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...The Return to Gold and Silver
What we are now witnessing is the collapse of the artificial central banking financial system and much like the collapse of the Soviet Union in the late 90s we are now witnessing the collapse of the USA. The big difference between the collapse of the USSR and the collapse of the USA is that the US dollar is the reserve currency backing every fiat currency in the world today.
Therefore the collapse of the US dollar will have massive repercussions worldwide and that is one of the main reasons why gold and silver is and will continue to head higher in terms of all fiat currencies over the coming months and years.
Jeff Berwick
Chief Editor
I don't know what's going on but the dollar is crashing in over sea's markets right now!! We shall see in the morning.
US Mint 5oz Bullion Coins Nearing the Market
By Dr. Jeffrey Lewis
Oct 13 2010 9:41AM
www.silver-coin-investor.com
The U.S. Mint should soon release a new five ounce silver bullion coin that it first suggested would be launched “later in 2010.” The coins will be .999 pure and utilize the same design as the mint's “America the Beautiful” quarters, which were first coined at the beginning of the second quarter 2010.
Dealers that carry American Silver Eagles directly from the Mint will also be offered these new bullion five ounce rounds. One interesting tidbit is that these coins will be massive at three inches in diameter.
Minting Millions
The U.S. Mint is clearly expecting strong demand for the new coins, with estimates suggesting that as many as 100,000 coins of each of the first five quarter designs will be released in 2010. At present market value, that comes out to roughly $115 million worth of fresh bullion for investors.
The bullion coins are a byproduct of House Resolution 6162, which outlines the characteristics the bullion pieces should have. Unfortunately, there is little information available about these coins except for HR 6162, and no one has yet received word on the premiums the U.S. Mint will charge its dealer network. The mint recently raised its premiums on the American Silver Eagle to $2 per ounce, but it would be foolish, though not unlike the government, to charge $10 in premiums on the new issues.
Silver investors have long seen the American Silver Eagle as a piece of artwork, something only an artist could design and create. Couple the artwork with the beauty of pure silver, and the combination is a match made in heaven.
While I've yet to study the new quarters that are supposedly being used as legal tender today, the fact I've not once seen one stand out gives me concerns that these pieces aren't particularly pieces of art. Nonetheless, as an excited silver investor, I'm sure they'll be beautiful, if only for their silver content.
One Government, Two Different Perspectives
The U.S. Mint clearly understands that investors are fearful, and they want precious metals as a way to reduce their exposure to the dollar and protect against inflation. The U.S. Treasury, however, has yet to come to that conclusion, as it seemingly borrows more and more money each week to finance stimulus packages and spending that only increase the desire for the new coins.
If the Treasury were to take some consideration from the Mint, it might realize that investors are running scared. The Mint has on several occasions run out of silver blanchets from which it can coin its bullion pieces, and it has raised premiums considerably without at all reducing the total demand for American Silver Eagles.
With any luck, competitive pricing from the U.S. Mint will help cool the exceptionally high premiums that physical silver investors have combated for many months. Since they will contain a hefty amount of silver, investors should expect demand mostly from other investors instead of collectors, due to the fact that one coin will set you back a full $115 in the silver content alone.
...their lips hermetically sealed to the government's depleted udders. I have got to remember that one the next time I talk to one of those big government liberals!!! LOL
The Silver Log - Comparing 1979 rally with todays rally
The Silver Log - Comparing 1979 rally with todays rally
Sounds like you may be able to charge some good money for that type of advice!!!
Inflation to Make All Americans Billionaires By 2020
One of the Federal Reserve's original stated purposes was to manage the nation's money supply through monetary policy that provides for stable prices without inflation or deflation. Shocking just about the whole world except for NIA members, the Federal Reserve this past week shifted its purpose from being an inflation fighter to now being an inflation advocate. Charles Evans, President of the Federal Reserve Bank of Chicago, is now saying that inflation in the U.S. is too low and the Federal Reserve needs to publicly declare a new goal of having inflation that is much higher than its informal 2% target. William Dudley, President of the New York Federal Reserve, is calling current low levels of U.S. inflation "a problem" because "it means slower nominal income growth".
Dudley believes "slower nominal income growth" is unacceptable because it "means that less of the needed adjustment in household debt-to-income ratios will come from rising incomes. This puts more of the adjustment burden on paying down debt." In other words, he wants to monetize our debts by printing so much money that all Americans are earning enough income to pay back their debts. NIA fears that one of the unintended consequences of such a policy will be an insurmountable currency crisis; this will lead to a U.S. societal collapse with class warfare, millions of Americans starving to death, and a return to a barter based system that will last until we can come up with a new form of workable government based on sound money that is backed by gold and silver.
When our government creates inflation with the goal of generating higher incomes, the real incomes of Americans always decline dramatically. Inflation never creates wealth, but instead misallocates resources that would have went towards productive purposes if the free market was allowed to operate. During periods of high inflation, no matter how fast incomes rise nominally, they never keep pace with rising gold prices. (Try to picture Zimbabwean President Robert Mugabe trying to keep pace in a race against Olympic gold medalist Usain Bolt.)
Back in 1970, the median family income in the U.S. was $9,870. During the next decade, the U.S. government created unprecedented amounts of inflation, which led to the median family income rising in 1980 to $21,020 for a gain of 113%. Gold was only $35 per ounce in 1970, but rose to a high in 1980 of $850 per ounce for a gain of 2,329%. One year of income in 1970 would have bought 282 ounces of gold, but one year of income in 1980 would have only bought 25 ounces of gold. Priced in gold, families saw their real incomes decline during the 1970s by 91%.
On July 19th of this year, with everybody in the mainstream media warning Americans about the threat of deflation, NIA predicted that the Federal Reserve was, "quietly getting ready to implement 'The Mother of All Quantitative Easing'". NIA said that, "come this October, Bernanke is likely to shoot up his largest ever dose of quantitative easing." Then on July 28th with gold down to $1,158 per ounce and silver down to $17.63 per ounce, NIA sent out an alert entitled, "Gold and Silver Capitulation is Near" in which we said, "The sentiment on gold and silver has abruptly changed to the negative like nothing we have ever seen before and to us this means the big move to the upside is right around the corner."
NIA called the bottom on gold and silver perfectly. Since July 28th, gold and silver have both risen 34 out of 49 days, with gold rising by 16% and silver rising by 30%. Many people are asking us when precious metals are going to dip. Although gold and silver will make many dips in the years to come, NIA is never going to make an attempt to predict these short-term, temporary dips. It is far too risky and dangerous to sell gold and silver with the hope of buying back on a dip. Those who actively trade gold and silver, usually go long the U.S. dollar while they are waiting for a dip. There will come a time when the U.S. dollar crashes, with gold rising hundreds or even thousands of dollars in a day, and silver potentially doubling or tripling in value in a day. Trust us, you do not want to be on the wrong side of the trade on that day. NIA is focused on the long-term risk of hyperinflation and is not concerned about short-term volatility.
NIA believes that if the Federal Reserve doesn't reverse course immediately, we are on a direct path to all Americans becoming billionaires by the year 2020, if not much sooner. Being a billionaire in dollars won't mean anything. The wealth of Americans later this decade will be calculated based on how much gold and silver they own. We are at the beginning stages of a massive worldwide rush out of the U.S. dollar and into gold and silver.
Gold, at a new all time high of $1,344 per ounce, is still very undervalued. If gold's total bull run from its 2001 low of $256 per ounce equals a percentage gain of 2,329% (just like the 1970s) we will see a gold price of $6,218 per ounce. Silver, at a new 30-year high of $23 per ounce, is still an absolute steal. Just like NIA predicted, the gold/silver ratio has declined in recent months from 70 down to 58, but is still well above the historical average of 16. In our opinion, because silver has been undervalued for so long with artificially high gold/silver ratios, once JP Morgan is forced to cover their naked short position in silver we could see the ratio decline to an artificially low level as low as 8. Therefore, if we see $6,218 per ounce gold, we wouldn't be surprised to also see $777.25 per ounce silver.
Dudley's solution to our current economic crisis is to "find ways to increase the amount of stimulus we currently provide via our balance sheet." This is pure insanity. Bush's $200 billion stimulus sent oil prices to $147 per barrel, Obama's $800 billion stimulus prevented massive price deflation (that would have made cost of living in America a lot more affordable) during a period of rapidly rising unemployment, and now the Federal Reserve believes even greater stimulus will fix our economy. Dudley is calling for the Federal Reserve to purchase $500 billion in bonds, but the Federal Reserve's real quantitative easing will be much greater. Dudley doesn't want to steal the show from Bernanke. He must allow Bernanke to be the one who first suggests the "genius" idea of having quantitative easing of $1 trillion or more.
The truth is, the exact amount of the Federal Reserve's short-term purchases is absolutely meaningless. Keep your eyes on the big picture and remember that if the Federal Reserve's treasury purchases aren't enough to create massive price inflation in the short-term, they will continue to unleash even larger doses of quantitative easing. Our gut feeling is that we are practically at the point where the U.S. economy is about to overdose on any further quantitative easing. A "Meltup" is currently taking place, exactly like NIA predicted in our documentary 'Meltup' that was released on May 13th (it has now been viewed by over 808,000 people).
We may be forced to soon change our hyperinflation forecast from the years 2014-2015 to as soon as the year 2012. NIA has long been predicting ever since its first documentary 'Hyperinflation Nation' that besides gold and silver, we would see inflation most in agricultural commodities. During the month of September alone we saw huge gains in agricultural commodities like soybeans +9.5%, rice +10%, corn +12%, orange juice +13%, cotton +17.5%, and sugar +19.3%.
All countries are now in a war with each other to have the weakest currency, with the false belief that having a strong currency destroys their export markets. When history looks back to the time period we are currently in, our world leaders (especially our elected representatives in Washington) will be considered the most incompetent and corrupt in world history. NIA's new documentary being released later this month will expose the U.S. societal collapse from a perspective that has never been addressed before by anybody in the media. NIA's co-founders are currently on their way to Kingston, NY, to interview Gerald Celente, the most accurate trends forecaster of all time. His interview in 'Meltup' was widely considered to be the most insightful and eye-opening economic interview to ever be a part of any documentary and his interview in our new documentary promises to be even better.
Gold and Silver Correction Happening Now!
Gonzalo Lira On The Coming Middle-Class Anarchy
Submitted by Tyler Durden on 10/09/2010 09:17 -0500
Fannie Mae Gonzalo Lira Guest Post Testimony Treasury Department Wells Fargo
Submitted by Gonzalo Lira
The Coming Middle-Class Anarchy
True story: A retired couple I know, Brian and Ilsa, own a home in the Southwest. It’s a pretty house, right on the manicured golf course of their gated community (they’re crazy about golf).
The only problem is, they bought the house near the top of the market in 2005, and now find themselves underwater.
They’ve never missed a mortgage payment—Brian and Ilsa are the kind upright, not to say uptight 60-ish white semi-upper-middle-class couple who follow every rule, fill out every form, comply with every norm. In short, they are the backbone of America.
Even after the Global Financial Crisis had seriously hurt their retirement nest egg—and therefore their monthly income—and even fully aware that they would probably not live to see their house regain the value it has lost since they bought it, they kept up the mortgage payments. The idea of them strategically defaulting is as absurd as them sprouting wings.
When HAMP—the Home Affordable Modification Program—was unveiled, they applied, because they qualified: Every single one of the conditions applied to them, so there was no question that they would be approved—at least in theory.
Applying for HAMP was quite a struggle: Go here, go there, talk to this person, that person, et cetera, et cetera, et cetera. “It’s like they didn’t want us to qualify,” Ilsa told me, as she recounted their mind-numbing travails.
It was a months-long struggle—but finally, they were approved for HAMP: Their mortgage period was extended, and the interest rate was lowered. Even though their home was still underwater, and even though they still owed the same principal to their bank, Brian and Ilsa were very happy: Their mortgage payments had gone down by 40%. This was equivalent to about 15% of their retirement income. So of course they were happy.
However, three months later, out of the blue, they got a letter from their bank, Wells Fargo: It said that, after further review, Brian and Ilsa had in fact not qualified for HAMP. Therefore, their mortgage would go back to the old rate. Not only that, they now owed the difference for the three months when they had paid the lowered mortgage—and to add insult to injury, they were assessed a “penalty for non-payment”.
Brian and Ilsa were furious—a fury which soon turned to dour depression: They tried contacting Wells Fargo, to straighten this out. Of course, they were given the run-around once again.
They kept insisting that they qualified—they qualified! But of course, that didn’t help at all—like a football, they were punted around the inner working of the Mortgage Mess, with no answers and no accountability.
Finally, exhausted, Brian and Ilsa sat down, looked at the last letter—which had no signature, and no contact name or number—and wondered what to do.
On television, the news was talking about “robo-signatures” and “foreclosure mills”, and rank illegalities—illegalities which it seemed everyone was getting away with. To top it off, foreclosures have been suspended by the largest of the banks for 90 days—which to Brian and Ilsa meant that people who weren’t paying their mortgages got to live rent free for another quarter, while they were being squeezed out of a stimulus program that had been designed—tailor made—precisely for them.
Brian and Ilsa are salt-of-the-earth people: They put four kids through college, they always paid their taxes. The last time Brian broke the law was in 1998: An illegal U-turn on a suburban street.
“We’ve done everything right, we’ve always paid on time, and this program is supposed to help us,” said Brian. “We follow the rules—but people who bought homes they couldn’t afford get to squat in those McMansions rent free. It would have been smarter if we’d been crooks.”
Now, up to this point, this is just another sob story of the Mortgage Mess—and as sob stories go, up to this point, it’s no big deal.
But here’s where the story gets ominous—here’s where the Jaws soundtrack kicks in:
Brian and Ilsa—the nice upper-middle-class retired couple, who always follow the rules, and never ever break the law—who don’t even cheat on their golf scores—even when they’re playing alone (“Because if you cheat at golf, you’re only cheating yourself”)—have decided to give their bank the middle finger.
They have essentially said, Fuckit.
They haven’t defaulted—not yet. They’re paying the lower mortgage rate. That they’re making payments is because of Brian: He is insisting that they pay something—Ilsa is of the opinion that they should forget about paying the mortgage at all.
“We follow the rules, and look where that’s gotten us?” she says, furious and depressed. “Nowhere. They run us around, like lab rats in a cage. This HAMP business was supposed to help us. I bet the bank went along with the program for three months, so that they could tell the government that they had complied—and when the government got off their backs, they turned around and raised the mortgage back up again!”
“And charged us a penalty,” Brian chimes in. The non-payment penalty was only $84—but it might as well been $84 million, for all the outrage they feel. “A penalty for non-payment!”
Nevertheless, Brian is insisting that they continue paying the mortgage—albeit the lower monthly payment—because he’s still under the atavistic sway of his law-abiding-ness.
But Ilsa is quietly, constantly insisting that they stop paying the mortgage altogether: “Everybody else is doing it—so why shouldn’t we?”
A terrible sentence, when a law-abiding citizen speaks it: Everybody else is doing it—so why don’t we?
I’m like Wayne Gretsky: I don’t concern myself with where the puck has been—I look for where the puck is going to be.
Right now, people are having a little hissy-fit over the robo-signing scandal, and the double-booking scandal (where the same mortgage was signed over to two different bonds), and the little fights between junior tranches and senior tranches and the servicer, in the MBS mess.
But none of that shit is important.
What’s really important is Brian and Ilsa: What’s really important is that law-abiding middle-class citizens are deciding that playing by the rules is nothing but a sucker’s game.
Just like the poker player who’s been fleeced by all the other players, and gets one mean attitude once he finally wakes up to the con? I’m betting that more and more of the solid American middle-class will begin saying what Brian and Ilsa said: Fuckit.
Fuck the rules. Fuck playing the game the banksters want you to play. Fuck being the good citizen. Fuck filling out every form, fuck paying every tax. Fuck the government, fuck the banks who own them. Fuck the free-loaders, living rent-free while we pay. Fuck the legal process, a game which only works if you’ve got the money to pay for the parasite lawyers. Fuck being a chump. Fuck being a stooge. Fuck trying to do the right thing—what good does that get you? What good is coming your way?
Fuckit.
When the backbone of a country starts thinking that laws and rules are not worth following, it’s just a hop, skip and a jump to anarchy.
TV has given us the illusion that anarchy is people rioting in the streets, smashing car windows and looting every store in sight. But there’s also the polite, quiet, far deadlier anarchy of the core citizenry—the upright citizenry—throwing in the towel and deciding it’s just not worth it anymore.
If a big enough proportion of the populace—not even a majority, just a largish chunk—decides that it’s just not worth following the rules anymore, then that society’s days are numbered: Not even a police-state with an armed Marine at every corner with Shoot-to-Kill orders can stop such middle-class anarchy.
Brian and Ilsa are such anarchists—grey-haired, well-dressed, golf-loving, well-to-do, exceedingly polite anarchists: But anarchists nevertheless. They are not important, or powerful, or influential: They are average—that’s why they’re so deadly: Their numbers are millions. And they are slowly, painfully coming to the conclusion that it’s just not worth it anymore.
Once enough of these J. Crew Anarchists decide they no longer give a fuck, it’s over for America—because they are America.
Hail Mary
Peter Schiff
Since the US economy has failed to recover as widely predicted, pressure on the Federal Reserve to conjure a solution has increased. In fact, the Fed now faces the hardest choices in its history. It can either redouble its past efforts to re-inflate America's bubble economy (risking the destruction of the US dollar) or it can stop pumping and let the economy deflate to a self-sustaining level. Unfortunately, both choices guarantee severe economic pain - but only one offers the possibility of ultimate success.
Today's news that the economy lost 95,000 jobs in September confirms that record doses of stimulus have failed to create a real recovery. The loss of 159,000 government jobs in the month could have been a positive if those lost positions had been replaced by wealth-generating private sector jobs. But the 65,000 jobs generated by businesses didn't come close. Worse still, most of these jobs came from the goods-consuming service sector rather than the goods-producing manufacturing sector (which lost another 6,000 jobs). The unemployment rate has now been above 9.5% for 14 consecutive months, the longest such streak since monthly records began in 1948. More importantly, the real unemployment rate, which factors in discouraged and under-employed workers, rose from 16.7% to 17.1%.
Armed with this weak jobs report, the Fed seems poised to make good on its plan for other round of quantitative easing (in English: printing money). Recent statement from top Fed governors have made that sentiment clear. Apparently they feel that they must do something, even though Fed inaction would be far better for the economy. At a time when we should be trusting the markets to grind out three yards in a cloud of dust, we have put our faith in the Fed's ability to fling a Hail Mary pass, even though all previous attempts have failed.
Most people assume that the "crash" I referred to in my 2007 book "Crash Proof: How to Profit from the Coming Economic Collapse" occurred in 2008. Those who actually read the book know otherwise. The financial crisis that resulted from the bursting of the housing bubble, accurately foretold in my book, was not the crash itself, but merely the overture to a much more tragic economic opera for which the curtain is just now rising.
I argued that the housing bust would threaten the financial system with collapse and that the government would react with stimulus and bailouts - thereby making the situation much worse. That is exactly what happened. I did not believe then, and I don't believe now, that the process of liquidating bad debt would kill us. But I do believe we will succumb to Washington's "cure" of endless stimulus.
Many now claim that government deficits and Fed easing prevented a repeat of the Great Depression. From my perspective, calamity was not averted but merely delayed. The price for the reprieve will be a far more severe downturn, which I now think will surpass the Great Depression.
In Crash Proof, I talked about how our economy suffered from the co-morbid diseases of asset bubbles, excessive debt and consumption, and insufficient savings, capital investment, and production. These conditions did not arise as a result of market forces, but from foolish monetary, fiscal, and regulatory policies that distorted market forces. The proper cure would have been to remove the distortions and allow the markets to correct.
Unfortunately, as I forecast, the opposite occurred. Washington lacked the economic understanding and the political will to allow for a painful adjustment to take place. So, instead, they cranked up the printing presses and administered the equivalent of economic heroine. The drugs succeeded in postponing the pain, but at the expense of exacerbating the underlying condition. As the high wears off, a more debilitating hangover will set in.
By electing to bail out the financial sector, prop up housing prices, allow excess spending and borrowing to continue, and maintain superfluous government and service-sector jobs, the government has pushed our economy to the edge of a very dangerous precipice.
The right choice is to admit past mistakes and reverse course. The Fed must raise interest rates aggressively, shrink its bloated balance sheet, and allow the real recession to finally run its course. It will be much more painful now than it would have been in 2008, but at least this time the pain will end and real recovery will take hold. By forcing the federal and state governments to slash spending, sound monetary policy will allow market forces to rebuild a solid foundation upon which future prosperity may be built.
The wrong choice is for the Fed to continue quantitative easing as planned, allowing the government to grow at the expense of the economy. This will widen the economic imbalances that lie at the root of our problems. As a side effect, the US dollar will continue spiraling downward as it becomes clear to foreign creditors that the Fed has no interest in protecting their investments. A weaker dollar will lead to higher inflation and higher interest rates, which will make the Fed's task that much more difficult.
In the end, our bubble economy will not just deflate, it will burst. The dollar will collapse, consumer prices will skyrocket, real credit will completely evaporate, millions more will lose their jobs, and our economy will change in ways few of us can imagine. Our standard of living will plummet and legions of middle- and upper-class Americans will be impoverished. It is not a pretty picture, but unfortunately, it's the one our government is painting. Unfortunately, we are running out of time to change artists.
This may support your theory:
A Few Reasons to Anticipate a Stock Market Downturn
Eric Fry
US stocks didn't do much of anything yesterday. They spent the entire trading session dancing around the unchanged level like Victorian schoolgirls around a Maypole. The Dow Jones Industrial Average gained a smidgen, while the S&P 500 Index slipped a skosh.
The commodity markets danced a little more purposefully - perhaps like a couple of junior high kids "grinding" at a school dance. The RJ/CRB Index of Commodity Prices advanced to a new 9-month high, while gold jumped to a new all-time high. The now-and-again precious metal tacked on $8.00 to $1,348.70 an ounce. Nothing new there...Gold is going up because the world is full of well-meaning central bankers who mean well to debase their national currencies in the pursuit of economic vitality. Sounds wacky, we know; but that's what the top universities are teaching these days. The top universities are also teaching that a few highly educated men in nice suits can turn enough dials and pull enough levers to cure recessions and create non-inflationary recoveries.
The men in nice suits are busily turning nobs and pulling levers, but the economy still flounders and gold still soars. Apparently, gold didn't go to college.
Turning our attention back to the stock market, yesterday's subdued trading action might soon yield to something a bit more raucous. At least that's the informed opinion of two guys who monitor this kind of thing. First up, Jay Shartsis, a seasoned options trader from R.F. Lafferty in New York, has identified a few "cracks in the wall" of the recent stock market rally.
Shartsis, who has been expecting an intermediate-term market top for more than a week now, is finding more evidence in support of his caution. He observes that many of the high-profile stocks that have been leading the market higher suffered big sell-offs yesterday. Netflix (NASDAQ:NFLX) slumped 4%, Salesforce.com (NYSE:CRM) dropped 8%, VMware, Inc. (NYSE:VMW) fell 9% and Citrix Systems (NASDAQ:CTXS) tumbled 14%. "These are leading stocks and have market-wide implications," Shartsis warns.
"I was also surprised to see only 272 new highs on the NYSE Tuesday," Shartsis continues, "versus 674 last April 26 and 306 recorded on Sept 20. That's a non-confirmation of importance. Further, as the S&P 500 has continued higher, the VIX Index - aka, 'Fear Gauge' - has not continued lower, as would be expected. In fact, the VIX bottomed at $20.93 on Sep 13 and has not made new lows as the S&P has made new highs. This non-confirmation suggests the VIX will soon rise and stocks will fall."
Picking up on this same bearish theme, Dan Amoss, editor of The Strategic Short Report, remarks, "The September rally looks tired... The market is at risk of another sharp move lower. The S&P 500 is encountering strong 'resistance' at 1,150. One can easily imagine a return back to 1050 - the starting point of the latest sprint."
Amoss believes the recent rally has less to do with underlying economic trends than it has to do with the Fed's easy money tactics - both actual and anticipated. He suspects the stock market has already priced in the Fed's next round of quantitative easing - the process by which the Fed conjures money out of thin air.
"Because the markets have already anticipated 'quantitative easing 2' by pushing up stocks and Treasury bond prices," says Amoss, "the actual implementation of 'QE2' is less likely to be imminent.
"Here's another ominous sign for stock market bulls," he continues, "the darling momentum stocks are looking weaker. Ridiculously overvalued stocks (but good businesses) including Priceline, Amazon, Netflix, and Salesforce.com are weakening. Perhaps traders don't want to own these stocks at triple-digit P/E multiples heading into earnings season...
"There's plenty of room for 2011 earnings estimates to come down," Amoss concludes. "This market is not cheap. I'm evaluating several short ideas..."
So there you have it; the stock market will fall very soon...unless it doesn't.
How do you come to that conclusion? The way I see it is that the day after the election the Fed is going to announce QE2, which will be about $1.5 Trillion, then the dollar will fall even more!! Unless we are seeing buy on the rumor sell on the news right now. What say you???
Do you think it is a short term bottom or a final bottom???
Three Horrifying Facts About the US Debt "Situation"
http://silverbearcafe.com/private/10.10/horrifying.html
Cash is trash:
http://silverbearcafe.com/private/10.10/trash.html
If you don't know GOD, don't make stupid
remarks!!!!!!
A United States Marine
was taking some college courses
between assignments. He had
completed 20 missions in Iraq
and
Afghanistan
. One of the courses had a
professor who
was an avowed atheist,
and a member of the ACLU.
One day the professor
shocked the class when he came in.
He looked to the ceiling and flatly
stated, "GOD, if you are real,
then
I want you to knock me off this
platform... I'll give you exactly
15
min."
The lecture room fell silent. You
could hear a pin drop. Ten minutes
went by and the professor
proclaimed, "Here I am GOD, I'm
still
waiting."
It got down to the last couple
of minutes when the Marine got
out
of his chair, went up to the professor, and cold-cocked him;
knocking him off the platform. The
professor was out cold.
The
Marine went back to his seat and sat there, silently.
The other students were shocked and
stunned, and sat there
looking on in
silence. The professor eventually came to,
noticeably shaken, looked at the
Marine and asked,
"What in the world
is the matter with you? Why did you do that?"
The Marine calmly replied,
"GOD was too busy today protecting
America 's
soldiers who are
protecting your right to say stupid
stuff and act like an idiot. So He
sent me."
The classroom erupted
in cheers!
Response to William Dudley
Peter Schiff
NY Fed President William Dudley's outrageous statements today closely conform to recent pronouncements from other Fed officials and confirm that a massive round of dollar devaluation is poised to begin.
Seemingly overnight, the Fed appears to have altered its mandate, ditching its former goal of "price stability" in favor of "moderate price inflation." While no one is under the illusion that the Fed has kept prices stable over the last century, it used to be that the governors would at least pretend to fight inflation. Low inflation used to be the aim, now it's the enemy.
Although the inflation being created by the Fed may not be showing up immediately in rising rents or auto prices, it is nevertheless pushing up asset prices in other areas. Many commentators are celebrating the "best September for the Dow and S&P in 71 years," rising 7.7% and 8.8% respectively. Well, it was also a pretty great September for soybeans (up 9.5%), rice (up 10%), oil (up 11%), corn (up 12.2%), orange juice (up 13%), cotton (up 17.5%), and sugar (up 19.3%). In fact, the whole CRB is up 8.7%. The Swiss franc is up 4.6%, the euro up 7%, the Aussie dollar up 9%. Gold is at all-time highs, silver at 30-year highs, and copper at 3-year highs.
In other words, the box of Uncle Ben's in my kitchen cabinet had a better month than the Dow Jones Industrials. The same could be said for the boxer shorts in my dresser. Could it be that the Dow isn't rising, but the dollar falling?
Dudley says it may take "several years" before inflation returns to levels consistent with the Fed's mandate. Exactly when did the Fed establish a floor for "acceptable inflation?" Where is that floor, 2%? (The core PCE index is currently up 1.4% for the year) If we are below the floor, where's the ceiling- 3%? 4%? In 1971, President Nixon imposed price controls when inflation averaged 4%. That rate was considered so high that emergency measures were needed. Is that still the case? How much higher do costs have to go for cash-strapped Americans before the Fed can be expected to take its foot off the gas?
Without better understanding of where these parameters lie for the Fed, the markets will be flying blind through an impenetrable fog.
If the Fed were serious about maintaining long-term price stability, which is its actual mandate, it would need to allow prices to fall after the speculative booms that it helped create. As we saw in the 1980s, unemployment resolves itself when the monetary system is sound, but no one will hire under the uncertainty of a rogue, inflationary Federal Reserve. As people on fixed incomes, increasingly impoverished by low yields and rising prices, desperately re-enter the work force, look for unemployment to head higher.
Peter D. Schiff
pschiff@europac.net
There are videos on the internet that will show you how to make that stuff from a silver coin. It's better than the flu shot and many were taking it when we had the H1N1 first break out!! Much better for you than all that nasty stuff they want to inject us with...
The Dollar Index and its correlation with Gold and Silver (Part 1 of 2 or 3?)
The Dollar Index and its correlation with Gold and Silver (Part 1 of 2 or 3?)
Prices Jump at Wal-Mart & 77% of Americans Barely Making it. NIA Inflationary Depression Update
The Silver Log (09.30.2010) - Monthly chart is Not Overextended
BREAKING NEWS: The United States Mint has officially raised their wholesale pricing above spot on American Silver Eagles to all authorized dealers from $1.50 to $2.00, an increase of a whopping 33%. This news comes on the heels of a significant silver spot price rally over the last month to a new thirty year record over $22 per ounce. The impact of this news is significant and has already affected dealer pricing across the country within hours, as prices on Silver American Eagles have jumped over $0.50/oz industry wide.
The year 2010 will go down as a record year for Silver Eagle sales, as the United States Mint has already sold more than 25 million coins year-to-date.
This development comes only two days after the US Mint announced it had sold out of 2010 gold American Buffaloes and would cease production for the remainder of the year.
Taxing the Poor; Creating Victims and Criminals
Szandor Blestman
There's a big, public debate going on right now about whether or not to keep the "Bush era" tax cuts. The Democrats are claiming that anyone making more than a quarter of a million dollars a year should be taxed more to close the national deficit and the Republicans are claiming that these are the very people who need the money to create jobs and kick start our economy. By the way, they've been trying to kick start the economy for a couple of years now, even after they spent hundreds of billions or even trillions bailing out the mega banks and corporations.
As you may have guessed, I believe we should do more than just keep the "Bush era" tax cuts. I think tax cuts should be expanded. In fact, I think the income tax should be completely eliminated. It can be shown by looking through history that more government causes greater economic stress. It can be shown that fiat money systems inevitably collapse. That's because they are nothing but ponzi schemes. All the money flows to the top of the pyramid, the people who set it up. When it collapses, those at the bottom get hurt, those at the top still have all the money.
Before 1913, there was no income tax in the United States of America. It was, however, necessary to implement one in order for the Federal Reserve to be created. The Constitution of the United States of America had to be changed in order for this to happen. Back then, it appears, people still cared about what the Constitution had to say and about the protections it codified for the individuals residing in this nation. Some have made the case that the change made (the 16th amendment for those who don't know) was made illegally and was never properly ratified. Whether or not this is true I'm not entirely certain due to the obfuscation of the English language by the injection of Legalese into our lexicon, but in my opinion the confusion surrounding it should make the article null and void. There was certainly no meeting of the minds when this change was foisted upon the American people. It was fraudulent from its very inception.
So taxes were sold to the American people as a propaganda maneuver to sell them a system they wouldn't have bought into had they known the truth about it. They were told it was necessary to stabilize the economy. They were told it was necessary to keep the depressions of the past from recurring. They were told it was necessary to keep the specter of high unemployment from rearing its ugly head. They were told that only a small percentage of the richest Americans would be required to pay any income tax whatsoever. They were even told that the very people who wrote the Federal Reserve Act were against passing it, creating the illusion that an elite group the American public inherently distrusted would be adversely affected by the legislation. They were lied to. It is their progeny that now pays for their error.
The Federal Reserve has not done what it was set up to do. It did not stabilize the economy. In fact, in certain ways it made the economy less stable. Since its creation in 1913 the dollar has lost more than 95% of its value. Before that, from the mid 1700s to 1913, the dollar had actually increased in value. In other words, anyone who had saved a dollar prior to 1913, even if they had simply put the money away in a home safe, could buy more with that money after, say, 10 years, than they could when they first put it away. A retirement plan could have been as simple as a savings plan. After 1913, a dollar saved today was worth less tomorrow. Suddenly, retirement plans had to take inflation into account and it was necessary to find investments that grew or what seemed like a nice nest egg at the time might not be enough in the future. Investments also involve risks and can cost the investor a significant portion of the money they thought they'd have to retire on. Not to mention, many times that money is taxed once the investment matures, where the pre 1913 savings plan was tax free.
But I have digressed. The point is that neither income taxes nor the Federal Reserve which caused them to be created have done what they were originally supposed to do. Why do we continue to support failure? Is it any wonder our prosperity has been squandered when one considers the amount of failed institutions that have been propped up by our taxes? Why do we continue to pay?
Taxes are immoral. One can talk about laws, obedience, services that may or may not be rendered, contributing to society, etc. all one wants, but when push comes to shove taxes are theft. More accurately, they are the form of theft known as extortion. Face it, most all people would not pay their taxes if they had a choice. If there wasn't the threat of force, if there wasn't the specter of arrest and jail hanging over one's head, then most people wouldn't give their money to the government. There is, in my opinion, no difference between the government saying "Gee, I'd hate to see you have to go to jail for not paying your taxes" and some mafia thug saying "Gee, it's a nice business you have here. I'd hate to see something happen to it." The only difference might be that the mafia thug is a little bit more overt about his threat and does not try to pretend that he is something he is not.
If the services government offers are so necessary to society, why do we need such a threat to get people to pay for them? Wouldn't people who wanted such services be willing to pay for them? If they are doing such a good job, why do they have to force people to pay? Why won't they allow everyone to vote with their dollars? Perhaps it's because the services they offer aren't so necessary, or because they aren't doing a good job providing them, or because they have a monopoly on such services, they know they have a monopoly, and they don't want to relinquish that monopoly because they know their competitors would do a better job and they wouldn't be able to stay in the business of providing those services when their competitors would take their market share from them by providing better service at a lower cost.
Taxes also punish success. Who wants to make more when it just means the government will take more? Who wants to produce when more than half of what's produced is taken away by the faceless bureaucratic institutions that rule over our lives? The more successful you are, the more you have to pay, the more you have to carry the rest of society, the more you have to bear the burden of big government. It just makes no sense. It would be a much fairer system to not tax anyone and let everyone decide for themselves which goods and services they want to pay for, what they can and can't afford, and what charities deserve any extra money they may have.
There is no doubt that taxes help some people, but I don't believe taxation is the most efficient way of doing that, and I certainly don't think that government bureaucrats are the best people to determine where the money should go. One can and should question the wisdom of trying to redistribute wealth, of taxing the rich to help the poor. As the income tax was originally supposed to tax only the wealthiest one percent of Americans, it has morphed into a burden on all of us, even the poorest and least able to pay. My personal experience is evidence of this.
I have been without a job for some time now, and looking for work. While I have made a little money here and there, I have been mostly surviving off of unemployment insurance and what was left of my 401K plan when I was laid off. Little did I know that I would have to pay taxes on these money sources. When I filled out my 2009 tax returns like a good slave, I was surprised to see that I owed several hundred dollars to the feds and a couple of hundred to the state of Illinois.
Having no money to spare, I wrote to both the feds and the state, explained my situation and asked for a payment plan. The feds sent me a payment plan so I wouldn't take a big hit in a month and charged me a little bit of interest. The state of Illinois, on the other hand, demanded their money in one lump sum and fined me for not paying my taxes on time. There's your compassion. There's how much the state "cares" about the poor. They talk about taxing just the rich, but one way or another taxes are eventually paid for by even the poorest amongst us. The only real solution is to completely eliminate taxes and fund government services in a voluntary manner.
Taxes create victims by robbing the taxpayer. They will tax the rich until the rich are poor and not bat an eye. They create criminals by making it illegal to withhold payment when one feels that the services rendered are less than satisfactory. This monopolistic system is antithetical to the principles upon which this nation was built. Income taxes are exceptionally abhorrent since their enforcement intimates that government owns a portion of your labor. It's not enough to simply keep the "Bush era" tax cuts, the time has come expand income tax cuts and end the extortion.
You sound like a Commie to me, Comrade Isaiah!! LOL
Great video ticket!! I wish he had more time...
A Red-Alert Threat to the Regime
Gary North
"Show me the money!" Cuba Gooding made this phrase famous in the 1996 movie, Jerry McGuire. The phrase soon got into the language.
"Follow the money!" That came from the movie, All the President's Men. No one knows who said it. "Deep Throat" didn't. The screenwriter says that he does not know where he got it. It has entered the language.
"Trust me." That was Jimmy Carter's phrase in 1976. It also got into the language. It has been used ever since as satire. It has been the mantra of every Chairman of the Federal Reserve System.
"Don't ask. Don't tell." That was Bill Clinton's phrase. I think he got it after watching Congress deal with Alan Greenspan.
"Never give a sucker an even break." That was W. C. Fields's famous line. This has been the FED's operational policy since 1914.
Audit the Gold
In 2011, Congressman Ron Paul will introduce a bill in the House of Representatives calling for an audit of the gold held by the Federal Reserve System on behalf of the United States government. If he can successfully promote this bill by the phrase, "Show us the gold!" he will inflict enormous damage on the American Establishment. This damage could conceivably spread to the entire international Establishment, which rests on the sovereignty of the central banks over their domestic governments.
Most of those few Americans who have ever heard of the Federal Reserve System operate under the illusion that the government is sovereign over the FED. On paper, this is true. Operationally, it isn't. We know this, because no government agency audits the FED.
You are surely not sovereign over the United States government. The United States government is sovereign over you. The supreme mark of this control is the fact that the Internal Revenue Service can tax you. It requires you to sign your tax forms, on penalty of perjury. You can be sent to jail if you lie about these forms. It can require you to provide evidence that you have filled out your income tax forms accurately. If you refuse to provide this evidence, the IRS will simply assess whatever it wants, and you will be required to prove that its assessment is inaccurate.
If you want to find out who is really in control in any situation, find out who has the legal right to audit the other one.
This is easy to understand with respect to individuals, corporations, and other organizations that are under the thumb of the tax man. This is understood by taxpayers all over the world. They fully understand who is in charge. In a modern society, the agency in charge is the agency that can and does compel other individuals and agencies to supply records relating to their income, capital, and bank accounts.
The Federal Reserve System has never been audited by an agency of the United States government. The FED hires private auditing firms, rotating them year by year, which undermines continuity, making it more difficult for them to follow the money. The FED limits those firms with respect to what they are allowed to audit. The FED then submits these internally audited facts to the United States Treasury.
Each year, the FED pays the Treasury any excess money beyond the FED's operations expenses, if the money came from interest earned from its holdings of U.S. government debt. This has been the law since the early 1940s. In the good old days, the FED kept all of the money that it earned as interest payments from the Treasury. It paid nothing to the Treasury. That was a sweet deal.
When Congressman Paul persuaded the House of Representatives in 2009 to vote in favor of a general audit of the FED by the Federal government, the bill was blocked in committee. His original version of the audit bill never came to a final vote in the House as part of the banking reform legislation. The Senate never considered the amendment.
So, it is obvious who is in charge. Congress pretends that it is in charge, but in fact the Federal Reserve System is in charge. Congress accepts the word of the Federal Reserve System with respect to how much it cost the FED to keep its doors open, and it accepts whatever payment the FED makes to the Treasury.
It is obvious that if the Internal Revenue Service did not have the power to audit taxpayers, and if taxpayers have the authority to decide how much it cost them to "keep their doors open," and pay the Treasury only that amount of money that is in excess of their costs of operation, the government would go bankrupt. It is equally obvious that the government does not intend to go bankrupt. The government does not intend to let individuals decide on their own authority how much to pay the government. This is because the government is in charge, and taxpayers are not in charge.
The Federal Reserve System is in charge of Congress; Congress is not in charge of the Federal Reserve. You can say that, on paper, the Congress is in charge. In response, I argue that this paper is rarely used, and with respect to an audit, it has never been used.
Where is the Gold?
This leads us to what I think is the symbolic heart of the matter: the gold that the Federal Reserve purchased from the United States government in 1933 and 1934, when Roosevelt confiscated the citizens' gold.
Officially, that gold belongs to the United States government. Unofficially, it does not. It no more belongs to United States government than Congress has authority over the Federal Reserve System. It doesn't matter what is on paper. What matters is what Congress is willing to enforce.
There has been no audit of the gold held by the Federal Reserve since the mid-1950s. The government does not know how much gold is in Fort Knox. It does not know how much American gold there is in the vault of the Federal Reserve Bank of New York, located at 33 Liberty St., New York City.
The gold remains in the possession of the Federal Reserve System. Most of the governments around the world have agreed to keep their gold stored at 33 Liberty St. This enables the employees at 33 Liberty St. to move bars of gold from one government's pile to another government's pile. This also lets them keep the records. The trouble is, no government anywhere has the authority to audit the holdings of gold at 33 Liberty St. The governments simply take the word of the Federal Reserve Bank of New York that their gold is properly monitored and allocated in the New York FED's vault.
It is quite possible that, beginning in 1968, the gold held in the vault at 33 Liberty St. was transferred to the London Gold Pool, a consortium of European central banks. From 1965 until the Pool collapsed in 1968, this gold was sold at $35 per ounce when the world market price began to climb above $35. You can read about this here.
Finally, in August of 1971, Richard Nixon unilaterally closed the American gold window. He refused to sell gold to other central banks at $35 an ounce, which the United States government had agreed to at the Bretton Woods meeting in 1944.
The government of the United States maintains the illusion that it owns all of the gold that is stored by the Federal Reserve System on its behalf. It also maintains the illusion that it is in control of the Federal Reserve System, merely because it is officially in charge of the Board of Governors of the Federal Reserve System. But the 12 regional banks of the Federal Reserve are not part of the government. You can prove this by going to any of the Federal Reserve bank websites. They end in .org. This includes the Federal Reserve Bank of New York. Only the website of the board of Governors of the Federal Reserve ends in .gov.
Faithfulness or Betrayal?
Ron Paul will wait until 2011 to introduce his gold audit bill. He seems to be assuming that Republicans will be in control of the House of Representatives in 2011. He also seems to be assuming that the House of Representatives will be more aggressive passing legislation that will embarrass the Obama administration, assuming that a House bill gets through the Senate.
Obama will veto any bills that he does not like, which will be a lot of them if Republicans control both branches of Congress. If Republicans do take control, and if they are successful in getting such legislation onto the desk of the President, this will undoubtedly embarrass the President. Short of that, bills from the House can embarrass Democrats in the Senate.
As part of positioning for the Presidential election of 2012, a bill to audit America's gold could play havoc with the Federal Reserve. The bill will not be seen as an audit of the FED's operations in general – only an audit of America's gold, which has been justified by the FED in its supposed capacity as a trustee. It is the issue of the FED as trustee, not the FED as a lender, that will be the heart of the audit.
Will the House pass a bill to audit the gold that is supposedly held in Fort Knox and also in the vault of the Federal Reserve Bank of New York? Will Congressman Paul be able to gain support from the rest of the Republicans in Congress? If he can't, then it will be clear who is really in charge. But if he is able to get the bill passed, and if it somehow gets through the Senate, then Obama will veto it. Whether that will be a big deal politically remains to be seen.
The problem that such a bill poses to the Federal Reserve is obvious. On paper, Congress has the right to audit the Federal Reserve. On paper, Congress also has the right to make certain that the gold reserves of the United States government are still available to be used by the United States government, should the United States government ever decide to do something with the gold.
Any attempt by the Federal Reserve to argue that it must not allow the United States Congress to see if there is really any gold in its vaults is going to be a very difficult public relations exercise.
It is one thing for the FED to say that a full audit will interfere with the privacy necessary for the conduct of central bank operations. Some voters might actually believe this. But it is something completely different to say that the Federal Reserve should not be required to prove that it still has possession over the gold that it purchased with the money created by the FED in 1933 and 1934. Its reports have always said that it does. If it doesn't, then there will be a huge scandal. "Who got America's gold?" That would force Congress to conduct a full-scale audit.
The public really does believe that the gold belongs to the government. Legally, the gold does not belong to the government. The Federal Reserve bought it fair and square back in 1933 and 1934 with newly created money. The gold is on the books of the Federal Reserve System. But the public, which is naïve, has the illusion that the government did not turn over the gold to the bankers in exchange for bookkeeping entries created out of nothing by the Federal Reserve System. The public thinks that whatever is in the vault at Fort Knox is in the vault of the government entity. Voters do not know that deliverable gold – 99.9% pure – is stored in the vault of a private entity, the Federal Reserve Bank of New York. The gold in Fort Knox is probably coin melt: 90% pure.
So, the Federal Reserve is going to be facing a big problem in 2011. If the Democrats lose control of the House, and Dr. Paul introduces his legislation as announced, the FED will have to invent some kind of believable reason why the United States government does not have the right to find out if the gold that is supposedly owned by the United States government is really in the vaults of the Federal Reserve Bank of New York and the other vault in Fort Knox, Kentucky.
If it were to turn out most of the gold in Fort Knox and New York is not there, the price of gold will rise. The investing public will figure out that the price of gold has been kept low by means of secret government sales of their nations' gold reserves – what Gordon Brown a decade ago did publicly with half of Britain's gold. With a scandal brewing, there will be no more central bank "leasing" of gold. That will dry up the supply.
If it turns out that the gold in Fort Knox is melted coins, and not deliverable gold for international markets, international markets will respond accordingly. Gold will go up.
If the physical inventory indicates that much of the gold that is stored at 33 Liberty St. has in fact been transferred to other central banks, then there is no legal way for the United States government to audit the reserves of those other central banks. But the pile of American gold that is supposedly under the jurisdiction of the Federal Reserve Bank of New York would turn out to be much smaller than what has been reported.
Here is my tip for any future auditors. Get a definition of the phrase "deep storage gold." Then find out where this gold is stored ... if anywhere.
If all the gold is not there, there will be enormous pressure from voters on governments around the world to audit the gold reserves of their central banks. If the gold held in trust by the New York FED is not there, foreign voters will conclude that their governments' gold may not be there, either. The reason is obvious: if a lot of American gold is missing from America's pile of gold at the Federal Reserve Bank of New York, it is quite possible the gold is no longer inside that vault.
It will occur to Website editors that other central banks have leased their gold to bullion banks, which then sold the gold and invested the money in high-yield government bonds. This would mean that the supposed reserves of the world central banking system have been depleted. It would also mean that the bullion banks, which are privately owned, are in hock to the central banks, because they borrowed the gold from the central banks. Then they sold the gold. They cannot get the gold back to repay the loans, because the price of gold would skyrocket. So, the bullion banks could default, and the central banks could be left holding IOUs from bankrupt private institutions.
If this were to take place, the financial dominoes would begin to fall. There would be outrage around the world by voters, and politicians would hold central bankers accountable for having in fact sold the gold, and hidden the fact by calling the transaction a lease.
An International Scandal
Politicians, of course, don't care about any of this, at least not until voters begin to put pressure on them. But the scandal that would result from an audit of the Federal Reserve that revealed the gold is not all there would spread very rapidly around the world. This would be the biggest news on the Internet relating to money and banking that there could possibly be. The major news media, of course, would attempt to cover it up, but at some point the pressure of the leaks into the web would force them to cover the story.
Under these circumstances, Congress might reassert its legitimate authority over the Federal Reserve System. Under these circumstances, the entire monetary structure of the West would be called into question. It would mean the end of the rule of central banks.
That rule has been almost complete since the outbreak of World War I in 1914. When the governments allowed the private banks to default on their contracts to pay gold to the public on demand, which took place within weeks of the outbreak of the war, the governments of the world transferred both gold and sovereignty to the central bankers. An audit of the Federal Reserve system that would reveal the gold, or most of the gold, is not there would begin to reverse the sovereignty of central banking over international and domestic politics. The fallout from an audit that indicates the gold is not all there is the greatest threat to central banking that it has ever faced.
This is why Congressman Paul is the most dangerous politician to the Establishment that the Establishment has ever faced. He has targeted the soft underbelly of the entire system. The soft underbelly is public trust in the Federal Reserve System.
The public cannot grasp the sophisticated operations of central banking. Neither can Congress. But the public can grasp the idea that the government's gold – gold held in trust by the Federal Reserve – is supposed to be in some vault. The American public believes that there is physical gold held somewhere on behalf of the United States government. If it turns out that a lot of the gold is gone, the public will understand this. The public will not be bamboozled into believing that the sale of the gold, quietly done under the secrecy provided by Congress to the Federal Reserve System, was necessary to maintain the prosperity of the United States.
Conclusion
Consider the dilemma that the President would face if Congressman Paul's bill lands on his desk. Should he take the risk of signing the bill into law, and thereby take the risk that gold is missing? Or should he veto the bill, with some kind of lame explanation as to why he vetoed the bill? He will then face a public relations disaster. He will be seen as an agent of Ben Bernanke. Is this wise political positioning for 2012? I don't think so.
I think the President will veto the bill. His advisers will tell him that this is necessary, even though it requires him to fall on his sword.
People don't understand the Federal Reserve System, nor do they understand the need for an audit of that system. But they do understand that the gold that is supposedly in the vaults of the Federal Reserve belongs United States government. This concept is much easier to understand than any other aspect of central banking.
This is why a bill to audit the gold is the biggest threat the Federal Reserve's secrecy and autonomy that has ever been posed to the FED ... if any of the gold is missing.
It is no threat at all if it is all there. If it is all there, why would the FED resist?
And so, I close with this thought: "Show us the gold!"
That Rumbling Sound Is Dollar Giving Way
Rick Ackerman
For nearly twenty years, we haven't flinched from our prediction that the massive debt build-up of the last generation would precipitate out as a deflationary bust. That is what we still expect, although we now believe there is likely to be a hyperinflationary phase at some point as the financial system implodes. But the bottom line is that no matter how things play out, America 's standard of living will fall more steeply than at any other time since the Great Depression. As for the deflation-vs.-hyperinflation "debate," it is useful only to the extent it helps predict how mortgage debtors will fare as economic disaster unfolds. We seriously doubt they will be "saved" by the kind of hyperinflation that would put hundred-thousand-dollar bills in Joe Homeowner's wallet. Imagine how mortgage lenders would react if Joe could peel off three or four of those bills and say, "Okay, pal, we're square." This scenario will seem particularly unlikely to those who believe that these economic hard times have been engineered by Masters of the Universe intent on stealing our property. Trust us on this: If there's a hyperinflation, it is the rentiers who will get screwed most ruinously, not the little guys.
Even so, that doesn't rule out the prospect of a fleeting, hyperinflationary spike on the way down, since widespread notions concerning the dollar's true value could change precipitously overnight. We mention this because notions are already beginning to change in ways that leave the dollar increasingly vulnerable to a global run. The exploding caldera of fear that will eventually bring this about bubbled to the surface yesterday when the Fed made clear that it is absolutely clueless about how to get the economy moving. The central bankers' muddled talk of yet more "quantitative easing" (QE2) is about as reassuring as the promise of more sanctions against Paul Krugman may be the last person in America who still believes that additional heaps of "stimulus" will do the trick. On Wall Street, however, the belief is clearly ascendant that QE2 will only wreck the dollar without providing any lift to the economy. That could explain why stocks fell yesterday while gold and silver soared. Not that the yahoos on Wall Street exhibited perfect knowledge. To the contrary, the broad averages shot up initially, driven by headless-chicken panic; and T-bonds finished the day with anomalously big gains despite the louche tittering about further easing.
Schiff's Scenario
Peter Schiff has provided the most plausible scenario for a hyperinflation. He foresees a day when confidence in the dollar collapses, forcing the Fed to become the sole buyer of Treasury debt. When municipal and corporate bond traders realize on that same day that there is no official support for their markets, private debt will go into a death spiral, forcing the Fed to monetize all bonds. Under the circumstances, the Fed would not become merely domestic debt's buyer of last resort, but the only buyer. Voila! Hyperinflation.
It should be noted that it is not some certain quantity of money injected into the banking system that will cause hyperinflation; rather, it will be the repudiation of all dollars already in circulation. Holders of physical dollars will panic to exchange them for anything tangible, causing the dollar's value to fall to zero in mere days. Everything needed to trigger this collapse is already baked in the pie, and it is only the truly benighted, Nobelist Paul Krugman foremost among them, who cannot see the obvious. As for mortgage debt, you will still owe $250,000 on your home the Day After, except that your home will be much more deeply underwater than before - worth perhaps $20,000 instead of $180,000. Mortgage lenders will have to work with you - work with scores of millions of homeowners in the same boat - to bring about a reconciliation. No one can predict how already-unpayable mortgage debt will ultimately be paid, but it is almost certain to require a radical change in our laws in order to avoid the kind of social upheaval that could jeopardize the very rule of law.
Your right about the Hunt Bros. buying up all the silver and it would of been interesting to see how high silver would have gone if that were not the case, but 45:1 has been more of a recent ratio for good and silver as opposed to the historical 15:1 ratio over the last 2,000 years. Ever since the creation of our fiat system silver has been artificially set at around 45:1 even though it is naturally found in the earth at 15:1. Now it is mined at 7:1 and the above ground inventory is approaching 1:1. Plus the USGS says it will be the first element on the periodic table to disappear from the earths crust in as soon as 20 years! Gold is still plentiful! We could see silver start trading as platinum does in the next decade because it will be so hard to find as a well desired industrial metal.
None So Blind
Howard Katz
As the old expression has it, there are:
"None so blind as those who will not see."
The world is about to get a sobering lesson over the next year or two as the precious metals markets move explosively to the up side. As happens so often in the affairs of men, reality is there in front of us just sitting and being itself. Yet so few of the species homo sapiens can see it.
I have presented an alternative explanation for the blind stupidity of the Keynesian "economists" and their almost perfect record of being wrong. On March 9, 1933, Congress gave the commercial bankers the special privilege to create money out of nothing. Immediately the money supply began to increase, and today the price level is 17 times what it was on that day.
Since the bankers could now make loans (receiving interest) without paying for capital (as the old fashion savings bank or S&L did), they naturally had a strong interest to do so. They immediately began to fund a group of "economists" who emerged to defend the thesis that creating money out of nothing was the "road to plenty" for a society.
Creating money had been tried many times in many different countries, always with the same result. Prices went to the moon, and the society got very poor. The most recent example of this was Zimbabwe where life expectancy dropped from 60 years to 40 years over a decade, a figure which explains the photographs of human skeletons and the official unemployment rate of 95%. By comparison, the two most successful countries in world economic history are Britain (including the Commonwealth) and the United States. And these are countries which maintained a strict hard money standard for over a century.
The "economists" who apologized for paper money and served the commercial bankers were a collection of phonies and frauds. Most prominent here were two American economists named William Trufant Foster and Waddill Catchings, who wrote a book in 1928 entitled, "The Road to Plenty." In the 1940s, the bankers realized that something had to be done, and they embarked upon a campaign to buy titles for these crackpot economists.
But first a British pedophile (John Maynard Keynes) "improved" the Foster and Catchings fraud by employing a technique I call the wolf in sheep's clothing. Here the wolf consists of a group of people in politics or economics who wish to go back to the way things were in the Middle Ages. The proper term for such people is reactionaries. The sheep's clothing is a disguise these people adopted to pretend to be in favor of science, liberty and progress. When you see words like "new" or "progressive," then you are dealing with the wolf in sheep's clothing.
Keynes plagiarized the Foster and Catching theory, called it "The New Economics," and presented it as the latest word in the modern science of economics. The bankers then entered and literally bought fancy titles for their favorite "economists" so that these could use the prestige so gained to influence the country in favor of paper money. The classic case here was when the Manhattan Bank (later Chase Manhattan) bought a chair of economics for John Kenneth Galbraith at Harvard to provide a platform from which he could present his paper money theories and serve the interests of the bankers.
This is a fantastic picture. The entire institution of higher learning in America was bought out by the bankers. They took the bankers' money and sold a pack of lies to the American people.
Actually, I have written a book on the wolf-in-sheep's-clothing tactic (The Wolf in Sheep's Clothing). It is scheduled for publication soon by the Foundation for Economic Education and Harper Collins. It is the story of a gigantic fraud which has deceived our entire society and come close to overthrowing freedom in America. A group of reactionaries (people who want to go back to the past) are pretending to be advocates of progress and have pulled the wool over the eyes of all of the people.
Once the banker "economists" infiltrated into our higher education system, it ceased to be education, and the teaching of economics became a joke. If you take an economics course in 99% of all American institutions today, you will be taught a pack of lies, not just any lies but precisely the lies designed to support the bankers' privilege to create money. You can hear a good many of these lies any time Bernanke opens his mouth to speak.
Now when economics was a science (prior to the 1930s), the basic thing that economists did was to make predictions. Prediction is the basic tool of science. If you have a true theory, then you use it to make a prediction, and when the prediction proves correct, then this is supporting evidence for the theory.
Naturally, when the banker "economists" came in during the 1940s, they established an unparalleled record of failed predictions. The year I entered Harvard (1955) John Kenneth Galbraith went to Washington and testified before Congress that the stock market (DJI 420) was in danger of another 1929. He caused a panic as speculators in the market rushed to sell their stocks, driving the DJI from 420 down to 400. It then turned and rose for the next 11 years, hitting DJI 1,000 in 1966. There was no repeat of 1929.
We had a more modern example of this foolishness in late July. After a decline in the gold market through late July, Alan Abelson of Barron's predicted (on July 26) that the price of gold was ready for a substantial decline. Gold declined for exactly one day as Abelson's readers rushed to sell. You know what has happened since that time. Gold turned on a dime. The breakout created on the 27 th proved false, and it is now at $1,275. Abelson's readers are sitting there with their mouths agape. They sold their gold at the exact bottom.
Now certainly people can make mistakes. The progress of science is full of them. But when a scientist makes a mistake, he observes it and admits it. When a banker "economist" makes a mistake, he hopes the public will not notice, puts a good front on it and uses his title to get away with it. I have often referenced Henry Kaufman's prediction of higher interest rates and a depression in 1982. I happened to catch Kaufman on a talking head TV show around the turn of the century. There was the host obsequiously kissing up to him and not one mention of the fiasco of 1982.
I was screaming at the TV set. "What about the depression? What about the high interest rates?" Kaufman got millions of stock market traders to sell their stocks with the DJI under 800. It was the bonehead play of the century. But the host continued smoothly on. "Oh yes, Mr. Kaufman, what is your opinion of the coming year?" To heck with the coming year. How does he explain his prediction of 1982?
I have detailed in these articles many other bonehead predictions such as the Great Depression of 1990 and Dow 36,000 (by 2003-05). Why are all these establishment "economists" making one wrong prediction after another " throughout their entire lives?
The answer is very simple. They don't know anything about economics, and they don't care. They are hired agents of the bankers, and their impressive titles are intended to get the sucker public to believe any absurd thing they say. Their most common error is; to predict "deflation" because they are trying to get the Fed to print money. When the "deflation" does not happen, they shrug their shoulders, hope you will quickly forget and go about their business. They are confidence men, not economists, and as long as you are stupid enough to believe them, they will continue to lie to you.
But consider the tremendous position that puts us gold speculators in. The last employment of the "deflation" lie occurred in 2008, and virtually all of the media joined in. The fools who believed the lie rushed to sell commodities in the last half of the year, and the CRB index fell in half. But despite this artificial self-confirming effect we have still not had one year in which the Consumer Price Index declined. "Deflation," where is thy sting?
And even as all await the "deflation" with bated breath, commodities are gathering strength for a second move up. Gold has broken out to new highs. Silver has broken out from an ascending triangle. Wheat and corn are on the move. Coffee is at new highs for the century. The CRB is gathering strength for an attack on the July 2008 high. The charts are not predicting "deflation." The charts are predicting "inflation."
So here are all the traders in the world taken in by a lie, the exact same lie which has been used to take their money over and over and over. Here are all these stupid people rushing to give their money to us, and all we have to do is to reach out our hand.
And what it all comes down to is that, if you want to be a good speculator (or a good person), then you have to see reality as it is. This is easier said than done. These five little words contain a crucially important moral virtue. To actually follow them requires a lot of work. You must draw your own conclusions in defiance of what the people around you believe (and are trying to shove down your throat). This is the virtue known as contrary opinion. You must put your emotions aside and believe what is true, not what you want to believe. Emotions are great things, but a strong emotion can cloud the mind. If you try to suppress the emotion, it will just get stronger and come out in ways of which you are not aware. What you must do is to tell your emotion to temporarily stand aside.
I often find it effective to simply talk to my emotions (as though they were a little person inside of me). For example, I might say, "Avarice, stand aside for a while. I need to think clearly if I am going to be able to give you what you want. You are a beautiful woman and should be given fine jewelry and pretty clothes. But if I am to accomplish this, then I have to see reality as it is. When I have made my big score, I will invite you back, and we will have great fun together." Ditto, ditto for the emotion of fear (which in the markets is very powerful).
Incidentally, Keynes' views on fear and greed, like everything else the man said, are garbage. Markets are not made by cycles of fear and greed. An easy way to see this is with the auto stocks (more so with the housing group). They characteristically develop very low P:E ratios at stock market tops (and high P:Es at market bottoms). Wait a minute. If the market puts a low P:E on the auto group near a market top, is it committing greed? No chance. If market tops are caused by an irrational desire for money, then why are auto stocks (one of the big movers) showing lower P:Es at the top? This is rational behavior, not irrational.
What, in fact, causes stock market tops is government intervention (via the Fed). When the Fed eases (as in 1982 and 2008), stocks form a bottom. When the Fed tightens (as in 1987 and 2006), stocks form a top. I have known this for 41 years. It has enabled me to predict 90% of all bull and bear moves in the stock market. I have been writing about economics for all of this time. Wouldn't you think that somewhere, someone would have caught on? How about when I predicted Black Monday on October 19, 1987? On that day, the DJI fell 22%. All these people lost a big bundle that day (as they will lose more bundles in the future), but no one woke up to see reality as it was.
None so blind as those who will not see.
Thank you for your interest.
$2,500 Gold Could Easily Result in $178.50 Silver - Here's Why!
Lorimer Wilson
More than 95 respected economists, academics, analysts and market commentators are of the firm opinion that gold will go to $2,500 and beyond before the parabolic peak is reached. In fact, the majority (55) think a price of $5,000 or more - even as high as $15,000 - is actually more likely! As such, just imagine what is in store for silver given its historical price relationship with gold!
Precious metal bull markets have 3 distinct demand-driven stages and we are now quickly approaching or perhaps even in the very early part of the last stage which occurs when the general public around the world starts investing in gold and this deluge of capital into gold causes it to escalate dramatically (i.e. go parabolic) in price.
Gold
Gold went up 24% in 2009 and is up 16% YTD and, as such, there are no shortage of prognosticators who see gold going parabolic reminiscent of 1979 when gold rose 289.3% in the course of just over a year (from a $216.55 closing price on Jan. 1, 1979 to a closing price of $843 per ounce barely a year later on Jan. 21, 1980) and 128% higher in a late-1979 parabolic blow-off of just under 11 weeks! A 289% increase in the price of gold from $1275 would put gold at $4,960. (More on what that might mean for the future price of silver is analyzed below.) That being the case what appear on the surface to be rather outlandish projections of what the bull market in gold will top out at don't seem quite so far-fetched. (For a complete list of the economists, academics, market analysts and financial commentators who maintain that gold will go parabolic to $2,500 -$15,000 in the near future please see: http://www.munknee.com/2010/09/5000-gold-bandwagon-now-includes-these-55-analysts-got-gold/
Silver
Silver has proven itself, time and again, to be a safe haven for investors during times of economic uncertainty and, as such, with the current economy in difficulty the silver market has become a flight to quality investment vehicle along with gold. The 49% increase in silver in 2009 (and 23% YTD) attests to that in spades. During the last parabolic phase for silver in 1979/80 it went from a low of $5.94 on January 2nd, 1979 to a close of $49.45 in early January, 1980 which represented an increase of 732.5% in just over one year. Such a percentage increase from the current price of almost $21 would represent a future parabolic top price of $175. (For what that might mean for the future price of gold see the analysis below.) Frankly, such prices seem impossible in practical terms but that is what the numbers tell us.
Gold:Silver Ratio
The current gold:silver ratio has been range-bound between 70:1 and 60:1 for quite some time which is way out of whack with the historical relationship between the two precious metals. It begs the question: “Is now the perfect time to buy silver instead of the much more expensive gold metal?â€
How both gold and silver perform, in and of themselves, does not tell the complete picture by a long shot, however. More important is the price relationship - the correlation - of one to the other over time which is called the gold:silver ratio. Based on silver's historical correlation r-square with gold of approximately 90 - 95% silver's daily trading action almost always mirrors, and usually amplifies, underlying moves in gold. With significant increases in the price of gold expected over the next few years even greater increases are anticipated in silver's price movement in the months and years to come because silver is currently seriously undervalued relative to gold as the following historical relationships attest.
Let's look at the gold:silver ratio from several different perspectives:
- Over the past 125 years the mean gold:silver ratio (i.e. 50% above and 50% below) has been 45.69 ounces of silver to 1 ounce of gold.
- In the last 25 years (since 1985) the mean gold:silver ratio has increased to 45.69:1
- The present gold:silver ratio has been range-bound between 60:1 and 70:1 (61.3:1 as of September 17/10).
- Interestingly, during the build-up to the parabolic blow-off in 1979/80 silver outpaced gold going up 732.5% vs. gold's 289.3% causing the ratio to drop from 38:1 in January 1979 to 13.99:1 at the parabolic peak for both metals in January,1980.
Let's now look at the various price levels for gold and the various silver:gold ratios mentioned above one by one and see what conclusions we can draw.
First let's use the Sept. 17, 2010 price of $1276.50 for gold and apply the various gold:silver ratios mentioned above and see what they do for the potential % increase in, and price of, silver.
Gold @ $1276.50 using the current 61.3:1 gold:silver ratio puts silver at $20.82 (Sept. 17/10)
Gold @ $1276.50 using the above 45.69:1 gold:silver ratio puts silver at $27.94 (i.e. +34.2%)
Gold @ $1276.50 using the above 13.99:1 gold:silver ratio puts silver at $91.24 (i.e. +338.2%)
Now let's apply the projected potential parabolic peaks of $2,500, $5,000 and $10,000 to the various gold:silver ratios and see what they suggest is the parabolic top for silver.
@ $2,500 Gold
Gold @ $2,500 using the gold:silver ratio of 61:1 puts silver at $41
Gold @ $2,500 using the gold:silver ratio of 45:1 puts silver at $55.50
Gold @ $2,500 using the gold:silver ratio of 14:1 puts silver at $178.50
Before we go any further the above analyses bears closer scrutiny. In paragraph four above it was noted that “During the last parabolic phase for silver in 1979/80 it went from a low of $5.94 on January 2nd, 1979 to a close of $49.45 in early January, 1980 which represented an increase of 732.5% in just over one year.†Such a percentage increase from the current price of almost $21 would represent a future parabolic top price of $175.
It is interesting to note that the above $175 is almost identical to the $178.50 that would result from a reversion to the mean in the gold:silver ratio with gold at $2,500. For the gold bugs who believe that gold is going to go even higher it can only mean a very much higher price for silver as the analyses below suggest.
@ $5,000 Gold
Gold @ $5,000 using the gold:silver ratio of 61.1 puts silver at $82
Gold @ $5,000 using the gold:silver ratio of 45:1 puts silver at $111
Gold @ $5,000 using the gold:silver ratio of 14:1 puts silver at $357
@ $10,000 Gold
Gold @ $10,000 using the gold:silver ratio of 61:1 puts silver at $164
Gold @ $10,000 using the gold:silver ratio of 45:1 puts silver at $222
Gold @ $10,000 using the gold:silver ratio of 14:1 puts silver at $714!!
From the above it seems that, any way we look at it, physical silver is currently undervalued compared to gold bullion and is in position to generate substantially greater returns than investing in gold bullion.
Summary
History will look back at the artificially high gold:silver ratio of the past century as an anomaly, caused by the dollar bubble and the world being deceived into believing that fiat currencies are real money, when in fact they are all an illusion. This fiat currency experiment will end badly in a currency crisis and when that happens, as it surely will, gold will go parabolic and silver along with it but even more so as the gold:silver ratio adjusts itself to a more historical correlation. The wealthiest people in the future will be those who put 10% to 15% (or perhaps more - much more!) of their portfolio dollars into physical silver today and were smart enough to research and pick the best silver mining/royalty stocks and warrants to maximize their returns.
Indeed, while gold's meteoric rise still has room to run, silver's run is yet to get started. As such, it certainly appears evident that now is the time to buy all things silver.