Wednesday, October 31, 2012

Why do the Germans want their gold back?
With the Cold War a distant memory, many Germans want the gold returned to their own country. A campaign called ‘Bring Back Our Gold’ has gathered significant support. Politicians and the popular press have jumped on the bandwagon.

One, this generation of Germans is far more assertive about their national interest than their parents were. For 50 years, most Germans were anxious to show they were citizens of the world. They dealt with post-war guilt by signing up for every international body available. Now they are quite happy to be citizens of Germany, and to stand up for their own interests.

Two, trust in financial institutions is dwindling all the time. Central banks built up a system of debits and credits because it was easier to move gold around on a ledger than to move it around on trucks. There are few more tempting targets for thieves, after all, than a cargo of ingots.

So it made sense for German gold to be stored elsewhere. But now people no longer trust those systems. They are increasingly unhappy with assets that are simply recorded on a bank’s balance sheet somewhere; they want something physical they can see and touch. That is true of national gold reserves, but it is increasingly true of other assets as well.

Thirdly, and most importantly, German sentiment is hardening against the single currency with each month that passes. After all, what is a whole vault full of gold in the basement of your central bank good for exactly? Starting a new currency, of course. And, er ... that’s about it. 

There’s nothing else you can do with it. In the most extreme circumstances, if the euro broke down chaotically, and national currencies were bought back overnight, one of the key things the foreign exchange markets would look at when putting a value on the new deutschemarks, lire or francs would be the amount of gold the central bank could back it with. That gold would seem a lot more valuable if it was held in your own country rather than a foreign one.

The campaign to bring back the German gold is in reality a campaign to bring back money that people can trust. The political establishment might not have caught up yet. But popular opinion believes it was sold a dog when it joined the euro EURUSD -0.01% , and is already looking forward to the day when it escapes responsibility for endless bailouts of its neighbors.

Yet it is hardly confined to Germany. Distrust of central banks rigging the monetary system is spreading from country to country. There will be many staging posts in the long road back to some form of gold-backed money — and the German campaign is just the beginning.

One Year Later - Santelli Rips Apart 'Connected' Corzine

It Begins: Ecuador Demands Repatriation Of One Third Of Its Gold Holdings

See?  I told you so.  The demands for repatriation of sovereign gold reserves will accelerate going forward (don't you hate that Wall St. phrase "going forward"?).

Chart Of The Day: Sturm, Ruger's Revenues

Supply Issues Offer Additional Underpinnings to Gold

Tuesday, October 30, 2012

Facebook Censors Navy SEALS to Protect Obama on Benghazi-Gate

This is unconfirmed, but deeply disturbing, if true.

Anticipating the Devolution of Big Government

Word of the Day: Exchange-Traded Fund (ETF)

As usual, Suze Orman is an idiot and gives exactly the wrong advice.

Turk - 2nd Time Germany’s Gold Has Gone Missing From Fed

Weakness Begets More Weakness

Turk - Central Banks Now Scrambling For Physical Gold
Gold is not a barbarous relic.  The real barbarous relic is central banking when it perpetrates State control of money.  This control impedes the market process that is an essential part of any free society.  Controlling money is like controlling free speech.  If a government controls a country’s money, it controls its people.

So consider what happened, for example, in the 20th century.  Gold was taken from the people by Lenin in Russia, Mussolini in Italy, Hitler in Germany and Roosevelt in the United States. Why did they do it?  It was to increase the power of the State by taking money that government can't control – namely gold – out of the hands of the people.

Governments can't control gold any more than they can control the value of a Picasso painting or any other tangible asset, but of course that doesn’t stop them from trying to manipulate the gold price.  But they will fail this time, just like they failed in the 1960s.

But let’s turn away from the geopolitics to a more important point here, Eric.  We are witnessing the same thing I have touched on time and again since 2009 when one of the world's top hedge funds called Greenlight Capital reported that it had switched its huge holding of GLD into physical metal.  Gold was about $920 at the time.  This switch highlighted the difference between paper-gold and physical gold.

Since then we have seen an ongoing scramble to turn paper-gold into physical metal.  But here’s the important point, this scramble for physical metal has grown because it has now moved from the hedge fund community to central banks.  Look, for example, at how long it took Venezuela to have its 200 tons of gold returned.  They had to wait 3 months just to receive the first shipment, so it had probably been leased out.  There is a good possibility that it had to be bought in the open market.  So can you imagine how long it will take Germany to collect 10-times that amount?

The repatriation of gold out of secretive central banks that have controlled the gold reserves of most countries since WW II back to the countries that own it is, I expect, going to be a major force driving gold higher in the months ahead.  The reality is finally being recognized that central banks have less gold in their vaults then people think. This deception is a result of the IMF policy which allows central banks to hide the true weight of gold stored in their vaults.”

Why Energy May Be Abundant But Not Cheap

Many people think “peak oil” is about the world is “running out of oil."
Actually, “peak oil” is about the world running out of cheap, easy-to-get oil. That means fossil fuels might be abundant (supply exceeds demand) for a time but still remain expensive.

The abundance or scarcity of energy is only one factor in its price. As the cost of extraction, transport, refining, and taxes rise, so does the “cost basis” or the total cost of production from the field to the pump. Anyone selling oil below its cost basis will lose money and go out of business.
We are trained to expect that anything that is abundant will be cheap, but energy is a special case: it can be abundant but costly, because it’s become costly to produce.

The Incredible Shrinking Half-Life Of Central Bank Action

I believe this can be classified as in the "law of diminishing returns" bin.

Monday, October 29, 2012

The Stupidity of Keynesian Economics, the New York Times, and why debt will choke the world economy to death

The title of this article in the New York Times is exactly why this world is in trouble, and why the whole concept of Keynesian economics is problematic.  A 6-year old could figure out overspending and over-indebtedness is unsustainable.  Why can't Princeton PhD economists figure it out?

Rise in Household Debt Might Be Sign of a Strengthening Recovery

LIBOR-gate vs. Gold-gate

The LIBOR scandal rocked the financial world--as it should--as the rigging of interest rates in London was exposed.  Multiple lawsuits have ensued, since the manipulation of credit affects everyone, from institutional clients forced to pay higher prices for less yield, to homeowners forced to borrow at higher rates (because of more regulations and banks paying fines), to citizens forced to pay higher food costs due to artificially low interest rates and debased national currencies.  In other words, exposure of LIBOR-gate was a big deal, but the average person remained apathetic.  Instead, the complacent masses are more interested in the electoral theater, too myopic to anticipate the imminent destruction of their purchasing power (and standard of living).

But the recent unfolding fractional gold accounting scandal will ultimately lead to different reactions by the masses.  The symptoms of fraudulent gold accounting aren't as esoteric as a few bankers behaving badly.  After all, the fixed-income market is for professionals, right?  And by now, most people understand bankers are mere crooks in suits.  This was news 5 years ago, but now, it's the status quo.

However, the re-hypothecation--and the disappearance of central bank gold will have entirely different outcomes.  The smart money (the "conspiracy theorists") have already bought in.  As more evidence seeps out that the emperors (central bankers from the US and Europe) have no gold, the Big Money hedge funds and emerging market central bankers from the East will catch on and pour into physical gold.  Actually, the Russian and Chinese central banks have already done this, dis-hoarding US Treasuries and hoarding gold.  The gig is up, and the USDollar Ponzi scheme is about to meet its end game.

This in turn, will catalyze a soaring price of gold which will catch the attention of even the most disinterested public, much like soaring gas prices are on the minds of every driver.  It will make news headlines on Main Street.  And that will only fuel the fires of a gold mania.  But not at $2,000 an ounce.  Try $3,000.

Embry - Truth Exposed About Missing Central Bank Gold

Sure, there's probably still gold in central bank vaults, but how many claims to it?

Turk - 15,000 Tons Of Western Central Bank Gold Is Gone

James Turk wrote this in 2003--when the price of gold was in the $300's per troy ounce.  Today as we close 2012, the price of gold is above $1700.  However, the same fundamentals in 2003 remain intact today--the emperor has no gold.

Emails: White House Told Two Hours After Benghazi Attack Began That Radical Islamic Group Claimed Responsibility

Sunday, October 28, 2012

Here Is Why Gold & Silver Are Set To Explode Going Forward

Some Follow-Up Questions For The Bundesbank, And Its Gold

This author de-bunks the lies emanating from the Bundesbank in its claim that the New York Fed and London can be trusted as custodians of Germany's gold reserves.

The Bread Aisle In Manhattan's Upper West Side Is Now Empty

Empty grocery shelves have been the past, are the present, and will be the future.

On The Fullness And Boldness Of QE's Manipulation Of American's Behavior

Bundesbank Says NY Fed to Help Meet Gold Audit Request

The New York Fed offering to audit the Bundesbank's gold reserves vaulted in New York is like the wolf guarding the hen house.

Central Banks’ Paper Gold vs Physical Gold: Is The Dust Settling?

Extraordinary Popular Delusions And The Madness Of Markets

I'm re-posting this video because it is worth watching.

Saturday, October 27, 2012

A Golden Opportunity

Barron's: Picks from the Pros

Barron's: What does your portfolio look like?

Marc FaberI'm 25% in gold, 25% in equities, 25% in bonds, 25% in cash, and 25% in real estate. I use the same accounting standards as the U.S. Treasury.

Major Banks, Governmental Officials and Their Comrade Capitalists Targets of Spire Law Group, LLP's Racketeering and Money Laundering Lawsuit Seeking Return of $43 Trillion to the United States Treasury

A law firm just sued the US government and banks, among others, for $43 trillion in damages for money laundering and racketeering. By invoking RICO laws, the plaintiffs are maintaining these banksters and their co-conspirators are organized crime partners.  I'm not saying the lawsuit doesn't have merit, but good luck on getting a favorable judgment, and then collecting.

Beijing hints at bond attack on Japan

Bank of Mexico Admits 96% of Gold Reserves Held in US & London

Speaking of other central bankers getting nervous about their gold, enter Mexico.

Netherlands’ Citizens Group Demands Central Bank Reveal Location of Country’s Gold Reserves

First it was Venezuela's Hugo Chavez who demanded repatriation of their national gold reserves from the Fed's vaults in New York. Germany's Federal Accountability Office last week demanded an audit and partial repatriation of that nation's gold reserves back to Frankfurt.  Now the Netherlands are demanding an audit and repatriation, also.  Venezuela is a banana republic (but possesses lots of oil).  Germany and the Netherlands are no banana republics, and have a lot of gold on their books.  Their demands for repatriation of their gold will start a run on other countries demanding theirs.  This is about to get REALLY interesting.

Greyerz - Two Absolutely Incredible & Key Gold Charts

Here Is What Will Fuel The Move Higher In Hard Assets

Celente - It’s Not Just Germany’s Gold That’s Missing

James Turk - The Entire German Gold Hoard Is Gone

This is a long, but incredibly important expose on the existence of Germany's gold reserves.  Due to the financial crisis in 2008, many in the blogosphere have questioned the actual amount of official gold reserves globally, but James Turk uncovered this "imbalance" back in 2001, which coincidentally aligns with the beginning of gold's decade-long bull market.

Thursday, October 25, 2012

Dollar Sell-off and Hyperinflation by 2014 – John Williams

My timetable for a dollar collapse is between 2013 - 2015.  I guess Williams split the difference.  The truth of the matter is it is impossible to predict the exact timing of events with reasonable accuracy, and when they materialize, it's mostly due to luck.  But if history is any guide, bull markets in gold during the 20th century--usually accompanied by economic and financial uncertainty--lasted 14 years.  The price of gold made a double bottom in 1999 and 2001.

If the number 14 seems arbitrary or coincidental, it may not be.  It usually takes a generation of doubters and short memories before reality takes hold.  Gold bugs have been mocked and ridiculed during this whole 11-year bull market run, despite gold appreciating 7-fold.  We're being castigated as lunatics even though we have been right for over a decade, over four decades, and over several millenia.

Meanwhile, the masses, both professional and retail investors, have been touting or buying equities, bonds, and real estate.  Equities have tanked twice in a decade, while real estate is still bouncing along its bottom.  The bond market has rallied for almost 30 years, but its upside is now severely limited--by definition, as yields are essentially 0%.  The credit bubble is one for the ages.

What should give readers pause about rosy predictions from mainstream, Keynesian economists is they are notoriously wrong at every turn.  Look to the Austrian school of economists, as they warned of the subprime mortgage crisis with uncanny accuracy, assigning soaring debt levels as the primary cause of the bubble bursting.

Asian economies turn to yuan

The demise of the USDollar as the reserve currency--and inversely--the rise of the Chinese yuan as one, is largely ignored by the US media, despite warnings from US-based think tanks.  Us Americans have to turn to the global media to get tidbits.

Before the Election was Over, Wall Street won

It's becoming increasingly fashionable for former Goldman Sachs employees to bash their former employer--and bankers, in general.  Of course, they're not whistleblowers--they're merely "disgruntled" employees, right?

China knows that gold is rigged

If there's only one article skeptics of gold should read, it is this one--not just for its contents, as much of it has already been exposed by the blogosphere for years (including this blog), but readers should consider the contents due to the source of this article:  the Wall Street Journal and MarketWatch, both mainstream financial news media outlets.  Word is getting out on the bullish case for gold, and no amount of market manipulation will be able to stem the rising tide.

Central banks and governments can intervene by creating trillions in currency units, but market forces will overwhelm the manipulators at some point, because precious metals are finite resources, difficult to extract, costly to produce, and impossible to create out of thin air.  In other words, despite soaring demand (from central bankers worldwide and peasants in China and India) in times of uncertainty, supply of gold and silver are constrained by Mother Nature.  It takes decades to bring gold and silver to market--assuming the explorations yield the minerals in the ground at all.  In contrast, it takes a microsecond for Bernanke to create trillions of dollars.
It is an open secret among precious metals analysts and traders that the gold and silver markets are being heavily manipulated, mostly to the downside; i.e. their prices are being suppressed by various Western financial entities in what should be a scandal much bigger than the Libor rigging scheme.

Not only did a senior commissioner at the Commodity Futures Trading Commission (CFTC), Bart Chilton, reiterate recently his original statements from 26th October 2010 that "there have been fraudulent efforts to persuade and deviously control the price of silver" adding this time that " there have also been silver and gold market anomalies outside of the [current] silver investigation" , but we have also heard similar comments from former Assistant Secretary of the Treasury Paul Craig Roberts: "I suspect that the Federal Reserve is manipulating the gold and silver markets in order to prevent its low interest rate policy from undermining the value of the US dollar. It is easy to offset rising prices of bullion due to physical demand by selling shorts in the paper market."

And then, of course, there is the famous, albeit much older, remark from the maestro Alan Greenspan himself, in his July 24, 1998 testimony to the Committee of Banking and Financial Services, U.S. House of Representatives that: "Central banks stand ready to lease gold in increasing quantities should the price rise". 

What seems to be still much less known to most of the investing public and even the better-informed metals analysts, however, is that this news also appears to have very much come to China's attention of late, and the country actually seems to have decisively entered the game on the opposite side, by taking advantage of the artificially low/suppressed prices to accumulate gold.

A cable from the U.S. embassy in Beijing on April 28, 2009 , brought to light by wikileaks, stated the following in this regard: "According to China's National Foreign Exchanges Administration China's gold reserves have recently increased. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries toward reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB. 

It should come as little surprise then that recently China has been buying gold like there is no tomorrow. Gold imports through Hong Kong in only the first eight months of this year (at 512 tons year-to-date 2012) already have surpassed the entire official European Central Bank gold reserves.
Meanwhile the wikileaks-quoted strategy of ' China's increased gold reserves will thus act as a model and lead other countries toward reserving more gold' also seems to be working. Central banks globally have turned into net buyers since 2010, following 20 years of net selling.

And, mind you (short speculators watch out!), given China's huge foreign exchange reserves, there is yet a long way to go for the country if it was to bring up its gold holdings to similar percentage levels as those of most Western countries (that is, if those Western countries' gold that is shown on their books is actually still physically there. That, of course, is an issue that many are concerned about, including, as of this week, the German 'Federal Auditor's Office' that just asked the German Bundesbank to seek to inspect its gold reserves held with the New York Fed.

Currency Manipulators

Click on Image to Enlarge

Wednesday, October 24, 2012

Currency Wars Continue To Rage & This Is Positive For Gold

Central Planners Greatest Fear, Possible Surprises & Gold

Japan to join currency wars as exports slump

What a surprise, Japan is joining the currency race to the bottom.  Guess which currency is the last one standing?

Generational Wealth and Upward Mobility

Batista's AUX moves on juniors in California gold district in Colombia

With prices of precious metals perpetually near historical highs, mergers and acquisitions were inevitable.  This will put a floor on share prices of junior and mid-tier producers, as well as the highly speculative exploration companies.

Volt no jolt: LG Chem employees idle

If you want accurate sales forecasts, don't listen to the manufacturer's propaganda.  Go to the source:  their vendors.  Politics aside, and for a myriad of reasons, sales of GM's electric car Volt, have been dismal.  Since General Motors is now "Government Motors", taxpayers are undoubtedly getting the most bang for their buck, paying for idle employees to play card games.  And I'm sure this will stimulate the economy as Chevy Volt's are pouring out the back door, stuffing the dealer channels to "boost" sales figures.

Dow:Gold ratio makes $12,400-an-ounce gold look a realistic target

The 80% Solution
If Mr. Obama comprehends how bad it is for Iran that its currency has shed 80% of its value, why doesn’t he comprehend that about a dollar that has lost 50% of its value under his presidency alone?
Mr. Romney keeps saying that on the first day of his administration he’s going to label the Communist Chinese regime a “currency manipulator.” The Wall Street Journal’s editorial page responds that “biggest ‘currency manipulator’ in the world today is the U.S. Federal Reserve.” The president is boasting that his policies have destroyed the Iranians’ currency even worse than he, the Fed, and the Congress have destroyed our own. The Iranian currency is down 80%, the value of our own is but half of what it was four years ago. American working men and women, and millions who can’t find work, are going to buy gas and groceries and coming home with empty wallets.

Tuesday, October 23, 2012

Rudyard Kipling

"If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:"

               -Rudyard Kipling

Exclusive: Turkish gold trade booms to Iran, via Dubai

Reuters finally reports that Iran is selling oil to its trading partners and receiving gold as payment, as a means of usurping the economic sanctions imposed by the US.  In doing so, the US is accelerating the demise of the petrodollar as the international trade transactional numeraire. Meanwhile, the sanctions allow Iran to stockpile gold, which is real money, unencumbered by reckless government printing presses worldwide.

This is a classic example of unintended consequences backfiring from misguided foreign policy.  By the way, zero hedge and other blogs (including yours truly) have been reporting about these trades for months.  When will the US media catch on?  Truth be known, investigative journalism is dead, thanks to the over-reaching government propaganda machine.

People Are Getting Scared And Liquidating & Germany’s Gold

No More Exits, We Are Already Past The Point Of No Return
"We have quite simply past the point of no return, and there is no way this will ever be done voluntarily.”

The operative word is "voluntarily."

VP Biden says he called Jon Corzine for advice

Google "Jon Corzine" and "MF Global."

Barack Obama and Jon Corzine

Corzine Tells Judge That Due To Purchase Of 50,000 MF Global Shares Before Bankruptcy, He Must Acquit

Fed considering upping QE3 size and language

If at first you don't succeed, try, try again...QE to infinity is necessary because it fails to stimulate the economy, so the Fed's twisted logic insists more QE is needed.  Even in failure, it will not prevent the Fed from injecting additional heroin to the addict.

Debt - Driving The Economy Since 1980
Debt is, by its very nature, a cancer on economic growth.  As debt levels rise it consumes more capital by diverting it from productive investments into debt service.  As debt levels spread through the system it consumes greater amounts of capital until it eventually kills the host.

Extraordinary Popular Delusions And The 'Madness' Of Bond And Gold Markets

Chinese Gold Imports Through August Surpass Total ECB Holdings, Imports From Australia Surge 900%

German Court Demands Bundesbank Audit Sovereign Gold Holdings

Japanese Government Demands BOJ Do QE 9 One Month After Failed

The USS Japan, Inc. ship is about to sink.

Monday, October 22, 2012

German auditor office urges central bank to control gold reserves held in US, France, Britain

My critics can kiss my ass--again.  I couple years ago, I suggested Germany demand a repatriation of their official gold reserves vaulted in New York--firstly, to see if it really is there, and secondly, to see if the amounts are correctly accounted for, and not re-hypothecated to various counterparties.  Bam!!!  Today, Bloomberg and the Associated Press, the Germany auditor is doing exactly that.

Guess what, boys and girls?  Official government gold reserves worldwide have been over-counted, and there will be numerous reports of "missing" gold.  That's been my position all along, and my suspicions are beginning to materialize.  Venezuela saw the writing on the wall--and demanded to have their gold reserves repatriated from the US and the UK.  It look New York and London weeks to fill Hugo Chavez's repatriation demands.

55 Facts About The Debt And U.S. Government Finances That Every American Voter Should Know

Deus Ex Machina & Ground Zero Of Fiat Currency Destruction

Why Money Is Now Pouring Into Hard Assets All Over The World

Turk - One Of The Most Important Gold Charts Ever

Thursday, October 18, 2012

China grabs Australian gold

Thoughts on Roman Circuses (and ours)

Why You Need a Passport Now!

Greyerz - Despite Manipulation, Swiss Gold To Become Money

French President Proposes Banning Homework

Yeah, and socialism works, right?

Google's Youtube site down

Apparently, the share price, revenues and earnings of Google aren't the only things down today--so is its Youtube site.  Here's the message you get when you try to log in.

500 Internal Server Error

Sorry, something went wrong.

A team of highly trained monkeys has been dispatched to deal with this situation.
If you see them, show them this information:

Are Neo-Nazis Aiding Greek Cops With "DIY Law Enforcement"?

Japan and the Exhaustion of Consumerism

Armed posse patrols timber land in sheriff's place

U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says
The sovereign credit rating of the U.S. will be cut as “fiscal theater” plays out in the world’s biggest economy, according to Pacific Investment Management Co., which runs the world’s largest bond fund.

“The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said today in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that.”

Iranian students feel the pain as currency collapses

Thanks to Kitty for finding this one.  Economic sanctions against Iran are working, but unfortunately, it also hurts many innocent people.  We are engaged in war with Iran already--a trade and currency war--without a single shot fired.  Let's hope it doesn't escalate into military conflict.

Izzy Friedman: What Now For the Price of Silver?

Fort Knox, an Impregnable Monument to Security Theater

Tuesday, October 16, 2012

Jim Willie: Death Knells for the USDollar- Gold & Silver Set to EXPLODE

China Continues To Boycott Treasurys As Japan Prepares To Become Largest Foreign Holder Of US Paper

The irony is not lost on the fact that the world's most insolvent country continues to be the biggest buyer of another insolvent country's sovereign bonds.

Gideon Gono Comments on QE3

The Future of Gold, Oil & the Dollar

I don't agree with everything Martenson predicts, but here are some of his insights.

What Can We Cut to Balance the Budget

China And The Recipe For $12,000 Gold

London Trader - Competition To Buy Physical Gold Is Fierce

Monday, October 15, 2012

NOT Everyone Is Happy About The EU Winning A Nobel Peace Prize

They Hate Us For Our Prisons

Sex Life Was ‘Out of Step,’ Strauss-Kahn Says, but Not Illegal

I predict a record number of resumes will be submitted to the IMF soon.

How To Play a Comex Default

Gold Slides Even As Ongoing South African Gold Miner Strike Means No Production On The Horizon

When markets are irrational, it is time to BTFD--largely due to market manipulation by the big institutions.  For those not pre-disposed to vulgarity, BTFD = Buy The F***ing Dip.  Despite South African gold production being taken off-line due to miner strikes, the price of gold plummeted today.  Wall Street is full of head fakes, and this latest bear raid on precious metals is a classic example of the bullion banks shaking the weak longs out of their positions in order to generate paper profits on the price declines, and then buying the lows before the return trip upward.  Wash, rinse, repeat.  Hence, BTFD.  Be bold when the naked shorts want you to panic.

South Africa was the preeminent gold-producing country in the last century, but its production levels peaked several decades ago.  Today, it is the fifth largest producer in the world, with China, Australia, the US, and Russia garnering the top four positions as of 2011.  However, forget production from China and Russia--their entire output is captive domestically and therefore never enters the global marketplace.  The Chinese and Russians are hoarding gold for their reserves, anticipating the demise of the USDollar as the global reserve currency, and the rise of gold-backed hard currencies, with the Renminbi and Ruble as likely candidates.

With Chinese and Russian gold output unavailable, a production shutdown in South Africa will adversely impact global supply, even while demand is soaring in emerging economies.  Expect the shortage in physical gold to intensify.

Chart Of The Day: Hourly Earnings, Or The Lack Thereof
You know the drill: please point out on this chart, which shows the yearly change in average hourly earnings for all US private workers, just where is this so-called "recovery", which an additional $6 trillion in public debt, and 5 quantitative easing episodes, have allegedly created out of thin air. For those confused, like us, we bring attention to the fact that in the past two months we have seen the smallest Y/Y increase in avg hourly earnings. Ever.

United Swing States Of America

I like this map because it takes a jab at the hubris of the elite (and the aspirational elite) on both coasts.  Hey, I'm a Californian, but I can call a spade a spade.

The Future of America Is Japan: Runaway Deficits, Runaway Debts

To Fight Hyperstagflation, Greece Will Allow Sale Of Expired Food Products

Let’s talk about facts, not fear

Quote Of The Day: Unbelievable Hypocrisy Edition

What To Expect Next With Gold & Silver Under Pressure

Marriner Eccles quote

Government credit (or debt) “is what our money system is.  If there were no debts in our money system, there wouldn’t be any money.”
- former Fed Chairman Marriner Eccles, 1941

Ludwig von Mises quote

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

Lawrence Summers quote

“How long can the world’s biggest borrower remain the world’s biggest power?”
  - Lawrence Summers, former US Treasury Secretary

Sunday, October 14, 2012

ECB's Weidmann On Gold: "Money Is A Social Convention"

Ben’s gold touch

How to Spot a Keynesian

China Central Bank Refuses To Join Global Print Fest, Warns About Inflation Risks

After Starting Riots In Greece, Merkel Booed In Germany Next

The first lady of Germany can't catch a break:  she's damned if she does (bail out the Club Med countries--see Stuttgart), and she's damned if she doesn't (see Athens).

Epiphanies from Nassim Nicholas Taleb
The most stable country in the history of mankind, and probably the most boring, by the way, is Switzerland. It's not even a city-state environment; it's a municipal state. Most decisions are made at the local level, which allows for distributed errors that don't adversely affect the wider system. Meanwhile, people want a united Europe, more alignment, and look at the problems. The solution is right in the middle of Europe -- Switzerland. It's not united! It doesn't have a Brussels! It doesn't need one.

Why Are Americans So Easy to Manipulate?

Ron Paul on Financial Reform, Europe, Greece, Currency Swaps, and Bailouts

Batch of New $100 Bills Stolen from Plane

21st Century Breakdown

Thanks to Kitty for finding this article about the Fourth Turning, a concept I have followed for quite a while.

Riots & Money Fleeing The Euro Into Gold & Silver

Friday, October 12, 2012

Fink Trumps Rubin As Geithner's BFF

Imagine that:  the US Treasury Secretary talks to the world's largest asset manager more than anyone else in the world.  The pipeline between Wall Street and Washington DC wreaks of so much $hit, the stench couldn't get much worse.  Yet, it will.

California Demands Business Insider Retract False Story On Jobless Claims Misreporting; Business Insider Refuses

So who lied?  The US Department of Labor, or California Employment Development Department?  And if it was the US Department of Labor, was it the Administration who ordered the omission?

Why America Needs To Embrace The Fiscal Cliff Instead Of Kicking The Can Once Again

Thursday, October 11, 2012

This War In Gold & Shorts Getting Overrun

Worth its Weight: Six Reasons to Buy Gold Today

U.S. Sues Wells Fargo: Yet Another Bailed-Out Bank Accused of Fraud

Warren Buffett and Charlie Munger should just STFU.  They are just as crooked as the banksters they so easily denigrated.

Kodak asks court to end retiree medical benefits

Retirees are about to become an extinct species.

Jack Welch: I Was Right About That Strange Jobs Report

Note to Jack Welch:  questioning the motives and methods of the federal government will put you in the hot seat--even if you were once the CEO of General Electric.

How Helicopter Ben Helps Jobs and, Inadvertently, Gold

Wednesday, October 10, 2012

How to Profit From Government Stupidity - Doug Casey

"Legalized Plunder of the American People" - G. Edward Griffin

If you can't take the time out of your day to watch this 12-minute video, then you deserve everything you're about to get.

Return to Bretton Woods

Lost Confidence Can’t Be Restored & Gold’s Final Move
“The only way to paper over the cracks here is to throw money at it.  So we see the European Central Bank doing that, and this is just going to be the wave of the future.  Europeans are also worried about increasing capital controls, and right now there are large movements of capital going into physical gold.  This is what people are doing to preserve their wealth in Europe, moving into gold.
At some point these policies are going to become tremendously inflationary and you are going to see interest rates begin to rise quite precipitously.  At that point the global collapse will be in full-swing.  The real problem here is that you can’t restore confidence at this point in the cycle.  At the end of the day, the only way to get out of this type of situation is to repudiate the debt.”

Barron also added: “Gold is going to keep going up until the US dollar is finished.  So the reign of the US dollar will come to an end, and we will see a new currency.  But in the meantime, you could see gold go to $3,000, $5,000, $7,000, $10,000, who knows?  It’s not really an appreciation in the price of gold, it’s a drop in the currency.

This is something people don’t really understand.  Gold is going up because the global fiat currencies are becoming worth less and less all the time.  If you look at a chart of the US dollar over the last century, the Fed has virtually destroyed the US dollar already, and this will just accelerate going forward.

So all we need to see here is for major pension funds to begin to move into gold, and you will see some real fireworks because the availability of physical gold is already tight in this market.  Eventually there will be a mass movement into gold during this destructive cycle, and the daily movements in the price of gold will literally shock people, even the most veteran of the goldbugs.

A Second Greek Man Has Been Found Dead Since The Emergence Of 'The Lagarde List'

Hathaway - Gold To Hit New All-Time Highs, Despite Pullbacks

Exclusive: Inside the GETCO Execution Services Trading Floor

BoE Finds Gold Standard Leads To Less Crises Than Fiat Regime

Well, golly gee, the Bank of England, one of the worst offenders of the printing press with their quantitative easing(s), wrote a paper advocating the gold standard.  Next thing you know, Bernanke will write a white paper on the advantages of preparing for financial Armageddon.

Energy Higher, Earnings Lower

Charles Hugh Smith is smart--he's made the connection between lower wages and higher energy prices, the classic stagflation of the 1970's, which began America's descent in purchasing power.  But he's not that smart.  He believes gold may be due for a steep correction.  He could be right, but he obviously hasn't made the historical correlation between the rising price of oil in tandem with the rising price of gold.  One can't happen without the other.

How To Identify The True Enemies Of Freedom

Forget Class-Warfare; It's Age-Warfare We Should Worry About

Is the IMF now recommending capital controls…?

CEO Threatens to Fire Employees If Obama Is Reelected and Raises Taxes

The title of this blog entry is misleading--Siegel clearly tells his employees to vote with their conscious and best interests at heart--along with their wallet.  He doesn't threaten to fire his employees--unlike what the title suggests.

Printing Money – Price of Gold – Preservation of Wealth

Printing Money – Price of Gold – Preservation of Wealth October 9th, 2012 by admin golds
by Egon von Greyerz – October 2012

1. Worldwide money printing continues unabated
2. Just In 10 years $120 trillion have been printed making global debt $200 trillion
3. World GDP has gone from $32 trillion to $70 trillion 2001-2011
4. Thus $120 trillion debt is required to produce a $38 trillion annual increase in GDP
5. The marginal return on printed money is negative in real terms
6. Thus the world is living on an illusion of paper that people believe is money
7. This illusionary paper wealth will implode in the next few years
8. The initial trigger will be the collapse of the world’s reserve currency – the US dollar
9. The dollar is backed by $120 trillion of US government debt and probably NO gold
10. All currencies will continue their race to the bottom and lose 100% in real terms against gold
11. This will create a worldwide hyperinflationary depression
12. All assets financed by the credit bubble will go down in real terms
13. This includes stocks, bonds, property and paper money of course
14. The financial system is unlikely to survive in its present form
15. The banking system including derivatives has total liabilities of around $1.2 quadrillion
16. With world GDP of $70 trillion, the world is too small to save a financial system which is 17x greater
17. This is why there will be unlimited money printing and hyperinflation
18. The only asset that will maintain its purchasing power is gold Click here for chart
19. Gold has been money for 5,000 years and will continue to be the only currency with integrity
20. Western countries’ 23,000 tons of gold is probably gone. See recent article by Eric Sprott.
21. The consequence is that most of the gold in the banking system is likely to be encumbered
22. This means that Central Banks one day will claim it back against worthless paper gold IOUs
23. Thus gold and all other assets within the banking system involve an unacceptable counterparty risk
24. Gold should be held in physical form and stored outside the banking system

Signs Of The Gold Standard Are Increasingly Emerging...Worldwide

Government Dependency Will End in Chaos

The Unstimulus

Uncle Sam Prepares To Unleash Up To 30,000 Drones Over America For "Public Safety"

Depositors Fleeing Euro Get Negative Rates at State Street

Madness has truly penetrated financial markets.  Banks are now charging depositors a fee for parking their money.

Tuesday, October 9, 2012

Are Businesses Quietly Preparing for a Financial Apocalypse?

Jack Welch Terminates Contract With Reuters, Fortune In Aftermath Of Infamous Tweet

As I've always said, when the money runs out, and when the all the minnows have been eaten, the sharks gobble each other.

Four alternative stores of value

Fear we are returning to a time in history where it is a common occurrence to fight for one's life?

Unemployment 7.8% to 22% - Is There A Better Method?

HuffPo’s 11 Myths About the Fed, Refuted

U.S. Silver Coin Melt Value Calculator

Enter the type of coin you have in the silver coin calculator and see how much that coin is worth, based on the market value of its metals content--and not it's face value.

Monday, October 8, 2012

Richard Russell - Gold & China’s Plan To Take Over The World

Global Debt Over $200 Trillion, Gold Demand Surges

Federal Reserve's Money Printing Failure

Alchemy and Bacteria

These are the latest desperate attempts by the media to thwart the rising price of gold.  Good luck bacteriologists!  I wonder who is funding these latest scientific attempts at alchemy?

Spain Police Beating Everyone: A Warning To America

The narration of this video by Judge Andrew Napolitano is precisely why his TV program was canceled.  It's provocative--only because all the scenarios in his rhetorical questions have already transpired.

California Wakes Up To Another Record High Gas Price

Chart Of The Day: The "New Normal" Trade Off - Debt vs Jobs


From The SEC To Goldman Sachs In One Easy Step: The Revolving Door Farce Full Frontal

Elsewhere, completely unfounded rumors that various DOJ staffers are planning to join assorted Mexican drug cartels shortly.

JPMorgan Loss Proves System Too Complex, China’s Gao Says
JPMorgan Chase & Co. (JPM)’s $5.8 billion trading loss this year showed that the financial system is getting too complicated for even respected institutions, the president of China’s sovereign-wealth fund said.

“You are creating a system that very few people understand, much less the regulators because the regulators haven’t the incentives like the bankers,” Gao Xiqing, president of China Investment Corp., said today at a lunch hosted by the Economic Club of New York. “As a former regulator I think we do need to slow down a little bit instead of rushing up to all those fancy derivatives."

He expressed concern about a society in which “all the best engineers are engineering financial products.”

“You have all the smartest kids to design these products, the only purpose of which is to get money out of other people’s pockets,” he said. “That is not very good.”

As Online Retailers Launch Vendor Financing, Is Apple Credit Corp Imminent?

This is sign of shrinking profitability going forward, as even profitable companies are scrambling to keep the plates spinning.  As business conditions get tougher, innovative companies have to become more "innovative" to satisfy shareholder expectations.  Longer-term, this will end in tears for equities.

Over 6,000 Cops Will Protect Merkel On Her 6 Hour Visit To Athens

Angela Merkel is one brave woman.

Enter At Your Own Risk: Police Union Says ‘War-Like’ Detroit Is Unsafe For Visitors

The SCO, China, Iran, and gold

Sunday, October 7, 2012

Iran’s Insane Rhetoric

Can The Fed Ever Exit?

Can the Fed ever exit?  The short answer is no.  The ability to unwind the purchases of toxic mortgage-backed securities and US Treasury bond assets will be constrained because they would have purchased said assets at too high a price. When interest rates rise (and they will rise at some point since they can't drop much below zero), they will guarantee the negative returns of the Fed's buy high / sell low bond-purchasing monetary policies.

The 11 Axioms of Marcus Tullius Cicero

The 11 Axioms of Marcus Tullius Cicero:

01. The poor: work and work,
02. The rich: exploit the poor,
03. The soldier: protects both,
04. The taxpayer: pays for all three,
05. The wanderer: rests for all four,
06. The drunk: drinks for all five,
07. The banker: robs all six,
08. The lawyer: misleads all seven,
09. The doctor: kills all eight,
10. The undertaker: buries all nine,
11. The Politician: lives happily on account of all the ten.

- Marcus Tullius Cicero (January 3, 106 BC – December 7, 43 BC) was a Roman philosopher, statesman, lawyer, orator, political theorist, consul and constitutionalist.

Friday, October 5, 2012

Have you seen Robert Triffin?

Kitco Erases Evidence of Cartel Silver Raid

Sigh No More: Obama, Romney Leave No Room to Argue

Here's an insightful, but cynical opinion from a leftist liberal journalist.  I can't say I disagree with him much.

Exchange Stabilization Fund

It's time to revisit the Fed and the US Treasury's Exchange Stabilization Fund, the biggest manipulators of markets in the world.  Google "Plunge Protection Team."  Do you think it's all a conspiracy?  Try the US Treasury's website.

The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury ("the Secretary").

The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.

The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.

Coming To A Gas Station Near You?
Click on Image to Enlarge

Amazing Pictures Of The Oil Crisis Of 1973

Marc Faber & Jim Rogers On Our "Clueless, Ignorant, Dangerous" Leaders

Turns Out Dumping 1,300 Tons Of Swiss Gold Isn't A Resume Builder After All

You gotta love the Zero Hedge guys:  by exposing the truth, the rats feel compelled to cover their tracks.

Gold Wars revisited
Applying these lessons to modern day Europe and the intellectual battle over the future of the euro, and it’s possible to say that the few virtues the euro still has can be abolished at the stroke of a pen by legislators and bureaucrats. Whether the euro survives a few more years or not is irrelevant: it will always be blemished by the original sin of being fiat money, imposed by decree instead of chosen by the people. Just as it was imposed by decree it will be manipulated by decree and always to serve the few at the expense of the many.

Gold is independent money. It cannot be created out of thin air, and even when it is outlawed, our rulers can never totally control it.

It is not just a philosophical matter: after the collapse of the Continental Dollar in America, the USA’s Founding Fathers learnt their lesson and enshrined gold and silver as money in the US Constitution, setting the stage for America’s development into the most prosperous and economically free country in the world by the early 20th century. Contrast this with 18th century France. After John Law's catastrophic experiment with fiat currency, France’s post-Revolution rulers again tried forcing fiat currency on the people – the ill fated assignats – leading to wars, terror, the loss of freedom and bloodshed throughout Europe.

The choice will be ours.

Price of gold could reach $2,400/oz

Silver Numismatic Products Suspended Pending Price Increase

Thursday, October 4, 2012

Wholesale Gasoline Shortage In California Causes Gas Stations To Shut Down: Hoarding Next?

I've been warning younger generations about gas rationing in the 1970's, the so-called "even/odd" days at retail gas stations.  Most are incredulous, unable to fathom something as essential as fuel could be rationed.  Unfortunately, I've had to REMIND older generations about it.  Funny how humans have selective memory when it involves unpleasant events.

The common denominator?  The Iranian oil embargoes--only this time it's economic sanctions imposed on Iran by the US.

One very strange use for silver coins

The Positive Power of Crisis

Resume Of The Day: Meet The Man Who Sold 1,300 Tons Of Swiss Gold

In the dumb $hit of the decade news:

China's currency foray augurs geopolitical strains
"It's our currency and your problem," U.S. Treasury Secretary John Connally famously said of the dollar in 1971.

Signs Of The Gold Standard Emerging In China?

Riots in Iran Over Currency Crash

This is what hyperinflation looks like.

The Scourge Of Central Banking

A big thanks to "Dio" from BORG for finding this piece.

1.4 Billion Don't Have Electricity

It's Not America Anymore

Is Gold In A Bubble?

Fed Confused Reality Doesn't Conform To Its Economic Models, Shocked Its Models Predict "Explosive Inflation"

What’s Iran doing with Turkish gold?

Wednesday, October 3, 2012

Does Stimulus Spending Work?

Kyle Bass One-on-One

Turkey Fires Artillery Shells Into Syria In Alleged Retaliation

Most people believe World War II started when Hitler invaded Poland.  While that event did trigger a declaration of war from England and France, the invasions of Austria and Czechoslovakia were actually precursors to Poland.

Today, most people rightly assume the core source of hostility is between Israel and Iran.  But there are many snowflakes which could cause the next world war avalanche.  See the most recent skirmish between Turkey and Syria.  Or perhaps it could be the conflicts between Japan vs. China vs. Taiwan over the Senkaku Islands.  Humans have this curious innate propensity to war with our neighbors--and it's usually over real estate.

The Real Reason Behind War

This is an interesting insight on war--from a Canadian.

Chart Of The Day: America's Debt Crisis - Who Really Is Responsible?

The answer is both parties.  Here's a homework exercise for readers.  Superimpose the chart for the price of gold in the last decade and compare its trajectory against US national debt, and ask yourself if there is a correlation.