Gold World News Flash |
- PHYSICAL Silver in Extremely High Demand: Provident Metals Begs Customers For Patience While Trying To Fill Orders
- Wall Street thanks you for your service, Tim Geithner
- KWN Monday Silver Chart Special
- Mo Dawoud- Silver Resistance At 35 oz – YouTube
- Silver Update 1/13/13 Silver Eagles
- Simon Mikhailovich: Bonds Are Not A Safe Haven – Today’s Population Hasn’t Experienced a Bond Debacle Gold Investors Should Ignore Short-Term Volatility | James J Puplava CFP | FINANCIAL SENSE
- New York Times Bestselling Author James Wesley, Rawles Interviewed By SilverVigilante
- Internet Activist And Reddit Co-Founder Commits Suicide
- Marc Faber: The US Dollar is a very Sick Currency, Marc Faber Blog
- Jim Rogers Blog: 17 Keys To Success
- Hathaway's charts show what should -- but only should -- happen with gold
- Business of Vision: Seed Funding and Making an Idea Last – YouTube
- Part II - Connecting the Dots
- Gold And Silver - Follow What The Market Says, Not What Others Say About The Market
- Citi: "It Is Possible That We Will Get A Technical Default For A Few Days"
- John Rubino: We Created The Conditions For Catastrophic Failure
- Jack Crooks – Bullish on the US dollar. Danielle Park – Bearish on stocks.
- Insights into Cultural Shifts from a Visit to a Hardware Store
- From the streets to success – Michael Cooley – YouTube
- KWN Sunday Gold Chart Special
- Global Gold Newsflash: Illinois To Start Tracking Gold Transactions
- Almost Dirt Cheap…
- Ben B. Nixed The Coin - What Does That Mean?
- Jay Taylor discusses gold market manipulation in Future Money Trends interview
- GoldMoney article: Austrian economics in 2013
- Macro Polo
- Gold Closer To Become Officially Money … Again
- SHOOT THE MESSENGER
- Inflationary Rally May Spark Breakout In Gold and The Undervalued Junior Miners
- SUNDAY FUNNIES
| Posted: 13 Jan 2013 10:40 PM PST from SGT report:
"NOTICE: Due to extremely high order volumes, some orders have been taking longer than normal to process. We have increased our staff and are working 12-14 hour days to ship your orders." |
| Wall Street thanks you for your service, Tim Geithner Posted: 13 Jan 2013 10:30 PM PST First the treasury secretary propped up the big banks with public spending. Then he backed their agenda: cuts to public spending by Dean Baker, Guardian:
This was an impressive diplomatic feat – given the widespread popular contempt for Europe's monarchical regimes. In the same vein, protecting Wall Street from the financial and economic havoc they brought upon themselves and the country was an enormous accomplishment. During his tenure as head of the New York Fed and then as treasury secretary, most, if not all, of the major Wall Street banks would have collapsed if the government had not intervened to save them. This process began with the collapse of Bear Stearns, which was bought up by JP Morgan in a deal involving huge subsidies from the Fed. |
| KWN Monday Silver Chart Special Posted: 13 Jan 2013 10:01 PM PST  Today King World News is pleased to share part II, which covers silver, of the fascinating chart series that was put together by Nick Laird from ShareLynx out of Australia. Laird put together four extraordinary silver charts to go along with his commentary below. We thank Laird for sharing this piece with our global readers.This posting includes an audio/video/photo media file: Download Now |
| Mo Dawoud- Silver Resistance At 35 oz – YouTube Posted: 13 Jan 2013 09:31 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Silver Update 1/13/13 Silver Eagles Posted: 13 Jan 2013 08:45 PM PST from BrotherJohnF: |
| Posted: 13 Jan 2013 08:42 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| New York Times Bestselling Author James Wesley, Rawles Interviewed By SilverVigilante Posted: 13 Jan 2013 08:40 PM PST from Silver Vigilante:
Q: So what led you to found the Survival Blog and author your New York Times Bestseller How to Survive The End of the World As We Know It: A: Well, I've been a pretty active "prepper" for a number of years now, dating back to when it was referred to as "survivalism" rather than "prepperism," and I've always been driven to get people motivated. My goal in all my writings is not just to entertain people but to also motivate them to get themselves and their families to prepare. Q: It is funny that we would even have to create a term "prepperism" considering it's an instinct to survive – it's part of the shock of being. Soldiers discuss this often. They leave the comforts of, most often, American society, and they are shocked at how they adapt in the so-called "war universe." Survival mode is built in. In modern society, this has been muted, hasn't it? A: Yes, definitely – the instinct is still there, but unfortunately people have become cocooned by modern technology to the point where if the power grids went down most people would not be able to survive. We have the instinct, but have lost the skills. |
| Internet Activist And Reddit Co-Founder Commits Suicide Posted: 13 Jan 2013 08:20 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Marc Faber: The US Dollar is a very Sick Currency, Marc Faber Blog Posted: 13 Jan 2013 08:13 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Jim Rogers Blog: 17 Keys To Success Posted: 13 Jan 2013 08:08 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Hathaway's charts show what should -- but only should -- happen with gold Posted: 13 Jan 2013 07:31 PM PST 9:25p ET Sunday, January 13, 2013 Dear Friend of GATA and Gold: Tocqueville Gold Fund manager John Hathaway has provided King World News with 11 charts making a powerful bullish case for gold. But like most bullish arguments for gold, the charts don't account for central bank intervention in the gold market as well as central bank and bullion bank creation of imaginary paper gold to meet metal demand from the unwary. So as valuable as Hathaway's charts are for demonstrating what should happen with gold, what actually will happen remains a question and something central banks will be striving to answer with every manner of deception and market rigging. Hathaway's charts are posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/11_Jo... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. Tthe gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata |
| Business of Vision: Seed Funding and Making an Idea Last – YouTube Posted: 13 Jan 2013 06:25 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Posted: 13 Jan 2013 05:41 PM PST As presented in the silver:gold and SPX performance series below, since the secular equity market high in 2000, the performance of the silver:gold ratio has closely followed the performance trend of the equity markets. Read More...  |
| Gold And Silver - Follow What The Market Says, Not What Others Say About The Market Posted: 13 Jan 2013 05:38 PM PST The best way to follow what the market says is to read its net effect as derived from the collective of all market participants that have made a buy or sell commitment. If it does not show up in the chart, then what is being ... Read More...  |
| Citi: "It Is Possible That We Will Get A Technical Default For A Few Days" Posted: 13 Jan 2013 05:10 PM PST From Citi's head of FX strategy, Steven Englander No coin + temporary debt ceiling extension + sequester = USD negative There was a an out-of-left-field idea that you could mint such a coin deposit it at the Fed and have a trillion dollars to spend. It was based on a very strained reading of some old legislation. The Washington Post link shows just how strained the reading is It really was a non-starter because it would have been risky from a legal viewpoint and financial markets would have priced in the risk that courts would have rejected it and the US would be close to default, not to mention the Fed looking rather Weimarian had they signed up for it. The rejection of the trillion dollar coin should not put any pressure on financial markets or risk-correlated currencies on Monday It may be viewed as political hardball by the White House, as there statement implies that they will not negotiate. WP quotes Press Secretary Carney "there are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default." This is a new reading since in 2011, they were busily negotiating with Congress (which is how the sequesters and temporary debt ceiling increase came into being.) So it is possible that we will get a technical default for a few days, but more likely that Congress will give in, vote the debt ceiling up temporarily, and let the automatic sequesters kick in. Mounting risk of a technical default was USD positive in 2011 because it led to cutting of long-risk positions and the USD/Treasury market remained safe havens. However, it also occurred in an environemtn of slowing EM growth and intensifying euro zone soveregin risk pressure, so the USD support came from external forces as well. Given that investors are now somewhat long risk again, the position cutting is again likely to be USD positive, however, unattractive US assets were. As was the case in 2011, it is very unlikely that the Treasury will not pay its bills, although even a technical default could have very unforeseen consequences, given the multiple functions that Treasuries play in global financial markets. The more likely scenario of sequester plus grudging debt ceiling rise is USD negative. It will put more pressure on the Fed to keep pumping liquidity into the US economy without giving any reassurance to investors that long-term fiscal issues are close to resolution. |
| John Rubino: We Created The Conditions For Catastrophic Failure Posted: 13 Jan 2013 05:02 PM PST In a recent interview with Gold Silver Worlds, John Rubino (co-author of "The Collapse of the dollar" and owner of DollarCollapse.com) explained how bad the economic fundamentals really are. The economic situation looks under control currently, but John Rubino is convinced we are now in the eye of the storm. He concludes that the longer this unbalanced situation goes on the faster the eventual collapse will play out. John Rubino published his book in 2004 together with James Turk from GoldMoney. The main theme of the book was that governments in the US lost control over their spending and borrowing, which would ultimately result in some sort of catastrophic crisis. Debt accumulation would continue until some kind of crisis, internally or globally, would force to stop this trend. Most of the predictions have come true, but John Rubino stresses that the 2008 crisis was not the final collapse. He is convinced that the big collapse is still ahead of us. The same trend was forecasted in the rest of the world and up until now it playing out as expected. Worldwide debt stands at $220 trillion, a figure that should be compared with the global GDP of $62 trillion. That's a debt to GDP ratio of 350%. The authors also predicted that money would flow out of paper assets into gold and silver as debt creation gained momentum and went public. It is important to note that gold and silver are the only forms of money that governments cannot debase by creating additional units of it. An interesting topic is treasury bonds. They are a function of a general flight to safety. The world is still looking at US dollar denominated assets as safe havens even when the US government is taking on an increasing amount of debt. However, it is mandatory to understand that the purchasers in the treasury market are mostly central banks themselves. Their intention is to prop up fiat currencies by buying sovereign debt. What this really means is that governments are taking on too much debt and turning it into currency to cover their debt. Most people don't see this process; it also remains underexposed in mainstream media. This process, historically, is the final stage of a country destroying its currency. Unfortunately, it is taking place on a global scale, so it will undoubtedly result in an implosion of the whole fiat currency concept. Where do we stand today? John Rubino points to a number of important statistics since 2009 (US only) to validate his thesis and forecast of a final collapse:
These trends are playing out as forecasted. However, in terms of timing things are unfolded at a much slower pace than expected. The path to the final collapse has been slowed down by two factors:
We are in a government debt / bond bubble. Markets and people tend to go with the flow during a bubble. However, history has shown that, as awareness changes, people move to the other side extremely fast. We saw this in the last two bubbles. One year before the tech stock bubble imploded, everyone expected the future to be better than the past, but in an eye blink the world was staring at a global depression. The same happened with the housing boom in 2008: everyone was convinced that housing prices could only go up in 2007, while one year later the whole global financial system was ready to collapse. Today everyone believes that government bonds can only go up and interest rates will remain low. It is unknown when exactly the coming shift will take place, but it will for sure happen as underlying conditions are deteriorating (proven by the above figures). An external shock or the weight of debt will crash our unsound system; the world will wake up from a dream … again! How the next collapse will play outThe structure of our financial system is a fascinating topic to explore. It gives us insights to describe the anatomy of the coming collapse. The best analytical framework explaining today's system is described in "Currency wars" (by Jim Rickards, published in 2011). The author explains how complexity in our system has risen to the point where it shows unique characteristics, the most important one being that the propensity for catastrophic failure is an exponential function of complexity. In simple terms, it means that, when the system doubles in size, the instability goes up tenfold. It means as well that it requires an exponential amount of energy to keep the system growing. The framework is revolutionary in that it perfectly describes today's reality. Today, governments need more and more debt to generate the same amount of GDP. We need to borrow more to only stay in place BUT at the cost of a huge (almost instantaneous) collapse of the system. The longer this process goes on, the faster the collapse will play out when it hist. Suppose the final collapse strikes in 2016. By then, the system will have grown so complex, and the amounts of debt will be so huge that there will be no way to control it; the crash will take a life on its own. The exponential growth of derivatives play a crucial role in our financial system. In fact, they ARE the complexity story. What most people do not realize is that banks report their net derivatives position (their long versus short positions). That position is shown as their risk. However, the gross position is the relevant number. To put things into perspective, the earlier mentioned $62 trillion global GDP should be compared with the gross derivatives figure which stands close to a quadrillion dollar of notional value.
It is really impossible to forecast the exact trigger that will cause the bubble to burst. Jim Rickards uses the analogy of the avalanche which also has no way to determine in advance which snow flake exactly will become the final trigger. There simply will be " a " snow flake that will take all the rest with it. What we clearly see today is that the fixed income (bond) market is the epicenter of the coming shock. A lot of derivatives are hedges against bond portfolios. So the crack could start with trouble in treasury bond markets for example as US interest rates start rising. As a reaction, he Fed could start buying all bonds that the US government is issuing which would spook the markets instead of calm them down. This could set off a chain reaction.
Trends for 2013 & potential triggers for a trust crisisJohn Rubino does not expect the final collapse to take place in 2013, although the following trends could spark a future trigger. (1) The erosion of the Petrodollar position. Oil producing countries start dealing their oil in other currencies with huge purchasers (think Russia, China, Brazil), resulting in a lower demand for dollars. If central banks decrease their demand for US dollars, it would lower the value of the dollar and make inflation and interest rates explode. We saw the first signs of this in 2012, where oil began trading for gold. (2) Expansion of the police state. The response to terrorism and instability is an increased control by the US government (think internet monitoring, surveillance systems, etc). It creates conditions for domestic turbulence via civil unrest, resulting in an outflow of money towards other countries. The acceleration of this trend should be visible in 2013. (3) State and local pensions are imploding. States and localities cannot pay off their obligations anymore and could go bankrupt in 2013, resulting in a tanking municipal bond market. (4) Threat of cyber war and cyber terrorism. The internet being an insecure system, the next future trade war could result in a breakdown of the electronic system, which could spook the markets tremendously. Gold & Silver – Store of safety and protection of wealth"Precious metals are where we hide when we do not trust the rest of the world," says John Rubino. When things start really spinning sin out of control, everything could potentially be destroyed, BUT the only things that cannot be destroyed are gold, silver, and probably the mining stocks, among other tangible assets. With a limited supply and availability, a massive demand for precious metals will translate into exponentially rising prices. The ongoing destruction of fiat currencies (see first paragraphs) will become increasingly apparent in 2013. An increasing number of investors will understand that precious metals are holding value while other assets are not. Central banks are already moving out of currency, into gold. China as the best example imported 800 tons of gold in 2012. To put that figure into perspective: their official reserves were 1,000 tons. The same trend is taking place in other countries (although on a smaller scale) like, for example, Russia, Brazil and several Asian countries. This demand only will be a main driver for higher prices in 2013. Downwards suppression of gold and silver prices ("manipulation") can be the only explanation for some strange price action in 2012 (and before). In December, for instance, huge amounts of short selling took place during the most thinly traded moments during overnight trading sessions. That is not how a market participant closes out a large futures position because all the subsequent trades are happening at a lower price. Commercial banks, together with Western central banks, actively try to depress gold and silver prices to validate the existence of their paper based, fiat based currencies. It has resulted in a controlled price rise, not an exponential one. People and investors need to look at it as an opportunity. A slow and steady bull market makes it possible to accumulate the metals in a steady way. At the start of 2013, the fundamentals justify much higher gold and silver prices. John Rubino is the co-author of the book "The Collapse of the dollar." Visit his website DollarCollapse.com for daily interesting readings. |
| Jack Crooks – Bullish on the US dollar. Danielle Park – Bearish on stocks. Posted: 13 Jan 2013 04:52 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Insights into Cultural Shifts from a Visit to a Hardware Store Posted: 13 Jan 2013 03:25 PM PST "So this is what it looks like when a society is starting to collapse," the man standing behind the counter at the hardware store said matter-of-factly. The remark had been directed at no one in particular, but generally at anyone standing nearby. As I was among that audience, I looked at him inquisitively, eliciting in return a look indicating that his observation should be intuitively obvious to even the casual observer. "We should not be this busy," he continued. "People are normally out Christmas shopping for the latest tech gadgets for their kids, but instead they are spending their hard-earned money here." I had to agree with his observation, because the place was packed, and it was obvious that his inventory was disappearing from the glass showcases and from the wall behind the counter quicker than the store could replenish it. "We have manufacturers that aren't taking any more orders. We even have a manufacturer that has shut down production and furloughed the entire workforce. I guess when we run out, we run out." He excused himself and joined his staff to help restock the shelves as well as operate the register.    |
| From the streets to success – Michael Cooley – YouTube Posted: 13 Jan 2013 02:50 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  |
| Posted: 13 Jan 2013 01:35 PM PST  Today King World News is pleased to share with its global readers a fascinating piece that was put together by Nick Laird from ShareLynx out of Australia. Laird put together four extraordinary gold charts to go along with his commentary below. We thank Laird for sharing this piece with our global readers and part II covering the silver market will be released later today. This posting includes an audio/video/photo media file: Download Now |
| Global Gold Newsflash: Illinois To Start Tracking Gold Transactions Posted: 13 Jan 2013 12:36 PM PST This article was submitted by Claudio Grass, managing director at Global Gold in Switzerland, as a newsflash that the company officially published. Last year the Illinois senate passed a bill called SB3341 or "Precious Metal Purchasing Act." The bill is still pending approval of the house. However, it is likely just a matter of time until the act is approved. In essence, the bill obliges persons in the business of purchasing precious metals to obtain proof of ownership, create a record of sale and verify the identity of the seller. It is also prohibited to pay for the precious metals in cash. All payments have to be carried out electronically. The precious metals dealer also has to keep records for sale for at least one year or even up to 5 years if the transaction value is over 500$. Furthermore, all collected information has to be reported to the local law enforcement agency. At Global Gold, we have been warning for a while now about possible financial repression and confiscation measures by western governments. This bill basically creates a paper trail for gold; it does not go beyond that. However the information gathered under the bill might be extremely helpful to governments at some future point in time, when they decide to outright confiscate gold or create some form of "special tax" on gold holdings. We are convinced that it is of upmost importance to hold precious metals in jurisdictions which have never confiscated gold in the past and believe in the importance of property right. In an earlier article, we wrote the following:
In the same article we shared several tips on how to protect your assets in case of a random confiscation:
Read more in "Government and gold confiscation: tips to protect your assets" |
| Posted: 13 Jan 2013 11:34 AM PST (click to enlarge) As of 1/13/2013, $9.00 USD purchases you the following organic agricultural products from the state of Espirito Santo, Brazil: Oranges – 6 lbs. Total: Roughly 30 lbs. of Basic Fruits & Vegetables. What do these low prices mean from an investment standpoint? Here's what Doug Casey had to say on the matter of Brazilian Agricultural in this month's Casey Report. Said Doug: "In the last five years, land prices in Argentina, Uruguay, Paraguay and southern Brazil have risen 15 to 20% per annum. That's mostly because, of course, grain prices have exploded…I'm disinclined to invest in farmland for the grains…I'm much more interested in specialty products, like grapes, olives and other fruits. And cattle." "Over the short term, global demand for agricultural commodities is likely to increase because, despite the downturn in world economic growth, world population is still going up…[However]the main driver for agriculture, in the long run, won't be rising populations but rising standards of living." "A major argument by Brazil promoters is that it's become the world's food storehouse, and it's going to grow from here. Unlike many of their arguments, I think this makes some sense. But it's not a good enough reason to invest there anytime soon." I'll have to agree with Doug. 15 years ago when I visited Brazil for the first time, real estate (outside of the major cities) was mostly a cash market, with families and neighbors trading land lots and buildings amongst themselves. But when I touched down in 2011, I was shocked at the economic growth. Brazil is at least waist-deep into the "age of consumer credit", the waters of which are rising quickly. Although food prices appear dirt cheap when observed from a Western perspective, in local terms they are mildly cheap at best. Before the decline of the dollar in the last decade (and corresponding rise in the Brazilian real & commodity prices) that list of 30 lbs. of produce could be had for under $4.00 USD. However in dollar terms, they'll most likely never be this cheap again. Thoughts are welcomed. Best, |
| Ben B. Nixed The Coin - What Does That Mean? Posted: 13 Jan 2013 11:04 AM PST
In the past 24-hours I've been reading the postmortems on the Coin; I just watched the Sunday morning shows. In my opinion, the Press is missing the story. The key sentence from the White House that killed the Coin for good:
I think the line "Treasury nor the Fed", is baloney. It was the Fed, in a message delivered by Bernanke, that caused Obama to back off on any consideration of the Coin. There might have been wiggle room in existing law to print a Coin, but there is nothing that says that the Fed had to take it. And Bernanke said, "No". When Obama ditched the Coin, he did it because it was no longer an option. Bernanke took the option off the table. The WH statement makes it sound as it it was their decision, that's just smoke and mirrors.
What bothers me about this is the timing. Why would Treasury/WH go public with its position on the Coin weeks before the deadline was reached? There are at least 14 days left before the SHTF, so, "Why now?" Did Bernanke put pressure on the WH with a threat to go public that he was unwilling to accept a Coin as valid payment? If so, the WH would have wanted to get ahead of the Fed, so Treasury came out with the nix.
I think Bernanke got some calls from other Central Banks. They told him it would be a dangerous precedent for America to do this. If there are coins to be printed, it would be better if some other country (possibly Japan) do it first. After all, the dollar is still the #1 reserve currency. The foreign CBs have some say in this. I also think that Bernanke got calls from Republican leaders. Heavy hitters, like Richard Shelby (R, Al), can get Bernanke on the phone. I'm sure that these folks told Ben that if the Fed facilitated the Coin, they would raise hell. They would rake Bernanke over the coals. But guys like Bernanke don't just roll over when someone whistles. And old timers like Shelby don't make one sided-deals. So what could have been winked, nodded and agreed to by all of the actors on this stage?
Take the Debt Limit debate completely off the table.
Republicans have everything to lose if they force the country to functionally default on the debt. If they did that, they would get murdered. Kiss-off the Republican party for another eight years. The Reds would probably lose the House bi-elections, and their majority; and they know this. If Congress passed a 6-12 month extension of the Debt Limit, it would not diminish the Republican bargaining position at all. In fact, it would strengthen their position, and improve their public perception (from the current level of +0.01).
The Debt Limit is not the only line in the sand for Republicans. They have the Sequestered Amounts they can fight over, but even that is a sideshow. The real issue that will trip up the Administration is the need for a Continuing Resolution. The CR is required by law, if there is no budget approved by the House. It is now 1,350+days since the US has had a budget. There is no way in hell we are going to have one in the next 90 days.
If the Republicans want to shut down the government, they have a much better issue to do it over than the Debt Limit. (The CR will do the "job" ) So watch for what appears to be a "concession" from some Republicans this week. Don't cheer too loudly if this happens (the markets will - at first). It doesn't change the fact that a showdown is coming, and it's coming pretty quick. The chance for a big brawl, that ends up shutting the government down, is still very much in the cards.
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| Jay Taylor discusses gold market manipulation in Future Money Trends interview Posted: 13 Jan 2013 10:10 AM PST 12:10p ET Sunday, January 13, 2013 Dear Friend of GATA and Gold: Gold market manipulation is the first topic in an interview with financial letter writer Jay Taylor by Dan Ameduri of Future Money Trends. GATA is cited. The interview is 19 minutes long and its audio is posted at Future Money Trends here: http://www.futuremoneytrends.com/index.php/interviews/382-how-to-invest-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. The gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... |
| GoldMoney article: Austrian economics in 2013 Posted: 13 Jan 2013 10:05 AM PST The following article has been posted at GoldMoney, here. Austrian economics in 2013 2013-JAN-13
Mainstream economists are confused by the whole subject of prices, concluding that production costs and marginal consumer demand between them set prices. This allows the mathematically-minded to draw supply and demand curves. They then contradict themselves by saying that falling prices discourage demand, because consumers will delay their purchases hoping for lower prices. And they fail completely to accommodate in their calculations the consumer who simply decides not to buy something at any price. On the second proposition, since no economist can foresee progress, they substitute for it growth. Growth is simply more money in the economy, usually contrived out of thin air by central and commercial banks. It is perfectly possible, indeed more than likely, for an economy to “grow” while regressing, when for example the state decides to take money from productive citizens and spend it less productively. Intellectual ignorance of both price theory and what constitutes economic progress leads mainstream economists into believing that their science can be dehumanised. They resort to statistical analysis, appropriate only to physical as opposed to natural science. They assume that yesterday’s prices, reflecting past supply and demand, can be projected forward to tomorrow, giving economic planners the basis to intervene to produce a better outcome. This assumption has its mere thread of validity by eliminating progress from calculations altogether. This is behind many inconsistencies, such as how can we all be better off when 10% of the work force is unemployed. And how are we better off with government providing us with many of the necessities of life instead of the market, when our personal experience tells us of costly bureaucracy and levels of service we would not otherwise tolerate? It is a plain fact that we have allowed ourselves to be deluded into thinking that what we know to be true is not true, and that the statistics economists produce as evidence are irrelevant and self-serving. Does anyone with half a brain actually believe the politicians, backed by the cleverest economic advisors the system can produce, when they say they can improve life with someone else’s money? Austrian economic theory tells us the truth about these and other fallacies. The great Austrian economist Ludwig von Mises remarked with full justification that the only correct declaration to come out of the neo-British Cambridge school (Keynesianism and monetarism) was Keynes’s statement that in the long run we are all dead. So I urge anyone who even suspects they are being bamboozled by the state to make the effort to understand the virtues of free markets, sound money and Austrian economics. Alasdair Macleod Head of research, GoldMoney Alasdair.Macleod@GoldMoney.com Twitter @MacleodFinance |
| Posted: 13 Jan 2013 10:03 AM PST From Qbamco's Paul Brodsky: Macro Polo The absence of meaningful negative market responses to debt ceiling dramas, Japanese inflation targeting, trillion dollar coins, and other odd and dubious politically-oriented market meddling seems to be sending reflexive signals back to capitals: all clear, continue self-destructing. The markets seem not to care, knowing that central banks have their back. Money creation can suspend nominal economic contraction and ensure rising financial markets until something, (anything!), might stir the public's imagination again and animal spirits. But while money can suspend animation, it is not and cannot replace real economic functioning. In fact, ongoing money creation is locking-in negative real economic growth and real returns in most financial assets. We think the best strategy for discretionary investors is to stay focused on the growing monetary mountain across the valley, and to not look down. This piece seeks to place the current investment environment in economic, political and social perspective. The second Chukker may break new ground for many. * * * A European friend recently suggested to us that madness has taken over American politics. True that. But it seems more likely that American politics is merely reflecting far greater and deeper social introspection. Americans seem to be in the process of sorting themselves into groups with shared social values. Why might this be? Perhaps it is because our money no longer allows us to measure our personal industry? What is my personal economic value to society when a Nobel Laureate thinks the effect of proclaiming a trillion dollar coin would be "benign"? On the surface, Left and Right fringes have always seemed bipolar opposites in terms of their social sensibilities and views on the optimal role of government. However, it is obvious that in the current environment the fringes are infiltrating established parties with which each has historically been associated and, it seems, finding a hollow core – the parties are long of self-serving ambition and tactical expertise and short of worthwhile principles. In this, the Left and Right fringes have a lot in common. They share deep disappointment in the efficacy of government and they are increasingly agitated by their representation in it. The response of centrist elected leaders has been to revert to what they know: to secure funding from special interests with deep pockets in return for implicit favors, and then to use the funds to create a fictional narrative to appeal to the masses. As time goes on the masses are learning their representatives are providing only basal representation; enough only to keep them on the team for the next election cycle. The sad reality is that this is actually working for elected officials and their backers, but at a cost of increasing popular self-worth and identity. Governments in representative democracies are not providing representation and their policies resemble nothing close to economic problem solving. Rather, they seem to be the result of consultants' cost/benefit analyses of political capital expended vs. …what, self-serving ambition? It may be working now but the political establishment should be very worried. The rest of us, regardless of our past politics, should be very excited. Like an old married couple that can no longer talk past each other once the money runs out, competing political parties are discovering they cannot escape each other as their societies' real wealth is diminishing. It seems they are almost to the point where they might have to begin to give a shine about the people they ostensibly serve. (Look for the reincarnation of Andrew Jackson in 2016 or 2020?) * * * Discussions of fiscal cliffs and sovereign bailouts are political constructs that we think have less to do with secular macroeconomics than most observers believe. At the risk of seeming overly glib, such events have been inevitable flashpoints that had to emerge. They represent the decision surrounding debt default: should it be explicit (natural credit deterioration that demands sudden widespread austerity), or implicit (policy-administered inflation that demands the loss of perceived wealth)? The former would demand politicians and policy makers step away and let organic market forces prevail. Debt would quickly be right-sized through massive defaults, nominal output levels would drop precipitously and there would be great social expense in the near term. The latter would maintain irreconcilable debt-to-real output levels at not-so-obvious near-term social expense in perpetuity until societies implode, their economic production uncompensated in real terms. The political decision has been made several times over: do the latter, take a pass and let central banks de-lever private banks, transferring wealth to them from the public directly via transfer payments and indirectly, via inflation. * * * To G7 leadership: it is time to shift the terms of the Monetary Empire before it destroys our cultures, both externally and from within. There are no good data points in the modern era where all global economic participants simultaneously lost faith in a completely unreserved global monetary regime. It would not be in your best interests to test these logical limits and then have to start the system from scratch. But the economic sky does not have to fall and property does not have to be transferred if (when) the current monetary system converts to a more sustainable one. We would all wake up the next morning in our beds and go to work. All that would change is the numbers we place on our commerce and property would be far larger, and the amount we owe far smaller in comparison. We urge readers, policy makers, political donors and, most importantly, global investors able to influence all of the above through capital allocation, to force central banks to devalue our currencies and peg them to sovereign gold, before it is too late. The money spent to date has yet to be created. Close the gap and let us all get back to work.
Full letter (pdf link) |
| Gold Closer To Become Officially Money … Again Posted: 13 Jan 2013 09:50 AM PST A new paper published by the Official Monetary and Financial Institutions Forum (OMFIF) describes how gold is ready to become officially part of the monetary system … again. In order to stabilize the world monetary system, in the light of a deteriorating global currency war and the lack of a real alternative world reserve currency, gold is the only alternative currency that is ready to take on a leading role. One thing is for sure, it is the ONLY time tested currency as ALL paper based money systems have failed in history. Although the Renminbi is a candidate to play an leading role in the future, it is not ready to take up that role yet. One thing will be proven once again: Gold was money and gold continues to be money, although we temporarily somehow "forgot" in it in the West. The document (44 pages) describes five reasons why the world would benefit for gold's official role as money.
Obviously we are not there yet. A lot of things need to be settled before such an evolution can take place including a stable gold price in different currencies and decisions on official gold reserves (monetary base to gold ratio). The OMFIF suggests it is time to start preparing "contingency plans."
John Butler commented on the Financial Sense right after the document was published, confirming his prediction in an earlier article and in his book The Golden Revolution (Wiley, 2012). He writes: "I believe this is of great historical significance. The economic and financial market implications are substantial. The global 'savers', that is, the countries that export more than they import, are finally forcing the world back onto a more stable monetary foundation that will make it far harder to print money to paper over fundamental economic problems and 'kick the can'. Yes, this implies that profligate governments will find it more difficult to finance deficits in future." |
| Posted: 13 Jan 2013 09:40 AM PST Governor Corbett will be scorned, ridiculed and vilified by the government unions and teachers across Pennsylvania when he reveals his plan to save PA taxpayers from seeing their taxes go sky high to pay pensions to retired government workers that are higher than the average pay of a teacher with ten years experience. This story sums it up perfectly. Previous numbskull governors (Tom "color code" Ridge – a Republican & Fast Eddie Rendell – a Democrat) promised far more in pension benefits than they could ever deliver and compounded that by not funding the pension plans. They strolled off into the sunset, writing books and going on TV shows, leaving Corbett with a big shit sandwich. Corbett is attempting to have an adult discussion about math and the impossiblity of honoring the pension promises that have been made. If he is courageous and stands his ground, he will be thrown out of office next year. This is how we run this country. Anyone who speaks the truth has no chance of being elected to public office. Of course the numbers they are discussing are far worse than they are willing to admit. All of these state pension plans are using an 8% annual return assumption. They are invested in bonds and stocks. The chances of a long-term annual return of 8% are ZERO. Their bond investments are likely to return 0% or worse with rates between 1% and 3% today. Stocks are priced to deliver a 10 year return of 4.5%. The PA pension funds will be lucky to achieve a 4% long-term return. Using this rate, the unfunded liability goes up by billions. But let's just shoot the messenger and elect someone who tells us what we want to hear. So it goes. Corbett hosts pension crisis meeting for mediaBy JENNIFER LAWSON Thursday, January 10,2013 HARRISBURG — North Penn School District and Souderton Area School District are both trying to balance their budgets for the next school year, but a big expense is their payments — in the multimillions — into the Public School Employees' Retirement System. To continue funding PSERS and avoid cutting programs, the districts are both considering applying for exceptions that would allow them to raise property taxes beyond the 1.7 percent increase normally allowable by law. It's a problem across the state, and it's been brewing for years. In a sit-down meeting with members of the media in the governor's mansion Thursday, Gov. Tom Corbett called the pension crisis "a tapeworm in the budget" and laid the groundwork for the pension reform plan that he will announce in his budget address on Feb. 5. "People before me didn't do what they were supposed to do," he said. "People are getting laid off because there's not enough money to pay the pensions and pay them. That's the point we're at." Pennsylvania administers two state pension systems: The State Employees' Retirement System (SERS) handles retirement systems for most state employees; the Public School Employees' Retirement System (PSERS) manages the retirement system for all public school employees. Combined, these two systems comprise more than 815,000 total members and pay out nearly $8 billion annually in retirement benefits to more than 300,000 retirees, according to Budget Secretary Charles B. Zogby. The pension systems are funded through a combination of employer contributions, employee contributions and investment earnings. Of these three, Zogby said, SERS and PSERS rely overwhelmingly on investment returns as the primary source of funding, with 71 cents of every dollar, or 71 percent, coming from investment earnings. The commonwealth and independent entities pay all of the employer contributions for public employees in the SERS system. For PSERS, the commonwealth and local school districts share the employer contribution costs. The percentage varies — the commonwealth pays at least 50 percent as a general rule, but the amount increases based on the financial conditions of the district. In the poorest school districts, the state pays more than 75 percent of the cost. In the current fiscal year, Zogby said, the state's employer contribution costs for both systems are projected to total more than $1.5 billion — $677.4 million for SERS and $856.1 million for PSERS. Both SERS and PSERS use a formula to determine a fixed amount to be paid in retirement benefits, taking into account years of service, final average salary and a multiplier of 2 or 2.5 percent. "It's ultimately the taxpayer that bears the risk of the plan," Zogby said. When investment returns go up, the state's employer contribution rate declines. When investment returns drop below expectations, the state's employer contribution rate increases to cover the entire shortfall. Zogby gave an overview of how Pennsylvania ended up in this predicament, saying it was a combination of former administrations along with economic forces. Retiree benefits became more generous "during the go-go '90s," Zogby said, when the state had, on paper, assets that exceeded more than 100 percent of liabilities. The stock market was booming, "and a decision was made to increase benefits." These benefits didn't require a proportional employee match, resulting in nearly a decade of underfunding by state government and local school districts, as well as investment returns that failed to meet expectations. "It was actions by previous governors and previous general assemblies that provided benefits that weren't paid for, and were intentionally underfunded," he said. "They were supposed to put in x and they put in y which was less than x, kicking the can down the road and pushing it to future generations." "A slew of bad legislative decisions" were passed in 2001, 2002 and 2003 to address the problems, Zogby said, but the efforts didn't go far enough. "What followed over the next seven years was 5.9 billion in underfunding of contributions. We were putting in 60 percent of what we should have," Zogby said. "The cherry on the sundae was investment earnings that didn't meet contributions. The 2000s are referred to as 'the lost decade,' a decade of no returns. You can see the damage that it imposed on the pension system." These past legislative decisions expanded retiree benefits without the funding to sustain them. Plus, there was nearly a decade of underfunding by state government and local school districts, combined with investment returns that fell short. So now the state is left with a large unfunded liability, or debt, to the tune of $41 billion, and employers are being forced to contribute more to fund past obligations. As a result, Zogby said, these costs are taking a greater share of available money, threatening to grab funding away from core governmental programs and services. For 2013-14, this means having to cut as much as $500 million to balance the budget. Although Corbett didn't describe his proposal to help solve the problem, saying he would go into detail in his budget address on Feb. 5, he said tax increases are off the table. "I don't think you can raise taxes enough to fix this without doing other stuff," Corbett said. There are no plans to harm current retirees by cutting their benefits, he said, and he also intends on respecting current state and public school employees. However, changes to benefits might have to be explored. Other states have also faced this challenge, Zogby said, and Pennsylvania might borrow some ideas from them. Possible solutions include increasing employee contributions, increasing retirement age, changing how the basic pension formula is calculated and giving incentives to longtime state and public school employees to retire without penalty. The Corbett administration and general assembly will work with various stakeholder groups and the pension systems to come up with a workable plan on how to reform the system over the next few months. "The vast majority of the house on the Republican side are new since all of this took place," Corbett said. "Even on the senate side, the question is, what are they going to do? Can they sit with us and can we reach an accommodation?" |
| Inflationary Rally May Spark Breakout In Gold and The Undervalued Junior Miners Posted: 13 Jan 2013 09:08 AM PST The equity markets are soaring to new highs following the Fiscal Cliff deal reached recently in Washington which continues to raise the debt and kick the can down the road. It is just what we expected a few months ago... Read More...  |
| Posted: 13 Jan 2013 07:58 AM PST |
Treasury Secretary 
James Wesley, Rawles is an American author, best known for his survivalist genre Patriots Novel Series, which have become New York Times bestsellers. Rawles is a former US Army officer and is also a 
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