saveyourassetsfirst3 |
- Have Asset Classes Really Become More Correlated Since The 2008 Financial Meltdown?
- A Glass Of Golden Bubbly- Miners, Gold, & Silver Set to Explode in 2013
- Gold, Silver, and Your IRA
- Stewart Thomson: A Glass Of Golden Bubbly- Miners, Gold, & Silver Set to Explode in 2013
- Top Ten Reasons Why Fiat Currency Is Superior to Gold (or Silver) Money
- The Gold Owner’s Guide to 2013
- Silver Update: Fiscal Clowns
- BREAKING: Keiser offers silver rounds to protest occupation by bankers
- Tim Iacono Positions For 2013: Most Investors Seriously Underweight Precious Metals
- Endowment-Style Strategies For Individual Investors, Pre-2007
- Unconditional Redemption for Gold
- The Gold Standard
- ArabianMoney looks for the winners and losers in 2013
- An Unhappy New Year
- 2012 ended with gold prices up for 12th-straight year, more hike seen in 2013
- Fiscal cliff fiasco/gold and silver rise
- A Massive Electromagnetic Pulse Could Collapse The Economy In A Single Moment
- Reports: NO DEAL- US to Plunge Off Fiscal Cliff
- 2013 Expectations
- The Three Legs of the Precious Metals Bull: Part II
| Have Asset Classes Really Become More Correlated Since The 2008 Financial Meltdown? Posted: 01 Jan 2013 10:47 AM PST By It is almost cliché to state that asset correlations have increased following the financial crisis of 2008, and that maneuvers such as zero interest rate policy may be driving this. My question is whether the markets have been fundamentally altered in the aftermath of the financial collapse. I did not test multiple different time frames. I simply selected in advance the relatively benign year 2006 and compared to 2012. Also, I used exchanged traded funds rather than individual equities (except for the business development company, Ares Capital (ARCC), since there are not mutual funds consisting solely of those). This is an exploratory, idea-generating analysis intended to be a starting point rather than a destination. The assets under consideration, along with their stock ticker, and brief description of the asset class:
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| A Glass Of Golden Bubbly- Miners, Gold, & Silver Set to Explode in 2013 Posted: 01 Jan 2013 10:35 AM PST On the last trading day of 2012, a watershed event occurred. Key gold stocks staged superb breakouts, from their weekly chart power downtrend lines. The gold exploration companies also look poised to rise significantly, and I expect large Japanese and … Continue reading | |||||||||
| Posted: 01 Jan 2013 10:30 AM PST Gold, Silver, and Your IRA As the nation considers the results of the last election, the last decade of federal spending, and the upcoming "fiscal cliff," more and more investors are looking for safe-havens for their long term savings and retirement money. Many investors are concerned about what will happen to the future of their [...] | |||||||||
| Stewart Thomson: A Glass Of Golden Bubbly- Miners, Gold, & Silver Set to Explode in 2013 Posted: 01 Jan 2013 10:25 AM PST Submitted by Stewart Thomson: On the last trading day of 2012, a watershed event occurred. Key gold stocks staged superb breakouts, from their weekly chart power downtrend lines. The gold exploration companies also look poised to rise significantly, and I expect large Japanese and Chinese companies to contact many of them soon, in an effort [...] | |||||||||
| Top Ten Reasons Why Fiat Currency Is Superior to Gold (or Silver) Money Posted: 01 Jan 2013 09:17 AM PST http://www.financialsense.com/contri...perior-to-gold By John Butler In the spirit of the holidays and hope for a more prosperous 2013, I thought my readers might appreciate a little humor to partially offset the relentless doom and gloom associated with the Amphora Report. So please, don't take this edition too seriously. But if you happen to stumble across a 'paperbug' or two over the holidays, perhaps you could share some of the points made here. Humor sometimes helps people realize just how hopelessly misguided they are. Cheers! Number 10: There Is Not Enough Gold (or Silver) In the World to Serve as Money Let's begin with the obvious. We know that central banks the world over have printed money at exponentially growing rates for years. There is now so much paper and electronic money floating around the world that gold (or silver) cannot possibly be expected to keep up. You can't print gold, after all, you need to find it, dig it out of the ground, refine it, etc., a hugely expensive and time-consuming process which practically ensures a stable rather than exponentially growing supply of the stuff. Of course, we know that an exponentially growing supply of money is a good thing. How else can an economy hope to grow, especially one bearing in an exponentially rising debt burden! We need all that new money to pay all that new interest, don't we? And don't forget, most things keep getting more expensive, like food and fuel. Don't we need more money to pay for all that too? What about government entitlements that keep growing in size? If we didn't have a constant flow of new money, how on earth would we pay for all of that? It is essential that we keep the printing presses rolling. Number 9: Gold and Silver are Old-Fashioned, Cumbersome Money Here's another obvious one for you: Gold is HEAVY! Who wants to carry it around? It might be nice and shiny, but hey, it really belongs around your neck. The more you think about it, in an age of electronic, plastic or internet money, the whole concept of coinage begins to seem a bit anachronistic. Who even uses small denomination coins anymore, except as household poker betting tokens? I suppose larger coins are still of some use, but let's face it folks, even those are almost worthless anymore. Coinage is just so passé. Sure, coins used to have some value. When I was young and I watched Little House on the Prairie and The Waltons I was amazed that at the general stores or other retail establishments a penny actually bought a range of items and with a few nickels and dimes you could purchase much of what was on offer! But why bother with coins today? I use plastic or electronic money for almost everything. Sure, that money still references dollars, or euros, or sterling, or yen balances of a bank account. But hey, it would be just so barbaric to reference a gold or silver account instead, wouldn't it? As if banks even hold enough cash on hand for large withdrawals anymore, much less gold or silver. Oh and an ounce of gold, a whopping $1,700 is just way too expensive for most commerce. So not only is there not enough gold in the world as per Number 10 above; what gold there is, is too expensive to serve as a useful money! Oh I suppose we could use fractions of ounces of gold instead of full ounces, but most people struggle with fractions, including me. Silver might be more useful, but at over $30/oz, it wouldn't really work for making change now, would it? Number 8: Gold Restrains Growth OK, this reason is a little bit wonkish, but if you'll bear with me I'll explain why gold-backed money would put the brakes on the healthy growth the world has been experiencing all through this prosperous modern period of an exponentially rising money supply and might even send us back to the poor house. We already touched on this in Number 10 but let's go off on a tangent here. You see, back when gold was money, people were poorer. Way poorer. And economic growth was often much weaker. I mean, before the industrial revolution, we didn't even have machines to do basic work like farming, so people had to have loads of children just to get basic work done, resulting in a cycle of poverty. Sure, a handful of landed aristocrats held most of the wealth, and they did just fine, but really, do we want to go back to that sort of wealth disparity? Oh and as for the industrial revolution, it was such a fluke. Sure it led to the most rapid economic growth in history in most of Europe, North America and Japan, but it would probably have been way more rapid had money growth been exponential instead of stable at the time. That said, inflation didn't actually work out so well in France, where exponential money growth destroyed much of the economy in the late 18th and early 19th centuries. But hey, how else to finance that Revolution of theirs? The American Revolution was also hugely inflationary, you know, those worthless continentals and all. But wasn't it a huge overreaction for the US federal government to choose silver coinage as the inaugural US federal money? For that matter, had Napoleon just kept on inflating, rather than paying his soldiers in silver coin, he might have won the wars against those Brits and others who refused to inflate their currencies. And why did the Americans experiment with gold- and silver-backed money for so long? Imagine how much faster they would have industrialized had they just kept on printing continentals instead! Ah well, hindsight is 20/20. Perhaps technology wouldn't exactly regress if we went back to gold- or silver-backed money but you never know. Some people talk like that. And certainly most of the innovations of modern times would never have taken place had we been on gold-backed money. Think about all those green technologies that promise to solve our energy problems someday. Things were just fine before we started consuming all the carbon stuff and now we've got to get back on track. Only exponentially growing money can fund these programs that aren't yet profitable. Imagine what would happen if money were backed by gold? We would be dependent on energy and other technologies that actually made fundamental economic sense. No, that would be a huge mistake. Number 7: The Gold Standard Caused the Great Depression This is related to the above but hugely important in its own right so I'm treating it as a separate critique of gold- or silver-backed money. Milton Friedman is famous in part for blaming the Federal Reserve for causing the Great Depression. This runs contrary to what many believe, however, that the gold standard itself caused the Depression. Of course, they are right. We all know that WWI was hugely inflationary as Britain, Germany and other belligerents went off the gold standard in order to finance the war by printing money. Following years of printing, in Europe prices for just about everything skyrocketed. It didn't help, of course, that much industrial capacity was destroyed by the war, limiting supply. In Russia, most of the capital stock was seized by the government as part of their anti-capitalist revolution. So there was loads more money chasing far fewer goods in Europe, which is one way Milton Friedman and other so-called 'monetarists' like to explain inflation. In some places like Weimar Germany, interwar Austria and Hungary, there was outright hyperinflation and currency collapse in the 1920s. Impoverished, these countries ended up with highly competitive labor costs, similar to various poor emerging markets today. Britain, however, had gone back on the gold standard in 1925 and thus had the strongest currency in Europe. This made British labor highly noncompetitive, resulting in persistently high unemployment and massive strikes, some turning violent. In 1927, the Bank of England kindly requested that the US Federal Reserve stimulate demand for UK exports by expanding the US money supply. The Fed obliged. This contributed to a huge stock market bubble in the US which crashed under its own weight in late 1929, while Britain's remained mired in a depression unknown to most Americans today. Finally, in 1931, Britain decided to devalue its currency. The US was already slipping into depression at the time and suddenly found it had by far the least competitive wages in the world. It was now in a situation comparable to Britain in 1927, yet without another country to which it could turn for help. The Federal Reserve had already accumulated a huge amount of gold from Britain but, as Milton Friedman observed, didn't do as it was supposed to do and expand the domestic money supply in line with the swelling gold reserves. Why? No one knows. Perhaps the Fed was spooked by the stock market boom and bust that it had created in 1927-29 and didn't want to risk a repeat. But whereas the 1927 monetary expansion was not linked to an inflow of gold reserves, in 1930-31 the Fed could have hugely expanded the money supply in line with growing gold reserves, thereby preventing many bank failures. To make matters worse, President Hoover was advised by some prominent, proto-Keynesian economists of the day that a drop in aggregate demand had to be avoided at all costs and that the best way to accomplish this was to support wages, notwithstanding rising unemployment. As a result, US wages were by far the highest in the world by 1931, labor was noncompetitive, and unemployment was thus far higher than it would otherwise have been, had Hoover left things alone. So, it is blindingly obvious that the gold standard was the cause of the Great Depression. Not WWI. Not the massive inflation to pay for WWI. Not the widespread destruction of European industry. Not the Russian Revolution and industrial collapse. Not the 1920s hyperinflations and revolutions in central Europe. Not the Fed's stock market bubble of 1927-29. Not the Fed's failure to allow the money supply to expand naturally with gold reserves in 1930-31. Not the artificial wage supports introduced by President Hoover and continued by FDR. No, the gold standard caused the Great Depression. Really. It did. Number 6: Rules Can Be Broken Returning to the obvious, this reason is so simple a child can understand it. Rules are nice on paper but we all know they can be broken. Just because a country is on a gold standard doesn't mean it can't just devalue. Britain and Germany did so in 1914 and inflated like crazy to pay for WWI as explained above. The US devalued the dollar some 60% versus gold in 1934 and left the gold standard entirely in 1971. Let's face it, if rules can be broken, what's the point having them in the first place? The claim that gold-backed money is stable and prevents runaway inflation is just hogwash. Whenever governments choose, they can ditch gold-backed money, devalue and create as much inflation as they desire. They can even hyperinflate if they like. What's to stop them? They set the rules. Gold advocates are just so naïve! Number 5: Gold-Backed Money Favours the US versus the Rest of the World Now for those of us residing outside the USofA, we're sometimes concerned that the US has the largest gold reserves in the world. If the world went back on a gold standard, then the US would be even more powerful than it already is. It would throw its weight around even more, use that gold to pay for an even larger military and open up more bases abroad, including where they aren't even wanted, like in Bulgaria. The US might even start more wars, as if it hasn't started enough already, financed as they are with the Fed's printing press. Now history does suggest that war and inflation go hand in hand. Certainly this was the case in the 20th century. The French Revolution and Napoleonic Wars were hugely inflationary in continental Europe. The 30 years' war was hugely inflationary too, ruining the previously prosperous Habsburg economies. Then there was the American Revolution, financed with those paper continentals. But today things are different. Really, they are. If the world were on a gold standard, there would be more wars, notwithstanding that these would be far more difficult to finance. On another note, the US economy imports far more than it exports. Wonks call this a 'trade-deficit'. Really wonkish types have a more expanded term called a 'current-account deficit'. If the world went back onto a gold standard, then the US would need to use its gold reserves to pay for net imports, instead of just printing more dollars. And at current gold prices, the US would not even be able to cover one year of its current-account deficit! Imagine, the US would be unable to keep importing more than it exported! It would be forced to become a more competitive economy and it would need to save and produce more and consume less! The horror! We all know that the US consumer is the only thing keeping the global economy afloat. To whom would China or others export if not to the US consumer? What a ridiculous idea! Well, it's just not going to happen. Keynesians like Paul Krugman know that there is just no other way to grow economies than with exponential money growth to finance consumption. Saving is the quick road to the poor house. Borrowing your way to prosperity has worked so well in the past, why would anyone possibly want to stop now? After all, savings is the four-letter word of Keynesian economics. Let's just not go there. Number 4: Gold Favours Gold-Mining Countries Over Others Here's another simple one: If you go back to gold- or silver-backed money, you are providing a huge subsidy for those countries producing the money. Why give them the printing press, when we can keep it for ourselves? Remember, the power to print exponentially rising amounts of fiat currency is the key to economic prosperity. We don't want countries rich in natural resources to benefit at our expense now, do we? Sure, some countries rich in gold are in Africa or other underdeveloped regions. They're poor. They're backward. Some are near-dictatorships. Many dictators depend on us and our foreign aid, financed as it is with our printing presses. Why, if we could no longer print that foreign aid into existence, these poor countries would have to help themselves instead. No, they're just too backward for that. Imagine that the value of gold and silver mines in Africa and other poor parts of the world soared as these metals were re-monetized. Why it would be like what happened to the Persian Gulf countries when oil became a highly valuable commodity back in the 1970s. They became rich! Today those economies are among the wealthiest in the world. They mostly export far more than they import and they have built up huge sovereign wealth funds for the future. But Africa and other poor regions being so screwed up, they can't be trusted to spend their wealth responsibly. They need the US and other countries to show them how to do it. Like what cars to buy. Or how many flat-screen TVs per house to have. Or how to administer a post office, or a national railway system, or quality state education. No, re-balancing global wealth toward Africa and other poor regions is bad enough. Giving them control over their wealth is just plain irresponsible. We shouldn't do it and so we shouldn't return to gold-backed money. (Please don't think I'm racist BTW, I promise you I have at least one black friend. Or I did once. Really. I'm sure the same is true of those politicians and bureaucrats who believe that, without foreign aid, many African countries would end up like Argentina. Or Greece.) Number 3: Gold Favors the Rich Notwithstanding the observation above, that gold- and silver-backed money would bestow greater wealth on countries rich in those natural resources, the fact is, today most gold and silver privately held is in the hands of the wealthy. They're already rich, why should we make them even more so? Wealth inequality is a serious problem, why make it worse? We all know that exponential fiat money growth in recent decades has helped to prevent even greater wealth disparity. Sure, in the US, the wealth of the top 1% has risen exponentially relative to the middle-class since the 1970s, when the US went off the gold standard and the age of exponential money growth began, but that is mere coincidence. It is true that real wages grew quickly under the gold standard, which created the largest middle-class in history, but even then there were those nasty Robber Barons who became far richer than they deserved. Some of them were enlightened enough to realize this, like Andrew Carnegie, who gave away most of his fortune. Economic progress is OK as long as people don't get too rich from it. So let's keep creating wealth by printing money but make certain that those that get too rich give it away. Or else. We shouldn't be too concerned that the banks and owners of capital are the primary beneficiaries of money expansion, as they have first access to the new money. After all, we want our under-capitalized banks to start lending again so we can continue on our borrowing and consumption binge. How else are the banks going to lend us money if we don't create it in the first place? Sure we have to pay them interest on it, but rates are low so we shouldn't care. Yes, inflation is historically associated with wealth disparity and sound money with a growing middle class. But that was before the modern welfare state that automatically transfers money from the wealthy to the poor, that is, unless the wealthy find ways to avoid tax by creating trusts and endowments, purchasing tax-exempt securities or acquiring assets that tend to rise in price with inflation. But they don't really want to avoid tax, do they? Warren Buffett, for one, says he wants to pay more tax. Of course he is allowed to do that, as the IRS has a special facility for those who wish to pay more than their mandated share. Sometimes I wonder why he doesn't. He could dump his tax-exempt munis and hold taxable bonds, for example. Or he could pay out dividends, taxed as ordinary income, rather than purchasing outstanding shares through buy-backs. Or he could live in a state with high taxes, rather than in low-tax Nebraska. Given the complexity of the tax codes in most developed countries, I suspect there are thousands of ways that Warren or other rich people could pay more tax if they wished. Maybe actions speak louder than words. Of course middle-class families don't have access to fancy tax planning, as it tends to be rather expensive. Really fancy tax planning requires writing new items into the tax code, something that tax lobbyists do full-time on behalf of the wealthy. No, middle-class folks just have to pay up to compensate for all those loopholes that most never hear about until the government decides that they are no longer politically expedient. In practice, this means that the welfare state is primarily a redistribution from the middle-class to the poor. But no, I don't think this is the reason for the shrinking middle class. I think it is because, notwithstanding clearly heroic attempts, we are still not printing enough money. Number 2: PhDs Know What's Good For Us Back to the obvious, we all know that someone with a PhD is smarter than we are. They've got the degree to prove it. Some PhDs even have degrees in economics, which is unbelievably complicated. How else could one understand how exponential money growth creates wealth? How you can borrow your way to prosperity and save your way into the poor house? How importing more than you export is sustainable? How coercive central planning is superior to voluntary, free-market exchange? Let's face it, we may all be equal, but PhDs are more equal than others. If we didn't have them telling us what the price of money should be—or the rate of interest if you prefer—we would just lurch from one economic calamity to the next. The Great Depression would seem a cake walk by comparison, as would our current economic malaise, which they say isn't a depression, even if it feels like it to most. If you need more proof, just look at those fancy buildings that central bankers work in. They're impressive. So are the headquarters of the big private banks. These guys are obviously successful and important, so there is no good reason why they shouldn't be telling us what to do. They even have a name for what they tell us to do: Free-Market Capitalism. I'm not entirely sure what the 'Free' part of that means, as most things aren't free, except of course those provided by the government. The problem with gold- or silver-backed money, you see, is that the PhDs would no longer have the ability to manipulate money for our benefit. And since they know precisely what the supply of money should be, we shouldn't be concerned that they might create too much of it, or too little for that matter. The exponential amounts they've been creating since 2007 are 'just right', as Goldilocks might say. Also, PhDs have all sorts of fancy statistics that only they understand. This is because they create them in the first place. PhDs are smart enough to do that, you see. So when they tell you that consumer price inflation is 2.43%, they don't mean 2.42%. Or 2.44%. No, they mean 2.43%. This precision is important as it determines how many billions of new money they need to give to the banks to ensure price stability and full employment. If they're having trouble doing that, however, it's not their fault. They're PhDs. Speaking of 'price stability', since when is 2.43% growth in prices 'stability'? Wouldn't that be 0.00%? They designed the statistics, so why on earth did they choose to set 'stability' at 2.43%? I suppose I would need a PhD to understand that. Number 1: If Given a Choice, We Would All Prefer Fiat Over Gold-Backed Money As I'm not a PhD, I'm not qualified to go around telling people what to do. Sure, I make suggestions from time to time, because I have a Master's degree. I even make strong recommendations on rare occasion, because I have an honors degree. (If I only had an undergraduate degree, I wouldn't even make suggestions. Without any degree, I suppose I wouldn't open my mouth.) One suggestion I wouldn't make, however, is that people be allowed to choose the money they use. What would be the point of that? We might all choose to use a different money, no one would accept these monies from each other, and so we would never engage in commerce except through direct barter. We all know how inefficient barter is. It is why money was created in the first place. And who created money? Well seeing how they control it, I suppose it must have been PhDs. There were no doubt PhDs in ancient Lydia, where coinage originated, no? The Lydian PhDs may have had the original idea but it was the Greek PhDs who supplied most of the coinage for the Hellenistic world. They knew just how much to mint. Even non-Greeks used the Greek coinage, because they liked it. (Here's a puzzle: Were the non-Greeks who chose to use Greek coinage also PhDs? If they were so clever, why didn't they mint their own coins instead? Are some PhDs cleverer than others? I'll have to revisit this at some point when I haven't been drinking wine.) Then there were the Romans. Now those guys were clever. So clever that they built a huge empire. The even discovered how to manipulate money through debasement. This really got going in the 3rd century, which happens to correspond with their decline. But that's just coincidence. My more educated readers might know that the Roman Empire eventually split in two and that while currency debasement continued in the Western Empire, which all but collapsed entirely by the 5th century, the Eastern Empire maintained sound coinage and lasted until the Turkish siege of Byzantium in 1453, roughly a thousand years later. But that's just coincidence too. Empires that debase money tend to last longer. Really. Anyway, back to this topic about choice in money. We really don't need it. We also don't want it. If we did, we wouldn't have legal tender laws that prevent choice in money in the first place, would we? After all, is choice a good thing? I try to do some shopping for my family once a week. My wife makes out a helpful shopping list with various staple items like 'butter'. Then I go to the market and find my way to the butter section and suddenly I'm facing a wall of butter. It's unbelievable. There's salted and unsalted; Irish, British or Continental. There's varying sizes, shapes, qualities, type of cow involved, oh my. And all my wife wrote was 'butter'. So now I've got to get on the phone, I've got to ask her to be more specific, and so I call her and she's changing the baby's nappy, and she can't talk, and she's tired and can't believe that this is the umpteenth time I've gone to do the shopping and yet I always call asking for some clarification, be it for 'butter' or 'detergent' or 'kitchen roll' or God knows what. Look, I'm not a PhD and my wife knows it. So why does she expect me to be able to read her mind? Anyway, I'm sure I've made the point clear that choice is a bad thing. It is just a source of confusion. So in the same way that my wife should just tell me what to purchase (as long as she is specific BTW) the government should tell us what money to use. But just for the sake of argument, let's entertain the fantastical notion that legal tender laws were repealed and we could use whatever desired as money. Nothing would change. I mean, come on, we would just go on using dollars, or euros, or pounds, or yen, or whatever. Who in their right mind would actually bother to evaluate the relative merits of all of these different currencies, or of gold and silver as alternatives? Are some better stores of value than others? Perhaps. But I tell you, for most of us it would be just like looking at that intimidating 'butter wall' in the supermarket. We would take one look at it, shudder, and walk away. Quantitative easing changes nothing. Remember, the PhDs are in charge of our economy and they know exactly how much our money should be worth. Those of us concerned that our money might lose purchasing power are just being paranoid. Choice is dangerous. Think Adam and Eve and you'll get my point. Those arguing in favor of monetary freedom, of choice in money, of repealing legal tender laws, they're just like that nasty snake Lillith in the Garden of Eden, the source of all trouble I tell you. So there you have it. Nowhere would choice be as harmful to commerce as with money itself. Even if legal-tender laws were repealed no doubt we would all continue using the paper stuff we already are. So please, drop all the nonsense about using gold or silver as money. Imagine you gave your spouse, or your children, or your relatives gold and silver coins instead. They wouldn't be able to use them as legal tender; they wouldn't be able to wear them as jewelry. Their only 'use' would be as that four-letter word for Keynesians: Saving. What a way to show a complete lack of holiday spirit. 'Tis the season to borrow and spend folks! So don't be such a Scrooge. Go out there and spend! Spend! | |||||||||
| The Gold Owner’s Guide to 2013 Posted: 01 Jan 2013 09:05 AM PST The Gold Owner's Guide to 2013 by Michael J. Kosares By the time we get to the end of 2013, we will forget much of what shaped 2012. Yet, as we look back at 2012, there are some fundamentally disheartening, if not disturbing, trends that are likely to play a determining role in all financial markets for some time to come, including the gold market. – The first is the inability of the political sector to deal with the "economic problem" on a global basis. From Jinping's Beijing flowing west to Putin's Moscow, from Merkel's Berlin to Hollande's Paris, from Cameron's London to Obama's D.C. and finally Abe's Tokyo, the world's great nation states are locked in a web of acute and alarming political disarray. The question is no longer whether or not stability can be achieved. It is to what degree the instability can be restrained – a circumstance not unfamiliar to the student of history, but one for which the modern investor is generally unprepared and lacking in defenses. - The second is the global predisposition to print money. Complements of the disastrous events following the 2008 financial meltdown, vote-buying politicians globally have defeated usually conservative central bankers in the battle of the printing press. Ben Bernanke's stewardship of the Federal Reserve has not only been emblematic of the trend, it has served as a bad example and dangerous precedent for other central bankers. You cannot slide a sheet of paper between the monetary policies of the Ben Bernanke, Mario Draghi and Mervyn King (soon to be replaced with the even more dovish Mark Carney). Shinzo Abe, who was just elected Japan's prime minister, has threatened to nationalize the Bank of Japan if it refuses to print money. It is as if John Law were reincarnated simultaneously in every major nation state in the world. - The third comes to us via Raoul Pal, the highly-regarded hedge fund manager who once co-managed one of the world's largest hedge fund groups, GLG Global Macro Fund in London. It has to do with the persistent nature of the debt crisis that began in 2007 and never really went away. Pal outlined the problem at a seminar in Shanghai this past summer for other hedge fund managers — a presentation ZeroHedge called one of the "scariest ever." In it he predicted a cascading sovereign debt collapse and default that would begin in Europe, jump the Channel to London, then move progressively through Japan, South Korea and even China. Finally, it would envelope the United States. The problem, he says, is that $70 trillion in G-10 sovereign debt is collateral for $700 trillion in derivatives. "You have to understand," he explains, "that a global banking collapse and massive defaults would bring about the biggest economic shock the world has ever seen. There would be no trade finance, no shipping finance, no finance for farmers, no leasing, no bond market no nothing. The markets are at the frankly terrifying point of realizing that LTRO (long term financing operations), EFSF (European Finance Stability Facility) and QE (quantitative easing) etc. are not going to prevent this collapse." (Note: A synopsis of Mr. Pal's seminar was the most popular post for 2012, and all-time, at the widely-read ZeroHedge website. Recommended.) I do not know if Raoul Pal is correct. I don't know if he's even close. I can tell you that he was successful enough as a hedge fund manager to retire to Spain's Valencia coast at 36 years of age and that he's one of those guys like in the old commercial: When he speaks, people listen. I can also tell you that something is in the air — a sea change in investor psychology of which we should take note. I pass this along as someone who has experienced several similar shifts in investor sentiment over the course of a forty-year career in the gold business. In the last two months of 2012, we experienced volumes at USAGOLD not unlike those of 2008 and 2009 — and those were record volume years. The U.S. Mint confirmed our own experience by reporting U.S. gold Eagle sales in November and December hitting their highest levels in two years. Too, demand for historic, pre-1933 gold coins surged — an important indicator because it tells us the safe haven investor is back in the market. Since safe-haven investors tend to run ahead of the herd, this bodes well for gold demand as we move into 2013. Wholesalers tell us that the market for British sovereigns, Dutch 10 guilders, Swiss 20 francs, etc. is running very strong both in the United States and Europe. In particular, British sovereign supply has dried up. If I am reading the signs correctly (and I am big believer in letting the market speak for itself), 2013 could turn out to be a very good year for gold. _________ You can access our most recent thinking on the gold market by signing-up for our free newsletter — NEWS, COMMENTARY & ANALYSIS. News, Commentary & Analysis is the contemporary, web-based version of our client letter, which traces its beginnings to the early 1990s under the News & Views banner. Its principle objectives have always been to keep our clients informed on important developments in the gold market; condense the available gold-based news and opinion into a brief, readable digest; and, counter the traditional anti-gold bias in the mainstream media. That formula has won it a five-figure subscription base. In addition to our regular newsletters, we occasionally publish in-depth special reports that focus on events and developments of interest to gold owners. Valued for their insight, accuracy and reliability, our publications are linked and reprinted by a large number of websites both in the United States and around the globe. We welcome your interest. News, Commentary & Analysis is distributed by e-mail and you can opt out at any time. We wish all of you the very best for 2013. . . __________ Mr. Kosares is the founder of USAGOLD and the author of The ABCs of Gold Investing – How To Protect And Build Your Wealth With Gold (Third Edition) http://www.usagold.com/cpmforum/2012...guide-to-2013/ | |||||||||
| Posted: 01 Jan 2013 08:25 AM PST BrotherJohnF discusses the fiscal cliff insanity and silver's technicals in his latest Silver Update: Fiscal Clowns. | |||||||||
| BREAKING: Keiser offers silver rounds to protest occupation by bankers Posted: 01 Jan 2013 06:18 AM PST Max Keiser of Russia Today's "The Keiser Report" has partnered with the Northwest Territorial Mint to strike another blow against the monetary metals price suppression scheme | |||||||||
| Tim Iacono Positions For 2013: Most Investors Seriously Underweight Precious Metals Posted: 01 Jan 2013 05:08 AM PST  By Tim Iacono: This is the ninth piece in Seeking Alpha's Positioning for 2013 series. This year we have taken a slightly different approach, asking experts on a range of different asset classes and investing strategies to offer their vision for the coming year and beyond. As always, the focus is on an overall approach to portfolio construction. Tim Iacono is the founder of the investment website Iacono Research, a subscription service providing market commentary and investment advisory services specializing in natural resources. He also writes a financial blog, formerly known as 'The Mess That Greenspan Made', a sometimes irreverent look at the many and varied after-effects of the Greenspan term at the Federal Reserve. Seeking Alpha's Jonathan Liss recently spoke with Tim to find out how the precious metal expert's views were shaping up heading into 2013. Jonathan Liss (JL): How would you describe your investing style/philosophy? Tim Complete Story » | |||||||||
| Endowment-Style Strategies For Individual Investors, Pre-2007 Posted: 01 Jan 2013 02:41 AM PST By [Author note: The following analysis was performed by me in 2007, prior to the financial collapse. I am presenting it here for historical context. The most significant change post-collapse was the near-bankruptcy of Allied Capital (ALD) although it was acquired by Ares Capital (ARCC). A forthcoming post will assess how the correlations of the assets listed below have performed post-collapse, and whether the same findings still apply.] Introduction The majority of investment portfolio returns is due to the mixture of asset classes within the portfolio, with only a minor portion of returns being attributable to the actual individual securities selected within each asset class. This analysis focused on the correlations of several mutual funds with each other, and did not study the investment returns of the overall portfolio mix. With this in mind, I selected a variety of relatively low-cost, widely available funds belonging to the asset classes:
Complete Story » | |||||||||
| Unconditional Redemption for Gold Posted: 31 Dec 2012 10:30 PM PST Mises.org | |||||||||
| Posted: 31 Dec 2012 10:30 PM PST Mises.org | |||||||||
| ArabianMoney looks for the winners and losers in 2013 Posted: 31 Dec 2012 10:26 PM PST ArabianMoney editor and publisher Peter Cooper talks to MyDubaiMyCity presenter Sandra Mergulhao about the winners and losers for 2013. The economic prospects for the UAE and Oil States look much better than for the world in general with global trade on a downtrend and key economies like Japan, the UK and eurozone still weakening. For investors we continue to recommend precious metals and silver in particular… | |||||||||
| Posted: 31 Dec 2012 10:00 PM PST Gold University | |||||||||
| 2012 ended with gold prices up for 12th-straight year, more hike seen in 2013 Posted: 31 Dec 2012 07:43 PM PST 2012 ended with gold prices up for 12th-straight year, more hike seen in 2013 NEW YORK: Gold jumped on the last trading day of 2012 to finish up 6 percent on the year on news of a possible U.S. fiscal deal, which lifted a market that had rallied earlier in the year on low interest rates, euro zone worries and central bank demand for bullion. Other precious metals finished strongly, with palladium up nearly 10 percent on the year, silver up 9 percent and platinum up 8 percent. It was the 12th straight year of gains for gold, making it one of the longest bull runs ever in a commodity. Oil, in contrast, has only been up for a fourth year since its rebound from the 2008 financial crisis. Analysts expect bullion which started 2012 at below $1,580 and scaled nearly $1,800 by October after the U.S. Federal Reserve rolled out a fresh economic stimulus to chart newer peaks in 2013. The market's alltime high above $1,930 was set in September 2011. "If anything, gold's rally today with the removal of the US fiscal cliff proves that it's become a risk asset more than a safe haven," said Adam Sarhan at Sarhan Capital in New York. Traditionally an inflation hedge and a market that investors rush to in times of trouble, gold has lately behaved more like an industrial commodity rising and falling with the stock market and sometimes even following the dollar. Worries about the socalled fiscal cliff had weighed on markets for weeks as the White House and its rival Republicans in Congress sought to find ways to avert some $600 billion in tax hikes and spending cuts that could have sent the economy into another recession in 2013. Obama cautioned at a news conference that a deal was imminent but not yet in hand. "Today it appears that an agreement to prevent this New Year's tax hike is within sight, but it is not done," the president said. "There are still issues left to resolve, but we're hopeful that Congress can get it done, but it's not done." Gold futures' mostactive contract settled at $1,675.80 an ounce, up 1.2 percent for the session and 6.1 percent on the year. Until news of the fiscal deal emerged, the market had barely gained half a percent. The spot price of bullion hovered above $1,670 an ounce, up 1 percent on the day and up nearly 7 percent for 2012. Although they moderated towards the year end, gold prices were up sharply in the first and third quarters, aided by ultraloose monetary policy in the world's leading economies, bullion buying by central banks trying to diversify foreign reserves and concerns over the financial stability of the euro zone. The rally in those quarters gave gold almost all of its 6 percent annual gain, ensuring its unbroken run since 2001. Platinum, palladium and silver also counted as precious metals along with gold outperformed bullion for the year. Palladium has been on a bullish trend since November when refiner Johnson Matthey projected the biggest supply deficit in 11 years in the metal largely used in auto exhaust systems. The spot price of palladium hovered near $700 an ounce, up more than 7 percent for the year. Platinum has turned volatile after rallying earlier in the year on concerns about sprawling worker strikes in top producer South Africa. U.S. platinum's frontmonth contract fell to a fourmonth low before recovering to finish at $1,538 an ounce, up 10 percent for 2012. Silver was up 1 percent on the day and 9 percent on the year, hovering at just above $30 an ounce. - Reuters http://biz.thestar.com.my/news/story...4&sec=business | |||||||||
| Fiscal cliff fiasco/gold and silver rise Posted: 31 Dec 2012 03:44 PM PST | |||||||||
| A Massive Electromagnetic Pulse Could Collapse The Economy In A Single Moment Posted: 31 Dec 2012 02:49 PM PST
Most Americans are totally clueless about what an EMP attack could do to this nation, but the threat is very real. There was even a congressional commission that studied the potential effects of an EMP attack on the United States for eight years...
Dr. William Graham was the chairman of that commission, and he says that an EMP attack could knock the United States back into the 1800s in just a single moment...
Unfortunately, very few of us are equipped to survive in such an environment. We have become incredibly dependent on technology, and most Americans would have no idea how to do something as simple as growing their own food. Most people would be in a very serious amount of trouble in a very short period of time. An article by Mac Slavo detailed some of the things that we could expect in the aftermath of a massive electromagnetic pulse...
Are you prepared for such an event? If not, why not? And actually, high altitude nuclear explosions and solar storms are not the only things that could produce sizable EMP bursts. For example, the U.S. military has developed "a directed electromagnetic pulse gun" that can take out all electronics within a limited area. This kind of weapon can be fired from a plane, a cruise missile or even a drone. The following is from a recent WND article...
Other nations such as Russia and China are busy developing similar weapons. The ability to instantly take out the electronics of the enemy would be a very powerful advantage. Even North Korea has been working on this kind of technology. According to Newsmax, it is believed that they may have tested a "Super-EMP" weapon back in 2009…
As this technology becomes more widespread, it will soon be accessible to just about everyone. You don't actually need a nuclear weapon to set off a massive electromagnetic pulse. A non-nuclear pulse generator can do the same thing. If you set one off next to a power station you could potentially take out the electrical grid for an entire region. Terrorist groups and lone wolf crazies could even use portable radio frequency weapons to do a tremendous amount of electromagnetic damage over a more limited area. The following is from a recent article by F. Michael Maloof...
Constructing a radio frequency weapon is not that difficult. In fact, you can find instructions for how to build them on the Internet. People need to realize that we live in a world where technology is absolutely exploding and we are dealing with threats that previous generations never even dreamed of. As the world becomes increasingly unstable, it is inevitable that these kinds of weapons will be used. It is only a matter of time. What will life look like after an EMP weapon is used? That is something to think about. And we also need to keep watching the sun. It could produce a massive electromagnetic pulse at literally any moment. As I have written about previously, scientists tell us that it is only a matter of time before we are hit with a technology-crippling solar super storm. Most people don't even realize that the massive solar storm of 1859 fried telegraph machines all over Europe and North America. If such a storm hit us today, the damage would potentially be in the trillions of dollars. The following is from a recent New York Times article…
By the way, 2013 is the peak of the current solar cycle. So we are moving into a time period when conditions will be very favorable for solar storms. Let us hope that we are never hit with a massive electromagnetic pulse that is strong enough to take out all of our electronics. But if it did happen, and all the lights went out for good, what would you do? Please feel free to share your thoughts by leaving a comment below... | |||||||||
| Reports: NO DEAL- US to Plunge Off Fiscal Cliff Posted: 31 Dec 2012 02:01 PM PST *Breaking Reports indicate that the House will NOT vote on any potential Senate fiscal cliff deal today, which means that the US will be plunging full speed ahead over the fiscal cliff in approximately 7 hours. In other news, the US just officially breached the statutory debt ceiling. Happy New Year America! Looks like 2013 [...] | |||||||||
| Posted: 31 Dec 2012 12:30 PM PST Read the Friday Afternoon Wrap-Up for 12/28/2012 and the Monday Morning Commentary for 12/31/2012 In last December's "2012 EXPECTATIONS," I expressed reluctance to predict near-term events. Frankly, I find most "year-ahead" forecasts to be USELESS; particularly when utilized as marketing tools rather than honest thought pieces. I feel no differently of this age-old rite of the financial industry; so again, I am caveating my "forecast" with the following disclaimer…
That said, I reviewed my 2012 forecasts and found them to be pretty close to reality – by essentially ALL metrics – per the bullet points below…
Frankly, the ONLY thing I did not gauge correctly was the extent TPTB would intervene to prevent the inevitable from occurring. That is why I was incorrect about points #7 and #10 – while being DEAD ON about the other eight. Going into 2013, the aforementioned inevitability appears FAR MORE acute than a year ago. That is, Currency Collapse, Hyperinflation & Social Unrest are GUARANTEED to spread through the Western world; with the only question being when. Will it be 2013, or will TPTB survive another – likely traumatic – year or two before the END GAME expresses itself in 2014 or 2015? Frankly, I have no idea; although the list of potential "swans" – black, white, or otherwise – grows longer each day. Thus, I have decided to "go with my gut" on forecasting 2013; that is, to utilize the ultimate in extrapolation bias – by giving the EXACT same forecast as a year ago! Sorry to disappoint those hoping I'd predict WAR – or PEACE, for that matter – as I haven't a clue what will ultimately occur. However, I have learned well that "the trend is my friend;" and given what I view as a dramatic deterioration in global political, economic, and social trends over the past 12 months, "the trend" should only GAIN momentum in 2013. Frankly, the only real question I have is whether TPTB will still have the ability to disprove points #7 and #10; as only massive MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA can prevent market volatility and significant asset losses. And I'm not talking the "2012 level" of such intervention; but a new, "amped-up 2013 level" that puts 2012 to shame. Can they do so without DESTROYING confidence – and with it, countless fiat currencies? I don't know, and I'm TERRIFIED to find out. PROTECT YOURSELF, and do it NOW! Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.Similar Posts:
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| The Three Legs of the Precious Metals Bull: Part II Posted: 31 Dec 2012 10:50 AM PST In Part I, readers were again reminded of two of the primary reasons we should all be converting our decaying paper currencies to gold and silver. Currency dilution and price-suppression are realities which don't merely suggest that bullion prices might rise in the future, but rather indicate why they must rise substantially. However, precious metals investors don't have to limit themselves to just those two reasons why bullion prices must rise dramatically over the longer term. There is a "third leg" to this argument which is an equally powerful dynamic, and also unequivocally certain to lead to much higher gold and silver prices. Demographics: I refer to the third leg of the precious metals bull as "demographics", but in actuality this is just a reference to some of the extremely potent supply/demand fundamentals which are certain to drive bullion prices much higher. In the global economy, it is common knowledge that there is a relentless transfer of wealth (and economic power) from West to East, as the thriving economies of Asia have real economic growth and real income growth amongst their populations. In China, per capita income was only around $1,000/year (USD) in 2003. By 2011, that figure had exploded to nearly $3,500 (USD) per person, and China's government is expecting a further doubling of that total by 2020. Given the explicit recommendation by official (i.e. government) media for the Chinese people to invest those rising incomes in bullion, we don't simply suspect that Chinese bullion demand will continue to increase; we can be certain of it. In India, per capita income finally crossed the $1,000/year threshold in 2011, which has already unleashed a wave of discretionary consumption; as low debt-levels/high savings and a low cost of living mean that Indian households are already rising above a subsistence existence at even these modest income levels. However, Indians were voracious consumers of bullion even before they rose above this subsistence level, as their peasantry (who lack access to banking services) use their bullion holdings (generally in the form of jewelry) as their means of saving their wealth. This deep, cultural affinity for bullion is obviously unlikely to diminish as incomes rise further. Instead, as indicated in a recent commentary; India has a huge, national gold-deficit – requiring the importation of hundreds of tons of bullion per year to satisfy domestic demand. With silver also widely held among the populace, there is a large silver deficit as well. Meanwhile, in Indonesia – another very large Asian population with rising incomes and a growing economy – gold currency has already been introduced into the economy several years ago. And the appetite for gold in the Middle East petro-economies is nothing short of legendary. This is still another demonstration of the general understanding in Asia of a principle which is (as of yet) beyond the ken of Western Sheep: gold is money; paper is merely currency. |
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