Wednesday, November 9, 2011

Exter's Pyramid-End Game

In an interview with Jim Rickards by King World News, Rickards said we would be on a gold standard within two years.

Hard to believe? All paper money is flowing into perceived value. If you are not familiar with Exter's Pyramid check out this link: http://en.wikipedia.org/wiki/John_Exter



Exter was a former board governor for the Fed Reserve. He basically said the paper world would fail and all fiat and paper based contracts would liquidate and collapse into gold and silver.

Looking at the chart you can see that derivatives are at the top of the list. We had a derivatives explosion 3 years ago which took down Lehman and AIG.

We are in the fourth tier of paper failures; government bonds. The next tier is paper money. Basically when you are in paper money you are going to be looking where to put that money. What imbecile would go back UP the pyramid?

Logically you wouldn't. You go into gold and silver. We are so close people. So close. If it took 3 years to get where we are, we cannot have much longer to go before some kind of resolution.

I think two years is very reasonable.

Friday, May 6, 2011

Ben Davies Buying....

I hope everyone took advantage of the dip.....

Ben Davies is genius in my book...from King World News:

"Ben Davies called for a 3 to 5 day $15 decline in silver and that is exactly what happened. I wanted to catch up with the CEO of Hinde Capital to get his thoughts on where we are now in the silver market. When asked if silver is bottoming Davies replied, “As a firm we have covered all of our hedges on silver and we have started to accumulate physical silver. Let me add that this is the swiftest 30+% decline in this bull market. If you are a cash buyer of physical silver then you should now be accumulating silver. There is always a danger in catching a falling knife, but you have to remember that silver has intrinsic value.”


Click here for the rest of the article....

Thursday, May 5, 2011

Another Rate Hike......

As I had suggested in my article yesterday……..

From Zerohedge:


CME Hikes Silver Margins By 17%: 4th Hike In 8 Trading Days


Submitted by Tyler Durden on 05/04/2011 17:36 -0400


"Nobody could have foreseen this. Nobody. At this point there is nothing left to comment on what is a concerted action to "mitigate" any and all risk in the commodity market but could as well be classified as executive order 6102.5. While we were joking before that soon one will have to post more cash than an silver contract is worth, we are now forced to reevaluate this sarcasm."


In addition to this Goldman Sachs (if you can believe a word they say) and others are calling for a temporary reversal in the dollar which would put further pressure on the commodities. Luckily that should include oil. If the dollar rallies and oil doesn’t retrace we have big problems. That would mean that dollars are being sold at an increasing rate throughout the world. Typically that would mean silver and gold would rise but as you can see the paper market in silver is at this point controllable.

Remember, there are TWO markets in silver: paper and physical. There is a shite load of paper silver and the price is easily controlled through margin hikes. Most people in the paper market are not interested in physically owning the metal. They don’t even think there’s a problem with the dollar as our nation’s debt ceiling is about to surpass the GDP. You can only hike so high however before you destroy that market. As I’ve said before, when the Comex is going through the process of defaulting the paper price of silver will go down and the physical price goes up.

Apmex which has usually charged $1.29 in premiums over spot is now charging $3.79 in spot. Physical sellers tire of the Comex but they don’t make the rules.

Wednesday, May 4, 2011

Has the Silver and Gold "Bubble" Burst?

The powers that be of the world have been conducting psychological warfare on the plebeians since the dawn of time.

The Egyptian pharaohs had people believing they were either given the divine right to rule or they were demi-gods themselves. Do not defy them.

The Greeks and other Mediterranean state rulers had people believing that they were also the offspring of gods or that through the god’s divine inspiration they were given prowess on the battle field allowing them to rule.

This carried over to Europe where the plebeians were also duped into believing that “nobility” by blood was actually real and the divine king meme was carried on. Largely this thinking has faded away although the Brits seem to still be awe struck with their former master oppressors as evidenced by the recent hoopla after the “royal” wedding. Even in the Middle East and North Africa (MENA) the Arabs tire of the whole strong man, leader type who claims to be president when his entire family constitutes the entirety of the governmental ministerial positions. That’s called a monarchy dressed up as democracy, aka, autocracy. Or, a wolf dressed in sheep’s clothing.

Over time as you witness the actions of these “leaders” you realize that they are quite fallible and prone to the same mistakes and errors of judgment we all make and that indeed that most of them, the more powerful and greedy they become, act the fool even more. Eventually the illusion is cast aside and the “let them eat cake” attitude is discarded and the king and queen lose their heads. Unfortunately the typical plebeian has a short memory span and is lazy and quickly return to their old habits allowing the foxes to rule the hen house over and over. Sad.

So getting to the point, today the primary battlefield is in the realm of fiat currency. You know those federal reserve notes in your pocket (purse)? The line MUST be held or the battle will be lost. The line of course is the price of silver and gold. Fortunately for the modern day plebe, we are living in a time where the illusions are being cast aside and for a short while enlightenment will spread across the land. The masses are slowly but surely pushing the line further and further back. The battle is being won and the elite minority have been in retreat for 10 years now as the silver and gold clad weaponry of the plebeian army pierce the dark veil of ignorance of the masses letting in a little bit of light. Through the patch work of that dark curtain we can see the power elite storing away riches as they trade silver and gold amongst themselves. Along the line of the curtain we see hands extending through passing along worthless pieces of paper they call “money” and tell us that it is valuable.

This meme is dying but they would have us believe otherwise.

Within the past week the margin requirements for commodities and specifically silver have been raised no less than 5 times with another pending. The goal is to drive speculators out of the silver market to “control volatility”. If this is the reasoning why are they not raising the margin requirements on oil? How many people do you know that own silver? Why the impetus on that obscure metal? How many people do you know that drive a car and buy gas? How important is the price of oil to our economy? Obviously for reasons untold silver and gold are very important to the powers that be. They are the canary in the coal mine. As governments print more and more money the price of silver and gold rise. The more silver and gold the peasantry own the less likely they are to be shackled into debt servitude forever more. The more we own the less they can have. This cannot be. They must constantly wage war against our minds to “shake” us from our positions.

This morning we read the following from Zerohedge: WSJ Reports Soros, Burbank Selling Gold, Silver, While Paulson Sees Gold Hitting $4,000 In Three Years

An excerpt from the article: "The rumormill around who is buying and selling precious metals is getting more ridiculous than daily Radioshack LBO speculation. The latest comes from the WSJ which informs that based on "people close to the matter" Soros and Burbank are now dumping their gold and silver: "George Soros's big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, according to people close to the matter, after furiously accumulating precious metals for much of the past two years." Greg Zuckerman's conclusion, assuming a multi billion hedge fund will actually let its competitors know what it is doing concurrently as it is doing it, is merited: "Their selling suggested the sharp, nine-month run-up for precious metals could be entering more dangerous territory." Of course, something tells us that just like Goldman, whose prop desk has a nagging tendency to buy as its sellside "analysts" say sell, we would rather hold off until we see respective 13Fs on the matter. In the meantime, we fail to see where over the past week the central (pardon the pun) thesis has changed: namely that central banks will not print more linen/cotton when the time comes. And if the market is indeed starting to price in QEasing's end, then the deflationary scare will certainly see the RUT plunge and undo months of carefully executed (by NYU interns) POMO operations. For a Fed which equates the economy with the RUT, this is simply unacceptable."


You should be aware that last month George Soros funded and coordinated a meeting at Bretton Woods to discuss the future of our monetary system worldwide. The discussion would revolve around the use of an SDR (special drawing right) in which it would be partially backed with gold, amongst other currencies and perhaps commodities. The announcement of the selling of gold by the Soros fund would suggest that gold being part of the SDR system was a no go. We have no information on how that meeting went to my knowledge however are we to believe that gold is now no longer desired as a safe haven against the foibles of government and their money printing ways? I’m not willing to make that wager. Actually I am and I wager they will keep printing money and they will continue to go in debt and they will continue to devalue currencies to pay for that debt and the price of silver and gold will continue to rise. My wager is placed and I am “all in”. In the metals that is.

You should also be aware that at the last Davos meeting in January, George Soros announced that “gold is the ultimate bubble”. Now you can interpret that in a number of ways. I believe he meant that the gold is ultimately where all currencies will collapse, creating the ultimate bubble. If all the currencies of the world collapsed today into gold and silver the “prices” would stagger you. Of course “price” would become a redefined term. We would be speaking in terms of value. You would perhaps use one ounce of gold as collateral against a loan to purchase a house. Yes, one ounce of gold. Delving too deeply into that would be outside of the scope of this investigation. See the Fofoa blog for more on that. Dig deep there and do go, you will learn much.

Of course the media, shortly after hearing Soros announcement that gold is the ultimate bubble started touting the headlines that silver and gold are in a bubble and they were claiming the trade to be crowded suggesting that they should be sold. If you would have done so it would have cost you dearly. Shortly thereafter we learned that Soros had been buying gold to the tune of $650 million. And now after multiple margin hikes where the momentum of the metals have turned downward and sentiment has turned negative, Soros claims to be selling a small portion of his holdings? My belief is that he is trying to push the price lower for the ultimate set up. We may see in his next 13-F that they had indeed sold a small portion of their holdings but he will likely go on a spending spree the day after the report is filed with the SEC.

Who else is selling gold today? Not the Mexican government’s Central Bank! They just announced that they are buying 100 tonnes of gold. Again, from Zerohedge: Portuguese Gold Sale Urged By Senior German Lawmakers As Mexican Central Bank Buys 100 Tonnes. Add them to a long list of other Central Banks who are buyers.

Indeed, not only are they buying gold but Central Banks of the world have become net buyers of gold instead of sellers for the first time in over a decade. These are the insiders of the inner circle who dictate to the world what money is and is not. Will you be led to believe that gold and silver are not money? There are also rumors that the Indian Central Bank has been buying silver. China clearly stated that thy will also be diversifying their currency reserves into silver and in the Middle East it is no secret that they have been minting silver and gold coins.

Now is the time to be vigilant more than ever. When you view the actions of those claiming lordship over us those actions do not mix well with their words. Silver and gold may run down in price further yet but this is a gift to you. You can despair and think we are defeated or you can see through the veil and see that the powers that be are afraid and shaking. They are preparing for major currency dislocations and the best way to protect yourselves from such events is by donning your silver and gold armor. Use this as a buying opportunity to strengthen your family’s positions in these chaotic times. Cast aside your doubts and fears, do what others will not and you will be rewarded.



“The gods favor the bold.”
Publius Ovidius Naso Ovid

Monday, May 2, 2011

What happened overnight??

Many of you may look at the price of silver this morning and be alarmed. We took a huge hit overnight on top of some selling Friday as well. It's rather simple what is happening really so I'll keep this short.

I've told you all before that the closer we get to the point where lack of physical silver meets the point of excessive trading on margin, things will get chaotic. There is a lot of doubt that JP Morgan and the other bullion banks will be able to deliver all the physical metal that traders are demanding. There are also traders that are moving in on the trade because they know that there isn't enough physical silver to meet demand. Their hope is that they can get a 20-60% or more premium for basically forcing a default by the bullion banks. If the BB's don't have the metal they have to pay a premium to contract holders, it's a default. Simple. People are wondering when the "Comex will default....". Everyday.

The bullion banks have ammunition in their arsenal to battle these "speculators". They can raise the margin requirement. As it stands, any of us could place an order for a 5,000 oz contract on the Comex, the Globex, or Think or Swim or any other trading platform. 5,000 oz x $50 is $250,000 worth of silver. But trading with margin only requires you to put down maybe $11,000. So you could trade 5,000 oz's with $11K. Nice huh.

Now imagine if you own 100 of these contracts. You pony up $1.1 million and get to trade 500,000 oz's of silver, or $25 million worth.

And now also imagine that your trading platform, unexpectedly announces that they are raising the margin requirements. Instead of needing $11,000 to buy a contract you need $30,000. And you have to pony up immediately. It's not many people who are able or willing to come up with $2 million that quickly. They might have it, somewhere, but not in cash. So basically what they do is they force a huge wave of selling.

So what's happened......? Let's read this short piece from Zerohedge and get some clarification, shall we?

Think Or Swim Hikes Silver Margin To Double That Of CME

Submitted by Tyler Durden on 05/01/2011 23:29 -0400

On Friday we reported that MF Global hiked silver margins to roughly $25k per contract (following the CME's own two consecutive margin hikes of 9% and 10%). On Sunday night, not letting any public hysteria go to waste, Think or Swim follows suit and hikes the /SI margin to $30,037.50 and $6,007.50 for the /YI. At this point there is an outright scramble to get anyone with margin out of precious metals positions, which of course in the long run will merely reinforce the holding hands.




These margin requirements are signs of desperation. Nothing more, nothing less.

We are in the midst of turbulent times my friends. The very nature of the monetary system of the world is changing before our eyes. I cautioned a while back they we will see big pull backs like this. Do not question if you have erred for you are on the right path. History and sensibility are behind you; the wind in our sails. I assure you many will use this as a buying opportunity to buy physical. That will simply exacerbate the problems that the bullion banks (BB) are having with trying to provide silver to the markets. We will have this chaotic to and fro until we don't. And when we don't, not many of us will be able to afford silver anymore. Of any quantity anyway.


I suspect we'll see a quick rebound as traders are over reactionary and don't really know the silver story. We'll see if JP Morgue and the bullion banks have any more tricks up their sleeves. They will want to ride this momentum Monday morning and force as many hands out as possible. The most likely thing they'll do is push some news that will be dollar positive. One reason I suspect this is gold has not pulled back much.

Fasten your seat-belts!!!!

Monday, April 18, 2011

QE3 Imminent?

The market is telling us they believe QE3 is imminent due to the coming S&P and Gdp downgrades.....

Friday, April 15, 2011

$43

I'd imagine this is going to get old after awhile.....at least I hope!


So....close....to....$43!

Thursday, April 14, 2011

Hope no one sold........GS

I hope no one got spooked based on Goldman sack recommendation to sell oil.....obviously a contrarian call. If you trade with them, you're a douche.


Wednesday, April 13, 2011

Serious Issues Regarding Liberty Dollar Injustice

I pulled this from www.howtovanish.com.....click for full link.

I believe this is a serious issue everyone should be aware of. Our own ignorance will bind us if we do not educate ourselves. Is Anne Tompkins the real terrorist here? Lying to instill fear in others? For shame, for shame.





Liberty Dollar II – Did Prosecutor Anne Tompkins Violate Ethics Rules?

by Bill Rounds J.D. on April 11, 2011


Anne Tompkns’ Liberty Dollar saga continues. Since the conviction of Bernard Von NotHaus for his involvement, there has been significant discussion about that case, its merits, motivations and implications. Contrary to the reports of many commentators, the legal issue in the case was fraud rather than a tyrannical government unjustly imposing its will. In a follow up article Liberty Dollar Part III I will include a much more detailed analysis of the relevant law and its constitutionality.

But there is an aspect of this case that has the stench of tyranny which I think a lot of people smell. The motivation of the United States attorney’s office, including Anne M. Tompkins, Jill Westmoreland Rose, and others, is much more suspicious.

It is possible that some of the prosecutors involved in the case have violated Rules of Professional Conduct. A violation could subject them to professional sanctions and possible disbarment. They may have also defamed Mr. Von NotHaus. I am approaching this professionally from a criminal defense perspective and a plaintiff’s tort lawyer as if I were advocating for Mr. von Nothaus.
Prosecutors Made False Statements of Law In The Indictment

Prosecutors indict people who they think have broken the law. The indictment is the legal justification for depriving people of their liberty and property.

The indictment in the Liberty Dollar case (at paragraph 33) states:

Article I, Section 8, clause 5 of the United States Constitution delegates the power to coin Money and to regulate the value thereof. This power was delegated to Congress in order to establish and preserve a uniform standard of value. Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money which is not issued under its own authority in order to protect and preserve the constitutional currency for the benefit of the nation. Thus, it is a violation of law for private coin systems to compete with the official coinage of the United States. (emphasis added)

There is no basis in the law or anywhere else which can support the part in bold letters in any way. I will compare the prosecutor’s false and misleading summary of the law to the actual law.

Friday, April 8, 2011

Wednesday, April 6, 2011

Excellent Chart-Inflation adjusted silver

Here’s a lovely chart indeed from Ed Steer at Casey Research……

Keep in mind that when this price movement happened this was confined to the US markets alone. And there was no public internet. If you wanted to make a trade you had to have a broker and an account with them. You had to call them and execute the trade. Think about this. Who knew what was even happening? Most people checked the paper the NEXT day for price movements.

Also, there was much more silver above ground back then available for investment. Most of the trading done today is through ETF’s and stocks and many other variations of paper that are not the real deal. Now you have many people internationally who want physical silver. Yeah there are still a lot of boobs out there trading paper but there will come a day when their shorts are on fire and as John Embry says, “ they will find religion.”

I know you all see predictions of price movements to $50 and $80 and whatever. That report I sent out yesterday was decent enough but a long term price of $17.00?!?!

Get it out of your heads. All these people have paid subscribers that they must offer up realistic price expectations to. They look at charts for the last year and project 8% gains. Most of them have no idea what the real supply and demand fundamentals are. Whenever you read an analysis done of silver that is very extensive the price projection is always in the hundreds of dollars. Why is that? Informed, educated guesses or reading tea leaves? Is the guy reading a chart reading tea leaves or is the guy holding silver in his hand who can tell you how much silver is produced every year reading tea leaves?

Think for yourselves and enjoy the ride.


Ed's comment.

"Here's a Casey Research chart that was sent to me by Washington state reader S.A. It's my personal opinion that the 1980 high in 2011 dollars is supposed to be in the $165 price range...but $110 is a nice jumping-off point."


$40 today??

Tuesday, April 5, 2011

Thursday, March 31, 2011

Rubbish and Analysis of Said Rubbish!!!

This kind of information boils my blood. There's an entire generation of thinkers out there that just need to step aside.....

Link....

What’s wrong with the logic in this article? My comments at the end (cuz I know, right?).


Stop The Madness: Make The Dollar As Good As Gold

Mar. 30 2011 - 1:04 pm | 3,451 views | 0 recommendations | 4 comments

By LOUIS WOODHILL

Unstable money creates anxiety. By now, the dollar has been unstable enough, for long enough, that this anxiety is popping out everywhere. TV commercials are urging people to buy gold, sales of “survivalist” books are rising, and consumer confidence is plunging. And, on March 22, “money” featured more prominently than tax cuts at a “Supply Side” conference in New York City, at which luminaries such as Robert Mundell, Steve Forbes, Arthur Laffer and Larry Kudlow offered their views.

Many of the participants in this conference called for “a return to the gold standard.” However, it is important to recognize that there are at least four distinct types of gold standards, and that some will work and some will not.

The most “fundamentalist” type of gold standard could be called the “Specie Standard” system. Under this system, the dollar is defined as a fixed weight of fine gold, and the monetary base consists of gold coins. Paper money is allowed, but only as warehouse receipts for gold coins. The size of the monetary base is determined by the amount of gold that is presented to the Treasury (or private banks) to be minted into gold coins. There is no central bank, and no attempt by government to influence interest rates. Fractional reserve banking is not allowed.

Proposals for setting the gold value of the dollar under a Specie Standard range from $20.67/oz (the gold price in 1930), to $14,300/oz, which is the gold price required to make it possible to replace all of M1 (currently about $1.9 trillion) with coins minted from half of the U.S. government’s gold holdings (which currently total about 261 million ounces).

A Specie Standard would not work. Gold cannot be used as money — there isn’t enough of it. Setting the gold price high enough (more than $14,000/oz) to make it possible to replace all of the dollars of M1 with gold coins would produce explosive inflation (as the rest of the world gleefully sold us gold and bought up our assets), followed by a steady, grinding deflation.

If it were possible to get past the “start up” issue, a Specie Standard would be operationally stable — it would not be prone to sudden, acute financial panics. However, it would yield a chronic deflation that would produce high unemployment and would likely make long-term debt financing too risky (for both lender and borrower) to be undertaken.

The second basic type of gold standard could be called the “Classic Gold Standard” system. This is what we had in the 1920s. Under this system, gold is the “final” money, and the dollars of the monetary base are redeemable for a fixed amount of gold upon demand. However, the monetary base consists not only of gold, but also of paper money and bank reserves created by the central bank. The size of the monetary base is under the discretionary control of the central bank, but is ultimately limited by a “gold coverage” law. The central bank sets short-term interest rates, and fractional reserve banking is allowed.

A Classic Gold Standard also will not work. Any monetary system that uses gold as money will produce deflation, as the economy grows faster than the supply of gold. Also, the central bank and the (fractional reserve) banking system would face a nearly irresistible temptation to use their ability to create money to hold the deflation at bay as long as possible. Unfortunately, this would cause deflation to build up in the system, and would guarantee a banking panic/liquidity crisis/economic collapse at some point. This is exactly what happened in 1930.

The third basic type of gold standard could be called the Bretton Woods system (after the monetary system that was used from 1948 to 1971). Under a Bretton Woods system, the monetary base consists of fiat dollars (both currency and bank reserves) created by the Federal Reserve. The monetary base is convertible into gold at the Fed or the Treasury (in the case of the actual Bretton Woods system, at $35/oz, but only for foreign central banks). The Fed sets short-term interest rates, and fractional reserve banking is allowed.

A Bretton Woods system could work. As in the case for all gold standards, setting the gold conversion price at the correct level would be crucial.

The actual Bretton Woods system failed because the Fed did not manage the size of the monetary base so as to keep the free market price of gold equal to the official price. However, a Bretton Woods system can be “attacked” via mass conversion of dollars into gold. It also creates the potential for the Fed to (mistakenly) provide opportunities for arbitrage between the official gold price and the interest rates set by the central bank.

The fourth type of gold standard could be called the “Dollar Bill” system. The name comes from the title of the bill that Congressman Ted Poe (TX-02) is planning to introduce into the 112th Congress for the purpose of fulfilling Congress’ Constitutional mandate to “…coin money, (and) regulate the value thereof…” (Article I, Section 8).

Under a Dollar Bill system, the monetary base consists of fiat dollars (both currency and bank reserves) created by the Federal Reserve. The Fed is not allowed to set interest rates, and it is relieved of responsibility for promoting full employment. Instead, the Fed is tasked with employing its Open Market operations to adjust the size of the monetary base so as to keep the COMEX price of gold as close as operationally practical to a target gold price. Fractional reserve banking is allowed.

The target gold price is set by naming a “date and time certain” sometime in the near future, and then fixing the target price at the market price on the COMEX at that moment. This is similar to the approach that was used to establish the final exchange rates for the currencies that were replaced by the euro.

A Dollar Bill system could work. Unlike a Bretton Woods system, it cannot be “attacked” in an effort to drain Fort Knox and panic the Fed. And, because the Fed is not involved in setting short-term interest rates, it creates no opportunities for arbitrage. The mechanism used for setting the target gold price would force the markets to disclose “what gold is really worth”, thus avoiding both inflation and deflation at startup.

The Fed’s discretionary, fiat money, “dual mandate” system is failing. It is creating inflation, impeding economic growth, and provoking rising anxiety. It is sowing the seeds of a sudden, violent “dollar crisis”. It is time to stop the madness and make the U.S. dollar once again “as good as gold”. The “Dollar Bill” will show the way.




Finn: The main flaw in all of these past and future scenarios and anything else anyone could dream up is that the price of gold has to be “fixed” or “set”.
The Classical gold standard did NOT cause inflation. Fixing the price of gold caused inflation. Had gold been floating they could simply have produced more dollars to accommodate transactional needs and the price of gold would have gone up.

The Bretton Woods system failed because again, they fixed the price of gold. Any “attack” conducted on the “system” is converting dollars to gold because you are printing too much freaking fiat!!! Politicians hate to be discovered. They don’t like the “little people” knowing what they are up to. If gold was floating and the price kept rising we would all know what they are up to.

Today this system is failing and the price of gold is rising because of their nocturnal, nefarious activities (spending). Now all they can do is manage the price of gold. What you are seeing is a controlled retreat from a losing battle. They will lose and they know it.

The real reason you do not see any real solutions (like simply letting the price of gold float) is because the banks and wealthy of the wealthiest want all the gold for themselves so they can always maintain control and power. If the people have metal, you have power; spending power. As it is all your saved up fiat (dollars) are NOTES. They are representations of debt. They can be canceled at any time and devalued at will and there’s nothing you can do about it. Chump!

No one can devalue your silver and gold. It simply is what it is. It has it’s own inherent value regardless of what anyone thinks about it or regardless of anyone’s opinion about it.

It is what it is and you have to deal with reality or reality will deal with you!

Now step!!!

Friday, March 25, 2011

Someone asked, silver or gold?

Someone asked the following: Gold or silver...please weigh in with your preference and rationale...

Here's my brief response (brief is hard for me sometimes!!)


Everyone seems to think this is simply an American debate since we are currently the reserve currency. It is true the MOST central banks don't own silver but how do we know that for sure?

After 5 years China came out and announced that they had much more gold than anyone had imagined.

We now know that BOTH the Chinese and Indian governments have announced that they are going to be purchasing SILVER and gold as reserve assets. Score 2 for silver.

We KNOW that the Koran demands that SILVER and gold be money. Certain Muslim countries are already minting silver and gold coins. Score 1 for each.

In a FREE MARKET governments cannot tell people what money is. And regardless of what governments dictate, people will still do what they are going to do. Silver sales and Silver Eagles sales are breaking records so what are people choosing to do?

A dollar according to the Constitution is silver. Score 1.

Another thing I never hear anyone speak of is you don't need silver held by governments for it to be money. A government could simply produce silver certificate legal tender (and gold) that you can only get by exchanging silver for them. You do not legalize the exchange of silver and gold bullion. Voila, the gov restores their silver and gold supply and life goes on. Creditors and bond holders get burned, the wise saver goes on a spending spree.

It doesn't really have to be that difficult. The central banks of the world are simply taking advantage of the fact that so many people have faith in and are using fiat.

One more point for silver: there will be less and less of it every year. Not true for gold. Even if gold is the only money you will one day be able to "sell" silver for more fiat than gold will provide. So really the discussion is about value and wealth at that point.

Own them both!!!

Thursday, March 24, 2011

America the Best, or Worst?

We’re No. 1!!!!!! We’re No. 1!!!!!!! The US fukkin’ rox dudes! We’re the best fukkin’ country on Earth! AND the whole world!!!!





US Finances Rank Near Worst in the World: Study
Published: Thursday, 24 Mar 2011 | 8:43 AM ET

Text Size

By: Jeff Cox
CNBC.com Staff Writer



The US ranks near the bottom of developed global economies in terms of financial stability and will stay there unless it addresses its burgeoning debt problems, a new study has found.

In the Sovereign Fiscal Responsibility Index, the Comeback America Initiative ranked 34 countries according to their ability to meet their financial challenges, and the US finished 28th, said David Walker, head of the organization and former US comptroller general.

"We think it is important for the American people to understand where the United States is as compared to other countries with regard to fiscal responsibility and sustainability," Walker said in a CNBC interview. "Americans are used to rankings and they're used to ranking very high, but frankly in this area we rank very low."

While the news is bad, there is a bright side.

"Here's the good news: Some of the top countries had their own fiscal challenges, made reforms and now rank highly," Walker said. "If we adopt the recommendations of the National Fiscal Responsibility and Reform Commission or ones that have similar bottom-line impact, we move from 28 to 8."

As the US languishes near the bottom, these countries make up the top five: Australia, New Zealand, Estonia, Sweden, China and Luxembourg.

Link to Video


Walker acknowledged that some of the countries that rank ahead of the US do not have the same type of challenges.

But he said policymakers in Washington can learn much from countries like New Zealand, which faced a currency crisis and made the necessary reforms to get back to prosperity.

"First, they're arguing over the bar tab on the Titanic," Walker said. "We need to cut spending. Frankly we need to cut spending more than what has been talked about but over a longer period of time. But what's imperative is that we need to attach some conditions to increasing the debt ceiling limit that will bring back tough budget controls..."

Walker predicted the US will have a debt crisis "within the next two to three years" and implored Washington lawmakers to "wake up."



$38. Next stop?

Wednesday, March 23, 2011

And there we have it......$37

Busting out of $36.30 range?

Bound to happen. This chicanery around $36 has gone on for long enough. Will it sustain?

Friday, March 18, 2011

A reader sends in a question....

Don P. sends in this question....

Question: Do you think in the silver currency era, an Apmex round will be any less trusted than a silver eagle? I know the eagle is legal currency and guaranteed to be one oz. but I was considering the additional spot paid for them. Worth the little extra for others' confidence?



The Eagle will be the most trusted coin on the planet, however, it’s not likely pure 1 oz silver coins and rounds will be money. They would most likely create a coin with a small amount of silver and gold along with an alloy in different denominations like the dime and quarter, etc. So the Eagle would be obsolete as far as spending but would instead carry a different value for being pure silver and rare as they will most likely cease minting them and people will store them safely away.

But considering a post fiat, metal monetary system the current scoundrels running the hooskow will resist all efforts to introduce metal into circulation but a couple of alternatives should be considered here.

1) IF the current crisis spins out of control and the bankers lose control of the markets you will see a barter system evolve out of the chaos. This is the worst case scenario and you really would not want anyone knowing you had metals in the first place. You would want to trade things you didn’t need for things you did before you brandished your metal. What would likely evolve out of this chaos would be private mints accepting bullion and making a more standard, common and familiar coin according to different Weights & Measures rather than a face value, e.g., 1/10th of an ounce, ¼ of an ounce, a half, etc. Here you would bring your Apmex rounds to have them converted into something more acceptable to the market place. Actually Apmex rounds may be acceptable enough but you may want smaller denominations. The Eagle would be a very valuable 1 oz coin. The one dollar face value would be ignored.

2) If the crisis is managed properly fiat will simply not disappear. They will try and incorporate silver and gold into the digital world. You will deposit your silver and gold and have credits that you can break down digitally into smaller increments. Think Goldmoney. It may even be that you will have the option of having a portion of your check automatically deposited into a silver and gold “saving’s account to be drawn on when needed. The rest of your check would go into checking for daily use. The Chinese actually do something similar now.


There are other alternatives as well but that hopefully answers your question.

Tuesday, March 8, 2011

Price Correction Cometh? Or QE IV?

I have been saying for some time know that I believe there will come a time when you will no longer be able to buy silver and gold at the retail level (like Apmex). What supporting evidence do I have? In brief:

1) In 1985 the Liberty Coin Act was drafted and ratified in 1986. Basically, by law, the US was to provide American Eagles to the public to satisfy demand. As demand went up so MUST their minting.
2) In 2008 the market collapsed and the dollar became increasingly under pressure. Sales of American Eagles (silver and gold) and Buffalo’s went through the roof. The Buffalo’s were discontinued and the Eagles were either sold out, suspended, rationed, or had certain types of uncirculated coins discontinued.
3) In 2010 Congress passed H.R.6162, Coin Modernization, Oversight, and Continuity Act of 2010. Basically that law allows the Treasury to modify the “quality and quantities” necessary to meet public demand. The Secretary would also be able to make recommendations about changes to coin compositions. That law basically marginalizes the 1985 act.
4) Yesterday we discover that the US Mint “today announced that it is requesting public comment from all interested persons on factors to be considered in conducting research for alternative metallic coinage materials for the production of all circulating coins.”

We know that they are running out of silver. Large quantities of silver and gold are being bought by the plebians and foreign governments of the world. They simply will not have the metal available to supply the American public, especially if the dollar continues to lose value and they want to introduce new coins into the money supply that will replace paper dollars of smaller denominations.

So, with all that being said, I offer up to you the latest from the much respected Chris Martenson. The reason I wrote all that I did was to prepare you. Below, Chris makes a case for the market (all markets) correcting anywhere from 20-40%. This would only happen if the Fed stopped buying treasuries and stocks. Lately the Fed has come under pressure for their Quantitative Easing II program which has fueled inflation the world over. It has been speculated that the Fed will end this program because of the heat they are receiving. I think that’s absolute rubbish because to date, they have taken no responsibility for causing inflation blaming rising prices instead on increased demand due to recovering global economies.

Considering that silver is currently at $36, a 40% correction would be $21.60. If it happens later in the year the numbers will be different. But ask yourself now how would you feel if silver dropped to $21.60? Would you despair? We’ve all been watching the prices and it feels good seeing $36 like perhaps we’ve made a good decision. Seeing $21 you will wonder if you have made a bad decision or perhaps you had terrible timing. You’ll do the math on how much more you could have if you had only waited. But I ask you this: what if the prices drop to $21 and there is no silver available to buy?

Think it can’t happen? I have said before and I’ll say it again: this fraud on the COMEX ends when the paper price drops and the physical market goes insane. You will see the paper price at $10 and Ebay selling for $250.

Therefore, ignore the prices. Get the physical metal when you can. Silver is undervalued as it is. If it drops, consider it a blessing and get as much as you can, for your days of buying cheap silver are numbered.

Now the article (like you want to read anymore!!!):

Submitted by Chris Martenson

The Coming Rout

There's a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%. The trigger will be the cessation of QE II and a multi-month pause before QE III.

This is a reversal in my thinking from the outright inflationary 'buy with both hands' bent that I have held for the past two years. Even though it's quite a speculative analysis at this early stage, it is a possibility that we must consider.
Important note: This is a short-term scenario that stems from my trading days, so if you are a long-term holder of a core position in gold and silver, as am I, nothing has changed in my extended outlook for these metals. The fiscal and monetary path we are on has a very high likelihood of failure over the coming decade, and I see nothing that shakes that view.

But over the next 3-6 months, I have a few specific concerns.

It's time to build on the idea I planted in the Insider article entitled Blame the Victim (February 28, 2011) where I speculated on the idea that the Fed might be forced to end its quantitative easing programs, almost certainly because of behind-the-scenes pressure.

Here's what I said:

“How I read [the Fed's recent propaganda tour] is that the Fed is taking some heat for its inflationary policies, mainly behind closed doors, and it is trying to do what it can -- with words -- to soothe the situation. Perhaps China is making noises, or perhaps Brazil's finance minister is making the phone lines feeding the Eccles building smoke ominously, or perhaps it is internal pressure coming from politicians with restless voters. Or all three.

The big risk here is that the Fed will be forced by this rising pressure to discontinue the QE program in June at the normal ending of the QE II efforts. Couple that with a possible federal showdown over the debt ceiling right at the same time, and you have the makings for a massive fireworks display, possibly involving derivative mortars bursting in air.”

At the time, I speculated that all of the Fed's pronouncements about inflation being almost nonexistent were actually signs that the Fed was taking some behind-the-scenes heat for the inflation its policies was creating. And I worried about what would happen if the Fed were to end the QE program in June.
Let's just say it won't be pretty.

Everything would tank. Stocks, bonds, and commodities. All of the risk assets that have been unnaturally supported by a flood of liquidity, too-low interest rates, and thin-air base money would give up those ill-gotten gains. Gold might behave a bit differently, because along with these market declines will come an enormous amount of uncertainty about the financial system itself, usually a condition for higher gold prices. So I expect gold to correct somewhat, but not nearly as much as everything else, and it could even gain.

The story is, admittedly, getting more confusing by the week, with some calling for hyperinflation and some calling for massive, outright deflation. I am trying to surf the probabilities and stay one step ahead of whatever curve balls are coming our way.

The basic idea is this: The Fed has been dumping roughly $4 billion of thin-air money into the US markets each trading day since November 2010. The markets, all of them, are higher than they would be without this money. $4 billion per trading day is an enormous amount of money. It's gigantic by historical standards. As soon as the QE program ends, the markets will have to subsist on a lot less money and liquidity, and the result is almost perfectly predictable.

Hello, downdraft.

The markets are quite substantially elevated due to the efforts of the Fed. T, and then some, is quite likely to be rapidly eliminated as soon as the QE program has ended.

It's really that simple.
To make the story even more difficult to follow, the Fed has been sending out teams of PR agents in an effort to guide the markets with their words.
First, on March 2, 2011 Bernanke said this:

Bernanke Signals No Rush to Tighten When Asset-Buying Ends

March 2, 2011

Federal Reserve Chairman Ben S. Bernanke signaled he’s in no rush to tighten credit after the Fed finishes an expansion of record monetary stimulus, seeing little inflation risk and still-slow job growth.

A surge in the prices of oil and other commodities probably won’t generate a lasting rise in inflation, Bernanke told lawmakers yesterday in semiannual testimony on monetary policy. A “sustained period of stronger job creation” is needed to ensure a solid recovery, and the Fed’s benchmark rate will stay low for an “extended period,” he said.

The "no rush to tighten credit" statement is a signal that the Fed will neither raise rates at the end of the QE program nor perform reverse POMOs where it reels cash back in and pushes MBS and/or Treasury paper back out.

Upon the cessation of the QE efforts, and the cessation of $4 billion a day in Treasury buying pressure, it's a safe bet that market interest rates will rise. Bernanke is at least on record as saying that if this happens, it won't be because the Fed has taken the lead.

Bernanke was being a little bit sloppy in his statements, because stopping QE will serve to tighten credit simply because there will be a lot less liquidity sloshing around the system. It's a situation where the absence of excess is the same as the presence of tightness, if that makes any sense.
Then on March 5th, a much stronger and clearer signal was given, confirming my worries:

Fed Policy Makers Signal Abrupt End to Bond Purchases in June

March 4, 2011
Federal Reserve policy makers are signaling they favor an abrupt end to $600 billion in Treasury purchases in June, jettisoning their prior strategy of gradually pulling back on intervention in bond markets.

“I don’t see a lot of gain to reverting to a tapering approach,” Atlanta Fed President Dennis Lockhart told reporters yesterday. “I don’t think that is necessary,” Philadelphia Fed President Charles Plosser said last month.

Whoa. This is important news. Not only a cessation of QE, but the possibility of a sudden stop is being telegraphed. This will change everything.
The old saying 'sell in May and go away' might never be truer than this year, although with this sort of a warning, the cautious investor may want to get a head start on things and sell in March or April.

For some time there have been rumors that the Fed has been splitting into factions, with some of the inner team becoming increasingly uncomfortable with the QE program and its effects. But so far they've either spoken in code to reveal their displeasure or quietly resigned. So we're pretty sure there's an admirable level of support within the Fed for ending QE, and it has now bubbled to the surface and reached the public arena.

Of course, there's some form of gobbledy-gook reasoning being floated to justify the plan for a sudden stop rather than a gentle wind-down, and it involves the distinction between 'stocks and flows' (from the same article as above):
Fed staff members, such as Brian Sack, the New York Fed official in charge of carrying out the bond buying, have argued the total amount, or stock, of securities the Fed has announced it will make has more impact on longer-term interest rates than the timing of those purchases. That’s a view now held by several members on the Federal Open Market Committee, including the chairman.

“We learned in the first quarter of last year, when we ended our previous program, that the markets had anticipated that adequately, and we didn’t see any major impact on interest rates,” Fed Chairman Ben S. Bernanke told the Senate Banking Committee during his March 1 semiannual monetary-policy testimony. “It’s really the total amount of holdings, rather than the flow of new purchases, that affects the level of interest rates.”

Fed Vice Chairman Janet Yellen supported that perspective, saying at a monetary policy forum in New York last week that “the stock view won out over the flow view.”
The idea that Brian Sack, a 40-year-old economist with a PhD from MIT, is winning the day in the argument of "stocks over flows" is somewhat troubling to me. MIT is a quantitative shop, home to some very brilliant people, but how markets will actually respond is another specialty altogether, one that requires a bit of on-the-street experience. Markets have a bad habit of not being logical, not fitting neatly into tidy formulas, and ignoring things like 'stocks and flows.'

I'll go even further. I'll take the other side of that bet and opine that the flows are much more important than the stocks, because it is the flows that support the continued budget deficits of the US government — which, it should be noted, will still be with us each and every month long after June 2011. Those deficits are baked into the cake and will require in excess of $125 billion in new Treasury sales each and every month.

Who will buy all the Treasury bonds after the Fed steps aside? That is unclear. If there are not enough buyers at these artificially inflated prices, then the price will have to fall until sufficient buyers can be found. Falling bond prices are at the other side of the financial see-saw from rising bond yields; one goes down while the other goes up, and the Fed has been pressing firmly down on yields for a while via the QE II program. When that's over, pressure will be reduced and yields will rise.

So what to do? For those concerned enough about this possible scenario to consider taking action, please see Part II of this article (free executive summary; paid enrollment required to access). In it, I predict the extent to which stocks, commodities, Treasury bonds and precious metals prices may be impacted in the near term. I also detail the key indicators to look out for in order to determine if and when this scenario is unfolding - as well as recommended strategies to preserve capital during this corrective phase.

Click here to access Part II.

Sunday, March 6, 2011

Friday, March 4, 2011

Quote of the Day

"If you disregard the currency dislocation we've created, the commodity price spike we've created (with our money printing and this the currency dislocation) and the worldwide currency problems (particularly in the Euro) then the economy is very strong."

Alan Greenspan


Wow! That's like: Save for the moon sized meteor hurtling through space towards Earth, the future looks quite bright!

On the Road To ???

Thursday, March 3, 2011

Pentagon Report

Here's the link to this must read:

I'm posting it in it's entirety with commentary throughout....

This is about as serious a threat as it gets. However, I think they’re putting the cart before the horse. What this article is to me is the “excuse” they’re going to roll out when this SOB crashes. And it will. This is an admittance by the Pentagon and the powers that be that it’s all coming to an end.


Pentagon Study: ‘08 Financial Crisis May Have Included Work of Financial Terrorists

It seems those Pentagon economic “war games” we reported on in December may have been a very good idea.

That’s because it was revealed yesterday that a Pentagon contractor report suggests the U.S. may have been, and may currently be, the victim of financial terrorism. As the Washington Times says, the 2008 economic crisis may have included “financial subversion carried out by unknown parties, such as terrorists or hostile nations … covertly using vulnerabilities in the U.S. financial system.” (Finn: or parties like JPM, Citi, Bank of America, etc, etc).

The report was authored by financial analyst Kevin D. Freeman in 2009, and is called “Economic Warfare: Risks and Responses.”

From the Times:

“There is sufficient justification to question whether outside forces triggered, capitalized upon or magnified the economic difficulties of 2008,” the report says, explaining that those domestic economic factors would have caused a “normal downturn” but not the “near collapse” of the global economic system that took place. (Finn: It had NOTHING to do with the fact that banks were levered 80:1)

Suspects include financial enemies in Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. Chinese military officials publicly have suggested using economic warfare against the U.S. (Finn: It had NOTHING to do with the fact that the US GDP is overstated by 30% {think about that} or that our national debt is over $14T with over $100T in unfunded liabilities!!! WTF!!).

“The new battle space is the economy,” Freeman told the Times. “We spend hundreds of billions of dollars on weapons systems each year. But a relatively small amount of money focused against our financial markets through leveraged derivatives or cyber efforts can result in trillions of dollars in losses. And, the perpetrators can remain undiscovered.

“This is the equivalent of box cutters on an airplane.”

So who does Freeman think could be responsible? The answer may not surprise you: Islamic terrorists, Russia, and China.
That possibility seems to be supported by news reported late last year that the Pentagon has been “war gaming” for a financial attack since early 2009 — and many of those scenarios have focused on China.
According to Freeman’s new report, the attack has three stages, two of which may have already been implemented:

• The first phase was a speculative run-up in oil prices that generated as much as $2 trillion of excess wealth for oil-producing nations, filling the coffers of Sovereign Wealth Funds, especially those that follow Shariah Compliant Finance. (Finn: nothing to do with Peak Oil, the world only had 2 million barrels per day of spare capacity, sounds like a lot but it’s not).
• The second phase appears to have begun in 2008 with a series of bear raids targeting U.S. financial services firms that appeared to be systemically significant [such as Bear Stearns and Lehman Brothers]. … This created a system-wide crisis, caused the collapse of the credit markets, and nearly collapsed the global financial system. (Finn: Again, if I’m an investor and figure out that you as a company are levered up 80:1, I’m selling, nothing personal. Don’t need a conspiracy for that.)
• The risk of a Phase Three has quickly emerged, suggesting a potential direct economic attack on the U.S. Treasury and U.S. dollar. Such an event has already been discussed by finance ministers in major emerging market nations such as China and Russia as well as Iran and the Arab states. A focused effort to collapse the dollar by dumping Treasury bonds has grave implications including the possibility of a downgrading of U.S. debt forcing rapidly rising interest rates and a collapse of the American economy. In short, a bear raid against the U.S. financial system remains possible and may even be likely. [Emphasis added] (Finn: They are preparing people for the reasoning for what IS happening and will continue to play out. They are telling us the system will “crash” suddenly and then will blame others. Would you hold Treasuries if the US is buying all of their own issuance and has told the world we will continue to do so at a pace of $1.5T forever? Come on!!!! Must…….get……head…..out…….of………ASS!!!!!!).

“We have taken on massive public debt as the government was the only party who could access capital markets in late 2008 and early 2009,” Freeman told the Times regarding phase three, which has put the U.S. dollar’s global reserve currency status at risk. (Finn: Right. It’s called abusing your privilege. We took on massive public debt because servicing our debt we’ve acquired over the last 200 years has gone exponential. This was written about in the ’30’s. Nothing new here).

“This is the ‘end game’ if the goal is to destroy America,” he added, noting that in his view China’s military “has been advocating the potential for an economic attack on the U.S. for 12 years or longer as evidenced by the publication of the book Unrestricted Warfare in 1999.” (Finn: The US will never be the same again and may break up in to sections or revert to the individual states. Consider the FORMER Soviet Union and the nation states that broke away. 13 states have introduced litigation to bring silver and gold back into monetary status. Use your heads folks, this is more controlled than you might think.)

According to the Times, Freeman’s suggestion has been largely ignored by the government, and there are many who don’t agree with his scenario. But while Freeman says at this point he’s only saying financial terrorism is a possible factor, ignoring that possibility is a mistake. (Finn: governments are idiotic and of course they are ignoring this, they’re being told the punch bowl is being taken away. The banks hold all the power, always have since the Medici’s in Venice in 1400 to the Rothschild’s today. And just because it’s ignored doesn’t mean it’s not believed or true. Remember that O-ring that NASA ignored on the space shuttle that blew up in the 80’s?).

“The preponderance of evidence that cannot be easily dismissed demands a thorough and immediate study be commenced,” the report says. “Ignoring the likelihood of this very real threat ensures a catastrophic event.” (Finn: do I hear taps in the distance?)

Ignore this at your own peril. Most of you are taking basic steps but there’s much more to be done mentally and physically.
Happy Thursday.

Tuesday, March 1, 2011

Wednesday, February 23, 2011

My view on unfolding events....

Recently I was asked this: "I do believe interest rates will go much higher. Will that contribute to a crashing dollar or help strengthen it? Don’t higher interest rates hurt physical metals? What other investments would do well with higher interest rates? Not bonds I’m guessing …"

Here's my response, as best as I can answer leaving out many sources and peripheral items but books could be written on these topics.....

In my opinion, higher interest rates can only happen after a dollar crises. The dollar is in such a precarious state higher rates don’t do anyone any good. Even those who would like to see it. Unemployment is rising. Federal tax revenues are falling. Higher rates means the Fed would have to print more money to pay the interest that is owed them. Weird eh? Basically we would be borrowing from the group we owed to pay the group we owe. You know this. The world for the most part knows this and is figuring it out in more detail. It’s appalling to any who discover this dark secret. So higher rates would hasten the weakening of the dollar, not strengthen it like it did in ’80.

When rates rose near ’80 it was drawing liquidity out of the system and deflation (stagflation) set in. Deflation today is devastating because money is credit. If you allow for deflation you are allowing debt to default which then calls into question the underlying asset values attributed to that debt. And since money is credit and all that contributes to the GDP, if those credit instruments fail and assets fall in value so does the GDP. If the GDP isn’t rising then investors (foreign banks, institutions and domestic sources) lose faith in our bond market and there’s a great sell off. That sell off would cause the rates to rise because that would be the natural market response to falling demand. Higher rates would attract demand again but would bankrupt the US. So the Fed must buy all these failing credit sources (mortgages, securities, bonds, etc) or the game is up.

In actuality the game IS up it’s just that no one knows what to do about it. Too many chefs in the kitchen who want to prepare their own meal. Too many have suffered as a result of the dollar policy of the US and UK. The world has had enough. Interestingly enough, George Soros has organized a meeting (Soros Plans New Bretton Woods Conference) to discuss a new monetary order at guess where? The Mount Washington Hotel in Bretton Woods, NH, the same place where our current monetary system was designed in 1944. I think choosing that location is symbolic of the fact that something is going to be hammered out. Do you think gold will be included in the new monetary system? Soros increased his $650M gold position by 15% recently. The higher the ultimate price the better off he is. It will suck up all the gold out of the market, never to be held again by the peasantry. Same for silver.

Enough of that. Now for your question will higher rates hurt metals? That’s a tough one considering everything I just wrote. We are witnessing the end of a currency system. Something entirely new will be put in place. I don’t even know that it’s a relevant question at this point because I firmly believe they will create an environment where metals will be priced so high that most people will sell everything they have down to the last spoon. This will all be by design.

In 1980 when the metals rose in price it was BECAUSE the rates were rising. Many bobble heads on TV mix this up because they are buffoons with an agenda. Rising rates were a sign of monetary weakness then. It wasn’t until rates rose PAST the point of inflation that the metals crashed. At this point the markets decided that they would rather be in paper and get more yield than the metals. It also became clear that paper would survive a little longer. If Turk and Williams are right and we hit 20-50% inflation starting this year, there is no way in HELL we could pay that kind of interest rate.

This game is over. The machine can take no more bogus quarters. There is no continue. The old money must be removed for a new, more acceptable form of currency. Money and the understanding of it has evolved just as our understanding of science has. But this time around you have a much more sophisticated citizenry who have the power of the internet to reveal all the chicanery. The games and tricks of the Power Elite can only be foisted on people for only so long.

Sunday, February 20, 2011

Friday, February 18, 2011

Even Cha-Ka is Amazed!!!!

Even Cha-Ka is amazed with the move in the silver market today!!! That’s a 10 oz. bar he’s holding. NO CHA-KA, YOU CAN’T EAT IT!!!!

And another.....

Thursday, February 17, 2011

Monday, February 7, 2011

Out of the Ashes

This is how gold and silver will be commonly used in the future. Collateral for capital raising ventures. In a world of decreasing energy production and energy inputs into developed economies and shrinking GDP’s, a person’s “good will” (aka, credit score) will not suffice to get credit. You will not assets; eg, real estate, silver, gold, business, etc.

“Witness: the world changes before your very eyes, if you have eyes to see. What do you gaze upon as the old images fade into the ether? Do you grasp out in yearning and reach for a decaying world? Tears for the death of you as you are born anew?"
Author: 'Tis himself!

JPMorgan takes gold collateral, inflation in focus, LINK

LONDON | Mon Feb 7, 2011 9:42am EST

LONDON (Reuters) - J.P. Morgan Chase said on Monday it would accept physical gold as collateral with its counterparties as a growing number of clients look to use bullion as a hedge against inflation.

The bank, which is one of the custodians of physical metals for some of the world's largest precious-metal backed exchange-traded funds, said it would take gold as collateral to satisfy securities lending and repurchase obligations with counterparties.

"Many clients are holding gold on their balance sheets as an inflation hedge and are looking to make these assets work for them as collateral," said John Rivett, collateral management executive for J.P. Morgan Worldwide Securities Services.

"By combining our collateral management and vaulting capabilities, we provide clients with greater flexibility in how they mobilize collateral." The spot gold price, which has fallen by some 4 percent so far this year to around $1,350 an ounce, rose by 30 percent last year, in large part thanks to investors seeking protection against rising inflation pressures in both developed and emerging economies.

JPMorgan, which owns vaulting facilities for storing precious metals around the world, said the initiative would allow its clients to mobilize collateral across borders and trading activities, "regardless of the underlying obligation, to extract maximum value and manage risk," it said.
(Reporting by Amanda Cooper; Editing by Jason Neely)

Friday, January 28, 2011

Rejoice!! Prices Have Dropped!!

This article below could be alarming to some of you but in all reality it, if it comes to pass, it should be a cause for joyous celebration.

I urge caution though; if you plan to purchase, timing the market can be dangerous. I try and get out as much quality information as possible to you on the mailing list and weed out the rubbish but at the end of the day we are all adults and must make our own decisions. (If you would like to be on the email list leave a comment below and I will include you).

Look at the 3 year chart below. I started buying silver around the August time from of ’08 at a little over $18.00. For the next YEAR prices fell. I bought all the way down to $8.87. Every month I couldn’t really understand what was happening because everyone was talking about silver shortages and the premiums were going up as prices went down and there was general panic. I kept learning more about the market and my faith increased and I just kept buying. Kept buying……

I promise you all that when silver hits $75 an ounce and falls back dramatically to $40 and ounce you will have this same thought process going on so gird yourself now. Don’t become discouraged, be wise and buy. 90% of successful traders learn emotional containment.

Now for those of you who want to graduate to the next level, and some of you have, you can get a BullionVault or GoldMoney account and protect yourself from some of the higher premiums. They do have a premium they charge and storage fees (minimal) but they have greater access to markets and you will pay less for ounce. Also you will have money outside of the banking system and more than an arm’s length away from particular entities that would rather you have your metal on US shores.

Personally I don’t see prices going to where he suggests but I would not be surprised. I certainly would NOT be disappointed.



And now for the article....here's the original link.

Predictable Gold and Silver Correction A Half-Done Buying Opportunity

By: Peter Cooper, Arabian Money


-- Posted Friday, 28 January 2011 | Share this article | Source: GoldSeek.com

Gold has corrected in price by more than 20 per cent no less than 46 times since the present bull market started back in 2001, according to analysts at MidasLetter. Silver has always been even more volatile.

That is why ArabianMoney warned about a correction earlier this month (click here) while still expecting silver to deliver the best absolute price performance for any major asset class by the end of the year (click here).

Buy the dips

The smart investor will therefore use price weakness like the current correction to stock up on precious metals. Indeed, if observers want any confirmation that gold is still in a bull market then they need only consider this correction itself.

This is just more of the same up-and-down upward progress we have seen for a decade, with no sign of a parabolic blow-off or obvious spike – except for the short-term one in silver that is correcting.

Corrections are of course always shocking if you have just bought and have not had the experience of recent years in the precious metals market. The tendency is to panic sell, and that amplifies the downtrend.

Talk about investors selling out of precious metals and rotating into stocks is largely rubbish. If ever there was an over-extended trend it is the current rally in global stock markets, and emerging markets are leading the correction phase that has now started.

The real retail boom in precious metal ownership has barely started. From today visitors to the world’s tallest building in Dubai, The Burj Khalifa can buy gold from vending machines. But there are still only going to be six of them in the whole country.

Still falling

Gold and silver prices probably have some way to fall just yet. The normal pull-back from a gold high is $200 or 15 per cent, that would be down to $1,243, and it could go a little lower than that if the bears get louder, say to $1,150. Silver looks headed below $22 and perhaps as low as $20.

So if you want to get the maximum price gain for silver available this year then that will be the moment to pounce, and then you need to watch carefully for a price peak, although if past trends are a guide the second half of the year will just head higher and higher until the end of the year.

ArabianMoney newsletter readers have the benefit of actual, actionable investment ideas for precious metals while we can only offer general trends on this free website. How to ride this price trend is well worth considering in depth (click here to sign-up).

Friday, January 21, 2011

Greenspan Gives a Heads Up!!

From ZeroHedge

Stunner: Gold Standard Fully Supported By... Alan Greenspan!?

Submitted by Tyler Durden on 01/21/2011 11:58 -0500

You read that right. After such establishment "luminaries" as World Bank president Robert Zoellick, Warren Buffett's father Howard, Jim Grant, and, most recently, Kansas Fed president Thomas Hoenig, all voiced their support for a return to a gold standard, the most recent addition to the motley group of contrite voodoo shamans is none othe than the man who is singlehandedly responsible for America's addiction to cheap toxic credit, who spawned such destroyers of the middle class as the current Chaircreature, and who currently is the chief advisor in John Paulson's crusade to gobble up every ounce of deliverable physical in the world: former Fed Chairman - Alan Greenspan! In an interview with Fox Business, the man who refuses to go away into that good night: "We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard." And a further stunner: Greenspan himself wonders if we really need a central bank. Now our only question: why couldn't the maestro speak as clearly and coherently during his tenure which resulted in our current near-terminal financial state? (finn: because he would have been thrown from a building). And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: "The US owns nearly 263m troy ounces of gold (the world's biggest holder) while the Fed's monetary base is $1.7 trillion. So the price of gold at which the US dollars would be fully gold-backed is currently around $6,300." And here you have people worried about day trading volatility...

h/t Mike Krieger

Finn:

Et Tu, Alan?
This news really should surprise no one when it comes to Alan Greenspan…….let us go back in time…..

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.”

This was written by Greenspan in 1966. The original article is here……LINK

I assure you all that Central Banks of the world are fully aware of the history of fiat money and how it all ends (badly).

There IS a plan B and there always has been. All that’s happening in the world right now is countries jockeying for position, wealthy bankers and business owners and Central Banks themselves all buying gold. There are discussions on how the world’s debts will be handled, etc., etc…

A new monetary system IS being created as I type. You can count on it. The question is, ARE YOU READY? Will you be a participant or a bystander, waiting for another job?

I have long been of the opinion that between history and the actions of the government and the comings and goings of the Central Banks, the bankers, the actions on the COMEX and a myriad of other happenings were a direct telegraph to thinking men that a new standard was coming and that they should prepare. There is one thing they did not count on though: the internet.

Since the invention of the internet there have been a number of sites, articles, writers and analysts who have all tried to get this story out to regular people.

Also, since the invention of the internet there have been a number of different mechanisms to get ordinary people to NOT buy physical metals. Stocks of shell companies that do not exist, certificates that promise a portion of future production, derivatives, gold and silver pools, ETF’s and the biggest fraud of all, futures contracts.

Regarding the price of gold and it’s price under a gold standard, it would depend on the monetary measurement metric you used. M0, M1, M2, M3….. I’ve seen numbers bandied about anywhere from $5,000 to $53,000 to $100,000 an ounce.

The evidence is all around you. You will not be able to look back in time and say you were not aware. No one could possibly be that blind. Besides, you all have me tormenting you. Relentlessly, but only because I wish you the best. Most of you!!! LOL.

GDP Growth

This is so alarming as to be nearly unbelievable. Think long and diligently about what this means. When and how does the illusion end? How does it manifest itself?

This post is pulled directly from Karl Denninger's Market Ticker. My commentary follows.

To properly look at GDP in terms of actual economic progress one must back out all the borrowing that takes place during the same period. That is, the proper way to look at GDP is to subtract back out that which is paid for not with today’s output, but with promises to pledge tomorrow’s. The reason for this is clear – you may in fact only spend a dollar once. When looked at this way one gets a very different view of “growth” in the economy, and the depth of the hole we have dug for ourselves becomes clear.



There has been no actual positive GDP growth during the entire period from 1953 onward – until the 4th quarter of 2009, and since 1980 the true GDP numbers, when one looks at output (not what one “pulls forward” via debt) has been hideously bad. The spike upward in actual debt-adjusted growth that began in the 4th quarter of 2009 and peaked in the 1st quarter of 2010 was due to total systemic debt reduction – the very thing the government is trying to prevent, but which is necessary to bring the economy back into balance.

This, incidentally, is why median incomes haven’t moved upward at all in the last decade and why it seems to be harder and harder every year to maintain a middle-class lifestyle - and has been since the 1950s. The loss of purchasing power in real terms, the drive to “two income” households and finally the wild screams from the media, government, and lastly Bernanke’s recent assertion that “QE2” has been a “success” because the stock market has gone up all underlie the truth – we have not grown the economy at all during the last sixty years! Instead we serially pulled out the credit card and said “Charge It!”, continually rolling over the debt and adding more to it.

If you look at the stock market, one has to ask – when did it start to “take off”? In 1991 the S&P 500 printed 300 and the Dow stood at 2,500. That was the start of the monstrous "bull run" in stocks.

Exactly none of the alleged “stock market appreciation” has come from actual economic growth since that time. It has all come from ever-increasing amounts of leverage (debt) that, when subtracted back out of the change in GDP, show that on an actual output basis the economy of the United States has been declining at absolutely outrageous rates every single year since 1992, peaking at an astounding 29% at the end of 2007!

Nobody in the media – or government – will talk about this, despite the fact that the there’s little room for argument on the mathematical facts – they’re right there in the government data.



From Finn, a note:

You might read the above and say to yourself, “Well, isn’t debt reduction good?” It is of course however, our entire economic model has been based on GDP growth. The main source of growth has been the expansion of debt. Example, you get a new car and take a loan for $15,000. That loan is debt and is representative of GDP. If the government borrows $1 million it’s GDP. If they spend that same million it is again counted as GDP. If some guy gets laid off and stops spending all money, the Gov counts as GDP a percentage of his NON-income that he WOULD HAVE spent on imports as GDP. Completely ridiculous.

The reason GDP HAS to keep growing is because it proves to the world that Americans are able to keep servicing their debts. How do you service debt? Well you work, get paid and pay your bills. If this perception changes in the minds of foreign investors (including Central Banks) and they start to believe that we have hit the wall, they will scale back in their purchases of our Treasuries.

What if they discover that America has a chronic unemployment problem? (They know we do)
What if they discover that our GDP growth has all been debt based? (They know this too)
What if they discover the Fed has been buying all the Treasuries and America will likely default on their debts? (They know this)

What foreign nations and investors are dreading, and indeed anticipating is the Awakening of the American people to our own situation. When Americans figure this stuff out and realize that their whole “prosperous” life has been nothing more than an illusion the lid on the boiling pot will fly through the roof. The reaction of the American people will be totally unpredictable except for the flight to value. Debt will be shunned. Things of “value” will be in vogue.

Imagine the ire that Americans felt towards Japan after Pearl Harbor except this time around the anger will be isolated within our own borders. It will be directed towards bankers, politicians and even each other. Think national L.A. riots, and hope it never happens.

Buy silver, buy gold.

Wednesday, January 19, 2011

Quote of the Day

I have often said that after all my studies I am beginning to believe that silver is more important to the world than gold. I started to think along these lines when I realized that silver, which dollar wise is one of the smallest markets on the commodities markets, has the largest outstanding short position against it, larger than gold even.

Also, the number of days it would take to cover these short positions is the highest of all the commodities as well, nearly 160 days of production.

A brief description of the above is this……If you go “long’ a contract you expect the price to go up. If you go “short” a contract you expect the price to go down. This “sentiment” affects which way the price moves. It has NOTHING to do with physical supplies. It's much more complicated than that but this is the Quote of the day post.

Anyway, the Quote of the day…..

"SILVER MONEY IS MORE IMPORTANT TO THE WORLD THAN GOLD." - Congressional Digest, November 1931, page 286.

Peculiar that, no?

Anyone who wants to go deep down the rabbit hole, read the following…..


The Silver Stealers series of articles……read for yourself the drama surrounding this metal for nearly 100 years….. that's where the quote was drawn from.


I urge you all to increase your positions with more zeal and fervor than I have ever conveyed. Ignore the price, eat one less meal a day, sell some of your personal belongings, whatever it takes. I strongly believe that after 5 years has passed you will NEVER be able to afford it or even find it ever again. Its production will be completely controlled by the governments of the world due to its scarcity and the difficulty they will have in mining new supply due to the price of oil and credit constraints.

Ignore this advice and be impoverished. Heed it and thrive.


And who says I don’t have a sense of humor through all of this?




The end of the silver price suppression that is! LOL



Cheers!