Gold

The Dow-Crash, The Dollar, Gold, and WAR!

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The June 2008 Dow Crash
and the coming first strike attack on Iran
herald the end of dollar hegemony.

BREAK-DOW!

They say that pictures speak a thousand words, so let’s start this with a picture:

Today, the Dow crashed through its eight-year support level at 11,750. There isn’t much below now to keep it from dropping all the way back down to the 7,500-range. What that will do to American investor psychology and worse, consumer confidence, and therefore spending, and therefore the economy, is only too apparent.

The gold-attack on Monday obviously didn’t take. Gold recovered the following day and powered up by $26 the very next day to close in NY at $911. On Friday, gold confirmed its breakout, which means there will be little holding it back – just like there is now very little that’s holding the Dow up.

Unsurprisingly, the US war machinery is in full swing at this time. Troop and military asset movements into the Iranian theater are nearly complete, the Israelis have flown their practice-attack of 100-plus fighter jets over the Mediterranean, and Congress has again prostrated itself before its banking-guild rulers who want total government (and therefore banking) of all economic activity.

Congress did this by passing the FISA Amendments Act of 2008 to give retroactive immunity to telcoms spying for the government, and by proposing a resolution (the already infamous H. Con. Res. 362) by which Congress demands that Bush completely blockade Iran in order to force it to stop enriching uranium. This, naturally, is a perfect setup for unleashing the long-planned bombing campaign on Iran. Congressmen know that Iran will not accede to these international demands.

End result: We will probably get another war because of all this, just like we got one back in 2002-03 when the Dow plunged into the chasm this recently broken support level has bridged for these past eight years (see chart above).

The problem is that this time, it is a bipartisan gang of US war mongers in our Congress who all appear hell-bent on forcing Bush to attack Iran with a preemptive strike, possibly even an unprovoked nuclear first strike – something that human history so far has not had to deal with.

It is also something that will cause the US to forfeit any legitimate claims of world leadership for the remainder of that history.

The War Currency

Wars are rarely fought over national security issues, as political leaders often claim. At rock bottom, they are mostly fought over economic issues.

Iraq and Iran (if Congress and the administration get their way) are the only two countries the US has ever attacked preemptively. They are also the only two oil-producing countries that ever went off the petrodollar. The alleged nuclear ambitions of a terrorist-sponsoring country cannot be the real reason for the planned attack – because terrorist-sponsor North Korea was not only allowed to develop nuclear weapons unmolested, it was even allowed to test-launch a potentially nuclear-tipped ICBM at the US without any military repercussions whatsoever.

There goes the “national security” rationalization for this planned attack.

This fact exposes the attacks for what they really are. tools of US monetary policy. The dollar has no real value internationally, save for the fact that the now militarily enforced necessity for countries to buy dollars in order to buy oil creates artificial demand.

The euro’s existence threatens all of this, now. Oil countries have a dollar-alternative in the euro, and so does the rest of the world. The euro is designed to not be quite as inflationary as the dollar is and has been. This is done by virtue of the ECB’s exclusive mandate of “price stability”, another word for inflation fighting.

Yet Another War Currency

Read moreThe Dow-Crash, The Dollar, Gold, and WAR!

Fortis Bank Predicts US Financial Market Meltdown Within Weeks

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BRUSSELS / AMSTERDAM (DFT) – Fortis expects within the next few days to weeks to complete the collapse of the U.S. financial markets.

That explains the bank insurers interventions of the series Thursday at dealing with € 8 billion.

“We are ready at the last minute. It goes in the United States much worse than thought, “said Fortis chairman Maurice Lippens, who maintains that CEO Votron to live. Fortis expects bankruptcies of 6000 U.S. banks that now lack coverage. “But Citigroup, General Motors, there begins a complete meltdown in the U.S..”

Fortis took yesterday € 1.5 billion with a share issue. At the end of last year was the Belgian-Dutch group € 13 billion of new shares for the takeover of ABN Amro, for which it paid € 24 billion. Lippens bases its concern on interviews with bankers. “Two months ago we knew not so bad that it is in America. And it will be much worse. We have a thick mattress needed for the next eighteen months to come when we can bring to ABN Amro. ”

Two weeks ago reported the U.S. investment bank and adviser to Fortis Merrill Lynch certainly € 6.2 billion in additional capital was needed. The VEB yesterday demanded clarification of Fortis: CEO Jean-Paul Votron stopped in late april Fortis maintains that after the purchase of ABN Amro does not need on the capital market. In one year € 30 billion in market capitalization destroyed. After Votron last confession kelderde the share price by 19.4%, although yesterday climbed by 4.4% to € 10.65.

The massive unrest around the bank insurers, especially with our neighbours in Belgium as a bomb broken. While the fuss arose in the Netherlands to the limited financial world, it is with our neighbours the call of the day. Not only is the bank dominates the streetscape, but by the mokerslag for the Belgian volksaandeel are also hundreds of thousands of small investors hit hard.

All Belgian newspapers opened yesterday with real rampenkoppen, where the free fall of the bank insurers was wide coverage. ‘Fortis crashes, “” Rampdag for Fortis’ and’ Fortis loses 5.3 billion, “opened three leading newspapers.

Read moreFortis Bank Predicts US Financial Market Meltdown Within Weeks

Oil Surges Above $140 to Record as Libya Warns of Output Cut

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June 26 (Bloomberg) — Crude oil jumped above $140 a barrel to a record as Libya threatened to cut output, OPEC’s president said prices may reach $170 by the summer and the dollar weakened.

Libya may curb output because of a U.S. law that allows terror victims to seize assets of foreign governments as compensation. OPEC President Chakib Khelil said oil may surge on a European interest rate rise, France 24 reported. Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday.

“The Libyan comments are helping send us higher,” said Brad Samples, commodity analyst for Summit Energy Inc. in Louisville, Kentucky. “The Libyans are responsible for only about 2 percent of production, but with supplies tight every missing barrel will have an impact.”

Crude oil for August delivery rose $5.09, or 3.8 percent, to $139.64 a barrel at 2:59 p.m. on the New York Mercantile Exchange, a record settlement price. Futures touched $140.39 today, surpassing the previous intraday record of $139.89 reached on June 16.

Read moreOil Surges Above $140 to Record as Libya Warns of Output Cut

The Gold Confiscation Of April 5, 1933

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From: President of the United States Franklin Delano Roosevelt
To: The United States Congress
Dated: 5 April, 1933
Presidential Executive Order 6102

Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled

An Act to provide relief in the existing national emergency in banking, and for other purposes~’,

in which amendatory Act Congress declared that a serious emergency exists,

I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:

Section 1. For the purpose of this regulation, the term ‘hoarding” means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term “person” means any individual, partnership, association or corporation.

Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

Read moreThe Gold Confiscation Of April 5, 1933

Government Is Sued Over Seizure of Liberty Dollars

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The federal government’s attempt to stop a group of gold-standard activists from minting an alternative to the greenback is about to face its first legal test.

A dozen people around the country filed suit in U.S. District Court in Idaho this week demanding the return of all the copper, silver, gold, and platinum coins – more than seven tons of metal in all – that the FBI and Secret Service seized in November during raids of a mint in Idaho and a strip mall storefront in Indiana.

The Justice Department had decided that the coins, many of which bear the familiar symbol of Lady Liberty and the phrase “TRUST IN GOD,” were being illegally marketed as government-sanctioned currency, according to the sworn affidavit of an FBI agent.

The creator of the coins, Bernard von NotHaus, who lives in Miami, claims that the federal government is trying to shut down production of his liberty dollars, as the coins are called, because of the competition they pose to the greenback. In recent years, his precious metal coins have outperformed the dollar, whose value has plunged in relation to gold.

The raids in November were the result of a two-year undercover investigation of Mr. Von NotHaus and how he sold liberty dollars. The Justice Department has not followed up with any criminal charges against Mr. Von NotHaus or the regional distributors of his coins.

In the suit filed in Idaho, the various plaintiffs say the federal government has no right to continue holding onto their coins any longer.

While it is common for agents to warehouse property seized during criminal investigations, such as firearms or surveillance equipment, the plaintiffs say coins of precious metal should be off-limits.

The coins “do not constitute contraband or other property subject to seizure,” the legal papers state, adding that the seizures violated the Fourth Amendment rights of the plaintiffs.

Read moreGovernment Is Sued Over Seizure of Liberty Dollars

Dollar Diving

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Dollar to fall to metals in upcoming rallies, rate hikes soon wont be able to fix economic problems, real inflation understated for years, USDX contracts plummet, why arent people fleeing from the stock market… Exchange Traded Funds are a disaster, losses from global write downs, Fed still invited to intervene in spite of failures

The dollar has once again collapsed. Get ready for the next dollar debacle and the coming rally in gold and silver which have just broken out. The elitists have lost all credibility. The would-be lords of the universe have told so many pathological lies that no one “in the know” believes anything emanating from the forked tongues of Buck-Busting, Bear-Bashing, Big-Ben Bernanke and Hanky Panky Paulson. If our Fed Head and Treasury Secretary had been characters in the Walt Disney movie entitled “Pinocchio,” their noses would have quickly grown to lengths that could have been wrapped around the earth’s equator several times. God would have had to reverse the earth’s rotation to extricate them.

Wall Street tells us the odds favor two quarter percent rate hikes to the Fed funds rate by the end of the year. We ask whether that would be before or after the economy collapses? If before, the Fed’s rate hikes will destroy what is left of our economy, and the dollar will collapse, thereby erasing any benefits from the rate hikes. If after, you will see rate cuts instead of rate hikes as the Fed attempts to save the fraudsters on Wall Street who are not even remotely close to recovering from the credit-crunch despite what the elitists might tell you to the contrary. We ask who the morons are that make up these odds, and what planet they come from. They give aliens a bad name. These index predictions are just another form of jaw-boning and disinformation.

As soon as the economy starts its final descent into Davy Jones’ Locker, which is likely to occur in the very near future, the Fed and the US Treasury will unceremoniously toss the so-called “strong dollar” policy into the nearest financial dumpster in order to save the economy and the fraudsters. Accompanying the “strong dollar” policy on its way to the dumpster will be the next round of derivative toxic waste that is on its way courtesy of the upcoming surge in fallout from tanking real estate markets in a process that will see the Fed blow what remains of its general collateral in exchange for such waste. Once the Fed’s general collateral is exhausted, we will be ushered into a new hyperinflationary era characterized by direct monetization of US treasuries to fund our deficits and to absorb more toxic waste as it continues to pour down on elitist financial institutions like Niagara Falls.

A few measly quarter percent cuts will do absolutely nothing to slow the acceleration of inflation, especially if the Fed keeps the M3 at current levels. Only a double-digit Fed funds rate and greatly reduced M3 could have any eventual and meaningful impact on the inflation that is built into the system for at minimum the next year and one half at levels in the area of 15% to 18%, and even then the impact will not be felt until the current baked-in inflation has run its course. Direct monetization of treasuries to replenish Fed collateral and to absorb our growing deficits will put inflation beyond the point of no return, as will the breaking of OPEC dollar pegs.

As you can see, there is no way that any of the proposed diminutive rate hikes will have a positive impact on the economy, on the dollar or on the balance sheets of the fraudsters. Therefore, there will not be any rate hikes. Any increase in the Fed funds rate would be accompanied by an economic catastrophe of epic proportions that would occur as a direct result of the raising of that rate. Any rate hike would take a year to a year and a half to have an impact on inflation. By the time the anticipated Fed rate hikes could have any kind of impact whatsoever, the economy will already be in a state of rampant hyperinflation, and would be well on its way to depression, far too late to save the dollar or the economy. Ergo, the new elitist motto will soon become: “Damn the inflation, full greed ahead!”

Read moreDollar Diving

Gold May Rise to $5,000 on Inflation, Schroder Says

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Related articles:
– Gold
– Weimar Inflation in America
– Silver Rationing
– Don’t Be Afraid Buy Gold
– The Only “Win-Win” Investment I know of …

June 19 (Bloomberg) — Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Schroder Investment Management Ltd., which oversees $277 billion of assets globally.

“You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value,” said Christopher Wyke, London-based emerging market debt and commodities product manager at Schroder, which oversees about $10 billion of commodity assets.

Investors are turning to gold for protection as two-thirds of the world’s population cope with inflation rates that are climbing to more than 10 percent, Wyke said. Cash and inflation- linked bonds are poor substitutes as low interest rates, coupled with surging inflation, erode the real value of assets, he said.

Read moreGold May Rise to $5,000 on Inflation, Schroder Says

RBS issues global stock and credit crash alert

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The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

(Got Gold and Silver? More under “Solution” – The Infinite Unknown)

A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

  • RBS alert: Quotes from the report
  • Fund managers react to RBS alert
  • Support for the euro is in doubt

    • RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the “Crossover” index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

    “I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

    “Cash is the key safe haven. (No way!!! Yet it is still good to have some cash. – The Infinite Unknown)
    This is about not losing your money, and not losing your job,” said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

    RBS expects Wall Street to rally a little further into early July before short-lived momentum from America’s fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

    “Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” he said.

    US Federal Reserve and the European Central Bank both face a Hobson’s choice as workers start to lose their jobs in earnest and lenders cut off credit.

    The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. “The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation,” he said.

  • Morgan Stanley warns of catastrophe
  • More comment and analysis from the Telegraph

    • “The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets,” he said.

    Read moreRBS issues global stock and credit crash alert

    Total Notional Value Of Derivatives Outstanding Surpasses One Quadrillion

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    The notional value of all outstanding derivatives now totals approximately $1.144 QUADRILLION.

    This appears to be Bank of International Settlement Spin to announce the largest gain in derivatives outstanding since they started to report. As of the last report it appeared that both listed and OTC derivatives was under $600 trillion. Now listed credit derivatives alone stood at $548 Trillion. The OTC derivatives are shown as $596 trillion notional value, as of December 2007. One can only imagine what number they are at now.

    Well we hit a QUADRILLION. We have more than $1000 trillion dollars in all derivatives outstanding. That is simply NUTS because notional value becomes real value when either counterparty to the OTC derivative goes bankrupt. $548 trillion plus $596 trillion means $1.144 quadrillion.

    It would be an interesting piece of research to see what the breakdown is of listed derivatives according to exchange to see if it adds up to the reported number. Spin is now everywhere.

    This means that no OTC derivative house can be allowed to go broke. This means that whatever funds are required to rescue failing international investment banks, banks and financial entities will be provided.

    Keep this economic law in mind. Monetary inflation proceeds price inflation and is its primary cause in economic history from Rome to present.

    Nothing can stop the juggernaut of price inflation heading towards every nation like a runaway freight train down a mountain.

    Gold is going to at least $1650. I am probably way too low with that estimate.

    The US dollar will trade down to at least .5200 as measured by the USDX.

    Gold is the easiest market to trade for the aggressive investor. Sell 1/3 when the market looks like a Rhino Horn which you will see with your French Curves at the point of the rollover.

    Buy 1/3 back when the price of gold looks like a fishing line hanging off a fishing rod. Your maximum power down trend line will give you this.

    Read moreTotal Notional Value Of Derivatives Outstanding Surpasses One Quadrillion

    WA gas explosion fallout serious for iron ore, gold and base metals suppliers

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    The Varanus Island gas explosion and subsequent loss of around 30 percent of the state’s gas supplies is creating serious problems for the state’s massive mining industry and will affect productivity and supply for months, rather than weeks.

    “Western Australia supplies about a third of the world’s iron ore, 20 percent of the gold and tens of thousands of tonnes of copper, nickel, zinc, lead and other industrial staples.”
    ___________________________________________________________________________________________

    PERTH (Reuters) – Western Australian miners, which supply the world with metals and iron ore, fear sharp falls in productivity and lay-offs after a gas-plant explosion robbed them of power, industry and local government officials said on Sunday.

    “This is very serious,” Reg Howard Smith, head of the state’s Chamber of Minerals and Energy, said after crisis talks with some of the world’s biggest resources firms, including BHP Billiton BHP..AX(BLT.L), Rio Tinto (RIO.AX)(RIO.L) and BP (BP.L).

    “We’re seeing some stand-downs of staff occurring and we’re still deciding what needs to be done,” Smith told Reuters.

    Western Australia lost about a third of its energy supplies last week when an explosion crippled a gas-handling plant on the tiny island of Varanus, about 100 km (62 miles) off Australia’s northwest coast. The Varanus plant, close to offshore gas fields, is operated by a unit of U.S.-based Apache Corp (APA.N).

    Tim Wall, managing director of Apache’s Australian unit, said on Sunday he was sticking with an earlier estimate of “months, not weeks” before damage to the plant and associated gas pipelines was repaired and operations could restart.

    Western Australia’s state government is trying to import more diesel from Asia to offset the drop in gas supplies, state premier Alan Carpenter said, noting that BP, which operates a diesel refinery in the state, was already at maximum production.

    But getting diesel to remote, outback mines could take time.

    “There is no wand to make this crisis disappear,” Carpenter told reporters on Sunday. “It’s one thing to get the diesel here on ships and another to where it’s needed by truck.”

    Western Australia supplies about a third of the world’s iron ore, 20 percent of the gold and tens of thousands of tonnes of copper, nickel, zinc, lead and other industrial staples.

    Read moreWA gas explosion fallout serious for iron ore, gold and base metals suppliers

    Gold

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    Realated articles (Gold, Silver, M3):
    – Buying Opportunity For Gold And Silver
    – Fed’s Direct Loans to Banks Climb to Record Level
    – How Low Can The Dollar Go? Zero Value

    What is the biggest mistake you can make with your money in 2008? Ignoring gold, silver and their related inflation hedges can lose you more money than all the other mistakes you can make put together, except for playing the roulette table in Vegas.

    Once in a lifetime, there comes a chance to turn a relatively small amount of money into a fortune, and this is one of them. We are in the early stages of a massive multi-year bull market in the metals. The supply-demand situation beggars belief. This is as close to riskless as anything I have ever recommended in 31 years of publishing The Ruff Times. You can put a list of mining stocks on the wall, throw a dart at them, invest in the holes and make a lot of money, in effect creating your personal mutual fund. When the wind blows, even the turkeys fly. Of course you can make lot more money picking the sheep from the goats, and that is what the Ruff Times is for, separating the biggest winners from the holes in the ground surrounded by liars.

    A word of caution: all my words of advice are for the long term only. In the short term, gold and silver can do anything, go anywhere. In the last bull market of the ‘70s-‘80s gold went from $120 to $850, but there were discouraging retreats of as much as 30% several times along the way. It was attacked by speculators, central banks, and even Uncle Sam through Jimmy Carter. But gold and silver prevailed, even though chickens bailed out from time to time. I was new to the advice business back then, and even I got scared out once for a little while.

    Actually, this is “déjà vu all over again,” as said the master of malapropism, Yogi Berra. It’s an eerie repeat of the 1970s, only more so. All the same factors that drove that historic 1970s bull market are back, only a lot more so; an explosion of money creation by the Federal Reserve that is so great they have even stopped publishing a monthly report on M-3, the most trustworthy measure of changes in the money supply. I guess they no longer know, or don’t want you to know, the embarrassing numbers.

    Actually, it’s worse than that. Did you know that the phrase “printing press” no longer means much when it comes to money? Actually, less than five percent of the money is actually minted, printed or coined! The rest of it is in cyberspace, created at the Federal Reserve, or by commercial banks. The amount is beyond comprehension. This process is called “monetary inflation,” and that is what ultimately drives price inflation and drives gold and silver. The more money is created, the higher go the precious metals.

    Read moreGold

    Has the Government Looted the Gold at Fort Knox?

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    A group called the Gold Anti-Trust Action Committee claims that the U.S. government has defrauded the American people out of the nation’s wealth. Specifically, the group claims that the U.S. has secretly sold, leased or otherwise frittered away half of its entire gold reserves to pay for past military adventures abroad and other ill-conceived actions. Furthermore, the group claims that the government has intentionally covered up this loss of gold reserves through accounting fraud.

    Are they right?

    Well, as described by Darryl Robert Schoon !!! in his book “How to Survive the Crisis and Prosper in the Process”:

    Read moreHas the Government Looted the Gold at Fort Knox?

    Silver Rationing

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    The 2008 Silver Eagle dollar coins have become so wildly popular, the U.S Mint stopped taking orders for the bullion coins in March, and late last month began limiting how many coins the exclusive group of 13 authorized buyers globally can purchase.

    Silver’s growing popularity as an investment vehicle has stymied the U.S. Mint, which stopped taking orders for its American Eagle Silver Bullion coin, and rationed sales for the remainder of this year.

    On Thursday, Michael DiRienzo, Executive Director of the Silver Institute, asked Edmund Moy, Director of the United States Mint, to meet with institute members to discuss immediate remedies to the shortage.

    The American Eagle Silver Bullion coin is the country’s only official investment-grade silver bullion coin with weight, content and purity guaranteed by the U.S. Government. With their unique government backing, the Silver Eagle dollar coin can be sold for cash at most coin and precious metals dealers globally. They are also considered legal tender and sell at silver’s prevailing marketing price, plus a small premium to cover coinage and distribution costs.

    The U.S. Mint advertised the coin as a building block for precious metals investment. “They increase your portfolio’s diversity by bringing balance because their value often moves independently of stocks and bonds. They offer liquidity, meaning they’re easy to buy and sell. And in this fast-paced world of electronic investing, Silver Eagles are tangible investments whose beauty and artistry you can literally enjoy in the palm of your hand.”

    The Wall Street Journal recently reported that the coins are made at an armored facility in West Point, New York, next to the military academy. “Dealers said they heard that the mint had run out of planchets-round metal disks ready to be struck into coins. …The companies producing the blanks are also busy, limiting the mint’s ability to increase production. The mint won’t comment on the planchets.”

    Jim Hausman of the Gold Center in Springfield, Illinois, one of eight U.S. companies authorized to buy silver eagles, told the WSJ that the rationing will halve his expected annual sales of 4 million eagles.

    As of May of this year, the U.S. Mint reports that 7,252,500 of the silver bullion coins had been sold, which had promised to well exceed the total of 9,887,000 coins sold last year. (!!!)

    Read moreSilver Rationing

    Don’t Be Afraid Buy Gold

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    As the price of gold has taken some lumps since it crashed into the symbolically significant $1,000 per ounce mark back in March, those on Wall Street who had consistently underplayed its potential on its way up are now assuring its continued retreat. According to these gold market spectators, prices have risen solely as a result of financial panic, and now that the fear has apparently subsided, gold’s gains will evaporate as well.

    I have been buying gold and gold stocks for myself and my clients since 1999 and not once did I buy out of fear. In fact, from my perspective the only fear I’ve observed in the gold market is from those who have been too afraid to buy.

    While fear may from time to time play a role in creating price spikes in gold, the underlying bull market has been driven by solid fundamentals. Those who have been too afraid to buy simply do not understand the underlying dynamics and have instead decided that the market is irrational. As a result, gold continues to climb the classic wall of worry as any dip in its otherwise upward trajectory causes the speculative investors to jump ship.

    Read moreDon’t Be Afraid Buy Gold

    Weimar Inflation in America

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    “Instead, take those steps necessary to protect yourself and your family to prepare for the dollar’s inflationary collapse. Buy gold. Buy silver. Avoid the US dollar.” – James Turk
    ___________________________________________________________________________________________

    Probably almost everyone is familiar with the hyperinflationary episode that engulfed Germany after the First World War. That nation’s economy was crippled by monetary problems that resulted in dreadful personal hardships, even though up to that time Germany had achieved one of the highest living standards in the world.

    The newly formed German government, named for the city where their constitution was drafted after the Kaiser’s abdication in 1918, kept pumping up the money supply. The process started relatively slowly, but quickly the pace of money creation accelerated.

    The Weimar government was paying its bills on credit – just like Zimbabwe is now doing. The Weimar government was issuing currency in exchange for valuable goods and services that it was receiving, and the vendors of those goods and services accepted the newly issued currency in the expectation that they would be able to exchange it for goods and services of like value. However, they soon realized that they were deluding themselves. Prices were rising rapidly, with the consequence that a flight from the currency into commodities and other tangibles began.

    There was no discipline on the creation of new currency, with the result that it was being issued to excess. Within a few short years, the German government eventually destroyed the Reichsmark, the currency it had been issuing, making the words Weimar Germany synonymous with hyperinflation, economic collapse, deprivation and personal hardship. All the wealth saved in Reichsmarks was wiped out.

    For example, in his classic book, “Paper Money”, penned three decades ago under the pen name of Adam Smith, George J.W. Goodman recounts the story of Walter Levy, an internationally known German-born oil consultant in New York. Levy told him: “My father was a lawyer, and he had taken out an insurance policy in 1903. Every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”

    The following photo is from an insightful book by Bernd Widdig entitled “Culture and Inflation in Weimar Germany”. This photo shows one way in which people coped with rising prices.

    As the inflation worsened, people sold whatever they could to survive. Widdig succinctly describes it in the caption to the above photo as follows: “The impoverished middle class has to sell its cherished possessions.”He should have correctly stated though that it was the “newly impoverished middle class”. They only became destitute after the inflation had destroyed their savings and ability to maintain their standard of living.

    Sadly, the problems of Weimar Germany are now appearing in the US. To survive the impact of rising prices, Americans today – like Germans did eight decades ago – are selling cherished possessions, as explained in a recent story by Associated Press entitled “Americans unload prized belongings to make ends meet”. The full article is available at the following link: http://abcnews.go.com/Business/Economy/story?id=4750846&page=1

    Read moreWeimar Inflation in America

    Congress Is Clueless On The Oil Issue

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    Related video: The Energy Non-Crisis by Lindsay Williams

    The U.S. Congress continues to show an incredible amount of ignorance on the oil issue. This week, the U.S. Senate held a hearing on the high price of oil and called out a group of oil company executives to testify. In addition, the U.S. House of Representatives approved a bill to sue OPEC over the high oil price. All of this grandstanding by our so called elected officials is going to do nothing to resolve the high oil price. This is a case of the U.S. Congress misdirecting the blame of the high oil price on OPEC and the major oil companies when they are really only minor players in this game. Threatening to sue OPEC is an incredibly stupid move because that could very well have the reverse effect and cause OPEC to respond to this threat by reducing the amount of oil they decide to pump. The two major reasons for the high oil price involve the Federal Reserve devaluing the U.S. Dollar through their monetary policies as well as the U.S. occupation of Iraq and Afghanistan. On top of this, it is clear that the Bush administration is looking for any excuse possible to bomb Iran. Israeli Prime Minister Ehud Olmert has even stated that a naval blockade of Iran is an option that should be put out on the table. With the devaluation of the U.S. Dollar and a potential expansion of war in an area where a tremendous amount of oil is drilled, it is no wonder why the oil price has skyrocketed as high as $135 a barrel. This makes the actions of the U.S. Congress entirely insane and intellectually bankrupt. Expect oil prices in the long term to move much higher.

    Since oil is priced in U.S. Dollar denominated terms and the monetary unit of the U.S. Dollar continues to be devalued by the Federal Reserve’s ability to create as many U.S. Dollars as they like, it isn’t a real mystery as to why the oil price is so high. Instead of suing OPEC, the U.S. House of Representatives should be suing the Federal Reserve for fraud. The Coin Act of 1792 states that U.S. Mint employees who are caught debasing the nation’s coinage would be subject to the penalty of death. The Federal Reserve is engaging in the intentional debasement of the nation’s currency which is fundamentally no different and in fact worse than employees of the U.S. Mint debasing the nation’s coinage. Instead of debasing the physical coinage, bankers can simply type digits into a computer to devalue the nation’s currency. Maybe the death penalty should be explored for some of the central bankers that have engaged in these practices.

    The U.S. Congress is also helping to contribute to the high oil price with their ridiculous policies. They have funded the illegal and unconstitutional occupation of Iraq and Afghanistan since 2003. The U.S. Senate just passed another war funding bill which will give the executive branch another $165 Billion to continue military operations in Iraq and Afghanistan. By continuing the military occupation of these countries it makes an attack on Iran all the more likely and contributes to greater uncertainty in the oil producing region.

    General David Patreaus the current commander in Iraq is on the path to being confirmed as the new CENTCOM commander which means he will be in charge of all U.S. military operations in the Middle East. Assuming he gets confirmed, the chances of a strike on Iran will be all the more likely. Admiral William Fallon the former CENTCOM commander resigned from the position due to the perception that he was refusing to play ball with the Bush administration’s agenda on Iran.

    Read moreCongress Is Clueless On The Oil Issue

    How to Profit from the Coming Economic Collapse

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    Peter Schiff is the author of the book: Crash Proof: How to Profit From the Coming Economic Collapse

    Source: You Tube

    (Preparedness is everything! Have a closer look at the World Situation and the Solution.
    – The Infinite Unknown)

    War Abroad, Poverty at Home

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    The US Senate has voted $165 billion to fund Bush’s wars of aggression against Afghanistan and Iraq through next spring.

    As the US is broke and deep in debt, every one of the $165 billion dollars will have to be borrowed. American consumers are also broke and deep in debt. Their zero saving rate means every one of the $165 billion dollars will have to be borrowed from foreigners.

    The “world’s only superpower” is so broke it can’t even finance its own wars.

    Each additional dollar that the irresponsible Bush Regime has to solicit from foreigners puts more downward pressure on the dollar’s value. During the eight wasted and extravagant years of the Bush Regime, the once mighty US dollar has lost about 60% of its value against the euro.

    The dollar has lost even more of its value against gold and oil.

    Before Bush began his wars of aggression, oil was $25 a barrel. Today it is $130 a barrel. Some of this rise may result from run-away speculation in the futures market. However, the main cause is the eroding value of the dollar. Oil is real, and unlike paper dollars is limited in supply. With US massive trade and budget deficits, the outpouring of dollar obligations mounts, thus driving down the value of the dollar.

    Each time the dollar price of oil rises, the US trade deficit rises, requiring more foreign financing of US energy use. Bush has managed to drive the US oil import bill up from $106 billion in 2006 to approximately $500 billion 18 months later–every dollar of which has to be financed by foreigners.

    Read moreWar Abroad, Poverty at Home

    The Only “Win-Win” Investment I know of …

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    Gold’s precipitous tumble from its record-high of $1,038 set on March 17 down to the recent $850 level has lots of people asking, “Is gold’s bull market over?”

    My answer: No! Not by a long shot!

    I know you’ve been getting an earful from the talking-head ninnies about how the long-running commodity bull is getting short of breath and is about to be put out to pasture. Ignore them.

    Other than a pullback here and there, gold — and virtually all natural resource prices — are headed much higher in the months and years ahead.

    My next target for gold: $1,250 an ounce. Then, its inflation-adjusted high of at least $2,270.

    Those numbers should come as no surprise. I’ve mentioned them several times before. Why I am I so bullish?

    I’m not going to get into all the arguments that clearly spell higher prices for gold. You’ve heard them from me time-and-time again.

    Instead, I’m going to point out something you’ve probably never thought about when it comes to gold. Heck, even the smartest guys on Wall Street haven’t figured it out yet …

    Gold Is In A “Win-Win” Situation!

    Consider the following two possible macroeconomic background scenarios for gold:

    Read moreThe Only “Win-Win” Investment I know of …

    Buying Opportunity For Gold And Silver

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    The international banking cartel during the past month has managed to push the price of gold down to the $850 – $880 level and silver down to the $16 – $17 level. The manipulation of the gold and silver market is incredibly obvious just by looking at daily charts of the gold and silver prices. Quite frequently you’ll see a nose dive in the price of both gold and silver without any sort of rationale behind the price swing. Also consider the fact that the price of oil is around $120 barrel which means that gold is incredibly undervalued relative to the oil price.

    Even a 10 to 1 gold to oil ratio is low from a historical perspective and as we speak, gold is well under that ratio. Gold at the $850 – $880 level is a tremendous buying opportunity. The corporate controlled media is telling us that the commodity bull is over and the U.S. Dollar is stabilizing. Therefore it is prudent to do the opposite of what they are advocating. Anyone saying that the U.S. Dollar has stabilized is living in fantasy land. The Federal Reserve recently cut interest rates another 25 basis points and they continue talking about creating more money out of thin air to bailout banks that are on the brink of collapse. The U.S. Dollar is heading further down the toilet unless there is a dramatic reversal in monetary policy and that doesn’t look as if it will happen anytime soon.

    (Buying Gold and Silver may save your life, when the economy crashes. But you can’t eat it.
    Thats why you have to store lots of food and water as well. – The Infinite Unknown)

    Read moreBuying Opportunity For Gold And Silver

    IMF sells some gold reserves to improve finances

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    The International Monetary Fund has approved the sale of 403.3 tonnes of IMF gold reserves, in a financial overhaul which is hoped to boost its coffers.

    Governors from 176 of the Fund’s 185 member countries cast votes to sell the gold, in order to create an endowment to helps provide a steadier source of income to the international organisation.

    The new income and expenditure framework is expected to cover a 400 million-dollar shortfall projected in the medium term.

    An IMF austerity program, announced April 7th, also calls for a 13.5 percent cutback in IMF spending over the next three years.

    The IMF was created over 60 years ago with a mission to foster global financial stability.

    Australian News.Net
    Wednesday 7th May, 2008

    Source: Australian News

    Former workers accuse employees of improper activity, including the stealing of weapons, artwork and gold

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    WASHINGTON — KBR employees working in Iraq stole weapons, artwork and even gold to make spurs for cowboy boots, two former company workers told Senate Democrats on Monday.

    Appearing before a Democrats-only panel looking into allegations of contracting abuses in Iraq, the witnesses accused their former co-workers of widespread improper activity.


    Linda Warren, former employee of KBR, shows the flag she brought back from Iraq during testimony on Capitol Hill on Monday. Warren said many of her colleagues stole numerous items while doing reconstruction work in Iraq.
    SUSAN WALSH    : ASSOCIATED PRESS

    Read moreFormer workers accuse employees of improper activity, including the stealing of weapons, artwork and gold

    Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin

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    April 28 (Bloomberg) — As farmers confront mounting costs and riots erupt from Haiti to Egypt over food, Garry Niemeyer is paying the price for Wall Street’s speculation in grain markets.

    Commodity-index funds control a record 4.51 billion bushels of corn, wheat and soybeans through Chicago Board of Trade futures, equal to half the amount held in U.S. silos on March 1. The holdings jumped 29 percent in the past year as investors bought grain contracts seeking better returns than stocks or bonds. The buying sent crop prices and volatility to records and boosted the cost for growers and processors to manage risk.

    Niemeyer, who farms 2,200 acres in Auburn, Illinois, won’t use futures to protect the value of the crop he will harvest in October. With corn at $5.9075 a bushel, up from $3.88 last year, he says the contracts are too costly and risky. Investors want corn so much that last month they paid 55 cents a bushel more than grain handlers, the biggest premium since 1999.

    Read moreWall Street Grain Hoarding Brings Farmers, Consumers Near Ruin

    Hyperinflationary Depression

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    Until now, I have given equal credence to two possible scenarios:

    1. We could have several years of inflation as we do now, and the powers-that-be would have a sudden rush of brains to the head, like Paul Volcker and Ronald Reagan did in 1980, and stop the “printing press,” ending inflation and the gold and silver bull market, for at least a few years; or
    2. It is too late to stop it. The political forces and the Unfunded Liabilities would prevent the powers-that-be from ending the money-printing process, and in fact, would grossly accelerate it. This would result in a hyper inflation (400 percent inflation or more), and the eventual total destruction of the dollar. Suddenly America would find its money totally useless. Store shelves would be empty, gas would go through the stratosphere, and Americans would suffer through the greatest threat since the Great Depression of the ’30s.

    So what caused me to settle on number two?

    I received John Williams’ recent newsletter “Shadow Government Statistics,” www.shadowstats.com in which he describes his case for a hyper-inflationary depression. It was most persuasive. It certainly persuaded me, and is consistent with what I’ve said for years.

    I spent the ’70s fending off the media label of “Prophet of Doom,” arguing that I expected much less than doom. It turned out to be so.

    With my new book in circulation, I’ll face the same accusations, and this time they are right. The financial world we know and love is facing genuine doom. You could lose the value of all your assets in the stock market. You could find yourself unable to buy essential commodities, when you want them, and gold and silver will be valued, not in the tens or hundreds of dollars per ounce, but in the thousands!

    John Williams’ Shadow Government Statistics newsletter is most unusual. John is a consulting economist with all of the academic credentials. Most of his clients are bank officers and high-ranking corporate officers. He has rearranged the government data according to historical analysis.

    For example, the government says inflation is under four percent by the simple expedient of eliminating energy and food from their calculations. John says inflation is over 11 percent, including energy and food.

    His academic credentials are way ahead of mine, but at least I know enough to understand his work. It’s my job to try to reduce such things to terms my subscribers can grasp.

    Here are some brief paragraphs from this 25-page report.

    “With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets.”

    Read moreHyperinflationary Depression