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Yes it would, however, we are in extremely volatile times and the longest flattening out period that we have seen in the last 10 years is about 6 months. I usually don't buy this early in the correction but we seem to be entering a new phase in the silver bull market!!!
I just pick up some more silver this morning on APMEX!! I will buy more in the $25 range if we get there...
This has been accurate for both gold and silver:
http://broadcast.ino.com/education/gold1611/
This has been accurate for both gold and silver:
http://broadcast.ino.com/education/gold1611/
This weekend they are raising my income tax's in Illinois by 75%. Also, the corporate tax will go up 75% and there will now be an internet tax when purchasing goods online!! I wish I could leave the state but I have been at my job for 15 years and can't find a better one in another state!! They are going to turn this state into Detroit. The reset button needs to be hit, and at this point I almost welcome it!!!
Happy New Year everyone!! My busy season is over so I always enjoy my New Years...
Dreams Only Last the Night
Richard Russell
Big bull markets are rare, particularly bull markets that span the years or even the decades. Such bull markets may arrive once or twice in a lifetime. If you're lucky enough or intuitive enough to spot one, you have the makings of a fortune.
It's extremely difficult to identify what could be a great and extended bull market. It's just as difficult to enter early in such a bull market and ride it all the way to somewhere near the top. But it can be done. My old mentor, the great George Schaefer, identified the beginning of the fabulous bull market of 1949 to 1966. George entered that bull market in June of 1949, the very month that it started, and he rode it, along with his subscribers, to somewhere near the 1966 top. George used every correction in that bull market as an opportunity to add to his portfolio, and he reinvested all incoming dividends. As a result, he made many of his subscribers wealthy beyond their wildest dreams.
Now we're witnessing another such primary bull market. This bull market in gold started around 1999 when gold was selling for 259 an ounce. I did my best at the time to push my subscribers into buying gold stocks (which, at the time, were selling at pitifully low prices) and into buying gold bullion. At no time since then have I ever suggested that we sell our gold items. Nor do I suggest that now.
Throughout history gold has moved to the strong, and that's still the case.
When World War II ended, the US literally "owned the world." We came out of the War undamaged and with the finest production and creative facilities on earth. But we got lazy and we forgot how to compete, and we forgot how to save. We had the best standard of living in the world, and we wanted even more of it; but we didn't want to pay for it. Instead we borrowed. But we had one fabulous advantage, with our Federal Reserve we could create our own money out of thin air, and it was money that the world respected and wanted, even though (after 1971) it had no intrinsic value. We built debts that were denominated in our own money, money that we created out of an accounting book. It was "magic money."
But economic magic, like the Houdini's magic, is built on an illusion. Our illusion was that our good life and great standard of living could go on forever - without our ever paying for it. And the rest of the world went along with our dreams. But dreams only last the night.
Now we're moving into "pay-me-back" time; the bills must be paid. Yet our illusions continue. We think we can continue to maintain prosperity by creating more and more of our fiat money. We think we can buy our prosperity by printing ever-more money. But the world is ceasing to buy our illusion. The ironic fact is that only our own stock market is buying our illusion.
And as the dollar slides in international value, sophisticated investors and frightened central banks around the world are substituting their dollar reserves with a currency they can trust - gold.
And as far as timing all of the above, it's probably around the middle of the story. The last quarter to a third of the story lies ahead. We've done it all with our magical, cost-us-nothing, money. BUT...
I've said all along that money that is made "legal" by fiat is illogical, it's immoral, it's a fantasy, it's counterfeit, and it's against the great Constitution of the United States. My advice; "Like rotten food, spit out the fiat money - and go for the real intrinsic money - gold and silver."
Dreams Only Last the Night
Richard Russell
Big bull markets are rare, particularly bull markets that span the years or even the decades. Such bull markets may arrive once or twice in a lifetime. If you're lucky enough or intuitive enough to spot one, you have the makings of a fortune.
It's extremely difficult to identify what could be a great and extended bull market. It's just as difficult to enter early in such a bull market and ride it all the way to somewhere near the top. But it can be done. My old mentor, the great George Schaefer, identified the beginning of the fabulous bull market of 1949 to 1966. George entered that bull market in June of 1949, the very month that it started, and he rode it, along with his subscribers, to somewhere near the 1966 top. George used every correction in that bull market as an opportunity to add to his portfolio, and he reinvested all incoming dividends. As a result, he made many of his subscribers wealthy beyond their wildest dreams.
Now we're witnessing another such primary bull market. This bull market in gold started around 1999 when gold was selling for 259 an ounce. I did my best at the time to push my subscribers into buying gold stocks (which, at the time, were selling at pitifully low prices) and into buying gold bullion. At no time since then have I ever suggested that we sell our gold items. Nor do I suggest that now.
Throughout history gold has moved to the strong, and that's still the case.
When World War II ended, the US literally "owned the world." We came out of the War undamaged and with the finest production and creative facilities on earth. But we got lazy and we forgot how to compete, and we forgot how to save. We had the best standard of living in the world, and we wanted even more of it; but we didn't want to pay for it. Instead we borrowed. But we had one fabulous advantage, with our Federal Reserve we could create our own money out of thin air, and it was money that the world respected and wanted, even though (after 1971) it had no intrinsic value. We built debts that were denominated in our own money, money that we created out of an accounting book. It was "magic money."
But economic magic, like the Houdini's magic, is built on an illusion. Our illusion was that our good life and great standard of living could go on forever - without our ever paying for it. And the rest of the world went along with our dreams. But dreams only last the night.
Now we're moving into "pay-me-back" time; the bills must be paid. Yet our illusions continue. We think we can continue to maintain prosperity by creating more and more of our fiat money. We think we can buy our prosperity by printing ever-more money. But the world is ceasing to buy our illusion. The ironic fact is that only our own stock market is buying our illusion.
And as the dollar slides in international value, sophisticated investors and frightened central banks around the world are substituting their dollar reserves with a currency they can trust - gold.
And as far as timing all of the above, it's probably around the middle of the story. The last quarter to a third of the story lies ahead. We've done it all with our magical, cost-us-nothing, money. BUT...
I've said all along that money that is made "legal" by fiat is illogical, it's immoral, it's a fantasy, it's counterfeit, and it's against the great Constitution of the United States. My advice; "Like rotten food, spit out the fiat money - and go for the real intrinsic money - gold."
Constitutional Judo
Giordano Bruno
In all things, there exists a 'point of balance'; a line that, if crossed, results in the sudden and expedient loss of our self-determinism and makes us subservient to the fickle whims of social, political, and physical gravity. We are "thrown" into the air, as it were, and the landing is rarely ever pleasant. The U.S. Constitution and the civil liberties it outlines is itself one of these historic points of balance. Its original purpose was to temper the most epic of grappling matches ever ignited; between the relentless constructs of government, and the individual freedoms of the common man. The ultimate problem inherent in this struggle is one of consistency, vigilance, and labor...
While the concept of the Democratic Republic and the Constitution was meant to remove suffocating class warfare from our political life and free us from the numerous dangers of elitism, invariably, those men who thirst for power over others find a way to insinuate themselves into any system, regardless of checks and balances, especially when the populace does not fulfill its necessary role as watchdog and tireless sentinel. Many Americans often assume that 'the people' derive their power from the Constitution, but the reality is actually reverse; the Constitution, in fact, derives its power from the people. Our duty (which some have forgotten) has always been to protect the rights and liberties inscribed on those pages of parchment. Not just to know those rights, or recite them, but to implement and defend them in our day-to-day existence. Without the constant nurturing cultural pulse of sound minds and courageous hearts, the Constitution dies.
Many in our society, instead of taking on the responsibility of preserving their freedoms, have instead handed it over to the trappings of government. The fatal error here is obvious; the corporatized and over-centralized political landscape of America's government today does not hold the same values as the people it is determined to lord over. We have witnessed the parasitic possession of our system, know it to be corrupt, yet still seem to expect this bureaucratic monstrosity to cradle our liberties in good faith!
Government is a tool; a mechanical apparatus that can be used to either preserve freedom, or annihilate it. Its use depends upon those men who wield it, and the men who wield our government today certainly do not have the expansion of freedom in mind. In this article, we will examine the many points of contention (balancing points) brewing as our exceedingly globalist leaning political leaders overstep their bounds. Any one of these points, if allowed to falter by Americans, could throw the whole of our heritage into disarray...
Death By A Thousand Cuts
If you've been living at the center of the Earth for the past decade, or playing online games till daybreak battling for dominion of Castle Grayskull, then you may have missed out on the numerous attempts by our Government (under both major parties) to erode our freedoms one precious layer at a time. Some of these attempts have so far fallen flat, while others have been frighteningly successful. Here is just a sample of various recent actions and legislation designed specifically to swindle away your rights, if not the shirt right off your back:
Patriot Acts I & II: The Patriot Act is what I call "chameleon legislation"; it's designed to be "open to interpretation" by officials and to be modified for whatever purpose they happen to deem fit at the moment. Ultimately, both Patriot Acts opened a terrible gateway to a world where any freedom is expendable, especially if it means stopping terrorists and "evil doers". Of course, the manner in which terrorism is defined by proponents of the Patriot Act is wildly general. ANYONE could be defined as a terrorist, and any threat could be construed as a matter of national security. The true goal of this legislation was not to protect the public, but to untie the hands of the establishment when implementing further destructive actions, as well as to plant the fog of doubt into the minds of Americans as to the continued validity of the Constitution itself.
The Enemy Belligerents Act: The Enemy Belligerents Act is a perfect example of how the leadership caste of the Democrats and Republicans (who are neo-cons, not true conservatives) work in tandem to institute globalist policy. In this case, the act was introduced by the dastardly duo of John McCain and Joe Lieberman. To put it simply, this legislation, if fully imposed, would allow the government to label any person they choose, even an American citizen, as an enemy combatant. This means you could be arrested without being officially charged, imprisoned without a trial or legal council for an unspecified length of time, and no one, not even your family, would be told where you were. They should just re-name it the 'Shanghai Act', because it basically legalizes government piracy. The only problem is that this shanghai is less likely to end with tropical island adventure and more likely to end with you being tossed in a dark stinky hole in the middle of another Abu Ghraib surrounded by Blackwater mongoloids with a penchant for naked man dog-piles. Again, this is the kind of poison your government thinks up on a regular basis...
http://www.govtrack.us/congress/billtext.xpd?bill=h111-645
The John Warner Defense Authorization Act: A bill passed by George W. Bush in 2007 with very little initial media coverage. Allows the Federal Government at the direction of the president to subvert Posse Comitatus and use the military within the borders of the U.S. as a police force without any consent from state governments. Also gives the office of the president unprecedented powers over the National Guard. Just add any real or engineered national disaster and what you get is a perfect recipe for Hurricane Katrina deluxe. Martial Law, here we come...
http://www.govtrack.us/congress/bill.xpd?bill=h109-5122
Establishment Of Northcom: Northcom (United States Northern Command) is, at bottom, the teeth behind legislation like the John Warner Defense Act. If martial law is declared in the U.S., it will be Northcom and its assigned military units that will stand at the forefront. Northcom's stated mission is to "defend the homeland", supposedly against terrorism, however, much of Northcom's focus in annual exercises like 'Vigilant Shield' has been to prepare for civil unrest and continuity of government. Meaning, they train under the assumption the YOU will be the enemy. The first person posted to command Northcom was General Ralph Eberhart, the same man who was in charge of NORAD on 9/11. Apparently, if you ignore available intelligence and fail completely in your assigned duties, you get a promotion in the upper echelons of the military today, unless I missed something, and he didn't fail...
Presidential Directive 51: A presidential action shrouded in secrecy and general cloak and dagger spookiness. When ignorant yuppies accuse the Liberty Movement of "paranoia", I always point out PDD 51, and ask them if they are at least intelligent enough to be concerned. This order was initiated by George W. Bush and continued by Barack Obama, and is designed to give the president virtual dictatorial powers during a state of "national emergency". It dissolves all states rights and places the entire country under the purview of Northcom, and Homeland Security. The guise of "continuity of government" is used as a rationale. Also allows the president to declare a state of emergency for almost any reason. Members of Congress and even some members of Homeland Security who have requested to read the entire directive have been denied. The bill is apparently so disturbing that Obama doesn't even want those with security clearance to view the full document. Though I'm sure there is some grey area that can be exploited where classified materials are concerned, as far as I can tell from my research, Obama's withholding of information on a directive such as PDD 51 from Congress is wholly illegal.
http://www.fas.org/irp/offdocs/nspd/nspd-51.htm
Foreign Intelligence Surveillance Act (FISA): Supported by both Bush and Obama. The word "foreign" is highly misleading. FISA allows telecom companies to supply the personal data and communications of anyone, including Americans, to the government without threat of civil retribution (lawsuit). Under Constitutional law, any invasion of privacy by government authorities must first be approved through an individualized warrant. The person or premises to be monitored must be specified, and the reason behind the surveillance must be clearly explained. FISA does away with all of these protections to your privacy and gives free reign to government to spy on whoever they choose without any oversight whatsoever. It even allows for mass surveillance, or data collation, on entire subsections of the populace. What I find most interesting about FISA is the way in which it brazenly breaks the barrier between government and corporate power. We all know about the revolving door in Washington, but in the past, the idea of the barrier was at least somewhat maintained for appearances, if nothing else. The trick to FISA is that "technically", it is the telecoms that are doing the actual surveillance, and not government. This is, I'm sure, the argument that will be used by the Feds if FISA is ever taken to the Supreme Court under the Fourth Amendment. The reality, though, is that the telecoms and the government are one in the same, and to treat them as two separate legal entities is to blind one's self to the facts. Now, Mussolini's definition of fascism (the melding of government and corporate infrastructure into a single entity with a single purpose) absolutely seems to apply to the U.S.
Big Brother Technotronic Super Villain-esqe Surveillance Grid: Ever feel like you are being watched? Get used to it, says Homeland Security! CCTV cameras have doubled in most U.S. cities over the past two years, while New York has tripled theirs in only six months. The TSA has been given invincible IRS-like goon squad status and now fondles and x-rays airport travelers at will, storing biometric data without consent and generally treating people worse than cattle. Don't care because you don't fly? Don't worry! Naked body scanners are coming to bus and train stations near you! Hell, if we don't put a stop to this horror soon, the TSA may roll scanners out on street corners.
A friend of mine was recently on a trip to Boston and went to see the U.S.S. Constitution, the oldest commissioned American war vessel still afloat. He related to me that his excitement was soon smothered when he realized visitors had to pass through metal detectors and security just to see the boat. I'm sure that the government is merely trying to prevent Al Qaeda from sneaking on board with box cutters, hijacking the ship, and sailing it into the Sears tower, causing the building to implode at near freefall speed.
The reason he was disenchanted with the experience was because he knew the metal detectors and security served little purpose, except to condition people into accepting that this was the norm. Everywhere you go, there DHS is.
Next of course would be easily tracked national ID cards, which were attempted a couple of years ago with little success under the Real ID Act. State compliance for the Real ID was postponed until May 2011, which is right around the corner. We'll see if the states cave, or stand their ground. Finally, no surveillance society would be complete without citizen spies. Homeland Security is establishing its new "If You See Something, Say Something" campaign in your local Walmart. Yes, imagine the ghoulish face of cave troll Janet Napolitano leering down at aisle five as you attempt to save a dollar on frozen buffalo wings. She slobbers rhetoric about how you are surrounded by terrorists while you try to find that economy sized box of Count Chocula. Wouldn't we all just feel safer?
Bailout Bills (All Variations): I find that a lot of people like to blame our current economic doomfest on one political party or the other, stumbling about in the dark in a sad attempt to trace the roots of the credit and mortgage collapse back to Obama, Bush II, Clinton, Bush I, etc. Everyone is desperate to play cheerleader for their team, not realizing that both teams are fake and almost every president since the creation of the Federal Reserve in 1913 is to blame for selling out the American people to global banks. Let's not forget, both Obama and Bush supported bailout legislation which is now widely considered to be an abject failure. The majority of Americans according to most polls apposed these bills, and yet they were still passed. What do the bailouts have to do with the loss of Constitutional rights? When the entirety of your country's financial future is poured into the coffers of international banking elites and your currency is subsequently debased if not destroyed, leaving you with nothing but debt and supranational centralization, it is a certainty that a total loss of your rights will soon follow.
FDA Food Safety Modernization Act S. 510: Currently being considered for passage in the House. Yet another bill written in such a way as to make it wide open for interpretation by the authorities. First of all, the FDA has never been synonymous with "safety", considering half the products they approve end up causing cancer or shrinking your testes. They would approve rat urine for mass consumption if a company like Monsanto wanted to market it. The FDA's true roll has been to let major corporations violate safety regulations unobstructed while ruthlessly bringing the hammer down on smaller businesses. Now, the FDA has set its aim upon not just small farms, but personal gardens!
http://www.govtrack.us/congress/bill.xpd?bill=s111-510
The bill gives the FDA far reaching powers over what it terms "food production facilities", which are defined as "any farm, ranch, orchard, vineyard, aquaculture facility, or confined animal-feeding operation". It also places all food production under the control of Homeland Security in the event of a "national emergency" (there's that poorly defined phrase again). I have heard some organic growers and ranchers shrug off the bill, believing that the FDA would never take advantage of the broad interpretation and bring pressure on private gardens or food trade. This kind of naivety is always astonishing to me. When has a society ever opened a door to power that its government has not taken quick advantage of? In fact, the FDA has already begun harassing the Amish, of all people, for private farm trade, even without S. 510:
http://foodfreedom.wordpress.com/2010/02/08/fda-agents-invade-amish-farm-in-pa/
http://www.nydailynews.com/ny_local/brooklyn/2008
These are non-commercial farms, yet the FDA believes it has the authority to dictate their food production activities. If the government is willing to set its laser guided sites on a pacifist group that still rides around in horse and buggy, then they'll definitely have no qualms going after the rest of us.
Anti-Constitutional Arguments For Dummies
Most people enjoy the advantages of freedom and are naturally conservative towards government, whether they realize it or not. Because of the rather unsavory past actions of the neo-cons (globalists), the word "conservative" has been sullied, and is now associated with corporatism and big government. However, real conservatism has always been quite revolutionary. True conservatives believe in the principle of limited government, and individualism above collectivism, which means they usually find themselves the target of establishment fury. True conservatives are almost always in rebellion against the system, because the system is almost always operated by those who are anti-freedom. Show me a self proclaimed conservative who supports proliferation of government with a smile and I'll show you a very confused man.
The label "Conservative" should really be interchangeable with "Constitutionalist", and once this is understood, anti-Constitutional arguments can be viewed without the blurred distractions of the false left/right paradigm. We begin to understand that the conflict is not between Democrat and Republican, Liberal or Conservative, because those terms have been warped and their meaning eroded. The conflict we face is instead between individualists (Constitutionalists), and collectivists (globalists).
We've all heard the gamut of anti-Constitutional arguments in the past, but almost always through the left/right filter. Let's set that filter aside for a moment and consider a few of them once again more objectively...
Argument 1 - The Constitution is an outdated document and is no longer practical for the modern world:
I've heard this argument from both sides of the aisle once again indicating that left vs. right is all fantasy. Does a good idea ever become outdated? What about inborn instincts? Can the desire for freedom ever be impractical?
The suggestion that the Constitution is "too old" is ludicrous for many reasons. First, the idea of an independent republic is painfully new compared to the long wash of human empires filled with vast stretches of feudalism and tyranny. Globalism is often touted as the next step in the cultural evolution of man, but it is really a giant leap backwards compared to Constitutionalism, representing yet another old centralist autocracy marketed in a modern way. A global feudal state is still a feudal state.
Second, the guidelines of the Constitution are built upon social necessities that have never and will never disappear. The right to speak openly one's opinions or observations without fear of government reprisal is not a right that we will ever find ourselves too modern to appreciate. The right to bear arms and defend oneself will always be essential to a culture that wishes to prevent despotism in its various forms. The right to privacy from all people, including the government, will never be programmed out of the public entirely. Every man has an innate need to live without being examined and judged as though he were under constant suspicion. Every aspect of the Constitution is archetypal, and therefore, as much a part of us our own eyes and ears. These things do not lose their usefulness, no matter what era we live in.
Third, I have yet to see a political dynamic that is more sincere and honorable than the U.S. Constitution. I have yet to see a social concept presented as an alternative to the Constitution that does not have an ulterior motive attached. If someone, anyone, can present a new system that improves upon the Constitution while retaining the liberties described in the Constitution, I would love to see it. I hear a lot of criticism of the Constitution by globalists, but I have never seen any of them present a workable replacement that the public would respect, or willingly accept.
Argument 2 - Some rights must be given up for the greater good:
I'll tell you a little secret; there is no "greater good", unless you are talking about personal conscience. If your version of the "greater good" demands that you supplant your personal conscience, then it is not "greater", and it is not "good".
Safety is usually the catalyzing issue that leads to relinquished liberties, but safety itself is an illusion. No government can promise you true safety. Life is dangerous, and filled with the unexpected. Get over it and stop projecting your fears on the rest of us. If someone really feels that they are in immediate danger of a terrorist attack, then they should build a concrete bunker for themselves and stay in it, instead of trying to impose a collective bunker made out of unconstitutional laws and government surveillance around all of us.
Ultimately, what IS the greater good in this situation? Is it an unaccountable globalist nanny state and the dissolution of all individual and national sovereignty for the sake of a few people's delusions of security? Maybe I'm just reckless, but I'm not buying it...
Argument 3 - National sovereignty must be removed if we are to achieve world peace:
World peace sounds very nice, I admit, but anyone who thinks removing Constitutional boundaries and bowing to globalism is the cure for war is smoking something laced with a serious amount of something. Almost every war of the past century alone has been funded, facilitated, or outright ignited by the same types of global elitists who now demand that we centralize world economic and political power into their hands to end war. This isn't irony, it's actually very well thought out Hegelian gaming; a sort of anti-Karma that rewards evil and punishes the respectable.
We have been led to believe that peace requires some kind of Faustian trade; freedom for harmony. But, legitimate freedom is a harbinger of peace, and nothing, not even the promise of harmony, is worth trading it away.
Argument 4 - The government could never undo Constitutional liberties because we would just vote them out:
This argument shows a serious lack of insight into how our government actually functions. As I have pointed out, most of the anti-Constitutional legislation described in this article was supported by both major parties. Therefore, it would be logical to then consider that voting out one party and replacing them with the other makes little difference as to the policies the government pursues. Unless you are voting for third party or liberty based candidates, your stop at the ballot box was a big waste of time. Sorry, that's just reality. The people who write in Mickey Mouse have more sense than most of the voting public. The point? Elections change very little on a federal level.
The argument is also sometimes reversed by nihilists, who claim that the American public is to blame for government corruption because they voted for said politicians in the first place. Again, how the public votes has little bearing on most major elections because they have not been given a real choice. I get more excitement when deciding between Coke or Pepsi.
Argument 5 - The Founding Fathers couldn't live up to their Constitutional ideals:
Yes, Thomas Jefferson owned slaves, and he also tried to implement a gradual emancipation for all slaves. It's a contradiction. Jefferson, like all the Founding Fathers, was living in the midst of a revolutionary age filled with contradictions and conflict. The fact that they were able to sort through much of this and form a nation that at least aspired towards equal rights and independence is nothing short of a miracle. Washington made many mistakes, and so did Adams. In the context of the era in which they lived, they still did extraordinarily well, and this world is immensely better off because of their contributions.
This argument is perhaps the most dishonest of those I've heard, because it seeks to dismantle the very tangible and beneficial accomplishments of the revolutionary period by defaming men who cannot defend themselves because they are long since dead. It is successful when used to target people who know only historical events or dates but do not know more about the characters of the figures involved. That is not to say we should blindly idolize the Founding Fathers, on the contrary, we should endeavor to see them as real human beings with strengths, as well as flaws. Those flaws do not discredit what they built. What men are able to achieve in spite of their flaws is often far more meaningful and valuable than what they lose because of them.
Moral Ambiguity In Times Of Crisis
Liberty is most threatened in moments of great duress. Desperation breeds reckless abandon, and such an atmosphere is suffocating to wisdom. Each point of balance in the struggle for freedom requires considerable focus, and that focus can be twisted, flipped, and wrenched by the shock of disaster. The preservation of Constitutional rights depends greatly on our ability to maintain a sense of integrity and discipline as a culture, even when all the world seems to crumble around us.
Fear makes the insane seem reasonable. Financial collapse, war, civil unrest, all of these calamities can tempt us to silence our dissent, to do things we would not normally do, or to concede that which is precious to us. Even now, that kind of fear has led to many unfortunate compromises. The good news is, there is no freedom taken, that cannot be taken back.
The question is, how much are we willing to endure to see that our ideals survive? How hard are we willing to work? How much of our time, effort, and energy are we willing to expend? If the answer is not "all of it", then we have failed already. What we have covered so far is the present situation, and by no means does it have to continue. When drawing a line in the sand, that line must first be drawn within. We must promise ourselves that it is here we will not bend, we will not lose balance, we will not be thrown. All liberty depends most on this.
Ron Paul : Lying is Not Patriotic
Dec 10 2010
Phase Two Of Greater Depression II Begins Now
We all know what caused the 2008 banking crisis killing Lehman and others. It was reckless lending, too low interest rates, loosy-goosy credit for consumers and most of all, instigation of derivatives by greedy bankers hungry to make billions on the quick. Now that central banks have bailed them out of their insolvency and replenished minimum capital standards by stealing TARP funds from taxpayers, we find the next LARGER MESS looming on the horizon. Governments grasping for tax income will be grubbing, and taking all at a new furious pace. Consumers that are able will simply drop-out of the system and down-size.
If you thought Lehman was fun get ready to see new price controls and acceleration of existing capital controls, with inflation that will knock your socks off. We have at least two to five more years of crash and burn in the financial markets before a new base is found. Then, toxic trade policies and old grudges open the door to a new World War, which obviously no one can afford. This is simply historical fact and not any wild forecasting by me although some may consider me crazy.
Many of the very large global banks will be nationalized and some will fold into insolvency or merger. Roughly 90% of the derivatives and real estate toxic paper trash remains hidden on banker balance sheets. Not only was the problem never fixed, they’ve been piling on more bad loans-paper at a furious pace. The Banker’s Motto is “Steal while you can. You never know when the party ends.”
Credit is the life blood of any positive economy. Yet, lending to commercial companies is almost non-existent. Further, the administration is piling on new and higher costs in health care, payroll taxes, benefit costs and SS withholding, crippling the only real source of new jobs and employment-small business. There is no strong, positive engine of growth on the horizon except precious metals and commodities trading and investing.
What few have noticed is the current inability of banks, bankers and investment banks to make any income. In a depression, income becomes paramount. Banks’ ability to earn money is diminishing on all fronts; credit cards, corporate loans, investment banking, commercial banking, real estate, and of course consumer loans for toys and stupid junk that composes 70% of the entire USA consumer spending economy. If Paulson and Bernanke had not conspired to give bankers TARP and other stolen billions, the big banks would now be insolvent.
Banks are stuck with earning a puny 1-3% on the stolen TARP funds they have invested in US Government paper. When the bond market tanks, that stolen cash is toast and so it will be with their 3% earnings. How fitting is that? Paybacks!
The losses are so beyond comprehension they simply cannot be measured due to derivatives and credit default swaps. Yes, the swaps are allegedly insured but the counter-parties simply have no hope of paying what they owe. They will be overwhelmed and the scary fall-out can only be broadly considered and not even estimated. For now, it’s all hiding in the back rooms of banks. If the mark-to-market they are insolvent.
American commercial and residential real estate is wrecked for two decades. Property ownership, banks, credit unions, title companies, loans, lender loan ownership and ability to pay are all simply destroyed.
Corporate insiders, CEO’S, presidents, and other officers have been selling gobs of stock at a rate we last heard of as 1600 to 1. That’s 1600 shares sold for each one purchased. Mr. Ballmer, chief honcho at Microsoft is dumping well over $1 billion as we speak…that is only one example. Others are selling entire companies, some taking a lifetime to build, in order to cash out and run with the money.
These people know exactly what is coming. Insurance companies thrive and live on earnings from investments they make using policy holders’ cash. If commercial real estate sinks some more, as we think it will, it’s adios income for the insurers. Further, policy holders, having paid into whole life, will cash them out to live; taking capital out of the insurance companies’ till. This further removes insurance company balance sheet cash.
The next big government taking will be to steal the pension pools of national and international corporations. This is the last remaining honeypot for government theft and has already been practiced in South America.
Those companies that are smart and can see it coming are off-shoring piles of assets, cash and investment paper to keep it away from the takers. How this can work out, lord only knows.
Individuals holding pensions and government paper will wake-up one morning to find its all been seized and piled into 30-year USA bonds, which are sinking like the Titanic. There will be no buyers and no exits for those assets. The owners could get totally wiped out. We strongly suggest you plan accordingly while being very careful. Old rules will not apply any longer. Bonds stink and they are getting stinky-er.
The real estate industry is such a tangled web of messes, the government plan (in our view) is to gather all the bad loan paper into Fannie and Freddie over the next 2-3 years. Congress gave them an open check book to buy as much garbage as possible. At the appropriate moment, the F&F’s will be forced into bankruptcy and presto, all the bad stuff goes away.
If this is true, we wonder, where does this leave the banks and home owners’? Do the banks get paid twice? No surprise to us if this happens. Would the homeowners be free and clear…interesting dilemma? Who owns the properties? Who owns the loans? How would you like to be in the title insurance business guaranteeing all the suspect properties?
The 4th quarter sales period for larger retailers, department stores and big box stores is when they make their entire year. One bad 4th quarter can take them down. We hope they have at least a decent quarter and can remain in business. Some of them after the January, 2011 returns and mark-downs will be filing bankruptcy. We forecast only a minimum of Xmas spending by Americans as a final result. By February, we’ll see who’s headed to the BK courts. Sales are mildly stronger but profits are toast on these give-aways.
We got the news today that the massive A&P grocery chain intends to file bankruptcy as early as Monday, December 13, 2010.
If the Congress fails to pass the Bush tax cut extensions before Christmas 2010, we forecast the later January, 2011 broader market selling cycle will occur before the end of December to reduce taxes.
QE2 Presents Our Largest Global Disaster.
We said years ago after the derivative mess and negative housing news came to light that Bernanke would have only one chance; and that is to print phony money and paper. This is exactly what he is doing and will continue to do until the financial system implodes.
Keep in mind the USA is the worst culprit originating digital cash and paper. China and Japan have had enough. They are sellers not buyers and further, they are beginning to produce the same problems in their own currencies and bonds. Japan’s central banker said yesterday he plans to overwhelm their system with QE2 that could make Chopper Ben’s paper dump appear to be play-school. Not too smart to say it.
System weaknesses we see are (1) A Chinese real estate bubble is popping and taking down their stock markets. Fallout from this will cause a chain reaction moving into other markets in Europe, Asia and North and South America. It doesn’t take a genius to figure out where this race to the bottom goes next. (2) First we get capital controls, price controls and then inflation. This produces some real economic pain and struggle. (3) However, the last phase is the really bad one-hyperinflation!
The first inflation phase is followed by hyperinflation and then a banking-system collapse. It’s not the end of the world as life goes on; but for millions of spoiled American brats; they will simply not be able to cope. They’re headed for major denial, and all kinds of social problems. It’s too bad it’s come to this as created by a bunch of greedy bankers and One-Worlder’s. It’s not nice to say but we wish them the worst and no mercy. They have literally destroyed our entire economic world for decades.
In the 1919-1923 European hyperinflation following WW I, hundreds of bankers and politicians were simply assassinated. (Read the book “When Money Dies” by Adam Fergusson). Could this possibly come again? We hope not but keep in mind Americans own millions of guns. When these people get very angry after being totally cleaned out, you tell me what happens next?
Most of these problems have been caused and created by the US Federal Reserve. This is a private banker enterprise not the US Government. We suggest that before all this is over, that bunch of snakes will be eliminated for good-one way or another. Never, until recently, since the birth of this gang in 1913, have there been so many responsible, authoritative calls and demands to first investigate them and second, shut them down for good. Its unfortunate the Federal Reserve born in 1913 could not have been still-born.
My beloved country and those throughout the world can manage to pass through this huge economic trauma. Our largest concern is for the freedom and liberty of America. Who will be in charge after this ends? What will be the fallout? Can we simply return to a strict U.S. Constitution and Bill of Rights? Or, will we be stuck with something much different? What happens to the dollar? What happens to other currencies?
One way or the other, I believe Americans will fight and struggle for what is fair and correct. Those that choose another path will pay the price. I am a non-violent journalist, a reporter, an analyst, a trader, and a market forecaster. I am a student of economic history and somewhat rely upon the past to forecast our present. I just wish it could be different. Buckle-up for a rough ride, use common sense and you’ll be able to manage this adventure.
The next fall rally in gold and silver should commence near December 13. From the signals we see, this rally could be absolutely outstanding. Try your best to own physical gold and silver and trade the shares of the related companies. The next larger-faster phase of commodities trading can continue for another 7 years based upon previous historical cycles.
Now, more than ever, it is important to take the immediate necessary precautions to protect yourself and your families and friends. Traders and investors should be buying precious metals and select shares right now. In our Trader Tracks Newsletter we have a great list of trading and investing ideas for you.
Meanwhile, you can never go wrong buying physical precious metals and holding them for security. We’ve had a constant run of nearly ten years with gold rising 15% per year so this remains a good trade. In the last twelve months, gold has rallied over 34% and is going ever faster.
Important news this past week was the February, 2011 Gold Futures breaking through $1424.50. The second event was the March, 2011 Silver Futures breaking through hard resistance at $30.18. Yes, we have corrected but technically I can tell what’s next.
This past week I have re-worked my gold and silver figures for next year. I am more than pleased with the answers and intend to use those new forecasts for our traders. The year of 2011 in our view is going to be an absolute barn-burning rally for precious metals.
It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this offers a chance, arriving only once in 25 years on the historical cycles.
Roger Wiegand
Editor Trader Tracks Newsletter
Dec 10 2010
Phase Two Of Greater Depression II Begins Now
We all know what caused the 2008 banking crisis killing Lehman and others. It was reckless lending, too low interest rates, loosy-goosy credit for consumers and most of all, instigation of derivatives by greedy bankers hungry to make billions on the quick. Now that central banks have bailed them out of their insolvency and replenished minimum capital standards by stealing TARP funds from taxpayers, we find the next LARGER MESS looming on the horizon. Governments grasping for tax income will be grubbing, and taking all at a new furious pace. Consumers that are able will simply drop-out of the system and down-size.
If you thought Lehman was fun get ready to see new price controls and acceleration of existing capital controls, with inflation that will knock your socks off. We have at least two to five more years of crash and burn in the financial markets before a new base is found. Then, toxic trade policies and old grudges open the door to a new World War, which obviously no one can afford. This is simply historical fact and not any wild forecasting by me although some may consider me crazy.
Many of the very large global banks will be nationalized and some will fold into insolvency or merger. Roughly 90% of the derivatives and real estate toxic paper trash remains hidden on banker balance sheets. Not only was the problem never fixed, they’ve been piling on more bad loans-paper at a furious pace. The Banker’s Motto is “Steal while you can. You never know when the party ends.”
Credit is the life blood of any positive economy. Yet, lending to commercial companies is almost non-existent. Further, the administration is piling on new and higher costs in health care, payroll taxes, benefit costs and SS withholding, crippling the only real source of new jobs and employment-small business. There is no strong, positive engine of growth on the horizon except precious metals and commodities trading and investing.
What few have noticed is the current inability of banks, bankers and investment banks to make any income. In a depression, income becomes paramount. Banks’ ability to earn money is diminishing on all fronts; credit cards, corporate loans, investment banking, commercial banking, real estate, and of course consumer loans for toys and stupid junk that composes 70% of the entire USA consumer spending economy. If Paulson and Bernanke had not conspired to give bankers TARP and other stolen billions, the big banks would now be insolvent.
Banks are stuck with earning a puny 1-3% on the stolen TARP funds they have invested in US Government paper. When the bond market tanks, that stolen cash is toast and so it will be with their 3% earnings. How fitting is that? Paybacks!
The losses are so beyond comprehension they simply cannot be measured due to derivatives and credit default swaps. Yes, the swaps are allegedly insured but the counter-parties simply have no hope of paying what they owe. They will be overwhelmed and the scary fall-out can only be broadly considered and not even estimated. For now, it’s all hiding in the back rooms of banks. If the mark-to-market they are insolvent.
American commercial and residential real estate is wrecked for two decades. Property ownership, banks, credit unions, title companies, loans, lender loan ownership and ability to pay are all simply destroyed.
Corporate insiders, CEO’S, presidents, and other officers have been selling gobs of stock at a rate we last heard of as 1600 to 1. That’s 1600 shares sold for each one purchased. Mr. Ballmer, chief honcho at Microsoft is dumping well over $1 billion as we speak…that is only one example. Others are selling entire companies, some taking a lifetime to build, in order to cash out and run with the money.
These people know exactly what is coming. Insurance companies thrive and live on earnings from investments they make using policy holders’ cash. If commercial real estate sinks some more, as we think it will, it’s adios income for the insurers. Further, policy holders, having paid into whole life, will cash them out to live; taking capital out of the insurance companies’ till. This further removes insurance company balance sheet cash.
The next big government taking will be to steal the pension pools of national and international corporations. This is the last remaining honeypot for government theft and has already been practiced in South America.
Those companies that are smart and can see it coming are off-shoring piles of assets, cash and investment paper to keep it away from the takers. How this can work out, lord only knows.
Individuals holding pensions and government paper will wake-up one morning to find its all been seized and piled into 30-year USA bonds, which are sinking like the Titanic. There will be no buyers and no exits for those assets. The owners could get totally wiped out. We strongly suggest you plan accordingly while being very careful. Old rules will not apply any longer. Bonds stink and they are getting stinky-er.
The real estate industry is such a tangled web of messes, the government plan (in our view) is to gather all the bad loan paper into Fannie and Freddie over the next 2-3 years. Congress gave them an open check book to buy as much garbage as possible. At the appropriate moment, the F&F’s will be forced into bankruptcy and presto, all the bad stuff goes away.
If this is true, we wonder, where does this leave the banks and home owners’? Do the banks get paid twice? No surprise to us if this happens. Would the homeowners be free and clear…interesting dilemma? Who owns the properties? Who owns the loans? How would you like to be in the title insurance business guaranteeing all the suspect properties?
The 4th quarter sales period for larger retailers, department stores and big box stores is when they make their entire year. One bad 4th quarter can take them down. We hope they have at least a decent quarter and can remain in business. Some of them after the January, 2011 returns and mark-downs will be filing bankruptcy. We forecast only a minimum of Xmas spending by Americans as a final result. By February, we’ll see who’s headed to the BK courts. Sales are mildly stronger but profits are toast on these give-aways.
We got the news today that the massive A&P grocery chain intends to file bankruptcy as early as Monday, December 13, 2010.
If the Congress fails to pass the Bush tax cut extensions before Christmas 2010, we forecast the later January, 2011 broader market selling cycle will occur before the end of December to reduce taxes.
QE2 Presents Our Largest Global Disaster.
We said years ago after the derivative mess and negative housing news came to light that Bernanke would have only one chance; and that is to print phony money and paper. This is exactly what he is doing and will continue to do until the financial system implodes.
Keep in mind the USA is the worst culprit originating digital cash and paper. China and Japan have had enough. They are sellers not buyers and further, they are beginning to produce the same problems in their own currencies and bonds. Japan’s central banker said yesterday he plans to overwhelm their system with QE2 that could make Chopper Ben’s paper dump appear to be play-school. Not too smart to say it.
System weaknesses we see are (1) A Chinese real estate bubble is popping and taking down their stock markets. Fallout from this will cause a chain reaction moving into other markets in Europe, Asia and North and South America. It doesn’t take a genius to figure out where this race to the bottom goes next. (2) First we get capital controls, price controls and then inflation. This produces some real economic pain and struggle. (3) However, the last phase is the really bad one-hyperinflation!
The first inflation phase is followed by hyperinflation and then a banking-system collapse. It’s not the end of the world as life goes on; but for millions of spoiled American brats; they will simply not be able to cope. They’re headed for major denial, and all kinds of social problems. It’s too bad it’s come to this as created by a bunch of greedy bankers and One-Worlder’s. It’s not nice to say but we wish them the worst and no mercy. They have literally destroyed our entire economic world for decades.
In the 1919-1923 European hyperinflation following WW I, hundreds of bankers and politicians were simply assassinated. (Read the book “When Money Dies” by Adam Fergusson). Could this possibly come again? We hope not but keep in mind Americans own millions of guns. When these people get very angry after being totally cleaned out, you tell me what happens next?
Most of these problems have been caused and created by the US Federal Reserve. This is a private banker enterprise not the US Government. We suggest that before all this is over, that bunch of snakes will be eliminated for good-one way or another. Never, until recently, since the birth of this gang in 1913, have there been so many responsible, authoritative calls and demands to first investigate them and second, shut them down for good. Its unfortunate the Federal Reserve born in 1913 could not have been still-born.
My beloved country and those throughout the world can manage to pass through this huge economic trauma. Our largest concern is for the freedom and liberty of America. Who will be in charge after this ends? What will be the fallout? Can we simply return to a strict U.S. Constitution and Bill of Rights? Or, will we be stuck with something much different? What happens to the dollar? What happens to other currencies?
One way or the other, I believe Americans will fight and struggle for what is fair and correct. Those that choose another path will pay the price. I am a non-violent journalist, a reporter, an analyst, a trader, and a market forecaster. I am a student of economic history and somewhat rely upon the past to forecast our present. I just wish it could be different. Buckle-up for a rough ride, use common sense and you’ll be able to manage this adventure.
The next fall rally in gold and silver should commence near December 13. From the signals we see, this rally could be absolutely outstanding. Try your best to own physical gold and silver and trade the shares of the related companies. The next larger-faster phase of commodities trading can continue for another 7 years based upon previous historical cycles.
Now, more than ever, it is important to take the immediate necessary precautions to protect yourself and your families and friends. Traders and investors should be buying precious metals and select shares right now. In our Trader Tracks Newsletter we have a great list of trading and investing ideas for you.
Meanwhile, you can never go wrong buying physical precious metals and holding them for security. We’ve had a constant run of nearly ten years with gold rising 15% per year so this remains a good trade. In the last twelve months, gold has rallied over 34% and is going ever faster.
Important news this past week was the February, 2011 Gold Futures breaking through $1424.50. The second event was the March, 2011 Silver Futures breaking through hard resistance at $30.18. Yes, we have corrected but technically I can tell what’s next.
This past week I have re-worked my gold and silver figures for next year. I am more than pleased with the answers and intend to use those new forecasts for our traders. The year of 2011 in our view is going to be an absolute barn-burning rally for precious metals.
It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this offers a chance, arriving only once in 25 years on the historical cycles.
Roger Wiegand
Editor Trader Tracks Newsletter
Why We're Headed For A Collapse
Karl Denninger
Pay attention folks....
Americans want Congress to bring down a federal budget deficit that many believe is "dangerously out of control," only under two conditions: minimize the pain and make the rich pay.
The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they're against an increase in the gasoline tax.
Got it? Must have this:
Over in Britain an attempt to play a game called "reality" has led to violence:
LONDON - Britain's coalition government survived the most serious challenge yet to its austerity plans on Thursday when Parliament narrowly approved a sharp increase in college fees. But violent student protests in central London, including an attack on a car carrying Prince Charles and his wife, Camilla, to the theater, provided a stark measure of growing public resistance.
That the word "survived" had to be used in that paragraph is a stark reminder of just how close things are to not surviving "as currently constituted."
Here's the problem with the American perspective (and that in Britain, for that matter): There is no means by which playing "tax the rich" can close the gap.
Here, again, is the budget picture in terms of deficits in dollars:
So let's assume we don't pass the tax cuts for the "rich." Ok, that's $70 billion a year. The gap between revenue and spending is over $1,600 billion.
In other words "soak the rich" gets you 4.4% of the problem.
And remember, this change gets rid of the dividend, capital gains, and income tax preferences for the wealthy, defined as "those who make over $250,000 as a couple, or $200,000 as an individual."
If we "**** the rich" even more, we could probably take another $200 billion off that number. That still doesn't matter, simply on the mathematics.
Beyond that level you probably run into "avoidance" - that is, perfectly legal choices to make less.
There have been plenty of years where I've written really big checks to the IRS, and not all of them were related to MCSNet. The last few years have been pretty good. But this much I can tell you - if the government was to, for example, tax everything I made at 90% beyond $200,000, I would never make more than $200,000 a year again. Ever. I will not work hard to earn that money only to turn 90% of it over to the government.
Those of you who get up and go to work every day simply don't get it or don't care to listen. You get paid time and a half for hours over 40, and double time on weekends and holidays. The former is actually Federal Law, not employer preference.
I, on the other hand, was literally on-call 24x7 for a decade building what I had with MCSNet. I didn't have an actual vacation - a time when I could choose to shut off the pager and phone for so much as 24 hours - for more than five years. For a decent part of that time I not only ran my own joint I worked for "the man" at the same time. Today, as an entrepreneur, I still can't take that vacation. I had it for a few years when I was effectively "retired" but now it's gone again, as I run The Ticker and forum. I go on "vacation" or have a "nice weekend" and my phone and laptop are always with me, as I have to be able to respond to potential problems with the infrastructure - and if I hired someone to watch the infrastructure I'd have to be able to respond to "business issues."
The motivation to do this - to take the risk of material loss of one's capital and to trade one's personal life off like this instead of being a working drone that works for "the man" from 9-5 and then comes home to watch "Dancing With The Stars" - is money. Remove that motivation by confiscating what I earn and I will stop doing it and sit in my hottub drinking Cognac or fishing every day instead - that's a promise and a fact, and your illusory "tax revenue" will fail to materialize.
Exactly where does that "avoidance" behavior begin? I don't know. But what I do know is that it begins at a lot lower level than you probably think. And the spiral that this promotes downward in tax receipts is both very real and impossible for the government to stop or prevent.
This isn't to say that letting the Bush Tax Cuts expire - all of them - shouldn't be done. It should, in my opinion, rather than not only extending them but creating a structural decrease in FICA tax that will, in my opinion, never be reversed. That will cause Social Security to run into actuarial trouble much sooner than it otherwise would.
Never mind that the big problem is in Medicare and Medicaid, two sacred cows. But while I've long written about these, going back to Musings before The Ticker was formed, in point of fact it really doesn't matter at the rate we're going - we're not going to keep this set of plates in the air long enough for that to all play out.
We have no leadership in Congress and worse, we've become soft as a nation, demanding handouts and refusing to work for what we have. We think we have a right to advanced medical technology even though we have no money, simply because we're alive. We have a "right" to unlimited unemployment if we can't - or won't - find a job. And make no mistake - much of it is "won't." There are jobs - just not at the rate of pay you expect to support the lifestyle you think you're entitled to, or that job might be halfway across the country - and you, of course, are "entitled" to live in a particular place, in a McMansion, irrespective of whether a job that pays enough to cover your expenses exists there.
Our sense of hubris has exceeded our willingness to get off our collective fat asses by several orders of magnitude.
I'm sure I'll get more hate mail for this missive, as I usually do when I write a Ticker like this.
It doesn't matter. I deal in the truth folks, and whether you want to hear it or not I'm going to put it in front of you anyway. I don't do this because I want to be popular. I do it because it's right, and because it is impossible for me to sit here with a clean conscience and see polls like that referenced in Bloomberg and say "oh it will all be ok."
No it won't, and the day of reckoning, when we're no longer able to play this game, will come here to the United States far sooner than most of you believe.
It is not just our leaders who need to grow a sack - it is also our people.
http://market-ticker.org
Bernie Sanders' Letter To Bernanke
http://online.wsj.com/public/resources/documents/Sanders_Bernanke_letter120610.pdf
This is a must read story:
Not Yours To Give
Col. David Crockett, US Representative from Tennessee
Col. David Crockett
(Editor's Note: The following was originally published in "The Life of Colonel David Crockett," by Edward Sylvester Ellis. Please read this missive over and over until you understand and agree with it. Members of Congress have no right to breathe (metaphorically speaking) with out our permission. All the bailouts, and special considerations, which include the compensation packages that they have"voted" for themselves, are illegal. These miscreants are criminal putzs that are pretending to "legally" pass unConstitutional abominations, and their actions are prosecutable. The bozos out there that are completely dependent on these handouts are no longer capable of being responsible citizens. Responsible citizens would insist that the criminals that were responsible for their hardships be prosecuted. If they have allowed themselves to be sufficiently "dumbed down" to not care, that is their problem, not ours. Our problem involves ridding America of the vermin that are criminal politicians. - JSB)
One day in the House of Representatives a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support. The Speaker was just about to put the question to a vote when Crockett arose:
"Mr. Speaker - I have as much respect for the memory of the deceased, and as much sympathy for the sufferings of the living, if suffering there be, as any man in this House, but we must not permit our respect for the dead or our sympathy for a part of the living to lead us into an act of injustice to the balance of the living. I will not go into an argument to prove that Congress has not the power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money. Some eloquent appeals have been made to us upon the ground that it is a debt due the deceased. Mr. Speaker, the deceased lived long after the close of the war; he was in office to the day of his death, and I have never heard that the government was in arrears to him.
"Every man in this House knows it is not a debt. We cannot, without the grossest corruption, appropriate this money as the payment of a debt. We have not the semblance of authority to appropriate it as charity. Mr. Speaker, I have said we have the right to give as much money of our own as we please. I am the poorest man on this floor. I cannot vote for this bill, but I will give one week's pay to the object, and if every member of Congress will do the same, it will amount to more than the bill asks."
He took his seat. Nobody replied. The bill was put upon its passage, and, instead of passing unanimously, as was generally supposed, and as, no doubt, it would, but for that speech, it received but few votes, and, of course, was lost.
Later, when asked by a friend why he had opposed the appropriation, Crockett gave this explanation:
"Several years ago I was one evening standing on the steps of the Capitol with some other members of Congress, when our attention was attracted by a great light over in Georgetown. It was evidently a large fire. We jumped into a hack and drove over as fast as we could. In spite of all that could be done, many houses were burned and many families made houseless, and, besides, some of them had lost all but the clothes they had on. The weather was very cold, and when I saw so many women and children suffering, I felt that something ought to be done for them. The next morning a bill was introduced appropriating $20,000 for their relief. We put aside all other business and rushed it through as soon as it could be done.
"The next summer, when it began to be time to think about election, I concluded I would take a scout around among the boys of my district. I had no opposition there, but, as the election was some time off, I did not know what might turn up. When riding one day in a part of my district in which I was more of a stranger than any other, I saw a man in a field plowing and coming toward the road. I gauged my gait so that we should meet as he came to the fence. As he came up, I spoke to the man. He replied politely, but, as I thought, rather coldly.
"I began: 'Well, friend, I am one of those unfortunate beings called candidates, and - -'
"Yes I know you; you are Colonel Crockett. I have seen you once before, and voted for you the last time you were elected. I suppose you are out electioneering now, but you had better not waste your time or mine, I shall not vote for you again."
"This was a sockdolager...I begged him to tell me what was the matter. " ’Well, Colonel, it is hardly worth-while to waste time or words upon it. I do not see how it can be mended, but you gave a vote last winter which shows that either you have not capacity to understand the Constitution, or that you are wanting in the honesty and firmness to be guided by it. In either case you are not the man to represent me. But I beg your pardon for expressing it in that way. I did not intend to avail myself of the privilege of the constituent to speak plainly to a candidate for the purpose of insulting or wounding you. I intend by it only to say that your understanding of the Constitution is very different from mine; and I will say to you what, but for my rudeness, I should not have said, that I believe you to be honest.
...But an understanding of the Constitution different from mine I cannot overlook, because the Constitution, to be worth anything, must be held sacred, and rigidly observed in all its provisions. The man who wields power and misinterprets it is the more dangerous the more honest he is.'
" 'I admit the truth of all you say, but there must be some mistake about it, for I do not remember that I gave any vote last winter upon any constitutional question.’
“ 'No, Colonel, there’s no mistake. Though I live in the backwoods and seldom go from home, I take the papers from Washington and read very carefully all the proceedings of Congress. My papers say that last winter you voted for a bill to appropriate $20,000 to some sufferers by a fire in Georgetown. Is that true?’
" 'Well, my friend; I may as well own up. You have got me there. But certainly nobody will complain that a great and rich country like ours should give the insignificant sum of $20,000 to relieve its suffering women and children, particularly with a full and overflowing Treasury, and I am sure, if you had been there, you would have done just as I did.'
" 'It is not the amount, Colonel, that I complain of; it is the principle. In the first place, the government ought to have in the Treasury no more than enough for its legitimate purposes. But that has nothing with the question. The power of collecting and disbursing money at pleasure is the most dangerous power that can be entrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer he is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government. So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. If you had the right to give anything, the amount was simply a matter of discretion with you, and you had as much right to give $20,000,000 as $20,000. If you have the right to give to one, you have the right to give to all; and, as the Constitution neither defines charity nor stipulates the amount, you are at liberty to give to any and everything which you may believe, or profess to believe, is a charity, and to any amount you may think proper. You will very easily perceive what a wide door this would open for fraud and corruption and favoritism, on the one hand, and for robbing the people on the other. 'No, Colonel, Congress has no right to give charity. Individual members may give as much of their own money as they please, but they have no right to touch a dollar of the public money for that purpose. If twice as many houses had been burned in this county as in Georgetown, neither you nor any other member of Congress would have thought of appropriating a dollar for our relief. There are about two hundred and forty members of Congress. If they had shown their sympathy for the sufferers by contributing each one week's pay, it would have made over $13,000. There are plenty of wealthy men in and around Washington who could have given $20,000 without depriving themselves of even a luxury of life.' "The congressmen chose to keep their own money, which, if reports be true, some of them spend not very creditably; and the people about Washington, no doubt, applauded you for relieving them from the necessity of giving by giving what was not yours to give. The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution.'
" 'So you see, Colonel, you have violated the Constitution in what I consider a vital point. It is a precedent fraught with danger to the country, for when Congress once begins to stretch its power beyond the limits of the Constitution, there is no limit to it, and no security for the people. I have no doubt you acted honestly, but that does not make it any better, except as far as you are personally concerned, and you see that I cannot vote for you.'
"I tell you I felt streaked. I saw if I should have opposition, and this man should go to talking, he would set others to talking, and in that district I was a gone fawn-skin. I could not answer him, and the fact is, I was so fully convinced that he was right, I did not want to. But I must satisfy him, and I said to him:
" 'Well, my friend, you hit the nail upon the head when you said I had not sense enough to understand the Constitution. I intended to be guided by it, and thought I had studied it fully. I have heard many speeches in Congress about the powers of Congress, but what you have said here at your plow has got more hard, sound sense in it than all the fine speeches I ever heard. If I had ever taken the view of it that you have, I would have put my head into the fire before I would have given that vote; and if you will forgive me and vote for me again, if I ever vote for another unconstitutional law I wish I may be shot.'
"He laughingly replied; 'Yes, Colonel, you have sworn to that once before, but I will trust you again upon one condition. You say that youare convinced that your vote was wrong. Your acknowledgment of it will do more good than beating you for it. If, as you go around the district, you will tell people about this vote, and that you are satisfied it was wrong, I will not only vote for you, but will do what I can to keep down opposition, and, perhaps, I may exert some little influence in that way.'
" 'If I don't’, said I, 'I wish I may be shot; and to convince you that I am in earnest in what I say I will come back this way in a week or ten days, and if you will get up a gathering of the people, I will make a speech to them. Get up a barbecue, and I will pay for it.'
" 'No, Colonel, we are not rich people in this section, but we have plenty of provisions to contribute for a barbecue, and some to spare for those who have none. The push of crops will be over in a few days, and we can then afford a day for a barbecue. This is Thursday; I will see to getting it up on Saturday week. Come to my house on Friday, and we will go together, and I promise you a very respectable crowd to see and hear you.’
" 'Well, I will be here. But one thing more before I say good-bye. I must know your name.’
" 'My name is Bunce.'
" 'Not Horatio Bunce?'
" 'Yes.’
" 'Well, Mr. Bunce, I never saw you before, though you say you have seen me, but I know you very well. I am glad I have met you, and very proud that I may hope to have you for my friend.'
"It was one of the luckiest hits of my life that I met him. He mingled but little with the public, but was widely known for his remarkable intelligence and incorruptible integrity, and for a heart brimful and running over with kindness and benevolence, which showed themselves not only in words but in acts. He was the oracle of the whole country around him, and his fame had extended far beyond the circle of his immediate acquaintance. Though I had never met him, before, I had heard much of him, and but for this meeting it is very likely I should have had opposition, and had been beaten. One thing is very certain, no man could now stand up in that district under such a vote.
"At the appointed time I was at his house, having told our conversation to every crowd I had met, and to every man I stayed all night with, and I found that it gave the people an interest and a confidence in me stronger than I had ever seen manifested before.
"Though I was considerably fatigued when I reached his house, and, under ordinary circumstances, should have gone early to bed, I kept him up until midnight, talking about the principles and affairs of government, and got more real, true knowledge of them than I had got all my life before.
"I have known and seen much of him since, for I respect him - no, that is not the word - I reverence and love him more than any living man, and I go to see him two or three times every year; and I will tell you, sir, if every one who professes to be a Christian lived and acted and enjoyed it as he does, the religion of Christ would take the world by storm.
"But to return to my story. The next morning we went to the barbecue, and, to my surprise, found about a thousand men there. I met a good many whom I had not known before, and they and my friend introduced me around until I had got pretty well acquainted - at least, they all knew me.
"In due time notice was given that I would speak to them. They gathered up around a stand that had been erected. I opened my speech by saying:
" 'Fellow-citizens - I present myself before you today feeling like a new man. My eyes have lately been opened to truths which ignorance or prejudice, or both, had heretofore hidden from my view. I feel that I can today offer you the ability to render you more valuable service than I have ever been able to render before. I am here today more for the purpose of acknowledging my error than to seek your votes. That I should make this acknowledgment is due to myself as well as to you. Whether you will vote for me is a matter for your consideration only.’"
"I went on to tell them about the fire and my vote for the appropriation and then told them why I was satisfied it was wrong. I closed by saying:
" 'And now, fellow-citizens, it remains only for me to tell you that the most of the speech you have listened to with so much interest was simply a repetition of the arguments by which your neighbor, Mr. Bunce, convinced me of my error.
" 'It is the best speech I ever made in my life, but he is entitled to the credit for it. And now I hope he is satisfied with his convert and that he will get up here and tell you so.'
"He came upon the stand and said:
" 'Fellow-citizens - It affords me great pleasure to comply with the request of Colonel Crockett. I have always considered him a thoroughly honest man, and I am satisfied that he will faithfully perform all that he has promised you today.'
"He went down, and there went up from that crowd such a shout for Davy Crockett as his name never called forth before.'
"I am not much given to tears, but I was taken with a choking then and felt some big drops rolling down my cheeks. And I tell you now that the remembrance of those few words spoken by such a man, and the honest, hearty shout they produced, is worth more to me than all the honors I have received and all the reputation I have ever made, or ever shall make, as a member of Congress.'
"Now, sir," concluded Crockett, "you know why I made that speech yesterday.
"There is one thing now to which I will call your attention. You remember that I proposed to give a week's pay. There are in that House many very wealthy men - men who think nothing of spending a week's pay, or a dozen of them, for a dinner or a wine party when they have something to accomplish by it. Some of those same men made beautiful speeches upon the great debt of gratitude which the country owed the deceased - a debt which could not be paid by money - and the insignificance and worthlessness of money, particularly so insignificant a sum as $10,000, when weighed against the honor of the nation. Yet not one of them responded to my proposition. Money with them is nothing but trash when it is to come out of the people. But it is the one great thing for which most of them are striving, and many of them sacrifice honor, integrity, and justice to obtain it."
Here are more absolute mind boggling details:
http://silverbearcafe.com/private/12.10/scam.html
When are people going to see that the Fed is criminal and that they should be put on trial, then abolished???
U.S. Military Prepares for Economic Collapse
Raven Clabough
Skeptics who continue to assert that the economic plight of the United States has been overstated need not look further than the Pentagon to find out just how wrong they are. CNBC has learned that the Pentagon is currently playing out “war games” pertinent to an American economic meltdown.
According to CNBC, “The Pentagon is planning for real economic threats to America.”
CNBC’s Business News analyst Eamon Javers explains:
Ever since the crash of 2008, the Defense Intelligence establishment has really been paying a lot of attention to global markets and how they could serve as a threat to U.S. National security interests. At one upcoming seminar that we’re going to see here next month, they’re going to be taking a look at a lot of the issues … [including] the use of sovereign wealth funds to manipulate markets, currencies; nation state economic collapse, sovereign default, nation state instability; U.S. Allies’ budgets, deficits, national security infrastructures.
Similarly, the Army has launched an operation called “Unified Quest 2011” in which it studies the “implications of ‘large scale economic breakdown’ inside the United States that would force the Army to keep ‘domestic order amid civil unrest.'” The Quest also trains the Army in how to “deal with fragmented global power and drastically lower budgets.”
In October, the United States Marine Corps visited J.P. Morgan to “study markets and the economy.”
Javers concludes:
All different parts of the Pentagon and Defense Intelligence establishment are looking at markets and looking at ways they can present a new kind of threat to the United States. These are the guys whose job it is to think of the worst possible things that could happen.
According to Wired.com, the Army hosts a Unified Quest every year, which entails “the Army’s chief of staff [instructing] talented mid-career and senior officers and senior enlisted (wo)men to evaluate where the service is falling short — and propose remedies.”
However, the 2011 Unified Quest lends truth to assertions that the United States is indeed not witnessing an upward economic recovery, as so many in our federal government have asserted. Soldiers are being trained in evacuation and detainment as a response to rioting, revealing the possibility that the United States military may resort to martial law in order to maintain order.
Unified Quest 2011 also prepares soldiers to act as diplomats in the event that there is a limited availability of diplomats at combat outposts, or on the streets contending with hungry and angry Americans. Wired.com writes, “There’s a strong consensus that negotiations ought to be part of the Army’s toolkit — something backed by a ream of recent doctrinal manuals and various short courses in negotiation at the Army’s many schools.”
Blacklisted News explains that the Pentagon’s war games are just one of many examples that show the direction in which the world is headed. Others include the decentralization of FEMA from a single distribution facility in Washington to 15 regional facilities across the nation. Blacklisted News also claims, “Anecdotal evidence indicates that the U.S. government has been the leading buyer of freeze dried foods for the last couple of years, and private emergency shelter contractors have reported a shortage in equipment and supplies for building personal-sized bunkers.”
Other global powers are apparently preparing for “Doomsday” scenarios. Russia has reportedly been preparing for the development of 5,000 new underground bunkers for the city of Moscow, while the European Union commissioned the building of a “Doomsday Seed Vault” in a mountainside several hundred feet above sea level in 2006.
Additionally, FEMA’s website recommends that American families have emergency preparedness supplies readily available, including food and water, for at least several weeks.
What's Next For Silver?
Jeff Nielson
Back in September (with silver at $21/oz) I wrote a piece titled "Does Silver's Smooth Ride Lead Past $30?" My answer to that question at the time was "yes", with a prediction that silver would make a short-term "top" somewhere between $30 - $35/oz.
Thanks to a rude interruption when the banker-cabal launched one of their trademark ambushes of the silver market, that "smooth ride" was somewhat abbreviated early in November. Under different circumstances, I might wonder whether that man-made pause in the market was enough of a consolidation to prepare silver for yet another leg higher. Given current circumstances, however, there appears to be no doubts about silver's current status.
As I observed in that earlier commentary, this recent spike by silver duplicates a chart-pattern which had already had two previous cycles. After both of those sharp spikes, silver suffered wicked sell-offs, thus those following that previous analysis may now be worried that history is about to repeat.
There are two very good reasons why silver bulls should have no fears of the previous pattern continuing to play-out. To begin with, the last crash in silver - which began at the end of the summer of 2008 - was by no means a "natural" reaction of the market to the spike in the price of silver. Rather, as I have written often before, the "Crash of '08" was a Wall Street/U.S. government "joint effort".
Wall Street was desperate to hide the fact that it, and it alone was "going down" with the crash in the U.S. housing sector, and overall economy. Meanwhile, the U.S. government had its own motive for engineering a commodities crash: postponing hyperinflation. Had that massive manipulation/intervention not taken place, there would have been no "crash" in the price of silver - despite the sharp run-up.
How can I be certain of this? This brings me to my second reason for believing there will be no crash in silver following this spike: there isn't anymore silver. No, I'm not claiming that the entire crust of the Earth has been scraped clean of silver. It's the "above ground" silver (i.e. global stockpiles) which has been exhausted. There hasn't been this little available silver in the world for thousands of years.
In that respect, it is irrelevant whether silver had just advanced by 10% or 1000%. If we are "out of silver", the price is going much, much higher. Silver investors should not necessarily expect the same "smooth ride" we saw when silver rocketed from $20 to $30/oz (the first time). That part of the previous chart-pattern has been completed.
In fact, no one can say with certainty how silver will behave in the near future - with the exception of concluding that the price will not make any significant move lower. Indeed, we see signs of inventory "stress" all over - aggravated by the endless inventory-fraud perpetuated by those reporting this data.
Not only are bullion-dealers having difficulties keeping any stock available for buyers, but even the U.S. government itself is desperately looking for ways to weasel-out of making silver available for its own citizens. First there was the announcement by the Obama regime (and reported by GATA) that it was seeking to repeal the law which requires the U.S. mint to produce enough minted coins to "meet demand".
With the general public in North America just beginning to catch-on to the value and scarcity of silver, demand can only go higher, and government mints around the world have struggled to keep pace with demand even prior to this latest spike in interest. Thus, the U.S. government just made a second announcement today: it is delaying the release of a brand-new series of commemorative silver coins dubbed the "America the Beautiful" series.
Given that the government had instructed official dealers to gouge Americans for these coins - by adding a $9/coin "premium" to the price - the "official" reason for delaying the release is that "prices are too high". Yes, delay the release today because prices are too high - and wait instead until silver is $40/oz or $50/oz. That makes sense.
From silver analysts to silver mining executives, anecdotal reports are rolling in that even "industrial" users of silver are having greater and difficulties in locating available stock for their businesses.
More alarmingly (from the perspective of massive silver-shorts like JP Morgan), following their latest attack on the silver market, buyers responded to the "sale" on silver by holding out their hands and asking for "delivery" of roughly æ of total COMEX inventories. For the moment, we can expect that silver-buyers will allow themselves to be bought-off with paper "bribes".
As GATA has reported in the past, such tactics have quietly been taking place with the London gold market for roughly a year. But this is no "solution" for JP Morgan and the rest of the silver-shorts. Obviously, the first thing that most of these COMEX customers will do after accepting their paper bribes in lieu of real metal is to buy even more silver for delivery in the next month's contract.
Markets rarely simply shoot higher in a straight line, no matter how out-of-balance that market had previously become. Thus silver investors (and especially those new to the sector) should not be recklessly buying silver, and by "recklessly" what I am referring to is the use of "margin". While the recent hikes in margin-requirements by the CME Group (owner of the COMEX) were clearly intended to be manipulative, as we come closer and closer to an absolute default in this market, we should expect margin requirements to legitimately be raised still higher in the future. Those greedy traders who get hurt by such moves have no one to blame but themselves.
What we know about the silver market today doesn't give us the luxury of "mortgaging the farm" in order to place massive bets on silver. However, what current fundamentals do allow is for ordinary people to invest a significant portion of their wealth in this monetary "insurance" - and know that they have no fears over the longer term of this investment losing value.
Such "one-way" trades are very rare in markets, and those sitting on the fence have no time to dither. Prices could explode still further, inventories could completely collapse - or both - in the near future. While investors will not enjoy quite as much "up side" on their investment as those who started their buying with silver closer to $10/oz, there can be no doubt that over the long-term that silver is heading to a three-digit price.
Knowledgeable investors in this sector already know that the average, long-term price ratio between gold and silver (over roughly 5,000 years) has been approximately 15:1 - and that was when silver was truly abundant in the world. With silver stockpiles exhausted, it would be silly not to expect silver to breach that ratio on the up-side.
Given that the price of gold is at $1400/oz, that implies silver hitting $100/oz even if the price of gold was to freeze at the current price. No one who understands this sector expects that to happen. Adjusted for real inflation, gold would have to rise to over $7,000/oz just to equal its previous high in 1980 - as calculated by John Williams of Shadowstats.com. This means that it is certainly not beyond the realm of possibility that silver could reach a four-digit number over time.
Ordinary people need to protect themselves from the monetary depravity of bankers, as they relentlessly drive the value of the paper currencies they foisted upon us to zero. This mandates that every person must protect their wealth with precious metals, or "go down" with the bankers (and our economies). However, thanks to those very same bankers, people can purchase their monetary insurance today and expect to make nice profits.
Merry Christmas!
Jeff Nielson
Silvergoldsilver.com Runs Out Of All Precious Metals In Hours
Submitted by Tyler Durden on 12/04/2010 16:00 -0500
Since Zero Hedge posted (unsolicited and uncompensated) the "Crash The JP Morgue" now-viral video late last night , it appears that among the tens of thousands of viewers who have subsequently gone to the goldsilvergold.com website, there have been quite a few conversions. So much so that as of today, the company is not taking any orders and is sold out of all products. The company goes on to say that it will not be accepting any new orders until December 6. We can only hope that the profits JPM will make in its copper market manipulation will be sufficient to offset the ever increasing pain it will experience courtesy of what is gearing up to be a massive margin call.
Silvergoldsilver.com Runs Out Of All Precious Metals In Hours
Submitted by Tyler Durden on 12/04/2010 16:00 -0500
Since Zero Hedge posted (unsolicited and uncompensated) the "Crash The JP Morgue" now-viral video late last night , it appears that among the tens of thousands of viewers who have subsequently gone to the goldsilvergold.com website, there have been quite a few conversions. So much so that as of today, the company is not taking any orders and is sold out of all products. The company goes on to say that it will not be accepting any new orders until December 6. We can only hope that the profits JPM will make in its copper market manipulation will be sufficient to offset the ever increasing pain it will experience courtesy of what is gearing up to be a massive margin call.
That was funny as hell!!!
China Importing U.S. Food Inflation
With the mainstream media once again being distracted by the debt crisis in Europe, a much larger crisis has been breaking out in China. China has been hit hard in recent weeks with massive food inflation. Food prices in China have risen by 10% during the past month, including a 20% rise in fruits and vegetables. McDonald's recently announced that they will be rising prices for products in all of their stores in China, including a $0.15 increase for Chicken McNuggets. Kweichow Moutai Co., China’s largest liquor maker, is expected to raise prices on their products by 24% this month.
In NIA's top 10 predictions for 2010, NIA predicted there would be major food shortages around the world. The China Banking Regulatory Commission is now admitting that there are severe shortages in China of corn, cotton, sugar, and other crops. China is now selling food from its state reserves in an attempt to keep food inflation under control. The Chinese government now fears that if they don't do more to combat food inflation, they will soon experience a massive outbreak of civil unrest across the country. In fact, last week a group of high school students in the Guizhou province started a riot in the school cafeteria over a $0.07 increase in the cost of a school meal; they shattered windows and destroyed tables, countertops, and chairs.
A $0.07 increase in school lunch prices might not seem like a lot to Americans, because Americans only spend about 13% of their annual expenditures on food. If a family of four in the U.S. earns less than $28,665 per year, their children get a free school lunch. If more than 50% of the children in a town qualify for free lunches, everybody gets a free lunch. 31 million American children are now receiving free lunches. Chinese children don't receive any free lunches and most poor families in China spend approximately 50% of their income on food.
So what is China's solution before food riots break out in every school and McDonald's nationwide? We are seeing signs that the Chinese government is going to implement price controls. We are hearing reports that in some Chinese cities, price controls have already been imposed on four main vegetables. NIA fears that China will soon impose price controls on dairy products like milk and eggs, as well as on meat, grain, and cooking oil. China might also impose price controls on energy commodities like oil, diesel, natural gas, and coal.
The inflation that Chinese citizens are currently suffering from is inflation that China is needlessly importing from the U.S. The solution to China's inflationary crisis is simple, they should allow the yuan to appreciate in value. China's currency is currently artificially low because they are keeping it pegged to the U.S. dollar. As the Federal Reserve prints money, China's central bank also prints enough money to keep the yuan's exchange rate with the U.S. dollar stable. This is done entirely to help Chinese export companies, but it is causing Chinese citizens to suffer.
If China allowed the free market to determine the exchange rate of the yuan, not only will their inflation problem be solved, but China will see massive short-term deflation where Chinese citizens see a massive increase in the purchasing power of their currency. When a government implements price controls, it is interfering in the free market and not allowing the free market to function efficiently. Price controls never work because the free market is always stronger than government. Price controls in China will likely lead to empty store shelves and hour long lines at gas stations. Price controls will also likely lead to the creation of a new underground economy in China where Chinese citizens buy and sell food and other goods in the black market, at prices that are determined by the free market.
While NIA has strongly been encouraging Americans to stock up on and store agricultural products, China is making it illegal to hoard food. Garlic prices in China have nearly doubled from one year ago, so China's National Development and Reform Commission (NDRC) decided to fine the Shandong Price Bureau, a local garlic seller, 100,000 yuan or approximately $15,000 for illegally cornering the garlic market to force up the price. The NDRC also fined Jilin Corn Central Wholesale Market Ltd. 1 million yuan or approximately $150,000 for colluding with their competitors to jack up the price of beans.
No individual corporation has the power to drive up agricultural commodity prices substantially on their own. Yet, China's government is blaming speculators for rising food and energy prices, without realizing it is the Chinese government's own manipulation of the yuan that is causing massive food price inflation. When Chinese citizens and businesses hoard commodities, they are not doing it to artificially manipulate commodity prices higher, they are doing it to protect themselves from the government's dangerous and destructive actions.
The same food inflation crisis that China is currently experiencing will likely hit the U.S. in early 2011, only much worse. NIA believes it is only a matter of time before Congress places the blame for rapidly rising U.S. food prices on American "speculators" who are buying agricultural commodity ETFs and "hoarders" who have food storage at home. While China can easily solve their food inflation crisis by allowing the yuan to strengthen, the U.S. will have no way of solving its upcoming food inflation crisis. Despite the U.S. being a major producer of agricultural products and being mostly self-sufficient, oil is a very important commodity used in agriculture production and the U.S. needs to import most of its oil. Oil prices hit a new 52-week high last month of about $88 per barrel.
It is also important to realize that agricultural commodities now trade on the international market. Americans are now competing against the rest of the world for the consumption of food. The U.S. just raised its forecast for fiscal year 2011 agricultural commodity exports to $126.5 billion, up $13.5 billion from its last estimate three months ago. They didn't raise this estimate by 12% because the U.S. is increasing production, they raised it as an admission that high agricultural commodity prices are here to stay.
In recent weeks, the mainstream media in the U.S. has been running nightly reports about large crowds at U.S. shopping malls. The media has been hyping up "Black Friday" and "Cyber Monday" as signs that the U.S. recession is over and U.S. consumers are once again confident and spending money. The truth is, the only reason shopping malls are full is because U.S. retailers have not been passing on their wholesale price increases to consumers.
NIA has been hearing reports from NIA members who own import/export companies and have direct access to sales sheets that show both the wholesale and retail prices of products at some of our nation's largest retailers. All indications are that many of the largest U.S. retailers are seeing as much as a 80% decline in their profit margins on some products, compared to one year ago. Shopping malls may be full, but shareholders of retail stocks may be shocked in early 2011 when retailers miss on their bottom line profit forecasts. With the S&P Retail Index hitting a new 52-week high on Wednesday of 501.17, up 31% since the beginning of July, there is a lot of downside risk in retail stocks at the present time. When stock prices of retailers fall, management will be forced to raise prices in U.S. retail stores.
U.S. 10-year bond yields rose by 17 basis points on Wednesday to 2.97%, a new four-month high. The mainstream media is proclaiming that bond yields are rising due to an ADP Employment Services report out on Wednesday that U.S. businesses added 93,000 jobs in November. We consider these ADP numbers to be meaningless. The Conference Board just reported Wednesday that new online help wanted ads by U.S. businesses in November were 2.575 million, down 2.6% from 2.6425 million in October, indicating that U.S. businesses are looking to hire less people. Interest rates are not rising because the U.S. employment situation is getting better, they are rising because the U.S. bond bubble is getting ready to burst due to massive inflation.
When the bond bubble bursts, not only will China stop increasing their U.S. treasury purchases, but they will likely dump the U.S. treasuries they already own. One of the main reasons China has been so reluctant to dump their U.S. treasuries until now is because there are many asset bubbles forming in China that they want to deflate slowly without causing them to collapse. Real Estate in Beijing is now being priced at 27 times the average worker's income in the city. China has a glut of unused capacity in factories and commercial office buildings. If these factories and office buildings aren't filled now, when times are good, think about what will happen when the U.S. dollar collapses and China is forced to go through a two or three year readjustment period of finding new buyers for the products they produce.
There are many export companies in China that will likely go bankrupt later this decade when Americans can no longer afford to import their products. To avoid this, China has been encouraged to continue rapidly expanding its foreign exchange reserves, which are mostly held in U.S. dollars. NIA believes that China shouldn't be concerned about the short-term, but must focus on the long-term growth of the country. Although in the short-term China might do better by keeping the U.S. dollar propped up for a little while longer, over the long-term the Chinese will be much better off when they no longer need to support our phony standard of living. Chinese government officials need to realize that over a dozen of the largest U.S. railroads went bankrupt in the 1930s, but the U.S. still went through its greatest era of prosperity from 1945-1973, which led to the country becoming the world's superpower.
If China wants to become the world's new superpower, they need to allow Chinese businesses that export to the U.S. to either go bankrupt or find new buyers of their products. Sure, the stock and bond holders will get wiped out, but the infrastructure will still be there. Those who are invested into gold and silver today will have the resources to buy up cheap Chinese assets out of bankruptcy years down the road. Although the first and second tranche investors in China may lose everything, those who buy up these assets out of bankruptcy will be positioned to prosper during what could be a future 25 year boom period for China when their citizens are no longer forced to prop up the U.S. economy.
Bernanke Tells Nation This Sunday: More QE Coming
http://www.zerohedge.com/article/bernanke-tells-nation-sunday-more-qe-coming
Here is a good silver TA:
http://silverbearcafe.com/private/12.10/shortage.html
Here is a good silver TA:
http://silverbearcafe.com/private/12.10/shortage.html
This one is brutal:
http://silverbearcafe.com/private/12.10/rant.html
This one is brutal:
http://silverbearcafe.com/private/12.10/rant.html
That was crazy P.C., it's good to see a video like that with 9 million views on Youtube. I wonder how many atheists at the mall were offended?? LOL
The Madness of a Lost Society
http://silverbearcafe.com/private/11.10/madness.html