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Thanks for that article... That's the first I have heard about that.
You can also check out eTrade.
How does the dollar go up with an announcement like that??
Liberty Defined
Ron Paul
America's history and political ethos are all about liberty. The Declaration of Independence declares that life, liberty, and the pursuit of happiness are unalienable rights, but notice how both life and the pursuit of happiness also depend on liberty as a fundamental bedrock of our country. We use the word almost as a cliche. But do we know what it means? Can we recognize it when we see it? More importantly, can we recognize the opposite of liberty when it is sold to us as a form of freedom?
Liberty means to exercise human rights in any manner a person chooses so long as it does not interfere with the exercise of the rights of others. This means, above all else, keeping government out of our lives. Only this path leads to the unleashing of human energies that build civilization, provide security, generate wealth, and protect the people from systematic rights violations. In this sense, only liberty can truly ward off tyranny, the great and eternal foe of mankind.
The definition of liberty I use is the same one that was accepted by Thomas Jefferson and his generation. It is the understanding derived from the great freedom tradition, for Jefferson himself took his understanding from John Locke (1632-1704). I use the term "liberal" without irony or contempt, for the liberal tradition in the true sense, dating from the late Middle Ages until the early part of the twentieth century, was devoted to freeing society from the shackles of the state. This is an agenda I embrace, and one that I believe all Americans should embrace.
To believe in liberty is not to believe in any particular social and economic outcome. It is to trust in the spontaneous order that emerges when the state does not intervene in human volition and human cooperation. It permits people to work out their problems for themselves, build lives for themselves, take risks and accept responsibility for the results, and make their own decisions.
Do our leaders in Washington believe in liberty? They sometimes say they do. I don't think they are telling the truth. The existence of the wealth-extracting leviathan state in Washington, DC, a cartoonishly massive machinery that no one can control and yet few ever seriously challenge, a monster that is a constant presence in every aspect of our lives, is proof enough that our leaders do not believe. Neither party is truly dedicated to the classical, fundamental ideals that gave rise to the American Revolution.
Of course, the costs of this leviathan are incalculably large. The twentieth century endured two world wars, a worldwide depression, and a forty-five-year "Cold War" with two superpowers facing off with tens of thousands of intercontinental missiles armed with nuclear warheads. And yet the threat of government today, all over the world, may well present a greater danger than anything that occurred in the twentieth century. We are policed everywhere we go: work, shopping, home, and church. Nothing is private anymore: not property, not family, not even our houses of worship. We are encouraged to spy on each other and to stand passively as government agents scan us, harass us, and put us in our place day after day. If you object, you are put on a hit list. If you fight to reveal the truth, as WikiLeaks or other websites have done, you are targeted and can be crushed. Sometimes it seems like we are living in a dystopian novel like 1984 or Brave New World, complete with ever less economic freedom. Some will say that this is hyperbole; others will understand exactly what I'm talking about.
What is at stake is the American dream itself, which in turn is wrapped up with our standard of living. Too often, we underestimate what the phrase "standard of living" really means. In my mind, it deals directly with all issues that affect our material well-being, and therefore affects our outlook on life itself: whether we are hopeful or despairing, whether we expect progression or regression, whether we think our children will be better off or worse off than we are. All of these considerations go to the heart of the idea of happiness. The phrase "standard of living" comprises nearly all we expect out of life on this earth. It is, simply, how we are able to define our lives.
Our standards of living are made possible by the blessed institution of liberty. When liberty is under attack, everything we hold dear is under attack. Governments, by their very nature, notoriously compete with liberty, even when the stated purpose for establishing a particular government is to protect liberty.
Take the United States, for example. Our country was established with the greatest ideals and respect for individual freedom ever known. Yet look at where we are today: runaway spending and uncontrollable debt; a monstrous bureaucracy regulating our every move; total disregard for private property, free markets, sound money, and personal privacy; and a foreign policy of military expansionism. The restraints placed on our government in the Constitution by the Founders did not work. Powerful special interests rule, and there seems to be no way to fight against them. While the middle class is being destroyed, the poor suffer, the justly rich are being looted, and the unjustly rich are getting richer. The wealth of the country has fallen into the hands of a few at the expense of the many. Some say this is because of a lack of regulations on Wall Street, but that is not right. The root of this issue reaches far deeper than that.
The threat to liberty is not limited to the United States. Dollar hegemony has globalized the crisis. Nothing like this has ever happened before. All economies are interrelated and dependent on the dollar's maintaining its value while at the same time the endless expansion of the dollar money supply is expected to bail out everyone.
This dollar globalization is made more dangerous by nearly all governments acting irresponsibly by expanding their powers and living beyond their means. Worldwide debt is a problem that will continue to grow if we continue on this path. Yet all governments, and especially ours, do not hesitate to further expand their powers at the expense of liberty in a futile effort to force an outcome of their design on us. They simply expand and plummet further into debt.
Understanding how governments always compete with liberty and destroy progress, creativity, and prosperity is crucial to our effort to reverse the course on which we find ourselves. The contest between abusive government power and individual freedom is an age-old problem. The concept of liberty, recognized as a natural right, has required thousands of years to be understood by the masses in reaction to the tyranny imposed by those whose only desire is to rule over others and live off their enslavement.
This conflict was understood by the defenders of the Roman Republic, the Israelites of the Old Testament, the rebellious barons of 1215 who demanded the right of habeas corpus, and certainly by the Founders of this country, who imagined the possibility of a society without kings and despots and thereby established a framework that has inspired liberation movements ever since. It is understood by growing numbers of Americans who are crying out for answers and demanding an end to Washington's hegemony over the country and the world.
And yet even among the friends of liberty, many people are deceived into believing that government can make them safe from all harm, provide fairly distributed economic security, and improve individual moral behavior. If the government is granted a monopoly on the use of force to achieve these goals, history shows that that power is always abused. Every single time.
Over the centuries, progress has been made in understanding the concept of individual liberty and the need to constantly remain vigilant in order to limit government's abuse of its powers. Though steady progress has been made, periodic setbacks and stagnations have occurred. For the past one hundred years, the United States and most of the world have witnessed a setback for the cause of liberty. Despite all the advances in technology, despite a more refi ned understanding of the rights of minorities, despite all the economic advances, the individual has far less protection against the state than a century ago.
Since the beginning of the last century, many seeds of destruction have been planted that are now maturing into a systematic assault on our freedoms. With a horrendous financial and currency crisis both upon us and looming into the future as far as the eye can see, it has become quite apparent that the national debt is unsustainable, liberty is threatened, and the people's anger and fears are growing. Most importantly, it is now clear that government promises and panaceas are worthless. Government has once again failed and the demand for change is growing louder by the day. Just witness the dramatic back-and-forth swings of the parties in power.
The only thing that the promises of government did was to delude the people into a false sense of security. Complacency and mistrust generated a tremendous moral hazard, causing dangerous behavior by a large number of people. Self-reliance and individual responsibility were replaced by organized thugs who weaseled their way into achieving control over the process whereby the looted wealth of the country was distributed.
The choice we now face: further steps toward authoritarianism or a renewed effort in promoting the cause of liberty. There is no third option. This course must incorporate a modern and more sophisticated understanding of the magnificence of the market economy, especially the moral and practical urgency of monetary reform. The abysmal shortcomings of a government power that undermines the creative genius of free minds and private property must be fully understood.
This conflict between government and liberty, brought to a boiling point by the world's biggest bankruptcy in history, has generated the angry protests that have spontaneously broken out around the country - and the world. The producers are rebelling and the recipients of largess are angry and restless.
The crisis demands an intellectual revolution. Fortunately, this revolution is under way, and if one earnestly looks for it, it can be found. Participation in it is open to everyone. Not only have our ideas of liberty developed over centuries, they are currently being eagerly debated, and a modern, advanced understanding of the concept is on the horizon. The Revolution is alive and well.
The idea of this book is not to provide a blueprint for the future or an all-encompassing defense of a libertarian program. What I offer here are thoughts on a series of controversial topics that tend to confuse people, and these are interpreted in light of my own experience and my thinking. I present not final answers but rather guideposts for thinking seriously about these topics. I certainly do not expect every reader to agree with my beliefs, but I do hope that I can inspire serious, fundamental, and independent- minded thinking and debate on them.
Above all, the theme is liberty. The goal is liberty. The results of liberty are all the things we love, none of which can be finally provided by government. We must have the opportunity to provide them for ourselves, as individuals, as families, as a society, and as a country. Off we go: A to Z.
www.ronpaul.com
Why Are The Republicans So Silent On The Falling Dollar?
Seth Lipsky
(Editor's Note: I reluctantly post this report from Seth Lipsky, not because it was reprinted by Forbes (immediately suspect) and not because I find fault with the basic premise of the piece; that the government is mindlessly allowing the Fed to intentionally debase the dollar, destroy the middle class and wreck the global economy, but rather that he attempts some mystical distinction between Republicans and Democrats. If you, dear reader, still consider yourself either a Republican or a Democrat you haven't yet fully opened your eyes to reality. The only way we will ever rectify the almost insurmountable problems our "sock puppet" leaders have caused with our political/economic system is to end the Fed (and incarcerate its members), prosecute the Wall Street banksters (and incarcerate its members), and vote out any incumbent that is not an independent (save Ron and Rand Paul). Our "two party system" has devolved into a contrived distraction.- JSB
The most astounding feature of the political fray as the 2012 election comes into view is that not a single Republican other than Congressman Ron Paul is stepping forward to brand as his or her own the issue of honest money. The whole party is into the negotiation with the president over the budget, and the underlying issue - the failure of our fiat currency - is up for grabs.
It is true that there's plenty of blame to go around on the dollar. It had a value of 265th of an ounce of gold on the day that George W. Bush acceded to the presidency and was worth less than an 853rd of an ounce of gold on the day he left office. The New York Sun, which supported Mr. Bush in 2000 and 2004 elections, issued in December of 2005 an editorial called "The Bush Dollar," warning of the collapse of the greenback. It had just sunk below a 500th of an ounce of gold.
Today, of course, it is worth barely more than 1,500th of an ounce of gold. The giddiness of the plunge of the dollar really started to be felt in the years after the Democrats acceded to the leadership of the House. At the time the Sun called for renaming the dollar "The Pelosi." The collapse has been so dramatic that the Europeans, the United Nations and even the Chinese communists are talking about the need to create a new international reserve currency. Yet not a single Republican has stepped onto the national stage and declared a run for the presidency on a platform containing the strong dollar as a major plank.
Now that the Republicans are back in control of the House they are in a perfect position to press this issue. Congressman Paul has been on the issue at least since the early 1980s, when he, with Lewis Lehrman, issued his dissent to the final report of the United States Gold Commission. The commission had been established in 1981, a decade after the collapse of the Bretton Woods system. It ultimately endorsed a continuation of fiat money. It's hard to think of a longer, more faithful adherence to constitutional principle than that which has been maintained by the physician turned legislator in the 30 years since. But Dr. Paul has yet to announce his run for president.
Neither has Sarah Palin. The alert Alaskan - as the Sun likes to call her - has made it clear she's watching the issue. In November, as the Group of 20 was preparing for its doleful meeting at Seoul, she leaked to National Review a speech she was about to make at Phoenix, confronting Chairman Bernanke over his program of quantitative easing. The demarche ignited quite a tumult for a few days (and an editorial salute from TheWall Street Journal), but Palin, too has hung back from a campaign.
A number of other Republican governors - current ones like Mitch Daniels and Tim Pawlenty and former ones, like Mitt Romney - would seem to adhere to the principles of political economy that would put a premium on sound money. But none is preparing to make campaign on sound money. Nor is Paul Ryan. He clearly sees the issue out there. It was he who elicited from Mr. Bernanke the famous reply, "I don't fully understand the movements in the gold price." But Mr. Ryan is focused on the details of the budget.
The conservative intelligentsia is waiting for a champion on the issue. The Wall Street Journal editorial page has been pressing the issue in op-ed pieces and editorials. So has Forbes. Lawrence Kudlow of CNBC has been calling for a return to "King Dollar." James Grant is illuminating the issue in his Interest Rate Observer (and TheNew York Times).
Even a group of our greatest federal judges is asking the Supreme Court to hear their plea for a ruling that Congress must reinstate the automatic inflation adjustment in their salaries that the legislature had suspended - a suspension that was, the judges contend, in violation of the constitutional prohibition of diminishing the pay of a judge while he continues in office.
And then there are the states. The other week Utah became the first to take advantage of an opening left to the states by Article One, Section 10 of the Constitution to make gold and silver coins legal tender. The Constitution prohibits states from coining their own money and/or making anything other than gold or silver coins a tender in payment of debts. Now, spurred by the American Principles Project, at least a dozen states are at least tentatively exploring doing just that.
In Utah's case, what it has done is not only make gold and silver coins legal tender but remove the state capital gains tax on any gain persons in Utah might get from holding gold and silver coins. There are those who set down the gesture as irrelevant and even flaky. But if several other states actually pass laws similar to what Utah has done it will add up to a remarkable vote of no confidence in the system that has been creating the money that we call dollars.
Could value start to return to the dollar without any candidate seizing the issue? No doubt it's possible. The bad-cop, good-cop team of Paul Volcker and Ronald Reagan used the combination of the chairman's tight money and the president's supply-side fiscal and regulatory reforms to achieve just such a turnaround during the 1980s. But can one expect the same from a combination of Chairman Bernanke and President Obama?
The fact is that the ground is so ripe for a candidate to seize the lead on monetary reform that one has to wonder why no one is stepping up. Is there what might be called the William Jennings Bryan effect? In 1896 he made the most famous attempt to run for the presidency on a monetary campaign. It produced his speech against crucifying mankind on a cross of gold. He lost. But then his campaign - a call for debasing the dollar - was the opposite of the opportunity that is beckoning the Republicans today, which is a campaign for a return to sound money. So let it be a lesson.
Inflation Explained
Silver: The Canary in the Gold Mine
Darryl Robert Schoon
Silver, the Canary in the Gold Mine was my talk at a Gold Standard Institute symposium in Canberra, Australia in November 2008. The topic could well describe today’s gold and silver markets.
Today, both silver and gold are achieving record highs but silver’s accelerating price indicates silver may indeed be the canary in the gold mine, the leading indicator for gold’s long-awaited explosive move upwards, a move the Fed and major bullion banks have colluded since the 1980s to prevent.
In 1979, the price of silver accelerated along with the price of gold. Silver had spent 1977 and 1978 hovering between $4 and $5 but in 1979 silver began to move upwards - as did gold.
In late January, silver moved to $5.94. Six months later, silver tripled, trading in the $16-$18 range before beginning a meteoric ascent in December, doubling from $17 to $34 , rising 33% on the first trading day in 1980 and peaking January 21st in intraday trading at over $50 per ounce, almost a 1,000 % rise in a year.
Silver=black: gold=red (source)
On January 21st, gold also peaked at $850. The simultaneous top of both gold and silver is all the more metaphysically coincidental because the factors driving the two metals were far different, i.e. the gold price was being driven by inflation while the Hunt Bros.’ squeeze attempting to corner the silver market was responsible for the spectacular ascent of silver.
Now, three decades later, a similar scenario is about to unfold, albeit with a different ending. The current decade will not only repeat what happened in the 1970s but it will bring to its inevitable end that which was set in motion in 1971.
The end of paper money is now in sight.
1970s REDUX
On August 15, 1971 President Nixon announced that the US would no longer convert US dollars to gold. For the first time in history, money was no longer gold or silver or convertible to either. On that day, because of Nixon’s actions all money everywhere became but government issued coupons with unknown expiration dates.
The reason behind Nixon’s extraordinary action was that US gold reserves had been virtually emptied by US overseas military spending. The massive outflow of US dollars needed to maintain America’s global military presence had far outweighed any corresponding inflow from America’s significant positive balance of trade.
By 1971, it was clear the US owed more far gold than it possessed. The closing of the gold window by Nixon constituted the largest monetary default in history. Now, thirty years later, the final consequences of that default are unfolding.
After 1971, governments everywhere borrowed, printed and spent even more money as gold no longer was a constraint on the global money supply. Additionally, gold was no longer exchanged in order to rectify global trade imbalances.
It was Milton Friedman - the monetary poster boy of the right - who advised Nixon to cut all ties between the dollar and gold. Friedman, like Keynes - the monetary poster boy of the left - was a strong believer in fiat money and Friedman advised Nixon that floating exchange rates would balance global trade flows. Friedman was wrong.
The 1971 cutting of ties between money and gold instead led to increasingly unbalanced trade flows, rapid increases in government debt, and by the late 1970s, increasingly high rates of inflation.
In January 1978, US inflation measured 6.84%. In January 1979, it was 9.28% and by January 1980 inflation had risen to 13.91%. Gold, the traditional refuge from monetary inflation, rose accordingly. In 1978, the average gold price was $193.40. In 1979, it was $306; and in January 1980, gold spiked to $850 with inflation peaking two months later at 14.76% in March.
In August 1979, President Jimmy Carter appointed Paul Volcker to head the Fed hoping to control inflation. Volcker’s aggressive rate increases brought down both inflation and the price of gold (note: Volcker was also responsible for the demonetization of gold in 1971).
Today, aggressive rate increases to prevent high inflation are almost impossible. As inflation moves higher - and irrespective of distorted US figures, it is already doing so - higher Fed rates would end the Fed’s liquidity-driven recovery and cause payments on the now astronomical US debt to rise to unsustainable levels.
Expect, then, that gold will move far higher before the Fed is finally forced, if ever, to raise rates. This long-delayed reaction will cause gold to move even higher as a slowing US economy would more than offset any potential rise in the US dollar until the US dollar crashed; and, in such an event, gold would be the only safe haven left standing.
The reason why gold is not rising as rapidly as silver as in the 1970s is because since the 1980s the Fed has focused on keeping the price of gold low à la Gibson’s paradox; and, as a consequence, instead of rising equally with silver, gold is lagging and silver is leading.
Silver, however, is clearly the canary in the gold mine and as the below chart shows, silver has now broken out.
Silver: The Canary in the Gold Mine
Darryl Robert Schoon
Silver, the Canary in the Gold Mine was my talk at a Gold Standard Institute symposium in Canberra, Australia in November 2008. The topic could well describe today’s gold and silver markets.
Today, both silver and gold are achieving record highs but silver’s accelerating price indicates silver may indeed be the canary in the gold mine, the leading indicator for gold’s long-awaited explosive move upwards, a move the Fed and major bullion banks have colluded since the 1980s to prevent.
In 1979, the price of silver accelerated along with the price of gold. Silver had spent 1977 and 1978 hovering between $4 and $5 but in 1979 silver began to move upwards - as did gold.
In late January, silver moved to $5.94. Six months later, silver tripled, trading in the $16-$18 range before beginning a meteoric ascent in December, doubling from $17 to $34 , rising 33% on the first trading day in 1980 and peaking January 21st in intraday trading at over $50 per ounce, almost a 1,000 % rise in a year.
Silver=black: gold=red (source)
On January 21st, gold also peaked at $850. The simultaneous top of both gold and silver is all the more metaphysically coincidental because the factors driving the two metals were far different, i.e. the gold price was being driven by inflation while the Hunt Bros.’ squeeze attempting to corner the silver market was responsible for the spectacular ascent of silver.
Now, three decades later, a similar scenario is about to unfold, albeit with a different ending. The current decade will not only repeat what happened in the 1970s but it will bring to its inevitable end that which was set in motion in 1971.
The end of paper money is now in sight.
1970s REDUX
On August 15, 1971 President Nixon announced that the US would no longer convert US dollars to gold. For the first time in history, money was no longer gold or silver or convertible to either. On that day, because of Nixon’s actions all money everywhere became but government issued coupons with unknown expiration dates.
The reason behind Nixon’s extraordinary action was that US gold reserves had been virtually emptied by US overseas military spending. The massive outflow of US dollars needed to maintain America’s global military presence had far outweighed any corresponding inflow from America’s significant positive balance of trade.
By 1971, it was clear the US owed more far gold than it possessed. The closing of the gold window by Nixon constituted the largest monetary default in history. Now, thirty years later, the final consequences of that default are unfolding.
After 1971, governments everywhere borrowed, printed and spent even more money as gold no longer was a constraint on the global money supply. Additionally, gold was no longer exchanged in order to rectify global trade imbalances.
It was Milton Friedman - the monetary poster boy of the right - who advised Nixon to cut all ties between the dollar and gold. Friedman, like Keynes - the monetary poster boy of the left - was a strong believer in fiat money and Friedman advised Nixon that floating exchange rates would balance global trade flows. Friedman was wrong.
The 1971 cutting of ties between money and gold instead led to increasingly unbalanced trade flows, rapid increases in government debt, and by the late 1970s, increasingly high rates of inflation.
In January 1978, US inflation measured 6.84%. In January 1979, it was 9.28% and by January 1980 inflation had risen to 13.91%. Gold, the traditional refuge from monetary inflation, rose accordingly. In 1978, the average gold price was $193.40. In 1979, it was $306; and in January 1980, gold spiked to $850 with inflation peaking two months later at 14.76% in March.
In August 1979, President Jimmy Carter appointed Paul Volcker to head the Fed hoping to control inflation. Volcker’s aggressive rate increases brought down both inflation and the price of gold (note: Volcker was also responsible for the demonetization of gold in 1971).
Today, aggressive rate increases to prevent high inflation are almost impossible. As inflation moves higher - and irrespective of distorted US figures, it is already doing so - higher Fed rates would end the Fed’s liquidity-driven recovery and cause payments on the now astronomical US debt to rise to unsustainable levels.
Expect, then, that gold will move far higher before the Fed is finally forced, if ever, to raise rates. This long-delayed reaction will cause gold to move even higher as a slowing US economy would more than offset any potential rise in the US dollar until the US dollar crashed; and, in such an event, gold would be the only safe haven left standing.
The reason why gold is not rising as rapidly as silver as in the 1970s is because since the 1980s the Fed has focused on keeping the price of gold low à la Gibson’s paradox; and, as a consequence, instead of rising equally with silver, gold is lagging and silver is leading.
Silver, however, is clearly the canary in the gold mine and as the below chart shows, silver has now broken out.
Good article P.C., us Americans think things like that only happen in other countries, but we will see what happens here once the dollar really begins its death march!! That is also why we all need to have a little gold and even more silver in our hands when the day of reckoning comes to our shores.
Goodbye $42...
http://www.zerohedge.com/article/goodbye-42
Oh no...what will we do with out Turbo Tax Timmy???
In and Out Burger is that expensive now??? That sucks!!
It's finally breaking down after the bounce it made off the new lows. I also think real price inflation will start to kick us all in the ass!!!
Gold & Silver Insiders-When To Sell? Real Estate-When To Buy?
Mike Maloney
Gold & Silver Insiders-When To Sell? Real Estate-When To Buy?
Mike Maloney
Look Out Above for Gold and Silver Prices
http://silverbearcafe.com/private/04.11/lookoutabove.html
With gold near all-time highs and silver approaching multi-decade highs, today King World News interviewed James Turk out of London. When asked about silver specifically Turk stated, “We’re now at a record backwardation in silver in terms of length of time. I think what we need to do is compare what is happening now to 2009 when silver was in backwardation the last time. Over a period of just about two months silver rose 40% from approximately $10 to $14, and that rise in price eliminated the backwardation.”
April 1, 2011
James Turk continues:
“But here is the really stunning thing this time Eric, we’ve gone from $27 to over $37, again about a 40% rise in price and the backwardation is still there. It hasn’t disappeared. So what that suggests to me is that there is tremendous physical demand for silver. This is a very, very rare event and it’s very bullish.
I don’t remember ever seeing anything like this before and this has real implications for the dollar because one of the other interviews that we did a while back I was saying if silver stays in a prolonged period of backwardation, what we really have to watch for is if gold goes into backwardation. Because if gold goes into backwardation then it’s all over for the dollar.
That’s a flight out of fiat currency and a flight into precious metals. And the fact that we’ve got silver at a record length in terms of backwardation, and even though the price has risen as much as it has, we’re still in backwardation. It’s really stunning.
Maybe the backwardation will disappear at 40 bucks, but who knows? Maybe the backwardation is still going to be there at $45 or $50 which is the target that I’ve been looking for this year. If that happens, it’s impossible to predict, but if that happens that’s going to be an earthshaking event.”
With gold near all-time highs and silver approaching multi-decade highs, today King World News interviewed James Turk out of London. When asked about silver specifically Turk stated, “We’re now at a record backwardation in silver in terms of length of time. I think what we need to do is compare what is happening now to 2009 when silver was in backwardation the last time. Over a period of just about two months silver rose 40% from approximately $10 to $14, and that rise in price eliminated the backwardation.”
April 1, 2011
James Turk continues:
“But here is the really stunning thing this time Eric, we’ve gone from $27 to over $37, again about a 40% rise in price and the backwardation is still there. It hasn’t disappeared. So what that suggests to me is that there is tremendous physical demand for silver. This is a very, very rare event and it’s very bullish.
I don’t remember ever seeing anything like this before and this has real implications for the dollar because one of the other interviews that we did a while back I was saying if silver stays in a prolonged period of backwardation, what we really have to watch for is if gold goes into backwardation. Because if gold goes into backwardation then it’s all over for the dollar.
That’s a flight out of fiat currency and a flight into precious metals. And the fact that we’ve got silver at a record length in terms of backwardation, and even though the price has risen as much as it has, we’re still in backwardation. It’s really stunning.
Maybe the backwardation will disappear at 40 bucks, but who knows? Maybe the backwardation is still going to be there at $45 or $50 which is the target that I’ve been looking for this year. If that happens, it’s impossible to predict, but if that happens that’s going to be an earthshaking event.”
Don’t Believe the Chart, the US Dollar is Dropping Like a Stone
Graham Summers
I want to take a moment to address the US Dollar’s collapse.
The US Dollar which most investors follow is the US Dollar index. This represents the US Dollar’s value against a basket of major currencies: the Euro, Japanese Yen, etc.
Think about that for a moment: the way we measure the US Dollar’s value is against a collection of other un-backed paper currencies all issued by over-indebted, bankrupt nations.
In other words, its nonsense.
Case in point, the Euro comprises over 50% of the US Dollar index. What’s the Euro? A currency backed by a loose group of bankrupt nations with maybe two solvent members in the bunch. Greece has already asked for an extension on its bailout repayments (like they’re ever going to repay anything), Spain is bankrupt, ditto for Ireland, Italy, Portugal, and others.
As for the more solvent European members (Germany and maybe France) their political leaders are getting crushed in the elections because NOBODY who actually works for a living (or has a working brain) wants in on the Euro.
So in Europe we’ve got one perhaps two solvent countries that are supposed to bailout 5+ insolvent ones (like that’s even possible). And the solvent countries are comprised of people who want no part of the Euro.
Man, now that’s what I call a real currency.
In simple terms, to claim the Euro is a viable currency is pure insanity. And yet, this "currency" comprises 50% of the US Dollar index (not as though the Yen or US Dollar are worthwhile either).
My point in all of this is that measuring the greenback using the Euro is insane. 100% totally insane. Which is why claiming the US Dollar is not collapsing is BS. If you actually go outside the US (which 99% of commentators don’t) you’ll find that the US Dollar is worth much less than the Dollar index is telling you.
I was recently on a trip to South America looking at real estate. While there I was told repeatedly by developers that they didn’t want to sign a contract in US Dollars. Instead they wanted to do it in the local currency. This has NEVER happened before during my trips abroad (even as recently as 2009).
When I pushed for having contracts based in Dollars, the price went up EVERY week.
The reason? The US Dollar is falling in relation to the local currency on a daily basis.
So here are local businessmen, (not economists or analysts), people who actually work for a living, refusing to accept US Dollars during business transactions.
That alone should tell you just where the US Dollar stands on the international stage.
In plain terms, the US Dollar crisis is already underway. If you ignore the stupid headlines and pay attention to the real world you can already see it. Prices of goods are EXPLODING higher. It’s being hidden because retailers are downsizing the size of their packages OR packing less goods in the same space (look inside any cereal box or other dry good and you’ll find that at best it’s 75% full).
So if you think things are fine because the US Dollar chart shows we still have a few lines of support, you’re being mislead. The US Dollar is worth far, far less than the chart shows you. So if you want to prepare yourself for a currency crisis you need to move now.
No Western Government Has Ever Claimed The Power To Do This, Not even Hitler
Judge Andrew Napolitano
http://silverbearcafe.com/private/03.11/nogovernment.html
American Fear
Don Cooper
Whether they realize it or not Americans live in a constant state of fear every day. I'm not referring to the fears of everyday life like losing a job or having an accident of some kind, but rather a more sinister and devious fear; a fear that Americans only dare talk about around the water cooler or at cocktail parties so as not to be taken seriously; a fear they try to mask with a with a whimsical tone of sarcasm or indifference. Whether Americans want to admit it or not, it's the single greatest fear in their lives: fear of the government.
Right about now there are those reading this thinking: Don Cooper is a drunk. To which I reply: what's that got to do with it? Maybe more people should drink if that's what it takes to sober up and confront what they are really afraid of.
In their defense, I'll admit that reality is scary. No argument that living in delusion is warmer, safer, cozier, and easier. Pretending is always more fun than reality, that's why we go to the movies. But fear of the government is a fear that invades a person's soul and - since the government intervenes in every aspect of our lives - it affects every move we make every day.
Fear of the government is hard to recognize and acknowledge. It's a fear that we are taught early on in life and to which we become accustomed. We inevitably end up tucking it away in the far reaches of our minds in order to function "normally" every day and live our lives. But just as a car backfiring will trigger a sense of fear from a shell-shocked veteran, so too can the State trigger that sense of fear they've instilled in us.
One need only ask: when you see a cop in your rearview mirror with his lights on, do you feel a sense of safety and comfort or do you get a shot of adrenaline from your body's "fight or flight" reflex? Do you immediately start asking yourself what he could possibly pull you over for, other than the fact that he was abused as a child, bullied at school and his mother didn't love him, and now he's going to whittle away at that chip on his shoulder by abusing you.
As you search for your proof of government permission to drive (i.e., your license), and your government permission to own the car (i.e., your registration), and your proof of government mandated insurance, do you do so calmly and with a smile on your face and with gleeful anticipation of speaking with someone who gives of himself to serve and protect you, or do you do so nervously, fumbling through your papers hoping everything's up to date and acceptable to him for fear of being detained for whatever reason and having it affect your job, your family, and every aspect of your life?
And when it's all over, do you feel glad that it happened or are you just glad it's over? Later that evening do you recount the story to others with a sense of pride, or do you do so with a sharp tongue and kick yourself for all the things you wish you would have had the presence of mind to say at the time but didn't? Do you feel happy that you have to pay $150 to the government because you were driving down the street faster than the government allows you to, or are you angry?
And in the end, do you send the money to the government even though you don't agree with it? Even though you feel it's unfair to have to pay so much money yet you've harmed no one? Of course you do. And why? Because you're afraid of what the government will do to you if you don't. In the end, you'll retreat back into your cubby-hole of delusion in order to justify paying the fine by convincing yourself that what you did was wrong, the government was right, and you deserve the punishment.
My favorite delusional argument from those still attached to the matrix is that they pay their taxes voluntarily. To these people I ask: when you do your tax returns, do you take as many deductions as the government will allow you? Of course, the answer is always yes. Then I ask them that if they could take enough deductions such that their tax liability was zero would they do so? Again, not surprisingly, the answer is yes. I then ask them that if their preference is to pay zero taxes then why don't they simply refuse to pay taxes. Inevitably, that's where their train of thought always runs out of track. Of course everyone knows the answer: because they're afraid of what the government will do.
I challenge everyone to ask themselves: when was the last time you even thought about the possibility you might be robbed, your house broken into or shot at? Can you even remember? Now ask yourself when was the last time you were afraid of doing something that could be deemed "illegal" by the government and for which you could be fined, detained or arrested? Something like not wearing a seatbelt, speeding, making a U-turn, going through a yellow light, not crossing the street at the cross-walk, riding a bike on a sidewalk, forgetting your license at home, taking too many deductions on your taxes, talking on your phone while driving, not allowing strangers to touch you or your children at the airport, cutting down a tree on your own property, owning and transporting a gun, collecting rain water and the list goes on. I would wager the answer is: daily! The first word out of everybody's mouth when asked a normal, completely benign question these days is: "Well legally..." It's first and foremost on our minds, and why wouldn't it be, there are 76,000 pages to just the federal register alone. Some argue that everyone commits at least three felonies every day!
Ignorance is a dangerous thing, and it must be stopped in our lifetime, fo' it kill somebody.
At the end of the day, all government mandates are enforced at the end of the barrel of a gun, and that scares the hell out of everyone, as it should. But if we truly believe we are free then we have to start acting like it. It's time we cared about something bigger than ourselves. It's time we stopped living our lives in fear.
Having said all that, I'm not holding my breath. It's proven to be difficult to convince people that freedom is more important than the real housewives of New Jersey.
And that's why I drink!
Regards,
Don Cooper
for The Daily Reckoning
Personal Actions You Should Take Before the TSHTF!
Ray Elliott
In a previous article I discussed when the financial collapse will occur. This report will review some steps each individual should take in advance of the difficult days that are coming. Before going into the details, it is important for you to judge the necessity of following these steps. If you follow them and no collapse occurs, you have lost very little. If you follow them and the collapse occurs, these steps may save your life. If this discussion seems unreal, think about how unreal the world will be when the U.S. cannot pay its bills. Treasury Notes are no longer being purchased by China or Japan. Both are now selling (just like PIMCO). The Fed's printing press is becoming the sole buyer.
Think about what your days are going to be like when paper money has no value. People that depend on government jobs, Social Security, food stamps, welfare, retirement checks or unemployment checks will no longer receive them. As the system winds down, some checks may be mailed, however; they will have little or no purchasing power. A new method of exchange will begin taking place.
Money in 401K's will be gone. Money in banks will be worthless. Some people will benefit from the collapse. Some that have mortgages will find that they now own the property but no longer have a burdensome loan payment. Larger and larger denomination currency bills will drive out smaller denominations. You will be able to wipe out your mortgage by simply sending your mortgage company a million dollar bill and tell them to keep the change. The change will not buy a loaf of bread. The banks know this and are making very few loans while foreclosing on others before TSHTF.
Silver coins (pre 1965 have silver in them) will be valuable for purchasing necessities. Gold coins will have great value, but will not be useful for small purchases. One or two ounces of gold may purchase a home. Other basic necessities will be used for bartering to acquire goods that you need. In Russia, after 1989 or in Argentina, in the late 90's, liquor was used as money to acquire goods. Producing alcohol requires having a small, home still (for distilling alcohol). Food items that you have stored or produce from your garden, sometimes gets too old for consumption (such as potatoes) and can be converted into alcohol with a still. Alcohol can be used for trading, for powering your generator or even fueling your vehicle. In post World War II Germany (during the German Occupation), poverty was widespread. A pack of cigarettes would purchase several hours of labor. Five gallons of gasoline was worth a week's supply of food. These days, medicines will be in demand (even outdated ones). Storing a quantity of aspirin will be useful for trading. Salt will also be used for money (as it was thousands of years ago).
Many have reviewed the need for storing sufficient food supplies. The amount depends on you and how many you need to sustain. Canned goods can be kept for two or more years. Rice and pasta in large bags can be kept in plastic storage boxes in a cool location. A water source and a method of sterilizing water are essential. Water disinfectants cost about one half cent per quart of water. Having a small garden will help feed your family. Storing good quality seeds is essential.
Finding a safe place for your family is more difficult to solve. Large population centers will not be safe. Those that have not prepared will begin taking from those that have prepared. Law and order will be sporadic because few in law enforcement will be paid. You should keep your survival supplies in or near the vehicle you plan on using when you leave. Getting out of town before TSHTF will be much easier than trying to leave later. Quickly relocating to a small town in a farming community will be much safer than remaining in a suburban home near a large city. Visit a small community near you now and set up a safe haven. See if you can arrange a garden and/or camping site. Small rural towns have lots for sale that can be acquired for very little. A small deposit can secure an option to purchase a lot in a small town that will give you a place to park your vehicle (a small motor home would be ideal) and a place for a garden. One quarter acre is more than you will need. Be careful about locating in a more remote location because it can be dangerous. In Argentina, roving bands of thieves routinely raided remote ranches and homes, inflicting both financial and physical harm. A small community is safer and may have an organized defense.
Last, but certainly not least is personal defense. Weapons are required. They can be used for both hunting and defense. Using the same caliber for both hand guns and long guns will save on the types of ammunition needed to be stored. Nine millimeter is a good choice. A shotgun is both a good hunting weapon and a defense weapon. A 22 rifle is a good weapon to harvest small game for your family. A compound bow also serves both purposes. Having a plan of action when strangers appear is a necessity. In the meantime, you may ask yourself, can you defend your current home? Do you have a safe room? Do you have a guard dog? Do you have a warning system? Do you have friends nearby that would help you? How do you contact them?
As I stated in the beginning, you may never need to use any of these tactics. I pray that you do not. However; if and when TSHTF, you and your family will have a far better chance to survive than those that do not prepare.
This is unbelievable!! What this video all the way to the end:
http://www.zerohedge.com/article/latest-and-greatest-tsunami-video
It doesn't take a chartist to know that those are very scary charts!! How could we possibly reverse trends like that??
The Road of Inflation Will Only End in Tears
Bob Chapman
Cycles and booms and busts just don’t happen. They are planned that way. In the late 1990s Fed Chairman Alan Greenspan commented on irrational exuberance and said he hoped the market would cool down. The amount of money and credit he had introduced into the system had a great deal to do with a forming of a bubble. He indicated that on the short-term there was little he could do about it, when all he had to do was raise margin requirements from 50% to 60% temporarily. We wrote about the solution as a couple of other writers did, but no one really wanted to take away the dotcom punchbowl. In late March of 2000 the market began its collapse. We removed our subscribers out of the market in the first week of April, as did Joe Granville, a friend and one of the best market timers ever.
Sir Alan Greenspan spent almost 20 years serving his masters who own the Federal Reserve, JPMorgan Chase, Goldman Sachs, Citigroup and many more. The Fed has no independence – it takes orders from these banks and brokerage houses. This same group controls Congress by paying off 95% of the representatives and senators via campaign contributions and via lobbying. Thus, with the assistance of the Fed, Wall Street and banking, they not only control money, supply, credit, interest rates and Washington, but they control our entire economic and financial scene and the lives of every American. Booms and bubbles can be blamed on politicians, but the real culprits behind the scenes are Wall Street and banking in which we spent 29 years of our lives and for many of those years owned our own firm. If you do not know and understand these realities you should not be an investor or a financial and economic journalist. Our whole existence as a nation is controlled from behind the scenes by parsonages and groups most people have never heard of. All of what you see just didn’t happen; it was planned that way. People must understand that creating money out of thin air to fund astronomical deficits has to end in failure and ruin. We are now in an inflationary depression that will probably graduate into hyperinflation and then descend into a deflationary depression. This is what these elitists have done for centuries and have more often than not gotten away with it. This time it will be different.
We started warning people more than 50 years ago that the path America was taking could only end in tears. The days of inflation and social and political misery are finally upon us and as a result, so is social dislocation worldwide in the form of protest, demonstrations, civil wars and the overthrow of governments. We are not witnessing that in North Africa and the Middle East. This has been in reaction to dictatorial governments, low wages, high prices for food and few jobs. As we have said over and over again, revolutions begin with empty bellies. What you are seeing will not be limited to the third and second worlds, but to the first world as well. the elitists have again gone too far and the people of the world are reacting. This is only the beginning of dramatically higher food prices and perhaps oil and gas prices as well. Governments cannot help, nor can the elitists behind the scenes for all intents and purposes, saving the system is now out of their hands and what they have done has been discovered.
Most countries have followed the path of the US, UK and Europe, accumulating deficits many of which are unpayable. Essentially the world banking system is bankrupt. The Fed and the ECB buy debt and toxic debt as well as sovereign debt; the funds used for this purpose are created out of thin air. Sooner or later there will be a major worldwide meeting to revalue, devalue, and to multilaterally default. This can be the only solution to 40 years of profligacy and fiat currencies. The present cover-ups by central banks, Wall Street, banking and the City of London won’t last much longer. Unemployment worldwide and higher inflation are worsening and can only end in social and political dislocation. How can a government such as the US continue to spend in excess of 60% of revenues and expect others then the Fed to purchase their bonds? Spending has to be cut and taxes raised over a five year period. If that doesn’t happen and we get QE3 and more stimuli there will be ever more inflation and debt. Finally there will be financial collapse.
We do not in anyway relish having to tell you that the future will be very difficult. Financial dislocation will abound and in some of the countries in the third and second worlds there will be famine and death. As you know desperate people do desperate things and in June 2003, after the point of no return has passed, we predicted the events that unfortunately are being sensationalized today. Bringing the truth and facts to the people of the world is one thing, but trying to unnecessarily terrify people is another. All this should be presented in a calm, logical and rational manner.
As you know gold is up 15-1/4% annually, versus 9 major currencies over the past ten years. Over 11 years it has risen 83% versus the US dollar. Even the venerable Swiss franc is off 12.1% annually or 50%. The Dow has fallen 82% versus gold. The US economy has not only been mismanaged, but it has been gutted by massive criminal corruption. As the end of the world financial structure comes into view the scramble by the criminals on Wall Street and in banking accelerates, because they want to steal as much as they can before the collapse. That is why once the people have rescued their country from these criminals they should be tried, convicted, jailed or hung and all their assets that they have accumulated for themselves and their families should go to the federal government and the people. Heads will roll and we remind them because we know they read this publication, that you are conscious and alive for 15 to 30 seconds after your head is removed. This gives these criminals a final view of their headless corpuses.
We predicted the demise of the bond market months ago and that process began four-months ago. The 10-year US T-note rose from 2.20% to 3.74%, but with the demise of the stock market there has been what we consider a temporary rally to 3.23%. The downward pressure will continue. The Fed will continue to dominate the short end of the market, but not the long end. The fed will come under relentless pressure trying to affect the long end of the market and in that process squeeze the corporate demand out of the market. Investors should have been out of municipals three years ago and other bonds at least four months ago.
As we write Rep. Ron Paul is having hearings regarding the governments’ bogus CPI and PPI statistics. Hopefully the employment figures will follow. Inflation is now about 8% headed to 14% by the end of the year and perhaps much sooner. QE3 and more stimuli will take us to hyperinflation. Near zero interest rates and commodity shortages are adding to the upward move in inflation. The flip side is if there is no QE3 and stimulus, or if official interest rates rise, such as the ECB is talking about, the bottom will fall out of the economy. All currencies continue to lose value versus gold and silver, so except for operating expenses, you want to be out of all currencies and in gold and silver related assets. No matter what Larry Summers does in behalf of the elitists all currencies will devalue versus gold and silver. We see the future as absolutely inevitable.
We see all kinds of terrible things going on in the world, so many say, why are not gold and silver and shares moving higher? It is simple your government is manipulating them. That is the bad news. The good news is they cannot do it indefinitely. Hopefully, Rep. Ron Paul will bring legislation to bring an end to the Executive Order that allows “The President’s Working Group on Financial Markets” to exist, and return us to free markets and ends the basis for corporatist fascism.
We do not have to remind you of the ongoing problems in the aftermath of Japan’s earthquake and the problems that presents for the world.
There are further problems facing the Middle East as well. Even the mainline news admits as much.
In the US the states, as far as we know, haven’t solved their financial problems nor have the municipalities or the Federal Government for that matter. In the bond market, MBS municipal and investment grade corporate spreads are widening. There certainly has never been a dull moment as the world continues submerged in debt, and a good part of which is unpayable. The public and corporations either pay down the debt as countries inflate it away or monetize debt, which causes inflation and currency debasement. That is why currencies fall against other currencies and more importantly versus gold and silver. It has been shown historically that when a gold standard is used, inflation alternates with deflation that brings balance in markets even if the government inflates. The result is that over time prices stay about the same. Today we suffer from the result of leaving the gold standard. Once you do that all you get is inflation, the depreciation of a fiat currency and higher gold prices.
It should be noted here that problems in the Middle East, North Africa and in Japan should develop into deflation, but that will be superceded by more massive debt creation, at least that will temporarily keep the deflation monster at bay. The only country in this group that could fall to deflation quickly is Japan, which has been in depression since 1992. What the US and others have experienced for more than three years is a papering over of the monetary and fiscal excesses and creating future inflation liabilities, which are now coming home to roast. Paper money, or at least money with no gold backing, brings on inflation. As a result the spectra of hyperinflation is discussed. There are very few episodes over the years when the world sees hyperinflation. Since the mid-1700s only some 30 instances have occurred. Thus, we are careful to predict such an event until it becomes overwhelmingly evident that hyperinflation will occur. We are often asked when does hyperinflation happen and the answer is probably when inflation exceeds 50% and has the power to become inflation of thousands of percent. These kinds of numbers come as a result of monetizing a large percentage of government debt. That unfortunately has been in process for the past two years or more. We are also in the process where bad money drives out good, or real money such as gold and silver. Eventually gold and silver and selective currencies in turn drive out the bad currencies, which in turn collapse and become valueless. Hyperinflation destroys the value of all but a few currencies and, of course, all the while gold and silver advance in value versus the currencies. You will always hold the value of your wealth and protect it by owning gold and silver related assets.
Before we leave this issue we’d like to say a bit more regarding quantitative easing. We as you know are closing in on the tail end of QE2, and last May we predicted QE3, stimulus 3 and perhaps more behind. The largess heaped upon banks, Wall Street, insurance companies and selected transnational corporations has allowed them all to prosper, dispense fantastic bonuses and to destroy their competition, thereby making them bigger and more competitive and further too big to fail. Of course, the taxpayer paid for all this and received little or nothing in return. All QE2 did was temporarily bail out the government by creating money out of thin air, again at the expense of the average American. The result has been at least in professional circles, a serious loss of integrity in the Fed and its ability to deal with such situations. The dollar is getting pounded as a result and that will continue. Inflation will rage and gold and silver will rise ever higher. It is evident to thinking people that the US and the world monetary systems are insolvent. It is obvious that almost zero interest rates, quantitative easing and stimulus have to continue indefinitely or the bottom will fall out of the US and world economy. The dollar is doomed and if the Fed, and its owners the banks, are not stopped from doing what they are doing Americans and eventually the world will be enslaved in a total corporatist, fascist structure.
In the meantime malinvestment rages along with capital destruction. The problem is systemic and cannot be solved short of a purge of the entire system and that is definitely where this is all going to end up. Quantitative easing and stimulus have created an illusion of recovery. The situation in the Middle East, North Africa and Japan will be justification for QE3. All central banks can now do is print money.
On Friday the dollar hit another recent low at 75.65. It passed right through support at 76. That is because the message is finally getting through. That is that the US is bankrupt. While the dollar falls the Treasury Secretary is asking Congress for more debt. That is an indication of how desperate the elitist banks and brokerage houses are. There is no denial, this is how it’s been planned, and this is exactly what they expected. Normal logic does not apply. You have to understand what these people are up too, and why they are deliberately taking the economy and financial structure down. They have tried this time after time unsuccessfully. Only a handful of writers understand the operation, but eventually everyone will painfully discover what has been done to them.
Again, gold and silver related assets are the only assets that can protect your wealth and give you safety through the storm that we are embroiled in. Just look back 6000 years or for that matter for the past 11 years. If you understand history there is nothing surprising in that foreigners continue to buy Treasury and Agency bonds from an insolvent nation. The reason is that they are all in on taking down of the world economy. Like times before the elitists will again fail. The reason for owning gold and silver grow. Gold replaces the dollar, massive inflation is on the way, less than 2% of the public and institutions are involved, many nations are bankrupt and then the situation in N. Africa, the Middle East and Japan and looming food shortages. The elitist manipulation of the markets continues with less and less success. It is all paper. They have no physical for sale. In addition, more and more Comex contract holders are taking delivery, which has to stun JPM the big naked short in silver. Both silver and gold corrections have been shallow over and over again. We might mention that these crooks are being aided and abetted by the CFTC an the government. HSBC, the other big silver short, like JPM, is making it as difficult as possible to take possession of physical silver. Then, of course, there are the 50% to 80% bonuses not to take delivery.
Intervention by the G-7 manipulated the yen down .0266 to 80.71. They say this was the first such episode in ten years. If you believe that we have a bridge that should interest you. In spite of that the USDX fell to new lows. So much for a free market. The manipulation was done to remind players of the power of the G-7 and to save US and foreign banks from taking massive losses in the yen carry trade. Incidentally, market interference extends to hedge funds as well. Under the direction of the Fed, Treasury and the “Working Group on Financial Markets” they are also selling yen. This shows you how widespread the manipulation and corruption is.
Most writers believe that the elitists are confused as to why a recovery has not taken place. We refer you to the Bernanke-Boskin Paper in 1988 in which they point out that the actions of Bernanke today cannot work. Thus, this business of elitists not knowing what is going on is ridiculous. They know exactly what is going on because they planned it that way. We never know when these people will pull the plug, so we keep playing the game on our terms, so that we can retain our wealth. Chances are now 80% that there will be QE3 and more stimuli. They have perfect excuses, the disorder in the Middle East and the tragedy of Japan. The main players know the system is insolvent, but if you look at history you will see that their biggest financial gains and impositions of power takes place during a time frame such as today’s. These tactics allow the major banks, brokerage houses and others to reap enormous profits to bail out their unpayable losses. Soon real interest rates will again rise presenting a very difficult problem for borrowers and at the same time commercial interests will be shut out of the market, not being able to compete with Treasury and Agency bonds. That will be accompanied by much higher inflation, which will also drive yields higher. In addition, investors and professionals are becoming more and more aware of monetization, inflation and corruption at the highest levels. In addition, Rep. Ron Paul is pursing the bogus CPI, PPI and employment figures. Once that is successful the economy will quiver in shock and the unraveling will begin, as many will start questioning everything the Fed and the government does. Things such as the Obama Healthcare plan, which keeps business formation to a minimum and causes businesses that are on the edge to just close up and cease business. Everything possible is being done by the elitists and their bought and paid for Congress to destroy the American economy.
That means with quantitative easing and stimulus will give the economy 2% to 2-1/4% growth, when in reality there is negative growth of 3% or more. No headway is being made in business formation or employment and that will continue and the elitists know that. They are saving Wall Street, banks, insurance, big Pharma and transnational conglomerates. As we warned on December 16th, there was a second meeting at the White House to allow these transnational to do as they did six years ago. On the proviso of creating jobs, which they failed to do the first time, they want a tax holiday. Last time it was $350 billion at 5-1/4% rather than 35% and that cost the taxpayer $150 billion. This time it is $1.9 trillion at 5-1/4%. That will cost taxpayers $680 billion in lost tax revenue. These transnational conglomerates are pure criminals. We’ll continue this thought in the next issue.
Fed and Inflation
Dr. Ron Paul
Last week, the subcommittee which I chair held a hearing on monetary policy and rising prices. Whether we consider food, gasoline, or clothing, the cost of living is increasing significantly. True inflation is defined as an increase in the money supply [monetary inflation]. All other things being equal, an increase in the money supply leads to a rise in prices. Inflation's destructive effects have ruined societies from the Roman Empire to Weimar Germany to modern-day Zimbabwe.
Blame for the most recent round of price increases has been laid at the feet of the Federal Reserve's program of credit expansion for the past three years. The current program, known as QE2, sought to purchase a total of $900 billion in US Treasury debt over a period of 8 months. Roughly $110 billion of newly created money is flooding into commodity markets each month.
The price of cotton is up more than 170% over the past year, oil is up over 40%, and many categories of food staples are seeing double-digit price growth. This means that food, clothing, and gasoline will become increasingly expensive over the coming year. American families, many of whom already live paycheck to paycheck, increasingly will be forced by these rising prices into unwilling tradeoffs: purchasing ground beef rather than steak, drinking water rather than milk, and choosing canned vegetables over fresh in order to keep food on the table and pay the heating bill. Frugality can be a good thing, but only when it is by choice and not forced upon the citizenry by the Fed's ruinous monetary policy.
While the Fed takes credit for the increase in the stock markets, it claims no responsibility for the increases in food and commodity prices. Most economists fail to understand that inflation is at its root a monetary phenomenon. There may be other factors that contribute to price increases, such as famine, flooding, or global unrest, but those effects are transient. Consistently citing only these factors, while never acknowledging the effects of monetary policy, is a cop-out.
The unelected policymakers at the Fed are also the last to feel the effects of inflation. In fact, they benefit from it, as does the government as a whole. Those who receive this new money first, such as government employees, contractors, and bankers are able to use it before price increases occur, while those further down the totem pole suffer price increases before they see any wage increases. By continually reducing the purchasing power of the dollar, the Fed's monetary policy also punishes savings and thrift. After all, why save rapidly depreciating dollars?
Unfortunately, those policymakers who exercise the most power over the economy are also the least likely to understand the effects of their policies. Chairman Bernanke and other members of the Federal Open Market Committee were convinced in mid-2008 that the economy would rebound and continue to grow through 2009, even though it was clear to many observers that we were in the midst of a severe economic crisis. Even Greenspan was known for downplaying the importance of the growing housing bubble just as it was reaching its zenith. It remains impossible for even the brilliant minds at the Fed to achieve both the depth and breadth of knowledge necessary to enact central economic planning without eventually bringing the country to economic ruin. Our witnesses delved deeply into these issues and explained this phenomenon in very logical, simple terms. The American people increasingly understand what is going on with our money. I only hope the Fed is listening.
JP Morgan DEFAULTS on their COMEX contracts! Then they cheat!!
End Game
Toby Conner
For months and months I've been warning investors that the dollar was going to come under extreme pressure sometime this year. I expected it to probably happen in the spring. Many people thought I was nuts. They were sure it was the Euro that would collapse, despite the fact that the EU is doing everything they can to protect their currency while Bernanke is doing everything he can to destroy ours.
On Friday the last confirmation occurred to signal the final collapse is now underway. On Friday the November yearly cycle low was violated. Cyclically this event is a major catastrophe.
We are now going to see the dollar get absolutely hammered for the next couple of months. The viability of the dollar as a currency will be questioned. There is a decent chance it may start to lose its status as the world's reserve currency. (Coincidentally about the time everyone becomes convinced the dollar is going to hyper inflate that will be the point where the three year cycle low will bottom and we will see an explosive rally, along the same lines as what happened in the latter half `08.)
This is what all the top pickers in gold and silver fail to understand. They are all trying to call a top based on charts without any understanding of what is happening to the currency.
In a currency collapse the market will flee into assets that will retain their purchasing power. Four weeks ago we went past the point of the stock market being able to protect one from Ben's printing press any longer. So buying stocks as protection is no longer a viable solution.
Four weeks ago spiking inflation rose to the point where profit margins are now being hit. Ben will no longer be able to prop up the stock market by further debasing of the currency. Stocks have now decoupled from their inverse correlation with the dollar and will now follow the dollar down.
The more Ben prints and the faster the dollar collapses, the faster the stock market is going to fall...and the quicker the economy is going to roll over into the next recession.
What will happen is that liquidity will rush into the commodity markets as the only true protection against the accelerating currency crisis.
This is why one has to ignore the top pickers and chartists. Overbought oscillators and stretched conditions are meaningless in a currency collapse. This is all about fundamentals. It's about protecting your purchasing power. You can't do that by exiting the one sector fundamentally best suited to protect you during this storm, which are the precious metals.
Now isn't the time to be selling your gold, silver or mining stocks, it's time to be buying more.
Time for Gold to Shine? USD Breaks 3-year Trend Line:
http://www.financialsense.com/contributors/chris-puplava/time-for-gold-to-shine
Once again silver and gold are off to the races this morning!!! The dollar has seen better days...
I don't know what to think about all this crazy stuff!! It definitely has my attention and we will see once those dates come to pass. I will be a believer if there ends up being a huge earthquake in the Midwest at the end of Sept.
Thanks for your reply. Sorry to be so off topic here on the dollar board but if I may ask you if Plant X(Nibiru or Elenin) is real?? As seen in this video:
IxCimi, why don't you make your GALAX board open to the public?? So dorks like me can ask you questions!!
I just picked up some potting soil for my basement grow room. We may be having an early outdoor growing season this year. I always love to see the little sprouts in the artificial lights!! It gives me hope after a long cold winter. Too bad I see no sprouts taking root in the world economy or in the Middle East. I Pray for our over extended troops and that they will not have to fight yet another war in Libya. My God, when will we but out of what happens in other counties? My friends don't have any fight left in them. They don't what to start putting rounds down range in another country!! Even hardened warriors need a break from deploying every 8 months and believe me, they don't want to go!!
The next target for the dollar is 71. If that is taken out then who the hell knows!!