Gold World News Flash |
- GoldSeek.com TV Exclusive: Strikes, Politics & China: the future of mining in southern Africa - Kobus Nell, STANLIB Asset Management
- Commodity Technical Analysis: Gold at Short Term Resistance
- Robert Kiyosaki Gold, Silver & U.s. Dollar Predictions 2013 – YouTube
- Jim Sinclair: Gold to $3,500 If Ben Bernanke Is Fired – Romney Election – YouTube
- Silver to Shine in 2013? – Blazer Metals Report
- Peter Schiff Gold Prediction 2013 – 2014 – YouTube
- Jim Rogers 2013 Predictions – Gold, Silver, Economic Outlook & Investments – YouTube
- Next 60 Days Key for Gold
- John Hathaway - 2 Key Charts, Gold, Fed & The Big Picture
- Can Banks Really Just Create Money?
- Prophets, Predictions and Profits
- Guest Post: Is American Justice Dead?
- Brodsky's Thompsonesque Trip Into The World Of Monetary Idiots Vs Krugman's Barbarians
- The Gold Price Closed Down at $1,655.50 Silver Also Lower at $30.25
- “Ponzi Finance”: What Must Happen To Bring It To An End?
- Paul Brodsky: The Real Idea Behind The Trillion Dollar Coin
- Is American Justice Dead?
- 20 Facts About The Collapse Of Europe That Everyone Should Know
- $10,000 Gold And 'Monetary' Roots: From Kunta Kinte To Keynes
- UNSUSTAINABLE
- Gold Has Been Riding The Euro Rollercoaster – Will It Continue?
- Gold Seeker Closing Report: Gold and Silver End Barely Lower
- Gold Daily and Silver Weekly Charts - The ¥100 Trillion Pair of Chopsticks.
- Gold Daily and Silver Weekly Charts - The ¥100 Trillion Pair of Chopsticks
- God, Guns and Gold!
- This Is About To Rock The Financial World
- AfterShock Book Writers Launch New Fund
- Doug Casey on Orwell's Nightmare – the Darker Side of Modern Technology
- Gold as a Weapon in the Currency War: Chris Mancini
- Confiscation of Gold - Then What? Part 5
- A Barbarous Inflation
- Nice note from a client. . .
- Gold Stymied at the 200 Day Moving Average
- All In Favour If $20,000/oz Gold Raise Your Hand
- Is There Really a Danger of Gold Being Confiscated?
- Doug Casey on Orwell's Nightmare – the Darker Side of Modern Technology
| Posted: 10 Jan 2013 10:23 PM PST GoldSeek.com TV presents an exclusive interview with STANLIB (www.stanlib.com) Asset Management's resource analyst Kobus Nell. Mr. Nell discusses the fast-moving outlook for gold and platinum mining as well as the diamond industry in southern Africa with (Jonathan Roth) www.GoldSeek.com. |
| Commodity Technical Analysis: Gold at Short Term Resistance Posted: 10 Jan 2013 01:16 AM PST courtesy of DailyFX.com January 09, 2013 09:33 PM Given the strong bounce from support, I’m inclined to look higher but weakness below Friday’s low negates anything bullish. Weekly Bars Chart Prepared by Jamie Saettele, CMT Commodity Analysis: Gold is holding HUGE support. The level in question is defined by the 61.8% retracement of the rally from the 2011 low (lowest level of the move from the record high) and former resistance (top of congestion from June to August 2012). The response at the level has been impressive. By the same token, a break of this well-defined support level could lead to a rush for the exits and extension of weakness. Commodity Trading Strategy: Given the strong bounce from support, I’m inclined to look higher but weakness below Friday’s low negates anything bullish. Near term resistance is being tested now (1660). LEVELS: 1585 1610 1626 1660 1670 1684... |
| Robert Kiyosaki Gold, Silver & U.s. Dollar Predictions 2013 – YouTube Posted: 09 Jan 2013 11:34 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Jim Sinclair: Gold to $3,500 If Ben Bernanke Is Fired – Romney Election – YouTube Posted: 09 Jan 2013 11:13 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Silver to Shine in 2013? – Blazer Metals Report Posted: 09 Jan 2013 11:03 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Peter Schiff Gold Prediction 2013 – 2014 – YouTube Posted: 09 Jan 2013 11:01 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Jim Rogers 2013 Predictions – Gold, Silver, Economic Outlook & Investments – YouTube Posted: 09 Jan 2013 10:58 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Posted: 09 Jan 2013 10:30 PM PST from KitcoNews: |
| John Hathaway - 2 Key Charts, Gold, Fed & The Big Picture Posted: 09 Jan 2013 10:01 PM PST  With gold near the $1,650 level, King World News is pleased to share the following extraordinary piece by superstar John Hathaway of Tocqueville Asset Management L.P.. There are also two tremendous charts in his piece. Hathaway is without question one of the most respected institutional minds in the world today when it comes to gold, and his fund was awarded a coveted 5-star rating by Morningstar.This posting includes an audio/video/photo media file: Download Now |
| Can Banks Really Just Create Money? Posted: 09 Jan 2013 09:25 PM PST by Paul Tustain, Gold Seek:
OBSERVERS of Fractional Reserve Banking have noticed that your deposit into a bank can cause the bank to offer new loans well above and beyond the size of your deposit. Those watchers often object on the grounds that this is new money which shouldn't have been created. |
| Prophets, Predictions and Profits Posted: 09 Jan 2013 09:01 PM PST Recently, Iwrote an article on the Mayan calendar predictions and you can read all aboutit [COLOR=#e06666]here. Let us now move on to predictions for gold.[/COLOR] At the start ofthe year, one can typically read about all sorts of predictions for where goldis ultimately headed. My unscientific survey shows a wide prediction spread of$750 on the downside and $31,000 to the upside, in the next few years. What is thetruth? Is it even possible to make any prediction? Let's look atthree examples plus predictive truth[COLOR=#0b5394] and guideposts to consider those questions.[/COLOR] (1) Prophets of Doom The bottom linefor the $750 gold prediction is essentially we are all doomed economically dueto debt issues. An inflationary depression will result and none of us will haveany money to buy gold so its price will drop. This logic sounds reasonable,except no consideration is given to the history of gold as an inflationaryhedge and a wealth building investment for 3000+ years. (2) Prophet... |
| Guest Post: Is American Justice Dead? Posted: 09 Jan 2013 08:08 PM PST Submitted by David Galland, via Casey Research, Every nation-state has a body of laws woven into the fabric of society. As Peruvian economist Hernando de Soto has commented on extensively, the stronger the rule of law, the stronger the economy. And by "stronger" laws, I mean laws that are impervious to tampering for personal or political gains. The connection between a sound judiciary and economic health is readily comprehensible, except maybe to a politician... businesses and individuals are far more likely to invest capital in a country with understandable laws that are impartially and universally enforced than if the opposite condition exists. That's because the lack of a consistent body of law breeds uncertainty and adds a huge element of risk for entrepreneurs. That is the case here in Argentina, where hardly a week goes by without La Presidenta and her meddlesome comrades cooking up some new hurdle for businesses to overcome. Which brings me back to the matter at hand – American justice on a slippery slope. Few recent cases make the contention clearer than the announcement last week by the US Justice Department that it had settled its case against HSBC for acting as the bag men for Colombian and Mexican drug cartels. The fine, $1.9 billion, amounts to about five weeks of revenue for the bank. And that was pretty much it. Matt Taibbi of Rolling Stone magazine, who can run hot or cold when it comes to reporting, in my opinion, nails his column on the verdict, which you can read here. The basic setup is that for years, at the highest levels of HSBC, the bank worked hand in glove with the drug cartels to launder their money. So smooth was their relationship that the drug gangs used special cardboard boxes for them to fill with cash – boxes that were designed to fit easily through the teller windows of the HSBC branches in Mexico. Now, don't get me wrong – I am 100% against the so-called "War on Drugs." That there are hundreds of thousands of Americans in prison for the "crime" of voluntarily ingesting recreational drugs, or providing said drugs in a rare free-market transaction (there's a willing buyer and a willing seller and no regulations – at least none that anyone pays any attention to), is an abomination. And so it is that the US has the highest prison population in the world, and by a wide margin: on a per-capita basis, it is 33% higher than the closest contender, Russia. If you take into account everyone under "correctional supervision," 3.1% of the US population is either in jail or on probation (for blacks, it's a stunning 9.2%). According to Human Rights Watch, since 1980 the number of people in US jails for drug charges has increased twelvefold. Yet, the money men for the murderous cartels that supply the stuff – the sort of fat-cat villains that serve as the centerpiece of every James Bond movie – get off with a hand slap. How is this possible? The answer is that, just like the much-maligned "banana republic," the judicial system in the Anglo-Saxon world has been bifurcated into two systems – one for the politically favored and the other for the rest of us. In the case of HSBC, the rationale for management being spared even a criminal trial, let alone years behind bars, is that the bank is too big to fail. And that should anyone within the bank be collared for their colossal crimes, it could provide the trigger for the widespread collapse of the global financial system. To which an Anglo-Saxon from the UK might retort, "Bollocks!" This is rather a case of the politically connected and their equally politically connected, high-priced law firms twisting the judicial system to their purposes. Another recent case is that of the LIBOR fixing scandal. As you know, in this case a group of banks clearly conspired to rig the rates on the interest-rate index used to underpin over $300 trillion in loans. As the scandal was revealed, it was also revealed that top tax dodger and now US Treasury Secretary Tim "Timmy" Geithner was aware of the rigging as far back as at least 2007 when operating the Federal Reserve Bank of New York. Yet Geithner's elevated position in the Obama administration meant that this inconvenient revelation quietly faded into nothingness. As did the clear implication that if Geithner knew about it, so did untold scores of others at the Fed and other institutions at the time. Meanwhile, back in the present, instead of rounding up the heads of these institutions, it was announced this week that a handful of floor traders – the ever useful minions – have been fingered to take the fall. For the sake of the public show, I suspect the fall will be pretty hard. Hell, the last time I checked, even Jon Corzine, who as a former senator and governor of New Jersey is the über-insider, is still a free man despite being the lead actor in the bankruptcy of MF Global and the subsequent looting of billions in customer funds. No one, except maybe Corzine himself, thinks that he isn't criminally complicit, yet, at this writing, there isn't even a hint he'll be prosecuted. As David Webb has so thoroughly documented, a spate of cases over the last decade has set a clear precedent that financial institutions – at least those of a size to count with the political class – are pretty much free to lie, cheat, misrepresent, and even use their clients' funds to trade for their own book. And if things go wrong, they can pass the losses on to the clients, or in the case of Corzine simply shrug his Savile Row-clad shoulders, and feign ignorance about where said funds went. It Goes On… and On…And the conniving and criminality doesn't stop at the judiciary but has infested pretty much every corner of the government. A personal recent favorite was Hillary Clinton's oh-so-convenient bout of fainting that kept her from testifying about the truly bizarre attack on the Benghazi consulate, thereby skipping the direct damage to her career that would have resulted from having to answer the unanswerable in front of television cameras. Then there's the sweetheart deal embedded in the soon-to-be-updated federal regulations related to mortgages. Given all the abuses leading up to the housing crash, John Q. might posit that there will be strong teeth in these new regulations. Sure, there's a couple – but lookie what else is in the new regs; this from the New York Times… As regulators complete new mortgage rules, banks are about to get a significant advantage: protection against homeowner lawsuits. The rules are meant to help bolster the housing market. By shielding banks from potential litigation, policy makers contend that the industry will have a powerful incentive to make higher-quality home loans. But some banking and housing specialists worry that borrowers are losing a critical safeguard. Industries rarely get broad protection from consumer lawsuits, and banks would seem unlikely candidates given the range of abuses revealed during the housing bust. Mind-boggling. Skipping across the pond, we have the truly incredible case of Julian Assange, who is now a prisoner, surrounded by upwards of 100 police officers, in the Ecuadorian embassy in London where he's been seeking asylum. At one point, a senior British official suggested they were seriously considering throwing hundreds of years of diplomatic precedent out of the window by storming the embassy to get their man. Yet his purported crime, having consensual sex with two different women without a condom (in one case, he had one, but it apparently broke) would, at most, be treated as a minor offense in pretty much any court, in pretty much every country in the world. Unless, of course, he knew he had AIDS and was deliberately trying to transmit it, which he wasn't. Do your own research, and maybe you'll draw a different conclusion – here's one fairly thorough story on the charges against Assange – but that the UK government is willing to spend untold sums of money it can't afford keeping him penned up in the Ecuadorian embassy smacks of collusion and corruption. What's really going on, of course, is that Assange's WikiLeaks organization embarrassed the power elite by doing what the media no longer does – getting to the truth, in this case releasing a stash of embarrassing diplomatic cables. While Assange is fighting the good fight, it's a fight against entrenched political interests, and so it's a losing battle. Aided by the corrupt judiciary or, failing that, the malleable military, it's just a matter of time before he ends up in a cell next to Bradley Manning whose tortured corpus is now on trial for giving up state secrets that were really not all that secret. In economic policy, too, the evidence of two different systems is glaring. Look no further than the Fed's recent decision to light the afterburners on over a trillion in new money creation each year. Whom does such a policy help? The politicians, of course, by allowing them to claim they "fixed" the economy that they broke in the first place… when all they are really doing is replacing the capital formation and spending of a healthy private sector with the polluted effluence of government disbursements. Whom does such a policy hurt? The population at large, by eroding the value of everything they own and eviscerating their ability to earn money on their money through a free market in interest rates… all the while fostering yet more malinvestment in the Potemkin villages of an uneconomic solar industry, electric cars, high-speed trains, etc. Make no mistake, the Fed and the government are keenly aware of the damaging consequences of their actions – but, out of self-interest, take those actions nonetheless. The enviro-socialists that have bought their way into the corridors of power provide another array of examples, using laughably bad science and arbitrary rulings to disadvantage key sectors of the economy such as energy and mining. What's It Mean to You and Me?There is little question that the vast majority of the public is ignorant or apathetic, or both, to the pervasive corruption of the political classes and their financiers. But even if they were paying attention and outraged, the fact of the matter is that things have degraded to the point where there is next to nothing John Q. can do about it. Sure, you can write your Congressman; just be sure to be extra polite, or your letter will end up in the hands of zee Homeland Security. Ditto if you write angry emails and send them to all your friends. Just don't make the mistake of thinking there is still such a thing as privacy or the right of free speech in the Anglosphere. And heavens forbid you try to organize a physical protest. Next thing you know, you'll end up wearing a pair of these bad boys coming to your friendly police officer's belt soon. (Not only do these next-gen cuffs restrain you, but they allow the arresting officer to remotely deliver electric shocks and, if that doesn't do the trick, even inject drugs into you.) Of course, if your company or industry wants to fight it out in the courts, you have to be ready and able to spend millions in legal fees fighting a government with unlimited funds (provided, of course, by your taxes and money borrowed from the Chinese or ginned up by the Fed). What I'm trying to say is that, regardless of what the popular corruption indexes show – and those are typically based on fairly suspect surveys on matters such as transparency in corporate reporting or whether bribes are required to do business – when you take into account the systematic skewing of the judicial and electoral systems to favor the entrenched politicos and their friends in high places, the level of corruption in the Anglosphere would make an African despot blush. It's not an accident that the Republicans and the Democrats, two sides of the same coin despite all the rhetoric, are never remotely at risk of losing their collective grip on power – the system has been carefully and thoroughly rigged to prevent that from happening. Logically, if there is virtually nothing the public at large can do about the rigged game they are forced to live with, then it comes down to decisions we make as individuals. Some general approaches for your consideration.
I could be wrong, but I think what happened in Bariloche yesterday has the potential to be just as seminal as the self-immolation in Tunisia that set off the Arab Spring. The implications of mobs deciding to come together to just take what they want are potentially huge. In the Anglo-Saxon world, it could provide exactly the excuse needed to bring down the stainless-steel curtain built with hundreds of billions of homeland security expenditures over the past decade. In fact, while I am probably overstating it, the action of the mob in Bariloche yesterday could be the missing link between Neil Howe's Third and Fourth Turning, ushering in the next and most troubled era. It's ironic that it's happening in here in my new retreat in Argentina, but it's of no personal import because our new hometown of Cafayate is rural, small and very successful, and the sort of place where everyone knows everyone else. And, besides, there are no large supermarkets to raid. In addition, despite the dark era of military rule (or perhaps because of it), Argentina is not a violent culture, and the big cities are few and far between. The same can't be said of places like Chicago and Detroit, where flash mobs have been increasingly cropping up with the primary intention of committing violence. How fast and how far things will spread from here is only a matter of conjecture, but the range of possibilities is wide. Regardless of whether the rule of law continues to be diminished through the acts of corrupt politicians or a mob – or through the militarized arm of the politicos trying to control the mob – I fear the knock-on consequences on the economy and on society at large. I really don't want to be a Chicken Little, but taking some basic precautions to protect yourself and your assets is only commonsense at this juncture. |
| Brodsky's Thompsonesque Trip Into The World Of Monetary Idiots Vs Krugman's Barbarians Posted: 09 Jan 2013 06:50 PM PST Submitted by Paul Brodsky of QBAMCO, Speaking of monetary abstractionism, there has been recent talk of a fiscal gimmick called "The Trillion Dollar Coin," in which a platinum coin valued at $1 trillion would be created by the U.S. Mint for the Treasury Department. Treasury would then rid itself of its pesky fiscal deficit in one fell swoop by simply keeping the coin on deposit at the Fed. The TDC idea is a marvel of political imagination and public ignorance (and so it seems to have legs!). As with most clever illusions, the TDC is based on sound logical footing, one in fact we have argued in favor of: asset monetization. But there is a fundamental difference separating the Fed monetizing Treasury's gold to devalue the dollar, followed by a re-pegging of dollars to gold at the higher fixed exchange rate (our idea), and assigning an arbitrary value to an asset no one else is allowed to own. After declaring the coin to be worth $1 trillion there would be no market-based discipline. In its aftermath, twice or half the amount of global platinum could not be exchanged in the marketplace for double or half the amount of dollars. (It is reminiscent of the Weimar Germany scheme to back Papiermarks with agricultural land. Brilliant! Er, but how do its users exchange the money for the land?) Not only would it be difficult to value extant platinum, it would be almost impossible to value anything in the world (at least in dollars). Once the coin were struck, it would become obvious to the global marketplace – producers, consumers, savers, investors and trade partners – that future global purchasing power would be left exclusively in the hands of the US Treasury. Treasury would be able to simply outbid everyone on the planet for everything. We suspect the Japanese Ministry of Finance would soon mint a ¥100 trillion pair of chopsticks and put them on deposit with the BoJ. They could then purchase most if not all of the oil on the market today for future consumption! We are confident oil exporters would not raise their prices because they would have the magic chopsticks as collateral. And why wouldn't all the world's treasury ministries simply create priceless flux capacitors and use them to create all the taxes needed to self-fund their governments? (To do so Ben Bernanke would have to hand over its proprietary technology – the Fed "has a technology called a printing press…") Obviously, the TDC idea is a political ploy with a targeted mission: to rid the US Treasury of its debt ceiling, which is an increasingly frequent and embarrassing public reminder of government ineptitude. Everyone knows government-led de-levering is not a serious threat. However, the irony of the scheme and its MMT (Modern Money Theory, is espoused by imaginative economists technically proficient in double-entry bookkeeping and deficient in confidence that free marketplaces can provide accurate valuations) / liberal Keynesian promoters could not be more delicious. The scheme exposes the forty year-old charade, otherwise known as the global monetary system, better than any mind-exercise we have been able to come up with. As we considered the plan, Hunter S. Thompson's observation sprang to mind: "in a world of thieves, the only final sin is stupidity." Though the TDC idea would work from an accounting standpoint, it seems awfully unlikely Americans and the rest of the world would let the US Treasury enjoy a very visible monopoly on fraudulent monetary accounting. |
| The Gold Price Closed Down at $1,655.50 Silver Also Lower at $30.25 Posted: 09 Jan 2013 06:26 PM PST Gold Price Close Today : 1655.50 Change : -6.70 or -0.40% Silver Price Close Today : 30.25 Change : -0.22 or -0.71% Gold Silver Ratio Today : 54.73 Change : -0.17 or -0.31% Franklin Sanders didn't post commentary today, if he posts later it will be available here. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com 1-888-218-9226 10:00am-5:00pm CST, Monday-Friday © 2012, 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 $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or 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. No, I don't.  |
| “Ponzi Finance”: What Must Happen To Bring It To An End? Posted: 09 Jan 2013 05:49 PM PST Register to "Follow the munKNEE" and automatically receive all articles posted The Boston Consulting Group has issued a paper that recommends 10 So writes (paraphrased) Ian R. Campbell (www.stockresearchportal.com) in edited excerpts from his most recent "Economic Straight Talk" newsletter (subscription) commentary on economic and resource news entitled World: The ponzi finance end game. (This commentary is an example of Campbell's daily commentaries, critiques, 'Think for Yourself' challenges and 'Speak For Themselves' World Headline summaries. Subscribe now to receive his full, unabridged newsletter.)
Campbell goes on to say (with his kind permission) in further edited excerpts: "Boston Consulting Group's (BCG) Daniel Stelter…has written a paper entitled Ending the Era of Ponzi Finance*…[which] begins with a 1992 quote from now deceased Hyman Minsky [which] is worthy of careful consideration:
Mr. Stelter's paper…draws a parallel between 'ponzi schemes' (citing the 1920 business scheme of Charles Ponzi and the much more recent business activities of Bernard Madoff) and the manner in which the developed countries have, and continue to, borrow to fund current consumption to the detriment of future generations. In summary, the BCG paper speaks to the current economic dilemmas of:
The BCG paper then goes on to recommend "Ten Steps Developed Economies Must Take" to end 'Ponzi finance', and to return the developed countries to a 'sustainable growth path'. These include, [in part]:
Conclusion [After reading the BCG paper in detail,] it seems to me that, [while it]…is well worth reading as interesting background and as a summary of 'where we are', the recommendations found…[therein] are but 'theoretical and impractical constructs'. I…believe that the only thing that will bring developed country politicians to their knees and force them to both pray together and work for common purposes… is a further global financial crisis."
Sources: Ending the Era of Ponzi Finance and Chilling economic report strikes fear into CEOs
Other Articles by Ian R. Campbell: 1. Don't Blithely Accept the Views of Stock & Commodity Commentators – Here's Why
3. Campbell's Challenge: Stop Being a Lemming! Contradictory Points of View are Imperative – Here's Why
4. Campbell: Balanced Opinions Regarding Gold & Silver are Paramount – Here's Why
Related Article: "This Time is Different: Eight Centuries of Financial Folly" – A Book by Reinhart and Rogoff
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| Paul Brodsky: The Real Idea Behind The Trillion Dollar Coin Posted: 09 Jan 2013 05:37 PM PST This article is a commentary from Paul Brodsky on the topic of the "Trillion Dollar Coin." Speaking of monetary abstractionism, there has been recent talk of a fiscal gimmick called "The Trillion Dollar Coin," in which a platinum coin valued at $1 trillion would be created by the U.S. Mint for the Treasury Department. Treasury would then rid itself of its pesky fiscal deficit in one fell swoop by simply keeping the coin on deposit at the Fed. The Trillion Dollar Coin idea is a marvel of political imagination and public ignorance (and so it seems to have legs!). As with most clever illusions, the Trillion Dollar Coin is based on sound logical footing, one in fact we have argued in favor of: asset monetization. But there is a fundamental difference separating the Fed monetizing Treasury's gold to devalue the dollar, followed by a re-pegging of dollars to gold at the higher fixed exchange rate (our idea), and assigning an arbitrary value to an asset no one else is allowed to own. After declaring the coin to be worth $1 trillion there would be no market-based discipline. In its aftermath, twice or half the amount of global platinum could not be exchanged in the marketplace for double or half the amount of dollars. (It is reminiscent of the Weimar Germany scheme to back Papiermarks with agricultural land. Brilliant! Er, but how do its users exchange the money for the land?) Not only would it be difficult to value extant platinum, it would be almost impossible to value anything in the world (at least in dollars). Once the coin were struck, it would become obvious to the global marketplace – producers, consumers, savers, investors and trade partners – that future global purchasing power would be left exclusively in the hands of the US Treasury. Treasury would be able to simply outbid everyone on the planet for everything. We suspect the Japanese Ministry of Finance would soon mint a ¥100 trillion pair of chopsticks and put them on deposit with the BoJ. They could then purchase most if not all of the oil on the market today for future consumption! We are confident oil exporters would not raise their prices because they would have the magic chopsticks as collateral. And why wouldn't all the world's treasury ministries simply create priceless flux capacitors and use them to create all the taxes needed to self-fund their governments? (To do so Ben Bernanke would have to hand over its proprietary technology – the Fed "has a technology called a printing press…")
As we considered the plan, Hunter S. Thompson's observation sprang to mind: "in a world of thieves, the only final sin is stupidity." Though the Trillion Dollar Coin idea would work from an accounting standpoint, it seems awfully unlikely Americans and the rest of the world would let the US Treasury enjoy a very visible monopoly on fraudulent monetary accounting. (*) MMT, or Modern Money Theory, is espoused by imaginative economists technically proficient in double-entry bookkeeping and deficient in confidence that free marketplaces can provide accurate valuations. |
| Posted: 09 Jan 2013 05:14 PM PST Every nation-state has a body of laws woven into the fabric of society. As Peruvian economist Hernando de Soto has commented on extensively, the stronger the rule of law, the stronger the economy. And by "stronger" laws, I mean laws that are impervious to tampering for personal or political gains. The connection between a sound judiciary and economic health is readily comprehensible, except maybe to a politician… businesses and individuals are far more likely to invest capital in a country with understandable laws that are impartially and universally enforced than if the opposite condition exists. That's because the lack of a consistent body of law breeds uncertainty and adds a huge element of risk for entrepreneurs. That is the case here in Argentina, where hardly a week goes by without La Presidenta and her meddlesome comrades cooking up some new hurdle for businesses to overcome. Which brings me back to the matter at hand – American justice on a slippery slope. Few recent cases make the contention clearer than the announcement last week by the US Justice Department that it had settled its case against HSBC for acting as the bag men for Colombian and Mexican drug cartels. The fine, $1.9 billion, amounts to about five weeks of revenue for the bank. And that was pretty much it. Matt Taibbi of Rolling Stone magazine, who can run hot or cold when it comes to reporting, in my opinion, nails his column on the verdict, which you can read here. The basic setup is that for years, at the highest levels of HSBC, the bank worked hand in glove with the drug cartels to launder their money. So smooth was their relationship that the drug gangs used special cardboard boxes for them to fill with cash – boxes that were designed to fit easily through the teller windows of the HSBC branches in Mexico. Now, don't get me wrong – I am 100% against the so-called "War on Drugs." That there are hundreds of thousands of Americans in prison for the "crime" of voluntarily ingesting recreational drugs, or providing said drugs in a rare free-market transaction (there's a willing buyer and a willing seller and no regulations – at least none that anyone pays any attention to), is an abomination. And so it is that the US has the highest prison population in the world, and by a wide margin: on a per-capita basis, it is 33% higher than the closest contender, Russia. If you take into account everyone under "correctional supervision," 3.1% of the US population is either in jail or on probation (for blacks, it's a stunning 9.2%). According to Human Rights Watch, since 1980 the number of people in US jails for drug charges has increased twelvefold. Yet, the money men for the murderous cartels that supply the stuff – the sort of fat-cat villains that serve as the centerpiece of every James Bond movie – get off with a hand slap. How is this possible? The answer is that, just like the much-maligned "banana republic," the judicial system in the Anglo-Saxon world has been bifurcated into two systems – one for the politically favored and the other for the rest of us. In the case of HSBC, the rationale for management being spared even a criminal trial, let alone years behind bars, is that the bank is too big to fail. And that should anyone within the bank be collared for their colossal crimes, it could provide the trigger for the widespread collapse of the global financial system. To which an Anglo-Saxon from the UK might retort, "Bollocks!" This is rather a case of the politically connected and their equally politically connected, high-priced law firms twisting the judicial system to their purposes. Another recent case is that of the LIBOR fixing scandal. As you know, in this case a group of banks clearly conspired to rig the rates on the interest-rate index used to underpin over $300 trillion in loans. As the scandal was revealed, it was also revealed that top tax dodger and now US Treasury Secretary Tim "Timmy" Geithner was aware of the rigging as far back as at least 2007 when operating the Federal Reserve Bank of New York. Yet Geithner's elevated position in the Obama administration meant that this inconvenient revelation quietly faded into nothingness. As did the clear implication that if Geithner knew about it, so did untold scores of others at the Fed and other institutions at the time. Meanwhile, back in the present, instead of rounding up the heads of these institutions, it was announced this week that a handful of floor traders – the ever useful minions – have been fingered to take the fall. For the sake of the public show, I suspect the fall will be pretty hard. Hell, the last time I checked, even Jon Corzine, who as a former senator and governor of New Jersey is the über-insider, is still a free man despite being the lead actor in the bankruptcy of MF Global and the subsequent looting of billions in customer funds. No one, except maybe Corzine himself, thinks that he isn't criminally complicit, yet, at this writing, there isn't even a hint he'll be prosecuted. As David Webb has so thoroughly documented, a spate of cases over the last decade has set a clear precedent that financial institutions – at least those of a size to count with the political class – are pretty much free to lie, cheat, misrepresent, and even use their clients' funds to trade for their own book. And if things go wrong, they can pass the losses on to the clients, or in the case of Corzine simply shrug his Savile Row-clad shoulders, and feign ignorance about where said funds went.
It Goes On… and On…And the conniving and criminality doesn't stop at the judiciary but has infested pretty much every corner of the government. A personal recent favorite was Hillary Clinton's oh-so-convenient bout of fainting that kept her from testifying about the truly bizarre attack on the Benghazi consulate, thereby skipping the direct damage to her career that would have resulted from having to answer the unanswerable in front of television cameras. Then there's the sweetheart deal embedded in the soon-to-be-updated federal regulations related to mortgages. Given all the abuses leading up to the housing crash, John Q. might posit that there will be strong teeth in these new regulations. Sure, there's a couple – but lookie what else is in the new regs; this from the New York Times… As regulators complete new mortgage rules, banks are about to get a significant advantage: protection against homeowner lawsuits. The rules are meant to help bolster the housing market. By shielding banks from potential litigation, policy makers contend that the industry will have a powerful incentive to make higher-quality home loans. But some banking and housing specialists worry that borrowers are losing a critical safeguard. Industries rarely get broad protection from consumer lawsuits, and banks would seem unlikely candidates given the range of abuses revealed during the housing bust. Mind-boggling. Skipping across the pond, we have the truly incredible case of Julian Assange, who is now a prisoner, surrounded by upwards of 100 police officers, in the Ecuadorian embassy in London where he's been seeking asylum. At one point, a senior British official suggested they were seriously considering throwing hundreds of years of diplomatic precedent out of the window by storming the embassy to get their man. Yet his purported crime, having consensual sex with two different women without a condom (in one case, he had one, but it apparently broke) would, at most, be treated as a minor offense in pretty much any court, in pretty much every country in the world. Unless, of course, he knew he had AIDS and was deliberately trying to transmit it, which he wasn't. Do your own research, and maybe you'll draw a different conclusion – here's one fairly thorough story on the charges against Assange – but that the UK government is willing to spend untold sums of money it can't afford keeping him penned up in the Ecuadorian embassy smacks of collusion and corruption. What's really going on, of course, is that Assange's WikiLeaks organization embarrassed the power elite by doing what the media no longer does – getting to the truth, in this case releasing a stash of embarrassing diplomatic cables. While Assange is fighting the good fight, it's a fight against entrenched political interests, and so it's a losing battle. Aided by the corrupt judiciary or, failing that, the malleable military, it's just a matter of time before he ends up in a cell next to Bradley Manning whose tortured corpus is now on trial for giving up state secrets that were really not all that secret. In economic policy, too, the evidence of two different systems is glaring. Look no further than the Fed's recent decision to light the afterburners on over a trillion in new money creation each year. Whom does such a policy help? The politicians, of course, by allowing them to claim they "fixed" the economy that they broke in the first place… when all they are really doing is replacing the capital formation and spending of a healthy private sector with the polluted effluence of government disbursements. Whom does such a policy hurt? The population at large, by eroding the value of everything they own and eviscerating their ability to earn money on their money through a free market in interest rates… all the while fostering yet more malinvestment in the Potemkin villages of an uneconomic solar industry, electric cars, high-speed trains, etc. Make no mistake, the Fed and the government are keenly aware of the damaging consequences of their actions – but, out of self-interest, take those actions nonetheless. The enviro-socialists that have bought their way into the corridors of power provide another array of examples, using laughably bad science and arbitrary rulings to disadvantage key sectors of the economy such as energy and mining.
What's It Mean to You and Me?There is little question that the vast majority of the public is ignorant or apathetic, or both, to the pervasive corruption of the political classes and their financiers. But even if they were paying attention and outraged, the fact of the matter is that things have degraded to the point where there is next to nothing John Q. can do about it. Sure, you can write your Congressman; just be sure to be extra polite, or your letter will end up in the hands of zee Homeland Security. Ditto if you write angry emails and send them to all your friends. Just don't make the mistake of thinking there is still such a thing as privacy or the right of free speech in the Anglosphere. And heavens forbid you try to organize a physical protest. Next thing you know, you'll end up wearing a pair of these bad boys coming to your friendly police officer's belt soon. (Not only do these next-gen cuffs restrain you, but they allow the arresting officer to remotely deliver electric shocks and, if that doesn't do the trick, even inject drugs into you.) Of course, if your company or industry wants to fight it out in the courts, you have to be ready and able to spend millions in legal fees fighting a government with unlimited funds (provided, of course, by your taxes and money borrowed from the Chinese or ginned up by the Fed). What I'm trying to say is that, regardless of what the popular corruption indexes show – and those are typically based on fairly suspect surveys on matters such as transparency in corporate reporting or whether bribes are required to do business – when you take into account the systematic skewing of the judicial and electoral systems to favor the entrenched politicos and their friends in high places, the level of corruption in the Anglosphere would make an African despot blush. It's not an accident that the Republicans and the Democrats, two sides of the same coin despite all the rhetoric, are never remotely at risk of losing their collective grip on power – the system has been carefully and thoroughly rigged to prevent that from happening. Logically, if there is virtually nothing the public at large can do about the rigged game they are forced to live with, then it comes down to decisions we make as individuals. Some general approaches for your consideration.
I could be wrong, but I think what happened in Bariloche yesterday has the potential to be just as seminal as the self-immolation in Tunisia that set off the Arab Spring. The implications of mobs deciding to come together to just take what they want are potentially huge. In the Anglo-Saxon world, it could provide exactly the excuse needed to bring down the stainless-steel curtain built with hundreds of billions of homeland security expenditures over the past decade. In fact, while I am probably overstating it, the action of the mob in Bariloche yesterday could be the missing link between Neil Howe's Third and Fourth Turning, ushering in the next and most troubled era. It's ironic that it's happening in here in my new retreat in Argentina, but it's of no personal import because our new hometown of Cafayate is rural, small and very successful, and the sort of place where everyone knows everyone else. And, besides, there are no large supermarkets to raid. In addition, despite the dark era of military rule (or perhaps because of it), Argentina is not a violent culture, and the big cities are few and far between. The same can't be said of places like Chicago and Detroit, where flash mobs have been increasingly cropping up with the primary intention of committing violence. How fast and how far things will spread from here is only a matter of conjecture, but the range of possibilities is wide. Regardless of whether the rule of law continues to be diminished through the acts of corrupt politicians or a mob – or through the militarized arm of the politicos trying to control the mob – I fear the knock-on consequences on the economy and on society at large. I really don't want to be a Chicken Little, but taking some basic precautions to protect yourself and your assets is only commonsense at this juncture. Trend hunters see the writing on the wall and can prepare themselves accordingly for the coming shifts. Those who do so successfully in the investment world can realize life-changing gains… such as David Galland's highly successful contrarian speculator friend and business partner, Doug Casey. Being able to get inside the mind of someone like this is a rare treat… a window into the thought processes of a self-made millionaire offers insights that can stimulate, entertain, and even educate others. Right now you have an excellent opportunity to get inside Doug Casey's mind, to learn his thoughts and feelings on subjects ranging from investing and speculating to American politics, culture, and education. His new book, Totally Incorrect, showcases Doug's radical libertarian thinking and irreverent personality. Whether you agree with Doug or not, Totally Incorrect will get you thinking – and probably investing – in new and better ways. Get your copy today. |
| 20 Facts About The Collapse Of Europe That Everyone Should Know Posted: 09 Jan 2013 05:02 PM PST Originally posted at The Coming Depression blog, The economic implosion of Europe is accelerating. Even while the mainstream media continues to proclaim that the financial crisis in Europe has been "averted", the economic statistics that are coming out of Europe just continue to get worse. Manufacturing activity in Europe has been contracting month after month, the unemployment rate in the eurozone has hit yet another brand new record high, and the official unemployment rates in both Greece and Spain are now much higher than the peak unemployment rate in the United States during the Great Depression of the 1930s. The economic situation in Europe is far worse than it was a year ago, and it is going to continue to get worse as austerity continues to take a huge toll on the economies of the eurozone. It would be hard to understate how bad things have gotten – particularly in southern Europe. The truth is that most of southern Europe is experiencing a full-blown economic depression right now. Sadly, most Americans are paying very little attention to what is going on across the Atlantic. But they should be watching, because this is what happens when nations accumulate too much debt. The United States has the biggest debt burden of all, and eventually what is happening over in Spain, France, Italy, Portugal and Greece is going to happen over here as well. The following are 20 facts about the collapse of Europe that everyone should know... #1 10 Months: Manufacturing activity in both France and Germany has contracted for 10 months in a row. #2 11.8 Percent: The unemployment rate in the eurozone has now risen to 11.8 percent – a brand new all-time high. #3 17 Months: In November, Italy experienced the sharpest decline in retail sales that it had experienced in 17 months. #4 20 Months: Manufacturing activity in Spain has contracted for 20 months in a row. #5 20 Percent: It is estimated that bad loans now make up approximately 20 percent of all domestic loans in the Greek banking system at this point. #6 22 Percent: A whopping 22 percent of the entire population of Ireland lives in jobless households. #7 26 Percent: The unemployment rate in Greece is now 26 percent. A year ago it was only 18.9 percent. #8 26.6 Percent: The unemployment rate in Spain has risen to an astounding 26.6 percent. #9 27.0 Percent: The unemployment rate for workers under the age of 25 in Cyprus. Back in 2008, this number was well below 10 percent. #10 28 Percent: Sales of French-made vehicles in November were down 28 percent compared to a year earlier. #11 36 Percent: Today, the poverty rate in Greece is 36 percent. Back in 2009 it was only about 20 percent. #12 37.1 Percent: The unemployment rate for workers under the age of 25 in Italy – a brand new all-time high. #13 44 Percent: An astounding 44 percent of the entire population of Bulgaria is facing "severe material deprivation". #14 56.5 Percent: The unemployment rate for workers under the age of 25 in Spain – a brand new all-time high. #15 57.6 Percent: The unemployment rate for workers under the age of 25 in Greece – a brand new all-time high. #16 60 Percent: Citigroup is projecting that there is a 60 percent probability that Greece will leave the eurozone within the next 12 to 18 months. #17 70 Percent: It has been reported that some homes in Spain are being sold at a 70% discount from where they were at during the peak of the housing bubble back in 2006. At this point there areapproximately 2 million unsold homes in Spain. #18 200 Percent: The debt to GDP ratio in Greece is rapidly approaching 200 percent. #19 1997: According to the Committee of French Automobile Producers, 2012 was the worst year for the French automobile industry since 1997. #20 2 Million: Back in 2005, the French auto industry produced about 3.5 million vehicles. In 2012, that number dropped to about 2 million vehicles. One thing that these shocking numbers cannot convey is the tremendous amount of pain that many average Europeans are living through on a daily basis at this point. To get a peek into what life is like in Greece these days, check out this short excerpt from a recent Bloomberg article… Anastasia Karagaitanaki, 57, is a former model and cafe owner in Thessaloniki, Greece. After losing her business to the financial crisis, she now sleeps on a daybed next to the refrigerator in her mother's kitchen and depends on charity for food and insulin for her diabetes. "I feel like my life has slipped through my hands," said Karagaitanaki, whose brother also shares the one-bedroom apartment. "I feel like I'm dead." For thousands of Greeks like Karagaitanaki, the fabric of middle-class life is unraveling. Teachers, salaries slashed by a third, are stealing electricity. Families in once-stable neighborhoods are afraid to leave their homes because of rising street crime. All over Europe, people that have lost all hope are actually setting themselves on fire in a desperate attempt to draw attention. Millions of formerly middle class Europeans have lost everything and are becoming increasingly desperate. Suicide and crime are skyrocketing all over southern Europe and massive street riots are erupting on a regular basis. Unfortunately, this is just the beginning. Things are going to get even worse for Europe. Meanwhile, those of us living in the United States smugly look down our noses at Europe because we are still living in a false bubble of debt-fueled prosperity. But eventually we will feel the sting of austerity as well. The recent fiscal cliff deal was an indication of that. Taxes are going up and government spending is at least going to slow down. It won't be too long before the effects of that are felt in the economy. And of course the reality of the situation is that the U.S. economy really did not perform very well at all during 2012 when you take a look at the numbers. The cold, hard truth is that the U.S. economy has been declining for a very long time, and there are a whole bunch of reasons to expect that our decline will accelerate even further in 2013. So if you are an American, don't laugh at what is happening over in Europe at the moment. We are headed down the exact same path that they have gone, and we are going to experience the same kind of suffering that they are going through right now. Use these last few "bubble months" to prepare for what is ahead. At some point this "hope bubble" will disappear and then the time for preparation will be over. |
| $10,000 Gold And 'Monetary' Roots: From Kunta Kinte To Keynes Posted: 09 Jan 2013 04:24 PM PST The saga of an American family centered around Kunta Kinte's roller-coaster life through freedom and slavery made Santiago Capital's Brent Johnson reflect on just how critical 'roots' are in many aspects of our lives. From anthropology and linguistics to the root of law in the US Constitution and Bill of Rights, Johnson extends the analogy to precious metal derivatives exchanges rooted in trust and explains that money is not the root of all evil. While his political taunts and Keynesian antagonism is well worth the price of admission, it is the discussion of the 'manipulation and debasement of money' as the root of all evil that is key as the manager explains gold's centuries long avoidance of this Lenin- or Keynes-inspired comprehension of how governments can "confiscate wealth" and by a "process of inflation... can overturn the existing basis of society." Gold provides the roots or solid base on which economies have grown (or individuals stored value) for all of recorded history. His conclusion is key - a tree (currency) with no roots simply cannot stand for long and the market will eventually come to the same conclusion it has for the last 5000 years as the OTC derivative bubble implodes.
3:00 Precious Metal Derivatives 3:20 Money 4:10 Root of Today's Economic Problems 4:50 Lenin and Keynes 5:10 Monetary Roots 6:30 Why Is This Important for Gold 7:30 How much will be needed -
9:10 What would a military conflict do to the price of gold? Always remember Gandhi's dying words of the 'roots of violence' - "wealth without work, pleasure without conscience, commerce without morality, science without humanity, worship without sacrifice, and politics without principles." |
| Posted: 09 Jan 2013 03:55 PM PST The charts in this article are truly disturbing. When you take into account the decrease in jobs, stagnant wages, skyrocketing college tuition, zero return in the stock market since 1999, tripling of gas prices since 2000, relentlessly higher food costs, and astronomical increases in health insurance costs and premiums, you realize why the middle class has been wiped out in the last twelve years. When the median household income is $50,000 and the average family of four has to pay $21,000 per year in healthcare costs, that doesn't leave much money for everything else. Our healthcare system is severely broken and Obamacare does absolutely nothing to fix it. Giving more control to government bureaucracies, health insurance conglomerates, and powerful drug companies will surely reduce costs. The chart that shows the average compensation of doctors ranging from $150,000 to $300,000 proves they are not the problem. That is a reasonable compensation level for the amount of education and cost they incurred to become a doctor. Is a Wall Street shyster really worth $2 million per year when an oncologist gets paid $250,000 and puts up with all the crap from Medicare, Medicaid and the health insurance conglomerates? The real problem is the complete disconnect between the patient and the cost of a service. With the Federal government insurance system and the monster insurance companies between the patient and the doctor, the cost of services becomes warped. The patient pays a premium, or their employer pays a premium, so they don't care about the cost that is charged for a test or procedure. Everyone along the chain needs to game the system to get their fair share, driving the costs sky high. The organizations that profit are the public insurance companies, the drug companies, hospital corporations and the medical instrument makers. The American middle class taxpayer gets screwed twice. They get screwed by the high premiums they pay for lousy service and they get screwed as Medicare blows a hole in the national budget and results in massive budget deficits and higher taxes. The amount spent in the last couple years of life is off the charts. How much of this is due to hospitals and insurance companies milking the system versus families choosing to keep parents alive with machines, even though their quality of life is zero? No matter how you dice it, this picture is unsustainable. There is no money left to sustain this delusion. It will all come crashing down because math is hard and reality bites. 2012 – The Year In Healthcare ChartsBy: Dan Munro There were a few charts that made the radar this year. In some cases, the data is older than 2012, but all too often, the data hasn't really changed or improved with age. First up is our National Healthcare Expenditure (NHE). According to the Deloitte Center for Health Solutions, this number has been historically underreported – by a significant amount. In their report (The Hidden Costs of U.S. Health Care), they cite two important components that have not been included in tradtional calculations. The first is out-of-pocket spending by consumers on professional services and the second is the "imputed value of supervisory care provided to a friend or family member." Using a conservative annual growth rate of 4% (from Deloitte's baseline year of 2010), here's what Deloitte suggests is our real NHE. Next up is the 2012 Milliman Medical Index – which eclisped $20,000 for the first time this year. According to the index, every U.S. family of 4 is paying the dollar equivalent of a new Chevy Cruze in healthcare costs. Every year. Without financing. The largest single component, of course, is the underlying cost of health insurance. The Kaiser Family Foundation (KFF) released this chart to highlight just that growth. One clear takeaway (when compared to the Milliman Index above) is the corresponding increase in out-of-pocket healthcare expenses. The Kaiser Family Foundation also provided a comparison of cumulative increases in health insurance premiums – relative to Workers' Contributions, Inflation and Workers' Earnings (from 2000 to 2012). Another annual chart is Medscape's Physician Compensation Report: 2012 Results (slide #2 – 2011 data). I wasn't that surprised by those on the lower end, but it was surprising (at least to me) to see Radiology as the highest (average) compensation. For those that may be relying exclusively on the transformative effects of PPACA (Obamacare) – this chart highlights the nominal impact of PPACA reform on our National Healthcare Expenditure. It's from a Commonwealth Fund Issue Brief (May, 2010) – The Impact of Health Reform on Health System Spending (Exhibit #3 – page 5). This next one was orignally assembled by Carnegie Mellon University professor Paul Fischbeck – and reported by Mark Roth of the Pittsburgh Post-Gazette (December, 2009) – and highlights our Per Capita Healthcare Costs by Age as compared to four other countries (Germany, the U.K., Sweden and Spain). This last one from Mary Meeker's landmark report – USA, Inc. (slide #111) – is definitely not new but it is foundational. It compares per capita costs and life expectancy across all 34 OECD member countries using OECD data from 2009. |
| Gold Has Been Riding The Euro Rollercoaster – Will It Continue? Posted: 09 Jan 2013 03:18 PM PST The following is a guest article provided by the team at forextraders.com. Forex Traders has been an active online foreign exchange market resource since 2002 and has recently expanded to include binary options trading for traders. At some point in every tutorial on investing, the relationship between Gold and the U.S. Dollar is referred to as an inverse correlation, meaning that as the value of the Dollar goes down, then an investor would expect the value of Gold to go in the opposite direction. As with any "rule", there are always exceptions, but if the Fed expands the money supply, it is a safe bet that Gold might appreciate, since it is priced in Dollars on the global market. If you dilute the Dollar's value, Gold must go up to compensate. What about Gold's relationships with other currencies? Currencies come in pairs. If the Euro, for example, strengthens versus the greenback, then you could expect that Gold would be a willing "dance partner" and follow the Euro around the dance floor, so to speak. Uncertainty, however, can spoil this "tango", and when it is running high in the minds of investors, Gold tends to reach for higher territory, as everyone runs for the hills. When crises hit, capital rushes to safe havens, typically precious metals and treasuries. How have these "rules" played out over the past year? Investors are always on the lookout for meaningful correlations that repeat over time. Gold investors have learned to follow closely the ratio between Gold and Silver prices for insights about what the future might bring. Over the past year, however, currencies have been a good "bellwether", especially the Euro, which has been on a rollercoaster ride for the previous twelve months. Let's take a look at a chart of comparative returns: Various market return correlations are presented for Gold, Silver, currencies and stocks for the past year. Here are a few comments on the above diagram:
The Euro currently sits at $1.306. Since August, it has been testing resistance levels just above this figure to no avail. The market is demanding that real GDP growth in the region must materialize before more appreciation can transpire. The central bank in Europe may help matters along, but the uncertainty of continuing budget battles in Congress will more than likely provide a bigger boost. Gold will most likely spike upward, much as it did in October, and then recede after a deal is consummated. Expect another rollercoaster ride in 2013. Let caution be your guide. The article is written by the team at forextraders.com. Forex Traders has been an active online foreign exchange market resource since 2002 and has recently expanded to include binary options trading for traders. |
| Gold Seeker Closing Report: Gold and Silver End Barely Lower Posted: 09 Jan 2013 02:19 PM PST Gold climbed $7.59 to $1665.79 in Asia before it fell back to as low as $1651.50 by about 1PM EST, but it then rallied back higher in the last few hours of trade and ended with a loss of just 0.05%. Silver rose to $30.57 in Asia before it slipped back to $30.05 by late morning in New York, but it also rallied back higher in afternoon trade and ended with a loss of just 0.07%. |
| Gold Daily and Silver Weekly Charts - The ¥100 Trillion Pair of Chopsticks. Posted: 09 Jan 2013 02:05 PM PST  This posting includes an audio/video/photo media file: Download Now |
| Gold Daily and Silver Weekly Charts - The ¥100 Trillion Pair of Chopsticks Posted: 09 Jan 2013 02:05 PM PST This posting includes an audio/video/photo media file: Download Now |
| Posted: 09 Jan 2013 01:58 PM PST January 9, 2013
The 5: You decide. "Hmmm," another reader comments. "We may be looking at cellular rejuvenation and immortality. Interesting. But there has always been a benefit to the aging process and death. It is one certain way to remove the assholes from Earth." The 5: Umn, we're not sure this meets our Presbyterian standard, but it does give you a sense of what type of response we're getting. Whatever the case, the potential immortality of human cells would appear to have more far reaching implications than a few flippant remarks in The 5. We'll keep you posted as things develop…
"Short term, gold is showing weakness," trend watcher Jonas Elmerraji writes, advising when might be a good time to buy again, "it's been making lower lows for the past three months, a sign that buyers aren't readily jumping in to buy the metal at lower prices. "At this point, though, we're getting close enough to support range that buyers should start stepping up to the plate in the near term." Mr. Elmerraji will keep us posted…
"Stocks look good right now," Jonas offers by way of explanation. "The S&P 500 — our preferred proxy for the broad market — has been rallying hard off of mid-November lows, and is a hair's breadth away from hitting new 52-week highs — even after Tuesday's decline. "That has implications for other big markets — like gold and bonds. "Earlier this year, gold and Treasuries had been trading in step with one another, a phenomenon that we see only when investors are scared of stocks (we saw the same thing in late 2011, for instance). But that relationship broke down at the end of December, even in spite of the fiscal cliff headlines." Translation: Investors are slowly coming around to stocks again.
"Even though Biden did not reveal what such an order would entail," Greg Guenthner writes, alerting us to a drastic move down in Smith &Wesson on the news, "Twitter gossip suggests a ban — or possibly even government-ordered seizures — of assault rifles."
Gun stocks like Smith & Wesson reeled on the news.
"Still, gun stocks present a moral dilemma for many investors. Share prices immediately dropped following the Sandy Hook tragedy. A stock and a company are two very different things — especially when emotional or controversial products are involved. Smith & Wesson could very well book record profits next quarter while enduring a devastating sell-off."
Likewise, another astute reader brought to our attention one story out of the gun control debate "viral spiral" this week: Joshua Boston, in a letter now largely known as "No Ma'am," was first penned on CNN's iReport on Dec. 27 as an open letter to Sen. Feinstein regarding her new proposed gun control legislation. The letter reads:
"After countless hours on the phone with BANK OF AMERICA I finally got a Manager in the right department," Joe Sirochman, owner of American Spirit Arms wrote in the Ironic Surrealism blog. "HER EXACT WORDS WERE." the peeved owner goes on, "'WE BELIEVE YOU SHOULD NOT BE SELLING GUNS and PARTS ON THE INTERNET.'" "There's no room for logic," Guenthner sums up the investment perspective. "If you own companies like Smith &Wesson (SWHC), you should prepare for intense volatility as this debate evolves."
"Gold producers, meanwhile, have collectively underperformed the metal, while the juniors as a whole have lost money. "Some claim that gold is in a bubble," Jeff writes, "because it has advanced so much. The reality is, however, that this bull market is small compared to most others in modern history.
"Based strictly on percentages, I'd bet that ours isn't over. "History shows that bull markets tend to end in a climactic blowoff top. For example, gold rose 120% in 1979. Our best year was 32% in 2007. Hardly meteoric, and contrary to how the typical bull market culminates." So where do we go from here?
Of course, this doesn't change his position: "I see that governments will print money… so I want to have gold as an insurance policy."
"Most things correct 30% every year or two, even in big bull markets — 30% corrections are normal, and yet gold has only done that once in the past 12 years."
One such method for sowing those seeds: ongoing "currency wars." "Currency wars," Mr. Amoss clarifies, "refer to the process of central banks printing up their own currencies and buying trading competitors' assets, mostly government bonds."
"Other central banks then worry about the 'strength' of their own currencies. They'll retaliate, beef up their trading desks, print their own currencies and buy bonds and other assets denominated in trade competitors' currencies."
"Is a reversal of globalization in the works? Will central banks usher in the end of the 'global economy' and spark the resurgence of intracountry trade within closed borders? "Once this starts, nobody can predict how it will end. But there will be chaos in the foreign exchange markets. The academic arguments to take paper money seriously, already losing credibility, will become laughable." [Ed. Note. In today's 5 PRO we'll explain why -- and how -- in preparation for chaotic currency wars you should own gold stored outside of the banking system. As you may be aware, we're giving 5 readers an opportunity to test-drive PRO for two weeks free. If you haven't already taken advantage, click here.]
This resurfacing story is only one of a growing string of bizarre precious metal narratives lately. Shortly thereafter, in early December, artist Tobi Wong created a gold pill he says will "turn your innermost parts into chambers of wealth."
Relatively cheap in comparison to the $1,007 golden cupcake created by baker Shafeena Yusuff Ali in Dubai earlier in the year.
Nearly 77 pounds of gold worth an estimated $1.7 million were found in several courier packages at an airport in the town of Aguadilla, spokesman for U.S. Customs and Border Protection Jeffrey Quinones told ABC. The officials weren't clear whether or not there is a link to the recent gold heist on the Dutch Caribbean island where six masked men masquerading as police stole $11.5 million in gold from a fishing boat.
Forthwith:
"Seems to me the Fed is getting the better part of the deal. At least the platinum coin actually exists! This is the ultimate destination of the make-believe economy." The 5: James Pethokoukis, a writer at the American Enterprise Institute covering this goofy plan, was recently contacted by Philip Diehl, who "says he is the former U.S. Mint director and helped write the law authorizing the trillion-dollar platinum coin." In an email, reprinted below in full, Diehl justifies the legality of minting such a coin, if not the lunacy:
"Now I've got to comment on the Jan. 2 5 and the new government regulations incurred on the lowly 75-watt incandescent bulb: Looks like another item to hoard and have available for trade and barter when TSHTF." The 5: We're already loading up… Regards, Addison Wiggin P.S. The company referred to in the God Switch video announced important news this morning. They've acquired a complete line of a competitor's "product" and did so without diluting existing shareholder value. "The contract has been signed," reads an elusive release, "giving [name withheld] control of nearly all the relevant patent library covering [technology] and [product]." That's big news for existing shareholders and a development our tech maven Mr. Patrick Cox has been anticipating for some time. If you're interested in learning more, please subscribe to Breakthrough Technology Alert.        |
| This Is About To Rock The Financial World Posted: 09 Jan 2013 01:33 PM PST  Today the man that has been meeting for the last two years with key foreign governments and sovereign wealth funds told King World News that many of these entities have "... reached the boiling point where they are really going to be unwilling to grow their reserves (of US Treasuries)." He also warned, "I think that is really going to rock the financial world at some point in the near future."This is the first of two incredibly powerful written interviews that will be released which reveals what is actually taking place behind the scenes with foreign governments and sovereign wealth funds, and how this will impact the financial world and the gold market. This posting includes an audio/video/photo media file: Download Now |
| AfterShock Book Writers Launch New Fund Posted: 09 Jan 2013 01:28 PM PST AfterShock is one of the books that correctly predicted the 2008 financial meltdown. The authors of the book (Robert Wiedemer and David Wiedemer, PhD.) wrote an update in 2012 predicting the big collapse to come. Their view is based on the creation of bubbles in the economy by the monetary policies of the Fed. The final collapse will take down the US dollar and government bond bubble. The mutual fund is called The Aftershock Strategies Fund, is now operational. The ticker symbol is SHKNX. The fund can be purchased via the website www.aftershockmutualfund.com. As from mid-January, the fund is available through Charles Schwab. The short and long terms goals are described on the fund's website:
Fund highlights The fund diversifies among asset classes as well as within classes. Rather than just having a diversified stock and bond portfolio, the fund also invests in gold, commodities and foreign currencies. In addition to long positions, the fund takes short positions in these asset classes as needed to attempt to protect against declining markets. The fund aims for a steady growth pattern even in a declining stock market. With this approach, the fund also aims to limit volatility. |
| Doug Casey on Orwell's Nightmare – the Darker Side of Modern Technology Posted: 09 Jan 2013 01:14 PM PST (Interviewed by Louis James, Editor, International Speculator) L: Doug, that article you emailed about – the one on California cops being able to apply advanced facial recognition technology to everyone in public – is pretty scary. They're planning the same in Iowa. Shades of Orwell's 1984. But you've said you're a techno-optimist – are you still? Doug: Well, I'm an optimist on the future of technology. But the way a lot of it is going to be applied by people in government is a different question. The current developments are quite disturbing, especially the emerging capability of police to use cameras and computers to scan millions and millions of people and identify individuals in seconds. They say it's to track sex offenders or catch terrorists, but what's clearly at stake here is the universal monitoring of everyone all the time – just like in 1984. The bad news is that it's here now, and spreading around the world. L: Is there good news? Doug: The good news is that simply using dark glasses, wearing a hat, growing a beard – or cutting one off – may throw the software running these systems off. At least for now, the countermeasures look cheaper than the dangerous technology. But it could easily get worse. For decades now, they've been implanting RFID chips in animals to help their owners track them. There are people who have volunteered to have such chips implanted in themselves or their children, ostensibly to help in case of a kidnapping or similar life-threatening issue. I think it's just a matter of time, however, before governments get the idea that every citizen should have such a chip implanted – and has to use it for almost everything. L: It would just be to fight crime, of course. "Honest people should have nothing to hide." I'm sure there are people in Washington now who would say it's everyone's patriotic duty to submit to the government's brand, like cattle in a rancher's herd. Doug: Yes, our patriotic duty. Patriotism is one of the lowest forms of groupthink, and the first refuge of a scoundrel. If someone says it's for patriotism, then no one dares argue, for fear of being branded a traitor. Privacy no longer exists – certainly not in North America or Europe. Mobile phones track location. Every time you fly, you show up on government radars. There are cameras everywhere in all major cities. In places like London, there are many thousands of them, watching and recording everything – if a car goes in one side of the city and out the other side faster than it should have been able to, there can be consequences. And that's not to mention the swarms of drones governments plan to release to watch us from above… L: Or kill – the military has armed drones, too. It's as though those in power were actually trying to assemble the component pieces of Skynet – maybe Terminator robots are next. Doug: That's true. There's not much question that, applying Moore's Law, we'll have something approaching the Terminator in another 10 years. Unfortunately. Just for instance, look at the BigDog and the Cheetah. These things are going to advance much faster than did aircraft. But you know I like to look at the bright side of things, and fortunately, the world seems to be headed for a major financial collapse. This may limit the ability – even while it may compound the desire – of bankrupt governments to deploy expensive, high-tech systems, and may well lead to social upheaval of the sort that could overturn states that go the totalitarian route. Maybe a "V" will arise and sabotage and subvert the systems of Orwellian people control. L: You are an optimist! Doug: I am, but not in the near term; as I've said many times, I see no way our civilization can avoid going through the wringer it's already caught in. The current trend downhill is not just in motion – it's rapidly accelerating. These things take on lives of their own and get completely out of control. The Internet is the best thing that's happened to communication since Gutenberg. But there's a complete lack of privacy on the Internet – I've heard that every Skype conversation is recorded… L: I thought Skype encrypted everything? Doug: I understand that it does, but it's not military-grade encryption, and if the busybodies record everything, they can concentrate on cracking your privacy later, if they decide you are of interest. They are planning to record everything, and save it permanently – every email, every Facebook post, every tweet. I understand that the giant facility the government is building in Utah is intended to collect all data available on all people everywhere, decipher it, organize and catalog it, and store it permanently for perpetual use by state snoops. It really is becoming an Orwellian nightmare. There's no financial privacy, no personal privacy, no privacy of any kind, really. L: Some authors have argued that the end of privacy is a good thing. Only criminals need darkness in which to hide while they formulate and implement their plans. If we all lived in glass houses, no one would throw stones. If all our quirks and kinks were open to public scrutiny, everyone would be more tolerant of other people's oddities, because we all have oddities. It's a sort of "mutually assured destruction" policy vision applied to all individuals in society. Doug: An interesting possibility. If that happens, the hi-tech future would closely resemble life in a Neolithic tribe, where everyone knew absolutely everything about everyone else. Perhaps it will encourage people to live in enclaves with trusted, like-minded people, so that they can avoid electronic communications to a degree. Perhaps it will provide traction for the Radical Honesty movement put forward by my friend Brad Blanton. After all, if everybody knows everything about you, perhaps you might as well be radically honest. The social implications of total surveillance are huge. I'll even agree that the technology would be useful for its stated purposes: more purse-snatchers, murderers, and burglars would probably get caught. But it's naïve in the extreme to imagine that the people running things would allow the same standards of transparency to apply to themselves. The Soviet Union was supposed to end the power of the tyrants and free the masses, but it just tossed out the tsars and enthroned a new class of overlords who gave Marxist egalitarian excuses for their depredations. Those in power would use universal surveillance to control the masses, and the masses would be utterly powerless to oppose them. I think Orwell's vision is more accurate than David Brin's on this question. But the average Joe doesn't seem to know or care about the disappearance of privacy. He thinks that because he casts a meaningless vote, he controls the government. L: Maybe we're just being paranoid? Doug: [Chuckles] Well, just because you're paranoid, that doesn't prove they aren't after you. We hear these rumors, like the one about the US Department of Homeland Security having a stockpile of more than two billion rounds of ammunition – that's about six bullets for every man, woman, and child in the country. Very disturbing, to say the least. And I speak as someone who is a big fan of firearms. Other than hoping V arrives and turns the tables on the tyrants, I'm not sure that there's anything that can be done to stop – let alone reverse – this tide in the developed world. Even if V appears, I'm not too optimistic that the average guy or gal will have enough spine to follow him. This is one of the main reasons why I like living in beautiful, peaceful, backward parts of the world, where they don't have the ability to implement such police-state technology, nor the money to pay for it. I can access the technology I want, but the state is too poor and too disorganized to use it to my disadvantage. I'm partial to Argentina, as you know, and I'm building a world-class resort and community of freedom-minded people there. In fact, I'm throwing a party there in March, and I invite everyone down to come check it out. The new spa is absolutely five-star. But it doesn't have to be Argentina; pick wherever you enjoy living that offers you the most freedom to live as you wish. L: I love Cafayate too, Doug, but if the strategy is to seek technologically backward countries, will not those countries themselves be unable to resist the will of the richer countries that embrace the power of the latest technologies – and are unafraid to use it aggressively? History shows that when a more technologically advanced civilization meets a less technologically advanced one, it's very bad news for the more backward one. Doug: That's true. Joe Lewis was right when he said, "You can run, but you can't hide." On the other hand, staying in the ghetto as ordered until it's time to get on the cattle cars is an even worse idea. And you'd best not confront them directly. You don't stand a chance as an individual, if you try to meet government violence with violence of your own. It's simply not true that atrocities can't happen in the US, which is no longer America. The fact that you're an American living in the US is no advantage, either. Remember that men in uniform are primarily loyal to each other, then to their employers, and scarcely at all to the people they are supposed to serve and protect. They will follow their orders, no matter how despicable those might become. Men who join the military and police often have issues to start with, often including an extra Y chromosome. They're not your friends or allies, notwithstanding the presence of some stand-up individuals in their ranks. However, if I'm right about the global crisis coming, the techno-tyrannies of the world will have their hands full at home. Even if they eventually do turn toward subjugation of other countries – in the name of fighting terrorism, or drugs, or some other politically correct excuse, of course – that will take time. At the very least, international living gives people some insulation from the coming turmoil in the developed world and a buffer of time before any spreading waves of violence reach them – time they can use to formulate new strategies. L: Why don't more people see this threat? I mean, how much more obvious can it be that there is reason for serious concern? Doug: I think it's the high standard of living most still enjoy in the West. I tell people we're living in an incipient police state and they look at me funny. Where are the military parades with masses of soldiers goose-stepping? Where are the dawn raids by storm troopers? Where are the cattle cars taking the usual suspects off to camps? We don't have the massed parades yet, but there are thousands of SWAT raids by both federal agencies and local police every year. No longer does a cop politely knock on your door if there's a perceived problem. The US has something like 2.3 million people in prisons and jails, and many millions more "in the system." But the average guy is propagandized into believing whatever the authorities and the media tell him. It reminds me of the movie The Running Man. As long as people can still go to the mall and get their super-sized fast food, as long as there are lots of stores selling lots of consumer goods on credit, as long as there are sports and sitcoms to watch, life seems good. Far from a police state, people believe they're protected by all these aggressive and heavily armed minions of the state. Everything seems normal and fine – just as it did to the average German, Russian, and Chinese in recent years. Plus, there's the Martin Niemöller thing – "First they came for the communists…" L: On the other hand, any technology can be hacked. Teenagers around the world have cracked security codes and changed the music industry forever. It's hard to imagine government bureaucrats keeping up with millions of teenage hackers around the globe. Maybe the more those in power think they know everything about everyone, the easier it will be to fool them into leaving you alone, with data camouflage. Doug: There's some hope in that. I suspect – or at least fantasize – that all these giant government computer systems around the world have secret back doors, cheat codes, and maybe even self-destruct routines built into them. Computer programmers, on average, tend to be the most libertarian-leaning of all professionals. It defies belief that among all the thousands of programmers governments have hired, they didn't let in any who didn't do what I would have. Sadly for impatient people like me, there's no evidence of this yet. But I am an optimist, and hope such folks are just laying low and waiting for the right time to come. Because, as soon as anything like WikiLeaks – which we've talked about – or any group that fights state power shows up, the stage brings all of its power to bear on crushing it. They devoted huge force toward activists like Anonymous and whistleblowers like Bradley Manning. Better to be long gone before taking any action. We're dealing with a huge dinosaur in its early death throes; it's extremely dangerous as it thrashes around. It's best not to confront it. Instead, hide in the undergrowth until it collapses and its corpse rots. Until then, or in case it doesn't happen, it's best to internationalize, keep your head down, and do whatever you can to avoid the gaze of the eye of Mordor – until the coming financial collapse shuts it down. That's one of the good things about the collapse; perhaps it will make it economically impractical for the state to keep adding to its surveillance and enforcement abilities. But although that's possible – and a fond hope – I'm afraid it's most unlikely. Instead, the state will redouble its expenditures in that area. The prime directive of any organism, including governments, is to survive. With that at stake, we can count on the US government to redouble its focus on surveillance, enforcement, and the like. L: Grim. Okay… Investment implications? Doug: As part of this dark tech war against privacy, governments are starting to move toward eliminating cash. I think the natural backlash will be for people to quietly start transacting everyday business in gold and silver coins. All the more reason to buy precious metals, as we've advocated many times – but again, that's for prudence. To speculate on this trend, you can't beat the explosive upside in the right mining stocks. L: Until governments make gold bullion illegal to own again and seize it, as FDR did in the 1930s. Doug: Yes, but given how many US coins from that era and before are still in circulation as collector's items, I'd have to guess that many Americans of the day had the spine to ignore FDR's executive order. Today, this possibility makes it imperative that people buying gold internationalize their holdings and secure a meaningful amount of physical gold with cash and no paper trail – this is still perfectly legal today. L: Very well – words to the wise. Thanks, Doug. Doug: My pleasure. |
| Gold as a Weapon in the Currency War: Chris Mancini Posted: 09 Jan 2013 01:01 PM PST The Gold Report: You recently wrote, "Gold mining companies are no different from any other company in that company managements must determine the most effective way to return capital to shareholders." In an environment where there haven't been corresponding increases in equity prices to the price of gold, how does a management group effectively grow per-share value for shareholders? Chris Mancini: If you're too big and don't think that you can grow on a per-share basis, the answer is to return some of the cash to shareholders through a dividend. If a company doesn't have high-quality, high-return-on-capital, low-risk projects to deploy that cash flow into, then a portion should be returned to shareholders as a dividend. TGR: We haven't seen a whole lot of that. CM: Take Barrick Gold Corp. (ABX:TSX; ABX:NYSE) as an example. It had a goal of eventually mining 9 million ounces (Moz) gold and should produce around 7.5 Moz in 2013, which is a difficult thing to do. Barrick h... |
| Confiscation of Gold - Then What? Part 5 Posted: 09 Jan 2013 12:20 PM PST Readers may not agree with our conclusions on the confiscation of gold, but we emphasis this reality. If we are wrong you will still own your gold. If we are right and you have not taken the right steps to guard against confiscation ... Read More...  |
| Posted: 09 Jan 2013 12:11 PM PST So, Paul Krugman comes clean about money, or at least his view of it, writing: For many people on the right, value is something handed down from on high It should be measured in terms of eternal standards, mainly gold; I have, for example, often seen people claiming that stocks are actually down, not up, over the past couple of generations because the Dow hasn't kept up with the gold price, never mind what it buys in terms of the goods and services people actually consume.In other words, the supposed "greatest" economist in the world cannot even articulate an Austrian theory of value without slipping into insults, caricatures, and straw men. Actually, Austrians believe that value is subjective and depends upon what individuals are willing to give up in order to obtain something. Now, we do believe that laws of economics are immutable because they are based upon human action. Is Krugman about to say that the Law of Marginal Utility, the Law of Scarcity, and Opportunity Cost are nothing but mere human constructs that can be changed at the whim of a legislature or a president? Does the Law of Demand hold only when Krugman wants it to do so? Austrians have favored gold as money not for any "religious" reasons, but rather because over time gold supplies are not easily manipulated, which means governments find it harder to debase the money that people are holding. Now, according to Krugman, this makes me "anti-Enlightenment" because I don't think that one group of people should be able to use covert means to take property from one person and give it to someone else who is politically-favored. Let's face it. That is exactly what inflation does: it transfers wealth. Krugman can write about "better outcomes" all he wants, but he really is saying that it is better for government agents to have the power at any time to make political decisions that will negatively affect the property and monetary holdings of individuals. Furthermore, when Krugman declares that money "should be adjusted, both in quantity and in characteristics, whenever there is compelling evidence that this would lead to better outcomes," he really means "adjusted" in just one way: expansion of the amount of money in circulation. After all, there can be nothing worse than deflation, at least in the Krugman-Keynesian view. I would like to turn toward Krugman's insults toward those who do favor gold. I first link readers to what Carl Menger wrote about money in his 1871 Principles of Economics: Money is not the product of an agreement on the part of economizing men nor the product of legislative acts. No one invented it. As economizing individuals in social situations became increasingly aware of their economic interest, they everywhere attained the simple knowledge that surrendering less saleable commodities for others of greater saleability brings them substantially closer to the attainment of their specific economic purposes. Thus, with the progressive development of social economy, money came to exist in numerous centers of civilization independently. But precisely because money is a natural product of human economy, the specific forms in which it has appeared were everywhere and at all times the result of specific and changing economic situations. Among the same people at different times, and among different peoples at the same time, different goods have attained the special position in trade described above.There is nothing "anti-Enlightenment" in that paragraph, or in Menger's entire section on money. So, let us turn to Rothbard, since he was much more libertarian than Menger or Ludwig von Mises, to see if he writes from a religiously-mystical viewpoint: A most important truth about money now emerges from our discussion: money is a commodity. Learning this simple lesson is one of the world's most important tasks. So often have people talked about money as something much more or less than this. Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless token only good for exchanging; it is not a "claim on society"; it is not a guarantee of a fixed price level. It is simply a commodity. It differs from other commodities in being demanded mainly as a medium of exchange. But aside from this, it is a commodity, and, like all commodities, it has an existing stock, it faces demands by people to buy and hold it, etc. Like all commodities, its "price" is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. (People "buy" money by selling their goods and services for it, just as they "sell" money when they buy goods and services.)In fact, the Austrians have not written about money or gold in any sort of mystical way, as Krugman claims. Yes, they have said that inflation does involve a form of "theft," since government is using it to quietly transfer wealth from one group of people to another, but claiming simultaneously that it is not engaging in such activity. I suspect that if I entered Paul Krugman's house and took some of his possessions without his permission, he also might accuse me of "theft," even if I vociferously protested by claiming that I was simply engaging in an act of "social justice," since he is wealthier than I am. Of course, Krugman ends with his usual insults posing as an intellectual contribution to monetary theory: And I do find myself thinking a lot about Keynes's description of the gold standard as a "barbarous relic"; it applies perfectly to this discussion. The money morality people are basically adopting a pre-Enlightenment attitude toward monetary and fiscal policy — and why not? After all, they hate the Enlightenment on all fronts. I'm not sure which of the "Enlightenment" figures advocated inflation, including Jeremy Bentham. However, Bentham did call for governments to arrest and imprison people who "might" commit crimes one day, and he favored the surveillance society that we have today. Certainly, the all-encompassing State is a product of post-Enlightenment thinking. However, when one points out that people are hurt by inflation, and that inflation over time distorts the structure of production and wreaks havoc on an economy, then according to Krugman, those people are wrong because someone before the Enlightenment might have believed the same thing. Furthermore, Krugman is claiming, apparently, that all systems of thought and all writings and laws produced before the Enlightenment were wrong. Does that include laws against theft and murder? Does that mean Aristotle and Plato were idiots? Who knows. After all, we are not having a "rational discussion," since Krugman now is claiming that any system of thought produced before the Enlightenment automatically is wrong. Somehow, I think that is an irrational way of looking at things.  |
| Posted: 09 Jan 2013 12:03 PM PST Dear Marie, I noticed this evening that the wire transfer came through to my checking account. This was much quicker than I was anticipating! I really appreciate you taking the effort to do this. My Dad became a USAGOLD customer several years ago, and I've heard him talk about the quality of the personal attention he has always received. However, after the past six months of being a USAGOLD customer myself, I can now personally attest to the superb customer service provided, all the way from purchasing to selling. It's great to know that this kind of attention is still provided by a firm to its customers, in a day when customer service is often placed on the backburner. There is obviously no where else worth looking when it comes to the place I will purchase gold in the future. JA |
| Gold Stymied at the 200 Day Moving Average Posted: 09 Jan 2013 12:01 PM PST [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] Yesterday gold bounced off its support level; today it bounced off its resistance level, which is the 200 day moving average. As you can clearly see on the chart, that line is holding the market quite firmly for the time being. Hedge funds are using this level against which to sell rallies while large physical offtake is providing the base of support from $1640 on down. The market is stuck in a range for the time being with neither the bull nor the bear camp gaining a decided short term advantage for now, although the chart suggests that the bears have the intermediate term advantage. Unless or until the bulls can take out the 200 day moving average and then get the price back above last week's high, the support level is going to be in danger if physical demand slacks off one iota. Once again it will be up to that side of the gold equation to try to put a firm bottom in this thing especially ... |
| All In Favour If $20,000/oz Gold Raise Your Hand Posted: 09 Jan 2013 11:41 AM PST An interesting read with some analysis by QB Asset Management that has a plan to being back stability to the banking system. Would be sweet, but I don't see it happening. See link here. Jim Sinclair has said gold is moving back towards the financial system, not away from it. The comments I find most interesting are of gold going to $3400 and the impact on miners. At some point gold will jump to new highs and investors will view miners very differently, I expect a panic move into precious metals. May be months away but more likely at least a year or two out yet. I am of course bias due to my McEwen Mining, MUX, and Rubicon Minerals, RMX investments. |
| Is There Really a Danger of Gold Being Confiscated? Posted: 09 Jan 2013 10:54 AM PST Readers may not agree with our conclusions on the confiscation of gold, but we emphasis this reality. If we are wrong you will still own your gold. If we are right and you have not taken the right steps to guard against confiscation and the personal dangers to you individually, you will lose your gold if not suffer the penalties the "Gold Confiscation Order" brings with it. |
| Doug Casey on Orwell's Nightmare – the Darker Side of Modern Technology Posted: 09 Jan 2013 10:41 AM PST Synopsis: Doug Casey on the Orwellian side of technology. (Interviewed by Louis James, Editor, International Speculator) L: Doug, that article you emailed about – the one on California cops being able to apply advanced facial recognition technology to everyone in public – is pretty scary. They're planning the same in Iowa. Shades of Orwell's 1984. But you've said you're a techno-optimist – are you still? Doug: Well, I'm an optimist on the future of technology. But the way a lot of it is going to be applied by people in government is a different question. The current developments are quite disturbing, especially the emerging capability of police to use cameras and computers to scan millions and millions of people and identify individuals in seconds. They say it's to track sex offenders or catch terrorists, but what's clearly at stake here is the universal monitoring of everyone all the time – just like in 1984. The bad news is that it's here now, and spreading around the world. L: Is there good news? Doug: The good news is that simply using dark glasses, wearing a hat, growing a beard – or cutting one off – may throw the software running these systems off. At least for now, the countermeasures look cheaper than the dangerous technology. But it could easily get worse. For decades now, they've been implanting RFID chips in animals to help their owners track them. There are people who have volunteered to have such chips implanted in themselves or their children, ostensibly to help in case of a kidnapping or similar life-threatening issue. I think it's just a matter of time, however, before governments get the idea that every citizen should have such a chip implanted – and has to use it for almost everything. L: It would just be to fight crime, of course. "Honest people should have nothing to hide." I'm sure there are people in Washington now who would say it's everyone's patriotic duty to submit to the government's brand, like cattle in a rancher's herd. Doug: Yes, our patriotic duty. Patriotism is one of the lowest forms of groupthink, and the first refuge of a scoundrel. If someone says it's for patriotism, then no one dares argue, for fear of being branded a traitor. Privacy no longer exists – certainly not in North America or Europe. Mobile phones track location. Every time you fly, you show up on government radars. There are cameras everywhere in all major cities. In places like London, there are many thousands of them, watching and recording everything – if a car goes in one side of the city and out the other side faster than it should have been able to, there can be consequences. And that's not to mention the swarms of drones governments plan to release to watch us from above… L: Or kill – the military has armed drones, too. It's as though those in power were actually trying to assemble the component pieces of Skynet – maybe Terminator robots are next. Doug: That's true. There's not much question that, applying Moore's Law, we'll have something approaching the Terminator in another 10 years. Unfortunately. Just for instance, look at the BigDog and the Cheetah. These things are going to advance much faster than did aircraft. But you know I like to look at the bright side of things, and fortunately, the world seems to be headed for a major financial collapse. This may limit the ability – even while it may compound the desire – of bankrupt governments to deploy expensive, high-tech systems, and may well lead to social upheaval of the sort that could overturn states that go the totalitarian route. Maybe a "V" will arise and sabotage and subvert the systems of Orwellian people control. L: You are an optimist! Doug: I am, but not in the near term; as I've said many times, I see no way our civilization can avoid going through the wringer it's already caught in. The current trend downhill is not just in motion – it's rapidly accelerating. These things take on lives of their own and get completely out of control. The Internet is the best thing that's happened to communication since Gutenberg. But there's a complete lack of privacy on the Internet – I've heard that every Skype conversation is recorded… L: I thought Skype encrypted everything? Doug: I understand that it does, but it's not military-grade encryption, and if the busybodies record everything, they can concentrate on cracking your privacy later, if they decide you are of interest. They are planning to record everything, and save it permanently – every email, every Facebook post, every tweet. I understand that the giant facility the government is building in Utah is intended to collect all data available on all people everywhere, decipher it, organize and catalog it, and store it permanently for perpetual use by state snoops. It really is becoming an Orwellian nightmare. There's no financial privacy, no personal privacy, no privacy of any kind, really. L: Some authors have argued that the end of privacy is a good thing. Only criminals need darkness in which to hide while they formulate and implement their plans. If we all lived in glass houses, no one would throw stones. If all our quirks and kinks were open to public scrutiny, everyone would be more tolerant of other people's oddities, because we all have oddities. It's a sort of "mutually assured destruction" policy vision applied to all individuals in society. Doug: An interesting possibility. If that happens, the hi-tech future would closely resemble life in a Neolithic tribe, where everyone knew absolutely everything about everyone else. Perhaps it will encourage people to live in enclaves with trusted, like-minded people, so that they can avoid electronic communications to a degree. Perhaps it will provide traction for the Radical Honesty movement put forward by my friend Brad Blanton. After all, if everybody knows everything about you, perhaps you might as well be radically honest. The social implications of total surveillance are huge. I'll even agree that the technology would be useful for its stated purposes: more purse-snatchers, murderers, and burglars would probably get caught. But it's naïve in the extreme to imagine that the people running things would allow the same standards of transparency to apply to themselves. The Soviet Union was supposed to end the power of the tyrants and free the masses, but it just tossed out the tsars and enthroned a new class of overlords who gave Marxist egalitarian excuses for their depredations. Those in power would use universal surveillance to control the masses, and the masses would be utterly powerless to oppose them. I think Orwell's vision is more accurate than David Brin's on this question. But the average Joe doesn't seem to know or care about the disappearance of privacy. He thinks that because he casts a meaningless vote, he controls the government. L: Maybe we're just being paranoid? Doug: [Chuckles] Well, just because you're paranoid, that doesn't prove they aren't after you. We hear these rumors, like the one about the US Department of Homeland Security having a stockpile of more than two billion rounds of ammunition – that's about six bullets for every man, woman, and child in the country. Very disturbing, to say the least. And I speak as someone who is a big fan of firearms. Other than hoping V arrives and turns the tables on the tyrants, I'm not sure that there's anything that can be done to stop – let alone reverse – this tide in the developed world. Even if V appears, I'm not too optimistic that the average guy or gal will have enough spine to follow him. This is one of the main reasons why I like living in beautiful, peaceful, backward parts of the world, where they don't have the ability to implement such police-state technology, nor the money to pay for it. I can access the technology I want, but the state is too poor and too disorganized to use it to my disadvantage. I'm partial to Argentina, as you know, and I'm building a world-class resort and community of freedom-minded people there. In fact, I'm throwing a party there in March, and I invite everyone down to come check it out. The new spa is absolutely five-star. But it doesn't have to be Argentina; pick wherever you enjoy living that offers you the most freedom to live as you wish. L: I love Cafayate too, Doug, but if the strategy is to seek technologically backward countries, will not those countries themselves be unable to resist the will of the richer countries that embrace the power of the latest technologies – and are unafraid to use it aggressively? History shows that when a more technologically advanced civilization meets a less technologically advanced one, it's very bad news for the more backward one. Doug: That's true. Joe Lewis was right when he said, "You can run, but you can't hide." On the other hand, staying in the ghetto as ordered until it's time to get on the cattle cars is an even worse idea. And you'd best not confront them directly. You don't stand a chance as an individual, if you try to meet government violence with violence of your own. It's simply not true that atrocities can't happen in the US, which is no longer America. The fact that you're an American living in the US is no advantage, either. Remember that men in uniform are primarily loyal to each other, then to their employers, and scarcely at all to the people they are supposed to serve and protect. They will follow their orders, no matter how despicable those might become. Men who join the military and police often have issues to start with, often including an extra Y chromosome. They're not your friends or allies, notwithstanding the presence of some stand-up individuals in their ranks. However, if I'm right about the global crisis coming, the techno-tyrannies of the world will have their hands full at home. Even if they eventually do turn toward subjugation of other countries – in the name of fighting terrorism, or drugs, or some other politically correct excuse, of course – that will take time. At the very least, international living gives people some insulation from the coming turmoil in the developed world and a buffer of time before any spreading waves of violence reach them – time they can use to formulate new strategies. L: Why don't more people see this threat? I mean, how much more obvious can it be that there is reason for serious concern? Doug: I think it's the high standard of living most still enjoy in the West. I tell people we're living in an incipient police state and they look at me funny. Where are the military parades with masses of soldiers goose-stepping? Where are the dawn raids by storm troopers? Where are the cattle cars taking the usual suspects off to camps? We don't have the massed parades yet, but there are thousands of SWAT raids by both federal agencies and local police every year. No longer does a cop politely knock on your door if there's a perceived problem. The US has something like 2.3 million people in prisons and jails, and many millions more "in the system." But the average guy is propagandized into believing whatever the authorities and the media tell him. It reminds me of the movie The Running Man. As long as people can still go to the mall and get their super-sized fast food, as long as there are lots of stores selling lots of consumer goods on credit, as long as there are sports and sitcoms to watch, life seems good. Far from a police state, people believe they're protected by all these aggressive and heavily armed minions of the state. Everything seems normal and fine – just as it did to the average German, Russian, and Chinese in recent years. Plus, there's the Martin Niemöller thing – "First they came for the communists…" L: On the other hand, any technology can be hacked. Teenagers around the world have cracked security codes and changed the music industry forever. It's hard to imagine government bureaucrats keeping up with millions of teenage hackers around the globe. Maybe the more those in power think they know everything about everyone, the easier it will be to fool them into leaving you alone, with data camouflage. Doug: There's some hope in that. I suspect – or at least fantasize – that all these giant government computer systems around the world have secret back doors, cheat codes, and maybe even self-destruct routines built into them. Computer programmers, on average, tend to be the most libertarian-leaning of all professionals. It defies belief that among all the thousands of programmers governments have hired, they didn't let in any who didn't do what I would have. Sadly for impatient people like me, there's no evidence of this yet. But I am an optimist, and hope such folks are just laying low and waiting for the right time to come. Because, as soon as anything like WikiLeaks – which we've talked about – or any group that fights state power shows up, the stage brings all of its power to bear on crushing it. They devoted huge force toward activists like Anonymous and whistleblowers like Bradley Manning. Better to be long gone before taking any action. We're dealing with a huge dinosaur in its early death throes; it's extremely dangerous as it thrashes around. It's best not to confront it. Instead, hide in the undergrowth until it collapses and its corpse rots. Until then, or in case it doesn't happen, it's best to internationalize, keep your head down, and do whatever you can to avoid the gaze of the eye of Mordor – until the coming financial collapse shuts it down. That's one of the good things about the collapse; perhaps it will make it economically impractical for the state to keep adding to its surveillance and enforcement abilities. But although that's possible – and a fond hope – I'm afraid it's most unlikely. Instead, the state will redouble its expenditures in that area. The prime directive of any organism, including governments, is to survive. With that at stake, we can count on the US government to redouble its focus on surveillance, enforcement, and the like. L: Grim. Okay… Investment implications? Doug: As part of this dark tech war against privacy, governments are starting to move toward eliminating cash. I think the natural backlash will be for people to quietly start transacting everyday business in gold and silver coins. All the more reason to buy precious metals, as we've advocated many times – but again, that's for prudence. To speculate on this trend, you can't beat the explosive upside in the right mining stocks. L: Until governments make gold bullion illegal to own again and seize it, as FDR did in the 1930s. Doug: Yes, but given how many US coins from that era and before are still in circulation as collector's items, I'd have to guess that many Americans of the day had the spine to ignore FDR's executive order. Today, this possibility makes it imperative that people buying gold internationalize their holdings and secure a meaningful amount of physical gold with cash and no paper trail – this is still perfectly legal today. L: Very well – words to the wise. Thanks, Doug. Doug: My pleasure. |
It's the banks, not their customers, who actually wind up owing each other money…
"Was your challenge to watch the 
Smith & Wesson got whacked shortly after Biden let his loose lips slip"The government coming door-to-door, list in hand, to take your guns? This speculation — which is all it is right now — was enough to spark an immediate reaction from investors."
"What happens if the values of the assets fall? The normal central bank response is to print even more and redouble efforts to support prices for those assets. So much new currency leaks into the financial system that its value falls.
"Digest to increase self-worth" suggests the online storeThe price tag for the 20mm tablets sits at $425 a pop.
"It's an exclusive design and a fine carving,"police chief Leonel Sauceda told the free British daily Metro.We'd generally view all the news and interest in precious metals with a jaundiced eye… and suspect that a top is nearing in the precious metals markets. However, for reasons we outline above… and in the first reader mail below… we don't think we've even come close to the panic buying phase we would expect to see in this economic cycle.
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