"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not take from someone else. When half of the people get the idea they do not have to work because the other half is going to take care of them, and when the other half get the idea it does no good to work because someone else is going to get what they work for, that, my dear friend is the end of any nation. You can not multiply wealth by dividing it." … Adrian Rogers (1931-2005) Pastor of Bellevue Baptist Church, Memphis, Tennessee

Snip…

Willie of the Golden Jackass writes:

"Forty years ago in 1959, any Chinese citizen caught with gold in possession was thrown in jail. But now the Chinese Govt is taking radical measures to change widespread indifference and lack of understanding for precious metals as an asset class. The year 2009 is the FIRST year that the Chinese public is permitted to own physical gold or silver. Officials are now trying to drum gold & silver as an investment from city billboards. Beijing leaders realize that public demand aids their strategy to pressure the USDollar and unseat it from the global catbird seat. Banks offer an array of precious metal investment options to the public, far more than are offered to Americans. As Simon Black of the International Man says, "Instead of Maoist propaganda, though, they are attempting to change the entire perception of gold & silver in the Chinese public. Simply put, the Chinese government is trying to trigger a national gold craze, and it is working. The Chinese public now has gold trading platforms on steroids. You can buy silver bullion or gold bars at any Chinese bank in four different sizes. Wealth management products tied to gold are skyrocketing in popularity, and the public can now instantly buy, sell, and trade gold 24 hours a day in five different forms with different eight types of services.""

Meanwhile in the US, investor sentiment towards gold, silver and the related shares is the worst that it has been in the past 9 years. Wait till people wake up to what is really happening to the world's "monetary" system.



He didn't buy gold back in the days when it was under USD 1,000.

Saturday, August 15, 2009

Buy Gold and Silver Now. Do not wait for the blast off into new high territory. It will probably take people by surprise and be relatively fast. Gold and silver have been building a big, over a year long base. The bigger the base, the bigger the move up. And, don't be fooled by the talking heads in the mass media. Most are clueless. We are just in the eye of the storm at the moment.



Many of the best mortgages in the US are due to default (even these people with good credit are losing their jobs) along with the commercial mortgages. The FDIC is almost broke, almost out of bank rescue funds. The rate at which banks in the US are going bust is increasing. Citi and AIG are still in trouble, probably JP Morgan, too. US bonds are looking to break their long term up trend line (since about 1982). Then yields / interest rates will climb. The US federal government is up against its debit limit again when it has not been even one year since the last time they had to raise the debt limit. The fact that they have a limit is a sham. What is the point?

The BIS's (Bank for International Settlement) total for derivatives was about $1.4 quadrillion. There is not enough wealth in the world to settle this amount. It is a crazy scene that built up fast over a few years.

Snip…

Recommended reading:

Pressure (Countdown) Toward Breakdown...
My best sources of information report that some unexpected deep shocks are coming from USGovt creditor nations. They are simply fed up, frustrated, and astonished at the manner of lost control, spiraling debts, and blatant monetization amidst lies in denial of that same monetization. The USTreasury auctions now have domestic hidden elements, and global hidden monetization elements. The USFed is purchasing through Permanent Open Market Operations the bonds grabbed by the primary dealers. Some of the auctions are actually underbid, and fortunately for the statistics, the bid/cover ratio includes obligated dealer bids. The USFed liberally uses its USDollar Swap Facility to enable strong bids by foreign central banks, except that they are highly likely coming from USFed accounts on foreign soil, or else from money lent by the USFed itself. Warning after warning have come not to monetize, not to debauch the USDollar currency, not to permit skyrocketing deficits. Yet they continue, and worse, little if any reform or actual stimulus has occurred. Mainly what we witness is more channeled funds to the big banks, more coverage of credit derivative fires, and more announcements of bond support. See the $1.25 trillion support for Fannie Mae bonds, aka USAgency Mortgage Bonds. The Green Shoots have now been dismissed as a marketing ploy. The Stress Tests have now been dismissed as a marketing ploy. The Stimulus Plan has now been dismissed as a marketing ploy. The only USEconomic recovery will be a statistical recovery. A Jobless Recovery is a recovery for stocks and a redemption for the bankers. Main Street continues to be discarded.

Snip…

China's Silver Bulls Are on the Loose
Monday, August 10, 2009
Official Chinese TV announced last week that silver bullion is now available for the investing public. China, once on a silver standard where nobody knows today what happened to the hoard, now offers 500 gram, 1-, 2- and 5 kilo bars. The news lady alluded that silver is comparatively cheap to gold, citing the current gold-silver ratio of 1:70. (normally history showed a ratio of 1:10!!)

China encourages Silver Bullion for investment

http://www.youtube.com/v/PqFpl31UwPI&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&feature=player_embedded&fs=1

It is going to get ugly. Real actual money ( gold / silver ) and other atoms are going to make a huge difference for those who had forsight and took action to protect themselves as best they could. In economics and markets, the crowd is wrong. This is the first time in the history of the world that virtually everybody uses a government fiat token that is not tied somehow to gold or silver, let alone reserved by these metals, to make payments. There is no escape to a currency tied to or reserved in gold or silver, like there was prior to 1971. There is only money itself and other atoms as an escape, safe store of value.

Snip…

Tuesday, August 04, 2009
Gold And Silver Are Chomping At The Bit To Run
Gold and silver are chomping at the bit to move higher, a lot higher. Gold and silver will roughly move inversely to government fiat tokens. Gold, silver and the HUI outside reversal days at the end of the first week in July were significant.
People who understood what was happening inside the US and paid no attention to regular stocks, nor any attention to real estate, are way ahead of the herd.

*****
Now for some bad news for the US, signs of the times, indications of the state of the US dollar:
1. "Wal-Mart has already broken out of the pack. Wal-Mart, the world's biggest retailer, plans to sell five-year "Samurai bonds" (commercial bonds denominated in Yen) out of its Japanese operations. The company filed documents with Japanese financial authorities on July 21. It is a law of markets that where commerce goes, Treasuries go later - to borrow - that being where the money is. Once the US Treasury follows Wal-Mart's lead - because it has to - the next step will be to "swap" debt paper still denominated in US Dollars for new paper denominated in other nations' money.
Once that happens, the US Dollar has lost its single reserve currency status and becomes just another currency amongst many while the US Treasury loses its ability to borrow internationally in US Dollars." - The Privateer

2. Jul 28, 2009, 11:15 a.m. EST
Citigroup sets final terms on 10-year euro bond

LONDON (MarketWatch) -- Citigroup Inc. will issue a EUR1.75 billion bond due to mature September 2019, at a spread of 385 basis points over mid-swaps, in a self-lead deal, the bank said Tuesday.
Order books for the transaction have exceeded EUR7 billion, attracting attention from more than 450 investors, the bank said.
The deal will be priced later Tuesday.

*****

Can you imagine the US Treasury having to price their debt in non-US dollar denominations to get the junk sold? For instance US Treasury debt denominated (priced in) Yuan? It's a real possibility. The federal government's budget deficit will be about $2 trillion or more this year. They do not have it. It all has to be borrowed somehow. Crazy!!! Insane!!! Especially when you consider the fact that they have $10s of trillions of dollars worth of unfunded liabilities to honor, which they will not, because there is no possible way that they can. The biggest, baddest, record breaking debtor in the world does not have anywhere near the wealth required. In fact there is not enough borrowable wealth in the whole world that can get the job done.





******
A good new article on silver and some big picture aspects of markets by David Morgan:

Silver Investing/Risk And Reward : http://www.gold-eagle.com/editorials_08/morgan073109.html


*****

What? 1,2,3 months till new all time highs in gold and silver?
There is no rush like a gold rush!!!!
The best parts of this bull market are still in front of us.

******
Snip…

Saturday, August 01, 2009
Crash The US Economy or Trash The US Dollar

If the US Treasury and the Fed create too many US dollars (that do not represent any new wealth what so ever, just increased US Treasury and Fed debt) to try to fend off (delay) the decent into the Greater Depression, they will trash the US dollar. If they do not do that (stop increasing the debt build up in the system) they will crash the economy. Actually, it is crashing already. They would just allow it to crash faster and not as badly as it would if they try to artificially prop it up (increase the debt in the system). The economy would also recover a lot faster than if they did not interfere. Plus, the US dollar would not be devalued as much.

If they do not create too many US dollars, they would allow the economy to crash. But it would crash faster, not crash as badly, and would repair itself a lot faster.
(more on the fast 1920 depression that nobody talks about in a later post)
Politically they are between a rock and a hard place. The history of human nature of both those in power and those who have given over their power to government says that both want to delay the day of reckoning for as long as possible no matter the cost in real terms, in degree and time. Neither group wants to "do real", "do reality", "get real" or "face reality".

"There are perhaps 5% of the population that simply can't think.
There are another 5% who can, and do.
The remaining 90% can think, but don't."
-- R. A. Heinlein, The Moon Is A Harsh Mistress

The US Treasury/Fed combo have already spent, made guarantees and promises totaling over $13 trillion in less than a year. That is practically speaking, eventually, almost doubling the US dollar supply in less than a year. Most people need serious protection from this, in the form of gold and silver, but still do not realize it.

"The best way to destroy the capitalist system is to debase the currency" - Nikolai Lenin

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." - Frederic Bastiat, 'The Law'

Boy!!!!!, is it going to get ugly as the last remnants of capitalism inside the US are dismantled/squashed.

"In a separate lecture, Hayek noted that, "I am more convinced than ever that if we ever again are going to have a decent money, it will not come from government: it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business; it imposes on the issuer a discipline to which the government has never been and cannot be subject."
- F.A. Hayek, Nobel Prize Winner, The Road to Serfdom

*****

Rogers: America Bordering On Communism

Wednesday, July 15, 2009 9:41 AM

By: Dan Weil

...

“Karl Marx must be somewhere standing up in his grave cheering.” And why is that? “America has become a socialist and maybe even communist nation in many ways,” Rogers said.

...

“They’ve been doing the wrong thing for over two years. Nothing has worked. I don’t know why they think this is going to work. This is going to make things worse, too.”

Rogers said that Japan implemented a huge stimulus in the 1990s. “It didn’t work in Japan, and Japan was a creditor nation… It’s not going to work for us, either.”

Treasury Secretary Tim Geithner, former Federal Reserve Chairman Alan Greenspan and White House economic adviser Larry Summers “used to say to the Japanese: ‘You’re doing it wrong. This approach isn’t going to work,’” Rogers said. “We’re doing exactly the same thing.”

Rogers isn’t too happy with the massive monetary easing the Fed has engineered under Chairman Ben Bernanke, either.

“Printing money has been tried many times throughout history in many countries,” he said. “It has never worked in the long term; it has never worked in the medium-term. Occasionally, it has worked in the short term.”

Still, he says, “Printing money is going to lead to serious problems down the road.”

...

Hear the whole interview: http://www.youtube.com/v/DTJQrtnGzcE&rel=0&border=1&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&feature=player_embedded&fs=1

Sunday, July 26, 2009
Trillions and Trillions of US Dollars



The Big Grin admits it:

"We're seeing numbers - trillions here and trillions there. And so I think legitimately people are saying, 'look, we're in a recession. I'm cutting back, I'm having to give up things - and yet all I see is government spending more and more money'."

It was just a few years ago that the word "trillion", never mind "trillions", was never mentioned regarding government spending. Now it is getting to be the norm. Right out of thin air is where they are coming from. Don't you wish you had a racket like a government protected private monopoly supplying US dollars; or any other government fiat token? There is one heck of a huge transfer of wealth going on.

"It is a sad fact of life that when you try to "run" a country on bread and circuses as the Imperial Romans did or on the modern equivalent which is the welfare state - it is hard to go on selling tickets to the circus when you run out of bread." - Bill Buckler, The Privateer

If you don't get the above, replace "real wealth" for "bread".

The way it used to be:




Back then, the government could not get away with the type of spending it is doing now because people would demand the underlying asset of the currency (certificate). They would redeem the currency (upon demand) for the silver or gold. It was the limited supply of the redeemable asset that kept a lid on the supply of the certificates/currency. Now a days, what is keeping a lid on the supply of dollars? Nothing much except for politics.

Bill Buckler:

"The strain is starting to tell, though. While individual Americans wilt under the economic and financial burdens now being imposed upon them and as governments at all levels below the Feds in Washington hit the spending wall and start actually CUTTING, Mr Obama proposes to spend yet more "trillions here and trillions there". Once the governments and central banks of the world STOP lending to the US - and they literally cannot afford not to - the jig is well and truly up. Washington DC can then emulate the state governments, notably the one in California - or they can make use of what they have that the states do NOT - a central bank. If they choose this route, it will be outright printing and the US Dollar will dive off a cliff. If they cut spending, it will be a horrendous depression and the entire system will crumble. Either way, the US and the rest of the world is going to need a functioning money. And that's Gold."

***

Keep in mind that according to the BIS (Bank for International Settlements, the central bank for national central banks) there are about $1.4 quadrillion worth of derivatives (until they changed the way they count derivatives to get the total down to about $800 trillion) that still have to be dealt with. A lot more "shake rattle and roll" to come.

***
A nice collection of gold and silver:



Got gold? Got silver?

Saturday, July 25, 2009
Gold, Silver and Other Atoms
Gold, silver and other atoms are protection from governments and their borrowings thus also protection from their deficits.

Many people believe that their government's increased borrowings will be paid in the future by their children and their children's children.

Not so. The increased spending by their government will be paid by them, usually in 1-2 years, in the form of higher prices. The US government is slowly being cut off from lending by the rest of the world. The rest of the world is getting fed up with lending to the biggest, baddest, record breaking debtor in the world that simply can't pay back all its debt and has no current intention to stop borrowing. The other reason is that the world economy has slowed down and therefore has little, or a lot less, savings to loan to the US federal government. No problem for governments with central banks. The US Treasury will simply borrow from the Fed. The US Treasury will create I.O.U.s out of thin air, send them over to the Fed, and the Fed will simply create US dollars out of thin air in return for the I.O.U.s and send them over to the US Treasury.

The more there is of something, the less it is worth. The more US dollars there are, the more of them people will want for the same amount of gold, milk, KWs of electricity, carrots, imported goods and services, gasoline, etc.

So, rising prices in the long run are a sign of the devaluation of the unit of account (of value) or unit of measure (of value) that something is being priced in; not a rise in the value of that something that is being bought.

Your taxes might not go up but your government has its butt covered with a central bank. You will pay higher prices instead of higher taxes. The point is: you will pay and you will not have long to wait to pay. Most people do not understand this therefore do not understand the importance of gold and silver as protection from what is going on inside the US right now. The US governments deficit has already hit the freakin 1 trillion dollar mark and will probably end the year with a deficit of around 2 trillion. This is borrowing with reckless abandon.


*****

... further explained by Howard S. Katz at The Gold Bug


"...
Now here is something that is very important to understand (and yet is understood by virtually no one). Every time the government runs a deficit (of any size at all) it creates money. This began with the origin of democracy (in England in 1689). The new democratic government wanted to spend money like water. As the old monarchical goverment had done. but unlike the old monarchical government the new democratic government was subject to the legislature, and the legislature was subject to the will of the preople. The people said "NO NEW TAXES."

So the new government invented the paper money system. The Bank of England was created (1694). It printed up paper money and lent this to the government. The paper money caused an increase in prices. Thus the people paid for the new spending via higher prices for the necessities of life when they had just refused to pay via taxes.
..."


[or in other words that Howard Katz wrote in another piece:]


"...
Many Americans understand that the Federal budget has to be balanced, but they do not realize how crucially important this is. They think that; when the Government runs a deficit, then the money needed gets borrowed from the wealthy people of the country and that it will have to be paid back by our children. But this is not true. Except for very small budget deficits democratic governments cannot borrow from their own people. An excellent example of this occurred after England became a democracy, in 1688. England immediately got into a war, and soon the King needed money to fight the war. He asked Parliament for a tax increase, but Parliament was getting pressure from constituents and voted down the taxes. (Although England at the time still had a king, he had little power; thus we consider the country a democracy.) So the King tried to borrow the money from the wealthy citizens of the country. However, his demand for money was so great that it pushed up interest rates to unacceptable levels. The King was not willing to pay those rates, and the businessmen of the country were also hurt by them.

Then a gentleman named William Patterson had an idea. He started a bank, the Bank of England. Patterson got some friends together and raised £72,000 in gold and silver. He then printed what are called bank notes (pieces of paper redeemable in gold or silver) to the tune of 16 2/3 times his £72,000, a total of £120,000, and he lent these bank notes to the King.

The King was delighted because he had gotten his money. The Parliament was delighted because they did not have to raise taxes. Patterson had seemingly created £120,000 out of nothing. However, the enemy spread nasty rumors that Patterson’s bank notes were no good. Holders of the notes rushed to the Bank of England and said, “Give me my gold/silver.” Patterson could not pay. His bank notes were indeed no good. But the Parliament appreciated Patterson because he had helped them out with the money for the King. So they passed a legal tender law. This said that the piece of paper upon which the bank note was printed was just as valuable as the gold and silver which it had promised (but now could not deliver). Essentially, the King got his money by simply printing up pieces of paper.

To cut a long story short, this same thing happened whenever any democracy needed to borrow money. An institution similar to the Bank of England (called a central bank) was set up, and it issued paper money (declared legal tender). Then the issues of so much money depreciated the value of the money, and general prices went higher. In the Civil War, for example, the U.S. issued legal tender greenbacks, and the average level of prices doubled. A similar thing happened in WWI.
..."


*****


Just the cost of the gigantic insane bureaucracy required to run the new proposed government take over of the medical industry plan could give a powerful kick start to hyperinflation, particularly since most governments have a problem organizing a dozen of donuts, and particularly since this government has a treasury that is literally broke and has been broke for some years.



See big Picture: http://goldprice.org/bob/uploaded_images/health-plan-783106.png

Most people do not know it but just the proposal of this plan screams that people need gold and silver right now. Just the proposal of this plan shows how ruthless and insane TPTB (the powers that be) are.

***

From ATLAS SHRUGGED, by Ayn Rand, page 387:

Rearden heard Bertram Scudder, outside the group, say to a girl who made some sound of indignation, "Don't let him disturb you. You know, money is the root of all evil—and he's the typical product of money."

Rearden did not think that Francisco could have heard it, but he saw Francisco turning to them with a gravely courteous smile.

...

"But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride, or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich—will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt—and of his life, as he deserves.

"Then you will see the rise of the double standard—the men who live by force, yet count on those who live by trade to create the value of their looted money—the men who are the hitch hikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law—men who use force to seize the wealth of DISARMED victims—then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: 'Account overdrawn.'

"When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, 'Who is destroying the world?' You are."
...