the factors that the market cares about while the investor owns the stock. This is pretty controversial and I suspect many investment professionals would have a problem with such a cynical approach. Conversely, I think most retail investors will probably say, "No, this is too hard to do. You should really just look at the big picture." From my perspective, that shuts investors off from a lot of great opportunities (and exposes them to a few lousy ones). If investors are able to segment the holding period of their portfolios and match positions to a specific investment thesis, they can increase their odds of success. TGR: Thanks for your time today, Tom. |
Posted: 16 Oct 2013 09:34 AM PDT Introducing Tom Szabo's Peerless system for picking gold mining stocks... TOM SZABO is co-chief analyst of Metal Augmentor, an investment research service focused on metals and mining. Szabo has co-founded several precious metal related businesses and investment funds. Tom Szabo does not believe that you can judge all gold mining companies the same. In this interview with The Gold Report, Szabo uses the Peerless concept to rank companies qualitatively, but dynamically as their circumstances change. The Gold Report: In a July gold mining research report, you wrote that the ongoing decline from the all-time high in the gold price may represent a correction of the last large up leg, which some say began in 2009 or mid-2008. Or it may represent a correction of the entire 1999-2011 advance in the gold price. Which is it? And has that correction run its course? Tom Szabo: We are in a correction of the 2008-2011 rally and it is ongoing. Big picture, the gold price needs to drop below $1155 per ounce and then subsequently below $1067 per ounce before this would represent a correction of the entire gold cycle that goes back to 1999. We haven't seen such a decline at this point so we can't conclude that it's a larger correction. TGR: We've seen modest upward momentum in the gold price since the lows of April. Is there enough momentum to invest in gold mining equities? Tom Szabo: There are smaller cycles within a correction. So long as investors select the right gold equities they can do well. A lot of projects are viable at this gold price. A lot of discoveries are going to become mines at this gold price. TGR: What's your near- and mid-term forecast for silver and gold prices? Tom Szabo: I suspect we will see a secondary low for gold, perhaps near the low that we reached this past summer, before this entire corrective wave is over. Potential lows are $1155 per ounce and $1067 per ounce. Longer term, about three years or less, I suspect that gold will again challenge its 2011 high. TGR: Is silver going to follow suit? Tom Szabo: Silver will follow gold, especially during the initial phase of a rally. As a rally progresses, silver has the distinct ability to overshoot expectations. I easily see it exceeding $50 per ounce and spiking to a $70-80 per ounce level before settling to a low in the $30-40 per ounce range. TGR: What is the sweet spot right now: explorers, developers or producers? Tom Szabo: In this market, it has to be about growth, which is a concept that can be applied to all of those categories. Explorers make discoveries and grow the resource. Developers grow by taking a project into operation. Producers grow by adding capacity, upgrading or bringing additional projects into development. TGR: MetalAugmentor.com uses the Peerless system to rank the quality of companies. How does that system work? Tom Szabo: The Peerless system is a subjective determination that is based on quality. We consider the factors that point to the success of a silver or gold mining enterprise. Success can be measured in different ways and means different things depending on the development stage of a company and its projects. We use different criteria for an explorer versus a producer versus a developer. It is also a binary rating where a company is either peerless or not. We don't rank a level of peerlessness, although we do keep track of potential peerless candidates that don't quite have all of the pieces together yet. We keep our eyes on prospective peerless companies as they develop because we think they could have it in them to be successful. These are generally more risky, have some blemish or perhaps a past history that doesn't scream quality or the highest level of investor confidence. Nonetheless, we think they could be on a path to becoming peerless. TGR: Some companies begin prospecting with a program of community engagement to let the locals know their intentions and potential outcomes. Other companies prefer to avoid this and just get down to business. Is there any evidence that suggests investors are better served by one approach versus the other? Tom Szabo: We've looked at why companies fail to develop or continue on to development and one of the things that comes up is local stakeholder resistance. There are some cases where a company simply will not be able to mine in a particular area. There's so much resistance to mining that it's not going to happen. But in most areas, if a company faces a lot of resistance or has really strong opponents, it's often because the company has not properly addressed the opposition. TGR: What do you make of companies that are "high-grading", which is mining the highest grade zones early on to pay back debt or get early profits? Tom Szabo: High-grading is just a way to pick the low-hanging fruit. Historically, where mining was very labor intensive, it was usually the only way to mine profitably. In modern mining, to attempt to recover the initial cost of the mine or pay off the project loan quickly, it's almost necessary. I don't find it very controversial. What's controversial is high-grading based on the metal price, which I actually think has some merit. Companies should high-grade when prices are near historic lows and highs. When prices are stable, they should mine the design grade. The reasoning is pretty obvious and simple. When prices are high, deliver as much metal through the plant as possible in order to build up your cash position. When prices are really low there's usually no other option. If a company doesn't go after the highest grades or the most prospective portion of the mine, it may have to shut down. An extension to that, for example, would also be locking in a price spike via short-term hedging. When silver prices momentarily reached $50 per ounce, it would have served the silver producers very well to lock in the price on a quarter or two of production yet none of them did that. They could have generated millions in additional cash flow with minimal risk. TGR: Could you leave our readers with a tidbit of insight that could serve them well this autumn? Tom Szabo: I would caution your readers to be aware of where we are in the market cycle and what type of companies they want to own and why. In a situation where not all boats are rising, only a select few are going to succeed. In this environment, investors need to have some growth stories. I don't think investors are going to be well served for the time being by simply investing in companies that are sitting on huge low-grade deposits but aren't doing anything to expand their potential, increase production or acquire projects to grow. There may be times when the companies with the biggest resource are the ones to own, but not now. Investors have to match strategy with the market reality. Investors should also be aware of what stage the company is in. Unless investors are going to own an explorer from the first drill hole to production, there are factors investors probably don't need to worry much about early on. An investor should care about the factors that the market cares about while the investor owns the stock. This is pretty controversial and I suspect many investment professionals would have a problem with such a cynical approach. Conversely, I think most retail investors will probably say, "No, this is too hard to do. You should really just look at the big picture." From my perspective, that shuts investors off from a lot of great opportunities (and exposes them to a few lousy ones). If investors are able to segment the holding period of their portfolios and match positions to a specific investment thesis, they can increase their odds of success. TGR: Thanks for your time today, Tom. |
Posted: 16 Oct 2013 09:25 AM PDT The wrong woman got the Fed job. Or rather, the right one did... WE SPENT last week up at the family ranch, high in the Argentine Andes, writes Bill Bonner in his Daily Reckoning. The ranch was meant to be an investment. It has turned into a social welfare project. Meantime, checking the news when we got back to an internet connection on Sunday night, we were thrown into the blackest funk when we found that our bid to head the Federal Reserve was rejected. The phone never rang. The person who never called, of course, was President Obama. So, we missed an opportunity to run the world's biggest and most powerful central bank. And President Obama missed a chance to put the nation's monetary house in order. Not that it would have been easy. Not that it would have been painless. Not that people would have liked it. Most likely, our plans would have been thwarted, and we would have been assassinated or committed to an asylum for the insane. That's why we had planned a quick getaway to our ranch in Argentina, where there is no phone...no TV...and, lately, no internet. The entire system depends on credit. And anything that threatens the flow of credit must be crushed...or ignored. In the event, we were ignored. Instead, the Prez chose Janet Yellen – the first woman to lead the United States' banking cartel. But she is not the first woman to lead a major government-sponsored banking boondoggle. That honour goes to Christine Lagarde, who heads the IMF...and who knows even less about what she is doing than Ms. Yellen. Still, the markets celebrated – sending stocks substantially higher and gold substantially lower. On both scores, we suspect Mr. Market is pulling a fast one, setting up investors for greater losses later on. Stocks were already on the high side...in an economy which appears to be deflationary, depressive and despondent. Ms. Yellen is committed to sending stock prices even higher – with easier credit policies. We are in risky territory. If monetary stimulus could really make equity more valuable, Zimbabwe would have the most valuable stocks in the world. And here in Argentina, stocks would be moving up nicely too, thanks to a real inflation rate near 30%. In America's depressive economy, on the other hand, the most recent trend in consumer prices – as reported by the nerds at the Bureau of Labor Statistics – is down. No kidding. The last quarter showed falling prices: a disinflationary trend is surely part of the reason that the gold price is slipping. It's also the reason that QE, ZIRP et al don't work. But that's a long story...for another day. Gold is a defence against inflation...and financial chaos, and uncertainty. Now, the uncertainty appears to be gone. We know that the Fed will keep to the program set up by Ben Bernanke. It will continue funding the feds' zombie projects with printing-press money – possibly becoming even more aggressive and ambitious. Stocks should benefit – in the short run. Speculators should come out ahead. And the rich should get richer (QE and ZIRP are fundamentally transfer programs, not stimulus programs. For example, they increase the value of anticipated streams of income from stocks by reducing the rate at which future cash flows are discounted.) But if it were that easy to create real wealth, of course, everybody would be doing it. Real wealth – like everything else that is precious – takes time, patience, and forbearance. You don't get it by using cheap tricks and economic gimmickry. Instead, you have to pay for it. That is, you have to give something up in the present to gain more prosperity in the future. The feds' programs promise the opposite: Americans will get something now...and pay (dearly) later. Eventually – sooner or later – Mr. Market will come down hard on investors' heads, like a murderer armed with a claw hammer. But hey...Barack had his chance. And we want dear readers to know that our feelings aren't hurt. Not in the least. We didn't really want to be Fed chairman anyway. We just suggested it as a gesture of civic generosity...offering our little mite to help the cause of prosperity and human happiness. And if Barack et al think the nation would be better off with Ms. Yellen, who gives every indication of understanding absolutely nothing about real wealth in any form, we will line up fully in support of his choice. We also want Ms. Yellen to know that we will do whatever we can to help her in this difficult job. They have our number. Really, no hard feelings. The feds now have the Fed chief they prefer...and they'll get what they deserve. The bastards. |
Posted: 16 Oct 2013 09:25 AM PDT The wrong woman got the Fed job. Or rather, the right one did... WE SPENT last week up at the family ranch, high in the Argentine Andes, writes Bill Bonner in his Daily Reckoning. The ranch was meant to be an investment. It has turned into a social welfare project. Meantime, checking the news when we got back to an internet connection on Sunday night, we were thrown into the blackest funk when we found that our bid to head the Federal Reserve was rejected. The phone never rang. The person who never called, of course, was President Obama. So, we missed an opportunity to run the world's biggest and most powerful central bank. And President Obama missed a chance to put the nation's monetary house in order. Not that it would have been easy. Not that it would have been painless. Not that people would have liked it. Most likely, our plans would have been thwarted, and we would have been assassinated or committed to an asylum for the insane. That's why we had planned a quick getaway to our ranch in Argentina, where there is no phone...no TV...and, lately, no internet. The entire system depends on credit. And anything that threatens the flow of credit must be crushed...or ignored. In the event, we were ignored. Instead, the Prez chose Janet Yellen – the first woman to lead the United States' banking cartel. But she is not the first woman to lead a major government-sponsored banking boondoggle. That honour goes to Christine Lagarde, who heads the IMF...and who knows even less about what she is doing than Ms. Yellen. Still, the markets celebrated – sending stocks substantially higher and gold substantially lower. On both scores, we suspect Mr. Market is pulling a fast one, setting up investors for greater losses later on. Stocks were already on the high side...in an economy which appears to be deflationary, depressive and despondent. Ms. Yellen is committed to sending stock prices even higher – with easier credit policies. We are in risky territory. If monetary stimulus could really make equity more valuable, Zimbabwe would have the most valuable stocks in the world. And here in Argentina, stocks would be moving up nicely too, thanks to a real inflation rate near 30%. In America's depressive economy, on the other hand, the most recent trend in consumer prices – as reported by the nerds at the Bureau of Labor Statistics – is down. No kidding. The last quarter showed falling prices: a disinflationary trend is surely part of the reason that the gold price is slipping. It's also the reason that QE, ZIRP et al don't work. But that's a long story...for another day. Gold is a defence against inflation...and financial chaos, and uncertainty. Now, the uncertainty appears to be gone. We know that the Fed will keep to the program set up by Ben Bernanke. It will continue funding the feds' zombie projects with printing-press money – possibly becoming even more aggressive and ambitious. Stocks should benefit – in the short run. Speculators should come out ahead. And the rich should get richer (QE and ZIRP are fundamentally transfer programs, not stimulus programs. For example, they increase the value of anticipated streams of income from stocks by reducing the rate at which future cash flows are discounted.) But if it were that easy to create real wealth, of course, everybody would be doing it. Real wealth – like everything else that is precious – takes time, patience, and forbearance. You don't get it by using cheap tricks and economic gimmickry. Instead, you have to pay for it. That is, you have to give something up in the present to gain more prosperity in the future. The feds' programs promise the opposite: Americans will get something now...and pay (dearly) later. Eventually – sooner or later – Mr. Market will come down hard on investors' heads, like a murderer armed with a claw hammer. But hey...Barack had his chance. And we want dear readers to know that our feelings aren't hurt. Not in the least. We didn't really want to be Fed chairman anyway. We just suggested it as a gesture of civic generosity...offering our little mite to help the cause of prosperity and human happiness. And if Barack et al think the nation would be better off with Ms. Yellen, who gives every indication of understanding absolutely nothing about real wealth in any form, we will line up fully in support of his choice. We also want Ms. Yellen to know that we will do whatever we can to help her in this difficult job. They have our number. Really, no hard feelings. The feds now have the Fed chief they prefer...and they'll get what they deserve. The bastards. |
Canada’s Northwest Territories seeks to raise debt ceiling Posted: 16 Oct 2013 08:59 AM PDT The territory says it needs more borrowing to fund a hydro-electric grid expansion to link remote diamond, gold and rare-earth mines. |
Gold to have another go at overhead resistance Posted: 16 Oct 2013 08:59 AM PDT The rest of the week should be tense and potentially explosive either way for the gold and silver prices, as many bet on a resolution in the US, says Julian Phillips. |
Forget the short term – gold is for the long run Posted: 16 Oct 2013 08:58 AM PDT Gold's recent poor performance has somewhat dampened the outpourings of the out and out gold bulls, but as a long term wealth protector then its prospects remain undiminished. |
Hinde Capital: “Why Gold Production Is Going To Go To Zero” Posted: 16 Oct 2013 07:50 AM PDT In an excellent new piece entitled, "The growing 90% club and why gold production is going to go to zero", Hinde Capital's Co-Founder and CFO, Mark Mahaffey, asserts that it's only a matter of time before world gold production goes to zero. That end-point is approaching quickly he implies, as the cost to pull an oz. of gold out of the ground is growing faster than ever before. Here is an excerpt from Mark's piece: "If gold prices stay at the current levels for a |
Goldrunner: Here’s My Take On All That Debt Ceiling Crap Posted: 16 Oct 2013 07:01 AM PDT All of the crap about the debt ceiling on television is just crazy. Here is my take on it. So writes Goldrunner (www.goldrunnerfractalanalysis.com) in edited excerpts from his latest subscription newsletter* entitled "THE DEBT CEILING CIRCUS- PART 1". [This article is posted here, with permission, by Lorimer Wilson, editor of www.munKNEE.com and www.FinancialArticleSummariesToday.com and the FREE Market Intelligence Report newsletter (sample here – register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]Goldrunner goes on to say in further edited excerpts: 1) It is sad that it is going on at all. The average American has to budget his finances while politicians just spend and spend. It is also sad to see politicians threaten Americans with things like cuts in Social Security that those same Americans paid into the system, but the government failed to fund. In the end, all of the crap about the debt ceiling is really about plausible deniability, delivered as propaganda. Threaten deflation and austerity to make a big scene, and force the people to demand the debt ceiling be raised. This is all part of the "show deflation" at critical times when they want to print more aggressively with no blow back. 2) The game plan is still to devalue the Dollar to devalue the debt. In order to devalue the Dollar, huge numbers of Dollars must be printed. Ironically, the only way that the Dollars can be printed is to increase the debt. This really no different than how the Dollar was devalued in the early 30's to end the deflation. 3) The Fed keeps printing while saying "No more QE" and then "tapering"- more propaganda: more plausible deniability. In reality they need to print very, very aggressively to stave off a deflationary depression. They need to be able to say, "Oh, look how we struggled trying not to print too much." 4) How the price of Gold has traded simply makes no sense. The approximate $600 move up in Gold to $1920 came on only $600 Billion of Dollar printing yet the Fed has printed much more than $600 Billion since the $1920 Gold top. Thus, the fundamentals dictate that Gold should be vastly higher than $1920. The markets buy all of the propaganda while the Fed Banks use the false pricing system, paper gold, to manage the Gold price. The Deflation Scare into the 4th quarter of 2008 came during a time when practically everybody thought that the Dollar printing was over since the bank loan multiplier system was blown out. Everybody saw deflation for the future yet the decline in the price of Gold and the DJIA was almost exactly like the late 70's as we had laid out in mid-2007, describing the coming waterfall decline as the Fed moved to dollar printing via debt monetization. Gold retraced almost exactly as expected, declining about 35% down to $680. Today, the Fed is still printing via QE, and the DJIA still sits around all-time highs. Nobody expects deflation, yet Gold has declined 38% in price during a period of massive demand for Real Gold. No doubt that the price of Gold is being managed via paper gold supply, but the real question is "Why, so late in the cycle?"
5) In reality, the demand for physical Gold, Silver, and commodities keeps rising. With the additional QE since mid-2012, the price of Gold should now be around $3,000. China keeps on picking up commodities and commodities-in-the-ground all over the world. 6) Along with the price of Gold and Silver being managed lower via paper gold, the PM Stocks are at the mercy of the big funds who short them. Many PM Companies are showing increased production and increased reserves, but the real issue for those PM Companies in this environment is cash flow. Companies starve without sufficient cash. The funds short the PM Stock, knowing that, and also knowing which PM companies will be dropped from different PM stock indices. Those PM Companies with production create a good portion of their own cash flow, yet they are shorted anyhow. This creates great potentials for much higher future PM Stock pricing once Gold rises aggressively, both in terms of earnings and in terms of reserve valuations. 7) The timing of the Debt Ceiling fiasco was set right in October when investors are always nervous due to cyclical weakness, in fact, it butts right up to the end of the week before the key October Monday "crash date." No doubt, this wasn't an accident. It feeds the deflation mental craze. 8) I still believe:
9) I think that it is funny to see all of the talk about "default" and how other countries might quit buying our debt. We have already defaulted on our debt to the tune of 50 to 60% of the decline in the US Dollar via Dollar printing/ devaluation. Other countries are not too willing to buy our debt, thus it has been reported that the Fed is now buying most of it with newly printed Dollars. All of the Fed buying with new Dollars is what has held the US Bonds up, and rising, for years. The Fed needs to keep interest rates down as long as they can. If the Fed is going to increase the debt monetization, then it will be buying up most of our debt into the future. In reality, most other countries are doing the same kind of shenanigans, though to a lesser extent- Global Competitive Currency Devaluations. The propaganda just gets deeper, and deeper. Do people really watch television and believe all of this crap? 10) In the end, we remain in a Deflationary Depression which has morphed into a Stagflationary Depression via massive debt monetization Dollar printing. There are only 2 ways out:
There are no other choices. Do you think the Fed is going to quit printing? I don't see that we have anything to lose by increasing the debt ceiling. The real sticking point appears to be this albatross called Obama Care. In 2008, a big portion of the new printed and debt monetized Dollars went to the big Banks. Now with Obama Care, it appears that a big chunk of the newly debt monetized Dollars will go to the big insurance companies. It looks like they figure, "Well, we have to print the money to devalue so we might as pay off our buddies who got us, here." For the moment, GOLDRUNNER (Email me at GOLDRUNNER44@AOL.COM with your questions and comments; Goldrunner offers a subscription service which provides detailed technical analysis of where the price of gold, silver and precious metal stocks are going in each stage of their respective bull runs. This service comes with detailed charting based on conventional technical analysis and his proprietary fractal analysis based on the '70s. Go here to subscribe.)[Editor's Note: The author's views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]Other insights from Goldrunner: 1. Goldrunner Dissects Realities of Gold Market Unlike Any Other This article identifies and analyzes the realities that have been, and are, affecting the gold market unlike any other article you have ever read on the subject. Get truly informed to better understand what has happened and why and what the future holds for the price of gold and why. Read on and enjoy. Read More » 2. Goldrunner Offers Clarity On How Banking Realities Affect Gold Price
Frankly, I cannot see how one can distinguish the Fed from the European banking system and looking at things in this way provides a very different picture of the international landscape. The Fed is dependent upon euro printing in order to ramp up dollar printing, yet they are both one and the same. All of the GS boys running over to Europe after the Fed banks defaulted on the OTC derivatives takes on a new light in retrospect. It was a family reunion! Read More » Related Debt Ceiling Articles: 1. 10 Ominous Warnings Of What Will Happen IF There Is An Extended U.S. Debt Default
If the debt ceiling deadline (approximately October 17th) passes without an agreement that would be extremely dangerous – and if the U.S. government is eventually forced to start delaying interest payments on U.S. debt (which could potentially happen as soon as November), that would be absolutely catastrophic. Read More » America was once the world's model democracy. Now it's a global laughingstock with a government that can't keep the lights on and is threatening to renege on its debts. How did this happen? Read More » Going over the debt ceiling would mean the US government legally can't pay its bills and would default on the national debt. This would be catastrophic in ways that would make Lehman Bros look like a walk in the park. Read More » The post Goldrunner: Here’s My Take On All That Debt Ceiling Crap appeared first on munKNEE dot.com. |
10 Ominous Warnings Of What Will Happen IF There Is An Extended U.S. Debt Default Posted: 16 Oct 2013 06:41 AM PDT A U.S. debt default that lasts for more than a couple of days could potentially cause a financial crash unlike anything that the world has ever seen before:
Don’t just take my word for it. Below are the ominous warnings that 10 of the world’s top financial experts are saying will happen if there is an extended U.S. debt default. So writes Michael Snyder (theeconomiccollapseblog.com) in edited excerpts from his original article* entitled 12 Very Ominous Warnings About What A U.S. Debt Default Would Mean For The Global Economy. [The following article is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]Snyder goes on to say in further edited excerpts: Because they are so close together, the “government shutdown” and the “debt ceiling deadline” are being confused by many Americans. a) The “partial government shutdown” that we are experiencing right now is pretty much a non-event (only about 17% of the federal government is actually shut down at the moment and should it continue for many more weeks it would not affect the global economy too much). b) On the other hand, if the debt ceiling deadline (approximately October 17th) passes without an agreement that would be extremely dangerous – and if the U.S. government is eventually forced to start delaying interest payments on U.S. debt (which could potentially happen as soon as November), that would be absolutely catastrophic… Don’t take my word for it. Below are the ominous warnings that 12 of the world’s top financial experts are saying will happen if there is an extended U.S. debt default. #1 Gerald Epstein, a professor of economics at the University of Massachusetts Amherst: “If the US does default, that will make the Lehman Brothers bankruptcy look like a cakewalk” #2 Tim Bitsberger, a former Treasury official under President George W. Bush: “If we miss an interest payment, that would blow Lehman out of the water” #3 Peter Tchir, founder of New York-based TF Market Advisors: “Once the system starts to break down related to settlement and payments, then liquidity disappears, as we saw after Lehman” #4 Bill Isaac, chairman of Cincinnati-based Fifth Third Bancorp: “We can't even imagine all the things that might happen, just like Henry Paulson couldn't imagine all the bad things that might happen if he let Lehman go down” #5 Jim Grant, founder of Grant's Interest Rate Observer: “Financial markets are all confidence-based. If that confidence is shaken, you have disaster.” #6 Richard Bove, VP of research at Rafferty Capital Markets: “If they seriously default on the debt, what we’re really talking about is a depression”… #7 The U.S. Treasury Department: “A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse” #8 Goldman Sachs: “We estimate that the fiscal pull-back would amount to 9pc of GDP. If this were allowed to occur, it could lead to a rapid downturn in economic activity if not reversed quickly” #9 Warren Buffett about the potential of a debt default: “It should be like nuclear bombs, basically too horrible to use” #10 Bloomberg: “Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just [hours] away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.” A U.S. debt default could be the trigger for the “nightmare scenario” that so many people have been writing about in recent years. In fact, it could greatly accelerate the timetable for the inevitable economic collapse that is coming. A recent Yahoo article described some of the things that we would likely see in the event of an extended U.S. debt default…A default would upend money markets, destroy bond funds, slam the brakes on lending, cause interest rates to spiral, make our banks insolvent, and deal a blow to our foreign trading partners and creditors around the globe; all of which would throw the U.S. and the world into economic disarray. …and, of course, stocks would crash big time. Deutsche Bank’s David Bianco believes that if the U.S. government starts missing interest payments on U.S. Treasury bonds, we could see the S&P 500 go down to 850 by the end of the year. There would be almost immediate panic among ordinary Americans as well. In fact, it is being reported that some banks are taking some dramatic steps to prepare for the possible economic chaos that would result, namely:
Let’s hope that cooler heads will prevail and that a U.S. debt default will be avoided. [Editor's Note: The author's views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]*http://theeconomiccollapseblog.com/archives/12-very-ominous-warnings-about-what-a-u-s-debt-default-would-mean-for-the-global-economy (Copyright © 2013 The Economic Collapse) Related Articles: 1. The Debt Ceiling Concept: It's Origins & Why It's Now A Dumb Idea
America was once the world's model democracy. Now it's a global laughingstock with a government that can't keep the lights on and is threatening to renege on its debts. How did this happen? Read More » Going over the debt ceiling would mean the US government legally can't pay its bills and would default on the national debt. This would be catastrophic in ways that would make Lehman Bros look like a walk in the park. Read More » The post 10 Ominous Warnings Of What Will Happen IF There Is An Extended U.S. Debt Default appeared first on munKNEE dot.com. |
Gold Surged 17% In 15 Trading Days After Last Debt Ceiling Extension In 2011 Posted: 16 Oct 2013 06:38 AM PDT 16-Oct (GoldCore) — It is interesting to note that in 2011, gold rose in the months prior to the debt ceiling agreement. Then in the immediate aftermath of the debt ceiling extension agreement on August 2nd 2011, gold surged another 17% in 15 trading days after the agreement was reached. From August 1st to August 22nd, gold rose from $1,619/oz to over $1,900/oz. The United States lost its important AAA credit rating from Standard & Poor’s late on Friday August 5th, 2011, in a dramatic vote of no confidence for the world’s largest economy and the U.S. dollar. This was a catalyst for the surge to the record nominal high of $1,920/oz two weeks later. [source] |
OBAMACARE – ALL THE EFFICIENCY OF THE DMV WITH THE COMPASSION OF THE IRS Posted: 16 Oct 2013 06:25 AM PDT Don’t get sick. Obamacare Meltdown Continues: $171 Million State Exchange Website Running on Paper; Many States Have Zero Signups A health insurance website reveals the ugly debacle that is Obamacare: HHS has released no comprehensive data on how many people have enrolled for health insurance using the HealthCare.gov system… …Oregon hasn’t even tried to […] |
Gold Holds Above Three-Month Low as Talks Resume on Debt Impasse Posted: 16 Oct 2013 05:49 AM PDT
U.S. Senate leaders are trying to complete an agreement to end the fiscal impasse, stepping in after House Republicans' last-minute plan to avert a government default collapsed. The emerging Senate accord may be announced as early as today. With the U.S. borrowing authority due to lapse tomorrow, Fitch Ratings put the world's biggest economy on watch for a possible credit downgrade, citing lawmakers' inability to reach a deal. …"The U.S. situation continues, with lots of talking and very little action," David Govett, head of precious metals at Marex Spectron Group in London, wrote today in a report. "Overnight, a quiet session has seen prices remain supported and with the situation unchanged in Congress, we should stay that way. Most people will stay on the sidelines now if they have any sense until things are resolved." [source] |
Posted: 16 Oct 2013 05:20 AM PDT |
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