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: