Thursday, December 24, 2009

There Is No Gold Bubble

John Embry of Spott Asset Management writes as to why there is no bubble in gold:

"Today, the western central banks are discovering . . . that the
manipulation of the free market process ultimately fails"

Gold bull has many years, thousands of dollars to go

For at least the past 15 years,
Western central banks have
been flooding the market with
massive quantities of gold, pri-
marily by leasing it surrepti-
tiously to their bullion-bank
cronies. Ostensibly that portion
of their activities, which was
transparent (i.e., direct sales),
was for reserve diversification.
However, the real motive for
their behavior was to depress the
price of the yellow metal, there-
by reducing critical scrutiny of
their increasingly reckless mon-
etary policy, ensuring that inter-
est rates remained at low levels
and allowing the U.S. dollar to
retain its supremacy.
Accordingly, I find it almost
nauseating that various pundits
are currently referring to gold as
overpriced and in a bubble phase.
In reality, gold remains in a
stealth bull market that will have
seen nine consecutively higher
year-end closes at the end of 2009.
Despite this, it has attracted
very little attention from the in-
vesting public in general. The
dedicated goldphile has partici-
pated throughout and a number
of sophisticated financial players
have come on board recently, the
latest being the legendary trader
Paul Tudor Jones, but the average
investor remains blithely un-
aware at this juncture.
It is instructive to remember
that at the end of the last bull
market in 1980, people were lined
up around the block outside the
Bank of Nova Scotia in down-
town Toronto to purchase physi-
cal gold. Today, the only lines
that have formed are outside em-
poriums set up so the unsuspect-
ing public can unload their gold
jewelry for cash. To have a bubble
of any significance, there has to
be wide public belief and it cer-
tainly isn’t on display in the gold
market at present.
More importantly, ...

[More at the above link]

Wednesday, December 23, 2009

The US Dollar Generally Acts Inversely To Gold

The US dollar generally acts inversely To gold and silver, and it sure as heck is not going up other than the occasional bear market rally like right now. There is a lot more to go on the down side.

This generally holds true for any other governments that are devaluing their fiat tokens; thus the price of gold and silver is going up on most other government fiat tokens also, since the ten year old bull markets in gold and silver started.

Jim Rogers and Marc Faber See Disaster Looming, Blame The Fed

Legendary investors Jim Rogers and Marc Faber have similar outlooks on the financial crisis and the efforts of the Federal Reserve to revive the U.S. economy. What do they think of the Fed's quantitative easing policy? In a word, it is a recipe for disaster.

According to Rogers, governments have not addressed the underlying problems which triggered the crisis, but instead have "flooded the world with money." He argues that trying to solve the problem of too much consumption and too much debt with more consumption "defies belief," and will result in epic failure.

Faber's outlook echoes the sentiments of Mr. Rogers. He says, "If we agree that excessive credit and excessive leverage led to the crisis, then what the Federal Reserve is doing is giving a wrong medicine to the patient—they are giving the drug addicts more drug instead of sending them to rehabilitation, which is not good for the economy. So I think that the whole policy will eventually end in another disaster but we don’t know when and many things can happen in between."

* * *

John Williams' Shadow Government Statistics
"Analysis Behind and Beyond Government Economic Reporting"
has released to non-subscribers the "Depression Special Report - August, 1st, 2009"


Number 52

August 1, 2009


Current Economic Downturn Is Worst Since Great Depression

Recession Started a Year Earlier Than Official Reckoning

Business Contraction Triggered Systemic Solvency Crisis
Not the Other Way Around

Still Heavily Gimmicked, Post-Revision GDP Shows More Realistic Numbers

Economic Crisis Is Far from Over



U.S. Economy Is in a Multiple-Dip Depression. The grand benchmark revision of the national income accounts on July 31, 2009 confirmed that the U.S. economy is in its worst economic contraction since the first downleg of the Great Depression, which was a double-dip depression. The current economic downturn increasingly will be referred to as a depression, and it is far from over. There will be intermittent blips of new activity, such as the current cash-for-clunkers automobile giveaway program that appears to be generating a one-time spike in auto sales. Yet, this downturn will continue to deteriorate, proving to be extremely protracted, extremely deep and particularly nonresponsive to traditional stimuli. ...

The rest is at this link.

* * *

International finance is sooooooo complicated. Nope. It's not. A five year old can understand it:

* * *

Over at Mover Mike:

Rickards remarked: “When you own gold you’re fighting every central bank in the world.”

That’s because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that’s why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.

As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.

* * *

This current rally in the US dollar and correction in gold and silver is just temporary. Nothing to worry about. There are no bubbles in gold or silver. Governments still have a lot more damage ("quantitative easing"/"stimulation"= further damage) to do to their fiat tokens.

Thursday, December 17, 2009

The US Dollar Goes Up AND Gold Goes Up, Too

Governments are going bankrupt. Bets and debt are being called, probably US dollar denominated. Thus a demand for dollars. The US dollar is going up BUT gold goes up, too. Gold, silver, atoms, stuff are being more highly valued than paper or digital financial instruments, particularly more than government fiat (order) tokens. More and more people are realizing that real safety, insurance lie in gold and silver; that governments can not be trusted with fiat paper/digital tokens. When a government's back is against the wall, it will screw anybody and everybody in an attempt to hang on to its power by creating more tokens out of thin air. The scene right now has been repeated over and over in the past. It's nothing new. There is a lot more of this to come.

Think about this. Many people that vote in the US expect a president to "manage" the economy. They don't understand that that is not possible (read Hayek's _Fatal Conceit_ in addition to _The Road to Serfdom_). Some people elected a president that said before he was elected that he did not know anything about economics (and expect him to manage the economy). More recently he said that we cannot expect to spend our way out of this economic situation. And, just the other day, he reversed himself and said that we are going to have to spend our way out of this economic situation. Insanity, theft and con jobs are ruling in the US. Who in their right mind would want shares of USA incorporated, shares being the US dollar, particularly since the US government expects to spend an additional 1.5 trillion dollars this fiscal year that they don't have. Where are they going to get those dollars from?

This is rare, panicky dollar/gold action.

After an 8-9 year bull market in gold and silver a few people are just starting to wake up, just starting to get what is happening; that a financial/economic system can only take so much debt. That there is a price to be paid when governments add even more debt to an amount that is too much to begin with. A government fiat token can not be created without that amount of debt being created first either by the treasury or the central bank. When all kinds of financial instruments and government "money", "currencies", and other financial instruments start failing; that the last resort is atoms of gold, silver, farm land, oil, etc.

* * *

The US government has to roll over, refinance (because the US Treasury is broke) over 2 trillion dollars of debt. Plus, it has to finance an about 1.5 trillion dollar deficit in this coming fiscal year. Who is going to buy over 3.5 trillion dollars worth of debt from the biggest, baddest, record breaking, incredibly irresponsible debtor in the world?

The rest of the world's economies are having a tough time, therefore there simply are not enough savings in the world to buy US debt like there used to be. It looks like it is time for the Fed to play "make believe" "let's pretend", accepting I.O.U.s from the US Treasury, putting them on the Fed's books as an asset beefing up their "reserves", allowing them to create more US dollars out of thin air and sending them over to the US Treasury in return for their debt. It's fantasy time, in a big way, for the Fed and the US Treasury. The more dollars they create, the more **value** they steal that is stored in existing dollars. What a huge scam/heist, which is the whole point to having a central bank to begin with.

* * *

"The U.S. is third worlding."
Going South

* * *

Time Magazine gives Ben Bernanke the Person Of The Year Award. No kidding. A man with no banking experience, no financial market experience and no business experience. The text on Time's web site about this award is completely mindless. That should reflect who reads Time. That is as dumb as giving Obama the peace prize as he increases war spending. Insanity rules out there. Ya can't make this stuff up. Truth is stranger than fiction.

* * *

U.S. already $292 bln in the red this year - CBO

* * *

Wait till most people wake up to this fact. "There is no rush like a gold rush.". Amongst a few, panic is setting in. When "money junkies" control a government, watch out!

Wednesday, December 16, 2009

Gold Is Looking Bullish

Nothing says that gold can not go lower here but it sure is looking bullish. The shares (equities) are suggesting the same thing.

Jim Rogers in a December 10 interview:

He says he likes silver better than gold, that central banks have turned from sellers to buyers, and, that there is no bubble here in gold.

Gold is trading nothing like it has in all the years since the bull market in gold began. Things have really changed. The big boys are paying attention, taking action and taking on the anti-gold cartel. The NY futures' prices show that.

Thursday, December 10, 2009

The HUI and Gold

The AMEX's HUI (gold bug index) is suggesting that gold is near its low for this pull back.

First, here's the big picture:

About 2 years ago, people were buying gold/silver shares as the HUI approached 500-525. Then the HUI took a big plunge down to around 150. What percent of people involved in this huge plunge were not vowing to get the heck out when the HUI made it back to break even? Not many. Most/many want out after regaining a break even position. It took almost 2 years for them to recover. That's a lot of emotional pain for a long time. No wonder the HUI is correcting/reacting after making it back to its old highs, and then backing off.

Now for a 12 month chart:

The September and October highs around 450 offer some support for the HUI now.

The HUI's channel:

The Dollar Bubble - if you are new to the scene and want to get up to speed on the big picture real quick like (about 30 minutes):

"Clowns to the left of me. Jokers to the right...."
"Trying to make some sense of it all. But I can see that it makes no sense at all."
"Got the feeling that something ain't right."
- Steelers Wheels

What ever you do, don't chicken out here at this level because many of the developed economies are still crashing, are still being ruined despite what the controlled financial Muppets on TV and the controlled heads of state say in the press. Both those groups are from moron land, gangster bankster land and gangster government land. A number of years from now, people will be in awe at the level of the HUI. The gold and silver bulls have years to go. Heck, they will be in awe of the gold and silver prices, too.

Wednesday, December 09, 2009

Gold, US Dollar, Celente

Gold is correcting/reacting to the small rise in the US dollar. Also, gold got up near the top of the two parallel lines that form a channel. Big deal. To be expected. Bull markets in gold and silver do not go straight up. Bull markets make higher highs and higher lows.

The head and shoulders formation of gold's over one year long deep correction say that gold is going to $1,300 at least, probably more for 2010. Do not be surprised if it is a lot more.

A recent interview of Gerald Celente; about one week old:

There is a competitive devaluation of most government fiat tokens going on out there around most of the world.

Both *fear* and *greed* are developing out there. These can do wonders to the price of gold and silver. And, do not worry about silver. It used to be about 16 times more plentiful than gold. Now it is about 5-6 times more rare than gold because of all the industrial uses over the decades that have been found for it, unlike gold. That and the fact that it is still real actual money is virtually unknown in the English speaking world for starters. Wait till the world wakes up to the reality of how 1.) rare silver is and that silver is 2.) actual real money. Unlike gold, silver is classified by some governments and industries as a "strategic metal".

Friday, December 04, 2009

What Is Reality? Two Gold Prices.

There are inflation adjusted gold prices and nominal gold prices.

If nothing changes in a residential neighborhood in the US over 10 years and the price of a house doubles in 10 years, it is not because the value of the house increased. The value of the house stayed the same. The doubling of the price (in the US) is due to the US dollar decreasing by 50%. So, the inflation adjusted price of the house stayed the same while the nominal price doubled. This principal holds true anywhere in the world.

The same holds true for other things like gold and silver, except sometimes they can go up in real terms a lot in addition to their nominal price increasing just to keep pace with the devaluation of the US dollar.

Nominal price:

True inflation adjusted prices via Shadow Government Statistics:

* * *

Banana Ben being taken to the wood shed by Bunning. He lays reality on banana republic Ben with no holds barred:

Senator Bunning Statement On The Re-Nomination Of Ben Bernanke To Be Chairman Of The Federal Reserve
Senate Banking Committee
Thursday, December 3, 2009

As Prepared For Delivery:

Four years ago when you came before the Senate for confirmation to be Chairman of the Federal Reserve, I was the only Senator to vote against you. In fact, I was the only Senator to even raise serious concerns about you. I opposed you because I knew you would continue the legacy of Alan Greenspan, and I was right. But I did not know how right I would be and could not begin to imagine how wrong you would be in the following four years.

The Greenspan legacy on monetary policy was breaking from the Taylor Rule to provide easy money, and thus inflate bubbles. Not only did you continue that policy when you took control of the Fed, but you supported every Greenspan rate decision when you were on the Fed earlier this decade. Sometimes you even wanted to go further and provide even more easy money than Chairman Greenspan. As recently as a letter you sent me two weeks ago, you still refuse to admit Fed actions played any role in inflating the housing bubble despite overwhelming evidence and the consensus of economists to the contrary. And in your efforts to keep filling the punch bowl, you cranked up the printing press to buy mortgage securities, Treasury securities, commercial paper, and other assets from Wall Street. Those purchases, by the way, led to some nice profits for the Wall Street banks and dealers who sold them to you, and the G.S.E. purchases seem to be illegal since the Federal Reserve Act only allows the purchase of securities backed by the government.

On consumer protection, the Greenspan policy was don’t do it. You went along with his policy before you were Chairman, and continued it after you were promoted. The most glaring example is it took you two years to finally regulate subprime mortgages after Chairman Greenspan did nothing for 12 years. Even then, you only acted after pressure from Congress and after it was clear subprime mortgages were at the heart of the economic meltdown. On other consumer protection issues you only acted as the time approached for your re-nomination to be Fed Chairman.

Alan Greenspan refused to look for bubbles or try to do anything other than create them. Likewise, it is clear from your statements over the last four years that you failed to spot the housing bubble despite many warnings.

Chairman Greenspan’s attitude toward regulating banks was much like his attitude toward consumer protection. Instead of close supervision of the biggest and most dangerous banks, he ignored the growing balance sheets and increasing risk. You did no better. In fact, under your watch every one of the major banks failed or would have failed if you did not bail them out.

On derivatives, Chairman Greenspan and other Clinton Administration officials attacked Brooksley Born when she dared to raise concerns about the growing risks. They succeeded in changing the law to prevent her or anyone else from effectively regulating derivatives. After taking over the Fed, you did not see any need for more substantial regulation of derivatives until it was clear that we were headed to a financial meltdown thanks in part to those products.

The Greenspan policy on transparency was talk a lot, use plenty of numbers, but say nothing. Things were so bad one TV network even tried to guess his thoughts by looking at the briefcase he carried to work. You promised Congress more transparency when you came to the job, and you promised us more transparency when you came begging for TARP. To be fair, you have published some more information than before, but those efforts are inadequate and you still refuse to provide details on the Fed’s bailouts last year and on all the toxic waste you have bought.

And Chairman Greenspan sold the Fed’s independence to Wall Street through the so-called “Greenspan Put”. Whenever Wall Street needed a boost, Alan was there. But you went far beyond that when you bowed to the political pressures of the Bush and Obama administrations and turned the Fed into an arm of the Treasury. Under your watch, the Bernanke Put became a bailout for all large financial institutions, including many foreign banks. And you put the printing presses into overdrive to fund the government’s spending and hand out cheap money to your masters on Wall Street, which they use to rake in record profits while ordinary Americans and small businesses can’t even get loans for their everyday needs.

Now, I want to read you a quote: “I believe that the tools available to the banking agencies, including the ability to require adequate capital and an effective bank receivership process are sufficient to allow the agencies to minimize the systemic risks associated with large banks. Moreover, the agencies have made clear that no bank is too-big-too-fail, so that bank management, shareholders, and un-insured debt holders understand that they will not escape the consequences of excessive risk-taking. In short, although vigilance is necessary, I believe the systemic risk inherent in the banking system is well-managed and well-controlled.”

That should sound familiar, since it was part of your response to a question I asked about the systemic risk of large financial institutions at your last confirmation hearing. I’m going to ask that the full question and answer be included in today’s hearing record.

Now, if that statement was true and you had acted according to it, I might be supporting your nomination today. But since then, you have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.

Instead of taking that money and lending to consumers and cleaning up their balance sheets, the banks started to pocket record profits and pay out billions of dollars in bonuses. Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives. You are repeating the mistakes of Japan in the 1990s on a much larger scale, while sowing the seeds for the next bubble. In the same letter where you refused to admit any responsibility for inflating the housing bubble, you also admitted that you do not have an exit strategy for all the money you have printed and securities you have bought. That sounds to me like you intend to keep propping up the banks for as long as they want.

Even if all that were not true, the A.I.G. bailout alone is reason enough to send you back to Princeton. First you told us A.I.G. and its creditors had to be bailed out because they posed a systemic risk, largely because of the credit default swaps portfolio. Those credit default swaps, by the way, are over the counter derivatives that the Fed did not want regulated. Well, according to the TARP Inspector General, it turns out the Fed was not concerned about the financial condition of the credit default swaps partners when you decided to pay them off at par. In fact, the Inspector General makes it clear that no serious efforts were made to get the partners to take haircuts, and one bank’s offer to take a haircut was declined. I can only think of two possible reasons you would not make then-New York Fed President Geithner try to save the taxpayers some money by seriously negotiating or at least take up U.B.S. on their offer of a haircut. Sadly, those two reasons are incompetence or a desire to secretly funnel more money to a few select firms, most notably Goldman Sachs, Merrill Lynch, and a handful of large European banks. I also cannot understand why you did not seek European government contributions to this bailout of their banking system.

From monetary policy to regulation, consumer protection, transparency, and independence, your time as Fed Chairman has been a failure. You stated time and again during the housing bubble that there was no bubble. After the bubble burst, you repeatedly claimed the fallout would be small. And you clearly did not spot the systemic risks that you claim the Fed was supposed to be looking out for. Where I come from we punish failure, not reward it. That is certainly the way it was when I played baseball, and the way it is all across America. Judging by the current Treasury Secretary, some may think Washington does reward failure, but that should not be the case. I will do everything I can to stop your nomination and drag out the process as long as possible. We must put an end to your and the Fed’s failures, and there is no better time than now.

The rest is here. Access to this piece on the federal government's server seems not to have been available for a couple of days now, thus the long quote. Keep trying. Access to: is not available right now either. His speech/testimony is quite factual and damning. You can see from it why the biggest heist/robbery in the history of the US of value stored in US dollars and US dollar denominated financial instruments is happening. NONE of this would have been possible without the existence of a central bank, with people free to choose whatever 1.) money and 2.) currencies they chose to use. The combination of government and bankers can be litterally deadly to many, many people; particularly those who can not understand/see what is happening.

Or, now, it's on youtube:

* * *

Since around 2000-2001 despite US Treasury debt being considered a "safe haven", bonds have been doing lousy relative to gold. Still, most people have not been paying attention. Amazing. Wait till the masses get clued in.

There are still plenty more private sector and government sector defaults to come. Wait till both greed and fear by the masses seriously enter the gold and silver markets where true safety lies. There is no bubble in gold/silver. An awful long way to go on the up side has to happen first

Wednesday, December 02, 2009

Gold, Silver and The Fed

The only point for any government to have a central bank is for looting the ignorant, the clueless. Now a days in the US at least, that includes the middle class, which will virtually disappear as well as a significant percent of the wealthy. President Andrew Jackson knew this and accomplished the closing of the second central bank that the US had. It had a much shorter life than the current [The Fed] central bank has had. Of course, Americans were much better educated in those days with virtually all schools being private. And, of course they were much better off with no central bank. After the end of the second central bank, American's standard of living increased faster than ever in the history of the world.

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world, no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government run by the opinion and duress of a small group of dominant men" … President Woodrow Wilson, in reference to the Federal Reserve Act of 1913

John Williams over at Shadow Government Statistics has a new "Hyperinflaton Special Report (Update 2010)": (for subcribers)
• Economy and Financial System Face Eventual Great Collapse
• Government and Fed Actions Have Narrowed Hyperinflationary Great Depression Timing to Next Five Years
• High Risk of Ultimate Dollar Crisis Unfolding in Year Ahead

"How has the hyperinflation outlook changed since the Hyperinflation Special Report was published in April 2008?" Such is the most frequently asked question I receive these days.

The answer is that the outlook is little changed, since the following report outlines the basic issues and limited options for the U.S. government that were in play well before the current crises broke. The actions taken since by the federal government, U.S. Treasury and the Federal Reserve, in response to the still-deepening recession and ongoing systemic solvency woes, just exacerbated the long-range problems described in the report. The official actions likely have advanced the timing of the hyperinflation to the much nearer future, perhaps within the next year or two. Since September 2008, the Federal Reserve has been attempting to debase the U.S. dollar at an extraordinary pace, and such now is recognized widely among the major U.S. trading partners.

Issue Number 41
April 8, 2008

is available to the public here

* * *

There is so much fraud in the government and financial systems now a days, who / what do you trust?

Gold and silver for starters. The speed at which gold and silver are moving on up is a bit unnerving. They haven't traded like this since the bull market started, although the 2% cap on a day's move is still able to be put on by the Powers That Be. We'll see how long that lasts.

By the way, last week:

"The other item this week is that the US Mint ran out of one ounce "Eagle" bullion Gold coins this week, the second time this has happened in a bit more than a year. The supply simply could not keep up with the demand." - Bill Buckler, The Privateer

Saturday, November 28, 2009

Gold vs US Treausry Bills

Gold, over a good number of decades, has beat US Treasuries of any maturity handily. No contest. US Treasuries are something "safe" that people run to when they feel threatened. I guess they do not do facts. One of these days, that is all going to change.

Actually the real negative rate is a lot lower since the CPI (consumer price index) is rigged to be unrealistically low.

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people." - Fredrich August von Hayek

"The gold standard has one tremendous virtue: the quantity of the money supply, under the gold standard, is independent of the policies of governments and political parties. This is its advantage. It is a form of protection against spendthrift governments." - Ludwig von Mises

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." - Alan Greenspan, 1966

"If you hold dollars, [or US Treasury debt] the Fed and the Treasury can confiscate your wealth, virtually at will. That is real power.

And, most people put up with this. Amazing! Must be the child like minds of adults. Plenty of people know they have a choice of keeping value stored in dollars in the hands of a banker, or in metal (gold/silver) and choose banks. Part of that may be that many do not feel comfortable being responsible for the safe keeping of their own savings. When people have been doing this type of thing for too long, politicians, gangster banksters and others in the financial arena start to think about ripping off the fools, suckers. That is what is going on now, big time. And, still, you ain't seen nothing yet. The Fed has already increased the base "money" supply by over 100%. They did that within a 6 month period. There is a baked in the cake 50% devaluation of the dollar at some point further out in time, for starters probably.

Just as the CPI numbers are rigged to the downside, so are the unemployment statistics.

Unemployment Rates By County in the US.

This map shows unemployment rates spreading over the country [US] from January, 2007 to present.As bad as this looks, it is twice as bad according to Shadow Stats' numbers. SS uses the much more realistic method that the federal government used to use before the Clinton administration.

Another picture of unemployment:

There is and will be even more incentive for the federal government to increase spending or at least keep it elevated, all when it is already broke, so that it has to keep borrowing. At some point, it will just be able to borrow from the Fed only. The Fed will create dollars out of nothing to loan to the Treasury, increasing the supply, devaluing the US dollar.

Having gold and silver in your own hands is a no brainer.

Thursday, November 26, 2009

Gold and the US Dollar

Gold is going up. The US dollar is going down. Gee, wonder why. Not that gold can not move to the upside on its own.

Amazingly, the air head Muppets on CNBC are taking Ron Paul seriously all of a sudden. Could it have been the relentless rise of gold over the last month that has forced them to make an about face, 180 degree turn from ignoring gold so that they won't be consider stupid or out of touch and therefor ignored?

"They used to cut away from him during broadcasts of congressional hearings when he got to question Federal Reserve officials. But this week CNBC's "Squawk Box" program did a wonderful 14-minute interview with U.S. Rep. Ron Paul, R-Texas, sponsor of the increasingly popular legislation to audit the Fed. The interview treated the subject with substance unusual for television." - Chris Powell, Daily Dispatches

Paul quotes from the interview:

"Gold is telling us that the dollar is in danger."

"The Fed is going to self destruct because they're going to destroy the dollar."

"Last week they bought up $75 billion [of Treasury debt] and foreigners bought up $11."

Tuesday, November 24, 2009

Peter Schiff on Gold, Geithner, Roubini, the Fed, Housing

Peter Schiff on his end of the week wrap up last Friday comments on gold, Geithner, Roubini, the Fed, the federal government continuing the conditions that enabled bad housing loans to be made. To do this, the financially broke federal government has to borrow more dollars where ever it can get them from. Right now it is mostly from the Fed which created them out of thin air. To do this, though, the Fed needs an I.O.U. from the US Treasury, thus creating more debt in a system that already has waaaaaay too much.

That's more dollars (USD), and more **debt** by the boozos, the con artists, that are supposedly trying to fix the problem.

The reasons for having plenty of silver and gold just keep increasing. Then again, studying the history of humans and governments, this should not be too surprising. The other thing to stock up on some are paper fiat tokens rather than digital fiat tokens for the possibility of ATMs, credit cards and banks shutting down for a period of days. Paper tokens might even develop a premium over digital tokens. We'll see.

If there are long gas lines, because of price controls, you would probably be sent to the head of the line if you pay with silver.

Saturday, November 21, 2009

Murphy Explains Some Fundamentals Of the Gold Bull Market

Bill Murphy, Chairman of GATA, clues people into some of the fundamentals of the gold bull market that is underway.

Amazingly, this interview is on Bloomberg (the mass media)! The boyz/cartel must be properly positioned to make it on the upside now. Bernie Lo in Hongkong interviews Bill Murphy in Dallas, Texas.

The sound is low. If you plug ear phones into your machine, you can hear it better. The value of the information is worth putting up with the low sound. This interview consists of 3 parts.

Asia Confidential - Bernie Lo interviews Bill Murphy, Chairman of GATA November 2009 Part 1

Part 2 of 3
Part 3 of 3

(Open in another tab to enlarge)

The Golden Sextant

Viva la Restoration
Remarks of Robert K. Landis

In Austrian teaching, money originates in the market: …all money has originated, and must originate, in a useful commodity chosen by the free market as a medium of exchange. The unit of money is basically just a unit of weight of the monetary commodity – usually a metal, such as gold or silver. Government has no role in the definition or selection of money, let alone its creation, price or quantity. That is the market’s function.

In Keynesian theory, by contrast, money originates in the state. Government has a total monopoly on money, starting with its very definition. It is not chosen in free exchange, it is imposed by force.

...bad ideas have bad consequences.


I believe it fair to say that as a society, we Americans have reached a dead end. We are bankrupt, and not just financially. Our leading institutions are corrupt and discredited. Our leadership class has betrayed its trust, openly and repeatedly.

Our financial and economic crisis will in due course lead to an intellectual and cultural crisis. We may yet avoid the fury and violence that have attended other paradigm shifts, other imperial collapses. But we will need to be very lucky indeed. That’s because on the one hand, this is about power which will not be voluntarily relinquished, and on the other, there is no reasoning with an angry mob.


In the meantime, what keeps the current system going?

You do.

You, meaning foreign investors, still lend us your savings. This just enables us to prolong the process, defer the resolution, and increase its ultimate cost.

When will it end?

Whenever you cut us off.

At some point, foreign holders will sell our debt in earnest, and buy gold with a conviction resembling panic.

And so, finally, I come to gold. This is, after all, a gold conference. Why then do I talk so much about politics?

Because I think it’s impossible to understand gold without understanding its political dimension. Gold is permanent, natural money, the antithesis of money made from nothing, money backed by force alone. It is a potent symbol of private property; of voluntary exchange taking place outside the control of the state; of limits on state power; and of resistance to the runaway state.

Left to its own devices, gold is the ultimate barometer of public confidence in government. It is also the ultimate means for ordinary citizens to opt-out of an oppressive, fraudulent system.

That is why gangsters who wield power in the name of the “people” always make ownership of gold a crime. So it was in France during the Revolution, in Germany during the Nazi era, in Russia during the Soviet era, in China during Mao’s rule, and in the United States from 1933 through 1974. It is why, even during periods when the ownership of gold is not outlawed, its price is ‘governed’, as one commentator puts it, or officially manipulated, as others of us put it.


We know from history and experience that once the free market has lost control over the definition and creation of money, individuals have lost their liberty.

That’s why neither a central bank nor fiat money find support in the Constitution of the United States, and why our monetary system, which has these two elements as its very foundation, is unconstitutional on its face.


Gold and Silver - Protection From A "Racket"

Here is organized crime at work:

Here is more organized crime at work:

Greenspan knew better. He used to hang out with Ayn Rand's crowd and was in business for himself although that one went down the tubes. He got the El Hefe job at the Fed just in time. Just another guy that went over to the "dark side". All Ben, the current puppet, knows is the world of academia. He has no business, banking, or financial market experience. What they figured he was good at was doing as he is told.

* * *

Of course things are not going too well for some of the boyz. Not one, but two of Madoff's buddies are dead (just an example). "Feel the love" on Wall Street/The Fed/Treasury/Congress/White House. There is no honer amongst thieves.


A Mafia Godfather finds out that his bookkeeper has cheated him out
of ten million bucks. His bookkeeper is deaf. That was the reason he
got the job in the first place.

It was assumed that a deaf bookkeeper would not hear anything that he
might have to testify about in court.

When the Godfather goes to confront the bookkeeper about his missing
$10 million, he brings along his attorney, who knows sign language..

The Godfather tells the lawyer, "Ask him where the 10 million bucks
he embezzled from me is."

The attorney, using sign language, asks the bookkeeper where the
money is.

The bookkeeper signs back: "I don't know what you are talking about."

The attorney tells the Godfather: "He says he doesn't know what
you're talking about."

The Godfather pulls out a pistol, puts it to the bookkeeper's temple
and says, "Ask him again!"

The attorney signs to the bookkeeper: "He'll kill you if you don't
tell him!"

The bookkeeper signs back: "OK! You win! The money is in a brown
briefcase, buried behind the shed in my cousin Enzo's backyard in

The god father asked the attorney, "Well, what did he say?"

The attorney replies: "He said you don't have the balls to pull the

* * *

As the famous Austrian economist Hans Sennholz wrote near twenty years ago;

"Sound money and free banking are not impossible, they are merely illegal. That is why money must be deregulated. The Gold standard will return as soon as people realize that honesty is the best policy.

As hope of ill gain is the beginning of the fiat standard, so is honesty the mother of the Gold standard. The Gold standard is as old as civilization. Throughout the ages, the Gold standard has emerged again and again because man needed a dependable medium of exchange."

* * *

The government schools (one of the planks of the Communist Manifesto) have been dumbing people down for so long that the rich (more often than not from buying government protection against competition) are only just getting what is going on in the world financially and economically. Only just realizing (after a bull market in gold and silver that started about 9 years ago, and was up in USD prices every year in a row) that even government protection that can be bought is no protection from what is coming. That only atoms, better the gold and silver types, can provide the proper protection.

And, wooooo unto those that think they are buying protection by buying "paper gold" like GLD, SLR (2 ETFs), futures (The Comex can not default? Oh, no, Joe. Say it ain't so Joe.), options, etc.

Friday, November 20, 2009

New All Time Gold High

The gold price and the silver price are going gang busters to the upside surprising most people, and still people are having a hard time believing there is anything sustainable about these moves to the upside in gold and silver. So be it. You can lead a horse to water but you can not make the horse drink the water.

Gold made an all time New York daily closing USD high.

Gold also made an all time New York weekly closing USD high.

On October 5, 2009, Robert Higgs gave the following speech at The Future of Freedom Foundation’s “Economic Liberty Lecture Series.” It is long (an hour and a half) and well worth it.

Robert Higgs is Senior Fellow in Political Economy for The Independent Institute and Editor of The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation.

Economic Liberty Lecture Series: Robert Higgs from The Future of Freedom Foundation on Vimeo.

Gold and silver look like dogs or horses being let out of the gates at a race track. Most people are not paying attention and have no idea what is happening in the really important gold and silver markets, let alone the why behind what is happening, lulled asleep by the bear market rally going on in general equities (a dangerous place to be). It's about time the gold and silver prices are making fast runs to the upside after such long base building periods of time. It would not be unusual for the gold price and the silver price to keep on heading up for the next 5-6 months for another good gain in a bull market that still has years left to it.

Does that "M" on the gold ring stand for money?

Sunday, November 08, 2009

Gold, Silver and US Treasuries

US bonds have been going up at a good rate since the early 1980s. This can not last much longer considering the number of USD being created out of thin air, which means an equal amount of debt is being created for each USD. This, when the problem is too much debt in the system to begin with. Nutty, crazy, incredibly irresponsible action! Why would the price of bonds keep going up as the US treasury keeps pumping out more and more of them? If people and governments around the world start selling them, watch interest rates / yields go up. Rates are one of the most powerful drivers to the upward trend of the price of gold and silver.
Now THAT is a scary picture of a bubble!


Jeffrey Rogers Hummel explains the reasons behind a possible default or partial default by the US government on its debt at:

AUGUST 3, 2009
Why Default on U.S. Treasuries is Likely


Increasing rates are one of the most powerful drivers to the upward trend of the price of gold and silver, and to a crashing economy. Increasing rates on debt are a major indicator of the gradual loss of principle due to too many of what ever was promised as repayment of the debt, in the US's case, USD because too many of them are being created out of thin air at the Fed central bank.

Inflation is not just a US problem. Many government treasuries/central banks are doing it.


Iceland says goodbye to the Big Mac


REYKJAVIK, Iceland – The Big Mac, long a symbol of globalization, has become the latest victim of this tiny island nation’s overexposure to the world financial crisis.

Iceland’s three McDonald’s restaurants — all in the capital Reykjavik — will close next weekend, as the franchise owner gives in to falling profits caused by the collapse in the Icelandic krona.

"The economic situation has just made it too expensive for us," Magnus Ogmundsson, the managing director of Lyst Hr., McDonald’s franchise holder in Iceland, told the Associated Press by telephone on Monday.

Lyst was bound by McDonald’s requirement that it import all the goods required for its restaurants — from packaging to meat and cheeses — from Germany.

Costs had doubled over the past year because of the fall in the krona and high import tariffs on imported goods, Ogmundsson said, making it impossible for the company to raise prices further and remain competitive with competitors that use locally sourced produce


Friday’s (Oct. 23) The Dennis Gartman Letter displayed some unusual enthusiasm for the gold story:

"When the "Jeremiads" of the "Hard Money" disdainful right-wingers become the order of the day, times are difficult at best. But we shall have to admit that the anti-deficit brawling of the "Hard Money" crowd that seemed for the past many decades to be nothing more than screeds is now coming true.

…now their wailing and gnashing of teeth is serving their followers well, and rather than being the fact that stopped clocks are right twice a day, perhaps those on the "Hard Money Far Right" are on to something as the deficit does not simply rise, it explodes."


World's richest & most successful speculator warns of great inflation

This is it. This is your last wake-up call... At a recent breakfast, John Paulson, the most successful speculator of the last 20 years, explained exactly how the great inflation will come to pass. Says Paulson: The banks will resume regular lending – thereby releasing all of the excess money supply into the system – within six to 24 months. Two or three years after that, we will see 12% annual inflation.

Paulson is recommending investing in gold. He's already placed more than $4 billion of his firm's assets in the metal. Why is Paulson building his position so early if he doesn't expect inflation to kick in for four years? Scarcity. Paulson notes, of the $200 trillion of investable assets in the world, only $800 billion is gold. You won't be able to get much of that $200 trillion into gold at any reasonable price. But that won't stop people from trying.

Friday, November 06, 2009

Gold, Celente, What's Happening

The economic/financial "shake, rattle and roll" is about 2 years old and is continuing. There are no green shoots. Those with decent stashes of gold and silver will feel less of it than those who are not prepared, which if current investor sentiment is any guide, most are not.

In 2007 global investments were about 200 trillion dollars worth. Now that may be down to 150 or even 100 trillion dollars worth. This one gold oriented money manager of 10s of billions of teachers pension funds estimates that in 2007 probably only about .4% of that was in gold or gold related investments. Wait till it dawns on the world where real safety is. There is no rush like a gold rush.


Below are links to a Gerald Celente interview on August 15, 2009, in 4 parts, by He is unusually angry, and for good reason. Celente is founder/director of Trends Research Institute. He has most of his savings in gold and little cash in a bank. Celente at Wikipedia.

Part 1/4
Part 2/4
Part 3/4
Part 4/4


Part of The Global Report from The Privateer



"Globalization and unfettered capitalism have been swept into the
history books along with the open-market theory of the 1920s, the
experiments of fascism, communism and the New Deal" (ie: interventionism).

Doesn't leave much, does it?

The Repeal Of Economic Law:

In January 1953, during his last week in office before handing over to President-elect Eisenhower, President Harry Truman issued his final "Economic Report". In it, he said this: "It is the purpose of the Employment Act (passed in 1946) to prevent depressions. The act stands as a pledge of the people voiced through their laws that never again shall any such sacrifice be laid on the altar of 'natural economic forces'. Thus, ...the act rejects the idea that we are the victims of unchangeable economic law."

Governments and the financial systems they control have been rejecting economic law ever since.

In its final form, the bill was diluted from the intent of its originators. It did not guarantee "full" employment. It did not enshrine President Roosevelt's "economic bill of rights" - including the right to a "useful and remunerative" job - in law. It did not set up a specific branch of the government to oversee the economy. What it DID do was to fix in the minds of the large majority of the American people the idea that it was both proper and necessary that their government RUN the economy.

The best proof of this is the statement from President Truman. It bears repeating: "Thus ...the act rejects the idea that we are the victims of unchangeable economic law." By the time this statement was made in January 1953, it was accepted without a murmur by almost all who heard it as a basic function of government. Economic law was deemed powerless in the face of government legislation.

Running The Economy - Into The Ground:

In 1909, 100 years ago, the US government did not "run" the US economy. It is true that it was tinkering at the edges with government land grants, railroad legislation, protective tariffs, "anti-trust" legislation and the like. But to measure the extent of this government meddling then as compared to now, only one fact is required. In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita.

Is it necessary to have increased per capita annual taxing, borrowing and spending 1300-fold in order to govern a little more than three times as many people? If it is a requirement of the government (and - sadly - most of the people) that it reject economic law, then yes it is. And even that is not enough, as witness the financial crisis we have been living through for the past two years.

Security Is Not "Social":

"Those who have an adult's recollection and ...understanding of the world which preceded WW I look back upon it with a great nostalgia. There was a sense of security then which has never since existed." (Benjamin M Anderson - Economics and the Public Welfare - 1949 - emphasis by The Privateer)

On the face of it, this is a most startling statement. Before WW I in the US, there was next to no vestige of government involvement in the economic and financial life of its citizens. The cradle and the grave certainly existed, but the vast majority of people made the passage from one to the other without support from government. And because the government lacked the means (see the 1909 US federal budget above) to provide support, it also lacked the means to "intervene" in the economic lives of its citizens. The period leading up to WWI in the US is the closest the world has yet come to a nation where state and economy were separate. It may seem "perverse" to most people today but THAT was the major reason why, to quote Mr Anderson again, "there was a sense of security which has never since existed."

It certainly does not exist today in the US or in any of the world's "developed" countries. The reason for this is very simple. WWI marked the end of an era in which both political and economic freedom had been steadily expanding. Today, we have been going in the opposite direction for almost a century. The current sorry state of global financial affairs is the inevitable end result. The means are running out but the idea lives on. Most people still see the government and its control of the economy as a necessary pre-requisite to their own well-being. In reality, the opposite is the case.


Increases in the US Treasury's deficit which means, since it's broke, increases in formal debt of the US.

Up $US 500 Billion in 2007.
Up $1 TRILLION in 2008.
Up just under $US 1.9 TRILLION in 2009.

This from the issuer of the world's reserve government fiat token. What's this say about the world's reserve token? Get out of it if you can, when you can, as you can.

The Congressional Budget Office CBO, is figuring trillion dollar plus deficits for the next 9-10 years. A wild and crazy situation.

When facism and communism are taking over in the US which is what's happening now, gold and silver, real actual money, will make a huge difference for those prepared.

Wednesday, November 04, 2009

HUI Index and Gold Possibilities.

The HUI gold bugs index of gold and silver related shares could very well be around 640 in 6 months:

There is no real telling how high gold can run up, but it has huge room to run. Expect really big volatility as gold runs up. Big moves both ways, up and down. This applies to silver, too.

"Be right. Sit tight."
- The great Jesse Livermore

Tuesday, November 03, 2009

Silver Could End Up Being Priced As High As Or Higher Than Gold

Mike Maloney - Gold should reach $15,000/oz!

Here is the link to see and hear Maloney explaining why.

At the moment, gold has a USD price over $1,000. Silver has a USD price under $20.

Here's the thing. It could be that the US Treasury has been leasing gold to other parties that in turn sell it for USD to invest in something else. If true, this could help explain part of the reason that gold has been so relatively cheap for so long; and still is, what with the friendly takeover of the US Treasury by Government Sacks. The other big reason being the western world's ignorance of the differences between money, currencies and fiat tokens. Not understanding the protection that gold and silver provide. Not understanding what they need protection from. Not understanding the world's current fractional reserve banking system. Not knowing any history that makes a difference.


"Much of the social history of the Western world over the past three decades has been a history of replacing what worked with what sounded good." - Thomas Sowell

"I actually think money is maybe the most fundamental idea that humanity has come up with. It's a 'universal bartering tool' that allows a person to concentrate on saving up for the future. -- Linus Torvalds, who wrote the Linux OS kernal

"People say money doesn't buy you happiness, but those people are usually people who don't have enough of it," -- Linus Torvalds, who wrote the Linux OS kernal

How many people in the western world think in the above terms?


Silver is found in the earth's surface about 14-16 times more often than gold. The above ground supply used to be about that much more than gold. That has all changed radically since many industrial uses have been found for silver, unlike gold. The industrial demand has radically used up much of the former above ground supply. Silver is now more scarce than gold.

Here's another thing to think about. If the US Treasury has in fact substantially less gold than it says it has, gold could go to a substantially higher price than Maloney's $15,000. Why is the US Treasury's gold account called "Deep Storage"?


"In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists." – Eric Hoffer, Union leader, Longshoreman, Philosopher

"Better to be on the fringe strategically planning than be in the middle of the fray getting trampled." - unknown

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” - Ludwig von Mises

Wednesday, April 26, 2006
Wiemar, Germany Gold and Silver Prices
German Mark prices of Silver and Gold from January 1919 to November 1923:

Saturday, October 31, 2009

The Recent Gold Price Action Is Saying The Fed And Other Western Central Banks Are in Desperation Samba Mode

Over the years governments have been selling their gold to keep the gold price down. To keep the canary in the coal mine from making noises. Well, they are running out of gold to sell. They can't make gold like they can fiat tokens. The US Treasury probably has well less than half of what they say they do. There has not been a public audit of the gold in the US Treasury since the '50s. Why would they change the name of the account that the gold is in, for the second time, to "Deep Storage". Because they sold their gold and took as collateral stakes of some kind in mining companies so that they now own gold in the ground that has not been mined yet? Future history will tell.

If you are not up to speed on this story/concept, check out

Bill H's opinion from Le Metropole Cafe
A site for the nitty gritty, the low down. The scoop.

"They can't do it again.

To all; if as I suspect the next leg of the GFC (global financial crisis) is unfolding now, what can we expect to see in the form of government response? More of the same? Can the Fed blow up its balance sheet again? Yes, and I feel sure they will. Can Treasury guarantee and borrow another $13 trillion or even more if necessary? I think not. What about the value of the Dollar? Stocks? Gold?

The "green shoots" lie as I call it is very long in the tooth and being disproven more and more on a daily basis. The only thing that has been accomplished since last fall has been a slowing of the economic and asset structure's decline and they bought some time. Yes we have had an inventory rebuild which will be the driving force behind positive quarterly GDP numbers that the brain dead will cheer and point to as "recovery". It is not. The next "resetting" of mortgage rates is again beginning and will be as bad or worse than what we saw last year. Commercial real estate loans from the "03-'06 timeframe are now coming due with property values declining and refinancings not available, this will be a disaster. The banking industry which cooked their books for Q2 and 3 will again be facing reality.

What happened last year to create "the perfect storm" is unfolding again but this time it's a little different. The banks are already financially crippled so it won't take much to push them over the edge. More importantly, the Treasury is bloated, debt drunk and thus crippled to the point where THEY will become the center of attention. Last year the Treasury put "the family jewels" on the line in order to "save the system". In reality, all they did was to buy some time. The Treasury is stuck! They already have huge borrowing needs just to keep the doors open and the system afloat, they do not have the ability to "borrow more" in order to whitewash "GFC 2".

In this next stage, the solvency and credit quality of the U.S. Treasury will come front and center. The fact is the U.S. is broke, period. We have been broke for quite some time but no one would say it. It didn't behoove anyone to say it so it wasn't said. This next wave of the GFC will make the U.S. bankruptcy too obvious for even an idiot to misunderstand. I expect the crisis to unfold similar in manner to what we saw in summer of '08. Negative announcements (insolvencies), bankruptcies, etc. will pop up left and right like popcorn kernels popping.

Next, we will hear about more fiscal stimulus, banking and systemic guarantees by the Treasury and Fed. BUT this is where it will be different from last year. The Treasury will have its credit shut off by the rest of the world, the Federal Reserve will be the sole buyer of Treasuries in their "virtuous circle" of monetization. Stocks will collapse, bonds will collapse and thus interest rates will explode. I believe the current "the Fed will tighten" fantasy may get a short lived Dollar rally started that will abort once sanity prevails and people realize that this is not an option. The market however WILL TIGHTEN for the Fed by liquidating Treasuries.

In short, the fears of all central bankers in an overlevered fiat world will come to fruition because this time it won't be about the banks, the insurers, car manufacturers, unemployment, housing, bankruptcies, states, nor municipalities. Yes, yes it will be about all of these but most of all it will be about the Treasury! The Treasury put themselves in the crosshairs for years and years by over leveraging themselves and then devaluing the currency with Fed help, and it worked for nearly 100 years. But they really did it this time didn't they?

For years the debt would increase even if they told us we had a surplus budget. They sold our Gold to quiet the alarm bells. They borrowed and spent and borrowed and spent because "that's the way they always did it". But they over did it and piled on so much debt that even a devaluation of 50% won't do the trick. The debt can NEVER be paid back in current Dollars. What they have done over the last couple of years was suicidal, unfortunately it is our own funeral we will be watching. Regards, Bill H."


Peter Schiff's wrap up for the week (Oct. 30, 2009):


Thursday's gold price action was a serious "in your face" "go the hell" to western hemisphere central banks. Entities are getting more desperate to get their hands on the real thing. Gold itself. No shady ETFs or anything of that sort. It's getting so almost nobody can be trusted on Wall Street. Since the older "developed" economies are either in big trouble or literally broke, in the process of moving down to third world status, gold is moving from the Western hemisphere to the eastern hemisphere. He who has the wealth has the gold. He who has the gold makes the rules. It's paradigm shift time.

Thursday, October 29, 2009

US Dollar, Silver, The Re-emergence of Gold

From The Privateer's end of week wrap up 'Gold This Week':

If you are content to have your government take care of your financial future, then the Gold price is, or should be, reasonably irrelevant to you. If you are NOT content, then it should be of the HIGHEST interest. That is especially true if you are not buying Gold with $US Dollars. In terms of many other major currencies, Gold has hardly moved in price this week and remains WELL below its highs of earlier this year.

But we would have thought that any subscriber or reader of this page, especially any of our longer-term readers, would have already established a position. Well, the most important Gold price - the $US Gold price - has just revalidated its bull market. That means that it is going to go a LOT higher, especially in $US terms. How high? We have no idea. But no matter how high the $US price of Gold goes, the metal will not REALLY come into its own unless and until it regains its historical role as MONEY. That didn't happen at the end of $US Gold's last bull run in 1979-80. But it took US interest rates above 20 percent to lure people back into $US Dollars and other paper currencies.

It will happen this time. For one reason amongst many others, global government debt levels mean that interest rates of even a fraction of those which held sway at the end of the 1970s would literally "kill" modern fiat currencies. The re-emergence of Gold as money well almost certainly not BEGIN in the US, but it will begin somewhere. Don't forget, the Chinese are now urging their citizens to buy and hold PHYSICAL Gold. Inscrutable? We don't think so.


The US dollar is looking terrible. Watch out when it goes below its all time low.

If US dollars are shares of US, Inc., then they are signaling the Greatest/Greater US depression.

The dollar rallied in 2008 so it makes sense that commodities took a dive. Now, the dollar is heading back down as commodities are heading back up. Cost of food, heating oil, driving gas, the necessities of life, heading up in US dollar prices. Not good.

A tidbit of news:

"Food stamp list soars past 35 million: USDA, Thu Sep 3, 2009 3:17pm EDT
WASHINGTON (Reuters) - More than 35 million Americans received food stamps in June, up 22 percent from June 2008 and a new record as the country continued to grapple with the worst recession since the Great Depression of the 1930s."

"We have to spend money to keep from going broke," says Joe Biden (Obama's vice president), a man who is out of his depth in the bathtub. - Bill Bonner

And then there is Ben Bernanke at the head of the Fed despite no financial market, business or banking experience. Huh??? Yup, it's true.

"Who loves ya, baby?" - Putin talking to the bar.

Wednesday, October 28, 2009

Gold and Silver Can Offer Some Protection From Insanity. Francisco d'Anconia. Realistic Inflation Adjusted Gold and Silver Charts

Some reasons for the prices of gold and silver going up. It does not matter much which government fiat token you use to price gold. Most governments are in a competitive fiat token devaluation action. One government that is in horrendous financial shape is the US. It is blowing up its budget deficit. Where/who are they going to borrow from? The deficit will be well over a trillion USD. The rest of the world is getting sick of loaning to a dead beat irresponsible creditor.

From the Fed. A central bank can create as many USD as the US government needs. Of course this devalues the USD. It seems that the US is in such bad shape that the Fed is already buying about half of all new debt that the treasury needs to sell to raise dollars for federal spending. The US Treasury needs to borrow about one half of what it is going to spend this fiscal year.

About one half. Amazing. Insane.


Francisco d'Anconia's response to "money is the root of all evil",
from Ayn Rand's 'La Rebellion de Atlas' (Pages 401 - 405):

Pagina 401:

No permita que ese hombre la perturbe. Ya sabe usted que el dinero es el origen de todos los males, y d'Anconia es un tipico producto del diner.

Reardon no creyo que Francisco lo hubiera oido, pero lo vio velverse hacia la parea con una sonrisa grave y atenta.

?Asi que piensa que el dinero is el orgen de todos los males? -inquirio Frncisco d'Anconia-. ?Se ha preguntado alhuna vez cual es el origen del dinero? El diner es solo un instrumento de intercambio que no puede existir a menos que existan bienes y personas capaces de producirlos. Es la forma material del
principio segun el cual quienes deseen tratar con otros deben hacerlo mediante transaccines, entregando valor por valor. No es instrumento de los pordioseros, que exigen llorando el producto del trabajo ajeno, ni de saqueadores que lo arrebatan por la fuerza; el dinero se hace solo posible gracias a quienes producen. "es eso lo que considera malvado?

"Cuando se acepta dinero en pago del esfuerzo propio -continuo Francisco- se hace con la condicion de que luego uno lo podra combiar por el producto del esfuerzo ajeno. No son los pordioseros ni los saqueadores los qu dan valor al dinero. Y ni un oceano de lagrimas, ni todos los canones de la Tierra, podran transformar los pedazos de papel que lleva en su billetera, en el pan que necesitara manana para sobrevivir. Esos papeles, qu en realidad deberian ser oro, son un pacto de honor; su tenencia da derecho a la energia de la gente que produce. Su billetera es la declaracion de su conviccion de que, en algun lugar del mundo, hay personas que no quebrantaran ese principio moral que es la raiz del dinero. ?Eso es lo que considera malvado?

"?Alguna vez se ha preocupado por investigar las raices de la produccion? Observe un generador electrico y atrevase a pensar que ha sido creado por la fuerza bruta de seres carentes de inteligencia; intente cultivar una semilla de trigo sin los conocimientos transmitidos por quienes lo hicieron anteriormente; o trate de obtener alimento tan solo co movientos fisicos, y se dara cuenta de que la mente humana es la raiz de todos los ienes producidos y de toda la riqueza que alguna vez haya existido sobre la Tierra.

"Sin embargo -continuo-, usted asegura que el dinero lo consiguen los fuertes a expensas de los debiles. ?Pero a que fuerza se refiere? No es la fuerza de las armas ni de los musculos, ya que la requeza es el producto de la capacidad del hombre para pensar. Entonces, ?el dinero lo obtene quien inventa un motor a expensas de quienes no lo inventaron? ?Lo obtiene el intelignte a ezxpensas del idiota? ?El capaz a expensas del incompetente? ?El ambicioso a expensas del holgazan? El dinero debe hacerse, antes de que pueda ser saqueado, y es hecho a traves del esfuerzo de las personas honradas, en la medida de la capacidad de cada una; y el honrado es aquel que comprende que no puede consumir mas de lo que ha producido.

"Comerciar utilizando dinero es el codigo de los hombres de buenas intenciones, porque el dinero se basa en el axioma de que cada uno es dueno de su mente y de su esfuerzo. El dinero no otorga ningun poder para prescribir el valor de un esfuerzo, mas alla de la eleccion voluntaria de quien desea ofrecer el suyo a cambio.

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"El dinero le permite obtener por sus bienes y su trabajo lo que vale para los que lo compran, pero no mas que eso. el dinero solo permite tratos que se hacen en beneficio mutuo, segun el libre juicio de ambas partes.

"El dinero exige el reconocimiento de que se debe trabajar en beneficio, y no en perjuicio, propio; para ganar, y no para perder. El dinero reconoce que el hombre no es una bestia de carga nacida para transportar el fardo de su propia miseria, que debe ofrecer valore y no agravios, que el lazo comun entre los seres no es un intercambio de sufrimientos, sino de bienes. El dinero exige vender, pero no debilidad a combio de estupidez, sino talento a combio de razon; exige comprar, no lo peor, sino lo mejor que pueda conseguir. Y cuando las personas viven basadas en el intercombio, poniendo como arbitro decisivo a la razon en lugar de la fuerza, lo que triunfa es el mejor producto, el trabajo mas perrfecto, el hombre de mejor jucio y mayor idoneidad. El grado de productividad de cada uno es tambien el de su recompensa. Este es el codigo de existencia, cuya herramienta y simbolo es el dinero. "Es esto lo que considera malvado?

"El dinero es solo un instrumento que lo llevara adonde quiera, pero no lo reemplazara commo conductor; le dara los medios para la satisfaccion de sus deseos, pero no le proveera dichos deseos.

"El dinero es el azote de quienes intentan revertir la ley de la causalidad; de quienes buscan reemplazar la mente apoderandose de los porductios de la mente.

"El dinero no comprara la felicidad para quien no sepa que desea; no le dara un codigo del valores a quien haya rehusado adoptarlo, ni porporcionara un porposito a quien haya eludido la eleccion.

"El dinero no brindara inteligencia al estupido, ni caraje al cobarde, ni respeto al incompetente. Quien intenta comprar el cerebro de sus superiores, reemplazando con dinero su mayor capacidad de juicio, termina convirtiendose en victima de sus inferiores. Los hombres inteligentes lo abandonaran, pero los embaucadores y los farsantes iran en manadas hacia el, atraidos por una ley que el desconoce: la de que nadie puede ser menos que su dinero. "Es este el motivo por el que lo considera malvado?

"Solo quien no la necesita esta capacitado para heredar requeza, o sea aquel que de todos modos haria su propia fortuna sin que importe su punto de partida. Si un heredero esta a la altura de su dinero, el dinero le sirve; de lo contrario, lo destruye. Pero cuando usted y quines comparten sus ideas observan a alguien asi, dicen que el dinero lo ha corrompido. ?Es verdad? ?O ha sido el quien ha corrompido al diner? No envidie a un heredero inutil, pues su requeza no es suya. No le habria ido mejor en caso de obtenerla. No tiene sentido considerar que esa riqueza deberia haberse distribuido entre usted y los otros, pues cargar al mundo con cinuenta parasitos en vez de uno no reviviria la virtud muerta de esa fortuna. El dinero es un poder viviente que si es despojado de su raiz, muere; por eso no le servira a una mente que no este a su altura. "Es este el motivo por el que lo considera malvado?

"El dinero es su medio de supervivencia. El veredicto que pronuncia sobre su fuente de supervivencia es el mismo que pronuncia sobre su vida. Si la fuente es corrupta, esta condenando su propia existencia. ?Ha consequido el dinero por medio del fraude? ?Siendo alcahuete de los vicios o de la estupidez humana? ?Sirviendo a los imbeciles con la esperanza de conseguir mas de lo que su

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capacidad merece? ?Degradando sus ideales? ?Realizando una tarea que desprecia para vendersela a quienes aborrece? En tal caso, su dinero no le proporcionara ni un momento de autentica felicidad, pues todo lo que compre no sera un elogio hacia su persona, sino un reproche; no un triunfo, sino un constante recordatorio de la verguenza. Entonces gritara que el dinero es malo. ?Malo porque no sustituye al respeto que se debe a si mismo? ?Malo porque no le deja disfrutar de su corrupcion? ?Es esta la causa de su odio hacia el dinero?

"El dinero siempre sera un efecto del que las personas somos causa. Es producto de la virtud, pero no lo hara virtuoso ni lo redimira de sus vicios. El dinero no le dara lo que no se merezca, ni material ni espirtualmente. ?Es esa la razon por la que lo aborrece?

"O acaso sostiene que el amor al dinero is el origen de todos los males? Amar una cosa es conocerla y respetar su naturaleza; por lo tanto, amar al dinero es conocer y respetar el hecho de que representa lo mejor de cada uno, que es la llave maestra para intercambiar su esfuerzo por el mejor esfuerzo de los demas. La persona que venderia su alma por unos centavos es la que proclama a gritos su odio hacia el dinero; y hay que reconocer que tiene motivos para odiarlo. Pero los amantes del dinero estand dispuestos a trabajar por el, y saben que estan en condicones de merecerlo.

"Permita que le de un consejo clave sobre el caracter de los seres humanos: quien maldice el dinero, lo ha obtenido de manera deshonrosa, pero quien lo respeta, se lo ha ganado honestamente.

"Huya de quien le dig que el dinero es malvado, pues esa frase es la senal que anuncia la presencia de un saqueador. En tanto los hombres vivamos en sociedad y necesitemos medios para tratar unos con otros, el unico sustituto, en caso de abandonar el dinero, serian las armas.

"el dinero exige las mas elevadas virtudes para consequirlo o conservarlo. Quienes carecen de valentia, de orgullo o de autoestima, los que no tienen sentido moral de su derecho al dinero y no estan dispuestos a defenderlo como si se tratara de su propia vida, esos que parecen pedir perdon por ser ricos, no lo seran por mucho tiempo, pues son un cebo natural para las bandas de saqueadores, que desde hace siglos se agazapan bajo las rocas y salen en cuanto huelen a alguien que ruega ser perdonado por ser rico, y se apresuran a aliviarlo de su culpa, de su dinero y de su vida, tal como lo merece.

"Entonces vera aparecer a hombres de doble moral: los que se basan en la fuerza, y sin embargo, dependen de quienes viven del comercio para darle valor a su dinero robado. Son los que quieren ser viruosos gratuitamente, aquellos que en una sociedad moral son los criminales de quienes la ley deberia proteger a los demas. Pero cuando una sociedad establece la existencia de crimiinales por derecho y de saqueadores legales, es decir de personas que utilizan la fuerza para apoderarse de la riqueza de victimas desarmadas, entonces el dinero se convierte en vengador de su creador.

"Esos ladrones se sienten seguros al robar a indefensos, luego de haber sancionado una ley para desarmarlos, pero su botin se convierte en un iman para otros saqueadores que tambien se lo arrebataran de la misma forma como ellos lo hicieron. Entones el exito ira, no al mas competente en la produccion, sino al capaz de la mas despiadada brutalidad y crueldad. Cuando la fuerza se convierte

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en norma, el asesino vence al carterista, y la sociedad desaparece entre ruinas y cadaveres.

"?Quiere saber si ese dia se acerca? Observe al dinero, pues es el barometro de las virtudes de una sociedad. Cuando vea que el comercio se hace, no por consentimiento de las partes, sono por coercion; cuando advierta que para producir, necesita obtener autorizacion de quienes no producen nada; cuando compruebe que el dinero fluye hacia quienes trafican no bienes, sino favores; cuando perciba que muchos se hacen ricos por el soborno y por influencias mas que por el trabajo, y que las leyes no lo protegen contra ellos, sino, por el contrario, son ellos los que estan protegidos contra usted; cuando repare en que la corrupcion es recompensada y la honradez se convierte en autosacrificio, entonces podra afirmar, sin temor a equivocarse, que su sociedad esta condenada.

"El dinero es un medio tan noble que no compite con las armas, ni pacta con la brutalidad. Nunca permitira sobrevivir a un pais basado parcialmente en la propiedad y parcialmente en el robo. Siempre que aparecen elementos destructores entre los humanos, comienzan destruyendo al dinero, porque este es la protecion del hombre y la base de su exestencia moral. Los destructores se apoderan del oro, y entregan a cambio un monton de papel impreso. De esta forma, destruyen todas las normas objetivas de valor y dejan al hommbre en las garras de un juez arbitrario. El oro era un valor y dejan al hombre en las garras de un juez arbitrario. El oro era un valor objetivo, un equivalente a riqueza producida. El papel es una hipoteca sombre riqueza que no existe, respaldada por un arma apuntada al pecho de quienes se espera han de producirla.

"El papel es un cheque librado por saqueadores legales sobre una cuenta ajena: sobre 'la virtud de las victimas'. Espere al dia en que ese papel sea rechazado con la leyenda 'sin fondos'.

"Cuando se haya convertido a la maldad en medio de supervivencia, no espere que los hombres sigan siendo buenos, no espere que conserven la moral y pierdan la vida convertidos en forraje de los inmorales, no espere que produzcan cuando la produccion sea castigada y el robo recompensado. Entonces, no debera preguntar "?Quien esta destruyendo al mundo?' porque sera usted mismo el que lo estara haciendo.

"Se encuentra entre los mayores logros de la civilizacion mas productive y se pregunta por que todo se derrumba, mientras maldice la fuente que le da vida: el dinero. Ve al dinero como lo han hecho sus antepasados salvajes, y se pregunta por que la selva vuelve a acercarse a los bordes de las ciudades. En la historia de la humanidad, el dinero ha sido siempre botin de los saqueadores, de un tipo o de otro, cuyos nombres fueron combiando, pero cuyos metodos fueron siempre los mismos: apoderarse del dinero por la fuerza y mantener cautivos a los productores, degradandolos, difamandolos y despojandolos de su honor. Esa frase acerca de la maldad del dinero, que expresa con meticulosa imprudencia, viene de la epoca en que la requeza era producida por el trabajo de los esclavos, esclavos que repetian los movimentos inventados con anterioridad por la mente de alguien y que siguieron ejecutandose sin mejora alguna durante siglos. Mientras la produccion fue governada por la fuerza y la riqueza se consiguio por usurpacion, habia poco para conquistar. Sin ebmargo, a lo largo de siglos de miseria y hambre, las personas exaltaron a los saqueadores como aristocratas de la espada, como aristocratas desde la cuna, y mas tarde, como aristocratas de la bu-

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rocracia, despreciendo a los productores, como esclavos, comercienates, vendeores o industriales.

"Para gloria d la humanidad, existio por primera y unica vez en la historia, un pais del denero y no me es posible dar un mayor tributo a los Estados Unidos de America porque eso significa un pais donde reinan la razon, la justicia, la libertad, la produccion y el progreso. Por primera vez, la mente y el dinero de los hombres quedaron libres, dejo de existir la fortuna como botin de conquista y, en lugar de guerreros y esclavos, surgio el verdadero productor de riqueza, el gran trabajador convertido en el tipo mas elevado de ser humano: el autosufciente, el undustrial estadounidense.

"Si me pide que de algun nombre a la distincion de la cual los estadounidenses pueden estar mas orgullosos, yo elegiria, porque contiene a todas las demas, la de haber sido el pueblo que acuno la expresion 'hacer dinero'. Ninguna otra lengua o nacion habia utilizado semejante formula, porque los hombres siempre consideraron a la riqueza como a una contidad estatica que solo podia ser arrebatada, mendigada, heredada, distribuida, saqueada u obtenida como favor. Los estadounidenses fueron los primeros en comprender que la requeza debia ser creada. La frase 'hacer dinero' contiene la esencia de la moralidad humana.

"Sin embargo, debido a esas palabras, los estadounidenses fueron denunciados por las culturas podridas de los contnentes de ladrones. Ahora, el credo de los saqueadors los ha llevado a pensar que los mas dignos industriales son motivo de verguenza, que su prosperidad es motivo de culpa, que los industriales mas eminentes son unos canallas, que sus magnificas fabricas productio de su trabajo honrado son el fruto del trabajo de exclavos movidos por el latigo, como los que construyeron las piramides de Egipto. El depravado que se lamenta de no ver la diferencia entre el poder del dolar y el poder del latigo, deberia aprender la deferenia en su propia piel... como creo que ocurria a la larga.

"Hasta que descubra que el dinero es la raiz de todo lo bueno, seguira encaminandose hacia su propia destruccion. Cuando el dinero deje de ser la herramienta mediante la cual los hombres se relacionan entre si, los hombres mismos se convertiran en herramientas de otros hombres. Sangre, latigos, armas; o dolares. Debe elegir.... No hay otra opcion, y el tiempo se esta acabando."


Shadowstat's realistic inflation adjusted gold and silver prices. These charts and the nature of those in power say that the gold and silver prices have a long way to go on the upside.

Gold would need to rise more than sixfold to top the 1980 record, using a more accurate inflation-adjustment, said John Williams, an economist and the editor of Berkeley, California- based He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.

Gold futures for December delivery closed Oct. 16 at $1,051.50 an ounce on the New York Mercantile Exchange’s Comex division, gaining for a third straight week.

“If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record,” Williams said.