Gold World News Flash |
- What catalyst will trigger Gold’s parabolic rise
- Inside The Bank Of Englands Gold Vault
- SOLA 5.25 Return OF Capital
- The Nature of Money and our Monetary System
- The Fed Just Guaranteed $9 Gas & $3800 Gold – Damon Geller
- Gold & Silver COT Report 12/7: Commercials Increase Net Silver Shorts Another 8.6 M oz- Now Nearly 300 M oz Net Short!
- Saving Gold: Old Reliable Stands Tall in Crisis Atmosphere
- Marin Katusa: Top Analyst at Casey Research Talks Gold, Energy, and What He's Buying
- The Collective Conscious Crack Up Boom.......Evil Plan 101.0
- IMF study in 1999 found 80 central banks lending 15% of official gold reserves
- SILVER LININGS PLAYBOOK
- The Historic Inversion In Shadow Banking Is Now Complete
- THE REAL FISCAL CRISIS
- "The Shape Of The Next Crisis" - A Preview By Elliott's Paul Singer
- German Gold Repatriation
- It?s Time to Seriously Consider SHORTING Gold ? Here?s Why
- Alasdair Macleod: Markets, not Paul van Eeden, determine value
- The Australian Dollar is Overbought
- The Christmas Clocks
- Chemistry Professor Tours BOE's Gold Vault: “It Can't Possibly Be Real!”
- GoldMoney: weekly article
- Market for gold is 'dispirited,' Hathaway says, even as central banks want more
- Adrian Ash: When governments steal gold
- Chilton blasts 'puny' fine in case where Goldman Sachs used fake trades
- Over The Road V: Internet Beginnings & Collapse Endings
- The value of the dollar
- Own Physical Gold Now - While You Still Can!
- Sprotts Michael Kosowan on Surviving Death by Paper Cut in Todays Mining Equity Market
- Gold, Silver to Finish 2012 Weak
| What catalyst will trigger Gold’s parabolic rise Posted: 09 Dec 2012 11:00 PM PST Gold Switzerland |
| Inside The Bank Of Englands Gold Vault Posted: 09 Dec 2012 11:00 PM PST Charleston Voice |
| Posted: 09 Dec 2012 09:39 PM PST [Ed. Note: If you want to preserve and potentially grow your capital, here's the link to the new limited edition .999 silver Trivium coins.] from TruthNeverTold: |
| The Nature of Money and our Monetary System Posted: 09 Dec 2012 09:00 PM PST by Johnny Silver Bear, SilverBearCafe.com:
One of the most important aspects of your financial survival concerns your understanding of the nature of money. If you believe that precious metals do not constitute "money", you may have been misled. If you have been misled, who misled you? Why? And "What's wrong with this picture"? What is money? The whole point of money is suppose to be the provision of a convenient and liquid medium that can be exchanged for less liquid value. It is a go between. One strives to accumulate money so it can be exchanged for something else. |
| The Fed Just Guaranteed $9 Gas & $3800 Gold – Damon Geller Posted: 09 Dec 2012 08:50 PM PST from Unconventional Finance: Damon Geller, from WholesaleDirectMetals.com, Damon reveals a startling correlation between the Federal Reserve's balance sheet and the prices of both gold and gasoline. |
| Posted: 09 Dec 2012 08:05 PM PST by Marshall Swing, Silver Doctors:
Large speculators decreased 880 longs and a massive 3,419 short contracts increasing their net long position to 206,360,000 ounces, an increase in their net long position of almost 12.7 million ounces from the prior week. Small speculators decreased 1,324 longs and 507 short contracts for a net long position of 86,210,000 ounces a decrease of over 4,000,000 ounces net long from the prior week. |
| Saving Gold: Old Reliable Stands Tall in Crisis Atmosphere Posted: 09 Dec 2012 08:00 PM PST by Michael J. Kosares, Gold Seek:
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| Marin Katusa: Top Analyst at Casey Research Talks Gold, Energy, and What He's Buying Posted: 09 Dec 2012 07:30 PM PST from visionvictory: |
| The Collective Conscious Crack Up Boom.......Evil Plan 101.0 Posted: 09 Dec 2012 05:55 PM PST From Slope of Hope: Well, my fellow Slope-a-Dopes, although this will undoubtedly be a dreadful decidedly devastating disappointment to many of you, I have chosen to put away my almighty artistically asinine alliteration pen for this Sunday's super significant spectacularly special EP. Instead of dazzling you with my proficient pathetically putrid pitiful prose, I will focus my alertly astute attention on a stupefyingly serious subject.
Ludwig Von Mises' Crack Up Boom. For those of you not familiar with the term Crack Up Boom, John Nyaradi sums it up nicely:?
You may have noticed that I bolded the last line in the first paragraph above. The reason for this should be quite clear, as it precisely describes exactly where we are in the U.S. economy today. There can be absolutely no doubt, that the men currently conducting our Nation's fiscal & monetary train wreck, have entirely embraced the concept of monetary expansion, as the categorically correct antidote for our economic malaise. Be it via the continued increase in spending initiatives funded by further untenable public treasury debt burdens, or the outright multiplication of the money supply, our financial authorities have chosen to press on regardless, undaunted by the near total abrogation of any modicum of monetary or fiscal jurisprudence. This from the departed Ludwig Von Mises in his own words:
Are we there yet? No, thank God, but we are sure doing our utmost to get there, and are most certainly well on our way.
The alarming question that continues to utterly perplex me, is how can these distinctively learned men senselessly continue merrily down this failed forsaken causeway. I mean seriously, the self evident truth that you can't print your way to prosperity, some how eludes these people? Are they that clueless? Are they totally blind? Are they drunk on their own hubris? Are they simply disgraceful men tossing all responsibility aside as they indulge for the moment, consequences be damned? Have they thrown in the towel? Are they intent on ensuring the country's demise? Do they have an Evil Plan of their own? Are they that stupid? Although it is embarassing to say, when one does witness the likes of Clinton, Bush, Pelosi, McConnell, Reid, Boehner, Obama & Company in action, one can readily conclude that our political class is indeed that stupid, quite simply dumb and dumber. However, the same can surely not be said of the highly educated financial authorities minding the store. One could certainly argue that they are way off track, but they can't simply be written off as the same demented morons our elected officials clearly are. So what gives? Why are clearly intelligent, educated & knowledgeable men, intent on driving us down the road to ruin? How can this be explained? Many will claim that it's always the same deeply ingrained flaw in man's character that eventually gets the better of these men/women of stature. Unbridled power & greed, which inevitably lead to hubris & deceit are surely the age old culprits to blame once again. Same as it ever was right? I'm not so sure I buy that though. After all, more often than not, these are the very same attributes that have frequently propelled many powerful men/women into positions of influence throughout the ages. Why would these particular people leading the way over the last 25 years be any more fallible than those that have come before? Has happenstance simply given us a bad bunch of apples, who serendipitously showed up together, all at once during the same period? Are we simply victims of a bad draw? Somehow, this timid take seems somewhat suspect to me. When you can plainly see the problem before your very eyes, yet decide to do nothing about it, you are clearly in way too deep. Whether it's due to stupidity, greed or indifference really doesn't matter one darn bit. Your goose is cooked, because either way, you have already accepted the unacceptable. Let's get real here, our Nation has and is cooking the books, and we are ALL simply unwilling to do a God damn thing about it. Ignobly accepting fraudulence for your own convenience's sake, while failing to admirably live up to your Country's own sacred principles is a shameful thing, and a decadent decaying thing. Our hapless fate is now sealed by our own soulless apathy, we will simply continue to print, party and consume, while others work, build and produce. The outcome of this dishonorable poisonous paradigm is written in stone, same as it ever was. We have given in to the ease. Without a shred of a doubt, it is distressingly clear for all to see now, that we have disgracefully chosen to take the doomed woeful path that Von Mises had warned us all about at the turn of the century. In the end, our once spectacular productive magnificence, which earned us the right to the most preeminent global reserve currency status ever achieved, will degenerate into the worst crack up boom the world has ever witnessed. As for the mundane markets, it is my contention, that we are well on our way towards the final furious crack up boom. The stock indices will relentlessly run up on a vapid nominal basis, as we continue to devalue our currency and ourselves. Don't let them fool you for one single minute, the fiscal cliff negotiations are all for show at this point. The faux fiscal fix is in, all foam no beer. 1500 SPX here we come, the crack up boom awaits us beyond the bogus bright blue skies above. |
| IMF study in 1999 found 80 central banks lending 15% of official gold reserves Posted: 09 Dec 2012 03:28 PM PST A study by the International Monetary Fund in 1999, obtained last week by GATA's researcher R.M., reported that more than 80 central banks had lent 15 percent of official gold reserves into the market and that central banks then lending gold included the German Bundesbank, the Swiss National Bank, the Bank of England, the Reserve Bank of Australia, and the central banks of Austria, Portugal, and Venezuela. |
| Posted: 09 Dec 2012 02:59 PM PST We don't go to the movies that often, and at $11.50 a ticket we won't be going too often in the future. But I wanted to see Silver Linings Playbook because I'd heard good things about it, the great cast (Robert DeNiro, Bradley Cooper, and Jennifer Lawrence), and mostly because the setting of the movie is the Delaware County suburbs where I grew up. The movie was filmed in my stomping grounds and I recognized all of the locations. I've eaten at the Llanerch Diner, where one of the scenes took place. The setting is Ridley Park, which is about 5 miles from where I grew up. The inside of the house has all the traditional Catholic statues and pictures of Jesus that were in all of our homes. One of the key storylines throughout the film is the love of the Philadelphia Eagles. The fanaticism of their fans is captured perfectly. DeNiro is fantastic as the fanatic Eagle fan, OCD father who has been banned for life from Eagles games for fighting other fans. The movie is darkly humorous. It's a One Flew Over the Cuckoo's Nest love story. Bradley Cooper and Jennifer Lawrence give great performances. The scene where DeNiro blames Cooper for the Eagles losing a key game against the New York Giants is a classic, with Lawrence stealing the scene.
You've gotta love a movie where someone is killed on the Schuykill Expressway. I'd highly recommend this movie to anyone, and especially to people from Philly. Bradley Cooper is from Philly. Another feather in his cap. Avalon thinks he's hot. It must be his uncanny resemblance to me. I also must make some observations about the economy. We went to a restaurant next to the movie theater before the movie for a bite and a drink (actually a pitcher of Sangria). At 7:00 pm on a Saturday night there was no wait for a table. Previously, we've waited 40 minutes for a table. There is a Target, Lowes, and BJ's Wholesale adjacent to the restaurant, so there should have been plenty of traffic. The movie theater appeared vacant. No wait for tickets. Usually there are multiple long lines. Avalon insisted this was due to everyone out Christmas shopping. I'm not buying it. I believe we've hit a wall. The signs are everywhere. Life is about cash flow. Declining real wages and the highest gas and food prices in history have sapped the life out of consumers. Taxes are going up, Obamacare has already increased our healthcare costs, and four more years of Obama economics will crush the middle class. It's not a collapse yet, but spending growth has come to a halt. You heard it here first. |
| The Historic Inversion In Shadow Banking Is Now Complete Posted: 09 Dec 2012 02:36 PM PST Back in June, we wrote an article titled "On The Verge Of A Historic Inversion In Shadow Banking" in which we showed that for the first time since December 1995, the total "shadow liabilities" in the United States - the deposit-free funding instruments that serve as credit to those unregulated institutions that are financial banks in all but name (i.e., they perform maturity, credit and liquidity transformations) - were on the verge of being once more eclipsed by traditional bank funding liabilities. As of Thursday, this inversion is now a fact, with Shadow Bank liabilities representing less in notional than traditional liabilities. In other words, in Q3 total shadow liabilities, using the Zoltan Poszar definition, and excluding hedge fund repo-funded, collateral-chain explicit leverage, declined to $14.8 trillion, a drop of $104 billion in the quarter. When one considers that this is a decline of $6.2 trillion since the all time peak of $21 trillion in Q1 2008, it becomes immediately obvious what the true source of deleveraging in the modern financial system is, and why the Fed continues to have no choice but to offset the shadow deleveraging by injecting new Flow via traditional pathways, i.e. engaging in virtually endless QE. What is more important, the ongoing deleveraging in shadow banking, now in its 18th consecutive quarter, dwarfs any deleveraging that may have happened in the financial non-corporate sector, or even in the household sector (credit cards, net of the surge in student and car loans of course) and is the biggest flow drain in the fungible credit market system in which the only real source of new credit continues to be either the Fed (via QE following repo transformations courtesy of the custodial banks), or the Treasury of course,via direct government-guaranteed loans. And while the chart that is the topic of this post is the following, which shows that the red line - traditional bank liabilities - have once again overtaken shadow... ... The most important chart of the modern monetary system, and hence the one which you will see nowhere else, continues to be the one below, showing that on a blended notional basis, total traditional and shadow liabilities have not budged at all in the last three years despite the massive injections from the Fed! Translated, the Fed continues to fight a losing battle, in which it has no choice but to offset any ongoing deleveraging - be it through maturities, prepays, or counterparty failure, or just simple lack of demand for shadow funding conduits - in the shadow banking system. And a notable tangent continues to be that between the peak of the credit bubble and the most recent data, there continues to be a $3.7 trillion credit hole on a consolidated financial credit basis, which is precisely the reason for the ongoing Economic Depression from a simple Austrian money supply perspective, why the Fed and the government are forced to misrepresent the true state of the economy (far worse than current economic "data" represent), and why should the Fed ever halt its monthly flow into markets which is now $85 billion each month, there will be a dramatic stock market crash... and Bernanke knows it. However, the bigger problem as more and more deposit-based liabilities take place of deposit-free shadow equivalents, is that the systemic propensity for runaway inflation rises with every quarter in which Fed reserve conceived deposits -prone to spilling over into the broader market based on the irrationality of individual psychology -serve to offset delevering shadow conduits. As explained in July, shadow banking was nothing more than a massive inflation buffer whose historic build up allowed the Fed to inject trillions without this money leading to a collapse in the USD value, now that it is actively deleveraging. But with every "shadow dollar" that is taken out of the system, said buffer gets smaller and smaller... Finally, those curious which components in the shadow banking system were responsible for the most recent deleveraging in Q3, the chart below sums it up: And the shadow deleveraging on a consolidated quarterly basis in all its glory: To summarize, the Q3 change in shadow liabilities:
How was this drop offset? Simple - by a $177 billion increase in the liabilities of U.S.-Chartered Depository Institutions, which rose to a record $12.224 trillion in Q3, primarily due to a rise of $140 billion in Small time and Saving Deposits, a topic discussed previously here. In summary: the shadow banking collapse continues, and is offset via the Fed "excess reserve" injection pathway entering M2 thanks to the ~4.5x M1 to M2 conversion pathway. Remember Fed's excess reserves are a component of M1: these then get "fractionally reserved" into M2 as per the multiplier shown below: To summarize: all hope abandon ye who think the Fed will stop monetizing debt, and thus injecting flow, at some point in the next several years. * * * For more on the topic of Shadow Banking, we suggest the following reading material:
Source: Z.1 |
| Posted: 09 Dec 2012 01:50 PM PST The fake fiscal cliff crisis will not impact you directly until the economic system grinds to a halt at some point in the future when confidence in the USD dissolves. In the meantime, the Federal government can keep generating $1.4 trillion annual deficits and the Federal Reserve will buy all the newly issued debt. The Federal government can get away with deficit spending because the Federal Reserve can debase our currency. States must balance their budgets every year. The unfunded pension liability for state government union workers is real and the contributions to fund these liabilites must be made every year. As I've pointed out previously, the 8% return assumption for these pension plans is complete and utter bullshit. They will be lucky to generate 4% returns over the long haul. There will be a showdown between the taxpayers and government unions in the next few years. The only way to balance state budgets will be to massively increase taxes on the citizens or to drastically cut the pensions of of government union drones. Ed Easterling lays out all the ugly data in this excellent article. Looming Crisis: State Budgets Soon to Be Under Siege By Ed Easterling, Crestmont Research December 7, 2012 There are numerous problem-solving and decision-making processes in the military and civilian sectors. All of them start with a common first step: Identify and define the problem. Get the first step wrong, and there is no chance for success. Public employee retirement systems across the nation have a major problem. Yet the issues are not isolated to investment portfolios managed in the basements of cold, dark government buildings. Nor is the impact limited to retirees or near-retirees of those programs. The tentacles reach out to the taxpayers that backstop those plans and the people served by the government workers in those plans. Pension plans are simple programs. They are set-up to receive contributions from employers and employees to be distributed later back to the employees as retirement benefits. But the plans expect to distribute more than the contributions that go in—and it almost always can. Down in the basement, the pension plan invests the contribution money over many years to produce a return. The return and the contributions combine to meet the obligations promised to the workers upon retirement. However, if that combination of funds is insufficient, then the taxpayers are expected to make up the shortfall. So there are three components to the pension machine: contributions, returns, and distributions. Two of them can be easily and accurately estimated. The third component is an assumption—a very important assumption. PENSION ANALYSIS Most often, the process starts with an estimate of retirement benefits. For each worker that the pension plan covers, the analysts (called "actuaries") estimate the expected years in retirement, the time to retirement, and the inflation rate across the entire period. This exercise is not very accurate for any single worker, yet it is surprisingly accurate across a population of workers. The total of all expected retirement payments is known as the pension plan's liability. Contributions are also easy to estimate because they relate to a percentage of workers' wages that are covered by the pension plan. The same actuaries grind numbers in big computers with good accuracy. They estimate the expected total contributions to the pension plan as well as the ultimate distributions for retirement benefits. The accumulated total of the past contributions is known as the pension plan's assets. This is where the third component comes in. The contributions alone are never sufficient to cover the liabilities. Pension plans expect the contributions to earn a return while they wait in the basement between employees' working years and the retirement years. And, as they say, there is the rub. What is a reasonable assumption for returns? Well, it's complicated. The return assumption should reasonably relate to the types of investments that are used by the pension plan. The mix of investments depends upon the risk profile that the pension plan is willing to accept. IT'S YOUR RISK Actually, the pension plan is not accepting the risk. The pension plan is just a conduit, a legal entity that stands between the retirees and the taxpayers. Most states have laws that provide some or complete protection for specified benefits promised to retirees. Therefore, the ultimate risk falls upon the taxpayers—not on retirees or the pension plan itself. It is more accurate to say that the mix of investments depends upon the risk profile that pension plan managers are willing to place on the taxpayers. The Social Security trust fund invests exclusively in bonds and securities issued by the U.S. Government. These investments are considered to be virtually risk-free and have little risk of loss. As a result, taxpayers bear little risk from a loss in the value of investments in the Social Security trust fund. In 2005, there was an effort to change the investment mix for the Social Security trust fund to include stock market investments. That initiative failed because the public rejected the additional risk that it represented. The stock market was considered to be far too risky for nation's largest retirement plan. Taxpayers refused to accept the risk associated with potential losses from stock market investments. Nonetheless, states have convinced taxpayers to accept stock market risk for their government retirement plans. Ironically, the national plan would have had national taxpayers accept stock market risk for virtually everyone's potential benefit; the state program has state taxpayers accepting stock market risk for plans that are limited to state and local government workers. REASONABLE RETURNS State pension plan investments are not limited to the stock market. They include corporate bonds, U.S. Treasury debts, real estate, private companies, hedge funds, commodities, and a wide variety of other investments. This mix of investments enables state pension funds to justify the assumption of a higher rate of return. This is critical because a higher rate of return means that state pension funds can contribute a significantly smaller amount of upfront contributions based upon worker's wages. If state pension funds were investing in less risky, lower return state and federal bonds, the states would have to contribute a lot more money at each payroll. It's the Big Tradeoff: contributions vs. returns. Lower expected returns means that higher contributions are needed so that the combination of contributions and returns can pay for retirement benefits. By assuming and hoping for a higher rate of return, the amount of contributions is less because the states expect for investment returns to make up the difference. To illustrate the tradeoff, assuming typical pension plan assumptions—including an expected annual return of 8%, the combined contribution between employee and employer is approximately 19% of the payroll. That's about 8% or 9% of the employee's wages paid by each of the employee and the employer. It's not too far from the rates that have been used by many states and public employment plans. But if the outlook for future annual returns falls to 4% (as current conditions warrant), the required contribution rises substantially to 68% of the payroll—more than three times typical current contribution rates. The reason is the power of compounded returns, the eighth wonder of the world that so enamored Albert Einstein. Unachieved or underachieved returns significantly reduce the ability of public pension plans to meet retirement promises in the future. To illustrate the effect that investment return has on supplying funds for retirement benefits, consider the following example. Assume for simplicity that the time horizon is thirty years. That's about the amount of time from the first dollar of wages to the first dollar of retirement. It's also about the time from the last dollar of wages to the last dollar of retirement. Clearly there are other considerations including wage gains and retirement benefit adjustments, yet thirty years provides a representative example. One dollar grows to just over $3 after thirty years of investment returns at 4%. But, the same dollar grows to more than $10 after thirty years when returns are 8%. That is more than three times the assets to pay retirement benefits. Investment return does not change the amount paid in retirement benefits, it only changes the amount of funds provided by investment returns. The difference must be provided through additional contributions. Clearly, taxpayers have a strong interest in the riskiness of the investment portfolio and the reasonableness of the assumption for returns. The only investment that assures its rate of return is a U.S. bond. Beyond that, the rate of return from investments generally increases as the chances of investment success decreases. Risk is not a knob that can be turned for higher returns. Instead, as investment risk increases, the odds of investment success decrease. Taxpayers accurately read the situation with Social Security and rejected accepting the risk of reaching for higher returns; yet they are now on the hook for substantial risk at the state level. Why? And what can be done about it? The "why" goes back to the assumption for returns from investments. Pension plan administrators know that higher return expectations make it easier to appear to meet the retirement benefit obligations. Despite the well-known tenant that "past performance is not an indication of future returns," state pension funds rely upon the results of past years to set the expectation for future years—the rate of return assumption for the pension plans. CONDITIONS CHANGE The reason that past performance is not a reasonable indicator is that conditions change. For example, as recently as five years ago you could walk into a bank and receive 4% on a certificate of deposit; the U.S. Government paid 5% for investments in its short-term notes. Today, with the same money, the interest rate is less than 1%. It is not reasonable to assume yesteryear's rate of return for the future. Yet that is exactly what the public pension plans are doing. They continue to assume that their investments will average around 8% annually despite the change in conditions. Bonds held by public pension plans return far less than 8%. Real estate and other non-traditional investments struggle to achieve 8%. Finally, the largest part of the portfolio for most public pension plans, investments in the stock market, has not been priced to return 8% for more than a decade! What? Conventional wisdom attributes the 2008 recession and stock market losses to current pension plan shortfalls. How and why could this discussion relate to the past decade? This leads to the most important point in this discussion—defining the problem. If the current shortfalls for public pension plans are the result of a unique gap created by the 2008 recession, then the solution is to refill the gap over time. Many states are attempting to do this by increasing slightly the level of contributions over the next ten or twenty years to plug the hole. But instead, if the shortfalls are the result of a trend that was merely recognized by the 2008 recession, then the current and future gap is destined to be ever-widening. That is the $4 trillion question. Markets go up and down, especially the stock market. The stock market has historically gone up or down by more than 10% each year during almost seventy percent of the years; it has gone up or down by more than 16% each year about half of years. That is a lot of up and down. More importantly, for long-term investors like pension plans, the combination of ups and downs across the decades is not driven by good or bad news. Nor is it a random walk of years that provides some constant average rate of return. Instead, longer-term returns from the stock market vary depending upon the starting point. As a result, longer-term returns from the stock market are quite predictable. To understand the predictability, consider that the average long-term annual return from the stock market has been almost 10%. Yet the so-called "long-term returns" refers only to one really long period, typically 1926 to present. Instead, consider long-term returns across each and every ten-year period since 1900. As it turns out, the average annualized return for decades of ten consecutive years is also near 10%. But the range for decade-long returns is quite wide and few of them deliver near 10% returns. Almost eighty percent of the decade-long periods over the past century ended with annualized stock market returns either above 12% or below 8%. So the odds-on bet for stock market investors is an outlook of well-above average or well-below average. Average is a bad assumption. Why can we say that long-term returns from the stock market are relatively predictable? The thirty-five percent of periods that averaged 12% or more have a common element—they started with the stock market having a value that was fairly low. The value of the stock market can be measured by comparing its price to the amount of annual profits generated by its companies. This is known as the price/earnings ratio, or simply P/E. The forty-four percent of periods when returns averaged 8% or less started when the stock market had a value that was fairly high. In general, the higher the starting value, the lower the decade-long returns. This is particularly relevant because today's stock market on a normalized basis is priced fairly high. It was very, very high after the market bubble in the late 1990s. Since the early 2000s, the stock market has been treading water—with normally dramatic ups and downs—as its value has settled from very-high to high. But it is still high. And that means that future returns from today are destined to be below-average. Here's where it gets tricky. As we know from history, at some point in the future the stock market will again be cheap. That will enable new, future contributions to be invested at lower prices with the expectations of higher returns. But, and it's an important but, current investments are destined to deliver low returns when measured from today. Returns from existing assets are baked-in at current prices. So not only will today's bond investments fall short of the current assumptions currently used by state pension plans, stock market investments will also fall short. The level of shortfall is dramatic. Bonds can be expected to contribute 2% to 4% annualized returns. Stocks can be expected to contribute 0% to 6%, depending upon the future inflation rate and the level of economic growth. Real estate and other non-traditional investments could reasonably be included at 4% to 10%. All in, depending upon the relative mix of investments that are used, the blended rate of return will more likely be 3% to 5% instead of the 7.5% to 8% currently assumed by most state pension plans. The result is an ongoing gap of near 4% annually that will cause an ever-widening shortfall for state pension plans. The problem is not a gap created by a unique event in 2008, but rather it is the result of an environment that started about a decade ago. That gap, moreover, will not move at glacial pace presenting a subtle 4% shift each year. Rather, with the force of an earthquake, periodic market declines will reveal large chasms. Subsequent surges may cure much of the hole until the next plunge. Yet over time, the gap will never seem to close and will attract excuses for why it is widening. Hope will spring eternal as the ship slowly succumbs to drowning waters. CONCLUSION The implications are significant. First, public pension plans have very large gaps to fill as well as ongoing shortfalls. Solutions must be dedicated to shore up the plans. Policy makers must resist the temptation to use pension reform as a way to fund obligations outside of the plans. Second, solutions will require additional contributions that will further challenge the budgets of state and local government employers. The magnitude of the additional funding will only increase with delay. Every year that additional funding is missed compounds and concentrates the problem into fewer future years. Further, state and local governments will be able to make much better decisions about sourcing additional funding if they are aware of the full magnitude of the problem. Likewise, the participants in these retirement pension plans will experience less change and will have more time to plan if their part of the solution is decided and implemented sooner. Additionally, there are significant implications for citizens. Budget shortfalls at the state and local level will drive higher taxes: income, property, sales, and other taxes. Higher taxes among the broad citizenry to fund retirement benefits—where the benefits are greater than in the private sector—may generate resentment and unrest. Such emotional responses often result in less-rational solutions. Higher taxes and social anxiety can lead to slower economic growth, which can reduce standards of living over time. The last comment is intended to recognize a significant risk with the hope of encouraging solutions; it is not intended to be a foresight. Finally, there are significant implications for investors. Some municipal bond issuers that appear solvent under current investment return assumptions will fail under the more realistic assumptions. Caveat emptor. Investors also tend to be targets for higher income and wealth taxes, which can lower net returns from their other investments. The solution to public pension woes is not a stopgap series of contributions; it will require fundamental reform to address the ongoing effects of the existing conditions. A successful solution requires an accurate assessment of the problem. An inaccurate assessment begs disaster. Without a comprehensive solution, the likely actions will be marginal plugs introduced with hope that ultimately result in ineffective results. Ed Easterling is the author of recently-released Probable Outcomes: Secular Stock Market Insights and award-winning Unexpected Returns: Understanding Secular Stock Market Cycles. Further, he is President of an investment management and research firm, and a Senior Fellow with the Alternative Investment Center at SMU's Cox School of Business where he previously served on the adjunct faculty and taught the course on alternative investments and hedge funds for MBA students. Mr. Easterling publishes provocative research and graphical analyses on the financial markets at www.CrestmontResearch.com. |
| "The Shape Of The Next Crisis" - A Preview By Elliott's Paul Singer Posted: 09 Dec 2012 01:00 PM PST Transcribed from a speech given by Paul Singer of Elliott Management Investing is an art, more so than a science. And for me, what I get paid for is managing the "dark art," if you will, of risk management and trying to be a visionary and having a dark vision at all times about what can go wrong. It's a particularly fruitful and impactful time to be thinking about risk management and the thing I want talk about today is what I've described as "The Shape of the Next Crisis." That doesn't mean we're going to be talking about the timing of it or exactly what to short or how to make money from it. But it's to provoke thought about what the elements are, the current landscape, the various aspects that will shape the timing, as well as the amplitude, the predictability, the suddenness of the next crisis. It's not something that I can talk about in any kind of hierarchical fashion. There are a number of elements that are in play, some of which are novel, completely new in virtually the human landscape. But they combine in what I think of, when I'm thinking of risk management and how to hedge my portfolio, what I think of as kind of "an evil stew." But here they are, and it should be obvious when you really think about it, but you have to bring these elements from other facets of life to see how they impact trading and investing. On Modern Communications and Information Processing
On The Financial System And Leverage
On 'Orderly Liquidation' And How Dodd-Frank Has Made The System More Brittle
On Japan And The Confidence-Destroying Implications Of Monetary Policy
And In Conclusion
Questions And Answers Section... Q: [Thoughts on Europe]? A: Yeah, that's really important. My view about Europe starts with my view 15 yrs ago (and by the way, on Wall St if you're early, you're wrong). My view 15 yrs ago was that the Euro was an inappropriate backdoor experiment on quasi-sovereignty. And all it would take would be a stark variation in economic performance or geopolitical or military considerations or interests. And here we are and there's been a stark divergence and the Euro is in the process of centrifugal force and breaking up. Will it break up? It's entirely unclear, and I'm not going to predict that it's going to break up or whether Greece is going to actually leave it. What I will say is that it doesn't make sense for the underperforming countries to actually be part of this. Everyone looked like they were getting benefits during the period of time when there was convergence. Exports for Germany, lower interest rates for Greece and Portugal and Spain and the rest. Big risks were built up, big variations in performance, and now Germany in particular is writing out checks. As long as Germany keeps writing out checks, the euro can limp along, Greece can limp along. But the answer to your question is the fixes to this, even if to kick the can down the road, are deflationary, they're harmful to growth despite the fact that a breakup of the euro would fall upon Greece. Pulling out by Greece from the euro would trigger other consequences in several of these other countries, would create a banking crisis which would have to be dealt with. So there is near term pain in doing, in my view, the right thing. But the medium- to longer-term pain of writing out checks to insolvent countries like Greece (insolvent, it's not a liquidity crisis, insolvency), is ultimately something that's going to be dampening growth in Europe, dampening global growth, possibly creating the transmission mechanism for the next banking crisis. So I think we're watching it. And by the way, how do I think it's going to actually happen that the situation is resolved? It's going to be from the bottom up, the political process. It's going to be on the streets, it's going to be hundreds of thousands of Greeks, or hundreds of thousands of Germans demonstrating against the bailouts. The elites want to keep writing the checks because their paradigms, their desire to have this experiment (because that's what it is, it's only 12 or 13 yrs old) continue. That's what their dream was: one Europe - sovereign. And they were going to get to sovereignty through the back door. It isn't working out at the moment; I don't think it's going to work out. And the fact that it's not working out is quite painful and the way they're doing it is stretching out the pain. Q: [Insights on using CDS on sovereign debt to hedge your portfolio]? A: Very good question. The question was about buying credit default swaps on countries or companies in order to hedge your positions, as a general risk management tool. I think that's a really great question, it's one that people like us really struggle with. One of the things that 2008 (I had forgotten to say this before, so thanks for reminding me) showed us about risk management was that some of the tools that we thought that we had for risk management were actually tools that could be harmed or defeated by the actions of governments. And governments have shown an increasing inclination to push us around, us as a community. Meaning overnight bans on short selling, statements and the beginnings of action against credit default swaps, so-called "naked" credit default swaps. Credit default swaps in the abstract, or actually in practice up till recently, are very effective at bringing liquid tools for taking judgments long and short about securities, and countries, companies that otherwise would be completely illiquid. Borrowing sovereign debt to sell short is not easy. When countries and companies get into trouble, it's very easy and very standard to be blaming speculators and credit default swaps as one of the reasons, or the main reason why a spread is blowing out and why the country or company is in trouble (because when a spread blows out, financing opportunities and possibilities diminish, etc.). Who can say what portion of CDS trading is so big that it actually creates prices rather than just discovers prices? But one of the very difficult parts about running a portfolio that is aimed to be absolute return or very risk conscious and trying to avoid the consequences of the next crisis, is that it's very difficult to predict using tools like that, which of these tools will be left unimpaired, or which will be suddenly impaired or destroyed by government action. One of the things that bothers me about running a gold position is (since gold is, really to me, a thermometer about how people think about real money versus fake money or versus paper money possibly for the first time in people's lives of anybody in this room), if gold actually is starting to be priced at a price that would represent real fear about paper currencies, what will governments do to derivatives or actual gold to keep themselves from being subject to what they feel is inflation caused by speculators? So I think everyone who is using these complicated instruments needs to understand that governments have sent out a shot across the bow that they are not in the mood to allow for free markets, when the free markets challenge the "everything-is-fine-and-we-can-kick-the-can-down-the-road" way of governing. |
| Posted: 09 Dec 2012 12:21 PM PST The greatest threat to worldwide prosperity is the collapse of what remains of free-market capitalism. Not depletion of scarce natural resources. Not environmental degradation. Not global warming (or is it "climate change" now?) No, the greatest threat to worldwide prosperity is the complete collapse of what little remains of free-market capitalism. Throughout the world, and not just in totalitarian countries, the state has been advancing at the expense of economic liberty. The indispensible tool that enables the modern state to usurp our liberties is its access to unlimited amounts of fiat money controlled by central banks — i.e., the unholy alliance of the state with the central bank. |
| It?s Time to Seriously Consider SHORTING Gold ? Here?s Why Posted: 09 Dec 2012 11:50 AM PST I view the current*market weakness in gold,*coupled with the pullback in trader positions, as a shorting opportunity which is strong in terms of reward vs. risk. I have come to that conclusion by questioning the assumptions that many make about it, isolating*its fundamental drivers and providing a trading recommendation as to where I believe the price is headed in the future. Let me share my analyses with you. (Words: 1440;*Charts: 4; Tables: 1) So*say edited excerpts (paraphrased) from an*article* written by QuandaryFX* and posted on Seeking Alpha under the title Prepare to Short Gold. [INDENT]*Lorimer Wilson, editor of [B][COLOR=#0000ff][COLOR=#ff0000]www.FinancialArticleSummariesToday.com[/COLOR] (A site for sore eyes and inquisitive minds) and [COLOR=#ff0000]www.munKNEE.com[/COLOR]*(Your Key to Making Money!), may have further edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a... |
| Alasdair Macleod: Markets, not Paul van Eeden, determine value Posted: 09 Dec 2012 11:22 AM PST 1:24 ET Sunday, December 9, 2012 Dear Friend of GATA and Gold: GoldMoney research director Alasdair Macleod can't resist replying today to the recent assertion of Cranberry Capital's Paul van Eeden that the true value of gold is about $900 per ounce, a little more than half the current price. (GATA called attention to van Eeden's calculation 10 days ago: http://www.gata.org/node/11976.) "According to the glossary of von Mises' 'Human Action,'" Macleod writes, "value is 'always relative, subjective, and human, never absolute, objective, or divine.' It is reflected in human conduct, placing value in the same subjective category as fairness and morality. So all Mr. van Eeden is basically doing is expressing a personal subjective opinion when he talks about the value of gold. ... If Mr. van Eeden's view of value was fundamentally justified, one would expect foreigners, particularly central banks and over three billion Asians, to cash in their gold for dollars. Instead they are keen gold buyers, and we get no explanation why, other than the implication that they are all wrong and Mr. van Eeden is right." ... Dispatch continues below ... ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Macleod adds, "The dollar only has value because the foreign exchange markets and the people who use it assume it has value, vaguely based on the standing of the issuer." Actually the dollar has value for a little more than that; it has value in large part because the residents of a great industrial country are required to pay their taxes with it. But even that is a subjective value to some extent, a matter of how many people want to keep residing in that country. Of course Billy Rose and Sophie Tucker notwithstanding, 50 million Frenchmen can be wrong -- http://www.youtube.com/watch?v=u-IP0DE2kTI -- as can three billion Asians, and overwhelming numbers of people all around the world have been wrong at one time or another throughout history, such as in the famous controversies over whether the Earth is flat and whether it revolves around the sun or vice-versa. But if determinations of market value are made by purchasing power and the willingness to exercise it, then, happily for once, might makes right. Macleod's commentary is headlined "The Value of the Dollar" and it's posted at GoldMoney's Internet site here: http://www.goldmoney.com/gold-research/alasdair-macleod/the-value-of-the... CHRIS POWELL, Secretary/Treasurer Join GATA here: Vancouver Resource Investment Conference * * * 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 Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. |
| The Australian Dollar is Overbought Posted: 09 Dec 2012 11:11 AM PST Last week, the Reserve Bank of Australia (RBA) cut its policy rate by 25 basis points. Economic data confirmed that a peak in resource investment is nearing. Further cuts were not anticipated by the RBA and the AUDUSD ... Read More...  |
| Posted: 09 Dec 2012 11:01 AM PST "This month's waterfall decline and its ultimate end [CENTER] will be seen by many and recognized by few [/CENTER] [CENTER] for the nuggets of opportunity and value it represents."[/CENTER] - Trader Garrett - [CENTER] [/CENTER] For those with vision, it should also be noted these vaults are the primary sources of future gold and silver supplies in spite of increasing mining expenses, declining profitability (at current prices) and decreasing ore grades. [COLOR=#0b5394]Undervalued and Overlooked [/COLOR] [CENTER] [/CENTER] It is a program based on mathematical undervaluation, a historical precedent and a reasonable chance for success. Only excess cash is used for this project. Stock Selection Criteria and Sources [CENTER] [/CENTER] [LIST] [*]Good management with a history of success [*]A tighter share structure and low enterprise or nav value [*]Defined resources/reserves of at least 2/mil oz (or will have within 1 year) [*]Cash... |
| Chemistry Professor Tours BOE's Gold Vault: “It Can't Possibly Be Real!” Posted: 09 Dec 2012 10:31 AM PST In what is no doubt a propaganda piece designed to attempt to slow the gold repatriation and audit request freight train, the Bank of England has taken the unprecedented step to allow University of Nottingham chemistry Professor Martyn Poliakoff to … Continue reading |
| Posted: 09 Dec 2012 10:26 AM PST The following article has been posted at GoldMoney, here. The value of the dollar2012-DEC-09
 We start with the definition of value. According to the glossary of von Mises’ Human Action, value is “always relative, subjective and human, never absolute, objective or divine”. It is reflected in human conduct, placing value in the same subjective category as fairness and morality. So all Mr van Eeden is basically doing is expressing a personal subjective opinion when he talks about the value of gold. He justifies his belief with a monetary statistic of his own invention, and compares its growth rate with the rate of increase in the price of gold. The basic error Mr van Eeden makes here is to believe there is a physical link between changes in the supply of money and the gold price. For a start, there is no convertibility between the two, and fiat dollars are intrinsically worthless, so cannot realistically form the basis of a valid monetary equation. The dollar only has value because the foreign exchange markets and the people that use it assume it has value, vaguely based on the standing of the issuer. This can change suddenly and substantially, irrespective of changes of the quantity in circulation: ask anyone who possessed Icelandic kroner a few years ago. Likewise, gold has a value that measured in paper money can change suddenly, without a sudden jump in mine supply, if people simply shift their preferences between gold and money. If Mr van Eeden’s view of value was fundamentally justified, one would expect foreigners, particularly central banks and over three billion Asians, to cash in their gold for dollars. Instead they are keen gold buyers, and we get no explanation why, other than the implication that they are all wrong and Mr van Eeden is right. Asians are not interested in his views, or mine for that matter: they know that gold is a better store of wealth in the long term than any invention of government or the financial markets; and they know this through experience. I would also question his statistics. He constructs something he calls actual money supply, which is merely the sum of cash and deposits. Inexplicably, he excludes checking accounts. All you need to know is that Austrian, or true money supply in dollars, for which there is a sound theoretical basis, is 23 times the value of gold said to be held by the US Treasury. Based on this relationship, my admittedly subjective view is that at a time of escalating global systemic risk, the dollar is wildly over-valued relative to gold, and not the other way round.  |
| Market for gold is 'dispirited,' Hathaway says, even as central banks want more Posted: 09 Dec 2012 08:58 AM PST 10:55a ET Sunday, December 9, 2012 Dear Friends of GATA and Gold: Tocqueville Gold Fund manager John Hathaway today tells King World News that "the setup is terrific" for gold even as the market is "dispirited," but he sees central banks and "big pools of money" getting more interested in the monetary metal as everything else keeps looking worse. An excerpt from Hathaway's interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/9_Th... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. Join GATA here: Vancouver Resource Investment Conference * * * 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 Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard |
| Adrian Ash: When governments steal gold Posted: 09 Dec 2012 08:51 AM PST 10:45a ET Sunday, December 9, 2012 Dear Friend of GATA and Gold: In a new essay, Bullion Vault's research director, Adrian Ash, tells three fascinating and little-known stories of how governments confiscated gold: fascist Italy in 1935; Nazi Germany in 1939 with the assistance of the Bank of England and the Bank for International Settlements, two organizations of barely greater integrity that are still around; and -- how can we not call it "fascist"? -- Britain in 1966. Ash concludes: "The moral of these tales? Because gold is no longer central to the world's monetary system, so-called 'confiscation' looks like a very 20th-century phenomenon today. But that may well change. Exchange controls such as Britain had in the 1970s (and which Italy didn't lose until 1999) are more likely -- because people, like governments, want to own gold when they fear inflation, financial strife, or political crisis. Holding it at home could expose them to theft or coercion. If they hold it safely at arm's length overseas, even a secure democratic jurisdiction requires clear ownership if you are retain control." Ash's commentary is headlined "When Governments Steal Gold" and it's posted at Bullion Vault's Internet site here: http://goldnews.bullionvault.com/gold-confiscation-120720125 CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Join GATA here: Vancouver Resource Investment Conference * * * 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 Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. |
| Chilton blasts 'puny' fine in case where Goldman Sachs used fake trades Posted: 09 Dec 2012 08:41 AM PST A 'Puny' Fine for Goldman Sachs Goof: Chilton Blasts Deal By Kaja Whitehouse and Mark DeCambre http://www.nypost.com/p/news/business/puny_fine_for_gs_goof_Uz1kN2oW00iC... An outspoken regulator lashed out at a $1.5 million settlement between Goldman Sachs and the Commodity Futures Trading Commission, calling the deal a steal for the Wall Street bank. Bart Chilton, a CFTC commissioner, described the cash amount as "puny" and "a slap on the wrist" when compared to the whopping $8.3 billion trade at the center of the case. In 2007, a Goldman trader hid the outsize trade as the market unraveled. "This is another example of where puny penalties send the wrong message for these guys who are breaking the law," Chilton told The Post. ... Dispatch continues below ... ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold. Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order. GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata "It's not even a sneeze for them," he said of the fine, which is roughly equivalent to what Goldman CEO Lloyd Blankfein would have pocketed in one week in 2007, when he earned $68 million. Chilton was the sole dissenter on a 3-1 vote to fine Goldman. CFTC Chairman Gary Gensler, who worked at Goldman Sachs for 18 years, recused himself from the case. The Goldman case centers on Marshall Taylor, a former Goldman trader who allegedly established an unauthorized series of complex derivative trades totaling roughly $8.3 billion and hid it from his superiors. Taylor's trades resulted in losses at Goldman of more than $118 million after they were discovered. The CFTC fined Goldman for failing to have proper risk management tools in place to detect the rogue trade. Taylor concocted a complicated scheme of entering fake trades in order to mask his actual trades in so-called futures contracts known as S&P e-minis. "Goldman failed to have policies or procedures reasonably designed to detect and prevent the manual entry of fabricated futures trades into its front-office systems," the CFTC's report said in its complaint yesterday. "Taylor's activity was flagged by our controls on Dec. 14, 2007, with no impact to customer funds," a Goldman spokesman said in a statement. "Since these events, we have enhanced our controls." Critics like Chilton, however, argue that such small fines on trades that could result in big hits to the system can become just the cost of banks doing business. Chilton, who has been with the CFTC since 2007, is lobbying the agency to raise its fines so that firms start to pay attention to the rules. He has proposed fines be increased to $1 million per violation for firms and $250,000 per violation for individuals. Under that scenario, Goldman would face a maximum fine of $60 million, he said. "The financial firms know we are understaffed and we don't have the resources to take them to court," he noted. "They lowball us on these settlement offers -- sort of daring us to take them to court." Join GATA here: Vancouver Resource Investment Conference * * * 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: |
| Over The Road V: Internet Beginnings & Collapse Endings Posted: 09 Dec 2012 08:24 AM PST Off the keyboard of RE Discuss this article at the Kitchen Sink inside the Diner It's hard these days to remember "life before the internet", when if you were in correspondence with anyone, you generally would take weeks between exchanging letters. Now, if I don't get a response to some email I send out to somebody or some corporation that screwed up on billing me for something by the next day, I figure I am either being ignored or it is a conspiracy or both. LOL. I used to watch TV in those days though, so that filled the need for constant information input, and I didn't get the Writing Jones until PCs were well into their development in the early 90s. I started but never finished a couple of Sci Fi novels before that and wrote some Poetry during my College Years, but writing wasn't a big part of my life until the Laptops showed up and I turned Solitary as an OTR trucker. The Internet was already in existence by then, although accessing it while OTR was pretty difficult. It was Dial-Up modems in those days, and I had to find access to a phone line with a Local Number I could call in order to stay online for anything more than a few minutes. Typical 800 Number charges were 10 cents/minute, $6/hr to stay online on the times I went that route. So in those days I would often compose as I am doing now in a word processor, copy into the buffer and then briefly sign on at some truckstop and paste my post into one of the yahoo groups I ran at the time, then sign off again. My email POP program would download messages I could read off the computer while not online in a few minutes, so for about $1/day I stayed caught up with my friends and net acquaintances that way. A couple of years into my OTR driving years, a company called Park-n-View started providing Cable TV, Phone and Internet service to truckers right in your Truck, by connecting up with Phone line and Coaxial Cable to a Port that was installed in each parking spot for the trucks. It was a pretty robust port made out of heavy metal in case the truck tandems ran over it in parking, as they almost always did. It also had to be well shielded from the elements, and remarkably to me these ports worked most of the time. Hadda be hell for the guys driving the Snow Plows in those parking lots though during the Winter. I suspect they kept the Plow Blades up 2″ or so off the ground level to clear the ports. Well built as they were, at right is what they look like today. Nice metaphor for technology in general, and in a sense its just a miniaturized version of Detroit screwed right down into the pavement. At the very end of my trucking years, rudimentary WiFi began to hit the scene, I got a Sprint Cell Phone I could access a dial up modem with, and had an Unlimited Minutes plan for this. It was mighty slow of course, but in those days it was all just Text, no Pics and certainly no Vids. I was off the road a long time before REAL High Speed WiFi started to be offered in all the Truckstops. There were of course many hours/days where I had no access to a phone line or even a Park-n-View connection to check in on the net, check my email and so forth, stuck in a Shipper or Receiver waiting for a load or unload. To fill those many lonesome hours in the cabin of my Freightliner, I played on my laptop. I installed graphics programs and publication programs and database programs. I taught myself rudimentary database programming and started creating publications that incorporated pictures into them. I learned the basics of HTML during this time as well, though never have really become a super geek with the uderlying Code that runs websites like the Diner. All of what I did accumulate in knowledge during that time though I now use to make the Diner a lively looking and functional website, though the underlying code comes from Peter, not me. Most of all though during those lonesome times, I wrote. Not about Doom though in those days, other topics occupied my mind back then. Still in the course of that writing I developed the Gonzo Style and "Atitude" I still use today in my writing, bombastic and over-the-top quite often. As it progresses here to today, I find some things very interesting in exactly who you find on the Internet to chat with. It is very demographically skewed of course. Despite the prevailing zeitgeist that it is the younger people who are conversant with Computers and the Internet, you wouldn't know that as you travel around the Collapse Blogosphere, that is for sure. The main Bloggers are just about all 40 & Up, and the older they are, the more Prolific they are in what they write. Likely because once Retired from whatever their normal job was, they have tons of time on their hands to write whatever comes into the Senior Mind. LOL. Similar demographics in the Commentariat on these Blogs also, heavily weighted toward the aging population of Boomers & Silents. Almost everyone of these folks has developed a "Lifetime Philosophy", which often breaks down to very conventional Political Classifications of "Socialist" or "Capitalist". There are of course innumerable variations on these ideas, but basically it seems to me to come down to those who think the Individual is more important versus those who think the whole Community is more important. Individual "Rights" versus Social "Welfare", that sort of thing. It is not just in age demographics that you get a skewed perspective, it is also across cultural lines as well. Even though a good part of the "well-educated" of 3rd World countries speak English and can afford a Laptop and Internet connection, I have never had a Native Chinese or Indian or Brazilian or Russian show up on any of my blogs or forums, though I did run into a few Eastern Europeans on Peak Oil in the HOT years from around 2006-2010. Mostly though what you find on the Internet in the Collapse Blogosphere are people from the native English Speaking countries of the FSofA, UK, Canada, Australia and New Zealand. So is it just these English-speakers who are concerned with Collapse Issues? The Well-Educated of China and India and Russia have no interest in investigating this stuff and discussing it? Perhaps on their own local net in their own languages there is something similar going on, but you know I really doubt it. I think the whole "contemplation of collapse" meme is pretty consolidated into a relatively small demographic of Boomers & Silents living in the 1st World English Speaking countries. Why is that? First off, I think the theories put forth by folks like M. King Hubbert and Richard Duncan have been very poorly disseminated outside the English Speaking world, hell even INSIDE this world said theories are not well known. I think in most countries particularly in the 3rd World that the "Progress Meme" is still being highly promoted amongst the Intelligentsia, and these folks are more concerned with CATCHING UP ot the 1st Worlders than with Reverse Engineering their societies toward a low energy footprint society. The "progress" or move toward Social Media as a primary function of the Internet is also IMHO in large part responsible for poor information dissemination in this area. The English speaking world got Computers and the internet early enough on in the game that your current 40-70+ year old class of people here have been researching and reading about these things for quite some time, at least the most active of them have been. for the younger folks, the Internet has become more of a Sound Bite medium much like Television, with the Internet mainly used as a Comunications medium between friends, not as a Research medium for Information. If ya can't consolidate it down to a 3 line Tweet or a 2 minute Vid, you can't get many people to pay attention to what is presented on the net. I certainly have been criticized ENDLESSLY for the fact most of my Essays and Articles run in the Nabe of 2000-5000 words as being just too LONG for people to read. WTF? How can you detail out any reasonably complex idea in much less than this? Books are much longer…oh but yea people don't read them anymore either! The upshot of all of this is that the truth about Collapse is very poorly disseminated information, both Globally across cultures and Demographically across age groups. It is most certainly NOT taught in the Schools ANYWHERE at all. What is taught and promoted is to take out huge loans to get an Engineering Degree which in all likelihood by the time the average 18 YO today graduates will be quite worthless. If even the "well educated" class of people with access to computers and the internet are systematically routed away from exploring these issues, it certainly makes it quite difficult to generate a new consensus. Is that a Purposeful Plan of the Illuminati? If not, then it certainly was a fortuitous outcome for them to have a generation of clueless people distributed around the globe just about everywhere. Henry Ford remarked once that if J6P understood the Monetary System at all, there would be a Revolution the next day. Ignorance is promoted and promulgated by the Illuminati. Anybody SMART enough to understand any of it is Coopted into the Game, and becomes a Mid-Level "Successful" Apparatchik, and over time develops a Rationale which explains and justifies his "Success" to himself. In justifiying that success, the same person demonizes and denigrates those less successful than himself as simply too stupid or too lazy to be successful. These are the people who make our Enslavement possible, these are the people who have brought us to the Brink of Extinction. This facet of cultural development represents the "Banality of Evil". The apparatchiks aren't the ones truly "running the show", but they ARE the ones who make the show possible at all. In one respect or another, anyone who participates in the system as a middle level apparatchik ends up functioning to perpetuate the Evil we have before us. You work, you pay your taxes, you vote, all of this serves to perpetuate the system. Dropping OFF this system, or "Dropping Out" really is an extraordinarily difficult thing for most people in Industrial Society to do at all. If you buy yourself a Doomstead somewhere to set up Permaculture Farming, you are going to have Property Taxes to pay, and it is quite questionable as to whether the farm can both Feed you and Family AND sell the excess produce to increasingly broke populations. Trying to go out Rewilding, you will find that nearly every spot on the Globe is "owned" by somebody, or by Da Goobermint which has restrictions on just what you can Fish or Hunt up and kill. More or less a version of the old "King's Fox Hunting Ground", nobody but the King can go there and shoot anything, all the creatures on that plot of land belong to HIM. You gotta go mighty far out in marginal territory to be let alone to hunt & fish and gather as you will, at least for now that is the case. Here on the Diner, we engage in the process of "Work Arounds" for these many facets of the failing industrial economy and how you might negotiate the shitstorm to come. The FOOD problem remains of paramount concern to most Diners, as we are all aware that the JIT shipping paradigm that utilizes the kind of Big Rig I drove is amongst the most vulnerable of the systems we are dealing with here and if/when it fails can rapidly bring extreme Hunger & Starvation to the most highly populated neighborhoods in the industrialized world, the Big Shities as I refer to them. Is there ANY reasonable solution which has some CHANCE at success? In fact there is, though hope is slim that it will be implemented on a large scale in a near enough timeline to ameliorate an extreme and rapid Die Off event for Homo Sapiens. What IS that HOPE? It is Hydroponics, a means of growing vast quantities of food in a Water and Energy conservative manner that can utilize much of the flotsam and jetsam of the Age of Oil ALREADY manufactured to produce vast quantities of food in many locations otherwise unsuitable for typical Ag techniques, including Permaculture. Here on the Diner, you can begin your exploration of Hydroponics in the Hydroponics NOW! thread inside the Diner, along with numerous other threads devoted to this topic. Is Hydroponics a FOOLPROOF Solution to the Food Problem we will face as the spin down progresses onward here? No it is not, there are many difficulties involved, not so much with the technology or even having available the varous plumbing stuff from the Age of Oil. Even though you can scale down to create a system just big enough to provide for our own needs as the above pictured setup does for Diner Admin Peter, you do face the problem of Have Nots, aka as "Zombies" who in all likelihood will resort to violent tactics to acquire the food you have or are producing. Although more secure than exposed plots of land, not that much more secure. In more remote areas, you probably can pursue such a technique with reasonable security, but inside a Big Shity or Suburb, even hidden in a basement your neighbors will quickly recognize you are not getting so skinny quite so fast as they are. They will knock on your door to ask for food, and eventually at the Point of a Gun likely ask to search your premises for food. So even though it is technically feasible to pursue Hydroponics as a Solo Adventure for yourself and family, this really is not the best route to go for most people in most neighborhoods. Rather, instead of HIDING what you are doing, ADVERTIZE IT! Let as many people as you know in the neighborhood KNOW about it, and TEACH them to do the same thing. Learning to do anything like this takes Time & Experience, and time you put in now to teaching yourself how it is done makes you a VALUABLE member of your Community. People will Look to YOU to HELP them, and you will have the means to do that. Not with Money, but with that which NEVER can be taken from you by Da Goobermint, what you KNOW HOW TO DO. Will it be IMPOSSIBLE to do Hydroponics once JIT fails and the Parts you buy now are no longer available from the Big Box Stores by way of Slave Laborers working in China? Not at ALL, because just about ALL of it can be scavenged from the parts used to construct your McMansion and your SUV! What cannot be scavenged this way can be facsimilated from local materials. Even Timers and Pumps can be created locally out of available materials. If like some of the Diners here you decide to try and build a Hydroponics grwoing facility in your McMansion or Garage or Basement, I urge you not to think of it as just a means to feed self and family, but rather as your autodidactic method of gaining the knowledge necesary to help everyoneelseinyour community do the SAME THING. So you do not need a HUGE setup for this, and a good beginner system can be set up at an affordable price. for all but the totally destitute already. The Diners are here to help you. We are all in the same mess of course, and this is something you CAN DO. Wherever you live right now, even in a Big Shity it is possible. Perhaps, just PERHAPS it is possible to get enough of your neighbors to WAKE UP in time to stave off the Zombie Apocalypse. Is this the Picture you want for the Future?
Or is it THIS You can CHOOSE right now to make the second picture the OUTCOME here. Or at least make the EFFORT at it. Even if you FAIL, at least you know when you Buy your Ticket to the Great Beyond, you did NOT quit, you did NOT go down without a fight, and you made your very BEST effort to….wait for it…
Save As Many As You CanRE
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| Posted: 09 Dec 2012 07:00 AM PST I very rarely criticise the work of others, but I am going to make an exception in the case of Paul van Eeden, of Cranberry Capital. Mr van Eeden, in an interview with The Gold Report stated that ...  |
| Own Physical Gold Now - While You Still Can! Posted: 09 Dec 2012 06:47 AM PST None of this, though, seems to bother the navigators of our ship, who are stubbornly steering us farther from care than danger on a course across an ocean of debt to follow the great white whale of business as usual. These are interesting times alright, and historically interesting times have been the best times to own real, tangible, physical gold. Somewhere, of course, where the navigators can't steal it. |
| Sprotts Michael Kosowan on Surviving Death by Paper Cut in Todays Mining Equity Market Posted: 09 Dec 2012 01:00 AM PST The Gold Report |
| Gold, Silver to Finish 2012 Weak Posted: 09 Dec 2012 12:03 AM PST We had a great week with markets consolidating recent gains and setting up for higher prices this coming week by the looks of things.n Many stocks were hit hard but most are just consolidating after some huge recent gains and are setting up for more upside in the very near future. As for the precious metals they are not in good shape with the exceptions of platinum and palladium. |
As the editor of the Silver Bear Cafe, I try to focus on the ramifications of world events. I try to understand how what's going on now will affect your pocketbook next week, next month, next year. It is my sole intent to help you consider the possibilities which will, in turn, help you prepare for your financial future.
In silver, commercials unloaded 4,115 longs on the week and 2,393 shorts to end the week with 47.74% of all open interest, an increase of 0.69% in their share since last week, and now stand as a group at 
Around this time each year we like to remind our clientele that the real rate return should be one of the most important factors influencing the way you handles your savings. The real rate of return — yield minus the inflation rate — governs the flow of international capital into various investment vehicles. It also influences the way private investors employ their capital. When interest rates go above the inflation rate, like they did in the 1980s, the incentive is to save in the form of government and commercial bonds and bank savings deposits. When interest rates stay below the inflation rate, as they have for most of the last decade, the incentive is to save in the form of gold and other hard assets.
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