Solutions

Peter Schiff is right on target but government will do the opposite. Therefore, you must buy gold & silver:



View Part II here
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Europe on the brink of currency crisis meltdown

From the Telegraph:

Europe on the brink of currency crisis meltdown
The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

By Ambrose Evans-Pritchard
Last Updated: 10:52AM GMT 26 Oct 2008

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

Europe has already had its first foretaste of what this may mean. Iceland’s demise has left them nursing likely losses of $74bn (£47bn). The Germans have lost $22bn.

Stephen Jen, currency chief at Morgan Stanley, says the emerging market crash is a vastly underestimated risk. It threatens to become “the second epicentre of the global financial crisis”, this time unfolding in Europe rather than America.

Austria’s bank exposure to emerging markets is equal to 85pc of GDP – with a heavy concentration in Hungary, Ukraine, and Serbia – all now queuing up (with Belarus) for rescue packages from the International Monetary Fund.

Exposure is 50pc of GDP for Switzerland, 25pc for Sweden, 24pc for the UK, and 23pc for Spain. The US figure is just 4pc. America is the staid old lady in this drama.

Amazingly, Spanish banks alone have lent $316bn to Latin America, almost twice the lending by all US banks combined ($172bn) to what was once the US backyard. Hence the growing doubts about the health of Spain’s financial system – already under stress from its own property crash – as Argentina spirals towards another default, and Brazil’s currency, bonds and stocks all go into freefall.

Broadly speaking, the US and Japan sat out the emerging market credit boom. The lending spree has been a European play – often using dollar balance sheets, adding another ugly twist as global “deleveraging” causes the dollar to rocket. Nowhere has this been more extreme than in the ex-Soviet bloc.

The region has borrowed $1.6 trillion in dollars, euros, and Swiss francs. A few dare-devil homeowners in Hungary and Latvia took out mortgages in Japanese yen. They have just suffered a 40pc rise in their debt since July. Nobody warned them what happens when the Japanese carry trade goes into brutal reverse, as it does when the cycle turns.

The IMF’s experts drafted a report two years ago – Asia 1996 and Eastern Europe 2006 – Déjà vu all over again? – warning that the region exhibited the most dangerous excesses in the world.

Inexplicably, the text was never published, though underground copies circulated. Little was done to cool credit growth, or to halt the fatal reliance on foreign capital. Last week, the silent authors had their moment of vindication as Eastern Europe went haywire.

Hungary stunned the markets by raising rates 3pc to 11.5pc in a last-ditch attempt to defend the forint’s currency peg in the ERM.

It is just blood in the water for hedge funds sharks, eyeing a long line of currency kills. “The economy is not strong enough to take it, so you know it is unsustainable,” said Simon Derrick, currency strategist at the Bank of New York Mellon.

Romania raised its overnight lending to 900pc to stem capital flight, recalling the near-crazed gestures by Scandinavia’s central banks in the final days of the 1992 ERM crisis – political moves that turned the Nordic banking crisis into a disaster.

Russia too is in the eye of the storm, despite its energy wealth – or because of it. The cost of insuring Russian sovereign debt through credit default swaps (CDS) surged to 1,200 basis points last week, higher than Iceland’s debt before Götterdammerung struck Reykjavik.

The markets no longer believe that the spending structure of the Russian state is viable as oil threatens to plunge below $60 a barrel. The foreign debt of the oligarchs ($530bn) has surpassed the country’s foreign reserves. Some $47bn has to be repaid over the next two months.

Traders are paying close attention as contagion moves from the periphery of the eurozone into the core. They are tracking the yield spreads between Italian and German 10-year bonds, the stress barometer of monetary union.

The spreads reached a post-EMU high of 93 last week. Nobody knows where the snapping point is, but anything above 100 would be viewed as a red alarm. The market took careful note on Friday that Portugal’s biggest banks, Millenium, BPI, and Banco Espirito Santo are preparing to take up the state’s emergency credit guarantees.

Hans Redeker, currency chief at BNP Paribas, says there is an imminent danger that East Europe’s currency pegs will be smashed unless the EU authorities wake up to the full gravity of the threat, and that in turn will trigger a dangerous crisis for EMU itself.

“The system is paralysed, and it is starting to look like Black Wednesday in 1992. I’m afraid this is going to have a very deflationary effect on the economy of Western Europe. It is almost guaranteed that euroland money supply is about to implode,” he said.

A grain of comfort for British readers: UK banks have almost no exposure to the ex-Communist bloc, except in Poland – one of the less vulnerable states.

The threat to Britain lies in emerging Asia, where banks have lent $329bn, almost as much as the Americans and Japanese combined. Whether you realise it or not, your pension fund is sunk in Vietnamese bonds and loans to Indian steel magnates. Didn’t they tell you?

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Dubai runs out of gold on Diwali rush

From the Gulf News:

Dubai runs out of gold on Diwali rush

10/27/2008 11:53 PM | By Sunita Menon, Staff Reporter



Dubai: A massive rush at jewellery shops has led to a shortage of gold at some outlets, prompting some shopkeepers to overcharge customers, Gulf News has learnt.

Jewellers are seeing a huge rush of buyers as gold prices are currently at a two-year low.

Shopkeepers said the rush, a combined result of the Hindu festival of Diwali and lower prices. has resulted in a shortage of gold bars. But they denied any hoarding by outlets.

"There is enough gold available in the market and sales are at their peak over the last couple of days with the market falling drastically," jewellers said across the emirate.

Gulf News received complaints from readers who encountered jewellers charging more than the market price.

A buyer who asked not to be named said: "The price of gold prompted me to visit the Gold Souq in Sharjah. However, most retailers claimed they were sold out. Outlets where gold was available were openly overcharging. They said it was in short supply. The price of 24 carat stood at Dh88.75 but they were openly charging Dh92.50. This is clearly an unfair practice."

Shubash Golati, a buyer, said: "It is a tradition to buy gold during the four-day Indian festival of Diwali. I bought 22 carat jewellery worth Dh5,000. I wanted to buy a 100 gramme gold bar but was told that it is out of stock."

Shortage

H.R. Bafna, financial controller from Siroya Jewellers, said a physical shortage of gold is happening worldwide.

He said: "It is matter of physical delivery. It might take a day or two to replenish the stocks. But I am sure that there is no hoarding by jewellers because the market rate has dropped. This has resulted in a tremendous rush of buyers and so the gold bars are out of stock."

In reply to buyers' complaints that gold outlets are cashing in on the limited stocks and buyer rush, Bafna said: "There is a possibility, but I can't confirm this."

A counter salesman at the Joy Alukkas outlet in Bur Dubai said for the last couple of days there have been no fluctuations in gold prices.

He said: "From a customer's point of view this is an excellent time to buy."

He too denied any hoarding taking place. "If the demand for gold is high it is but obvious that some stocks will run out. Some retailers take advantage of this."

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Gun Sales Up - Got Yours?

From the Washington Post:

Gun Sales Thriving In Uncertain Times

By Fredrick Kunkle
Washington Post Staff Writer
Monday, October 27, 2008; A01

Americans have cut back on buying cars, furniture and clothes in a tough economy, but there's one consumer item that's still enjoying healthy sales: guns. Purchases of firearms and ammunition have risen 8 to 10 percent this year, according to state and federal data.

Several variables drive sales, but many dealers, buyers and experts attribute the increase in part to concerns about the economy and fears that if Sen. Barack Obama of Illinois wins the presidency, he will join with fellow Democrats in Congress to enact new gun controls. Obama has said that he believes in an individual right to bear arms but that he also supports "common-sense safety measures."

"Even though [Obama] has a lot going for him, he's not very pro-gun," said Paul Pluff, a spokesman for Massachusetts-based Smith & Wesson, which has reported higher sales. Gun enthusiasts are "going to go out and get [firearms] while they still can."

Gun purchases have also been climbing because of the worsening economy, which fuels fears of crime and civil disorder, industry sources and specialists said.

"Generally, we know that hard economic times always result in firearm sales," said James M. Purtilo of Silver Spring, who publishes the Tripwire Newsletter.

Gary Kleck, a researcher at Florida State University's College of Criminology and Criminal Justice whose work was cited in the District's recent Supreme Court gun-control case, said that although there are no scientific studies linking gun sales and economic conditions, people often buy firearms during periods of uncertainty. People often buy weapons because of concerns about personal safety or government actions to limit access to firearms, causing spikes in sales, Kleck said.

Industry experts and law enforcement officials point to several examples over the years. In 1994, there was a rush to buy guns when President Bill Clinton pushed for a ban on military-style semiautomatic rifles. Handgun sales jumped last year after the massacre at Virginia Tech as some worried about personal protection and others feared sweeping restrictions on handguns, pushing applications for concealed gun permits in Virginia alone up 60 percent. People also rushed to buy guns after the 1992 riots in Los Angeles and the breakdown of order in New Orleans after Hurricane Katrina.

Bob Leyshion, who visited a gun shop in Manassas recently, said the economic crisis and Obama's lead in the polls were on his mind.

"People are preparing for catastrophe right now," said Leyshion, 55, of Nokesville. "It's insurance. With the stock market crash and people out of work, and the illegal aliens in this area, the probability of civil disorder is very high."

Gun owners haven't been especially thrilled about the prospect of Sen. John McCain in the White House. They see the Arizona Republican as less of a threat than Obama, but they are still angry over McCain's support for certain gun-control measures in the past, such as requiring purchasers at gun shows to undergo background checks.

Gun owners said McCain's moose-hunting running mate, Alaska Gov. Sarah Palin, is far more likely to champion Second Amendment rights.

"The industry and sportsmen have not been in love with McCain, but the selection of Palin wiped that all away," said Anthony Aeschliman, a spokesman for the National Shooting Sports Foundation.

More than three dozen interviews with gun dealers and buyers in Virginia and Maryland and with experts nationwide indicated that the increase in gun sales appears to be driven predominantly by concerns about the presidential election and the economy.

Gun buyers were more likely to say they were responding to the political situation than to the economy, and all but three people said they feared that Obama would restrict gun rights. Two who indicated that they would support Obama anyway said their concerns about the economy and health care outweighed those about gun rights.

Most buyers who emphasized the economy said they thought the worsening situation could lead to an increase in crime and jeopardize their safety. A few said they were buying guns as an investment.

"Look at the political situation and the financial situation," said Fred Russell, owner of Russell's Gun Emporium in Hagerstown, Md. "It's common sense. People are scared."

Brad, 42, and Margaret Marcus, 47, who were at a Fairfax County shooting range recently with their two children for weekly target practice, said they sped up the purchase of two semiautomatic rifles that had been banned during the Clinton administration because they feared they could become illegal again if Obama wins. The couple, who run an online retailing business from their Ashburn home, said they viewed Obama's remarks about protecting the Second Amendment as campaign trail "pandering."

"I think right now people are scared Obama is going to take their rights away," said Margaret Marcus, who was carrying a Glock 19 9mm semiautomatic pistol under a blue jean jacket embroidered with "Winnie the Pooh" characters. "He's definitely anti-gun, despite what you see in the mainstream media."

Law enforcement and industry data and anecdotal reports show that guns are selling well this year. In 2008, there were 8.4 million background checks from Jan. 1 to Sept. 28, compared with 7.7 million in the same period last year, a 9 percent increase, according to the FBI's National Instant Criminal Background Check System.

The increase is also notable because it follows a heavy year for gun purchases, which industry officials and experts link to the Virginia Tech shootings in April 2007 and a burgeoning housing market crisis. NICS checks show a 20 percent increase in April 2007, compared with the previous year.

This year's jump is a continuation of a trend that began in 2006, about the time the housing bubble popped in parts of the nation, and remained steady last year as the political season began to take shape and the housing crisis grew. It is also a bigger jump than the average annual increases of about 5 percent or less typical since instant background checks began in 1998.

Federal tax data also show that quarterly excise taxes collected on sales of firearms and ammunition have increased about 10 percent this year, compared with last year, according to the National Shooting Sports Foundation.

Gunmakers see the same trend. "We're ahead of last year," said Pluff, of Smith & Wesson. "There's a few things that drive the market, and one of them is political elections."

On a recent weekend, a crowd of lookers and buyers milled around in the Virginia Arms Co. in Manassas. Some were shopping for large-capacity magazines, or clips, that attach to firearms and hold additional rounds of ammo. Those were banned during the Clinton administration and became legal again when the ban expired.

"I'm looking for gun clips because I got the funny feeling that prices are going to rise, or they're going to be banned," said Wayne Heglar, 48, who lives in Aldie and builds custom motorcycles. Heglar said he also planned to stock up on ammo.

"When the Democrats are in office, it seems like anti-gunners come out of the woodwork," Heglar said. He said he expected Obama to use tax law to restrict gun ownership. "A bullet will be a luxury," he said.

At Clark Brothers Gun Shop in Warrenton, a sign over the door says: "Experts Agree . . . Gun Control Works!" Underneath are photos of Hitler, Stalin, Fidel Castro and Libyan leader Moammar Gaddafi. There are also posters that criticize Obama's record on guns.

Steve Clark, the shop's owner, said customers have been buying weapons they fear would be restricted and that have been before, such as Colt AR-15s, semiautomatic rifles that go for $1,100.

"What I hear a lot is fear that Barack will win the election and tax everything to the point that you can't afford anything," said salesman Eugene Proko, 51.

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The "Amero" Hoax

There has been much discussion of a new currency for North America coined the "Amero" (pun intended). Jeffrey Tucker comments on it's true origin here:

http://blog.mises.org/archives/008844.asp

Alpha Bank closed, 16th failure this year

Alpha Bank closed, 16th failure this year
By John Letzing, MarketWatch
Last update: 4:46 p.m. EDT Oct. 24, 2008

SAN FRANCISCO (MarketWatch) -- Regulators said late Friday they've closed Alpharetta, Ga.-based Alpha Bank & Trust -- the 16th U.S. bank this year to succumb to the ongoing credit crisis.

The Federal Deposit Insurance Corp. said in a statement that as of the end of September, Alpha Bank had total assets of $354.1 million, and total deposits of $346.2 million. The FDIC said there are roughly $3.1 million in uninsured Alpha Bank deposits in 59 accounts that potentially exceed its deposit insurance limits.

The FDIC recently raised its insurance limit per regular account to $250,000 from $100,000.
The FDIC said it's reached an agreement with St. Cloud, Minn.-based Stearns Bank, National Association to assume Alpha Bank's insured deposits.

In addition, Stearns Bank will purchase roughly $38.9 million of Alpha Bank's assets, while the FDIC will retain the remaining assets "for later disposition," the FDIC said.

Alpha Bank's two branches will open Monday as Stearns Bank, and Alpha Bank customers will be able to access their accounts over the weekend using ATM or debit cards or by writing checks, the FDIC said.

How to Protect Against a Hyperinflationary Depression

There is a very real risk of a Hyperinflationary Depression happening in the U.S. over the next 12 months. In a Hyperinflationary Depression the dollar collapses and you will see events like those in Iceland over the last several weeks and Zimbabwe over the last couple of years.

Here are a couple of ways to protect yourself and your assets:

For Landlords:

Convert your leases to "month to month" rental agreements. This will allow you to raise rents to keep up with the hyperinflation. If it gets really bad, a week to week rental agreement might make sense. If you are locked into a long term lease when a hyperinflation hits, your money coming in could lose up to 50% or more of its' value overnight and even 99% within a matter of months.

For Renters:

Lock yourself into a 2 to 3 year lease if you can. Make sure there is no adjustment for CPI or anything like that. When hyperinflation hits, you can pay a whole month's rent with a single day's pay (assuming you still have a job).

For Homeowners/Debtors:

Make sure your debts are locked in at long-term, fixed-interest rates. Like the renters above, you could, at some point, pay off your mortgage with just a couple week's pay.

For Everyone:

Build up several month's worth of Food Storage because one of the first things you will see is a run on the grocery stores.

Also, immediately withdraw all of your funds from retirement funds, savings, banks, credit unions, CD's, IRA's, etc. Convert these funds to physical gold & silver. Keep about one month's worth of cash on hand and sell a little portion of your gold & silver only as you need it. At some point we might simply go into a barter situation and you could trade your gold/silver and canned goods for other products and services.

If anyone owes you money, consider offering them a discount if they pay you off immediately - especially if you are carrying the note on a long-term, fixed interest rate.

Consider your self-defense and security. Store up on ammunition and get familiar with your firearms (you do own a gun don't you?).

Avoid an ostentatious lifestyle. Ditch the Rolex and the Lexus for something more conservative. There could be a lot of "class angst" and you don't want to be the lightening rod for someone's anger.

Here are a couple of articles worth reading on the likelihood of a Hyperinflationary Depression:

http://www.shadowstats.com/article/292

http://tinyurl.com/6juujd

For an excellent home study course on Economics, and why the economy is the way that it is, we recommend the following:

http://www.freedomschool.org

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Philosophy of Liberty

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Financial Advice

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More Tough Times for Ed McMahon

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The Face of Evil

Scott McPherson has written an excellent piece entitled "Being Prepared" which I have re-posted here:

Being Prepared
by Scott McPherson
source: LewRockwell .com

Several months ago a good friend of mine told me that every time she goes to the supermarket she picks up an extra bag of beans and an extra bag of rice. Her husband, a Second Amendment enthusiast (to put it mildly), has the ammunition stash covered; she's making sure the family has plenty of food if things should get really bad.

Following her advice, I've started doing the same thing.

But there's another type of preparedness we should all consider.

My wife and I like music, especially live music. Last month we went to our favorite music venue in the world. Our neighbor has a band, which was opening up for another band that he highly recommended, so, funds and a babysitter being available, we had a night out.

Both bands were great. We danced and drank good beer. The low-point, however, came at the end of the evening. The headliner band, after playing one long set, dedicated their encore to "President Obama." The crowd, mostly young people from nearby University of New Hampshire, cheered enthusiastically. But it gets worse: the bass player stepped up to the microphone and, pumping his fist in the air, shouted "Obama Forever!" I'm not kidding. The crowd went nuts.

I don't remember what song they played; I'd stopped listening at that point. I did shout "Long Live the King" at the top of my voice, but I doubt anyone heard, or understood what I was talking about, or cared, if they did. I walked to the back of the room and stood by the main exit. As soon as the encore was done the lights would come up, and everyone would start filing out.

I made it a point that night to look in the face of every single person that went past.

After a few minutes my wife spotted me and came over. "What are you doing?" she asked. "I want to see what evil looks like," I responded.

This isn't partisan; I feel the same way when I see McCain's Republican Robots chanting wildly and waving their fascistic "Country First" signs at their would-be Emperor.

On Tuesday and Thursday evenings I take a small class; I'm learning to play bass guitar, and gather with several others to play in an Ensemble coached by a local musician. Just a few days ago, when we were taking a break, me and one of the other students walked to the Panera next door for a coffee. I've talked to this guy before, and know he's a Democrat; his frequent pontifications on the virtues of high taxes, government regulation, and universal healthcare was my first clue.

He also knows I'm a libertarian. We haven't talked much, but I'm sure to inject a reasoned rebuttal every time he fouls off at the mouth. As we stood in line, he said, "There's something about New Hampshire. I feel different when I'm here." (He's from Maine.) I didn't really care what he meant; I was certain I wouldn't agree with it. So I said, "Maybe it's freedom. You live in one of the highest-taxed states in the union." He then proceeded to lecture me, sneering all the while, about New Hampshire's high property taxes.

"Sure," I said. "It's too high – especially when so much of it pays for services I don't use! How's about I get back that third or so that funds the public schools?"

In a classic deflection, he said, "When I lived in Florida I got so sick of listening to old people, whose children were grown and out of school, complain about the property taxes."

I didn't hesitate. I said, "The difference is, I've never had a child in any public school. So can I have that money back now?"

More deflection: "So who's going to pave that street in front of your house," he sneered, "the Road Fairy?" I wanted to stay on topic, so rather than get into a debate on private roads, I kept him focused. "If I use a service, I ought to pay for it," I said. "But what about those public schools?"

At this point he'd had enough. Turning his back to me, he said, contemptuously, dismissively: "We're all in this together." No dictator ever said it better.

Later that evening, in class, I took a good, long look at that man. I wanted to see what evil looks like.

Be they Fascist Republicans or Marxist Democrats, one common thread runs through their thinking: there is no right or wrong. There's only a desire to impose their will on the rest of us.

By all means, stock up on beans, rice, ammunition, fuel, and gold. If the Empire is crumbling – and I believe it is – you'll need all of those things.

More important, though, is that we be mentally prepared for what is coming. When your friend, neighbor, colleague, or any passing acquaintance declares himself for evil, take him at his word.

October 22, 2008

Scott McPherson lives in Portsmouth, New Hampshire.

Copyright © 2008 LewRockwell.com

Here is another excellent essay on the violent nature of voting:
No Treason VI: The Constitution of No Authority

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John Stossel on Why the Free Market Works Better than Government

Here is a must see video series from John Stossel that shows the fallacy of government and the beauty of the Free Market. The series is entitled "Politically Incorrect Guide To Politics":



Here is:
Part 2
Part 3
Part 4
Part 5
Part 6

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Bullion Savings vs. Investments

Part of your bullion holdings should be considered your "core savings" which protect you for a rainy day. This portion you never sell unless it is a rainy day, you really need the money, and only after you have sold all of your "investment" holdings. The next portion is your "investment" holdings. These you buy and sell to capture profits.

Here is the danger though...

Don't sell your "investment" holdings in a hyper-inflationary environment just because it looks like a great "profit" on paper. You will be trading your "store of value" for dollars that continue to drop in value.

Instead, consider transferring your bullion holdings into other assets that are also "stores of value" and which appear to be undervalued. Don't leave the funds sitting in depreciating dollars for very long.

In my opinion, real estate will soon be an undervalued asset that makes sense as prices over-correct. In Southern California the lower-end homes now are starting to look good because you can actually generate a positive cash flow by renting them out.

If (and most likely when) we get into a hyper-inflationary environment make sure that you allow for frequent rent raises in your lease agreements. A month-to-month lease would be ideal. This is even better if you secure long-term, fixed-rate financing so you can pay back the debt with worth-less dollars.
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More comments on bullion prices

Here is more insight on why the Comex bullion prices no longer represent reality in the marketplace:

Why Gold Is Dropping When It Shouldn't...
By Alex Wallenwein
Oct. 13, 2008 10:54 AM

Why is gold dropping right now when anyone in their sane mind would expect it to rise? The simple answer to this question is, “because Comex-gold isn’t gold” – and because it deceptively pretends to be 'the' price-setter for real gold.

Gold is gold, paper is paper, and “Comex gold” is nothing but paper masquerading as gold while simultaneously pretending to be the price-setting medium for actual gold in the world. Now, finally, Comex-gold is in the process of being unmasked.

The real supply and demand determinants for Comex gold are not actual gold investors but fund managers. Fund managers are inextricably intertwined with the world of contract-based credit instruments. They use bet on Comex gold contracts to hedge their other (currently horrendously losing) bets with something they all, in their in-bred belief in paper markets, believe will 'go up' in value while everything else is going down.

However, these very same fund managers and their paper-bound investment psychology are the exclusive reason why Comex gold is dropping in these times when everyone (including fund managers) expects gold to rise. As already stated, though, and as they now finally realize to their own dismay, Comex-gold just isn’t gold – and that causes even further selling.

Two Losing Bets, Compounded

Fund managers' other bets are losing money fast, now, so they need to raise cash to keep up the overall value of their respective funds, so they can earn their management bonuses and avoid getting booted for lack of relative performance. Guess what they cash in on? The very same Comex paper-gold they mistakenly bought as a 'hedge', of course.

Meanwhile, real investors in real gold are enjoying their shopping spree – except that the spree turned into a treasure hunt as the shelves and display cases of gold dealers look more and more like the supermarket shelves in the old Soviet Union - bare.

This is the only 'bare-market' in real gold the world will see for a long, long time to come.

With this split, this disconnect, between Comex illusion and gold reality, one thing or the other will have to give, and it won’t be physical gold that gives.

The system built up around the reputation of Comex-gold as being a price-setting mechanism for real gold plays right into the hands of the financial establishment. The establishment depends for its (now increasingly meager) existence on the illusion that gold "isn’t living up to its promise" as a real inflation and disaster hedge. The implication, of course, is that investors might as well stay in the computer blip and paper world.

As the Comex gold price illusion drops, many retail investors are still persuaded to keep their money circulating in the paper world, and that ultimately feeds the system. Of course, by now that ‘feeding’ mechanism looks more like life-support, but try and unhook someone who is on life-support. The results are dramatic, inevitable, immediate – and final.

Yet, even on life-support, the system is deteriorating at a catastrophic pace. It would be hilarious to watch if it wasn’t for the fact that we are all depending on this phony system for our real-life support. Without credit freely circulating through the commercial paper universe, for example, grocery stores won’t have food on their shelves, there won’t be gas a the gas station, and your bank will be shut. Cash doesn’t transfer very well without the bank settlement process.

That’s the problem. full article...

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"Inflation Holocaust"

Watch the interview with famed investor Jim Rogers as he describes the coming "inflation holocaust":

http://www.cnbc.com/id/27097823

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The "people's money"

Vincent Bressler has written a nice piece that echos my sentiment regarding silver:

Viva Silver!

By: Vincent Bressler

-- Posted 16 October, 2008

We are in the middle of world altering financial events.

In this environment, high profile people with deep knowledge are saying that silver is primarily an industrial metal. What these people are actually saying is that governments, who still hold a lot of gold, but no silver, are going to re-monetize gold, add a few zeros to the price and thereby re-capitalize their failing monetary systems. The presumption is that the people will go along with a situation where they do not see the gold, do not hold the gold in their hands, but merely "trust" that the government has the gold.

Of course this is absurd. By the time this crisis is over, people will have been so thoroughly burned by their "trust" in government and in their "trust" in government's funny money, that the people will want to touch and hold their real money. It will not do to lock money away and pass around slips of paper or computer entries. Only real money in hand will do. Government will decide whether that real money lives in the black market or in the government sanctioned market. But real money it will be.

In such a situation, silver money will thrive. There are billions of recognizable quarters, dimes and half dollars that are 90% and 40% silver, just waiting for this opportunity. These coins look like the zinc coated coins in circulation today, but they are silver, and readily distinguished from the current counterfeits. Gold will be used to settle large debts and will not circulate in the same way. Silver will be the people's money.

Watch the premium on 90% and 40% US silver coins, first over and above the fraudulent COMEX price, and then, after COMEX defaults, over and above 100 ounce silver bars. That premium has been zero or negative until very recently. That premium is the "monetary" premium in silver. As this plays out, the premium on 90% and 40% silver coins will greatly exceed the premium on 100 ounce silver bars. These old quarters, dimes and half dollars will be the people's money. I don't see any other way out of this deep dark place.

Vincent Bressler

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Consequences

Please review the important comments below from Jim Sinclair's website tonight. I agree with everything he says with the exception of his comments about silver. When Gold trades at $1,650 an ounce you will need a medium of exchange for smaller transaction amounts and silver fits the bill as it has since biblical times.

A 1/10th ounce gold coin is about the size of a dime and, at $1,650 an ounce, it will represent $165. Using today's gold/silver ratio of 84:1 a 1/10th ounce of silver would then be worth $2 - much more practical for day to day cash transactions. Imagine trying to break down a $165 1/10th ounce of gold! Anything smaller than a 1/10th ounce would be too small and too easy to lose.

From Jim Sinclair:

Dear Friends,

There is one simple but extremely dangerous error being made by the man who is the world's greatest expert on the time period and economics of the Great Depression, Dr. Bernanke, Chairman of the Federal Reserve.

The Chairman is an expert on the history and consequences of that period. He is being guided by this deep knowledge, yet is totally oblivious to the consequences of the alternative actions he is taking to not make the same errors as the 30s. This is all in his attempt to prevent his president from going down in history along with other failed economic leaders.

The unprecedented creation of infinite dollars for the purpose of flooding the world's entire financial system is causing the birth an inflation of types unknown in a modern economy.

The test case for the CONSEQUENCES of present united central bank actions is the history of the Weimar Republic, but this time it is on a planetary basis.

CONSEQUENCES cannot be avoided by any means. They are economic equal and opposing forces. That is simple fact.

In an attempt to avoid what the Chairman see as consequences of incorrect central bank action in the 1929 - 1933 period, he is creating new and infinitely more dangerous, longer lasting, society changing, politically provocative new sets of unexpected economic CONSEQUENCES.

The only number that might compare to the nominal value of all OTC derivatives is a count of all the individual plankton in all the oceans of the world and then only maybe.

The world will never be the same because of the greed of these 29 year olds and the old goat bosses who sat at the long desk of the board of directors while looking the other way.



Upcoming events:

As a result of "This is it and It is NOW":

1. US exchanges will be closed. There is a chance all world exchanges will close down. Only gold and currencies which are planetary markets will continue to trade.
2. Retirement programs will not pay off.
3. Medicare and Medicaid will at best buy you a bandage or pay for 1/4 of a visit to a free clinic.
4. Social security, due to the massive upcoming inflation, will provide no security for any society.
5. Money Market Funds will not pay off.
6. A CD is a gift, but not to you.
7. Unified central bank action has a short life.
8. Central banks will soon revert to the strategy of everyone for themselves.
9. 401Ks not self directed are headed for the toilet forever.
10. Exchange Traded Funds will not return the assets upon which it is based to you.
11. Sliver will demonstrate the fact that it is more industrial a metal than precious.
12. Silver is not a currency because it is simply too HEAVY to settle debts or to be universally fungible.
13. Silver performs best when there is reasonable industrial demand and distrust of currency. When this happens rounding up the gang and their money will have a lot to do with which party is elected.
14. Credit card companies are going to have to be bailed out.
15. GE Capital is a nuclear capable entity that has the capacity to take down the good old toaster and refrigerator manufacturer - SIGMA ZERO.
16. GE Capital is a huge OTC derivative dealer but somehow I do not recall that fact being discussed.
17. Gold is the only Honest Money because it has no liability attached to it.
18. Gold coins are the best way to own gold for the average investor.
19. When you select a junior gold, I would look for the highest quality, most bashed, highest short positioned, with real assets and real people devoid of pussy management. The situation is best if it is based in another country than the country you live in while doing business in a third and trading in multiple areas. The benefit is obvious.
20. Nobody ever did or will ever trade items as insurance. That is a form of madness.
21. At $1650 I will take my leave, having been with you to the point I promised.
22. The only place you will find me then is at my place of business on the ground or the web.

There is no question that gold will trade at or above $1650 by January 14th, 2011.

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Buy Physical Gold & Silver

Just stop paying your mortgage

By Peter Schiff
October 10, 2008
Union Tribune

If you are a mortgage holder who is either struggling with crushing payments, bitter for having overpaid for your home during the bubble, or who has extravagantly refinanced when prices were rising, the government's landmark $700 billion bailout package has an important message for you: stop making your mortgage payments . . . immediately. Furthermore, if you believe that with some planning and sacrifice you may be able to meet your mortgage obligations, the government's message is clear: relax, don't bother.

While angry voters have labeled the package as a bailout for Wall Street, it is more akin to a “Get out of Jail Free” card for anyone who acted irresponsibly during the boom. Here's why.

Nobody likes foreclosure, least of all politicians. The new law clearly indicates that the government will make major efforts to reduce foreclosures through “term extensions, rate reductions and principal write-downs” of the troubled mortgages that it buys from the private sector. In other words, your new landlord will bend over backward to keep you in your home. The legislation telegraphs this by including a provision that extends until 2013 the exclusion of loan reductions from taxable income.

When a financial institution holds a mortgage, homeowners must live with the fear of foreclosure. Private institutions only have obligations to shareholders. In the case of a defaulting borrower, they will look to recover as much of their principal as possible. If foreclosure is their best option, they will take it in a heartbeat.

The government has no such obligations. Its only goal is to keep voters happy. After supposedly bailing out the fat cats on Wall Street, no politician wants to be accused of evicting struggling families. Once you understand this, all of your anxiety should melt away. Why pay your mortgage if foreclosure is off the table, and if you know that lower payments, and possibly a reduced loan amount, would result? A tarnished a credit rating is a small price to pay for such a benefit.

Unfortunately, this boon will not extend to those foolish individuals who either made large down payments or resisted the temptation of cashing out equity. The large amount of home equity built up by these suckers, I mean homeowners, means that in the case of default foreclosure remains a financially attractive option. As a result, these loans will be much less likely to be turned over to the government.

If your mortgage does become the property of Uncle Sam, the growingly popular impulse to “just walk away” should be replaced by “just stay and stop paying.” No one will throw you out. After a few months, or years, of living payment free, you will get a call from a motivated government agent eager to adjust your loan into something affordable.

To bolster your bargaining position it will help to be able to claim poverty. As a result, if you have any savings, spend it soon, before they call. Buy a bigger TV, a new wardrobe, or better yet, take a vacation. After the hardship of spending all of your refi cash, you probably deserve it. If you have any guilt just remember, Washington argues that consumer spending is the best way to stimulate the economy. Living beyond your means is a patriotic duty.

If you do get the opportunity to live for a while with no mortgage payment, don't make the tragic mistake of using your extra cash to pay down your credit cards. As the growing level of credit card defaults will soon push credit card companies into bankruptcy, we can expect a similar bailout plan for American Express and Discover Financial. When that happens, expect massive balance reductions for Americans who can demonstrate the inability to pay. The bigger your balance, the greater the benefit.

Taxpayers, however, will not be so lucky. The savvy investment strategists who see the government turning a tidy profit on its mortgage purchases have not factored in the incentives that will discourage nonpayment. The only way the government will be able to profit would be to buy the mortgages at deep discounts to actual loan values. However, if the purchase prices are too low, the plan will bankrupt the institutions it is trying to bail out. On the other hand, if it substantially overpays, which seems far more likely, it will bankrupt the nation.

In any event, as more and more borrowers succumb to the allure and safety of nonpayment, look for the number of troubled assets to swell. This will ensure that the $700 billion merely represents the first installment in what will be a multitrillion-dollar plan. Just as government policies provided the primary impetus in blowing up the housing bubble earlier in the decade, its latest attempt at market manipulation will only result in making a terrible problem far worse.

Schiff is president of Euro Pacific Capital and author of “The Little Book of Bull Moves in Bear Markets.”
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Silver News

From Barron's:

The Other Coin of the Realm
By ALLEN SYKORA

With demand building, the "poor-man's gold" looks ready to rally.

INDUSTRIAL COMMODITIES GOT GUTTED again last week, yet a bright spot remains -- in silver futures. While they've hugely sold off since hitting historic highs around midsummer, demand for coins and bars remains strong, setting up the metal for a rally through next spring.

Last week's action made silver's price even more attractive. At one point December silver was up $1.03 an ounce for the week, as global stock markets melted on credit-crisis fears. But silver then got caught up in selling across commodities in the final hour of trading, to settle Friday at $10.60, down by 72.5 cents, or 6.4% on the week.

Silver futures are off 46% from a mid-July high of $19.705 an ounce, and hit an interim low of $10.31 in September).
The Continuous Commodity Index, an updated version of the CRB which tracks the overall performance of the commodities markets, set a 14-month low Friday at 392.33, off its July high of 615.04.

Numerous haven-seekers bought gold in the past month, but many more investors can be expected to seek silver. "When gold takes off, people will look for a cheap alternative," says Gijsbert Groenewegen, managing partner of Gold Arrow Capital Management. "That's why silver is called poor-man's gold."

Coin and bar sales have been so robust -- the U.S. Mint now is rationing American Eagle coins -- that dealers say they can't meet small-investor demand.

"That's going to continue, because the economic problems the world is facing...are probably going to get worse," says Jeffrey Christian, managing director of commodities researcher CPM Group. "Sooner or later, physical trumps paper [markets] and the price of silver goes back up sharply."

Analysts look for the price of the white metal to rise to between $14.50 and $24 by the end of next year's first quarter. December gold has rallied already from a 2008 low last month of $739.80 to a Oct. 10 peak of $936.30. Silver could soon follow that trend. This is especially the case since above-ground silver inventories are less than in gold, says Jon Nadler, analyst with Kitco Bullion Dealers.

"Even though we didn't have a significant gain in the last two weeks of total chaos, it could still happen," Nadler says, noting that silver historically was viewed as currency before gold.

Silver lagged in the past month, since it relies on demand, unlike a monetary asset, says Bart Melek, BMO Capital Markets commodity strategist. Uses include jewelry, dentistry, electronics and more. "Those will be impacted by the slowdown globally in manufacturing and consumer spending," Melek adds.

When the economy turns around, it should add luster to silver by increasing industrial demand, analysts say. Furthermore, newer uses for silver are replacing lost photography demand. Silver conducts electricity at lower heat loads than other metals, and is used in laptops, cellphones and iPhones.

One sign of investment is that holdings in iShares Silver Trust (ticker: SLV), an exchange-traded fund, hit 200 million ounces for the first time in July, and were up to 220 million on Thursday. Since many types of coins and bars are hard to obtain, Christian says, some haven-seekers "buy the ETF instead."
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Options traders predict gold will touch $1,200 an ounce

Reuters
Published: October 13, 2008, 00:02

New York: Options traders are betting that gold will run towards $1,200 an ounce by year end, but it looks like they will have to sweat out some extremely choppy markets before seeing if the prediction pays off.

Buying of cheap calls has been one of the strategies for gaining exposure to gold, which has been one of the few commodities to prosper as a safe haven during the scariest stock market rout in memory.

Call options confer the right but not an obligation to buy something, in this case the December gold futures contract, at a predetermined strike price and date.

Comex December $1,200 call options currently have 24,000 contracts of open interest, by far the most popular among all the different strike prices.

The second highest were the $900 calls with 18,000 lots, followed by the $1,000 calls with 17,000 lots.

When heavy interest lines up at a particular strike price, it can indicate where the underlying market is headed, or at least where options traders think it is.

Sell-off

The hedging by options desks to make sure they can sell or buy an instrument if the option is exercised can force the underlying market in the direction of the strike, especially as it nears expiration.

A relentless sell-off that pulled the US stock market down about 20 per cent last week bolstered gold's status as a safe store in times of financial chaos, driving bullion $200 higher in just a month's time.

"Gold is seen as something real to hold onto during times of panic," said Rob Kurzatkowski, futures anal-yst of optionsXpress in Chicago.

Out-of-the-money call options, where the underlying price is well below the strike, are priced much cheaper than near the money calls. This signalled the price volatility of gold will likely stay at an elevated level in the near term, option traders said.

Kurzatkowski said that the prices of near-the-money calls have been bid up due to increased volatility, prompting many investors to buy the cheaper December $1,200 calls as a way to profit from gold's upside potential.

Single lot

A single lot of December $1,200 call option costs $9.00, compared with $60 of the on-the-money December $900 call. The difference is due to gold's high implied volatility, a statistical measure of the expected magnitude of gold futures price movement given an option price.

"The volatility would suggest that the option premiums are pretty high," said David Rinehimer, director of Citi Futures Perspective in New York. The market's actual volatility was illustrated by gold's massive $108 swing on Friday that included a $65 loss.

Kurzatkowski said he expected gold to rise to $1,000 soon should mounting fears on banks and a global recession continue to pummel the stock markets, but a sudden resurgence of the dollar could limit bullion's rally.

Jonathan Jossen, a Comex gold options floor trader, said that volatility in gold prices "exploded" on Friday, as measured by the frantic activity in the options market.

Jossen cited heavy buying of the December $1,200 calls against gold futures, and bull call spreads between $1,000 and $1,200 calls - both strategies are betting that gold prices will remain volatile.
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The Ultimate Safe Haven

Physical Gold Ownership: The ultimate safe-haven asset with no counterparty risk!

In the News:

Economic slump starts a new gold rush among investors
Norwich Bulletin

Germans Stockpiling Gold Amid Market Panic
Deutsche Welle

Gold, silver in short supply for those getting out of stocks
Dayton Daily News

Cops: Stamford Man Threatened Bank Over Financial Losses
MyFox News New York

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FDIC Friday - two more banks fail

Two banks fold, bringing total to 15 failures this year
By John Letzing, MarketWatch
Last update: 6:50 p.m. EDT Oct. 10, 2008


SAN FRANCISCO (MarketWatch) -- Northville, Mich.-based Main Street Bank and Eldred, Ill.-based Meridian Bank became the latest victims of the ongoing financial crisis on Friday, when they folded and their deposits were transferred by the Federal Deposit Insurance Corp.

The closures are the 14th and 15th bank failures so far this year.

The FDIC said in a prepared statement that Main Street Bank had $98 million in total assets and $86 million in total deposits as of Tuesday. All of Main Street's deposits were assumed by Monroe, Mich.-based Monroe Bank & Trust, the FDIC said.

The FDIC said that Meridian Bank had total assets of $39.2 million and $36.9 million in total deposits as of Sep. 25. National Bank will buy roughly $7.6 million of Meridian's assets, while the FDIC will "retain the remaining assets for later disposition," according to its statement. All of Meridian Bank's depositors, "including any with deposits in excess of the FDIC's insurance limits," will automatically become depositors of Hillsboro, Ill.-based National Bank, the FDIC said.

The FDIC said Main Street Bank's failure will cost its insurance fund between $33 million and $39 million, while Meridian's failure will cost the fund between $13 million and $14.5 million.
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Are you ready for a Bank Holiday?

Have you prepared yourself in the event a Bank Holiday is declared? Read last night's comments from Jim Sinclair:

Dear Friends,

Gold is about to VAULT UP.

I am reliably informed that the paper versus bullion gold war is lost by paper gold at a $930 close.

Gold will vault to slightly under $900 then get pushed back, but not much at all. Directly after that we are off to $1200.

A Bank Holiday is moving from possible to PROBABLE.

* Have you fully protected yourself?
* Have you distanced yourself as much as possible away from financial agents holding your assets?
* Have you gotten paper certificates for your shares or became a direct registration book entry at the transfer agent?
* Have you protected your retirement accounts the same way as your shares above but in the name of the retirement account and the trust holding them?
* Have you closed your Money Market fund accounts regardless of what assurances your bankers offer?
* Have you withdrawn from your Credit Union?
* Have you exited your corporate retirement fund?
* Do you have significant gold and related shares investments?

It is getting UGLY out there as each day an attempt to postpone a bank holiday fails. Almost every other day lately financial leaders of the world have announced new plans that were "the final answer" to the super-glued credit market. All these plans have had no effect. The Dow fell like a rock off a cliff.

This says all efforts have failed.

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Gold Prices May Spike Soon?

Gold Prices May Spike
Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.

Watch the CNBC Video

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FDIC Insurance: The Big Lie

The new bailout package has lifted the FDIC insurance amount from $100,000 per account to $250,000 per account. Do not be misled by this Confidence Game.

Let's look at the facts:

The FDIC, according the its 2007 annual report, has $53 billion dollars.
The Indy Mac Bank Failure is expected to soak up from $4 billion to $8 billion.
That leaves any where from $45 billion to $49 billion dollars to guarantee over 4 Trillion dollars worth of deposits.

Banks only keep about $1 on hand to cover every $10 worth of deposits. The rest of the money has been loaned out. This means that if more than 10 percent of the depositors attempt to withdraw their funds at any one time the banks would have to shut down because the funds would not be there. How do you like those odds of getting your money out? It's like playing a game of musical chairs with one chair and nine other people. Everything is fine while the music is playing but what happens when the music stops?

Here is what would likely happen if more than 10% of the depositors attempt to withdraw their cash at the same time:

First, the government would declare a "bank holiday" and close down the banks for a period of days. When they reopen they would likely limit the amount of money that you can pull out each week. A few short years ago this happened in Argentina where depositors could only withdraw $200 per week.

Next, they would pump liquidity into the markets (in other words they would print massive amounts of money) sparking accelerated inflation. This would cause people to dump their dollars and trade them for basic goods and gold in order to protect their purchasing power.

This rapid increase in the money supply becomes self-feeding as people dump more and more dollars for items that act as a "store of value" causing supply shortages. Prices of food and other necessities would rise rapidly. Precious Metals will also rise rapidly.

Don't wait for these things to happen before acting. Pull out the money you want to protect, build up your food storage, and buy as much gold, silver, and platinum that you can.

Sincerely,
The Bullion Insider
Trust in Gold

Financial Crisis: Rush for gold as savers queue for bullion

Bullion Insider: The story below illustrates the value of owning the "real deal" in your hands - not paper promises. Forget the ETF's - get "physical" and avoid counterparty risk. Too bad Gilligan (the one guy in the article) still doesn't get it.

Savers have been queuing in the street to buy gold bars and coins, as they search for a safe place to invest their money.

By Harry Wallop, Consumer Affairs Editor
Last Updated: 6:26PM BST 02 Oct 2008
Telegraph

Traditionally, gold has been one of the safest investments during times of financial turmoil Photo: AP

London's two leading bullion dealers, ATS Bullion and Baird & Co, have reported a rush of interest from savers, many of whom have hundreds of thousands of pounds worth of savings they want to convert into the precious metal.

At least two customers have invested the entire proceeds from selling their houses into gold, each buying up more than £500,000-worth of gold bars, according to one dealer.

Savers have been queuing in the street at ATS Bullion, whose offices are just off the Strand in London's west end.

Sandra Conway, the company's managing director, said: "We've had to turn people away. The queues have been right out of the door and it's been really hectic at times.

"Ever since Lehman Brothers went bankrupt, the phones have been going off the hook."

Traditionally, gold has been one of the safest investments during times of financial turmoil. In 1973 gold cost just $60 an ounce and hit $650 in 1981.

However, since the summer the price of gold has fallen as the dollar has strengthened – the two are linked quite closely.

But the fact that gold has not performed well in recent months has not deterred thousands of investors.

"They don't think of gold as a way of making money. They think of it as a safeguard in these turbulent times. You can move gold quickly, in a way that you can not with shares or cash in a bank account," Ms Conway said.

The average investor is buying up between £10,000 and £50,000 in bars on each visit, but it is possible to buy as little as a half sovereign coin, which costs about £70.

Some analysts say that while it may be romantic to buy bars of gold, there is a far more practical way to investing in gold. Investors can buy Exchange Traded Funds, which are like shares – they trade on the stock market – and they are directly linked to the price of gold.

Mick Gilligan, at stockbrokers Killik & Co, said that his clients had been asking about investing in gold in far greater numbers in recent weeks.

"It's lot easier to sell than the gold you keep in your sock drawer," he said.
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Stunning Recap of the Dollar Death Spiral

A picture paints a thousand words...

National Debt Clock

For an excellent overview in words read the following article:
US Dollar Doomed as Credit Crisis Tuning into a Currency Crisis

Title Wave of Inflation coming?

Our good friend Robert Wenzel has pointed out the possibility of massive inflation in our future on his blog. Read the short commentary here:

The Federal Reserve Is About To Engage In The Greatest Money Supply Inflation In Its History

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Trust in Gold

Counterparty Risk - more Lehman fallout

Physical Gold and Silver, in your possession, are some of the very few assets that have no corresponding liability or counterparty risk.

Here's what this means:

Money in your checking account or brokerage account is an asset to you but it is also a liability to the bank or brokerage that owes you the money. When someone owes you money, there is always the very real risk that they will default on their obligation to you. This is what is currently happening in the financial markets as we speak.

When you own physical gold and silver in your possession nobody can go bankrupt on you. Read that last sentence again in light of current market developments.

The current financial system is cracking and there is a very real possibility of a full-blown financial meltdown. If this happens, you will be glad you protected yourself with physical gold and silver. Read the following news story that illustrates what can happen when your counterparty defaults on their obligation to you:

Today's News Story:

Lehman Hedge-Fund Clients Left Cold as Assets Frozen

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Trust in Gold

Ignorance, apathy or wisdom?

While watching the local news show today, there was a segment where the interviewer - in Jay Leno style - interviews several people off of the street and asks them questions like "who is the Vice President of the United States?" and "who are the Vice Presidential candidates?".

Of course, most of the people interviewed didn't know and didn't seem to care.

The tone of the interviewer was that of disdain and disbelief. He, and the other news anchors, implied through their smirks that this "ignorance" and "apathy" were "what's wrong with America".

I propose an alternate view. Could it be that the average person realizes that the whole system is just a rigged game designed to distract the common man and woman to make them feel like they are part of the process? Statistics show that most Americans don't even bother voting anymore.

Like the lyrics from the rock bank Rush "if you choose not to decide you still have made a choice" I believe that the average American who does not vote is actually voting against the current system by their "non-vote". It is a vote of "no confidence".

Take a look at history and decide for yourself. From a historical perspective, governments - through their wars and fiscal mismanagement - are responsible for more murders and human tragedy than any other cause.

I propose an alternative way to vote. Do it with your dollars. Pay for the products and services that you want - and resist and withhold payment for those products and services that you do not want.

Are the majority of Americans ignorant or apathetic? I think not. Wisdom may be a better characteristic to attribute to the average American who casts his or her vote by "non-voting".

For more information on "non-voting" click here.

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Trust in Gold

Moose caught in the headlights?

Here at The Bullion Insider we favor no political party. In fact, we subscribe to the Voluntaryist philosophy and reject electoral politics, in theory and practice, as incompatible with libertarian principals. With these thoughts in mind, we look at the current political landscape with amusement - then we buy more gold.

In this Sarah Palin Interview with Katie Couric she looks a little like a "moose caught in the headlights":




Do you trust in governments or do you trust in gold?
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Wealthy investors hoard bullion

Source: Financial Times
By Javier Blas in Kyoto

Published: September 30 2008 19:00 | Last updated: September 30 2008 19:00

Investors in gold are demanding “unprecedented” amounts of bullion bars and coins and moving them into their own vaults as fears about the health of the global financial system deepen.

Industry executives and bankers at the London Bullion Market Association annual meeting said the extent of the move into physical gold was unseen and driven by the very rich.

“There is an enormous pick-up in investment demand. I have never seen a market like this in my 33-year career,” said Jeremy Charles, chairman of the LBMA. “The gold refineries cannot produce enough bars.”

The move comes as fears grow among investors over the losses at investment vehicles previously considered almost risk-free, such as money funds.

Philip Clewes-Garner, associate director of precious metals at HSBC, added that investors were not flying into gold simply because they saw it as a haven amid Wall Street’s woes. “It is a flight into gold because it is a physical asset,” he said.

“Vault staff are also doing overtime,” another banker at the LBMA meeting said, adding that investors in some countries were paying premiums of up to $25 an ounce above the London spot price to secure scarce gold bars.

Spot gold prices in London on Tuesday traded at about $900 an ounce, more than 25 per cent above the level before Lehman Brothers’ collapse. Although some traders said the rush into physical gold could boost prices, others cautioned that prices were depressing jewellery demand, capping any price gain. Industry executives said gold refineries and government mints were working at full throttle to keep up with investor demand, but acknowledged they were suffering from shortages, particularly on coins.

Johan Botha, a spokesman for the Rand Refinery in South Africa, which manufactures the Krugerrand, the world’s most popular gold coin, said the plant was now running at full capacity seven days a week. “Even so, now and then we have shortages,” he said.

The Austrian mint, which manufactures the Vienna Philharmonic, a popular gold coin in Europe, said it had extended work to the weekends to accommodate soaring demand.

Last week, the US mint suspended the sale of its American Buffalo coin after it ran out of stocks.

Copyright The Financial Times Limited 2008

"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2008.

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U.S. Default?

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