A must see for All Newbies & lurkers
 

Hi All

Inspired by Twisted's post after seeing the thread Required reading for kids. So for all the the kids large (adults) & small :D here is what nobody ever told you but wish they did.


So pass this around to all your friends & you will see why all the good folk here are nuts about Silver & Gold & for good reason. They've changed my life :wink: how about changing the lives of the ones you love & it cost you nothing? :D

Crickey I was ok until I came here now I'm addicted, maybe there should be a health warning "Enter at your own risk, there is no going back!" :signs1:

:bull-smile:


P.S. I'm now looking for the book in the UK cheap. EDIT I got the book now. ;)

Re: A must see for All Newbies & lurkers
 

Wow! Thank you so much for posting the link. I watched the first ten minutes and then downloaded it for viewing later and e-mailing it to friends and family who haven't got a clue. Please feel free to post more links. Thanks! :clap2:

Re: A must see for All Newbies & lurkers
 

Hi Trailrider You are very welcome. I only found the video last night, mind blowing isn't it? You will learn something new here every day & likely become a Precious Metal junkie, think I�m kidding I�ll give you a month at the outside. :D

These should keep you busy for a while. People here are great & only willing to help, most don�t bite & those that do only nibble. :laugh:

Just read & read you will find everything you are looking for already posted. Now you'll will be regretting asking for more videos. :wink:




http://goldsilver.com/video_categori...14d3383be28015


http://video.google.ca/videosearch?q...deo.google.com

Re: A must see for All Newbies & lurkers
 

That G. Edward Griffin vid is fantastic. I know next to nothing about economics, so this nicely fills in some information, with added extras!! Cheers!

Re: A must see for All Newbies & lurkers
 

Glad you like it. :wink: Funny thing is since coming here I seem to have gone backwards from buying physical silver & gold. As I had no knowledge & was completely unaware of its significance. On this Journey you soon realise how economics & politics which I had no interest in, it bored me to death are linked with the precious metals & it is pretty scary the can of worms it opens.

I soon realised when people are so entrenched in using paper money because they know of nothing else as I guess most people are. Then I would have to find some material to convince my family & friends I hadn't lost the plot converting ALL my paper money to gold & silver coins & try to convert them for their own safety.

Probably most people think it's a scam of some kind, because they don't understand. When you think the best place to put your money is in a tax free savings account (ISA) in the UK, until you realise inflation (& what it really is & how it is created) is running at a really much higher rate than you are lead to believe then the penny drops.

Although it doesn't help when I bought near the top & prices have declined since trying to convince them but I have no fears as I understand from finding material that it's just a blip & nothing to fear just an opportunity to buy more when spare finds are available & remember it is never too late to start. I have managed to get some people to open their eyes to see the why's & wherefore's & video's seem to be easier for them to absorb than suggesting to read something. To make it more interesting I've shown them the pretty bullion available just to get them interested, sourced places to buy from & helped them choose & even bought for them.

Sounds drastic & I guess it is but drastic times call for drastic measures when you've had your eyes opened to the real picture & the people you care about are wobbling in what you are saying because it sounds serious, then you arm yourself with as much information as you can find to pass on. I even went to the extreme with one relative to say ok pick some coins (she picked about 25 coins after liking more & more I showed her :D) you like I will order them & if in 12 months time they have not gained more than specified 5% at the time by retaining the same amount of paper money in an ISA then if she was still not convinced I would buy them back off her for what she paid for them + double the interest of what she would have got in paper. Win win situation, though I did say I thought she would be looking at nearer 50% return, maybe hasty but I doubt it as she has bought panda's, lunars, kangaroo's & kooks of different years. :D Hell if I can only get someone to buy 1 coin a month it is better than non at all.

Re: A must see for All Newbies & lurkers
 

Great, great infomation.......



T

Re: A must see for All Newbies & lurkers
 

Thanks TA have to say though I was inspired by you. :wink: :beer:

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

I haven't seen the crazy panicky side of you, :shocked_ma: or maybe I haven't looked hard enough. Knowledge is the way to freedom & empowerment in my book, it's difficult to argue with Facts! Life is a never ending wealth of experiences & what you learn from them is what matters.

:bull-buddy-icon:

Re: A must see for All Newbies & lurkers
 

+1........


T

Re: A must see for All Newbies & lurkers
 

My eyes stand opened O.o

Re: A must see for All Newbies & lurkers
 

Welcome aboard teamchen.

Something else to consider. :wink:

Re: A must see for All Newbies & lurkers
 

This will give you the next part of how it all fits together.

Re: A must see for All Newbies & lurkers
 

Seems plenty of you still looking here hope you enjoy. This next one I forgot about but also had me thinking who the narrator was. Hey presto it is the guy who dated Samantha in Sex & the city. :D

Re: A must see for All Newbies & lurkers
 

Gold Rush 21

http://www.wave2capital.com/index99.php

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Good stuff on this thread ........ it is just the beginng to show how deep the rabbit hole goes.


T

Re: A must see for All Newbies & lurkers
 

Thanks T. Connecting the dots through history I've discovered is the key to the importance of holding Physical. There is just a couple of mistakes in the above video the date of the FED & on 1 of the chakras which interestingly enough is Iran & it should have said it is placed at the Third Eye (slightly above the centre of your eyes) not what is stated on the video.

http://en.wikipedia.org/wiki/Third_eye

I'm almost finished reading the The Skinny on Silver By David Morgan & would recommend to others it explains plenty.

:bull-buddy-icon:

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

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Re: A must see for All Newbies & lurkers
 

Gold will pay out in times of political uncertainy.

How very true.

T

Re: A must see for All Newbies & lurkers
 

Just came across this. Each to their own in deciding which form to buy, personally I prefer the coins although costing more than bars it appears to give you more seller opportunities, thereby hedging your market. Eg Coin collectors & bullion buyers. :D

Re: A must see for All Newbies & lurkers
 

I love the way he tells this situation, makes you think. :D If anyone can find the film rollover on the net to watch would love to see it, either through google or youtube.

Re: A must see for All Newbies & lurkers
 

Just came across thses video's, this is guy is pretty geared up.

Re: A must see for All Newbies & lurkers
 

Things are really getting interesting now & while there seems to be a lot of activity from the viewing count I also suggest that you also try & stock up on food supplies if possible as things are developing really quickly now. :wink:

http://www.kitco.com/ind/schoon/jun172008.html

The last shall be first and the first shall be last

Jesus of Nazareth

Nobel Laureate Buckminster Fuller�s introduction to his Critical Path is titled, Twilight of the World�s Power Structures. Published in 1981, Fuller�s book predicted the end of the world�s power structures during a process where humanity would undergo a crisis of unprecedented proportions.

In 1991, the Soviet Union and communism collapsed and now with the severe contraction in credit markets, capitalism is in similarly deep trouble; and. Fuller�s 1981 prediction about the demise of the world�s power structures certainly cannot be good news for those who attended the 56th Bilderberg meeting held June 5-8 in Chantilly, VA.

The Bilderberger are believed by many to be the world�s ruling elite, those who determine the world�s direction�at least the western world�s, as attendees are overwhelmingly from Europe and the US (Europe 2:1 US).

In truth, however, the majority of attendees at the Bilderberger meetings are not the ruling elites but their minions�the well paid servants of money and power who toil 24/7 on their behalf, the bankers and corporate CEOs who shepherd the collective wealth of their masters, thereby gaining position and power for themselves in the process.

This fact, however, should not take away from their considerable influence in today�s world. That world, however, is today in a highly precarious state; for, if Fuller�s prediction is true, the Bilderberger�s world is now about to collapse.

MARSHALL THURBER�S CHECKERBOARD GAME

Marshall Thurber who was a close friend of Buckminster Fuller recently unveiled his new Checkerboard Game at the Positive Deviant Network (the PDN (www.posdev.net). A gamesmeister whose Blocks Game (which literally �melts� the right/left brain into a unified state) is the foundation of his long-running Money & You seminar (now taught internationally including China), Thurber�s new Checkerboard Game reveals the dynamics behind the formation of financial and power elites.

The setting itself was rather extraordinary. The Positive Deviant Network was in Dunkirk NY to view one of four prisons where PDN member Dr. Cherie Clark (who received her PhD based on her study of Buckminster Fuller�s principles of Synergistics) co-heads Shock Incarceration (http://www.ncjrs.gov/pdffiles/shockny.pdf), a course based on Buckminster Fuller�s principles, the 12 step addiction program and superlearning techniques (80% of Shock Incarceration graduates starting with an average of 5th grade education receive their GEDs (high-school equivalency) in 6 months with 12 hours of classroom time per week).

Where the average prison program lasts only 2-3 years, Shock Incarceration is now in its 21st year after having successfully graduated 37,000 inmates, significantly lowered New York State�s recidivism rates, saved the state of New York over $1 billion dollars and transformed countless lives in the process (Dr. Clark is also the president of Doing Life International, (http://www.doinglife.com/company.html).

The connection between The Checkerboard Game and Shock Incarceration was obvious. The creation of financial elites such as the Bilderbergers creates a world where elites continue to coalesce financial and political power at the expense of others. The rich get richer and the poor now go to prison. The Checkerboard Game and Shock Incarceration reflect that simple but increasingly ubiquitous truth.

If you have the chance to play The Checkerboard Game you should do so. And if you�re ever incarcerated by the state of New York and have a chance to take Shock Incarceration (the US is now the world�s #1 jailor so your odds are increasing)the same advice holds. Buckminster Fuller�s influence in both is obvious.

THE BILDERBERGERS & THE PAPER BOYS

A fortune composed of paper is like a house built on sand

At the very same time the Positive Deviant Network was meeting in northern New York in early June, the Bilderbergers were meeting in northern Virginia; and, while the PDN was looking at ways to alleviate the problems of the powerless, the Bilderbergers were looking at ways to extend the power of the already powerful.

In attendance at the Bilderberg meeting were Ben Bernanke, the Chairman of the Federal Reserve System, Henry Paulson, the US Secretary of the Treasury, Timothy Geither, President and CEO of the Federal Reserve Bank of New York, Jean-Claude Trichet, President of the European Central Bank, and Robert Zoellick, President of the World Bank.

It is no coincidence that so many high ranking "public servants" were openly attending a private meeting of the western world�s financial elites. Public servants in name only, public bankers are the handmaidens of the private elites, and in so doing serve their own interests as well.

It is also no coincidence that bankers play such a prominent role in the affairs of the Bilderbergers, the western power elite. Prior to the introduction of the bankers� debt-based money in England in 1694, the east and the west were "separate but equal". The bankers, however, were to significantly change that dynamic.

After central banking was introduced by the Bank of England, the relationship between the east and west shifted dramatically. England in its Faustian pact with the bankers was able to fund its navy and military with debt-based money and in a version of national gang violence, sic imperialism, imposed its will on much of the world.

The 18th, 19th, and 20th centuries reflected this great shift in power. The 21st century, however, will not. By the end of the 19th century, England�s time as the preeminent world power had run its course.

In 1870, England�s balance of trade went negative and its Treasury had increasing difficulty in paying the enormous bills of the British Navy and the bankers took careful note of this turn of events.

So, in 1913, the European bankers extended their operations to the US via the creation of the Federal Reserve System, the US version of the Bank of England�s central bank. The Federal Reserve System, a consortium of private European and American banks, would issue the same debt-based money in America as had the Bank of England in Britain and the bankers would continue their power and influence in America as they had in England and Europe.

Now, however, in the 21st century, America�s run at the table of fortune is coming to an end as did England�s one century before. In 1970, America�s balance of trade went negative (as did England�s in the 1870s) and again like England, its military budget would consume more and more of its national wealth.

In 2008, the world of the Bilderbergers is now suddenly and unexpectedly threatened. The western power base built on the foundation of central banking has encountered an unexpected problem. The debt-based western world of the Bildebergers has now collided head-on with the savings-based world of the east.

CAPITALISM IS NOT COMMERCE THE COIN OF THE REALM BECOMES THE CON OF THE REALM

Capitalism is the description of the wholesale introduction of credit into the world of commerce. Prior to the introduction of the Bank of England�s debt-based money, the words "banker" and "capitalism" did not even exist. The previous description of banking was "money-lending", an avocation made possible by the charging of interest on the lending of gold.

The utterly brilliant ascent of the money-lenders was made possible by their pact with government, first with King William of England, wherein private bankers would be allowed to issue public currency on which they could charge interest just as they had previously with gold�and government could then spend whatever it wished of the public�s money, usually on war.

The advantages are obvious, at least to the bankers and governments. Over time, however, the credit based "money" turns into debt on which compounding interest is levied. In this system, time is the enemy as time compounds debts as well as the amount of paper money causing a continual debasing of previously issued currency.

THE MORE PAPER MONEY PRINTED THE LESS ITS VALUE

The ultimate seduction of credit lies in its ability to deceive the debtor into believing that it is real money he or she has. It is not. Credit and debt are two sides of the same coin, albeit a coin of highly dubious origin.

The two-sided coin of credit and debt was substituted for gold and silver in an arrangement that served bankers and government, not producers and savers; and, much to the chagrin of the Bilderbergers and their bankers, the rest of the world, sic producers and savers, are now beginning to catch on to this increasingly obvious truth.

The recent rapid rise in the price of oil is a reflection of the intention of oil producers to no longer automatically trade their limited supply of oil for an unlimited and continually devaluing supply of paper money.

The current volatility in the price of gold and silver is a reflection of the death throes of the Bilderberger�s regime of paper money. No paper money system has ever lasted, all have ended in failure and disaster and this present system will end the same way�no matter what efforts are exerted on the behalf of paper money.

IT�S YOUR CHOICE PAPER, GOLD, OR SILVER

It was the bankers of the west that invented this game of charades where credit and debt masquerade as money. It is a charade that has lasted three hundred years. All games end, however, and this game is ending now, gratis of the universe whose intelligent hand Buckminster Fuller saw everywhere, even in our mistakes.

Bucky maintained that mistakes are an integral part of learning (see Fuller�s Mistake Mystique, see (http://www.flighttogenius.com/mm_ebook.pdf), Fuller maintained that the universe evolves by mistakes, learning ever more as it does so�and that includes mankind�no matter how dissociated our minds think we are from the originating phenomena of life.

In early June, as we in the Positive Deviant Network walked through Lakeview Prison in Dunkirk, NY, we saw a slogan prominently painted on a wall. In that prison, especially, its truth was obvious:

LEARNING IS HAPPENING

And, so it is. It is a lesson the bankers and the Bilderbergers will soon understand.

POWER IS NO MORE CONTROL THAN CREDIT IS MONEY

Re: A must see for All Newbies & lurkers
 

http://www.kitco.com/ind/Dyson/jun172008.html

The amount of liquid savings I keep in gold would make the average investor choke.

In fact, on the occasions when I have told people how much of my money is in gold, they think I'm nuts. Gold represents over 50% of my savings. When folks hear that, they think I'm making a crazy speculation on the price of gold. Or they think I'm an eccentric.

I tell them investing in gold is the safest place to keep your money. It's the modern equivalent of putting money under the mattress. Gold is such a conservative investment it doesn't even pay an interest rate.

Here is why I like gold:

To stave off the housing and credit crisis, politicians have increased the amount of paper(and electric) money in our financial system. If you double the number of dollars in the system, for example, then the market should make you pay double the number of dollars for an ounce of gold. If you increase the quantity of paper money by a factor of 20, the gold price should also rise by a factor of 20.

This is simple mathematics. It's the same calculation for tailored suits... loaves of bread... or rare seashells. Double the quantity of money, double the prices.

Chris Weber, the editor of the excellent Weber Global Opportunities Report, makes the calculation in the most recent issue of his newsletter. He adds up the value of all the paper money in the world... and comes up with $100 trillion. Then he divides this by the total amount of "above ground" gold in existence � 5 billion ounces � and comes up with a fair value of gold at $20,000 an ounce.

Total Value of Paper Money $100 trillion

Ounces of Gold in existence
5 billion


--------------------------------------------------------------------------------


Theoretical fair value of gold
$20,000/ounce


If Chris Weber's calculations are correct, the gold price would need to rise about 22 times to match the rise in the quantity of paper money in the system.

For gold to reach $20,000 an ounce, people would have to lose confidence in paper money. I think this will happen eventually... just not anytime soon. And of course, this calculation is theoretical. I'm not predicting $20,000 gold. The point here is lots of paper dollars are floating around, but only so much gold.

Normally, gold is an expensive investment to own. That's because it doesn't pay interest. And you have to pay a small cost to maintain a safety deposit box. So you lose a few percent a year in opportunity cost of not investing in the bank.

But right now, that penalty doesn't exist. My bank pays 1% interest in its savings accounts. Ten-year U.S. treasury bonds pay 4% interest. The government says inflation is running at 4% a year. I think it's higher... around 5%-7% per year. The fact here is that real interest rates are negative. You can see this "penalty on savers" in the chart below, which shows real interest rates over the past 12 years:



That's why I keep my savings in gold. It's a safe investment with huge upside, and I pay no interest penalty for making this bet.

Other people are starting to figure this out. That's why gold has risen from $250 an ounce to $900 an ounce over the last six years. I don't see our growing inflation disappearing anytime soon... and I see commodity prices in a long-term uptrend.

That's why I'm comfortable with such a large gold position... and why gold's bull market still has a long way to go.

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

BINGO!!!! Couldn't have put it better myself! :D

These babies are about to sky rocket I can feel it in my bones within the next few weeks. Silver especially is getting more difficult to get hold of in my neck of the woods at reasonable prices. The coin guys I use are having to pay much higher premiums to get it when they can get it & says no one is selling only buying & holding. :applause_

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Yikes loads of new members it seems, sure is getting busy on here. :wavey:

Really interesting First Hour for all the newbies & lurkers.

http://www.financialsense.com/fsn/main.html

June 28, 2008
1st Hour with FS NewsTeam
Select an Audio Format
RealPlayer | WinAmp | Windows Media | Mp3

Re: A must see for All Newbies & lurkers
 

Understanding why you hear much talk about returning to a Gold Standard, full details at the link. Also explains why the flight from paper to Physical is no whim but a life saver.

http://en.wikipedia.org/wiki/Gold_standard

Gold was a common form of representative money due to its rarity, durability, divisibility, fungibility, and ease of identification,[4] often in conjunction with silver. Silver was typically the main circulating medium, with gold as the metal of monetary reserve. The primary advantage of gold or silver backed currency is it self regulates. Therefore there is no government tinkering with the boom and bust cycles that accompany fiat-based currency.

The Gold Standard variously specified how the gold backing would be implemented, including the amount of specie per currency unit. The currency itself is just paper and so has no innate value, but is accepted by traders because it can be redeemed any time for the equivalent specie. A US silver certificate, for example, could be redeemed for an actual piece of silver.

Representative money and the Gold Standard protect citizens from hyperinflation and other abuses of monetary policy, as were seen in some countries during the Great Depression.[citation needed] However, they were not without their problems and critics, and so were partially abandoned via the international adoption of the Bretton Woods System. That system eventually collapsed in 1971, at which time all nations had switched to full fiat money.

Former US Federal Reserve Chairman Alan Greenspan once argued, before the advent of monetarism, that

"under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth... The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation."[5]

Stability offered by gold standard
The gold standard limits the power of governments to inflate prices through excessive issuance of paper currency. It is also supposed to create certainty in international trade by providing a fixed pattern of exchange rates. Under the classical international gold standard, disturbances in the price level in one country would be wholly or partly offset by an automatic balance-of-payment adjustment mechanism called the "price specie flow mechanism." At the time of the Bretton Woods agreement, it was believed that markets were always internally clear; Say's Law. However, in practice, wages, not capital, depreciate in price first.


Advocates of a renewed gold standard
The return to the gold standard is supported by many followers of the Austrian School of Economics, objectivists and libertarians largely because they object to the role of the government in issuing fiat currency through central banks.

U.S. Congressman Ron Paul is perhaps the leading advocate of a return to the gold standard (or at least the legalization of competing currencies which would include gold and silver) in the Western world.

Few lawmakers[who?] today advocate a return to the gold standard, other than adherents of the Austrian school and some supply-siders. However, many prominent economists have expressed sympathy with a hard currency basis, and have argued against fiat money, including former US Federal Reserve Chairman Alan Greenspan (himself a former objectivist) and macro-economist Robert Barro[citation needed]. Greenspan famously argued the case for returning to a gold standard in his 1966 paper "Gold and Economic Freedom", in which he described supporters of fiat currencies as "welfare statists" hell-bent on using monetary printing presses to finance deficit spending. He has argued that the fiat money system of today has retained the favorable properties of the gold standard because central bankers have pursued monetary policy as if a gold standard were still in place.

The current monetary system relies on the US Dollar as an �anchor currency� by which major transactions, such as the price of gold itself, are measured. Currency instabilities, inconvertibility and credit access restriction are a few reasons why the current system has been criticized[citation needed]. A host of alternatives have been suggested, including energy-based currencies, market baskets of currencies or commodities; gold is merely one of these alternatives.

Re: A must see for All Newbies & lurkers
 

Quizz Test yourself on some economic terms.

http://news.bbc.co.uk/1/hi/magazine/7497754.stm

Re: A must see for All Newbies & lurkers
 

Thanks go to lemett999 for finding this gem :applause_ Might be a good place to duplicate here for the newbies.

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

2008 predictions

Re: A must see for All Newbies & lurkers
 

Some more for you enjoy. :wink:

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Some more :D

Re: A must see for All Newbies & lurkers
 

Not suggesting using these companies but highlights the need to buy & hold physical silver & gold. At least for those of us with limited funds to retain your wealth.


http://video.google.com/videoplay?do...jgLkz-Ul&hl=un

Re: A must see for All Newbies & lurkers
 

Courtesy of Jesse :wink:

Understanding what some of the investment terms we are constantly hearing can be confusing to a newbie & what they are & mean & their affects, especially when it comes to what is going on with the banks. Here is a couple of video's which hopefully will enlighten you & why the taxpayer will end up footing the bill.

Re: A must see for All Newbies & lurkers
 

Useful to know for newbies something else I just came across with regular newsletters. Extensive details of around the world activity of the crooks. Interesting that things hotted up too around the depression & probably likely to increase with the current lock up of available metals.

http://www.coinauthentication.co.uk/newsletter10.html


The Royal Mint reported3 181 counterfeit coinage related convictions in England and Wales in 1910, the highest annual figure prior to the First World War. This included 17 convictions for making counterfeit coins and 29 convictions for possessing counterfeiting equipment. In 1932, the peak year for counterfeit related convictions between the wars, 127 convictions were recorded by the Royal Mint. This included 51 convictions for making counterfeits and 44 for possessing counterfeiting equipment. In 1900 in an article4 in "The Weekly Dispatch" a Scotland Yard spokesman was quoted as stating, "that something like �300 worth of counterfeits was being got rid of in London alone every week". In 1932 John Phelps, the Royal Mint Assayer estimated5 that, "there would be about 2,000l. nominal placed in circulation annually", that is �2,000 face value of counterfeits. It would appear that although the number of counterfeit conviction rose to pre-war levels after the mid-1920s the number of counterfeits made did not.

The number of colonial cases appeared to vary considerably according to the nature of the colony, its economic development and the relative value of its highest denomination circulating coins. The Government Analyst for the Straits Settlements reported6 examining specimens from nineteen [19] cases in 1932. In 1936 the Hong Kong Government Analyst reported7 that, counterfeit coin "batches were being brought in several times a week". The number of cases involved with these "batches" is unclear from the report. It would appear that, apart from Hong Kong and probably India, there were significantly more counterfeiting cases in Britain than in most of its individual colonies but probably less than the total number of cases in all the colonies.

They are still selling too. :no_ma:

http://search.ebay.com/_W0QQsassZjinghuashei

http://www.coinauthentication.co.uk/coininfo.html

Re: A must see for All Newbies & lurkers
 

With the current ambushing of the metals & some people probably panicking of what on earth they have got themselves into, buying precious metals or think we are all mad here. :D STOP I'm new like so many here. So your heart did a flutter, you felt really really sick (or was that just me? :shocked_ma: ) & you thought of the losses you would take jumping out now.

All natural of course, how do I know? Well listen to the August 16th 1st hour & 3rd hour Part 2 with Eric King. Follow the link below.

http://www.financialsense.com/fsn/main.html


Don't be swayed to ditch your silver bullion just buy more if you can find it cheap although not very likely here in the UK, I've been looking all day & looks like will have to wait & hope the suppliers can manage to buy some up cheaper, you American's are lucky :wink: as impossible to get the current ratio's of gold to silver even with this slaughter. If you have not bought any bullion yet get your butt in gear & get some bought NOW!!!!

Re: A must see for All Newbies & lurkers
 

Interesting article Roger Wiegand & audio

http://www.webeatthestreet.com/index.php?id=445

Breath-Taking Collapse


The speed and volatility of credit and share
markets� collapse this week has been astounding.

While tout TV, international banksters and market manipulators did their level best to hide it, prime supports are caving-in with scary rapidity. Most all global stock markets have posted the arbitrary 20% declines, or more taking them �officially into recession.� The USA was there long ago but has not been recognized for several nefarious reasons. Canada is the last major nation not in official recession. Stock markets tell us the future for months in advance and it�s not at all pretty. Bond markets take it a step further as these traders forecast credit standards and interest rate trends with remarkable accuracy. In many respects, the bond traders predict more than the manipulated shares� markets. As we�ve been shaken and rudely reminded by the bond boys; credit, bonds and cash are driving the bus not share markets.

We were hoping Chopper Ben and nervous Hank could hold it altogether with Federal Reserve and US Treasury chewing gum and bailing wire. It�s only not working but it appears another soon-to-be-named monster corporation or global bank is going over the falls into a gigantic smash. Worse yet, Australia, a leading commodity indicator and shining light mining provider had a big bank post a massive derivative write down ala Merrill Lynch. This super nasty event sets the credit quality bar infinitely lower than their credit system can manage. As in America, they are on the edge with a cataclysmic firestorm at their backs.

In the worlds� of trading and finance, exiting holders of small positions have little affect on price. But when a nation has six dominant banks mutually holding piles of derivatives and one sells out with a BK-like discount what do you suppose the other five banks� stuff is worth? All it takes is one and they all cave-in with massive write-downs and a falling domino lack of confidence in this paper.

It appeared earlier this week that new bottoms were found in commodities including our favorites. We�ve been snake bit before years ago when being a tad too eager. This is why our forecast for a new beginning was either 8-15-08 or, 8-18-08 for this new rally. Considering more damage done yesterday overseas and a large trading error in silver last night, the repairs might take even more time.


We checked with our broker this morning and he figured somebody had a large silver futures order posted with thousands of contracts and didn�t meet a margin call. The broker had to close �em out and silver skidded $2.00; a rather large negative move to say the least. Since this apparently happened in the night during thin electronic trading, there was nobody on the other side of this failed trade to help.


Silver fell from roughly 14.30 to 12.30 on the December, 2008 futures. This morning it came back to 13.19 by 10:16am and we predict it could close at 14.32 to 14.48 for this Friday, if it can recover. Monday is another day and hopefully better realigned after this mess to base and rally some more. We would suggest the worse case recovery could now be in the last week of August or after Labor Day next month. The only caveat would be if some other outlier or Black Swan (vulture) came flying in out of nowhere and hit us again.


Currency Disruptions Real and Accidental

Central banks of the world including the USA noticed the August 15, 2008 breakout time was due for precious metals on the historical cycles and Mr. US Dollar was looking pretty punk. Further, there has been an increasing storm of foreign whining (deservedly so) about the dollar�s sinking valuations. Lots of folks have been increasing upset about taking dollars for manufactured stuff and then watching their newly acquired paper skid toward trash levels. This is why Asia, Europe and others, forced to take US bonds, notes and currencies have been spending it with vigor to purchase hard assets of value.

The intake of dollars into China, Japan, India, Europe and Middle East for oil has been offset with follow-on trades for exiting those dollars. First these nations moved dollars into stronger currencies but now those formerly stronger currencies like the Euro are sinking, too. Next secret sovereign banks used dollars to buy US shares. The embarrassment of riches is too much so any hard asset is the last resort and that is where off-loaded dollars are moving right now.

Currency traders yahooed the new dollar rally saying it had improved. Wrongo! The dollar is just as crummy as before, it�s just that the Yuan, Euros and others dumped over and are selling BRIEFLY, faster than our dollars. This is a temporary re-jiggering of currencies in the marketplace. Soon the dollar resumes its skid into oblivion. None of these fiat currencies is backed by gold so the next great trade is toward the Swiss Franc, long considered the premier, blue chip currency, yet un-backed by gold.

These so-called superior credits of US Treasury bills, notes and bonds have already posted lower credit scores as somebody wrote two weeks ago the USA national credit is AA not AAA. Traders need to keep currency valuations in perspective to get a better handle on speeds of up-down trading, overall volatility and relationships in dominant groups.

For example, the UK�s British Pound has been hammered as they are suffering a housing bubble and related credit mess even worse than in the US if you can imagine that one. Now that Australia has tripped and our F&F Fannie and Freddie specious rescue plan�s in place, it seems everybody is going one notch closer to Armageddon, or at least crash city.

The End Game

We�ve watched this rolling disaster with unblinking amazement as Benny and Hank furiously stomp out the weekly forest fires. We�ve learned throwing mountains of taxpayer cash is not a solution. With each succeeding fire, it takes more credit, more lying, and more taxpayer robbery to snuff the latest conflagration. These credit firemen are about out of water as next they face the largest hurdle of all-consumer collapse.

The entire saga goes back first to give-away real estate lending and related companion derivatives. Since consumers have been the traditional locomotive of America�s economy we now reside in some really deep pasture piles.

The green guy pumped real estate to avoid a recession after 2000 when the Nasdaq dumped. It worked but made things much worse only delaying the inevitable.

Foolish unqualified consumers got nearly free money not only for houses but subsequent crazy inflation enabled them to buy lots more stuff using the follow-on transparent, phony ATM house equity.

New York seized the moment packaging and re-packaging mortgages, selling them several times into a derivative abyss.

Everybody loved the game. Consumers got a freebie new home and lots of Monopoly Money. Banks and brokers got rich on fat fees and derivative peddlers got really rich selling billions of this crap. The latest scorecard this week says the banks must payback $50 billion collectively but the real damage was more like $350 billion; or worse.

As in any 60-70 year Bubblemania event, the bubbles burst and we all fall down. It�s called the Kondratieff Cycle. We think it keeps happening as the last bunch that went through it died of old age. So the new and inexperienced bunch learns the same lesson all over again-the same old hard way.

After bubble time is over governments are dealing with a depression, angry Sheeple, and finger pointing becomes the new indoor sport. From there government must invent a catastrophe to start a war as a war is the monetary engine of recovery. It puts everybody to work or fighting this new war effort working in the factories. Roosevelt did it when he jumped into Europe and ignored the warnings about Pearl Harbor after cutting off Japanese oil and gas. He gave them no choice but to fight.

Since the US is busy in Iraq, Afghanistan and maybe next in Iran, we would suggest all western nations including the US stay extra vigilant for another manufactured event ala Reichstag in Germany in the early 1930�s. Could we see another 9/11? I think it�s entirely possible. I doubt our country would mount such an illegal event but would they stop one if it could be used for political gain? Probably not. These are very harsh criticisms of the west and others but if you suggest I�m full of prunes read history and not the homogenized phony versions either. War profiteering is very big business. Those making the big money never send their sons into battle. They make better arrangements ahead of time.

What�s Next? This is 1938.

Read history about Europe, Asia and the United States from 1920 to 1945 and expect a re-run with some new nasty twists. Further, if you think the government will be there to bail you out after they mess everything up forget it. You are on you own. Either get busy and take intelligent measures to protect your family, home and self or try to endure years of misery. The western world�s standard of living is falling and the spoiled American brats will be hurt the worst. We wish we were wrong on all of this stuff but we read a lot and we know how to count. This simply doesn�t add up. Be careful out there.

As they say so often when lightening bolts hit us out of the blue; �This too shall pass.�

Gold and silver traders, shares� investors and those with enough foresight to prepare, will endure this mayhem without too much disruption and can in fact be handsomely rewarded.

Late Summer Buying Cycle Arrives Near August 18-September 8, 2008

Watch for new rallies in most all commodities markets after the current profit-taking event. Channelized mini-rallies in gold and silver are completed. Now its time to buy. Our late summer forecast is a completing haircut in most stock shares including precious metals. The only action to prevent selling is our stunningly time-worthy Plunge Protection Team who had multiple recent failures propping shares. Will they win during the summer-fall push-�em-up event? We think with all the other market dangers they will prop their little hearts out and not permit the Dow and S&P 500 to get out of control.


http://www.kereport.com/audio/0628-03.mp3

Re: A must see for All Newbies & lurkers
 

This has been posted elsewhere but thought it might be useful here for the newbies. :wink:

http://www.chrismartenson.com/crashcourse

Re: A must see for All Newbies & lurkers
 

I agree 100%!!! When we make our coins gold and silver, well then we are helping outselves out twice. Aside from providing *Honest Money* that encourages saving instead of debt, we're getting something else for free.

When we have coins that have a face value higher than the melt value, to encourage keeping them in circulation, well it's just beautiful. That way, when we acquire money, not only do we have currency to spend later, but we've acquired a commodity (Gold; Silver; Real Honest money) at the SAME time. It is two items in ONE and it is beautiful!


I am starting to get tired of people asking me...silver huh? How much is that in DOLLARS?

Re: A must see for All Newbies & lurkers
 

http://goldismoney.info/forums/radio.blog/

Click on the creature from jekyll island. In particular after listening to this & important comments around 60 mins I was suddenly recalling a conversation I had with my Dad when I was 12. Being one of those kids that constantly asked "Why?" to things in life, I think I drove him nuts. :D

He was helping me with some maths homework & percentages & compounding interest as I was stuck & in the process explained it by using mortgage interest rates calculating how much you pay over the term. I recall being horrified & saying thats mad why would someone want to buy a house when you have to pay 3 times the money back than what you borrow? At the time this was during the stagflation years. Answer was something like that's just what you have to do when you buy a house & I didn't give it much thought after.

On my 1st house bought in the late 80's which was when interest rates rocketed unexpectedly (well I would have realised if I had understand finances like I do now) & mortgage payments almost doubled. Looking back I would likely have been in negative equity but as there was no intention to move & though tough at the time bills were met. Though I do recall when the rates came down after a few years I decided to leave the payments up & consciously paid more off the interest only mortgage (badly advised to get at the time). However, that conversation must have had an impact as I have never had any other debts & only bought things when saved up for them unlike many of my peers.

I moved house 4 years ago & on talking to a financial advisor about getting a mortgage was surprised to hear most people look at re-mortgaging every few years so searched the net for information before the advisor returned & ended up picking a mortgage no different than what he came back with & stayed well clear of interest only mortgages. I guess what I'm saying is you don't have to be clever to find the best deals for yourself it just takes initiative to learn & understand what finances are about & is very empowering.

Following this & having to spend money adapting my new home for the first few years I again got to thinking early last year about actively trying to overpay my mortgage to get rid of this debt, which I am doing. What I discovered by accident in August last year in the UK which I didn't know they did was when the banks reduce their interest rates they re-issue the same named mortgages with a different above base rate figure usually less.

However, what I didn't realise was if for e.g. say my initial mortgage rate contract was 5% + 0.99 above base rate mortgage, then when the Bank of England reduced interest rates by 1/4 percentage points then on my initial mortgage the reduction would appear as 4.75% + 0.99 above base rate, as the above base rate figure is fixed for the term of the loan agreement & any changes to Bank of England interest rates is changed as above.

After checking the same mortgage @ the same bank when they dropped the interest rates the above base rate figure had been reduced to 0.79 & they reduced the mortgage rate from 5% to 4.75% @ the same time. Therefore instead of getting a reduction of 1/4 percentage points by remortgaging for free with the same bank I gained a further reduction & then in March 6 months after remortgaging they reduced the above base rate figure again by 0.05% which I discovered by following the news that banks were going to change their rates but there was not a rate cut coming via the Bank of England. So I remortgaged again for free :D Now this is sneaky as the banks don't tell you this is what they do but realised this is how they make extra money out of people who are not familiar with this activity.

Bear in mind this is in the UK & was 6 months ago & things have radically changed in regard to mortgage rates & availability but keep your eye on your bank for this happening & if you are in a position to switch within your bank for free & it can be done then do it if it is beneficial as every penny counts. Better in your pocket than in there's until you can pay your mortgage off.

Now this same bank has just changed its rates again this last week & to get the same rate I am on now from last March which is what they are offering I would have to bank with them & be a premier customer which means to qualify I would have to have savings of �50k with them or a mortgage of �250k & an income of �75+ of which I have none of the above. So keep your eye on your banks mortgage rates.

Just thought I would share this little gem with you all as it may help somebody who finds mortgages a minefield.

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

http://www.gold-eagle.com/editorials...lie091808.html

I've posted this elsewhere but maybe useful for the newbies. :wink:

An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

We are in historically unprecedented times. The foundation is being laid for a default of USTreasurys in the wake of the greatest regulatory failure in modern history, and the collapse of the US financial system. Anyone who cannot see that suffers from poor vision, chronic nostalgia, low mental wattage, a paycheck from Wall Street, a post in financial press media, or owning an Economics advanced degree. So many changes come with each passing day, not week, that it boggles the mind. Many of us predicted $100 updays for gold, and we almost saw one. The wheels came off the US financial wagon long ago, but only now that fact is being recognized. The monetization largesse finally has gone beyond the corrupt bailouts of fraud kings on Wall Street. My longstanding forecast has been that when the monetary inflation machinery spits output beyond the sanctimonious walls of the Wall Street whorehouses, INTO THE MAINSTREAM, that the gold price would rise substantially. That process has begun, starting with Fannie Mae & Freddie Mac, and now moving to AIG. Only when phony money floods the system where people live, not where the elite conmen with strangehold control the counterfeit processes, will gold shine. So many unexpected upcoming events will occur, enough to make a forecaster dream. Let�s begin with the most important. Much more details are provided to Hat Trick subscribers.

RAIDS OF INDIVIDUAL ACCOUNTS
This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. Finally the corrupt USGovt and corrupt Wall Street houses are desperate enough to put into policy, stated by the US Federal Reserve, outlining the authorized raid of your money. Beware. A good route would be to remove your money, start a subscription here, and open a GoldMoney account, then purchase physical gold or preferably silver with my offered discount. That cannot be taken from you, and will rise 5x for gold and 10x for silver in the next two to three years. The actual evidence for legalized stock account raids by the financial firms can be found in recent articles in Financial Times and Wall Street Journal. So this is not a wild claim. The September 14th article on the Wall Street Journal entitled �Wall Street Crisis Hits Stocks� was the first exposure.

The runs on US banks are in progress. See Washington Mutual, where private email messages have been shared by WaMu bank officers. WaMu alone could deplete the entire Federal Deposit Insurance Corp fund for bank deposit coverage. Eventually the FDIC will compete for USGovt federal money for bailouts and nationalizations. Eventually, bank deposits will not receive 100 cents per dollar, in a compromise. Next the bank runs will push banks into failure, at a time when stock accounts are under raids, without broad public knowledge.

GOLD TAKES LEAD IN CURRENCY WORLD
Did anyone notice that on Wednesday the 17th, gold was up big, like over $50, silver was up big, like over 70 cents, but the USDollar was essentially flat, even up a smidgeon? By afternoon, the gold rise intensified, and the USDollar fell hard. THE MESSAGE IS CLEAR: GOLD IS LEADING MOVEMENTS IN CURRENCY PRICES. The world did flock to the USTreasurys, surely led by mangled confused central bankers who have lost control. However, gold is finally being seen as a safe haven. It will become highly amusing to observe a clueless cast of corrupted minds attempt to explain why gold vaults past the 1000 mark, and why silver vaults past the 20 mark. They will offer up reasons, and if lucky, they will touch on at most three or four of the twenty relevant reasons. Their confusion includes observation of the decline in the crude oil price. Their eye is off the monetary panic.

Moral hazard is just an obstacle to be side-stepped in such times. Today, Bill McCullum of PIMCO actually said �We should not give one thought to inflationary consequences.� He was referring to gargantuan rescue packages and now global lending lines to central bankers. And people wonder why gold shot up $80 yesterday, and why silver silver shot up over $1 yesterday. PREPARE IN THE VERY NEAR FUTURE FOR GOLD TO RISE OVER $100 ON SUCCESSIVE DAYS, AND FOR SILVER TO RISE OVER $2 ON SUCCESSIVE DAYS. Inflation is soon to be seen as the remedy to prevent monetary collapse. Gold just hit 900, and silver has reached 12.70 today. The euro has risen 500 basis points just since Friday morning. Gold is not rising sharply due to inflation concerns alone, although plenty of monetary inflation is set to continue flying through the money pipelines. THE REAL REASON WHY GOLD IS RISING IS FOR THREAT OF SYSTEMIC FINANCIAL FAILURE CENTERING IN THE UNTIED STATES.



What factors are key to gold rising? Perhaps because the US financial system is imploding. Perhaps because the USGovt nationalization demands are accelerating. Perhaps because the threat of default for USTreasurys is seen as inevitable, even imminent. Perhaps because nitwits who have highjacked the White House and USMilitary are planning something truly reckless on the military front in Iran. Perhaps because the US Federal Reserve is depleted and secretly insolvent, even as they put word out of an INFINITE BALANCE SHEET. Perhaps because enormous demand has come in physical gold & silver, despite the low price set by corrupt US PaperHangers. Perhaps because fear has entered the room globally.

CONSOLIDATION AMONG THE DEAD
The financial firms are not just dead, they are corrupt to the core. Perhaps one or two Wall Street firms will be left standing in a year or more. Has anyone figured out why foreign pursuit of Wall Street firms is blocked? Partly because foreigners cannot assess the value of such complicated opaque assets, intertwined within nests of acid pits. The other reason is that US banking authorities wish to keep the protected corrupt evidence within the Manhattan fold. The South Koreans wanted a piece of Lehman Brothers, the best pieces. But they would have had access to evidence needed eventually in criminal prosecutions. See the KfW case of �300 million theft, possibly soon to emerge against Lehman crooks. The German insurance titans wanted a piece of AIG, the dead insurance giant. But they would have been handed access to evidence of extreme vulnerability or criminality. Why were officers at Lehman permitted to remove box after box from their building, when it should be treated as a crime scene with yellow cordon tape? The answer has to do with the Fascist Business Model, the merger of state with business, where the syndicate facilitates fraud in deep collusion.

Why did Morgan Stanley stock go down hard after they announced early their quarterly earnings? Possibly because nobody believes they are honest. Morgan Stanley might be kept afloat longer, so as to enable theft of brokerage account funds. Lehman does not have private stock accounts, mostly bonds of the acidic type. So Lehman is free to enter the trash heap of liquidation and the de-bone process for assets. Meat is to be separated from bone. John Mack of Morgan Stanley had better be careful, as he appeals for a Chinese role in a merger. That could give the Chinese an important toe-hold in US mortgage bond ownership. They are looking to convert mammoth USTBond garbage paper into hard assets, as a foundation to a possible migration of one hundred thousand to one million elite Chinese, to California, Arizona, Las Vegas, and Florida. It is called colonization.

The moral of the consolidation story is that the dead are marrying the dead. The Bank of America merger with Merrill Lynch struck me as hilarious. Each is dead from insolvency. Each has big counter-party risk from coverage of failed bonds. So they will now serve as each other�s guarantor of counter-party risk? Not in this world! Imagine two fat men absent of musculature tossed overboard a ship. They tell each other, �Stand on my shoulders and you will be fine for breathing in this vast sea.� They both sink. The end game for such ludicrous indefensible consolidation is that the Wall Street fraudulent corporations go down all together. A friend called last night from the analyst community. He wondered aloud that nobody could expect the speed of the breakdown. My response was to point out a strong message mentioned here repeatedly. Since the Bear Stearns bailout killjob merger by JPMorgan, all Wall Street investment banks are aligned in similar fashion, with common bond risk and common counter-party risk. So when one Wall Street firm goes down, several will immediately go down, and AIG is the umbilical cord to the Main Street economy. This point was borne out as wickedly true when the Lehman funding bailout failed. The parties trying to bail them out, offering funds, all found themselves as subject to writedowns immediately. The funds they offered were not available, since the loop of price reality reduced the level of the offered funds!!! That means they are all in the same boat, and if one fails, they all fail. So the system will desperately attempt to avoid any failing. Thus, the entire system fails.

As simple citizens, people should be concerned that the US Federal Reserve and US Dept of Treasury have begun to take actions far outside their own legal powers. The bailout of AIG was made illegally. The USFed cannot act to aid non-bank entities. Senator Jim Bunning has drafted Congressional legislation to limit the USFed action outside the banking realm. The system is losing control, especially with the law.

The parade of doomed deals continues. Talks have begun for JPMorgan taking over Washington Mutual. Could the JPMorgan �Garbage Can� be inadequate soon? Bank of America has entered talks to take over Merrill Lynch, apparently striking a deal. Could BOA serve as the alternative �Garbage Can� next, whose service would be as squire to JPMorgan? Now Morgan Stanley is in talks to take over Wachovia. The disaster du jour today seems to be State Street, which was down over 50%. The dominos are falling. THE MESSAGE IS CLEAR: THE DEAD ARE MARRYING THE DEAD. It is unclear what music to play at such events. My suggestion is something from �Phantom of the Opera� would be apt.



A SHORT �TOLD YOU SO� HERE
The US financial sector became unglued this week. In last week�s article, the point was made that the financial system had just that one week to lift the USDollar, to raid private accounts with games like yanked credit and a raft of paper naked short gold & silver future contracts. Then next week the brown excrement hits the fan. Over the weekend, deals were attempted to be forged into the night. Nobody seemed to ask the question why they were all acting like in an emergency. What emergency? A condition ordered by whom? My maintained point is that the Bank For Intl Settlements ordered the US bankers to fix it or flush it!

Big news was expected from my analysis, and my Hat Trick Letter newsletter. We got it! By the way, AIG was not on the radar for numerous analysts. It was on my radar, a secondary radar. The big banks are primary for my observation and monitor. WE ARE WITNESSING A CONCENTRATION OF RISK, OF RUINED CORPORATIONS, AND OF THEIR ACIDIC BALANCE SHEETS THAT IS SO GREAT THAT THE RISK OF US FINANCIAL IMPLOSION GROWS BY THE DAY !!!

Blame for speculators continues, as nitwit players within the fraud centers accuse others of speculation, and threaten prosecution by their watchdogs on leash. Recent research failed to disclose any collusion or illegal activity in the crude oil market. That does not stop continued claims, with hue & cry. These criminals are pathetic, if not consistent. Just when failed regulation is at the core of the financial crisis, Wall Street conmen and clueless Congressional legislators argue for more regulation and control, when the regulators and controllers deserve prison terms. Instead, prosecute the regulators and controllers, and begin with Alan Greenspan, and his knights of the Stupid Table at the Federal Reserve.

The financial crisis continues each day. Last Friday the currency markets smelled what was cited in broad terms as the end of the OPEN WINDOW for the US banks. The euro currency rose over 220 basis points that Friday, and the pound sterling rose over 330 basis points. Gold and silver firmed in price. Something tipped them off, like huge flows of private money out of the Untied States. This week, AIG and Merrill Lynch and Morgan Stanley dominate the news. On two different days this week, the NYSE Dow Jones Industrial index fell over 400 points. Today, when the Dow Jones Index was up 170 points, in a phone call to a trusted friend, we both agreed that the index would turn negative before the afternoon, and close down. So far, that call looks correct, as it was minus 100 points before now being up 50 to 60 points.

By the way, important option put stock positions are in place against Goldman Sachs. They point to a strong likelihood of the GSax stock falling to 80 or 85 imminently. The knock on GSax is that they have lied about their subprime mortgage exposure, and soon will be forced to come clean. The �GS� stock shares plummeted from 160 in early September, now to under 100. Justice is served. My guess is their executives will profit privately from shorting their own stock. Even their 6-month corporate paper must pay out 20% in bond yield in order to attract funds.

UNIVERSAL MONETARY INFLATION
OK, so finally the US Federal Reserve has opened the monetary spigots to England, to Europe, to Switzerland, to Japan, and later to Canada. Not only is the monetary spigot overflowing inside the Untied States, it is overflowing from the US to the world. At least to the world affected (infected) by US control. The total central bank infusions of liquidity (translated: phony money) is $180 billion in the last several hours alone!! This huge amount is not enough to quiet the LIBOR or the 2-year USTreasury swaps. Gold is rising versus the pound sterling, the euro, the yen, and Canadian Dollar, aka the loonie. This trend is new and powerful. Central bankers are growing desperate. Their measures to open numerous lending facilities have not stopped lending constraints. Even commercial paper has fallen by $52 billion last week.

Clownish anchors and analysts cannot seem to comprehend what is going on with the central bankers, liquidity injections, market tanking, USDollar decline, and gold & silver zoom. They wonder why the USDollar would continue to fall after central bankers reacted responsibly. BECAUSE THE USTREASURY IS DOOMED FROM INSOLVENT BANKS, EXTREME DEMANDS FROM NATIONALIZATION, AND RECESSION, AGAINST A BACKDROP OF ENDLESS WAR FOR PRIVATE SYNDICATE BENEFIT. It is obvious! Gold smells a systemic failure.

FOREIGN CREDITORS UNITE
A hidden initiative has been in progress for the last two weeks. Foreigners are forced to supply credit for the Untied States. Nations led by Russia, China, Arabs, and Japanese are meeting to form a formal committee. They have a common purpose, to maintain and manage massive US$-based debt securities in danger. Their continued credit support is hampered by three magnificent factors, each a show stopper. 1) The US banks are insolvent, 2) The Wall Street bankers export fraudulent bonds, and 3) The USMilitary has acted with chronic aggression in violation of established contracts, international treaties, and disrespect for sovereign boundaries. So they are working to organize a committee of giant USTreasury Bond creditors. They wish to confront the US debtor with a single voice. Regard this important step as a prelude to possible default of the USTreasurys. It is one thing to be in trouble from insolvency. Add corruption from export of fraud, and you have a bigger problem. Throw in military aggression, complete with misreporting by a controlled press, and you have a crisis in need of almost immediate remedy. My argument has been made for four years, that foreign held US debt creates a threat to national sovereignty. Since when are the Chinese our friends and allies? They are business partners turned rivals, now adversaries. Since when are Russians our friends and allies? They are energy and metals suppliers, betrayed by treaty violations, now adversaries, even on the military front. Since when are Arabs our friends and allies? For three decades an uneasy partnership has been in existence, one that has turned into a blatant protection racket. The endless concocted war on terrorism is seen by Arabs as a war on Islam.

US TREASURYS AT RISK
Don�t be fooled by the drop in USTBond yields. That is a symptom of collapse in my view. Yesterday, it was with great disillusion yet satisfaction that my eyes and ears witnessed an interview by a Standard & Poor analyst. He said there was no imminent danger of a USTreasury debt security downgrade, but he did say that if pushed, the S&P would put them on NEGATIVE WATCH. Interpret that to mean the USTreasurys will soon be downgraded. Never is a denial of such importance made without coming to fact and fruition later. Why else is the topic even discussed? This line of thinking is basic when ripping the BS from US financial propaganda. Notice the Credit Default Swap price for USTreasury Notes. The price is around 0.24% for the AAA-rated USGovt debt. Without colossal continued corrupt pressure against the ratings agencies by the US thugs in financial orifices, the USGovt debt would have been downgraded immediately with the launch of the Iraq and Afghan Wars, or years earlier. The Shock & Awe should have been reflected in USTBond risk.



CHECK OUT THE 1-MONTH USTBILL YIELD
The US bankers have lost control badly. Even ill-equipped USFed Chairman Bernanke admitted recently as having lost control. He spoke to economist David Hale at a Florida financial conference last week. Bernanke said, �We have lost control. We cannot stabilize the dollar. We cannot control commodity prices.� The age of central bank control, ala Soviet Politburo, is coming to an end. GOLD RECOGNIZES IT. Check out the 1-month USTreasury Bill yield. Incredibly, it closed under 0.1% yesterday. This ultra short-term bond yield testifies to lost control and the advent of extreme conditions, the prelude to an historical storm. Just what should the USTreasury maturity yield curve look like before a default? Let me check, and get back to you. Ooops, no precedent! The TED Spread (difference between USTreasury and EuroDollar yield) has jumped up, another signal of banking turmoil. In recent days, the tight grip control of certain commodities has been lost by the Evil Ones. Even Morgan Stanley has been forced to close down its trading desks at the Platts Window, where they trade crude oil. The USCongress is equally lost. Today, a quote came from Senate Majority Leader Harry Reid. They are unlikely to pass new legislation to overhaul financial regulations this year. He said, �No one knows what to do. We are in new territory, this is a different game. [Neither Federal Reserve Chairman Ben Bernanke nor Treasury Secretary Henry Paulson] know what to do, but they are trying to come up with ideas.� Gee! Maybe the chief architects of this grand failure have a solution? They should be ignored then imprisoned. Perhaps they are seeking final opportunities to steal, raid, and pilfer from the public till during the final months of this Administration.



The 2-year USTBill yield has also plummeted, but not as drastically. It is now far below the official USFed Fed Funds 2.0% rate. Some thought the USFed might cut rates in an act of desperation this week, me included. My guess is for two reasons, why they did not. 1) They did not want to project an impression of lost control, not after the Fannie Mae & Freddie Mac bailout, not after the failed Lehman Brothers deal, not after the shotgun wedding for Bank of America & Merrill Lynch, not after the secret eloped marriage in the works for JPMorgan & Washington Mutual, not after the merger of cadavers planned between Morgan Stanley & Wachovia. And 2) the Bank For Intl Settlements in Switzerland might have forbidden a USFed rate cut. My maintained position is firm, that the BIS ordered the US to fix it or flush it! Let�s watch to see if the 2-year TBill yield continues lower, a signal of even more lost control.



THE USELESS INFLATION VS DEFLATION DEBATE
My greatest impatience is shown for those who attempt to argue whether inflation or deflation is winning, and where we stand. Such pursuits of chasing one�s tail serves to illuminate nothing and to waste time. We have both, will continue to have both, as both intensify. The key is for monetary inflation to enter the mainstream, which is underway finally. One can benefit little from putting the unique crisis into convenient cans for purposes of organization. This is not simple, and people should not attempt to simplify the ongoing collapse of the Great American Experiment in Counterfeit Monetary Systems. To be sure, we have gone past a tipping point. The move to flood the monetary pools of phony money beyond Wall Street is the big event. To be sure, the bankruptcies and deep insolvent events are accelerating. To be sure, the desperation for attempted mergers is palpable. To be sure, central bank activity with lending, swapping, and even accepting stock equity as collateral is a sign of total absence of any safeguard toward respect of moral hazard.

Looking for inflation vs deflation labels when the failure and default of USTBonds and receivership occur TOTALLY MISSES WHAT IS GOING ON. This is a death event for the US finances, US banking system, USEconomy structure, and USTreasurys, all rolled together like a gigantic vortex hurricane. Looking for (in) vs (de)flation in this environment is like observing color schemes on walking dead as they attempt to merge at a ceremony. They are of DEAD PARTIES ATTEMPTING TO SHARE COUNTER-PARTY RISK. Looking for (in) vs (de)flation when dead partners are marrying is like DECIDING WHETHER A HONEYMOON SHOULD TAKE PLACE IN THE CARIBBEAN OR FRENCH COAST. They both go to the recycling cemetery instead. The place to be now is in gold and silver, preferably silver since central banks own none and because silver has strong industrial demand. Besides, a silver default of sorts has been in effect for several months.

It is with pleasure to attend again the upcoming Cambridge House conference in Toronto on October 4 and 5. Thankfully, my Frequent Flyer miles were used to cover the airfare from Costa Rica, where the rainy season is coming close to an end. POR FIN! Is that inflationary or deflationary? With absolute certainty, one can say WHO CARES?

Buy gold, buy silver, do NOT use borrowed money or leverage, and rest comfortably at night, since it cannot be taken from you. Then patiently wait for gravity to work, for night to follow day, for evil to be unmasked, for foreign creditors to arrive with hatchets

Re: A must see for All Newbies & lurkers
 

Essential listening. 20th September 2008

http://www.financialsense.com/fsn/main.html

If these don't work click link above.

1st Hour with FS NewsTeam
Select an Audio Format
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Puru Saxena
Economy

Richard Loomis
Energy

James Turk
Metals


3rd Hour with Jim & John
Select an Audio Format for Part 1
RealPlayer | WinAmp | Windows Media | Mp3

Who's Next
Other Voices with John Williams, Shadow Government Statistics:
Helicopter drops & B-52 bombing runs
Select an Audio Format for Part 2
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Band of Brothers
The Next Major Crisis
Select an Audio Format for Part 3
RealPlayer | WinAmp | Windows Media | Mp3

Q-Calls

:bull-buddy-icon:

Re: A must see for All Newbies & lurkers
 

Thought would add it here Thanks Khan :wink:

Re: A must see for All Newbies & lurkers
 

Thanks Khan :wink:

Re: A must see for All Newbies & lurkers
 

An interesting question and problem is associated with what you have just posted.

I noticed this phenomena about 2001, and pondered the meaning for nearly five years before trying to write anything about it. Here is one little ditty: http://goldismoney.info/forums/showthread.php?p=736494 (partial extract)From a thread titled "Design a perfect gold/silver currency post #42 of 63 posts.

I suggest that your line: "When we have coins that have a face value higher..." should read: "When we have coins that have a face price higher..."

Carver

Re: A must see for All Newbies & lurkers
 

World Economy debate.

http://news.bbc.co.uk/1/hi/business/7636497.stm

Re: A must see for All Newbies & lurkers
 

Silver Summit Discussion 20th September 2008
Click below for entertaining audio.

http://www.kereport.com/WeekendSpecial/WS092008-1.mp3

On the Korelin Economics Report which will air this weekend, there is an interview with James Turk, Paul van Eeden, Dr. Martin Weiss and Jay Taylor this weekend so click on the following over the weekend.

http://www.kereport.com/

Re: A must see for All Newbies & lurkers
 

Interesting Table.
http://www.nowandfutures.com/us_weimar.html

German Weimar Republic in the early 1920s and the U.S. - Troubling similarities

Re: A must see for All Newbies & lurkers
 

Interesting this week
http://www.financialsense.com/fsn/main.html

September 27, 2008
1st Hour with FS NewsTeam
Select an Audio Format
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Robert McHugh
Technical

Peter Schiff
Economy

Roger Conrad
Energy

Metals Roundtable

3rd Hour with Jim & John
Select an Audio Format for Part 1
RealPlayer | WinAmp | Windows Media | Mp3

The Beginning of the End
The Killer Storm

Re: A must see for All Newbies & lurkers
 

Next videos up
http://www.chrismartenson.com/peak-oil-c

http://www.chrismartenson.com/environmental_data

http://www.chrismartenson.com/future_shock

Re: A must see for All Newbies & lurkers
 

GOLD RUSH

http://www.telegraph.co.uk/finance/f...r-bullion.html

Don't fall for the paper ETF though, physical is the way to go no counterparty risk.

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.

:bull-smile:

Re: A must see for All Newbies & lurkers
 

Excellent Vids ........... thanks to all


T

Re: A must see for All Newbies & lurkers
 

Thanks for the appreciation TA :coolbeer: Plenty viewing lately, welcome to all the newbies. :applause_

Re: A must see for All Newbies & lurkers
 

Just came across this for you guys over the pond. :wink:

http://www.moneytalksnews.com/2008/1...our-bank-safe/

Re: A must see for All Newbies & lurkers
 

Good article written Feb 5th 2008 by Nouriel Roubini

12 steps to financial disaster. Maybe everyone needs to buckle up for next week as the article is right on the money it's scarey.

http://media.rgemonitor.com/papers/0/12_steps_NR

Re: A must see for All Newbies & lurkers
 

Video interview if you click on the link within the link.

http://news.bbc.co.uk/1/hi/programme...lk/7646224.stm

In a HARDtalk programme broadcast on 1 October, Stephen Sackur talks to economist Nouriel Roubini and journalist Oliver Kamm about the current economic crisis.


Click here to watch the full interview
The US House of Representatives' rejection of a $700 billion plan aimed at bailing out Wall Street sent markets plummeting.

None of this is a surprise to critics like economist Professor Nouriel Roubini from New York University.

Roubini predicted the current crisis back in 2006.

He thinks US Treasury Secretary Henry Paulson's rescue package is too late -- and furthermore, it's "totally flawed".

In a special programme, Professor Roubini joins Times columnist Oliver Kamm in the HardTalk studio.

Stephen Sackur asks them if we really are heading for another Great Depression.

Re: A must see for All Newbies & lurkers
 

Ok guys interesting week at Financial sense 4th October

Listen to the Q lines @ around 50 min mark will hear what someone did with their savings & if they hadn't. :wink:

http://www.financialsense.com/fsn/main.html

Select an Audio Format for Part 3
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Q-Calls

Re: A must see for All Newbies & lurkers
 

Interesting interactive guide of inflation & what has happened in different time periods. Scroll down the years using the pencil & notes that appear, enjoy.

http://www.bankofengland.co.uk/educa...line/chart.htm

Re: A must see for All Newbies & lurkers
 

Some more interesting video's from above link
http://www.bankofengland.co.uk/educa...ames/index.htm

And this one with a piggy. :smile:

http://www.bankofengland.co.uk/educa...lash/index.htm


http://www.bankofengland.co.uk/educa...ces/prices.htm

Re: A must see for All Newbies & lurkers
 

"The creature from jekyll island" is a fantastic book! I have read it twice and likely will read it again!

Thanks for all the great links and videos!

Re: A must see for All Newbies & lurkers
 

Thanks Penny :wavey: I'm still trying to get my hands on a copy of the book. This place will blow your mind especially those that had no idea like myself until recently. Glad to repay the knowledge gained to help others. :beer:

Re: A must see for All Newbies & lurkers
 

Courtesy of Uranian :applause_ thought good to post here.

Meet the Fed
http://www.restoretherepublic.com/to...ederal-reserve

Originally Posted by uranian
A Phone Call To The Fed
From Dan Benham �1988-2002
d.benham@worldnet.att.net
9-8-2

The following is a conversation with Mr. Ron Supinski of the Public Information Department of the San Francisco Federal Reserve Bank. This is an account of that conversation.

CALLER - Mr. Supinski, does my country own the Federal Reserve System?

MR. SUPINSKI - We are an agency of the government.

CALLER - That's not my question. Is it owned by my country?

MR. SUPINSKI - It is an agency of the government created by congress.

CALLER - Is the Federal Reserve a Corporation?

MR. SUPINSKI - Yes

CALLER - Does my government own any of the stock in the Federal Reserve?

MR. SUPINSKI - No, it is owned by the member banks.

CALLER - Are the member banks private corporations?

MR. SUPINSKI - Yes

CALLER - Are Federal Reserve Notes backed by anything?

MR. SUPINSKI-Yes, by the assets of the Federal Reserve but, primarily by the power of congress to lay tax on the people.

CALLER - Did you say, by the power to collect taxes is what backs Federal Reserve Notes?

MR. SUPINSKI - Yes

CALLER - What are the total assets of the Federal Reserve?

MR. SUPINSKI - The San Francisco Bank has $36 Billion in assets.

CALLER - What are these assets composed of?

MR. SUPINSKI - Gold, the Federal Reserve Bank itself and government securities.

CALLER - What value does the Federal Reserve Bank carry gold per oz. on their books?

MR. SUPINSKI - I don't have that information but the San Francisco Bank has $1.6 billion in gold.

CALLER - Are you saying the Federal Reserve Bank of San Francisco has $1.6 billion in gold, the bank itself and the balance of the assets is government securities?

MR. SUPINSKI - Yes.

CALLER - Where does the Federal Reserve get Federal Reserve Notes from?

MR. SUPINSKI - They are authorized by the Treasury.

CALLER - How much does the Federal Reserve pay for a $10 Federal Reserve Note?

MR. SUPINSKI - Fifty to seventy cents.

CALLER - How much do they pay for a $100.00 Federal Reserve Note?

MR. SUPINSKI - The same fifty to seventy cents.

CALLER - To pay only fifty cents for a $100.00 is a tremendous gain, isn't it?

MR. SUPINSKI - Yes

CALLER - According to the US Treasury, the Federal Reserve pays $20.60 per 1,000 denomination or a little over two cents for a $100.00 bill, is that correct?

MR. SUPINSKI - That is probably close.

CALLER - Doesn't the Federal Reserve use the Federal Reserve Notes that cost about two cents each to purchase US Bonds from the government?

MR. SUPINSKI - Yes, but there is more to it than that.

CALLER - Basically, that is what happens?

MR. SUPINSKI - Yes, basically you are correct.

CALLER - How many Federal Reserve Notes are in circulation?

MR. SUPINSKI - $263 billion and we can only account for a small percentage.

CALLER - Where did they go?

MR. SUPINSKI - Peoples mattress, buried in their back yards and illegal drug money.

CALLER - Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation?

MR. SUPINSKI - I don't know.

CALLER - If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt?

MR. SUPINSKI - No

CALLER - Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy?

MR. SUPINSKI - About $7.

CALLER - Correct me if I am wrong but, $7 of additional Federal Reserve Notes were never put in circulation. But, for lack of better words were "created out of thin air " in the form of credits and the two cents per denomination were not paid either. In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest. Is that correct?

MR. SUPINSKI - Yes

CALLER - Is that the reason there are only $263 billion Federal Reserve Notes in circulation?

MR. SUPINSKI - That is part of the reason.

CALLER - Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nation's money and to regulate the value thereof from Congress to a Private corporation. And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest. Is that correct and the debt can never be paid off under the current money system of country?

MR. SUPINSKI - Basically, yes.

CALLER - I smell a rat, do you?

MR. SUPINSKI - I am sorry, I can't answer that, I work here.

CALLER - Has the Federal Reserve ever been independently audited?

MR. SUPINSKI - We are audited.

CALLER - Why is there a current House Resolution 1486 calling for a complete audit of the Federal Reserve by the GAO and why is the Federal Reserve resisting?

MR. SUPINSKI - I don't know.

CALLER - Does the Federal Reserve regulate the value of Federal Reserve Notes and interest rates?

MR. SUPINSKI - Yes

CALLER - Explain how the Federal Reserve System can be Constitutional if, only the Congress of the US, which comprises of the Senate and the House of representatives has the power to coin and issue our money supply and regulate the value thereof? [Article 1 Section 1 and Section 8] Nowhere, in the Constitution does it give Congress the power or authority to transfer any powers granted under the Constitution to a private corporation or, does it?

MR. SUPINSKI - I am not an expert on constitutional law. I can refer you to our legal department.

CALLER - I can tell you I have read the Constitution. It does NOT provide that any power granted can be transferred to a private corporation. Doesn't it specifically state, all other powers not granted are reserved to the States and to the citizens? Does that mean to a private corporation?

MR. SUPINSKI - I don't think so, but we were created by Congress.

CALLER - Would you agree it is our country and it should be our money as provided by our Constitution?

MR. SUPINSKI - I understand what you are saying.

CALLER - Why should we borrow our own money from a private consortium of bankers? Isn't this why we had a revolution, created a separate sovereign nation and a Bill of Rights?

MR. SUPINSKI - (Declined to answer).

CALLER - Has the Federal Reserve ever been declared constitutional by the Supreme Court?

MR. SUPINSKI - I believe there has been court cases on the matter.

CALLER - Have there been Supreme Court Cases?

MR. SUPINSKI - I think so, but I am not sure.

CALLER - Didn't the Supreme Court declare unanimously in A.L.A. Schechter Poultry Corp. vs. US and Carter vs. Carter Coal Co. the corporative-state arrangement an unconstitutional delegation of legislative power? ["The power conferred is the power to regulate. This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons." Carter vs. Carter Coal Co...]

MR. SUPINSKI - I don't know, I can refer you to our legal department.

CALLER - Isn't the current money system a house of cards that must fall because, the debt can mathematically never be paid-off?

MR. SUPINSKI - It appears that way. I can tell you have been looking into this matter and are very knowledgeable. However, we do have a solution.

CALLER - What is the solution?

MR. SUPINSKI - The Debit Card.

CALLER - Do you mean under the EFT Act (Electronic Funds Transfer)? Isn't that very frightening, when one considers the capabilities of computers? It would provide the government and all it's agencies, including the Federal Reserve such information as: You went to the gas station @ 2:30 and bought $10.00 of unleaded gas @ $1.41 per gallon and then you went to the grocery store @ 2:58 and bought bread, lunch meat and milk for $12.32 and then went to the drug store @ 3:30 and bought cold medicine for $5.62. In other words, they would know where we go, when we went, how much we paid, how much the merchant paid and how much profit he made. Under the EFT they will literally know everything about us. Isn't that kind of scary?

MR. SUPINSKI - Yes, it makes you wonder.

CALLER - I smell a GIANT RAT that has overthrown my constitution. Aren't we paying tribute in the form of income taxes to a consortium of private bankers?

MR. SUPINSKI - I can't call it tribute, it is interest.

CALLER - Haven't all elected officials taken an oath of office to preserve and defend the Constitution from enemies both foreign and domestic? Isn't the Federal Reserve a domestic enemy?

MR. SUPINSKI - I can't say that.

CALLER - Our elected officials and members of the Federal Reserve are guilty of aiding and abetting the overthrowing of my Constitution and that is treason. Isn't the punishment of treason death?

MR. SUPINSKI - I believe so.

CALLER - Thank you for your time and information and if I may say so, I think you should take the necessary steps to protect you and your family and withdraw your money from the banks before the collapse, I am.

MR. SUPINSKI - It doesn't look good.

CALLER - May God have mercy on the souls who are behind this unconstitutional and criminal act called the Federal Reserve. When the ALMIGHTY MASS awakens to this giant hoax, they will not take it with a grain of salt. It has been a pleasure talking to you and I thank you for your time. I hope you will take my advice before it does collapse.

MR. SUPINSKI - Unfortunately, it does not look good.

CALLER - Have a good day and thanks for your time.

Re: A must see for All Newbies & lurkers
 

Another video guys.

http://goldsilver.com/video_player.p...14d3383be28015

Re: A must see for All Newbies & lurkers
 

http://news.bbc.co.uk/1/hi/business/7654525.stm

Financial crisis at-a-glance: 6 Oct
1816: Iceland's prime minister says the government has agreed legislation to enable it to have wide-ranging control over banks, including the option to merge them or force them to declare bankruptcy.

1649: The FTSE 100 Index of leading shares closed down 7.85% at 4589 points, a drop of 391 points.

1638: The Cac 40 in Paris closes down 9%, the worst fall in percentage terms since its creation in 1988.

1545: Iceland's government will offer an unlimited guarantee for all deposits in domestic commercial and savings banks and their branches.

1534: Russia's dollar-denominated RTS stock market closes down 19%, its worst one-day fall on record. The index closes at 866.39 points, down 65% from the all-time high reached in May this year.

1530: Chancellor Alistair Darling says the government will do whatever necessary to ensure the stability of the financial system, but stops short of guaranteeing all UK bank savings.

1506: The Federal Reserve acts to boost liquidity in money markets - by making $150bn available for auction on 24-day and 85-day loans.

1435: Trading on Brazil's stock market is suspended half an hour after opening following a 10% fall on the main index.

1430: On Wall Street the Dow Jones opens down 208 points, or 2%, at 10,117.


DOW JONES INDUSTRIAL AVERAGE: 6th October 2008

1350: In the US, the President's Working Group on Financial Markets says it is moving quickly to exercise the new powers it has been given as part of the Wall Street rescue package, saying it will move "with substantial force on a number of fronts".

1315: The Federal Reserve says it will start paying interest on the reserves that banks are forced to deposit with it.

1218: Iceland's stock exchange says it has suspended trading in all financial shares including the major banks Kaupthing, Landsbanki and Glitnir.

1205: Russia's benchmark RTS stock exchange reopens after a one-hour suspension triggered by a 14% share fall. The country's other exchange, the Micex, underwent a similar shutdown earlier in the day after shares slumped 15%.

1145: The FTSE 100 in London is down 5.4%, the Cac 40 in Paris is down 5.9% and the Dax in Frankfurt has dropped 5.4%.


FTSE 100 INDEX: 6th October 2008

1140: New car registrations fall for the fifth consecutive month, down 21.2% in September, the Society of Motor Manufacturers and Traders says. Its chief executive says the car industry is facing the most difficult economic conditions for 17 years.

1134: International Monetary Fund managing director Dominique Strauss-Kahn says Europe needs a collective response to the financial crisis and warns countries not to act alone.

1129: Bank of America says it is ready to spend up to $8.4bn to restructure the troubled mortgage loan portfolio of the mortgage lender Countrywide, which it acquired in July.

1115: Key European markets all sharply lower in morning trading. London's FTSE 100 index and France and Germany's main stock markets have all lost about 6%.

1027: BBC business editor Robert Peston says the German government is not legislating to provide extra protection for savers, despite Chancellor Angela Merkel's commitment at the weekend that no German savers would lose a penny.

0956: Iceland announces part of a plan to hammer out a financial package to shore up its troubled banking sector.

Re: A must see for All Newbies & lurkers
 

http://africa.reuters.com/wire/news/usnN07435260.html

US Mint halts some American Eagle coin production
Tue 7 Oct 2008, 12:02 GMT

[-] Text [+] NEW YORK, Oct 7 (Reuters) - Unprecedented demand for precious metals and volatile markets forced the U.S. Mint to cease production for the half-ounce and quarter-ounce popular American Eagle gold coins for the rest of this year and to supply other bullion coins on an allocation basis.

"Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high," the U.S. Mint said in a Monday memorandum to its authorized coin dealers.

"The U.S. Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the U.S. Mint to focus remaining bullion production primarily on American Eagle Gold One Ounce and Silver One Ounce Coins," the Mint said.

The Mint said it would continue to supply one-ounce American Eagle gold coins and one-ounce American Eagle silver coins on an allocation basis to coin dealers.

For half-ounce and quarter-ounce American Eagles, the Mint said that inventory was depleted last week and no more coins would be produced for 2008.

Produced from gold mined in the United States, the American Eagles have been novel items among collectors and investors since their introduction in 1986. Each coin has a face value of $50 but it is sold by authorized dealers at a premium to the price of gold.

Coin dealers from the United States to Canada have recently reported a surge in buying of bullion coins and other gold products as a worsening crisis in the financial markets prompted people to seek a safe haven in precious metals.

Re: A must see for All Newbies & lurkers
 

http://www.chrismartenson.com/

Interesting stuff on the front page.

Tuesday, October 7, 2008, 2:46 pmPhysical gold market "on fire"
I have long advocated that owning physical gold is the cornerstone of a prudent portfolio. How much is up to you, but in my estimation it should be somewhere north of 10% of your total holdings.

I have recently had difficulty trying to help a few individuals obtain the gold and/or silver they desired. In my 6 years of being a very active gold/silver investor, I have never seen anything like this. Product is hard to find, and getting harder.

The "official price," as set by the paper traders in the NY Comex pits, is miles away from the actual price you'd have to pay to actually get real physical gold, and growing wider by the week.

This "spread" between the "official" spot price and the real price you'd have to pay has doubled for gold in the past month and is now a whopping 40% for quality silver product.

And that's if you can find any.

Today the US mint announced that "due to high demand" they are ceasing production of a wide range of gold products.


Quote:
US Mint halts some American Eagle coin production
NEW YORK, Oct 7 (Reuters) - Unprecedented demand for precious metals and volatile markets forced the U.S. Mint to cease production for the half-ounce and quarter-ounce popular American Eagle gold coins for the rest of this year and to supply other bullion coins on an allocation basis.

The 'explanation' given is that with demand so high the mint has decided to cease production so that it can "catch up". I am no production expert, but halting production seems like an odd way to go about "catching up".

What makes more sense to me is that the US Mint is running out of stock material with which to work. That fits the decision like a t-shirt that's three sizes too small.

At Colorado Gold, a very reliable gold dealing website, these messages now grace the front page:


Quote:
Gold: No Credit Suisse, Buffalos, Maple Leafs, or tenth ounce or half ounce Gold Eagles till you see it here

Silver: SORRY. NO SILVER ORDERS ACCEPTED TILL ALL EXISTING ORDERS ARE FILLED. THE MINTS WILL NEVER CATCH UP, IF ORDERS KEEP PILING UP. IT COULD BE SEVERAL WEEKS BEFORE SILVER ORDERS ARE ONCE AGAIN TAKEN.

There is a graph here but unsure how to post, maybe someone can do it. :wink:

The Fed - Picture of the Day
In 1998, the Long Term Capital Management (LTCM) blow-up (aka "the worst financial crisis of all time,") happened. To fight the pernicious effects of this crisis, the Fed expanded its asset base, which is a fancy way of saying that they pushed a bunch of cash out into the banking system

Well, that crisis passed, and the Fed slowly re-absorbed that excess cash and returned to a more normal rate of exponential money expansion.

Then the Y2K 'crisis' came along and the Fed shoved tons of money into the banking system in anticipation of a crisis that never was. (Hey, they didn't know that.) Unfortunately, all this hot money poured onto an already-raging stock market mania and served to fuel the final blow-off that finally burst in the spring of 2000.

Then 9/11 came along, and this was by far a larger shock to the system than either of the prior crises. Again, money was shoved into the system and then reeled back in later.

Well, then, this picture will help you put this current crisis into context.





Yikes.

The opportunity for this level of monetary monkeying to end up in the hyperinflationary ditch is very, very high.

Re: A must see for All Newbies & lurkers
 

Good radio show on what's happening & what to prepare for.
Click on the link within the link.

http://www.chrismartenson.com/blog/r...d-kzyx-ca/6427

Re: A must see for All Newbies & lurkers
 

This is a really excellent long article which demystifies the jargon.

http://www.sundayherald.com/news/her...ial_crisis.php

Smoke, mirrors ... and how a handful of missed mortgage payments started the global financial crisis
GLOBAL FINANCIAL CRISIS, PART 4: How we got here -Iain Macwhirter traces the history of financial mismanagement, fraud and complex mathematics that combined to culminate in a run on – and the collapse of – some of the world’s biggest banks

LAST WEEK, something happened which I never expected to see in my lifetime. There was a general run on the entire British banking system, something that hasn't happened before, even in wartime. Ordinary people started moving their money around from bank to bank in fear that they might lose their cash. Millions of pounds were flowing across the Irish sea for the safe haven of the Irish government's recently-announced 100% depositor guarantee. The UK's banks were on the verge of losing public trust, and public trust is the one thing that banks need to survive.

We are witnessing what the commentator Martin Wolf of the Financial Times calls "the disintegration of the financial system". But how did we get here? How did a few dodgy sub-prime mortgages in American inner cities lead to what is beginning to look like the collapse of capitalism?

This is the great unanswered question in the midst of this extraordinary crisis, as banks implode one after the other across the world. We hear endless talk these days about "de-leveraging", "derivatives", "collateralised debt obligation" and "credit default swaps" most of which is completely incomprehensible - and very often designed to be. A lot of what has been going on is essentially fraudulent. But underneath all the jargon is a fundamental truth about banking: that it is based on a kind of confidence trick.

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It's called "fractional reserve banking". Alone among commercial institutions, banks are allowed to create value out of nothing - in other words, they are allowed to lend out money they don't have.

To explain more fully: at any one time a bank may have, say, �1 billion in assets, but it will have lent out at least �10bn. That �10bn will yield interest, earning money for the bank - but it's interest on money the bank doesn't actually own, that is not based on deposits in its accounts. Magic. Money for nothing.

But this magic only works if the debtors the bank has lent to don't default on their loans and that the savers who have placed deposits in a bank do not all try to take them out all at once. If they did, then the bank would rapidly become insolvent, because of the �9bn it has lent out that it never had in the first place. That's what started to happen last week: the confidence trick began to fail.

Banking practice dates from medieval times when kings and aristocrats deposited their gold with goldsmiths for safekeeping. The goldsmiths noted that the owners didn't all ask for all the precious metals back at the same time, so they started to lend it out. This is why, until very recently, bank notes "promised to pay the bearer on demand" a sum of sterling silver. It was all based on precious metals. But not any more.

Currency ceased to be linked to precious metals in 1971 when America abandoned the gold standard and ordained that, instead, the world should regard their dollar as being "as good as gold" and use it as the universal medium of exchange. This is called "fiat" money, and some economists believe that it is the root of all evil because, with no intrinsic value, governments cannot resist printing more and more of it, thus devaluing their currency.

The prevailing view nowadays among economists is that central banks can maintain the value of their currencies by manipulating interest rates up or down to control inflation. But this depends on the willingness of the banks to do so.

It also depends on the wisdom and prudence of the banks who manufacture this magic stuff called credit. For the past 20 years, central banks have seen economic growth as more important than combating inflation, and banks have thrown prudence to the winds.

After the 1987 crash, central banks cut interest rates and economic life resumed. Again in the late 1990s, after the Asian financial crisis and the near-collapse of the hedge fund Long Term Capital Management, banks cut interest rates again. After the dotcom crash in 2001, the US Federal Reserve, followed by the Bank of England, cut rates dramatically yet again, and kept them low for the next three years, stimulating house price bubbles in both countries.

At the same time, the bankers made saving money a loser's game - interest rates were held below the rate of inflation, so anyone who saved actually lost money.

The bankers knew perfectly what they were doing - the former Bank of England governor, Sir Eddie George, told a Commons Select Committee two years ago that the housing boom was "unsustainable" but that he and Gordon Brown deliberately inflated it to prevent a recession. Unfortunately, it got a bit out of hand.

The other problem with central banks always cutting interest rates was that this encourages the banks to stop behaving themselves. Huge institutions, including Lehman Brothers and HBOS, started to think they were invincible, masters of the universe, "too big to fail".

Banks like HBOS piled into property, believing that house prices would never fall, and if they did, the Bank of England would slash interest rates and house prices would rise again.

Banks like Northern Rock stopped bothering about the boring business of attracting deposits from savers and started borrowing money on the international money markets to fund ever more ludicrous mortgage lending - such as their 125% so-called "suicide" loans. Northern Rock was still selling these "together" loans six months after it was nationalised.

This confidence that central banks would ride to the rescue led banks to take bigger and bigger risks. Instead of lending 10 times the value of its underlying assets, investment banks including Lehman started lending out 30 times their asset value. This is called leveraging, and allowed the hedge funds and private equity groups financed by Lehman to go on buying sprees across corporate world. They were getting colossal quantities of almost free money.

"Leveraged buy-outs" (LBOs) became the name of the corporate game. Groups of investors would get together, target a company - for instance, the AA in the UK - borrow to buy it, load it up with more debt, sell it, and move on.

Hedge funds flipped multi-billion companies the way amateur property speculators in California flipped houses.

But it was all based on credit, and the dark side of credit is debt. All of this leveraging works only as long as the underlying assets retain their value. Using leverage seemed like free money. But when assets decline in value, the ugly side of debt appears in the form of "de-leveraging".

If a bank has loaned out 30 times its assets, it has loaned out �3 trillion on the basis of only �100bn in reserves. If those assets lose half their value, the bank finds itself in the hole to the tune of �1.5trn.

Greatly simplified, this is what has happened in the last year. A class of complex paper assets called "securities", which are based on the value of residential mortgages, started to lose their value as US house prices started to slide. The banks suddenly stopped trading these mortgage-backed securities because they were afraid of the potential losses that might show up if they did.

These assets included the now-infamous sub-prime loans - money lent to Americans who couldn't possibly pay, in what was essentially fraudulent behaviour - which were packaged up into "collateralised debt obligations" and sold on to other banks and governments who didn't really know what they were buying.

THAT'S about where we stood at the time of the collapse of Northern Rock in August 2007. A general panic among banks froze inter-bank lending. Governments then stepped in, first to nationalise Northern Rock, then to pump billions of so-called "liquidity" loans into the system. In essence, the Bank of England agreed to exchange valuable Treasury bonds for dodgy mortgage assets. The banks could then use these Treasury bonds as a kind of currency, because everyone accepted their value was underwritten by the government - ie, by you and me.

But then something else happened. Huge Wall Street investment banks such as Bear Stearns started to discover that their assets were declining even more rapidly than expected, and investors started withdrawing their funds from them, causing a kind of bank run. To prevent widespread defaults, the US government stepped in and forced another bank, JP Morgan, to buy Bear at a fraction of its value. But this didn't stop the contagion.

Within the space of six months all the big investment banks on Wall Street had collapsed or been merged with other institutions in one of the greatest banking crashes of all time.

Then the big mortgage banks on either side of the pond started to go under - including IndyMac, Washington Mutual, Wachovia, HBOS and Bradford & Bingley. The two huge state-supported US mortgage banks, Freddie Mac and Fannie Mae - responsible for $5trn in mortgages - had to be nationalised, along with the world's largest insurance company, AIG.

Banks which had previously handled hundreds of trillions of investments were finding that they were becoming insolvent almost overnight.

Because of the global reach of these companies, this became a crash even more severe than the series of banking failures that led to the Great Depression in the 1930s.

We are now reaching what might be called the terminal stage in this crisis. The contagion has spread through the entire banking structure of the West. It has moved from a crisis of liquidity to a crisis of insolvency and, finally, to a crisis of confidence in the banking system - everyone wants their money out because no-one trusts their banks. The essential trust that allowed the goldsmiths to lend on the basis of their borrowed gold has begun to evaporate.

To prevent Ireland's banks going bust, the Taoiseach last week decided to guarantee all of the deposits in Irish banks, even though it would be impossible for the Irish government to pay up if everyone withdrew. Money is now flooding out of British banks to this "safe haven", causing fury in the UK.

So, what made the collapse quite so catastrophic that even hundreds of billions of pounds in liquidity loans was not enough to staunch the flow? Well, the answer appears to lie in what is called the "shadow banking system". This refers to the unregulated dealing by banks in what are called "derivatives" - these are financial instruments which don't have a value in themselves, but relate to a future value.

Originally, derivatives were things like pork belly futures - essentially bets on the value of that year's cull of hogs. But a hugely complex market evolved in the trading of derivatives called credit default swaps, which are like insurance policies taken out on corporate debt. In the space of five years the value of credit default swap contracts rose to $62trn, larger than the combined value of all the world's stock markets. The Bank for International Settlement in Basel calculated that the total value of all derivatives in the world last year amounted to some $500trn.

The market in these "over-the-counter" derivatives is unregulated, and traders are allowed to make bets and enter into contracts without having assets to back them up. The derivatives banks thought they had removed the risk by using complex mathematical formulae which seemed to indicate that they could so finely calculate the likelihood of making a loss that they could insure against it.

These derivatives and the mathematics underlying them are immensely complicated and very few people understand them. Indeed, it has emerged that the people who devised them didn't seem to understand them either, because the whole derivatives pyramid is now collapsing.

But through all the confusion the simple essential fact is that banks have hugely over-lent, their assets are declining, debtors are defaulting and their losses, multiplied by complex derivatives and de-leveraging, have become almost incalculable. The banks have had to cut back their lending drastically to build up their capital reserves, and they are now appealing to governments for direct injections of capital.

This is what the $700bn Troubled Asset Relief Programme was all about - using taxpayers money to try to shore up banking capital by buying their worthless assets. But the trouble with this scheme, devised by the former Goldman Sachs boss Henry Paulson, who is now the US treasury secretary, is that no-one really knows how big the losses of the banks are because of this huge amorphous cloud of impenetrable derivatives contracts.

But the story isn't over there. Not only did the banks lend too much and binge on dodgy derivatives, they based most of their devilish formulae on a presumption that house prices always go up. Now, statistically speaking, this is arguably the case - over time, house prices have always risen in the long run.

However, in the short run, the graph can be a very lumpy one, with rises and big falls. For some reason, the banks forgot this, and thought that the bubble in house prices that was ignited by the 2001 interest rate cuts would continue forever.

This was utter madness. House prices are now falling to trend - which means to their historic values. This means a reduction of something like 30%-50%, because the graph of prices always overshoots on the upside and downside. Look at any historical table of house prices and this is blindingly obvious - but for some reason the banks believed that the laws of economics had been suspended by their brilliant mathematics.

So now what happens? Well, as house prices continue to fall - as fall they must - the value of the assets in companies like HBOS will continue to be marked down. This is why Lloyds TSB shareholders are very reluctant to take on HBOS at any price, because it is stuffed with dodgy mortgages which are falling in value. The banks all hoped that by now the central banks would have cut interest rates and people would all have started buying houses again. But house prices are simply too high and have to fall, even with cuts in interest rates. The banks know this, which is why they are refusing to lend unless people can put up large deposits.

This creates a vicious circle which can only be resolved by the assets being revalued. House prices must come down; the banks' assets must be repriced; insolvent banks must be closed; interest rates must encourage saving; consumers will have to stop borrowing to spend and everyone will have to start paying their debts.

It's a tall order, and governments across the world are in denial. But the only way out of this mess is some very hard medicine. The longer governments and banks put off swallowing it, the longer the slump will last.

Re: A must see for All Newbies & lurkers
 

These week & last weeks radio shows a really good listen. In particular

http://www.financialsense.com/fsn/main.html
October 11, 2008

2nd Hour Guest Experts
Select an Audio Format
RealPlayer | WinAmp | Windows Media | Mp3



Bud Burrell
TheSanityCheck.com

Topic:
What's Wrong With This Picture?

October 18, 2008 they discuss the argument if we are in deflation or inflation as is discussed here numerous times & the reasons what they believe we are in. Along with the gold & silver prices & Jim is especially bullish on silver. :wink:

3rd Hour with Jim & John
Select an Audio Format for Part 1
RealPlayer | WinAmp | Windows Media | Mp3


Depression vs. Recession
The Credit Crisis: Is It Contained?
Is This the Bottom? with Frank Barbera
Select an Audio Format for Part 2
RealPlayer | WinAmp | Windows Media | Mp3

The Presidential Candidates' Positions on Energy, Taxes & Spending with Richard Loomis
How the Gold Market Has Changed
A National Strategy for Energy Security
Select an Audio Format for Part 3
RealPlayer | WinAmp | Windows Media | Mp3

Q-Calls

Re: A must see for All Newbies & lurkers
 

Why metal prices are cheap to buy based on money supply.

Re: A must see for All Newbies & lurkers
 

Good video on money situation.

http://news.bbc.co.uk/1/hi/business/7688308.stm

Re: A must see for All Newbies & lurkers
 

Listen to the latest financial sense broadcast 25th Oct very bullish on silver
http://www.financialsense.com/fsn/main.html

Credit default swaps explained.

http://www.cbsnews.com/video/watch/?id=4546583n

Re: A must see for All Newbies & lurkers
 

There are 42 parts to this one here is the first.

Re: A must see for All Newbies & lurkers
 

Wall Street's shadow markets
http://www.cbsnews.com/video/watch/?id=4502673n

Re: A must see for All Newbies & lurkers
 

Things are looking very grim as many of us realise so hope you all are trying to protect yourself with food supplies & the precious metals. It makes you realise why the metals are going to be particularly "precious". :wink:

Re: A must see for All Newbies & lurkers
 

Hi to all the newbies sure is getting busy around here :wavey:

Just thought I would post the following as I have heard a few members mentioned somebody called Mahendra. I didn't give much thought to it until I saw the name mentioned again today on the Net. Also there has been much talk about gold slumping to around the $600 ish or below range. Now this could be something or nothing as I hadn't really thought about the price implications of the currencies affecting gold with it being measured in dollars except noticing that the price in the UK hadn't come down much from the high price in March in dollar terms to recent lows today. I guess this should have sent alarm bells ringing loudly before as I had a niggle that something wasn't adding up. Now I get it :9536:

Now as some of us not being from the USA our prices have been rising in gold in particular making new highs in the pound & the Auzzie dollar to name just a few, so I guess the key is not to focus too much on the dollar but other currencies for gold prices. So instead of everyone thinking people need to panic as the dollar price declines it seems that the opposite is true in other currencies & the price is looking more bullish despite the decline in dollar terms as other currencies are weakening. Therefore it is looking wise to buy gold in other currencies (in your native country) rather than hold onto the paper currencies waiting for a pullback as it is looking like it is not coming especially in the UK as the currency is depreciating more than ever.

So after doing a bit of digging I came across some more details. Firstly I went to kitco gold prices in currencies http://www.kitco.com/ & clicked on different countries & looked up the price changes over the different periods within the country window. Now this gives a more accurate picture of what is happening to gold in other currencies & I guess more importantly showing how other currencies are weakening against the US dollar.

Now getting back to Mahendra I thought I would just show you what I found & let you make your own mind up as some of it seems interesting. After doing some searching through his predictions & firstly he indicates the following for 2008.

http://www.mahendraprophecy.com/2008-predictions.asp
Seven year trade from 17 March
Next Five months:

Gold will go to $665;

Silver $12.20;

Platinum $1150;

Palladium $280;

Now after checking the above on kitco historical charts he was close on silver & the others have all happened except Gold, but this could just be a matter of timing as there are plenty forecasts of Gold reaching that figure & he also indicates the currency values he foresees.

Then he states some other stuff.
http://www.mahendraprophecy.com/next...nsd.asp?PID=54

METALS

2008 holds mix trend for metals. From 14 of January metals will remain negative but from middle of February I see sharp rising in metals and upward trend shall continue till. From May 2008 metals will have negative trend and fall will be more than what they gained during Feb to Mid-March. From July to October, metals will trade weak but from Mid November through December metals will trade positive.

Metal stocks shall perform well in patches. First three month of year starting they will remain positive but from end of March metal stocks will have major setback for whole year. So I don�t recommend investors to hold gold and silver stocks after Mid-March 2008.


http://www.mahendraprophecy.com/Late...?Pyear=&page=3

Weekly Financial Newsletter for 13th to 17th October

GOLD/SILVER

We were negative on metals last week, and we still are. By going against stock markets, gold is committing a grave mistake. We have seen gold rising in the last three weeks on the fall of stock markets. As you are all aware, I am predicting a historic bull market for the DOW, and this will start any time, and the question is what gold will do when this happens! Last Friday the market started to stabilize, and gold/silver came down drastically.

Gold has been a major attraction for many people in recent years, and for astrological reasons, I supported it from 2001 to 2006. I have however been recommending getting in and out from that period because its trend has not been equally stable. Nevertheless, I would once again like to confirm that gold will move above $1500 at one point when time is favorable. One must note is that this does not in any way mean that you should begin buying now.

Last week silver came down sharply and it shall touch our predicted low of $7.90. We don�t recommend even a single contract buying at this stage neither in silver nor in gold. We maintain my prediction of fall in metals till end of October.

Once again buy gold against Euro, Pound and other currencies. Buy Dollar against other currencies and you will make fortune with this combinations. Meaning gold and Dollar will gain value against all currencies. Monday there will be positive opening but one can lettel gold around $863 and $872 because maximum side gold can reach $878. I don�t see gold trading above $872 in near future. I still believe that this week range will be $868 to $828 and silver $10.92 to $9.50. Same time you take trade in silver as well when you selling gold. As in medium term I see gold, silver and all other metals breaking previous low of 2008 so trade carefuly as I once gold break $828 then it can reach to $772 and silver can go to $8.80.

Here is Thursday's (17 Oct) interview with Rich Roffman: Go more then halfway on play (2600 point)http://www.therichroffmanshow.com/in...details&did=33

It does not matter if you believe what he says or if he calls everything exact but for people outside the US it is looking like the metals for those who are unconvinced are about the best place to hold your wealth or spare cash to retain your purchasing power going forward irrespective of what the dollar price is doing as other currencies are getting much weaker & it is not looking pretty.

Re: A must see for All Newbies & lurkers
 

Peter Schiff 6 years ago.:biggrin:

Re: A must see for All Newbies & lurkers
 

Jim Rogers interview.

http://www.usmarkets.tv/

Re: A must see for All Newbies & lurkers
 

This is a must listen to interview about silver. :bear_w00t:

From the 2nd hour 8th Nov.
http://www.financialsense.com/fsn/main.html

http://www.netcastdaily.com/broadcas...008-1108-2.asx

Re: A must see for All Newbies & lurkers
 

Hard times they compare elements to the times in Charles Dickens when banks failed then. Also on this weeks show is G Edward Griffin Author of Creature from Jekyll Island.

http://radio.goldseek.com/shows/2008...11.08.08-c.mp3

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Get ready for what you are about to hear. :biggrin:

http://goldsilver.com/video_player.p...14d3383be28015


http://goldsilver.com/video_player.p...14d3383be28015

:ok:

Re: A must see for All Newbies & lurkers
 

WOW and THANK YOU. Now my Ag Jones doesn't worry me as much as it used to.

Re: A must see for All Newbies & lurkers
 

Only glad to help "About":wavey: I think some people are in a hurry to get a positive return from their investments (physical bullion) instead of thinking that this is not a quick get rich fix. However despite the decline in dollar price of the metals when looking from the perspective of the UK then buying bullion it has actually made a substantial gain. I say this loosely as it is the declining value of the currency (�) which has shown the price increase in bullion prices despite the dollar gold spot price fall. Therefore those that have bought anytime this year in the UK no matter what the price are preserving their buying power against leaving their savings in a bank. So although the US are suffering in regards to the dollar gold spot price over the year I'm sure it will only be a matter of time before we are all in the same boat.

I have just found this which has some interesting interviews http://www.forbes.com/saxobank/ click on the topics listed to the left. The credit crisis is a good listen as are some of the others.

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

You got to listen to this. :rant:

This guy can't lie straight in bed. I contacted them a few weeks ago & they said they would not be getting in any gold nuggets in stock ever again. Also doesn't explain why they have been out of stock on bars for weeks/months on end now bearing in mind what he says in the interview & seems like he is hesitating plenty between his answers why he comes up with excuses over the questions put to him & contradicts himself quite a bit then tries to cover his tracks.

http://commoditywatch.podbean.com/20...-baird-and-co/

Re: A must see for All Newbies & lurkers
 

Dubai getting hit.

http://www.telegraph.co.uk/finance/n...-moves-in.html

Dubai's Palm Jumeirah sees prices fall as crunch moves in
Property prices on the Palm Jumeirah, the island in Dubai that has been dubbed the �eighth wonder of the world�, have plummeted by as much as 40pc since September amid fears that the global credit crisis is stalling the emirate�s economy.

By Louise Armitstead
Last Updated: 6:36PM GMT 20 Nov 2008

The Atlantis hotel is one of the biggest on the Palm The economic concerns come as the world�s biggest man-made island, which is created in the shape of a date palm, prepares to throw a $20m extravaganza for today�s launch of the �1bn Atlantis hotel on the Palm.

More than 2,000 world celebrities are due to attend the event tonight including Oprah Winfrey and actors Robert De Niro and Denzel Washington. Sol Kerzner, the South African billionnaire owner of the Atlantis is organizing the launch party.

A four-bedroom villa on the Palm, which is run by the state-owned developers Nakheel, is now selling for 10 million UAE dirhams (�1.8m), down from 15 million dirhams in September, Dubai-based property consultants Engel & Volkers told Reuters.

When work started on the Palm in 2001, the villas were snapped up for as much as �5m each and sold to buyers including footballer David Beckham and racing driver Michael Schumacher. In the following hype surrounding the island, nearly a quarter of the villas were sold to British buyers.

Nakheel said earlier this week it has witnessed a slowdown in the rate of real estate sales. Last month the developer announced it had scaled back dredging work on its massive Palm Deira project, the largest of three palm archipelagos that is planned to house more than 1 million people.

Meanwhile buyers are struggling to get mortgage loans in the region. Dubai Islamic mortgage lender Amlak told Reuters today it had suspended new mortgage loans as Dubai�s real estate sector shows further signs of stress.

Dubai-based Elysian Real Estate this week sent out a text message to up to 40,000 mobile phones advertising distressed property sales, offering a luxury six bedroom, six bathroom villa in Dubailand, a multi-billion-dollar luxury theme park.

The Palm is the flagship part of Dubai�s ambitious �Universe� development. The Universe will extend Dubai�s coastline to around 625 miles (calculated by measuring the coastal circumferences of the various manmade archipelagos), around 15 times its natural 43 miles.

Also bullish article
http://www.telegraph.co.uk/finance/p...time-high.html

Demand for gold at an all-time high
Demand for gold reached a record high in the third quarter as investors sought refuge from the financial crisis and volatile stock markets, according to the World Gold Council.

By Paul Farrow
Last Updated: 8:31AM GMT 20 Nov 2008

World Gold Council: Demand for gold at all-time high
The WGC said demand for gold reached an all-time quarterly record of $32bn between July and September as investors around the world sought refuge from the global financial meltdown. This was 45pc higher than the previous record in the second quarter of 2008.

Demand for gold via exchange traded funds (ETFs) and bars and coins was the biggest contributor to overall demand during the quarter.

The figures show investment demand from private investors rose by 121pc to 232 tonnes in the third quarter, with strong bar and coin buying reported in Swiss, German and US markets. The quarter also witnessed widespread reports of gold shortages among bullion dealers across the globe, as investors searched for a haven.

Overall, the third quarter saw Europe reach an all-time record of 51 tonnes of bar and coin buying and France became a net investor in gold for the first time since the early 1980s.

Gold ETFs enjoyed a record quarterly inflow of 150 tonnes. The peak in inflows occurred in late September, triggered by the collapse of Lehman Brothers and a fear of banking sector failures. Net inflows surged by an unprecedented 111 tonnes during five consecutive trading days, equivalent to $7bn. Jewellery buyers also returned to the market in droves on a lower gold price.

James Burton, the chief executive of World Gold Council, said: "Gold's universal role as a store of value has shone through during this quarter, helping attract investors and consumers to all forms of gold ownership. The rise in demand for gold bars and coins has been impressive, as has the record rise in gold ETF inflows."

However, the price of gold has fallen in recent days to around $730 an ounce on speculation that the slumping global economy will reduce demand for commodities.

But Mark Harris at New Star said gold shares continued to look cheap and remained a decent portfolio diversifier.

He said: "The process of global deleveraging may be affecting many previously reliable ratio signals, so it is important to monitor the activity of the constituent instruments. Many investors have retreated from mining stocks due to concerns about a slowdown in emerging markets' growth and the potential effects of inflation on consumer spending, particularly in China, the world's fourth largest gold producer.

"Any slowdown in growth would be from a high base, however, and many emerging market economies continue to enjoy healthy growth on a relative basis.

"But I believe that the recent underperformance of gold stocks represents a necessary correction following a lengthy commodities bull run. It anticipates higher levels over the coming months and expects to increase its holdings in the sector to benefit from these moves.

"Overall, stock markets are likely to remain highly volatile, perhaps even retesting lows in the short term. In such circumstances, gold should remain a useful portfolio diversifier."

:9536:

Re: A must see for All Newbies & lurkers
 

Peter Schiff
:wink:

http://www.cnbc.com/id/15840232?video=935047784

Re: A must see for All Newbies & lurkers
 

WOW! Worth a listen. :bear_w00t:

http://finance.yahoo.com/tech-ticker...WM,CFC,XLF,JPM

Former Regulator: Clear Fraud in Financial Crisis -- Why Isn't Anyone in Jail?
Posted Nov 21, 2008 12:47pm EST by Aaron Task in Newsmakers, Banking
Related: BAC, WM, CFC, XLF, JPM
In the aftermath of the corporate scandals earlier this decade, investor confidence was (partially) restored by a parade of "perp walks" of fallen chieftains like Ken Lay, Bernie Ebbers, and Dennis Kozlowski.

But nearly two years into the bursting of booms in housing and mortgage securities, scant few related arrests have been made � and most of those have been focused on individual mortgage brokers vs. major industry leaders.

"There is no poster child [for the housing scandal] because you need to investigate, and you need to bring cases and we haven't done either against the major players," says William Black, Associate Professor of Economics and Law at the University of Missouri � Kansas City and a former federal regulator.

Black, who was counsel to the Federal Home Loan Bank Board during the S&L Crisis and blew the whistle on the "Keating Five" in 1989, says investigations have shown fraud incidence of 50% at (once) major subprime lenders like IndyMac and Countrywide.

But even though the FBI warned of an "epidemic" of mortgage fraud in 2004, they subsequently made a "strategic alliance" with the Mortgage Bankers Association, which serves the major industry players.

In this case, the foxes truly were guarding the hen house.

Black notes it was only this year that the total number of FBI agents devoted to mortgage-fraud investigations rose to more than 200. By comparison, during the S&L and Enron investigations in the 1980s and '90s, respectively, multiple task forces totaling hundreds of agents were employed.

"The DOJ has refused to emulate its successes in the S&L debacle, and even dealing with Enron, by creating a large task force that would take on the major fraud participants," Black said. "In this context, that would mean creating a large task force to investigate major, nonprime lenders."

Re: A must see for All Newbies & lurkers
 

Long informative Video

Re: A must see for All Newbies & lurkers
 

More articles on gold shortages. Hope all the newbies are convinced now it is the best place to preserve your wealth & accumulate as & when funds allow when you can source some.

http://www.theaustralian.news.com.au...37-643,00.html

FEARS of the unknown long-term effects from the global financial crisis have sparked a new gold rush.

With retail and wholesale clients around the world stocking up on the precious metal, the Perth Mint has been forced to suspend orders.

As the World Gold Council reported that the dollar demand for gold reached a quarterly record of $US32 billion ($50.73 billion) in the third quarter, industry insiders said the race to secure physical gold had reached an intensity that had never been witnessed before.

Perth Mint sales and marketing director Ron Currie said the unprecedented demand had forced the Mint to cease orders until January, with staff working seven days a week, 24-hour days, over three shifts to meet orders.

He said Europe was leading the demand, with Russia, Ukraine, Middle East and US all buying -- making up 80 per cent of its sales. One European client purchased 30,000 ounces for $33 million.

"We have never seen this before and are working right at capacity. And we are seeing it from clients in the shop buying one ounce, right up to 30,000 ounces from overseas clients," Mr Currie said.

Robert Jaggard, manager of bullion and rare coins dealer Jaggards, said business had picked up strongly and he expected it to increase further.

"All around the world there has been a heavy run on physical gold and there is a shortage of supply," he said.

Mr Jaggard, who has been dealing in gold for 40 years and is an agent for the Perth Mint, said some clients were buying up to $1million worth of gold, paying a premium above the spot price.

Late yesterday afternoon, spot gold in Sydney was trading at $US747.30 an ounce, up $US8.15 on Thursday's local close.

"Professional business people who have previously bought small amounts now want more gold because they are suffering in other markets," Mr Jaggard said.

At a conference this week in Munich, delegates were lined up 30-deep to purchase physical gold. And reports out of the Middle East suggested that there had been unprecedented gold buying in Saudi Arabia during the first half of November, with an estimated $US3.5 billion purchased in recent weeks.

The World Gold Council, releasing its global demand trends yesterday, said identifiable investment demand, which incorporates demand for gold through exchange-traded funds and bars and coins, was the biggest contributor to overall demand during the quarter. It was up to $US10.7 billion, double last year's levels.

The figures showed retail investment demand rose 121 per cent to 232 tonnes in the third quarter, with strong bar and coin buying reported in Swiss, German and US markets.

The quarter also witnessed widespread reports of gold shortages among bullion dealers across the globe, as investors searched for a haven. Overall, quarter three saw Europe reach an all-time record 51 tonnes of bar and coin buying. France became a net investor in gold for the first time since the early 1980s.

World Gold Council chief executive James Burton said gold's universal role as a store of value had shone through during the quarter, helping attract investors and consumers to all forms of gold ownership.

"The rise in demand for gold bars and coins has been impressive," he said.

Demand in India, the largest market for gold, recovered during the third quarter, encouraged by lower gold prices, a good monsoon and the onset of the festive season. At 250 tonnes, total consumer demand was 31 per cent higher than the same period last year. In value terms, demand hit the record quarterly sum of $US5 billion.

Re: A must see for All Newbies & lurkers
 

Blimey Peter is getting about the last few days. :biggrin:

http://finance.yahoo.com/tech-ticker...WH,EWA,EWS,UDN

Re: A must see for All Newbies & lurkers
 

3rd Hour with Jim & John
November 22, 2008

http://www.netcastdaily.com/broadcas...08-1122-3a.asx

More news to listen to http://www.financialsense.com/fsn/main.html

Re: A must see for All Newbies & lurkers
 

Some classic quotes here on the future ahead. It's not really funny bearing in mind what is happening but :biggrin:

http://www.cnbc.com/id/15840232?video=935472423&play=1

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Fractional Reserve banking.

http://www.lewrockwell.com/rothbard/frb.html

Fractional Reserve Banking

by Murray N. Rothbard



We have already described one part of the contemporary flight from sound, free market money to statized and inflated money: the abolition of the gold standard by Franklin Roosevelt in 1933, and the substitution of fiat paper tickets by the Federal Reserve as our "monetary standard." Another crucial part of this process was the federal cartelization of the nation's banks through the creation of the Federal Reserve System in 1913.

Banking is a particularly arcane part of the economic system; one of the problems is that the word "bank" covers many different activities, with very different implications. During the Renaissance era, the Medicis in Italy and the Fuggers in Germany, were "bankers"; their banking, however, was not only private but also began at least as a legitimate, non-inflationary, and highly productive activity. Essentially, these were "merchant-bankers," who started as prominent merchants. In the course of their trade, the merchants began to extend credit to their customers, and in the case of these great banking families, the credit or "banking" part of their operations eventually overshadowed their mercantile activities. These firms lent money out of their own profits and savings, and earned interest from the loans. Hence, they were channels for the productive investment of their own savings.

To the extent that banks lend their own savings, or mobilize the savings of others, their activities are productive and unexceptionable. Even in our current commercial banking system, if I buy a $10,000 CD ("certificate of deposit") redeemable in six months, earning a certain fixed interest return, I am taking my savings and lending it to a bank, which in turn lends it out at a higher interest rate, the differential being the bank's earnings for the function of channeling savings into the hands of credit-worthy or productive borrowers. There is no problem with this process.

The same is even true of the great "investment banking" houses, which developed as industrial capitalism flowered in the nineteenth century. Investment bankers would take their own capital, or capital invested or loaned by others, to underwrite corporations gathering capital by selling securities to stockholders and creditors. The problem with the investment bankers is that one of their major fields of investment was the underwriting of government bonds, which plunged them hip-deep into politics, giving them a powerful incentive for pressuring and manipulating governments, so that taxes would be levied to pay off their and their clients' government bonds. Hence, the powerful and baleful political influence of investment bankers in the nineteenth and twentieth centuries: in particular, the Rothschilds in Western Europe, and Jay Cooke and the House of Morgan in the United States.

By the late nineteenth century, the Morgans took the lead in trying to pressure the U.S. government to cartelize industries they were interested in � first railroads and then manufacturing: to protect these industries from the winds of free competition, and to use the power of government to enable these industries to restrict production and raise prices.

In particular, the investment bankers acted as a ginger group to work for the cartelization of commercial banks. To some extent, commercial bankers lend out their own capital and money acquired by CDs. But most commercial banking is "deposit banking" based on a gigantic scam: the idea, which most depositors believe, that their money is down at the bank, ready to be redeemed in cash at any time. If Jim has a checking account of $1,000 at a local bank, Jim knows that this is a "demand deposit," that is, that the bank pledges to pay him $1,000 in cash, on demand, anytime he wishes to "get his money out." Naturally, the Jims of this world are convinced that their money is safely there, in the bank, for them to take out at any time. Hence, they think of their checking account as equivalent to a warehouse receipt. If they put a chair in a warehouse before going on a trip, they expect to get the chair back whenever they present the receipt. Unfortunately, while banks depend on the warehouse analogy, the depositors are systematically deluded. Their money ain't there.

An honest warehouse makes sure that the goods entrusted to its care are there, in its storeroom or vault. But banks operate very differently, at least since the days of such deposit banks as the Banks of Amsterdam and Hamburg in the seventeenth century, which indeed acted as warehouses and backed all of their receipts fully by the assets deposited, e.g., gold and silver. This honest deposit or "giro" banking is called "100 percent reserve" banking. Ever since, banks have habitually created warehouse receipts (originally bank notes and now deposits) out of thin air. Essentially, they are counterfeiters of fake warehouse-receipts to cash or standard money, which circulate as if they were genuine, fullybacked notes or checking accounts. Banks make money by literally creating money out of thin air, nowadays exclusively deposits rather than bank notes. This sort of swindling or counterfeiting is dignified by the term "fractional-reserve banking," which means that bank deposits are backed by only a small fraction of the cash they promise to have at hand and redeem. (Right now, in the United States, this minimum fraction is fixed by the Federal Reserve System at 10 percent.)

Fractional Reserve Banking

Let's see how the fractional reserve process works, in the absence of a central bank. I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I "lend out" $10,000 to someone, either for consumer spending or to invest in his business. How can I "lend out" far more than I have? Ahh, that's the magic of the "fraction" in the fractional reserve. I simply open up a checking account of $10,000 which I am happy to lend to Mr. Jones. Why does Jones borrow from me? Well, for one thing, I can charge a lower rate of interest than savers would. I don't have to save up the money myself, but simply can counterfeit it out of thin air. (In the nineteenth century, I would have been able to issue bank notes, but the Federal Reserve now monopolizes note issues.) Since demand deposits at the Rothbard Bank function as equivalent to cash, the nation's money supply has just, by magic, increased by $10,000. The inflationary, counterfeiting process is under way.

The nineteenth-century English economist Thomas Tooke correctly stated that "free trade in banking is tantamount to free trade in swindling." But under freedom, and without government support, there are some severe hitches in this counterfeiting process, or in what has been termed "free banking." First: why should anyone trust me? Why should anyone accept the checking deposits of the Rothbard Bank? But second, even if I were trusted, and I were able to con my way into the trust of the gullible, there is another severe problem, caused by the fact that the banking system is competitive, with free entry into the field. After all, the Rothbard Bank is limited in its clientele. After Jones borrows checking deposits from me, he is going to spend it. Why else pay money for a loan? Sooner or later, the money he spends, whether for a vacation, or for expanding his business, will be spent on the goods or services of clients of some other bank, say the Rockwell Bank. The Rockwell Bank is not particularly interested in holding checking accounts on my bank; it wants reserves so that it can pyramid its own counterfeiting on top of cash reserves. And so if, to make the case simple, the Rockwell Bank gets a $10,000 check on the Rothbard Bank, it is going to demand cash so that it can do some inflationary counterfeit-pyramiding of its own. But, I, of course, can't pay the $10,000, so I'm finished. Bankrupt. Found out. By rights, I should be in jail as an embezzler, but at least my phoney checking deposits and I are out of the game, and out of the money supply.

Hence, under free competition, and without government support and enforcement, there will only be limited scope for fractional-reserve counterfeiting. Banks could form cartels to prop each other up, but generally cartels on the market don't work well without government enforcement, without the government cracking down on competitors who insist on busting the cartel, in this case, forcing competing banks to pay up.

Central Banking

Hence the drive by the bankers themselves to get the government to cartelize their industry by means of a central bank. Central Banking began with the Bank of England in the 1690s, spread to the rest of the Western world in the eighteenth and nineteenth centuries, and finally was imposed upon the United States by banking cartelists via the Federal Reserve System of 1913. Particularly enthusiastic about the Central Bank were the investment bankers, such as the Morgans, who pioneered the cartel idea, and who by this time had expanded into commercial banking.

In modern central banking, the Central Bank is granted the monopoly of the issue of bank notes (originally written or printed warehouse receipts as opposed to the intangible receipts of bank deposits), which are now identical to the government's paper money and therefore the monetary "standard" in the country. People want to use physical cash as well as bank deposits. If, therefore, I wish to redeem $1,000 in cash from my checking bank, the bank has to go to the Federal Reserve, and draw down its own checking account with the Fed, "buying" $1,000 of Federal Reserve Notes (the cash in the United States today) from the Fed. The Fed, in other words, acts as a bankers' bank. Banks keep checking deposits at the Fed and these deposits constitute their reserves, on which they can and do pyramid ten times the amount in checkbook money.

Here's how the counterfeiting process works in today's world. Let's say that the Federal Reserve, as usual, decides that it wants to expand (i.e., inflate) the money supply. The Federal Reserve decides to go into the market (called the "open market") and purchase an asset. It doesn't really matter what asset it buys; the important point is that it writes out a check. The Fed could, if it wanted to, buy any asset it wished, including corporate stocks, buildings, or foreign currency. In practice, it almost always buys U.S. government securities.

Let's assume that the Fed buys $10,000,000 of U.S. Treasury bills from some "approved" government bond dealer (a small group), say Shearson, Lehman on Wall Street. The Fed writes out a check for $10,000,000, which it gives to Shearson, Lehman in exchange for $10,000,000 in U.S. securities. Where does the Fed get the $10,000,000 to pay Shearson, Lehman? It creates the money out of thin air. Shearson, Lehman can do only one thing with the check: deposit it in its checking account at a commercial bank, say Chase Manhattan. The "money supply" of the country has already increased by $10,000,000; no one else's checking account has decreased at all. There has been a net increase of $10,000,000.

But this is only the beginning of the inflationary, counterfeiting process. For Chase Manhattan is delighted to get a check on the Fed, and rushes down to deposit it in its own checking account at the Fed, which now increases by $10,000,000. But this checking account constitutes the "reserves" of the banks, which have now increased across the nation by $10,000,000. But this means that Chase Manhattan can create deposits based on these reserves, and that, as checks and reserves seep out to other banks (much as the Rothbard Bank deposits did), each one can add its inflationary mite, until the banking system as a whole has increased its demand deposits by $100,000,000, ten times the original purchase of assets by the Fed. The banking system is allowed to keep reserves amounting to 10 percent of its deposits, which means that the "money multiplier" � the amount of deposits the banks can expand on top of reserves � is 10. A purchase of assets of $10 million by the Fed has generated very quickly a tenfold, $100,000,000 increase in the money supply of the banking system as a whole.

Interestingly, all economists agree on the mechanics of this process even though they of course disagree sharply on the moral or economic evaluation of that process. But unfortunately, the general public, not inducted into the mysteries of banking, still persists in thinking that their money remains "in the bank."

Thus, the Federal Reserve and other central banking systems act as giant government creators and enforcers of a banking cartel; the Fed bails out banks in trouble, and it centralizes and coordinates the banking system so that all the banks, whether the Chase Manhattan, or the Rothbard or Rockwell banks, can inflate together. Under free banking, one bank expanding beyond its fellows was in danger of imminent bankruptcy. Now, under the Fed, all banks can expand together and proportionately.

"Deposit Insurance"

But even with the backing of the Fed, fractional reserve banking proved shaky, and so the New Deal, in 1933, added the lie of "bank deposit insurance," using the benign word "insurance" to mask an arrant hoax. When the savings and loan system went down the tubes in the late 1980s, the "deposit insurance" of the federal FSLIC [Federal Savings and Loan Insurance Corporation] was unmasked as sheer fraud. The "insurance" was simply the smoke-and-mirrors term for the unbacked name of the federal government. The poor taxpayers finally bailed out the S&Ls, but now we are left with the formerly sainted FDIC [Federal Deposit Insurance Corporation], for commercial banks, which is now increasingly seen to be shaky, since the FDIC itself has less than one percent of the huge number of deposits it "insures."

The very idea of "deposit insurance" is a swindle; how does one insure an institution (fractional reserve banking) that is inherently insolvent, and which will fall apart whenever the public finally understands the swindle? Suppose that, tomorrow, the American public suddenly became aware of the banking swindle, and went to the banks tomorrow morning, and, in unison, demanded cash. What would happen? The banks would be instantly insolvent, since they could only muster 10 percent of the cash they owe their befuddled customers. Neither would the enormous tax increase needed to bail everyone out be at all palatable. No: the only thing the Fed could do, and this would be in their power, would be to print enough money to pay off all the bank depositors. Unfortunately, in the present state of the banking system, the result would be an immediate plunge into the horrors of hyperinflation.

Let us suppose that total insured bank deposits are $1,600 billion. Technically, in the case of a run on the banks, the Fed could exercise emergency powers and print $1,600 billion in cash to give to the FDIC to pay off the bank depositors. The problem is that, emboldened at this massive bailout, the depositors would promptly redeposit the new $1,600 billion into the banks, increasing the total bank reserves by $1,600 billion, thus permitting an immediate expansion of the money supply by the banks by tenfold, increasing the total stock of bank money by $16 trillion. Runaway inflation and total destruction of the currency would quickly follow.

This article originally appeared in the October 1995 issue of The Freeman and is reprinted with permission.

Murray N. Rothbard (1926-1995), the founder of modern libertarianism and the dean of the Austrian School of economics, was the author of The Ethics of Liberty and For a New Liberty and many other books and articles. He was also academic vice president of the Ludwig von Mises Institute and the Center for Libertarian Studies, and the editor � with Lew Rockwell � of The Rothbard-Rockwell Report.

Re: A must see for All Newbies & lurkers
 

http://www.telegraph.co.uk/finance/c...-unravels.html

Citigroup says gold could rise above $2,000 next year as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.

By Ambrose Evans-Pritchard
Last Updated: 4:48PM GMT 26 Nov 2008

An employee of Tanaka Kikinzoku Jewelry K.K. displays a gold bar at the company's store in Tokyo Photo: Reuters
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.

"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.

"This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised."

"What happens if there is a meltdown in a country like Pakistan, which is a nuclear power. People react when they have their backs to the wall. We're already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore," he said.

Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies. "If true, this is a very material change," he said.

Mr Fitzpatrick said Britain had made a mistake selling off half its gold at the bottom of the market between 1999 to 2002. "People have started to question the value of government debt," he said.

Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months � reverting to is historical role as a safe-haven store of value and a de facto currency.

Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.


:signs1: :23_30_104:

Re: A must see for All Newbies & lurkers
 

5th Annual Precious metals show.

Some interesting listening.

http://www.financialsense.com/fsn/main.html

http://www.netcastdaily.com/broadcas...008-1129-2.asx

Re: A must see for All Newbies & lurkers
 

Use the tabs at the top within the link to give you prices coins going for on ebay.

http://www.24hgold.com/english/buy_s...s.aspx?co_id=3


Also recent summit in the UK 4 video's in link.

http://www.silversummit.co.uk/davidmorgan.htm

Re: A must see for All Newbies & lurkers
 

Some more video's from the summit.
http://www.silversummit.co.uk/jamesturk.htm

http://www.silversummit.co.uk/nednaylorleyland.htm

http://www.silversummit.co.uk/speaker.htm

Re: A must see for All Newbies & lurkers
 

Good Video with Peter Schiff vs. a lot of other 'Experts'?

Re: A must see for All Newbies & lurkers
 

Michael Maloney on the Crisis

http://goldsilver.com/video_player.p...14d3383be28015

Re: A must see for All Newbies & lurkers
 

There are 8 parts to this so click on the link to go through all parts but here is the first article.

HONEST MONEY

http://www.financialsense.com/fsu/ed...2004/1020.html

HONEST MONEY
Part I and II
by Douglas V. Gnazzo
October 20, 2004

INTRODUCTION

The recent bull market in gold and silver has generated much discussion in the media regarding the �gold standard� of the past � versus the present system of irredeemable paper fiat currency known as Federal Reserve Notes.

Even the issue of the constitutionality of the Federal Reserve and the irredeemable fractional reserve banking system it wields, as the Sword of Damocles above unwary heads, has been debated. Many well-intentioned and knowledgeable writers have rightfully questioned both the efficacy and the soundness of the present monetary system of paper fiat.

Numerous articles often discuss the �gold standard� of past history, including the recommendation of a return to the standard of old, as being both the financial and constitutional �fix� for our present financial problems.

However, is the �gold standard� as popularly put forth and understood by most of these well-intentioned articles, the same as the original constitutional standard and �hard� money system, as stated within the Constitution of the United States?

And perhaps of even greater importance, is whether returning to the �gold standard� of old � at least the �version� that is most often referenced and discussed, in contra-distinction to the original constitutional standard � is truly the fix-all for the debilitated and debased state of our present monetary system of irredeemable paper currency.

Most, but not all, of those friendly to the precious metals or hard money persuasion, sometimes referred to as gold-bugs, speak of the �gold standard� of the past as if it were sacrosanct and beyond reproach � and thus the standard deemed most suitable as the model for modern day monetary reform. But perhaps this model is flawed, which inherently, yet almost unknowingly, except to the elite few who perpetrated the crime, contributed to its intended demise.

The belief seems widely accepted, that the �gold standard� of the later 1800�s and the early 1900�s, is sufficient historical documentation of our monetary system to explain not only the problems with the present fiat currency; but to also provide the remedy for any such ills to simply be a return to the �gold standard� of the past.

Such views may very well explain and offer the best course of monetary reform, but then again, perhaps they do not: perhaps there are other more sound and honest alternatives; that are closer in keeping with our original Constitution � as opposed to the present system of irredeemable promises to pay.

The �gold standard� most often discussed, is the standard whereby, U.S. Notes, or Treasury Notes or Federal Reserve Notes are redeemable in gold coin. Occasionally, those of a �purer� ideal, refer to the establishing of the one dollar gold coin � which was set by statute as the standard unit of our monetary system � hence the term �gold standard�.

However, this setting of the one dollar gold coin as our standard unit of account, did not take place until 1873; and more importantly, is whether the Act was and is, in accordance with the Constitution and the Original Coinage Act of 1792?

To use the creation of the �gold standard� as a starting point for monetary reform, involves taking quite the leap of faith � as there may be much more to understanding our currency system than just the �gold standard� that involved various paper issuances, that were supposedly backed by, and could be, redeemed for gold coin. Even the minting of gold coins such as the gold eagles; or the coinage of a gold �dollar�; or the coining of the magnificent gold double eagles, leaves out a great amount of very important monetary history and policy.

Such a leap in faith may end up missing the original Constitutional Standard � that set the standard for honest money � of silver and gold coin � not of paper redeemable in specie. It may even be, although unintentionally, offering a cure that is as deadly as the disease it seeks to remedy.

It must be remembered, that even a �gold standard� that has 40% of the currency backed or redeemable in gold may appear to be solvent � but it is not liquid � as there is only backing for 40% of the currency and that�s it. What about the other 60%? Is it any less real then the first 40%?

And the above is premised on the gratuitously supposed fact or pretense, that the issuance of paper bills of credit is even allowed or granted by the Constitution � regardless if they (bills of credit) are redeemable or not in gold or silver coin; and more importantly � whether the Constitution directly forbids the issuance of such paper money.

Many of these well-intentioned articles on gold and or the �gold standard� often use the word �dollar� in describing �money�, almost in a flippant manner � as if the definition of a �dollar� is automatically understood, both by the general reading audience, and by most writers on the subject as well.

Most often it is taken for granted, that the definition of the �dollar� has always been one and the same � which it has been constitutionally, and according to the Original Coinage Act of 1792. Various subsequent coinage acts, however, and the generally false beliefs of both government officials and the public at large, that such legislation was intended to, and did perpetuate; have seemingly changed the definition of the �dollar� from the original intent of the Constitution.

All of which has led to the present make believe world of the Federal Reserve, and the infamous Federal Reserve Note or dollar bill; and whether it just may be possible that a dollar bill, and a �dollar�, are two distinct and separate entities � as different from one another as night and day.

In lieu of the above, we are naturally led to ask whether or not the above assumptions of most present day writers on the �gold standard� and the �dollar� are correct, according to the actual history that has transpired?

Also, is it possible that some of the history regarding these subjects has been left out and hidden from the public eye � by deceitful design and behind the scenes manipulation, undertaken by the self-same powers and interests that brought forth the Federal Reserve, and its irredeemable paper fiat currency: to purposefully confuse the issues and muddy the waters?

As unbelievable and stunning as it may prove to be, perhaps the powers that have brought us the Federal Reserve, also brought us the �gold standard�; and the First and Second Banks of the United States, pre-cursors of our central bank; and perhaps for the same reasons: as a means of implementing a wealth transference system of plunder � from �We The People� to �they� who control the system � by dishonest attempts to discredit both gold and silver, by entangling and implementing them in unworkable standards and systems, that were knowingly doomed to fail from the start.

Popular views have been put forth that under the �gold standard� money is gold � perhaps this is true � but perhaps there is a bit more to it. Is the meaning of the statement that money is gold, the same as � gold is money? This involves much more then mere semantics, as will be seen.

A famous quote states: "Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.� This is very much true, but does it not include all paper money, even if fractionally backed by gold, as under a �gold standard�?

Is the �gold standard� where paper currency is backed by gold, the same as a system where only gold and silver coins are the medium of exchange?

Is a system of state or even national private banks that issue paper currency, the same as a system where the government becomes partners with a national central bank, that Congress grants the sole monopoly of power to issue bank notes to � that are only fractionally backed by gold?

And lastly, is the present system of paper fiat currency, that is not only irredeemable and no longer backed by gold; but is also the mechanism and means, by which all Treasury bond or government debt is monetized � exactly the same as any of the systems that came before it, and led to its creation; or is it a gross genetic mutation, engendered by the interbreeding of the preceding diseased and sickly schemes of issue?

So let�s take a trip back in time and follow the money and see where it leads us � perhaps we will be able to discover a story not often told about our monetary heritage; and from whence this thing called �money� and �dollar� has come; all in the pursuit of: Honest Money.

We will start by examining �money� according to the Constitution and the Original Coinage Act of 1792. Next we will look at the subsequent Coinage Acts that defined our monetary system. Then the different Treasury Note Issuances will be looked at to see how they fit in. And finally we will go back to the pre-Constitutional history of Colonial America to see from whence this �business� of central banking was born. A summary of conclusions will then be provided.


PART I: THE CONSTITUTION & HONEST MONEY
SEVEN CONSTITUTIONAL MONETARY CLAUSES

There are seven main clauses of the Constitution that deal with the issue of �money�:

Article I, Section 8, Clause 2. The Congress shall have Power�To borrow Money on the credit of the United States.

Article I, Section 8, Clause 5. The Congress shall have Power�To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

Article I, Section 8, Clause 6. The Congress shall have Power�To provide for the Punishment of counterfeiting the Securities and current Coin of the United States.

Article I, Section 9, Clause 1. The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.

Article I, Section 9, Clause 7. No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.

Article I, Section 10, Clause 1. No State shall�coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

Amendment VII. In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved�


DISCUSSION OF EARLY MONETARY HISTORY

Of particular interest and importance in reading over these provisions is to note that the word �money� appears but four times in the original constitutional document. The word �coin� appears five times; the word �dollar� appears but twice; the word �credit� twice; and the word �tender� appears but once. Conspicuously absent is the word � paper, although �bills of credit� is a close surrogate.

Most striking is the fact that nowhere in the Constitution is a literal definition of the �dollar� provided. Was the lack of such an important definition as to the dollar or unit of account of our monetary system an oversight by such an august and learned group of men as the First Congress?

Or did our Founding Fathers perhaps know uncontrovertibly the definition of the dollar that at the current time was universally accepted by all? � As in like manner, the usage of the word �day� or �time� within the Constitution was understood, and the definition was not seen to be needed, required, or given � as it was already known.

Perhaps by examining the past monetary history from which the Constitution evolved, as well as the monetary history the Constitution gave birth to, a clearer understanding of the Constitution�s meaning and intent can be revealed.

As Blackstone noted in his �Commentaries�: �Sir Edward Coke lays it down, that the money of England must be either gold or silver; and none other was ever issued by the royal authority till 1672, when copper farthings and half-pence were coined�.

During our early Colonial history, Queen Anne�s Proclamation of 1704, and the Parliamentary Act of 1707 both referred to ��regulation of coin according to their weight and fineness in proportion to the rate before limited and set for the Pieces of Eight of Sevil, Pillar, and Mexico� commonly known as the silver Spanish milled dollars�.

In 1776 a report in the Journals of the Continental Congress referred to �the precise weight and fineness of the Spanish milled dollar now becoming the Money-Unit or common measure of other coins in these states�.

The Continental Congress subsequently laid the groundwork for The Constitution with the Articles of Confederation in 1781. The following sections of the articles are the most noteworthy in regards to the present discussion:

��The United States in Congress assembled shall never engage in a war, nor grant letters of marque or reprisal in time of peace, nor enter into any treaties or alliances, nor coin money, nor regulate the value thereof, nor ascertain the sums and expenses necessary for the defense and welfare of the United States, or any of them, nor emit bills, nor borrow money on the credit of the United States, nor appropriate money, nor agree upon the number of vessels of war, to be built or purchased, or the number of land or sea forces to be raised, nor appoint a commander in chief of the army or navy, unless nine States assent to the same: nor shall a question on any other point, except for adjourning from day to day be determined, unless by the votes of the majority of the United States in Congress assembled�.

The First Congress followed with The Constitution of The United States, which was adopted in 1787 and ratified in 1788. The sections that express the monetary powers granted to Congress and that are of importance to this discussion have been previously listed above.

In 1791 Secretary of State Alexander Hamilton presented to Congress his report on the subject of a mint to �coin� the �money� the Constitution had mandated.

In Hamilton�s report to Congress there are many passages that discuss the dollar or unit of money to be issued. The following depicts the definition of the dollar that is constantly used by Hamilton:

�It may, nevertheless, be advisable to repose a discretionary authority in the President of the United States, to continue the currency of the Spanish dollar at a value corresponding with the quantity of fine silver contained in it��

The following year, The Second Congress passed the Coinage Act of 1792 by which The United States monetary system was enacted.


WHAT THE CONSTITUTION DID NOT SAY

The Constitution was the written plan for the construction of our government, that was established and ordained by �We The People�, according to the legislative powers that were granted to Congress by the People; including the limitations of such powers; the disabilities of the government in regards to such powers; as well as the delineation of all rights, duties, privileges, and immunities of the government.

Very often it is forgotten that what the Constitution didn�t state is just as important as what it did state. The Constitution was the written expression of the People�s will, to form a more perfect �Union�, by granting to Congress specific powers to carry out the implementation of their new form of government � that the People had established and ordained.

Of particular interest is to note that the Constitution does not grant any of the following powers:

No power to print paper money

No banking powers or regulations

No mention of fractional reserve banking policies

No power to loan money � only to borrow

No power to create any paper currency regardless if it was redeemable in specie

No power to delegate non-existing Constitutional powers to private corporations

No power to grant charters of incorporation to banks

No power to form monopolies

No power to issue forced loans

No power to draw money from the Treasury, but in consequence of appropriations by law


COINAGE ACT OF 1792

The Coinage Act of 1792 was the legislative means to implement by statute, the monetary system of the government, according to the monetary powers granted in the Constitution.

The following are the most important sections of The Coinage Act of 1792 as related to the subject under question � what was the original Constitutional money or dollar?

Section 9. �And be it further enacted, That there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denominations, values and descriptions, viz

EAGLES �each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold.

HALF EAGLES �each to be of the value of five dollars, and to contain one hundred and twenty-three grains and six eighths of a grain of pure, or one hundred and thirty-five grains of standard gold.

QUARTER EAGLES �each to be of the value of two dollars and a half dollar, and to contain sixty-one grains and seven eighths of a grain of pure, or sixty-seven grains and four eighths of a grain of standard gold.

DOLLARS OR UNITS �each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver. (Note no mention of gold in regards to the dollar)

HALF DOLLARS �each to be of half the value of the dollar or unit, and to contain one hundred and eighty-five grains and ten sixteenth parts of a grain of pure, or two hundred and eight grains of standard silver.

QUARTER DOLLAR �each to be of one fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen sixteenth parts of a grain of pure, or one hundred and four grains of standard silver.

DIMES �each to be of the value of one tenth of a dollar or unit, and to contain thirty- seven grains and two sixteenth parts of a grain of pure, or forty-one grains and three fifths parts of a grain of standard silver.

HALF DIMES �each to be of the value of one twentieth of a dollar, and to contain eighteen grains and nine sixteenth parts of a grain of pure, or twenty grains and four fifths parts of a grain of standard silver.

CENTS �each to be of the value of the one-hundredth part of a dollar, and to contain eleven pennyweights of copper.

HALF CENTS �each to be of the value of half a cent, and to contain five pennyweights and a half a pennyweight of copper.

Section 11. And be it further enacted, That the proportional value of gold and silver in all coins which shall by law be current as money within the United States, shall be fifteen to one, according to quantity in weight, of pure gold or pure silver; that is to say, every fifteen pounds weight of pure silver shall be of equal value in all payments, with one pound weight of pure gold, and so in proportion as to any greater or less quantities of the respective metals.

Section 16. And be it further enacted, That all the gold and silver coins which shall have been struck at, and issued from the said mint, shall be a lawful tender in all payments whatsoever, those of full weight according to the respective values herein before declared, and those of less than full weight at values proportional to their respective weights.

Section 20. And be if further enacted, That the money of account of the United States shall be expressed in dollars, or units, dimes or tenths, cents or hundredths, and the milles or thousandths, a dime being the tenth part of a dollar, a cent the hundredth part of a dollar, a mille the thousandth part of a dollar, and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation.�

Now that we have before us the pertinent information regarding the original monetary policy of the United States, according to the Constitution and the Coinage Act of 1792, let�s take a closer look at what was said.


SUMMARY OF THE CONSTITUTION & COINAGE ACT OF 1792

Article I, Section 8, clause 5 of The Constitution states that Congress has the �power to coin money� and furthermore Article I, Section 10, Clause 1 specifies that � No State shall�coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.�

The Constitution undeniably grants Congress the power to coin money, i.e. to form and shape metal (silver, gold & copper) and to regulate its weight and purity and to affix the stamp of the issuing government thereon.

From ages past, before the time of the Bible, man has coined metal to be used as money. Accordingly, money is brought forth into society to be used as a medium of exchange to facilitate the trade of goods of all kinds. The use of money involves the progress from direct exchange or bartering of goods, to the indirect exchange of goods using a common medium: money.

The free acts of individual commerce, that collectively form an economic body of trade, chooses and decides by its own internal market forces of supply and demand, what commodity is most widely accepted as �the medium of exchange� � money.

We have seen that in early Colonial times that the Spanish milled Silver Dollar had been the most popular and widely accepted coin then current, although many other different types of coin also circulated.

The Constitution clearly states that money is to be coined and that only gold and silver coin (i.e. money) is a tender in payment of debt. Note that Congress was never granted the power to print money, only to coin it.

However, the Constitution does not define exactly what a �dollar� is, although twice it refers to the dollar � once in Article I, Section 9, Clause 1 and once in Amendment VII.

Let us now once again turn our attention to the Coinage Act of 1792 to see if the Founding Fathers and Congress expressly and explicitly defined the �dollar�.

In Section 20 of the Coinage Act we read, ��that the money of account of the United States shall be expressed in dollars or units.�

We are now getting closer to our goal for a definition of a dollar. Congress in Section 20 clearly states that the money of account of the U.S. is expressed in dollars, which are �units�

In Section 9 of the Coinage Act we read that ��That there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denomination, values and descriptions, viz. Eagles�each to be of the value of ten dollars or units and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold.�

Here we clearly see that Congress coined Eagles that were of the value of ten dollars or units. But an Eagle was not a �dollar�, but of the value of ten dollars. So what is the definition of a dollar?

Further on in Section 9 it is stated, ��dollars or Units�each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenths parts of a grain of pure silver, or four hundred and sixteen grains of standard silver.�

At long last � the goal we have been searching for � the definition of �the dollar� or unit � each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenths parts of a grain of pure silver, or four hundred and sixteen grains of standard silver.

According to the documents we have so far examined, we find that the Constitution grants Congress the power to coin money while explicitly limiting the states to make �any Thing but gold and silver Coin a Tender in Payment of Debt�.

We further find in the Coinage Act of 1792, that the money of account of the United States shall be denominated in dollars or units of the value of a Spanish Silver Dollar, as was current at the time (1792). Also note that the Gold Eagle is to have a value of ten dollars or units.

This means that originally our monetary system had as its standard the Spanish Silver Dollar, and that the Gold Eagle coin was not a �dollar�, but was measured against the silver standard, being valued at ten dollars or units or 3,712 � � grains of fine silver.

Congress had statutorily defined and legislatively implemented a bimetallic system of coinage � that had the Silver Dollar as the standard where:

��the proportional value of gold and silver in all coins shall be fifteen to one, according to quantity in weight, of pure gold or pure silver and that all the gold and silver coins which shall have been struck at, and issued from the said mint, shall be a lawful tender in all payments whatsoever, those of full weight according to the respective values herein before declared, and those of less than full weight at values proportional to their respective weights�.

The widely accepted belief that originally the United States was on a monometallic �gold standard� is incorrect. The idea that Congress had originally ever issued a gold �dollar� or that the Constitution ever granted Congress such power is also incorrect.

The first monetary standard was a silver standard that defined the �dollar� as a specific weight of silver, as well as establishing that the �dollar� was the �money or unit of account�.

However, a bimetallic monetary system of coinage was also established by the Constitutional mandate to Congress to �coin Money, regulate the Value thereof�.

The word �regulate� means to �adjust�, as in one thing to another � which in the use of coins refers to systems of weights and measures and the regulation of such weights and measures to the standard, which is the �measure� they are to be regulated to or against.

As stated in the Coinage Act of 1792 � Section 11 introduces an exchange ratio of 15 to 1, according to weight. Therefore, although a dollar was defined as 371.25 grains of silver, gold exchanged for a dollar at 24.75 grains of gold (10 x 371.25 divided by 15).

Also, Section 9 of the act defined the Eagle as containing two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold.

To reiterate: the standard was Silver � the monetary system of exchange was a bimetallic system of coinage.

Note, however, that the �dollar� that the Coinage Act of 1792 statutorily decreed was not the exact original �Constitutional dollar� � but as the act says, ��each to be of the value of a Spanish milled dollar�.

Thus �each� denotes something that is not the Spanish milled dollar but is to be the �value� (specific weight and fineness) of the Spanish milled dollar.

Furthermore, originally there was no gold dollar � only a gold Eagle valued at ten dollars. The Coinage Act of 1849 created the first gold dollar 57 years later. Any reference to an �original gold dollar� dating back to the Constitution is incorrect.

We have thus answered the question regarding whether or not the United States was originally on a �gold standard� according to the monetary powers granted in the Constitution and according to the subsequent legislative statues of the original Coinage Act of 1792.

The answer emphatically being � No � the standard was the then current Silver Spanish Dollar known as Pieces of Eight, coupled with a bimetallic system of coinage using both silver and gold.

This is not a matter of semantics � there are very important distinctions of detail involved that have greatly affected our monetary history � especially our present system of irredeemable paper fiat currency � incestuously wedded to its sibling: fractional reserve banking, spawned in greed � nurtured by the lust for power.


PART II: SILVER STANDARD WITH A BIMETALLIC COINAGE SYSTEM
THE STANDARD & THE COINAGE SYSTEM

As we have seen, the Constitution along with the Coinage Act of 1792, established by statutory decree that the dollar was the unit of account and also declared that a dollar or unit was �each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver�.

According to statute, the United States was on the silver standard. However, as we have seen, Congress also decreed that gold coins were to be minted and circulated along side of silver coins, and fixed the statutory valuation of silver to gold at 15 to 1.

In other words, Congress had �fixed� the exchange rate between the two metals. Thus the United States was on a silver standard, but it was also on a bimetallic system of coinage, that included gold to be circulated at a �fixed� exchange rate to the silver standard.

Such a system can present problems, however, as the free market exchange rate between gold and silver can diverge from the statutory or legally fixed exchange rate � necessitating the adjustment of the other metals legal value up or down to conform to the statutory fixed rate of exchange.

In other words, Congress was trying to make two different types of metal coinage equal in purchasing power. This was not a good idea and would have been better left undone.

This also raises the very interesting question as to whether or not this �fixing� was an accidental mistake, by very learned men, well acquainted with this exact monetary issue, as the discussions of such are in the Congressional records.

Past historical monetary writings also address the issue in detail. Perhaps such was not a mistake, but was very much intended and planned, although unknown by most but a select few. We will trust the reader with making such determinations, as the following discussions occasion.


LEGAL TENDER & PURCHASING POWER

Involved in the issue of �fixed� exchange, are the ideas of legal tender and the concept of purchasing power.

Legal tender has to do with distinguishing between the legal or juristic meaning of money, and the purely economic meaning and use of money. The term legal tender refers to the medium of payment that is designated as the legally accepted settlement of debts, especially debts due and owed to the government.

Money in the purely economic sense is commonly referred to as the medium of exchange or that which the common man uses to exchange one good for another to facilitate commerce and trade.

In a free market environment, whatever is determined to be the legal medium of payment (legal tender) must first naturally evolve as the accepted medium of exchange. Man by free choice determines what is to be money � the most commonly accepted or marketable medium of exchange.

A truly free society or government will only declare as legal tender, that media that society has already chosen as the accepted medium of exchange by its own free will.

As we have seen with the development of our Constitution and its monetary policy, the dollar was the unit or medium of exchange that was the most accepted then current medium � a specific weight and fineness of silver � the �silver dollar�.

Any alteration in this Constitutional dollar, both as the medium of exchange and the medium of payment or legal tender � without a Constitutional amendment � would not be the workings of a free society or government, but one of forced obedience.

This also goes to the point that the legal intrinsic value of the dollar is the physical amount of silver or gold as measured against the �standard�, which in the case of the U.S. dollar is a specific weight of silver.

However, the economic value or purchasing power of the medium of exchange is not �intrinsic�, as it is not based on an objective determination or standard, but on the subjective valuations of the market participants. Some refer to this as the subjective theory of value or the theory of declining marginal utility.

It is exactly this difference � between the legal intrinsic value of money based on an objective standard or defined weight of metal � versus the subjective value of the medium of exchange that changes according to the supply and demand of the marketplace � that precludes any system of bimetallic coinage, that sets one metal as the standard, and then declares the other metal to be �exchangeable� for the standard metal at a �fixed� rate of exchange � to be inherently doomed to fighting free market forces and laws of supply and demand, continually requiring �regulatory� legislation and �adjustment�. Such is not the workings, of a truly free market, but of a contrived or fixed market.

Although in the strict technical and statutory sense, the standard was silver and the system of coinage was bimetallic � in all practical applications or according to the prevailing �populist� views � the system was a duometallic system that reciprocally recognized and exchanged one metal for the other. As will be shown, however, the system fluctuated back and forth from one metal to the other, and with good cause � the purposefully contrived reasons of power and influence: all in the pursuit of profit and gain.


GRESHAM�S LAW

Establishing fixed exchange rates allows "Gresham's Law" to enter the picture, whereby an artificially overvalued money tends to drive an artificially undervalued money out of circulation.

Free markets and supply and demand being what they are, inevitably the market values one metal over the other. Eventually one metal is driven out by the other. This process is oft times referred to as �demonetization�. But remember, bimetallism under a fixed standard is not necessarily a completely free system.

Starting slowly in the 1780�s, the market value of silver slid downwards, steadily continuing down through the 1790�s, up until about 1804-1805; mainly in response to the increased supply of silver from Mexico and the diminishing supplies of gold from Russia; while at the same time, its mint price remained the same, thereby causing silver to be overvalued in relation to gold.

Gold coins started to flow out of our country and ceased to circulate, while silver coin flowed in and was abundant. Gold coin was melted down and exported abroad. From 1800 to 1834 only silver coin circulated as the currency of choice. Gold had been driven out � but by what force? Might there be an unseen �guiding hand�?

First gold was driven out of circulation, and then over time silver became the lackey, until eventually both metals were driven into exile and buried beneath a mountain of worthless paper debt and hollow promises to pay: that is our now current system of paper fiat � a mere shade of its former self. But such events beg the question: a lackey of whom or by what power?

Congress would have been better off to have simply minted gold Eagles without fixing a dollar value on them, thereby allowing the free market forces of supply and demand to regulate their exchange rate value. This would help prevent the �authorized� control by other than free market principles or by �others�.

Because of this flaw in a bimetallic system of coinage that has one metal as the standard and then fixes the exchange rate between the two metals, and the resulting �crying� up or down of the value of one metal in regards to the other � our monetary history was one where first one metal was dear and the other shunned, and vice versa, on several different occasions.


CONCLUSIONS SO FAR

It has been shown that the both the Constitution and the Original Coinage Act of 1792 established the monetary standard to be silver, in conjunction with a bimetallic system of silver and gold coinage.

The definition of a �dollar� has been found to be a specific weight and fineness of silver; commonly referred to as the silver dollar: 371.25 grains of silver.

The silver dollar was the unit of money or account that the Constitution and the Original Coinage Act of 1792 established.

Silver was exchangeable with gold at the rate of 15 to 1.

Neither the Constitution nor the Original Coinage Act of 1792 mentioned or established a gold dollar.

A U.S. gold dollar did not exist at this time in history and did not appear until 1849.

The gold eagle coin was of the value of ten dollars � the dollar being defined as the standard weight of silver of 371.25 grains of silver.

Gold exchanged for a dollar at 24.75 grains of gold (10 x 371.25 divided by 15), however, there was not any actual gold dollar coin.

The Constitution established that the States could not accept anything but gold and silver coin as legal tender and that Congress had the authority to mint silver and gold coins, but not the authority to print or emit bills of credit or paper money.

Now that we have discovered just what the Constitution and the Original Coinage Act of 1792 established as our monetary standard and system � the standard being a defined weight of silver with a bimetallic coinage system of silver and gold coins � let�s now look and see how the various and subsequent monetary acts brought forth, by the process of devolution, our present system of irredeemable paper fiat currency.

Re: A must see for All Newbies & lurkers
 

Gold backwardation explained.

http://watch.bnn.ca/#clip119810

Re: A must see for All Newbies & lurkers
 

The Great Gold Debate: Do Financial Institutions Conspire to Suppress the Price of Gold?

There is a video in the link at a recent conference.

http://www.newsthattrades.com/?p=22

Re: A must see for All Newbies & lurkers
 

Some interesting comments at end of article

http://www.guardian.co.uk/commentisf...-simon-jenkins

Better to hand us all a grand than hurl billions at banksCall it unsophisticated and crude, but the best way to stop a slump is to shower people with cash and make them use itComments (173)
Simon Jenkins The Guardian, Wednesday December 10 2008 Article historyOne prediction about the recession is for sure. It will end. Every recession in the past century (roughly 20 of them in all) did exactly that. It ended. It ended when demand stopped falling and began rising.

Those of us with old economics degrees lurking in the mental attic recall that credit bubbles turn into recessions when they lead to a collapse in demand. People stop buying goods and services. Businesses lose profits, lay off staff and are refused bank credit. Unemployment rises, and the vicious circle proceeds. That is what is happening now.

There is an obvious plan to counter it. It was put forward by John Maynard Keynes ostensibly to make a point - shower people with money or pay them for doing nothing - and has ever since been treated by policymakers as unsophisticated and rather silly. Proper macroeconomists do not dabble in such simplicities. The plan is excellent. If recessions are caused by collapsing demand, increase demand. Do not wait on tax cuts or lower interest rates. They all take time. Do not plead with people to spend, as the Japanese did while suppressing interest rates to zero, or as Iceland is doing with its patriotic slogan: "Spend for your country."

Get people to spend by giving them money, and just stop them saving it. Give them non-cashable vouchers for domestic goods and services that expire in three months. Drive them to the high streets, supermarkets, restaurants, entertainments, garages, anything that is not saving and has an employment multiplier effect. Only firms should be able to bank the vouchers. Demand must feed straight into business revenue, because revenue is collateral for credit. Without revenue, boosting credit is pointless.

There is no shortage of the requisite money in the Treasury. We know because anyone can get it if a banker. The government is obsessed with bankers. The whole thrust of policy is aimed at trying to get banks to offer credit. But this was last August's problem, and it conspicuously failed to stem recession.

Credit is still the obsession of public policy. The government is underpinning bank deposits and shares to the tune of a staggering �500bn in guarantees and �50bn in real money. The giveaway to banks must have reached its limit. Cuts to bank rate have little effect on the real economy.

The government has nationalised bankers, lunched them, told them how much to pay themselves. Now it has started bullying them, hectoring them and telling the public how awful they are. Christmas pantomimes are casting bankers as villains. Card games depict them as knaves. Mothers tell children that "a banker" will come to eat them up if they fail to finish their sprouts.

Some �1,000 for every man, woman and child in the land has gone into saving banks, the most extravagant policy of all time. Yet all this is aimed at forcing banks to do precisely what caused the credit collapse in the first place. It is aimed at making them lend to people and businesses which, with each passing week, are ever less able to pay them back. As the Guardian's economics editor wrote despairingly on Monday, "nothing seems to be working".

Having failed to halt the run on credit in September, the authorities are now trying to halt it when the disease has gone elsewhere, into the cash economy. Two points off the bank rate or an inter-bank guarantee are no good to a sacked shop worker. Give that �50bn, or even half of it, to every person in the land, and it does not matter what people do with the vouchers, provided they generate economic activity. They may be traded at a discount, but that does not matter since they can only be banked by firms by the end of the period. Vouchers are better than hurling money at banks.

The subsidies donated to stave off recession so far appear to have gone on restoring bank balance sheets, rewarding staff and lending overseas. Money being poured into projects such as Crossrail and the Olympics is going on fees to the rich, which also tend to be saved rather than spent. America is no wiser, in bailing out its least efficient car firms. It would make more sense to give people vouchers to buy cars of their choice, rather than have government choose which they may buy instead.

Just giving people money clearly sticks in the gullet of those who run the economy. The whole point in collecting taxes is to control their disbursement. The idea of Gordon Brown going into the street and giving the public their own cash seems undignified and somehow wrong. Yet Brown, Darling, Cameron and the rest seem comfortable giving vast sums to bankers - with no condition that the money be channelled into spending. The banks say thank you but understandably decline to lend to borrowers who are going bankrupt because the government (and Bank of England) has been careless of recession.

The reason for this indulgence of banks is that bankers are "the authorities". They are like chateau generals in the first world war. They talk the same talk as politicians. They head grand institutions that can supposedly handle billions of pounds. They "launder the giveaway" and make it seem respectable. Also ministers can blame them if, as has happened, nothing seems to work.

Such counter-recession policy, like last summer's credit policy, is always too little, too late. America earlier this year introduced a mild version of my plan, a $300 tax rebate. While the intention was sound, it suffered from being a rebate, not a restricted cash handout. The money could vanish into savings. It was too small and did not work.

A closer parallel is the gift voucher proposed by German Social Democrats. This is a �500 uncashable voucher with a two-month expiry, for every German over 18. Objections have been intriguing: "people might buy imports"; it "would not solve long-term problems"; it "might recall wartime rationing". In other words, none was substantive.

The authorities are too hidebound to tolerate eccentricity or simplicity. Giving people money (or borrowing to give it) suggests a loss of competence and control. It is crude and unsophisticated, without the jargoned nuances that have given macro-economic policy its specious intellectual beauty.

Even the Tories, who should welcome the vouchers as an in-the-hand tax rebate, cannot stomach the idea. The whole lot will go nobly into recession arm-in-arm with their friendly banks, rather than trust people to spend their own money rescuing the economy.

Re: A must see for All Newbies & lurkers
 

Part 1 of 3 of this series missing as no longer available.

Lawyers will merge with Tesco's like stockbrokers merged in with banks, part way down article.

http://www.guardian.co.uk/business/2...onomics.policy

How Britain's middle class was betrayed

Britain's professionals are worried. Their careers and living standards are under threat. Lawyers, doctors, bank managers and postmasters face an uncertain future as faceless corporations take over their work. In the second of three extracts from their new book, Larry Elliott and Dan Atkinson reveal how a wealthy elite rewrote all the rules - and conned the middle classLarry Elliott and Dan Atkinson The Guardian, Tuesday June 3 2008 Article history
Illustration: David Parkins

The summer of 2007 was a washout - literally so for people in Gloucestershire, Herefordshire, Yorkshire and beyond, who suffered severe flooding. Autumn weather alternated between further rainfall and plunging temperatures. The glorious summer days and fiery autumn colours of 2005 and 2006 seemed a fond memory.

Poor weather was matched by growing unease in the British middle class as 2007 turned into 2008. On every front, its living standards, status and career prospects were threatened, along with such objects of affection as the value of its homes and its children's education.

Life was still sweet for the New Olympians, the pampered rich who run the country's biggest companies and financial institutions. But Middle Britain, that union of the traditional professional middle class and the much wider group of "aspirant" households, was facing the stark possibility that 15 or more years of prosperity were drawing to a close. Worse, its members could have been forgiven a sneaking feeling that they were now the target of the sort of asset stripping that had been visited on the nation's factory workers, on those employed in "primary" industries such as farming, fishing and mining, and on small shopkeepers, thousands of whom had been driven out of business by supermarkets.

Indeed, on the subject of supermarkets, lawyers learned this time last year that they had a new competitor. "Tesco," the Sunday Telegraph reported, "is plotting to take on high-street solicitors by launching a property conveyancing service ... The move is likely to see a call centre-type operation offering shoppers a low-cost, computerised service."

Lest anyone comfort themselves with the thought that property conveyancing is a pretty standardised service, and that a supermarket's incursion into the market is nothing about which to get excited, beware. The Labour government's "liberalisation" of the legal system, due to take full effect by 2011, aims to allow all legal advice, not merely conveyancing, to be dispensed from booths in supermarkets. Not for nothing have the "reforms" been dubbed "Tesco law".

As with the City of London's "Big Bang" changes in 1986, "Tesco law" allows firms of solicitors to seek outside investment and even have their shares listed on a stock market. This parallel was made explicit in an authoritative news report on November 9, headed "Law firms gear up for their own Big Bang". "Observers inside and outside the profession," reported the Financial Times, "say the very act of selling out would destroy the value of the business, as young lawyers who had been aiming to become partners would immediately leave and go into a better-paid industry such as banking. Young lawyers would stay only if the new owners raised pay sharply so that salaries and bonuses were competitive with those at leading investment banks."

This, of course, is precisely what happened to the stockbroking and stock-jobbing professions after Big Bang. Partners sold out for huge sums and firms were absorbed into anonymous, all-purpose "investment banks". With the checks and balances of the partnership system replaced by bonus-driven salary packages, the way was clear for "rogue traders", most famously Nick Leeson, whose reckless gambles brought the bank Barings to its knees.

Nor was the law the only middle-class profession to face the asset strippers in 2007. In early November, the Heart of Birmingham primary care trust announced plans to let private firms run general practitioners' surgeries. According to the trust, Asda and Tesco had expressed an interest, as had Sir Richard Branson's Virgin group. As the Sun reported, "the trust said the non-health organisations ... were confident they can replicate the best aspects of the GP partnership's relationship with its patients. They do this with their customers on a daily basis." The British Medical Association attacked the proposal, with one member of the GP Committee claiming that "continuity of care" for patients would be disrupted if the private firms took over surgeries, while some smaller practices would be forced out of business.

By the early weeks of this year, the government was in a confrontation with family doctors over extended opening hours for surgeries. From the doctors' ranks came murmurings that this was merely a dummy run for a much bigger battle, started by ministers, to force doctors into anonymous "polyclinics" run by private companies. On January 29 the London Evening Standard reported: "A private American health firm has won control of three GP surgeries in London. The deal with United Health Europe opens the way to the privatisation of family doctors' practices. It comes after a government push to put primary care into corporate hands. Doctors have warned that patients could suffer as conglomerates offer 'cut-price deals to win contracts'."

If that sounded an extraordinary sell-out by a supposedly Labour government, it was of a piece with the news on January 28 that commercial companies were for the first time to be allowed to award nationally recognised qualifications based on their own workplace training schemes. In a parody-defying move, the government announced that the first three accredited schemes would be run by the burger chain McDonald's, the airline Flybe and the train track operator Network Rail. The Guardian that day reported: "Staff at McDonald's will gain the equivalent of A-levels in running burger restaurants after the fast-food giant won government approval to become an exam board."

Elsewhere, plans to slash the Post Office network were being finalised. Of the 14,000-strong branch network, 2,500 were to close, leaving customers and communities stranded. The Telegraph described it as "an act of community vandalism" that would "rip the hearts out of many of our small towns and villages".

For generations, the job of sub-postmaster and sub-postmistress has been part of the very backbone of middle-class respectability. Yet despite the terrible sadness of the destruction now being wreaked on the Royal Mail, the way it came about is instructive. The Conservative government of the early 1990s announced plans to privatise the Post Office, but backed down in the face of enormous public protest. Undaunted, ministers and bureaucrats merely put the country's name to a European Union scheme to liberalise all EU postal services, which would have much the same effect without too much in the way of pesky public debate.

When the branch closure programme - coupled with the abolition of second deliveries - evoked protest, the Royal Mail and the government were able to claim they had no choice, as the service had to be made leaner and fitter in order to compete with both private delivery organisations and foreign post offices.

Lawyers, GPs, sub-postmasters ... like bewildered characters in a superior television thriller, all seem destined by some shadowy authority for punishment for crimes the nature of which has never really been spelled out. Nor are they alone. The bank manager, in times gone by a pillar of the community, has virtually disappeared in his old form. Lending decisions have been almost entirely centralised, using complex computer risk-assessment systems. Managers and staff are expected to concentrate on selling financial products - insurance, savings, investments and the like.

If the unrestrained free market threatens the status and earnings of the middle class on one flank, the activities of government mandarins pose quite a different threat on another.

Next in the affections of the denizens of Middle Britain to the value of their homes (and often linked intimately with that value) is their children's education. Since the late 1980s, the official emphasis has been on parental choice within the state system. By last year, however, it was becoming clear that, in the wonderful world of public education, "choice" was not meant to involve actually choosing anything. Indeed, making effective school choices was thought to be vaguely reprehensible. In November the admissions regulator, Dr Philip Hunter, declared that schools should select pupils by lottery to prevent middle-class parents monopolising the best comprehensives. The policy should be used even if "deeply unpopular with groups of articulate parents".

The Department for Children, Schools and Families broadly agreed with Hunter. That in doing so it was tacitly admitting that parents, rich and poor, would try to avoid like the plague a large number of the schools for which it was directly responsible would not be lost on Hunter's "articulate parents" - or even, perhaps, on the inarticulate ones.

At this point, the neutral observer may find his sympathies starting to drift. Does not the school lottery affair highlight a problem with going to the defence of Middle Britain at this time? Is it not merely a defence of semi-closed shop arrangements that may be agreeable to those on the inside but less so to those who are not? After all, if Tesco can provide cheap legal advice from a corner booth and medical services in a similar (albeit, one would hope, rather more private) location, what is so wrong with that?

We would argue on four grounds that there is likely to be a great deal wrong with it. First, from the customers' point of view there is little - indeed, no - reason to believe that the public, as a whole, will enjoy better or cheaper professional services from corporate providers than they do from local partnerships. Some of these providers will doubtless seek to cherry-pick the best customers, as (quite legitimately) did the pioneering telephone insurance service Direct Line and its banking equivalent First Direct. Those customers will receive favourable offers. The others will not, being offered instead standardised "quickie" services. In law and medicine, in particular, where personal advice and consultation are so vital to the provision of the service, this could prove a very bad deal indeed.

Second, the transformation of independent professionals, who are effectively self-employed, into salaried corporate employees will be bad for everybody. It will rob ordinary people of sources of confidential service and bloat further the power of large corporations. Professionals provide an important counterweight to other forms of power, and can assert their independence in ways that corporate employees cannot. Pro bono work is different in kind from PR-driven "corporate social responsibility".

Third, an independent professional class has value beyond its utility as a source of advice and as a bulwark against the power of companies and the state. It provides a continuum within which aspirations can be satisfied while delivering a public service. If social tranquility matters more than shareholder value, the independent professional class should be shielded from corporate and other depredations, not exposed to them.

Fourth, as we have said before, if these dumbed-down, commoditised, supposedly cheap, corporately owned services are so good, why do we rarely hear of members of the wealthy elite using them? Why do the New Olympians prefer to stick with the traditional one-to-one relationship with doctors or solicitors?

The reply could be that they can afford it; but so, at present, can most people, thanks to the ways in which the National Health Service and the legal profession are structured. The local GP's surgery may be down at heel compared to the Harley Street consulting room, but the two are fundamentally the same thing.

School lotteries may appear to raise a separate issue, involving as they do the middle class solely as a user of one particular type of public service. But the neat symmetry of the whole affair is a near-perfect illustration of the way in which Middle Britain has been "had". For 10 years, the government supported the whole notion of parental choice while suggesting it would become increasingly irrelevant as all schools were steadily improved. With the lottery, the illusion is ended - the government opposes the whole notion of parental choice precisely because it exposes the fact that there has been no such improvement.

Middle Britain has been conned, well and truly.

Where did all the money go?
By no stretch of the imagination could the public sector be considered to be starved of cash. In the eight years between 1999-2000 and 2007-2008, public spending in Britain rose by 29% when adjusted for inflation.

Even so, the local police station that was once open 24 hours a day, seven days a week, is now open only between 8am and 4pm and closed all day Monday. The local sub-post office is closing for good, the library is short of books, and the weekly refuse collection is fortnightly.

Voters supported the increase in spending: they had been unhappy at the shabby state of the public realm in 1997 and wanted to see extra investment. They now want to know what has happened to all the money.

The government's answer is twofold. First, it says the money has led to an improvement in services, which is true but only up to a point. Given the colossal increase in spending - particularly on health and education - it would have been miraculous had there been no benefits; the question is whether the improvement matched the scale of the investment. Sad to say, it does not. In the NHS, for example, productivity has been falling; in education, there is no evidence that extra money has meant higher achievement. The government argues that, after the hard rations of the 18 years of Conservative rule, it will take time for the extra money to show up in higher productivity.

While stretching the boundaries of plausibility, this explanation is a lot more convincing than the second reason for the economies made by ministers, namely that they have a duty to make sure that precious resources are spent as efficiently as possible. If that means temporary opening hours at police stations that might have only two callers a day, or the closure of "uneconomic" post offices, then so be it.

This is undermined by the glaring examples of New Labour's non-efficiency once big corporate and financial interests become involved. These include the �2bn bail-out for the failed Underground maintenance contractor Metronet; the doubling of the cost of the new IT system for the NHS from �6bn to �12bn; and the systematic closure of hospital beds to pay the fees on Private Finance Initiative contracts.

Clearly, there have been beneficiaries of the surge in public spending over the past eight years. It is, however, not immediately apparent that the real gainers have been either the public or those at the sharp end - the nurses, the refuse collectors, the librarians, or the police.

Labour used to be accused of allowing producer interests to "capture" the public sector. It is still open to that charge. But now the producer interests in question have bigger salaries, drive more expensive cars, and appear to have been singularly unsuccessful in delivering for the public.

Re: A must see for All Newbies & lurkers
 

http://www.guardian.co.uk/business/2...growth.banking


The fightback starts here

The excesses of banks, big business and the super-rich have shattered our economic system. In the final extract from their new book, Larry Elliott and Dan Atkinson put forward their principles for a fairer and more cohesive societyLarry Elliott and Dan Atkinson The Guardian, Wednesday June 4 2008 Article history
Illustration: David Parkins

For those with long memories, today's financial crisis evokes nothing so much as the 1978-79 "winter of discontent", when Britain's trade unions, after weeks of often bitter strike action, smashed through a government pay limit. In place of the mounds of uncollected rubbish on the streets are mounds of suddenly worthless securities that nobody wants to buy. For the trade unions who believed their size and membership made them too big to ignore, there are the banks and brokerages that are, apparently, too big to fail. For the flying pickets, there are the financiers in pinstriped suits informing one and all that the failure of taxpayers to bail them out of the consequences of their huge mistakes would threaten a global meltdown.

It's a depressing picture, certainly, but it prompts another reflection. The tables were turned on organised labour after the late 1970s, in both Britain and America. Might capitalism's winter (and spring) of discontent also prompt elected governments to reform an economic system that has been shattered by the excesses of the New Olympians? Might policymakers at last attempt to rein in the reckless orgy of speculation? With even the banks themselves admitting their mistakes, no more promising moment has presented itself for more than half a century. We can envisage a US president within the next few years dusting down a copy of Franklin Roosevelt's 1933 inauguration speech, when he said the "practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds
of men".

It is against this background that we set out our own proposals for reform - a New Populism to replace the New Olympianism.

First and foremost among its principles is the subordination of finance. Before the current madness, from Washington in the 1930s to London in the 1940s to Paris and Bonn in the 1950s and 1960s, financial-sector activities were kept on a tight rein, their destructive potential fully realised and their proper, auxilary role in relation to the real economy kept firmly in focus. It is time to remember that banks and other large corporations are creatures of law, and it is the public's right and duty to supervise them.

Furthermore, they, the financial New Olympians, have had their chance. The result of letting them off the leash has been a disaster.

Next comes personal and social security, the principle that society should insure its members against misfortune, protect their savings and make proper provision for their old age. This is what we tried to do in the past, and, in Britain, are trying again to do, with very mixed results, using a range of entitlements of frequently baffling complexity. The loss of a person's job ought to be a problem, not a cosmic disaster.

Savings in approved schemes ought to be guaranteed. Why are the sort of high-quality pensions on offer in the postwar period now "unaffordable"? It would rightly be thought extraordinary were policymakers to agonise today over the difficulties of ensuring the average family could buy an Austin Cambridge car and a black-and-white television - our society is greatly wealthier than it was 40 years ago, and very much improved cars and consumer goods are relatively much less expensive. Why retirement schemes should be any different is not clear.

A third principle is accountability, or "democracy", to put it slightly differently. The leaching away of powers from national parliaments to the New Olympians' mandarin allies in bodies such as the IMF, the World Trade Organisation, independent central banks and the European Commission would be obnoxious even without the economic and financial turmoil that it has created. So great is the democratic deficit that people increasingly either do not bother to vote or vote for non-mainstream parties. The answer from left-of-centre parties, terrified of crossing the Olympian orthodoxy, has been more of the same. Thus the UK's Labour party is losing votes to the British National Party and the Irish Labour party is losing votes to Sinn Fein. The response of both parties has been to cede more powers to Brussels and to insist on the need for another world trade agreement that will transfer more authority to the WTO.

There have been suggestions that Gordon Brown is planning a bill reasserting the primacy of British law over EU law. That would be a most welcome blow against the Olympian system, but we fear it is unlikely to be proposed by Brown, a fundamentally conformist person with an apparent yearning for respectability.

A fourth principle is the undesirability of a semi-detached super-rich class. Not only does such a class pull money values completely out of shape - in the housing market, for example - but it tends to be the fons et origo of the horrendous errors from which the world economy is now reeling. It was super-rich investment bankers and derivatives traders who dreamed up the collateralised debt obligations and exotic derivative products that have caused such chaos in the past year or so. It was the super-rich who have demanded cheap money for most of the past decade and cheered on the inflating of the credit bubble.

This leads to our fifth principle, the protection and strengthening of an independent middle class. As we described yesterday, the super-rich and their political allies are destroying the middle class. Lawyers and doctors are to be faced with a stark choice between corporate employment and unemployment, while de-skilling and outsourcing are eating into occupations such as accountancy and journalism. Much of this is attributed to "market forces", when in fact it stems from legislative changes designed to tear down time-honoured protection for professionals. But even were the market driving all these changes, we believe the value of a professional middle class, independent of both the state and of corporate power, greatly outweighs any efficiency losses, and that the market ought to be curbed.

Which leads neatly to our sixth principle: social stability and tranquillity are more important than market efficiency or shareholder value. In other words, to the specific protections from the market for the professions ought to be added a general protection for everybody. If market forces dictate the concreting over of the south of England, or the obliteration of British manufacturing, or the closure of the rural post office network, then they should be resisted. This is, of course, an impeccably conservative as well as a centre-left position. This is TE Utley, writing in the Daily Telegraph in 1977: "I simply do not believe that if society decides that some evil produced by the spontaneous forces of competition (ie, mass unemployment in an area like Ulster, afflicted by civil disturbance, or the destruction of the farming industry) calls stridently for governmental action to temper it, that action is bound to prove disastrous, however prudently and deliberately it is conceived and carried out."

Our seventh and final principle may surprise some readers: liberty of the person. Hang on, you may say. You propose all sorts of controls on financial and business activity. It is a bit late in the day for you to start banging on about individual freedom.

Not at all. The New Olympians have been keen to assert that their right to move colossal sums around the world, to speculate and to generate credit, is indivisible from the right of humbler folk to live their lives as they choose, but we argue otherwise. The Olympians are in receipt of huge legal and other support from the state; ordinary people, including the self-employed and those running small businesses, are not. And yet, as financial interests have been progressively freed over recent decades, the liberty of the person has been increasingly restricted. Spot-tested at work for drugs, monitored by closed-circuit television, subject to rules prohibiting "inappropriate" language, soon perhaps to be burdened with a national identity card, the individual is having a thin time of it. It is time to restore privacy and autonomy to the private citizen.

Much is made of the need to make trade-offs between liberty and security in the age of terrorism. We are told that we must face restrictions on our liberty to prevent terrorist attacks, and few object to sensible restrictions in this respect. But the New Olympians must concede the same point. They have been merrily transporting the financial equivalent of fissile material around the world for several years now, and the result is widespread contamination of the financial system.

So yes, our principles would give rise to much greater control of finance and big business. The "liberty" of the Olympians' institutions would be severely restricted. And this in turn gives rise to the objection that such controls would be ineffective, because "in a globalised world" there is nothing much that can be done to control the investment banks, hedge funds and others.

This deprecation of interventionism is not new. As long ago as 1867, the writer and lawyer Richard Henry Dana was lecturing the Massachusetts legislature about the undesirability of passing laws against usury: "The market of the world moves with the irresistible power of ocean tides." But the notion is quite misleading, for two reasons.

First, the technology that makes possible almost instantaneous money transfers around the world and split-second dealings in cash and securities also makes possible the tracking of such funds by national authorities. Indeed, large financial movements are tracked already, in the name of anti-money laundering measures. No one suggests this is a pointless activity. Should some form of capital controls be thought desirable, the surveillance and enforcement machinery should not be impossibly difficult to bring into existence.

Second, there is a low-tech reinforcement for this hi-tech equipment. Contracts or deals entered into in offshore jurisdictions, or anywhere else, in defiance of financial controls could be declared void in British law, say. This "negative enforcement" is highly attractive. It requires no police; it relies simply on courts not doing something, ie recognising and enforcing financial arrangements made without authorisation. No one will sign a contract if they know that the other party can simply walk away from it once they start to lose money.

Both these methods of enforcement also give the lie to the objection that financial controls can work only with international agreement. In some cases, the objector is genuine and really hopes for every country in the world to sign up to a grand treaty on controlling speculative activity. In others, the objection is a ploy from those with no desire to see finance put back in its cage, rather like the child who declares he is only too happy to tidy up his bedroom but only when his left thumb stops hurting.

Not that international agreements are to be despised, provided two things are kept in mind. First, that, as things stand, such agreements are likely to be drawn up and enforced by the New Olympians' political and bureaucratic allies. Second, even when drawn up in good faith, such agreements tend to represent the minimum that all countries can sign up to. Individual nations serious about dismantling the New Olympian system will find they need to go it alone, at least to begin with.

So given the above-mentioned principles, and given that, contrary to myth, measures can be enforced, what ought those measures to be?

First, we suggest very much tighter controls on lending and on the generation of credit. Linked to this is a second suggestion, for the forced demerger of large banking and finance groups, splitting retail banking from both corporate finance and securities dealing. This would echo America's Glass-Steagall legislation, which separated retail and investment banking until the 1990s.

Third, even the remaining demerged units are likely, in many cases, to be large entities. We would suggest breaking them up into smaller banks, on the principle that mega-banks make mega-mistakes that affect us all. Instead of institutions that are "too big to fail", we should aim for institutions that are small enough to fail without creating problems for depositors and the wider public.

Fourth, we would suggest subjecting all exotic financial instruments to official inspection. Only those approved would be permitted to be traded. Anyone trying to circumvent the rules by going offshore or on to the internet would face the "negative enforcement" mentioned above - their contracts would be unenforceable in law.

Fifth, we would seek to offer the same protection for our remaining top-class industrial companies as is routine in France or the US - and perhaps go further. Ultimately, the aim must be an orderly downsizing of the financial sector, much as postwar France and Italy sought an orderly move of employment from agriculture to industry. More of the engineers and technical experts from our best universities would end up making things. Some of the famed "rocket scientists" who spend their days in the City cooking up ever more abstract financial entities may even end up making rockets.

Certainly, at a moment when the survival of human life on the planet might depend on our finding new technologies to generate energy and reduce our disruptive impact on natural systems, it seems perverse to the point of insanity to corral our brightest and best technicians on to trading floors.

Sixth, we would sharply increase taxes on the hedge fund operators and private equity partners, to ensure at the very least that they pay the same rate of tax as their cleaners. The loophole whereby income can be disguised as a capital gain and thus taxed at a lower rate was closed by a previous Labour government in the mid-1960s, only, bizarrely, to be reopened by Labour more than three decades later. It is time to close it again.

Seventh, we would suggest deregulating genuinely private businesses and the self-employed (frequently the two are synonymous). One byproduct of the Olympian myth that vast financial institutions are part of the "enterprise culture" has been the imposition on genuine enterprises of the sort of employment and other legislation used to extract at least some payback from the New Olympians for the benefits of limited liability and other privileges. The self-employed and small firms ought to be regulated only with regard to their activities (eg, a jam-maker would have to obey the food and hygiene laws) and not as businesses. Indeed, by greatly enhancing the attractiveness of the partnership or the small firm, such deregulation may divert many talented people from the pursuit of Olympian status to gentler, more rewarding and more socially useful business careers.

None of this will be easy. Some of it may involve abrogating Britain's signature to various international agreements, not least the various European treaties. Nor does much of this New Populism appear to be immediately in prospect, despite the darkening clouds over the world economy. It could move rapidly on to the agenda should the crisis worsen markedly, but it is also possible that it will take time to piece together a Populist coalition.

We have touched already on some of the elements that might join such an alliance: small business people and farmers (if there are any left); independent professionals and shopkeepers. Then there are those filling the basic supervisory roles that ought to be the backbone of society: railway station managers and their equivalents in bus depots and motorway service stations, police sergeants, prison officers, high-street store managers, noncommissioned officers in the forces and similar. We would seek to add two significant blocks of members: manufacturing and export businesses and trade union members. Industry and those working in it have been the biggest losers from the Olympian experiment as productive capacity has been destroyed and millions of manufacturing jobs wiped out. Those owning, running and working in industry know better than anyone the virulence with which New Olympianism has blighted the economy. Both union members and managers have much to gain from a more sensible attitude to industry.

And those within such a coalition will always have the inestimable advantage of the fact that, beneath the shiny packaging, the Olympians' creed is and always has been the reverse of their own. It is Unpopulism, the belief system that sacrifices jobs and productive assets on the altar of deal-making, that demands schools and post offices be "rationalised" (ie closed), that insists on lower tax rates for the rich than for their domestic servants, that has created a vast debt bubble and chronic global instability, and that, even at this late hour, has the effrontery to suggest that the answer to the crisis lies in the even more enthusiastic application of free-market ideals. Unpopulism ought to make the selling of the New Populism a whole lot easier.

Re: A must see for All Newbies & lurkers
 

Great listen this week at Financial sense for all 3 hours
http://www.financialsense.com/fsn/main.html
20th December 2008

2nd hour
http://www.netcastdaily.com/broadcas...008-1220-2.asx

Re: A must see for All Newbies & lurkers
 

Crash of 1929 video

http://economicrot.blogspot.com/2008...h-of-1929.html

Re: A must see for All Newbies & lurkers
 

How credit cards become asset-backed bonds

Re: A must see for All Newbies & lurkers
 

Interesting Article & maybe TA is right about the pennies & nickels. :wink:

http://www.dailywealth.com/archive/2...008_dec_19.asp

Why Gold Bullion Premiums are High and Going Higher
By Porter Stansberry
December 19, 2008

Yesterday, I explained why the U.S. dollar will lose much of its value during the government's all-out attempt to "paper over" trillions in worthless home loans, retirement obligations, and war debts.

Today, I'll show you the best way to protect yourself and prosper from it...

The huge inflation underway right now will be what I call "The End of America." I don't mean an end to our political union � I mean an end to the special role America has played in the global economy since World War II.

The coming great inflation will destroy America's economic leadership. It will lead � eventually � to the return of settling international obligations in gold instead of paper dollars. And this will happen much faster than anyone expects. By the time Obama leaves office, you will not be able to exchange dollars for any sound currency in the world without permission from the U.S. government. The price of gold will be well over $2,500 per ounce. Most importantly, commodities will no longer be priced in dollars either, but instead in the currencies of the leading producer. Americans haven't experienced anything like this since the Great Depression.

I'm sure 99% of you don't believe anything like this is possible. All I can do is warn you. Looking at these numbers and watching the bullion premium growing, I'm reminded of a classic quote from science-fiction author Robert Heinlein: "There is no such thing as luck. There is only adequate or inadequate preparation to cope with a statistical universe."

If you protect yourself from what's coming, your neighbors will think you were lucky. But luck's got nothing to do with it. And you can still protect yourself from The End of America.

The best way to protect yourself is to own gold bullion � plain, regular gold coins. The premium on these coins is moving higher over the spot price of gold. What does that mean? It means to actually take possession of gold in the United States, you have to pay a significant premium over the spot price of gold in the futures markets.

According to Parker Vogt, the head of Camino Coin (phone: 650-348-3000), one of the leading bullion dealers in the United States, the premium on a $100,000 order of gold coins would be 9.25%-9.50%. I've made a $100 bet with my colleague Tom Dyson that this spread increases over the next year.

Why? The reason is simple and well understood by all economists. It's called Gresham's Law.

Thomas Gresham was an advisor to Queen Elizabeth of England in the 1500s. The queen was perplexed by the shortage of bullion in England following the great debasement of the currency under Henry VIII and Edward VI. The kings, like all governments, had clipped coins to increase the money supply rather than increasing taxes to pay for their governments.

Then, by edict, they enforced legal tender laws, requiring the clipped coins be accepted for all obligations at face value. As a result, all the "good" money � coins that hadn't been in circulation � fled the country where the king couldn't destroy it. Meanwhile, clipped coins from all over the world found their way to England, where they earned more than their real value. As Gresham famously summarized, the bad money had forced out the good.

The same thing has been going on in America for years. As late as 1964, the U.S. half-dollar coin was still being minted with 90% silver. But in 1965, the silver content was lowered to only 40%. Even before this change became official, the market perceived the U.S. was slipping off the gold standard and the government couldn't afford to mint real silver coins much longer. The 90% silver coins had largely disappeared from circulation by the time the change was actually made in 1965.

In 1971, the government stopped including any silver in the coins. In 2007, the same problem arose with pennies and nickels, which are made with copper and zinc. The government banned the melting of the coins and forbade their export.

So... what does this have to do with the bullion premium?

The spot price of gold is set in London. Buying bullion in America now costs more because the market realizes the value of the dollar is inflated. Bullion has fled America. The market clearly believes legal tender laws will soon be imposed, forcing merchants to accept a fixed value of the dollar. The bad money, America's paper dollars, is chasing away the good money, gold bullion.

My advice is to buy physical gold as "wealth protection" against the currency debasement I see happening around us. Don't check the price every day. Think in terms of ounces accumulated rather than current market value. And do it soon.

Re: A must see for All Newbies & lurkers
 

Merry Christmas to all & a prosperous New Year for 2009.

A Sterling Thanks to all who started this forum like many I guess it has & will be a lifesaver to those here & their loved ones who had their eyes closed to this upcoming historic event. :36_3_16:

Re: A must see for All Newbies & lurkers
 

Meet The Federal Reserve Video's.

http://news.goldseek.com/GoldSeek/1212432992.php

Re: A must see for All Newbies & lurkers
 

Very Long video

The Money Masters - How International Bankers Gained Control of America...

Re: A must see for All Newbies & lurkers
 

For those interested in Cycles, stocks, economy & comparisons to the 1930's this is a good read yet very long.

http://www.321gold.com/editorials/ta...lor121808.html

J. Taylor's GOLD & Technology Stocks
Dr. Robert McHugh Speaks of a Potential "Cataclysmic Nation Changing" Wave C
Jay Taylor
Dec 18, 2008

I was was greatly impressed by an insightful article I found back in 2005 on the Internet titled, "The Feds Are at It Again. What Do They Fear?" It was written by Dr. Robert McHugh, who was, just as I was, once a banker before he became a newsletter writer. Unlike your writer, who worked for well-established foreign multinational banks in New York, Robert actually founded a local community bank in Eastern Pennsylvania that ultimately became known as Main Street Bancorp. Talk about a "ground floor" opportunity; as one of the founders of the bank, Robert was one of 13 employees when it started. From zero deposits, the bank grew to $3 billion in deposits and had 500 employees when management chose to sell out in 2000 because they believed the economy looked like it was ready to head south.

Dr. Robert McHugh
Robert was the second ranking member of management. He was an executive vice president and he was also the company's CFO. So he was responsible for funding the bank's portfolio. He also was involved in managing the investment portfolio of the bank. It was at that time that he gained a great interest in technical analysis, which he used as an investment tool. So, when the bank was sold and Robert had plenty of time on his hands, he decided to really dig into technical analysis by returning to school and acquiring his Ph.D. in that field.

Robert is one of the few people I know who has been a part of the establishment's money creating machine who understands the virtues of gold as money. That factor, along with his strong analytical skills and his exceptional quest for objective truth- enhanced, I believe, by his strong Christian faith-makes Dr. McHugh a very interesting and valuable addition to our growing list of noteworthy interviewees. We are very thankful to Dr. McHugh for graciously granting us an hour of his time on December 8, 2008 to talk about some extremely dire predictions that his Elliott Wave analysis is warning us of. During this season of "joy and good tidings," we are not eager to pass along Dr. McHugh's gloom and doom message. However, we have always believed it is better to see the freight train barreling down the tracks than not to see it heading our way so that we can best prepare for the protection and welfare of our families and others whom we love. As my old mine engineering friend Ricardo Campo used to say, "It is what it is. Let's make the best of it."

TAYLOR: Robert thanks again for taking the time to talk to our subscribers. The last time we interviewed you was in July, 2005 and a lot of things have happened since then. I'd like to begin by asking you about a couple of dire predictions you have made recently. I'm going to quote something that you have written in the last couple of weeks, "We find ourselves in a catastrophic bear market Grand Super Cycle degree wave four down which is correcting the bull market from 1718, before the United States even started." My question here is how do you know this? What makes you so sure that is the case?

McHUGH: We have been keeping track of the Elliot Wave structure for the markets. We have a long term chart which goes way back. The credit for a lot of the traditional work building up these wave cycles goes to Robert Prechter. He went into the past with a lot of historical analysis and identified Grand Super Cycle waves going way, way, way back Based upon those waves and just taking it from the point of time where the United States existed, if you started counting the waves forward, we had a Grand Super Cycle wave three top in October of 2007. The reason we know that happened then was because of something that happened a few weeks ago: The S&P500 fell below its intraday low of 2002. That's a problem because it means that the rally from 2002 to 2007 had to have been a complete five wave structure. Originally, we were hoping it was just Intermediate degree wave one up of an ongoing bull market. But in Elliot wave terms, wave two can't fall below wave one's starting point. Wave two correcting the rally from 2002 to 2007 would have had to have stayed above the bottom in 2002. It did not. It fell below that level three weeks ago. This means that the move from October of 2002 to 2007 could not have been a wave one, because we have dropped below that level. It has to have been a complete full five wave cycle. We had marked a primary degree wave four bottom in October 2002. It means that the top in October 2007 has to be a primary wave five, which also happens to complete a cycle wave five which happens to complete a super cycle wave five.

That is based upon the wave identification going back centuries. Therefore, this means that the October 2007 high was the completion of a Grand Super Cycle wave three. It is kind of like a logic sequence, if this, then that, then that, then that. It is all because the S&P500 fell below that October 2002 low. So we now have confirmation of this Grand Super Cycle degree, which is a horrible development because the degree of trend for the Great Depression was one lower (smaller) degree. The Great Depression was a Super Cycle degree wave four. This is a Grand Super Cycle degree wave four; therefore the damage that is going to happen now will be greater than the damage that happened in the Great Depression.

TAYLOR: Robert, perhaps now would be a good time to explain to our readers, Elliot Wave analysis. You talk about these waves; I believe you are talking about Elliot Wave theory. In general terms, could you explain to our readers a little about that?

McHUGH: Sure. There was an accountant named Ralph N. Elliot who made the observation back in the 1930's that stock markets move in repetitive wave patterns that are predictable. Generally, progressive moves, or moves that are taking prices toward the primary trend happen in five waves and then after those five waves are completed, markets always reverse in shorter corrective waves that are generally three waves, although there are other corrective patterns in addition to three wave patterns. You can have triangles which are five wave patterns. But generally speaking, to keep it simple, bull markets move forward in five waves and move backwards in three waves. In bear markets, it is the opposite, they are going to move down in five, retrace and correct (rally) up in three waves and then move down again in five. It is really that simple. What it says is that psychology moves the markets. It's not the fundamentals, earnings per share, so to speak. The earnings per share numbers are a function of market psychology. Market psychology of human masses, of jumping on the bandwagon in total, moves markets. That's why some days, the market will go in a direction and nobody has an explanation. Watching CNBC today is an example, when the market was down 200-250 points and a trader on the floor being interviewed commented, "I have no explanation for why it went down today." Because if we look at last night's wave structure that we presented to our subscribers, it was simply time for a correction, we had just completed five waves up in a very small degree.

TAYLOR: So this behavior is predictable then to an extent, this mass psychology or mass behavior is predictable in these waves?

McHUGH: Yes, it is predictable. However, it is not always easy to apply. A price wave can start out in the direction where you think it is going, then it can morph into something else. For example, something that looks like three waves up can morph into five waves up, it can just keep going. Or something that looks like it is going to be a three wave correction can progress into a triangle formation, which would be five waves. So, while you are in a price move, it is a little hard to master or predict it, although there are other tools you can use to help you. But when you look back, it is a fabulous photograph or map of where you have been. I love Elliot wave particularly for its mapping value. It does have predictive value, but I use a lot of other tools for prediction that I would rather rely upon. What I like about Elliot Wave Analysis is that it gives you the overall big picture, an idea of where you are headed, the map so to speak, identifying what is likely going to be the investing environment in the future. That is basically Elliot Wave in a nutshell.

TAYLOR: Excellent, thank you. You have talked recently about the Supercycle (A) wave, which I take it was the big leg down in the equity markets. Now you are talking about a (B) wave up, sideways to up. You have said that we should really enjoy every second of this, because when it is over, we are going to start wave (C ) down, which will be the big one. I think you have used the words "cataclysmic decline" and "nation changing event." Those sound like enormously dire predictions. As you were saying before, what you are seeing in the wave patterns looks considerably worse than what we saw in the 1930's. So, we are in this (B) wave now, how long do you think it will last?

McHUGH: From a time perspective, Grand Super Cycle wave 4, to correct something that started in 1718, you would think this thing would last for 20, 30 or 40 years. So, time wise from proportionality, that's what you would estimate. However, the price damage that is happening is so rapid and so powerful and so fast that, a Grand Super Cycle wave four could correct three centuries of bull markets in a very short relative period of time, something on the order of two to six years, let's say. Our hope is that it is over in two years, but that will happen only if the degree of labels that I have marked in our analysis is correct, the highest levels. In other words, I have the decline from last October to this November's low as a Super Cycle degree decline because it was a 50% drop. If I am wrong and that is only a Cycle degree drop instead of a Super Cycle degree drop, that means that Cycle wave (A) down, the first leg of this Bear Market, isn't even over yet. Any correction of the Grand Super Cycle is going to be three waves, most likely. (A) down, (B) up, (C ) down, of the Super Cycle highest degree. If I am wrong, and these labels are too high, then this thing is going to last for six years and we could be seeing stock markets plummet further, the DJIA could go down to 1,000 or 500 and the S&P500 down to a similar level, to 50.

TAYLOR: To 50?

McHUGH: Yes, if it is going to be a four to six year event, that's a possibility, and that's terrifying.

TAYLOR: I think I read somewhere that you were talking about an S&P to 500 possibly. My good friend Ian Gordon, who loves your work and is a Kondratieff wave proponent of a major bear market now. He thinks also that we could see something worse than the 1930's. Ian asked me to ask you if we are going to see something worse than the 1930's, then why would we not see something worse than a 500 on the S&P? Maybe I didn't understand you or he did not understand you right. What are your predictions for the S&P500 on the downside assuming you are correct?

McHUGH: That's a difficult number to come up with because the Grand Super Cycle wave four can take three different shapes. It can be a zigzag down (first chart on left) which is the worst case scenario and in that case we will see the S&P below 500, possibly going all the way to 50. That would mean the third wave, the (C) wave, would be a dramatic wave like the (A) wave has been. The second (second chart) possibility is flat where the C wave will not take us down that far. It may take us down to slightly below levels where we saw with the (A) wave and that would be more like a
5000 target on the industrials (DJIA) and a 500 target on the S&P500.

Or it could be a triangle (CHART III), which in this case, a lot of wave fours are triangles. It will be five waves. It will be an A, B, C, D, E pattern and we will actually finish higher than the November lows, meaning the November lows will be the low for this bear market in terms of price, but it is going to extend for a long time. If it is a triangle, we are talking five to six years, but the price damage would be over and then it will be a sideways struggle.

TAYLOR: That will be the best of all worlds, as you see it?

McHUGH: That is one way of looking at it, the best case scenario, price wise. Time wise, it is not, because triangles take time.

TAYLOR: Because my friend Ian his question was, in the 1930s, in the Dow (DJIA), we saw a decline of almost 90% at one point in time, so a decline to the S&P500 would be about a 65% decline. So I guess that was his question, but I think you have answered it.

TAYLOR: Ian had noted that during the 1930's, the Dow (DJIA) ultimately declined almost 90% at its low, so if we had a decline in the S&P500 to 500, that would be a loss of "only" about 65% from the all time high last. But are you saying that depending on the wave structure down, it may dip below that.

McHUGH: It really is based on probabilities. Nobody knows the future. We know there are three different patterns. Zigzags are the most common. However, wave fours do get triangles. The Great Depression did not get a triangle. It got a zigzag of Super Cycle degree. So if we get a zigzag of Grand Super Cycle degree, we are going way, way lower. That is why I am telling everybody to raise cash. I think we are now in the Super Cycle wave (B ) up. It could be Cycle degree. In any case, we are going to be up for a while. If everybody is wrong, at least you were conservative. You saved yourselves a ton of aggravation, a ton of losses. If this is the worst, great, you have cash and you can get some pretty cheap prices down the road, if this zigzag event does not happen.

TAYLOR: Robert, if this is a Grand Super Cycle wave (B), where do you think we can go on the S&P500 and on the Dow (DJIA)?

McHUGH: Typically a B wave is not going to be a deep retrace, it is a shallower one. Again, it can form a triangle. Wave Bs and
wave fours form triangles. If this is a B, it could form a triangle, in which case, it's not going that high. If it is going to be some
sideways pause, maybe we get as high as 9500 on the Dow (DJIA). If it is a zigzag up, we could go to 11,000. If it is flat, we could go
to 10,000 on the Dow. At this point it is really hard to tell, we are going to try to identify it as soon as we see where it is going. We
always try to make the assumption without knowing, that it will be a zigzag. We are looking for something in the neighborhood of
the 10,500 area for the Dow, 1050 in the S&P500 if a normal zigzag happens. The retrace percentage often times with a B wave
would be a Fibonacci 38% of the move down. The move down was 50% or roughly 6800 points on the Dow, so 38% of that gets you
back up above 10,000 and above 1000 in the S&P500, that would be about a 38% retrace. We also use other tools. We have a bullish (reverse) head and shoulders pattern that is targeting 10,000. We would expect to see at least 10,000 in the Dow Industrials and 1000 in the S&P500 before Wave B completes, but again, if it goes to a triangle, we may not get that high or if it gets there, it will be brief and then it will bring it back down and it will go sideways for several months. The first wave (A) down was about a year, year and a month. Wave (B) up should be shorter than that, could be 3-4 months long. Wave (B) is normally a shorter time frame than wave

(A). Once that correction (rally) is over, the final wave (C ) down, if this is a zigzag or a flat, should last about the same amount of time as the wave A did and that would be about a year.

TAYLOR: Could I get you to comment on the phi mate turn date? That is a very important tool that has been very accurate from what I understand. Could you just comment on that briefly?

McHUGH: Sure, there are a lot of different sciences to technical analysis which all bases itself upon the concept that psychology moves markets. One of the tools is cycles. A cycle is a periodicity where history repeats itself. We came across a cycle pattern that is fascinating. We have discovered that, since the January 14, 2000 top in the industrials, most of the tops and bottoms since then have occurred a Fibonacci number of trading days from that date to another top or bottom since then. It has a phi relationship. Phi is the value .618, which is kind of like pi, it goes to infinity, but we round it off to .618. It is known as phi. It is not a random number, most of the physical world we live in, the science of it, is earmarked by phi relationships. Back in the 12th century, Fibonacci identified this number. He found out that nature or God has designed the world primarily using a relationship of Fibonacci numbers, particularly phi.

For example, a gentleman's belly button is approximately 2/3s or phi (.618) of the total distance from his toes to his head. It is amazing. If you look at all the great art and architecture of history, they use the relationship of .618 to .382. If you look at a frame of a picture on the wall, it will look right if the sides are .382 in relation to the width which is .618. That is when it looks right. If you use any other relationship, it won't look right. The architecture of the Greeks, Romans, Egyptians all used phi. This is just because this is the way our physical universe has been established mathematically.

Note: For those readers who would like to find an excellent definition and explanation of phi and gain anunderstanding of the many places in nature where the "golden ratio" exits, please visit the Golden Number web site at: http://goldennumber.net/neophite.htm

TAYLOR: That is very interesting because then it suggests that perhaps the activities of policy makers are an exercise in futility.

McHUGH: Correct. The way that I put it is this, you think about all of the billions of transactions that go on daily by the millions of people using thousands of computer models and hundreds of business models, all buying and selling in stock transactions on any given day and time and yet a mathematical formula using a phi number can pick tops and bottoms. Is this God's sense of humor telling mankind, "You can be busy and do all you want to do, but ultimately I am going to decide and control when the tops and bottoms happen." It is amazing, just amazing.

TAYLOR: Well, Robert, I would like to go back to our interview of 2005 then and maybe quote a little bit of what you had to sayabout Mr. Greenspan's activities and his attempt to keep things going, to keep the housing bubble moving forward and of course in2005, it was just getting underway in earnest about then. I said to you, "So, Mr. Greenspan has been erring on the side of liquidity. He's afraid that things might come unglued if he doesn't keep pumping lots of money into the system." And you said, "Yes, I think so, the Fed Chairman is a student of the Japan deflation and I think it scared him beyond belief, so he has really gone overboard to make sure that that does not happen here, but the truth of the matter is that once the foreign holders of our dollars, bonds and stocks, and they are becoming a larger and larger percentage of the ownership of our financial assets, lose confidence and decide to sell those assets for whatever reason, the Fed is not going to be able to pump enough money supply into the system to offset what is going out the door, because as you get a big wave of selling from foreign securities holders, it is going to drop asset values sharply lower. They will be wiping out trillions of dollars of financial wealth and I think once something like that happens, the Fed will see that they are standing under an avalanche. What are they are going to do? Pump 100% money growth to try to make up a 30% or a 50% drop in avalanche gets started." As far as I know and at least on a grand scale, we have not yet seen evidence that the Chinese and other foreigners have stopped buying our Treasuries, have we?

McHUGH: No, that is the event that is yet to come that may be what happens with the wave (C ) down.

TAYLOR: And yet, we are seeing a Federal Reserve and a Treasury Department doing incredible things, trying to pull rabbits out of hats and nothing is working so far, would you say that is true?

McHUGH: Yes.

TAYLOR: It would seem that, so far, they are not able to defy the laws of nature. In spite of the fact that we haven't even seen the cessation of lending from foreigners at least on a grand scale. Do you see any evidence of what they refer to as "quantitative easing" where the Fed is buying our own Treasuries to keep the price down and interest rates down?

McHUGH: Bernanke actually admitted two weeks ago that he was going to start buying the long end. I think that with this whole Treasury bailout, Congress basically gave the Treasury and the Fed carte blanche to fix it. There is very little accountability over their actions and a lot done in secret. Today we had a four week Treasury bill auction that went out at 0%. Zero percent interest, $32 billion in Treasury bills were sold, with four times that amount bid. People are so afraid of holding money that they just want to park it someplace where they think it will be safe and they can immediately get their principle back.

TAYLOR: That's Tuesday, December 9, 2008, right?

McHUGH: Yes.

TAYLOR: That's incredible.

McHUGH: Incredible. So what has happened is that confidence in the system is down the drain. We haven't seen the foreigners give up on us yet. The evidence is that the Fed has just buys Treasuries with money they have printed out of thin air. They have the right to do it. They can legally do it. It is not illegal. They have a mandate from Congress to do whatever is necessary to fix the mortgage problem. They already have a plan of up to $700 billion where they are going to buy bad assets from banks and replace them with Treasuries and then those Treasuries can be used to acquire cash. They have already started that process. They can certainly buy Treasuries from the Treasury Department any time they want to or in the open market. They can buy any term they want to for cash they print out of thin air. They have hidden M3 now, so it will be hard to track what they are doing. They stopped disclosing M3 which disclosed a lot of the Fed repo Treasuries for cash transactions. They stopped revealing M-3 two years ago. They now can do whatever they want to do with little accountability. Clearly with the way interest rates are dropping, some of this is a flight to quality, but there is also the invisible large hand of the Fed at work purchasing securities to lower interest rates.

TAYLOR: Is it a flight to quality, or is it just as Bob Hoye, an analyst in Vancouver, calls it, a giant short covering rally in essence, where the margin clerk is calling the shots, because you have this great unwind of the credit expansion now into a credit contraction, which creates a demand for dollars. In that sense, I guess it is a flight to quality, or is it that the dollar is getting stronger for all of the wrong reasons?

McHUGH: Yea, but that game is not going to last because at some point, the missing link in the whole process is the American household. The whole reason this thing unraveled in the first place is because the American household lost its income, lost its ability to borrow. Everything started squeezing the American household. They were not able to make their payments. That let the whole house of cards fall. Unless they address the balance sheet of American household, it is not going to get better. Now that we have seen essentially one year's gross domestic product drop out of the stock and real estate markets and we are going down even further, they have to pump about $13 trillion into this economy and get it into the hands of American households as fast as they can to fix it. Well, so far, they have pumped a couple of trillion and none of it has gone to the households.

TAYLOR: It is going into the hands of the rich bankers essentially.

McHUGH: That's exactly right. So, two of the thirteen trillion dollars is gone, given to these bankers and nothing has gotten to the American households. I don't want to just be a critic here, I'm recommending a constructive solution. My thought is, let's rebate three years of income taxes which would come to about $13 trillion dollars. Let's get it into the hands of American households.

Require them to take half of it and pay off their debt. What that will do is clean up most of the bad assets that Wall Street and other financial institutions are holding. All of a sudden bad loans become good loans, bad securities become good securities. Those payments are made and the benefit trickles up. The American household cleans up its balance sheet. It has picked up significant cash to spend, cash that will replace income and wealth. It has gotten rid of its debts. Wall Street and banks suddenly have clean assets that before were bad assets that the Fed has just been monetizing according to the current bailout plan. That's a strategy that would work

It's going to cost $13 trillion. The deficit is going to be through the roof and it's going to force a devaluation of the dollar.

We are going to have to devalue the dollar as part of the cleansing process. Then we are going to have to start looking at gold as a monetary standard against it to boost our currency..

TAYLOR: Ok, what are the chances of government doing that? It's not the common folks that carry much weight in the electoral process these days. At least that's my cynical point of view. It is really the heavy hitters (lobbyists and special interests) that have access to these characters in Congress. So, if that's the case then, in light of an Obama presidency, what chance is there that we might see a more equitable distribution of income along the lines of what you are suggesting?

McHUGH: Probably slim to none, but this thing is going to get worse if there is not. At some point, they are going to be looking for creative solutions like this. They continue to put the Wall Street bankers in positions of political power. The next Treasury Secretary was the Federal Reserve Bank's New York branch president. He was a coauthor of this current bailout plan that isn't working, so

TAYLOR: More of the same

McHUGH: More of the same. Rubin was a Treasury Secretary under Clinton. And now he is head of Citicorp. They needed a $250 billion dollar bailout. You've got Paulsen running Treasury now, who came out of Goldman. The first thing he did was let Lehman go down the toilet and destroyed the confidence in the entire system by allowing that to happen. He let his competitor go down the john and then he bailed out what seemed like everybody else on Wall Street. There is a lot of politics, a lot of games going on, a lot of nonsense for letting the bankers run things. The grass roots people have to get a hold of their representatives and shake them and say, "look, we are starving out here, I can't put my kids through college." Our credit rating is destroyed by the credit card companies that are charging 30%, because they mailed out a bill two weeks before it was due and I didn't get a chance to pay it. Or we just lost our jobs and we can't pay it. Credit ratings right now are getting annihilated. Credit card companies have just announced that they are going to wipe out $2 trillion dollars of available lines of credit from the consumer. The household is getting smashed and that's why we are headed into a depression that is greater than the depression of the 30s. There is no talk of anybody doing a darn thing for the American household other than the ridiculous comments like a $1500 tax rebate that Bush put out a year ago. That's nonsense. We need big money for the household. My plan is for a minimum payment of $50,000 per household. The average payment would be $130,000 per household.

TAYLOR: Ok, so we're agreeing that probably their plan is not going to work right away at least. They are probably going to continue bailing out Wall Street. The fat cats will continue to walk away with more money in their pockets, keep their fancy multimillion dollar homes on the south shore of Long Island and their penthouses in Manhattan. Life will go on as it has been. Given that political scenario, where do you think we are going to go in the bond market? I am really concerned about the bond market. Like you said a little bit ago, where is the money going to come from if the foreigners finally decide they are not going to lend to us or even roll over what they currently own? Even if they do roll over what they currently own, given the trillions of dollars that our government is going to be spending to bail out the fat cats, where is that money going to come from if they monetize it? At what point in time do lenders to the Federal government say we have to have more for our money? When are they going to say this 3.5% 30 year Treasury, we are not willing to lend to you at that level? When do you think that will happen?

McHUGH: There is a problem if that happens. The ball game will be over, and we are going to have a new country. This isn't going to be the United States of America anymore.

TAYLOR: So if the interest rates spike up, what would happen? Would we hyper inflate then?

McHUGH: Yes, the Fed would buy the debt. We would monetize our own debt, basically devalue the dollar and declare a year of jubilee where all government debts are no longer payable to anybody. Then if China wants to sell their holdings, the Fed will buy it and it will be a big sham. Then they are going to be forced to look at a gold standard, a brand new currency or the whole country will collapse. And that is the problem with this Grand Super Cycle Bear Market as I said earlier. Grand Super Cycle degrees change governments and economic ideologies. There is a paradigm shift of the way the world is structured. That is what is scary about this Grand Super Cycle Wave four. The potential is there and you just laid out a very good scenario for how it could happen. That is why it is urgent that the government get a smart policy of rehabilitating the American household now, before it is too late. While $13 trillion sounds like a lot of money to rebate, they are going to spend it anyway. They have already identified $8.5 trillion in bailouts, excluding entitlement payments from social security and medicare. Why not go a little further, to $13 trillion, they are going to get there anyway, and save the American household, and perhaps capitalism at the same time? They are trying to save the system exclusively, but they have to do it together, save both the household and the system.

TAYLOR: I agree with you Robert on what you are saying, but given the realities of politics, and as you suggested, it is probably not going to happen right away. Now, people are tripping all over themselves to lend to the Treasury (buy Treasuries). As you were saying a little earlier, we have zero interest rates (on Treasuries) today. So if we get this Grand Super Cycle, is it likely that no one will want to lend to the Treasury anymore?

McHUGH: That's why I am telling everybody to raise cash as wave (B) unfolds here.

TAYLOR: If we start to hyper inflate and is that what you think is likely to happen here?

McHUGH: Yes, it has to happen.

TAYLOR: They are going to hyper inflate, the Treasury is going to have to buy the debt because certainly Americans don't have the money to buy it.

McHUGH: No, that's the problem. The Fed and Treasury are going to have to do it all. If they let this thing go down the drain, if they don't do something aggressive for the American Household, to rebuild the grassroots now, the Fed and the government will have to devalue the dollar anyway. It will almost have to be an official devaluation. They will have to buy out all of the debt with lower, cheaper dollars. And I am not sure what is going to be left standing when that happens. People are going to be crying and screaming for government protection and for government solutions and that is how you slip into totalitarianism. That's how you slip into socialism. That's how you slip into fascism. That's the danger here, if the American household is not fixed now, before it is too late, when we get to the bottom of this Grand Super Cycle, they will be screaming for a new political structure just like they did in Germany. That is how Adolf Hitler rose to power. This is how the dictators of history have risen to power. And that is a danger.

What might be the form of that? Who knows? It is anybody's guess. Maybe what happens, is that there is an international consolidation of nations, where the United States becomes a state within a larger nation, maybe with Europe, maybe with Canada and Mexico.

TAYLOR: Right, there is certainly some talk of that. Congressman Paul has even confirmed that there are some tentative plans for going in that direction with an Amero currency. Unfortunately, that all seems very possible to me as a person who has been observing this scene for some time. So, we are looking at the possibility of a major increase in interest rates. Could one make some money shorting the long bond somewhere along the line here?

McHUGH: Maybe that will happen, but my own personal opinion is that I don't think the Fed will let interest rates rise on the long bond. They will buy them all up if they have to first.

TAYLOR: So, they will keep the interest rates down and that means buying them at an accelerated rate as time goes on.

McHUGH: What will happen is that the Federal Reserve will print money out of thin air, go into the market and buy up all of the United States Treasury debt. All the debt will be held by the Fed and money, dollars, that will be worth a lot less, it's a form of devaluation of the dollar, will float into the government and into the economy. What happens is, that creates a hyperinflation and keeps interest rates down at the same time.

TAYLOR: Well, John Walter Williams, the economist, had been strongly suggesting a hyperinflationary scenario by 2010, but given recent developments, has moved that up to as early as 2009. That, in a way would dovetail with your scenario of a very rapid unwinding of this Grand Super Cycle, would it not?

McHUGH: If that is the case, that means we are having an accelerated wave and that's right, it would be a shorter term thing.

TAYLOR: You've talked about gold a little bit, Robert. Can you use analyze gold the same way, with the Elliot Wave techniques that you use on the equity markets? Can you use the same Elliot Wave analysis on any number of markets?

McHUGH: You can use Elliot Wave on anything. It works on any market, on any instrument. We do use it on everything we cover, gold included.

TAYLOR: How do you see gold now?

McHUGH: The other thing we use for gold to help us, is to look at the monthly and weekly full stochastics, which is a momentum measure. When stochastics get to an oversold level, that points toward a turn. So with the combination of the two, what we see now for gold is that gold is bottoming. It has been in a corrective phase, but there are strong momentum indicators indicating that gold is bottoming and should head much higher. If we see the dollar devalued or hyper inflated, gold has to grow in value. Gold becomes money at some point here as this crisis deepens. It becomes something that is tangible and has monetary value that people want to have their hands on. It is just going to add more demand for it. Right now, you can hardly buy gold coins anywhere. The demand for them is greater than the supply.

TAYLOR: And yet the paper price for gold has been declining.

McHUGH: Yes, and there is some manipulation going on there or what you would call government manipulation or market manipulation from other sources than government. They try to keep the price of gold down because they want people to continue to turn to the fiat currencies like the dollar and the Euro. What happens is, as people lose confidence in those currencies, they are going to look to gold as real money. At some point here, gold's value increases as these fiat currencies get shakier and shakier and central banks hyper inflate more and more volume of them. The central banks don't want gold's value to increase at all. Their whole strategy is to preserve the dollar, preserve the fiat currency system to keep the bankers in power and control. They need to keep the lid on gold, but at some point, supply and demand forces, fear, and the break up of the financial system will drive people to what has traditionally been, for thousands of years, real money, which is gold and silver.

TAYLOR: I think it is remarkable Robert, that that insight comes from an ex-banker. I just pass that along to my readers because most bankers wouldn't think that way.

McHUGH: Well, I'm a renegade banker. I have sat in at meetings where the Federal Reserve came in, sat down and "said stop lending, we think there is a recession coming." The very fact that we were told to stop lending caused a recession. That happened in 1990-1991. Word of that finally hit the mainstream media and one of the first acts Clinton did was that he grabbed the regulators by the throats and said, "why don't you let the bankers start lending again." The next time they came in, they told us to start lending.

They have that kind of power. They decide when recessions and depressions happen. They decide when hyperinflation happens.

They can do it through a lot of different tools. The hidden one is the regulatory agencies where they come in and intimidate bankers and tell them what to do. They have a lot of power. They can have the boards of directors of banks thrown in jail. They can have people fired. They use those powers behind the scenes, nobody knows about them. As a banker, I have seen the dark side of the Fed. I have watched them rate good loans as bad loans, and charge off loans when in fact, customers were fine, the loans were fine. We are in a bit of that environment again now. What happens is, the last thing these government agencies want to happen is that they get called on the carpet before Congress. So they become overzealous, overcautious at precisely the wrong times. There is a lot of action by the Fed that messes with the normal business free market cycles that would prevent excesses. A lot of the publicity in today's market is that there wasn't enough government intervention, there wasn't enough regulation and that is true too, they got too far in one extreme, but they create imbalances and create these problems by overacting as well.

TAYLOR: Robert, while we are on this topic, I have to ask you about the Plunge Protection Team, or in more polite circles, known as the President's Working Group, which you talk about frequently in your newsletter. You have some way of measuring their activity. Could you just talk about that for a moment?

McHUGH: Yes, it's hysterical. I started to get into technical analysis to a large degree back around 2000. Prior to that, I was a user of technical analysis, when I managed money, millions and billions of dollars, and I appreciated it. When I got into it closely and started preparing a lot of it myself, instead of reading other people's work, I learned real quickly that there is manipulation in the markets. There are unexplainable moves that are outside the parameters of normal indicators, and normal things that work. I really saw it increase and intensify to a degree I had never seen before in the mid-2000s, I'd say about 2003 to even today. I researched the President's Working Group and sure enough, it is legal for the Federal Reserve or the Treasury or the SEC or the other members of this Working Group to authorize the purchases of stock, to authorize the purchases of futures, to manipulate stock markets, to manipulate bond markets. They have the right to do this under the legislation that was passed right after the 1987 stock market crash.

From say 1987 to 2002, I just don't think that the PPT's actions were used to keep markets going up, up, up. They did it to stop major declines and prevent collapses. There were prudent opportunities to use it, to intervene, such as the LTCM hedge fund collapse and the Asian crisis in the late 90s. Those were appropriate uses for the Plunge Protection Team. What I noticed is that the market never went down after 2003. It never went down when it should. There were no corrections to speak of. There were months and months and months of straight up. Just when all of the indicators that you would normally be able to rely on, would anticipate a correction, nothing would happen, the correction would suddenly reverse.

TAYLOR: So, what we are really talking about here Robert, is the President's Working Group. That is directly from the Executive Branch of the United States Government, then?

McHUGH: Yes. There are no minutes to their meetings. There is no disclosure. There is no transcript. It is completely hidden. It was all circumstantial evidence. I would have e-mails from subscribers, from traders, from floor traders. The Working Group is allowed to use Goldman Sachs and a few of the other major investment banking groups to conduct their transactions for them. I had traders on the floor e-mail me saying, "our mystery buyer has ordered Goldman Sachs to buy the market." Sure enough, it turned it on a dime and the thing flew up. It got to the point, where the traders just followed this mystery buyer operating through Goldman and so on, to make a profit. I realized that at this time, we had an intensified degree of market manipulation throughout the middle of the first decade of the 21st century. So I played around and found a proprietary indicator using data I can measure that can actually predict when it is probable, not guaranteed, but probable that government intervention into the market will occur, and approximately when it is probable that it won't. I have been using this tool for three or four years. It's called my plunge protection team indicator, my PPT Indicator. It has been astonishingly accurate at pin-pointing the environment and periods of time when markets are more likely to go up than go down and vice versa. Interestingly, the last six months or so, the PPT has not gotten heavily involved in jacking the markets up to the degree that I expected them too. These indicators allowed for large periods of time where markets could slide, and in fact, they did. I don't know whether it was a change in philosophy or whether the selling pressure got so great that even the Working Group's (a.k.a., Plunge Protection Team) efforts were starting to fail.

TAYLOR: Just overwhelmed perhaps by the sheer magnitude of the decline.

McHUGH: Yes, as the house of cards collapses, their ability to manipulate the markets unravels.

TAYLOR: So, let me get back to gold just briefly then, in terms of your medium and long term view of gold

McHUGH: My long term view is that I am bullish, incredibly bullish, because I do think it will eventually have to be used to back new currencies or existing currencies. If we are headed into this Grand Super Cycle depression, they are going to have to recreate the currency, so gold is really critical there. Intermediate term, I am also bullish, looking at both stochastics on a weekly basis, which is my intermediate signal that allows for a nice rally. The longer term, which would be the monthly full stochastics, allows for a nice rally. Short term, the daily full stochastics and the Elliot Wave count allow for some more give and take, a slight minor decline back and forth. All in all, I think gold is going to hold up fairly well in relationship to how other financial market instruments have done.

Relatively speaking, gold has held up pretty well and should continue to do so. Once the short term correcting phase is over, gold should take off, perhaps even in 2009.

TAYLOR: Well, it's interesting that you say what you did about the fact that gold has held up relatively well compared to most other things. Gold has, of course, risen dramatically compared to oil, compared to copper, compared to the Rogers Raw Material Fund, compared to a whole broad base of things. One of the beliefs that I've had is that gold mining shares should do well as they did in the 1930s because the cost of producing gold goes down much more than the price goes down. We are seeing that actually happen now, which leads me to one of my final questions, for you Robert. With respect to gold shares, how do the gold share markets look to you, maybe the XAU or one of those indices?

McHUGH: Well, the HUI is really the one we pay a lot of attention to and it did not do well. It really fell almost hand in hand with the entire general market. In fact, it even fell more, which surprised me a little bit. I thought that although it is below ground gold, I thought the fact that it was tied to gold would help it a little bit

TAYLOR: Actually, I believe that is exactly what happened in the 1929-1930 time frame as well. Homestake and some of the others went down initially with the market and then we had a bounce up in the equity markets before the next plunge down, but gold shares continued to perform well then after that

McHUGH: And that is what we hope will happen now is that, in the next leg down in the major stock indices, the HUI will not follow its stock component, but will follow its gold component. It did not do that in the first leg down. That's disappointing, but at some point, they have got to get their hands on gold as demand increases, and it is going to increase for it. They are going to have to mine it because the coins are drying up and.

TAYLOR: liquidity, to get real liquidity back into the system.

McHUGH: I think what happened too, is that as liquidity became a real problem, I think gold and precious metals and the HUI, it was the first part of the portfolio that a lot of these hedge funds and so on threw out the door.

TAYLOR: Sure, they didn't see the value of it.

McHUGH: They didn't see the value of it. They are more short term focused with margin calls, redemption requirements and survival issues than they were about the long term future of currencies. I think the HUI is the baby that got thrown out with the bath water. I do believe that you are making an excellent point and I had not done that research. That is fascinating to know that and it makes logical sense that it (the HUI) would not perform as poorly on the next leg down.

TAYLOR: Do you see anything in your Elliot Wave work with respect to the shares that give us some hope for a more bullish picture?

McHUGH: It is the exact same scenario as with gold. Monthly full stochastics are bullish. We are bottoming and are due for a rise. The weeklies are bottoming and due to rise. That means the long term and intermediate term future of the HUI looks positive. The daily is not quite as positive and is subject to some downside risk in the short run, but over the long run and over the intermediate term run, the position for HUI looks very similar to gold, which would be positive.

TAYLOR: Robert, I would just like to thank you for your time and for sharing your views with our readers. I know that you work very hard for your subscribers. I can tell you that every day, I look at your letter now. In order of importance during these tumultuous times, I read your letter first and secondly, I always read Richard Russell. I find yours and Russell's to be mandatory reading in this environment. In particular, you keep your finger on the pulse of the markets on a daily basis.

Re: A must see for All Newbies & lurkers
 

Film coming out in the new year The International.
Could be a coincidence but find it strange the release date is 5th Feb. Why well I have been looking at history & patterns & a site some have been also looking at & it links to an event in Bermuda & stock market decline on 9th Feb. Maybe something maybe not I guess we'll see.

http://www.imdb.com/video/screenplay/vi1329791001/

Re: A must see for All Newbies & lurkers
 

Interesting article.

http://321energy.com/editorials/kuns...ler010109.html

Forecast for 2009

James Howard Kunstler
January 1st, 2009
Author of The Long Emergency
Kunstler.com
kunstler@aol.com

Introduction
There are two realities "out there" now competing for verification among those who think about national affairs and make things happen. The dominant one (let's call it the Status Quo) is that our problems of finance and economy will self-correct and allow the project of a "consumer" economy to resume in "growth" mode. This view includes the idea that technology will rescue us from our fossil fuel predicament -- through "innovation," through the discovery of new techno rescue remedy fuels, and via "drill, baby, drill" policy. This view assumes an orderly transition through the current "rough patch" into a vibrant re-energized era of "green" Happy Motoring and resumed Blue Light Special shopping.

The minority reality (let's call it The Long Emergency) says that it is necessary to make radically new arrangements for daily life and rather soon. It says that a campaign to sustain the unsustainable will amount to a tragic squandering of our dwindling resources. It says that the "consumer" era of economics is over, that suburbia will lose its value, that the automobile will be a diminishing presence in daily life, that the major systems we've come to rely on will founder, and that the transition between where we are now and where we are going is apt to be tumultuous.

My own view is obviously the one called The Long Emergency.

Since the change it proposes is so severe, it naturally generates exactly the kind of cognitive dissonance that paradoxically reinforces the Status Quo view, especially the deep wishes associated with saving all the familiar, comfortable trappings of life as we have known it. The dialectic between the two realities can't be sorted out between the stupid and the bright, or even the altruistic and the selfish. The various tech industries are full of MIT-certified, high-achiever Status Quo techno-triumphalists who are convinced that electric cars or diesel-flavored algae excreta will save suburbia, the three thousand mile Caesar salad, and the theme park vacation. The environmental movement, especially at the elite levels found in places like Aspen, is full of Harvard graduates who believe that all the drive-in espresso stations in America can be run on a combination of solar and wind power. I quarrel with these people incessantly. It seems especially tragic to me that some of the brightest people I meet are bent on mounting the tragic campaign to sustain the unsustainable in one way or another. But I have long maintained that life is essentially tragic in the sense that history won't care if we succeed or fail at carrying on the project of civilization.

While the public supposedly voted for "change" this fall, I maintain that they underestimate the changes really at hand. I voted for "change" myself in pulling the lever for Barack Obama. I regard him as a figure of intelligence and sensibility, but I'm far from convinced that he really sees the kind of change we are in for, and I fret about the measures he'll promote to rescue the Status Quo when he moves into the White House a few weeks from now.

Where We Are Now

Without reviewing all the vertiginous particulars of the year now ending, suffice it to say that the US economy fell on its ass and that the "global economy" did a face-plant as well. The American banking sector imploded spectacularly to the degree that investment banking actually went extinct -- as if a meteor landed on the corner of Madison Avenue and 51st Street. The response by our government was to shovel "loans" onto the loading dock of every organization that pretended to be something like a bank, while "bailing out" an ever-longer line of corporate claimants with a pitiable song-and-dance. The oil markets went on a roller coaster ride. The housing bubble collapse grew to avalanche velocity (taking out whole colonies of realtors, mortgage brokers, and construction contractors in its path), the commercial real estate sector developed hemorrhagic fever, retail drove off a cliff on Christmas Eve, the stock market fell in the toilet, jobs and incomes went up in a vapor, and tens of millions of ordinary citizens addicted to revolving credit found themselves in a life-and-death struggle for the means of existence. None of this is over yet.

The Year Ahead

Much of what has been lost in 2008 will not be recovered: enterprises, personal fortunes, chattels, reputations.

I expect a period of euphoria to mark the early weeks, perhaps months, of the Obama team. It will be a relief to have a president who speaks English correctly and has experienced something like real life prior to politics. Restoring credibility and legitimacy in leadership will be a big deal. If nothing else, we may recover a collective sense of consequence from a president who tells the truth, even the harsh truth. The age when it was enough to claim that "mistakes were made" might be over. A sign of this sort of change may be the commencement of prosecutions for misdeeds in banking and securities that are now destroying the entire system of deployable capital. A good place to start will be an investigation of Henry Paulson for insider trading stemming from Goldman Sachs's shorting of its own issued mortgage-backed securities when Mr. Paulson was the company's CEO. Beyond his case, there should be enough work at Attorney General Eric Holder's office to employ a line of law school graduates stretching from Brattle Street to the planet Mars. It will be salutary for the nation to see those who engineered the banking collapse come to greater grief than the mere surrender of their Gulfstream jets and Hamptons villas. By the way, being allergic to conspiracy theories, I don't believe for a minute that there is some kind of shadow elite of "Bilderburgers" standing in the background to protect these grifters -- and I also believe the reason these paranoid notions persist is because it is otherwise hard to account for the extravagant irresponsibility of the Bush circle and its servelings.

Apart from "cleaning up Dodge," so to speak, and from issues of collective character-and conscience-in-office, I worry that the avalanche of troubles already ongoing will overwhelm Mr. Obama and his people. It's also well worth worrying whether they will pursue policies similar in kind to the ones pursued by Bush, namely throwing money at everything and anything, and it sure looks like they are planning to do just that. I am especially concerned about an "infrastructure stimulus" project aimed at highway improvement at the expense of public transit. This would be the epitome of a campaign to sustain the unsustainable. We need to begin planning right away for a transition away from automobiles, not in order to be good socialists but because Happy Motoring is at the core of our unsustainability trap. The car system is going to fail in manifold ways whether we like it or not, and it will fail due to circumstances already underway. For one thing, it will cease to be democratic as the remnants of the middle class find it impossible to get car loans, or pay for fuel, or insurance, and that will set in motion a very impressive politics-of-grievance setting apart those who are still able to enjoy motoring and those who have been foreclosed from it. Contrary to what you might make of the the current situation in the oil markets, we are in for a heap of trouble with both the price and supply of petroleum (more on this below). And there is no chance in hell that any techno rescue remedy to keep all the cars running by other means will materialize.

A consensus in the blogoshpere says that the stock markets will rebound strongly during the first Obama months. This is possible just on the basis of pure "animal spirits," but the Obama Bounce will occur against a background of continued dismal business and financial news. It will appear to defy that news. By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year. Meanwhile, jobs will vanish by the millions and companies will go bankrupt by the thousands, especially in the so-called service sector, and in all the suppliers of such, along with the landlords in all the malls and strip malls. The desolation will mount quickly and will be obvious in the empty storefronts and trash-filled parking lagoons. In the event, two things will become increasingly clear to the nation: that the consumer economy is dead, and that there is no more available credit of the kind that Americans are in the habit of enjoying.

We'll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable. This is the area where the crash of giants will be heard. I've been saying since publication of The long Emergency that comprehensive downscaling in all our activities, from farming to business to schooling to governance, will be the categorical imperative of the years ahead. Giant enterprises requiring giant loans to get from quarter to quarter will tend to not make it. Borrowing from the future will become a practical impossibility as past bad debts from previous borrowings continue to unwind, cease performing, and get written off. This argument implies that the federal government will tend to flounder just as General Motors, Citicorp, Target Stores and other gigantic enterprises will tend to flounder. It would be sad to see a President Obama so hamstrung and helpless, and it is largely why I see his role as largely symbolic -- as a reassuring presence encouraging the distressed public to bravely bear their hardships, and to be kind and helpful among their neighbors.

Households, like businesses, will have to pay as they go from earned income. The house as ATM is over. Credit cards are maxed out and credit ceilings are lowering like the ceiling in "The Pit and the Pendulum," preparing to slice-and-dice the old "normal" of family life in America. Bankruptcy will be the new Nascar. A lot of families will lose everything. They will sift and disperse into the housing owned by other family members -- parents, siblings -- and a strange new not-altogether comfortable kind of togetherness will become common. Over time, a lot of people will go looking for casual work "under-the-table"( and probably low-paying). To some degree, these workers will begin to look and act like a new servant class, and before too long they may be absorbed into the households of people who employ them. There will be plenty of room for them there.

Counties, municipalities, and states will join in the bankruptcy fiesta. It would be reasonable to expect collapsing services as a result. This would be a situation fraught with danger -- of rising crime, of public health emergencies as water systems are not kept up and sewage treatment becomes unaffordable. I don't imagine the federal government stepping into every Podunk or Metropolis from sea to shining sea and propping up these services. People will have to cope with danger and deprivation.

2009 may be the point where we begin to understand what kinds of places will be more hospitable to human society further ahead. I maintain that our giant urban metroplexes have way overshot their sustainable scale and will contract severely. With all the economic hardship, we ought to expect a lot of demographic churning, people leaving hopeless places and moving on to something more promising. I believe we will see them move to smaller towns and smaller cities. The reorganization of the rural landscape into smaller-scaled farms has not begun to occur -- though 2009 might be very hard on agribusiness, given the shortage of capital and if oil begins to march up in price by late winter. Eventually, the rural landscape will require the labor of many more people than is currently the case. Whatever else happens, 2009 will surely see a massive return to home gardening as budgets become strained to the extreme. As the New Urbanist Andres Duany said recently, "Gardening is the new Golf!"


The Oil Scene

Many were stunned this year to witness the parabolic rise and fall of oil prices up to nearly $150 and then back around $36 by Christmas time. Quite a ride. I said in The Long Emergency that volatility would be the hallmark of post peak oil because it was obvious that advanced economies could not absorb super high prices and would crash in response; that at some point after crashing, these economies would respond to the new lower oil price, resume their cheap oil habits, and build to another price rise. . . and crash again. . . in a declension of ever-lower industrial activity.

What I probably didn't realize at the time was how destructive this cycling between low-high-and-low oil prices would actually be in the first instance of it, and what a toll it would take right off the bat. We can see now that our first journey through the cycle took out the most fragile of the complex systems we depend on: capital finance. As a result, a huge amount of capital (say $14 trillion) has evaporated out of the system, never to be seen again (and never to be deployed for productive purposes). It will be harder for the USA to rebound from the grievous injury to this crucial part of the overall system, and Europe has foundered similarly -- though the European nations are not burdened to the same degree by the awful liabilities of suburbia.

Even if these advanced economies -- throw in Japan too -- remain moribund, the price and supply prospects for oil look ominous. My own guess is that the price of oil has overshot on the low end just as it overshot on the high end, and that, when all is said and done, we'll still see an upwardly trending price line over the long haul. The plunge, which began right after the $147 peak in July 2008, was as much the result of banks, hedge funds, and individuals dumping oil investments and positions to raise cash as it was a matter of the markets predicting a sharp fall-off in economic activity (and supposedly oil consumption). The truth is that demand destruction for oil in the USA has been surprising mild compared to the drop in price. Jim Hansen's Master Resource Report says that gasoline consumption dropped from 9.29 million barrels a day in 2007 to 8.99 million barrels a day for 2008. That's not much of a fall-off, especially compared to the price drop.

As Julian Darley of the Post Carbon Institute put it recently: "There won't be any energy bail-out." And, as many other people have noted, the recent plunge in oil prices strongly implies future supply destruction, since so many planned oil projects have been suspended or cancelled because they are economic losers at $40-a-barrel (or even $70). Even projects well underway, such as Canadian tar sand production, have been scaled back or shut down because they don't make sense at current prices. Some of these other newer projects will now never get underway -- they have missed their window of opportunity with so much capital leaving the system -- and so the hope of offsetting very-near-future depletions in old giant oil fields looks dimmer and dimmer.

Those depletions are very serious. For instance, Mexico's super-giant Cantarell oil field, the second-largest ever discovered after Saudi Arabia's Ghawar field, has shown a 30 percent depletion rate in the past year alone. (Pemex had forecast a 15 percent rate entering the year.) Cantarell provides over 60 percent of Mexico's total production, and Mexico is America's third largest source of imports -- just after Saudi Arabia (#2) and Canada (#1). Obviously, Mexico soon will lose its ability to export oil, and as that occurs, America is going to feel more than pinch -- more like a two-by-four upside the head. In short, remorseless depletion is underway and we are less likely now than even a year ago, to make up for it.

At some point, then, demand, even if slightly lower, will catch up with declining supply. My prediction for 2009 is that we will see two things occur, possibly at the same time: a resumption of rising prices, and spot shortages. I say this because the global economic fiasco is sure to produce geopolitical friction, and inasmuch as America has to import almost three-quarters of the oil we use, the prospect for trouble is great.

The tragic part of all this, of course, is that the temporary plunge in oil prices has prompted an incurious American public to assume, once again, that the global oil predicament is some kind of a fraud. Given the flood tide of fraud they have been subject to in banking and investment matters, I suppose you can't blame them from thinking that everything is some kind of a scam. Given feeble car sales this season, there are reports that an increasing percentage of those sold now are are trucks and SUVs.

Though I give Boone Pickens high marks for stepping up to the leadership plate, I'm not altogether on board with his energy proposal for swapping natural gas for gasoline in motor fuels while we swap out wind power for natural gas in electric power generation. I don't believe that the ballyhooed shale-gas-plays of the last few years will prove-out long-term, as some huckster's claim. They are expensive to drill and run, and they all tend to deplete very quickly -- around one year. I'm not convinced we have the capital or the resources even to come up with the steel necessary to drill for it. Anyway, the last thing we need is a way to prolong our car-dependency.

In the meantime, there are still those who hope (as described above) that various alt.energy systems will insure the continuation of Happy Motoring. This is an idle hope, and 2009 will be very sobering for those who imagine that hybrid cars, or electric cars, or "air" cars, or natural gas cars, or any other kind of car technology will save the day. Even if President Obama mounts an "infrastructure stimulus" program, it will not keep up with all the necessary routine road repair that our highway system requires. The extreme financial hardship faced by localities and states insures that they will have to postpone a lot of expensive highway maintenance -- even if the federal government fixes a big bunch of bridges and tunnels -- and so we face the interesting prospect that our roadway systems will enter their own deadly zone of systemic failure even before the whole car issue is settled.

I am waiting to see whether Mr. Obama will undertake a restoration of passenger railroad service. I've said enough about this in the past, but it's worth reiterating that a failure to get comprehensive passenger rail service going will be a sign of how fundamentally unserious we are as a nation.

The Specter of Inflation

This is the "other shoe" that a lot of people are waiting to drop. Right now we are caught up in a compressive debt deflation as mortgages stop "performing" and loans of all kinds are welshed on. Since money is loaned into existence, and a great many loans are not being repaid, then a lot of money is going out of existence. That's what I mean when I say that capital is leaving the system. At the same time, the Federal Reserve has made good on its promise to drop money from helicopters if necessary to prevent an implosion of the banking system (as all that older money goes out of existence), and so it's now a question as to when the amount of new money will exceed the disappeared old money. (Of course when I say money, I mean "money," because we are dealing here in a shadow realm of assumed value.) In any case, there is bound to be a lag period between the time that the Fed's money is dropped from the choppers and the time it actually filters through the banks and other recipients to the so-called "real economy" of people who buy and sell real things. The credible estimates I hear run between six and 18 months.

I'll only venture to guess that we could see the start of serious inflation sometime in 2009. To some extent, all currencies are now free-falling together, some at slightly faster rates than others, but the situation of the US dollar is so grotesquely dire, and our structural imbalances so monumental, that it is hard to imagine that our currency will not win the international race to the bottom. Gold resumed its movement upward against the dollar a week before Christmas, and that may be an early sign. The government -- and anyone badly in debt -- benefits much more from inflation than deflation, so every effort will be made to avert the latter. The trouble lies in the government's dumb incapacity to control dangerous things that it sets in motion, so that an inflationary campaign to avoid compressive deflation can so easily lead to a fiasco of super or hyper inflation -- the kind that kills governments and turns societies into murderous monsters. I'll forecast the that the US dollar is worth 40 percent of its current value by next Christmas.

Geopolitics

Well, now, who the hell knows what's in store. Aside from a few bombs here and there, and pirates skulking around the horn of Africa, the world scene was miraculously free of major incidents in 2008 -- perhaps the worst being a toss up between the September Mumbai bombings and the fiasco in Georgia, where the US prompted Georgia President Mikheil Saakashvili to send troops into the South Ossetia region and the move was answered by overwhelming force from neighboring Russia, leaving the US looking feckless and retarded for our troubles. But otherwise, there wasn't a whole lot of action out there.

Until the last few days of the year, that is. I'm sure the ever-growing cohort of American anti-semites who send me emails will be tickled when I assert that the Hamas rocket attacks against Israel of recent days guaranteed a sharp response from Israel -- and now, of course, Hamas is playing the crybaby card: "... what'd we do to deserve this...?" Well, you ****ing fired a bunch rockets into Israel. Did you ever hear of cause-and-effect? This matter requires no further elucidation, except that it seems to suggest a ramping back up of hostilities. I wonder if it is the beginning of a new coordinated offensive by Islamic extremism aimed at taking advantage of the West's current economic plight (and the West's probable aversion to anything that will complicate its desired recovery). We'll know in a month or so, I think, since any coordinated campaign (if such a thing were possible) might well be aimed at confounding the new American president.

The other hot corner of the world right now is the India-Pakistan border where the 60-year-old rivalry, which has already produced three wars, looks to be gearing up for yet another round. I'm not the first one to say that Pakistan is an extremely dangerous regional player, being an economic basket case, possessing a score or so of nuclear bombs, harboring more Islamic fundamentalist maniacs than any other place in the world, and having a government held together with duct tape and twine. The caper in Mumbai last September could well have been construed as an act of war, but somehow India kept its head. Who knows where this is going. . . .

So far I have only described what is already obviously going on. Add to this the likelihood that Iran is closer to achieving membership in the atomic weapon club. They've been spinning their centrifuges all year and nobody has done anything about it. My guess is that neither the US nor Israel will attempt to take out their facilities in the year ahead. If Iran used a nuclear device against Israel, or anybody else, they would be asking to become, in turn, the world's largest ashtray. End of story. A different story, though, is how Iran might behave if and when the US Military presence in Iraq is reduced. I can imagine Iran doing anything possible surreptitiously to gain control over Iraq's southern oil regions around Basra, but even the Iraqi Shia don't like the Iranian Shia that much. Anyway, iran's economy has suffered hugely from the fall in oil prices. That nation may be in for more internal trouble than they have seen in thirty years since the Shah was tossed out by the minions of Ayatollah Khomeini.

There's been a lot of sentiment the past year that as the US and the Europe fall into economic disarray, China would emerge as the great new hegemonic superpower. While it's come a long way in a quarter-century, China's internal problems are still enormous and worsening. They're in trouble with water, food imports, mass unemployment, and energy. They have locked in some oil contracts around the world, but they are still susceptible to vagaries in the oil markets and Black Swan events. As the US consumer economy falls into a coma, and the shipping containers from China to WalMart get sparser, the Chinese government will face the wrath of millions of unemployed workers. I believe they will struggle through 2009, perhaps growing more surly as the US dollar inflates and their holdings of treasury bills begins to look more like a swindle.

Russia may be suffering economically for the moment due to the crash of oil prices, but they are energy resource-rich -- at least for the next couple of decades -- and if they don't like the current price, they can keep more of their oil in the ground until the price looks more attractive. I think Mr. Putin has the confidence of the Russian people and will survive the current malaise.

Japan remains a riddle wrapped in toasted nori. They're beggaring their own factory workers to stay solvent. Their banking sector has been zombified for a generation. They import 95 percent of the energy they use. Do they have a plan? One can imagine them sliding in resignation back to something like the sixteenth century, giving up the whole industrial circus as more trouble than it's worth, just as they once gave up on firearms.

The over-arching geopolitical theme of 2009 will be the end of robust globalism as we've known it for some time. Reduced trade, competition for energy resources, sore feelings over debts and currencies will drive the nations inward or, at least, direct their energies toward their own regions. Note to Tom Friedman: the world turned out to be round after all.


Conclusion

The big theme for 2009 economically will be contraction. The end of the cheap energy era will announce itself as the end of conventional "growth" and the shrinking back of activity, wealth, and populations. Contraction will come as a great shock to a world of conventionally programmed economists. They will toil and sweat to account for it, and they will probably be wrong. Unfortunately, this contraction will do its work in unpleasant ways, driving down standards of living, shearing away hopes and expectations for a particular life of comfort, and introducing disorder to so many of the systems we have depended on for so long. People will starve, lose their homes, lose incomes and status, and lose the security of living in peaceful societies. It will become clear that the Long Emergency is underway.

My hope for the year, at least for my own society, is that we will transition away from being a nation of complacent, distracted, over-fed clowns, to become a purposeful and responsible people willing to put their shoulders to the wheel to get some things done. My motto for the new year: "no more crybabies!"

Re: A must see for All Newbies & lurkers
 

Keep the faith guys. :biggrin:Will be nice to get another big dip to buy before this baby takes off. :yippee:

http://www.cnbc.com/id/15840232?video=982695689&play=1

Re: A must see for All Newbies & lurkers
 

This situation seems to get worse by the day.

http://online.wsj.com/article/SB123086700722648471.html
FDIC Employs Tool Used for S&L Crisis

WASHINGTON -- Federal regulators are dusting off a tool used during the savings-and-loan crisis to help deal with an expected wave of bank failures in 2009.

The mechanism, known as "loss sharing," gives healthy banks an incentive to take on troubled assets of a failed institution, with the government agreeing to assume the majority of future losses. In most other cases, the buyer takes the failed bank's deposits, leaving most of the assets to be managed and sold by the Federal Deposit Insurance Corp.

The FDIC used versions of the loss-sharing model several times last year, including during the initial ...

http://www.cnbc.com/id/15840232/?video=978164631&play=1

Re: A must see for All Newbies & lurkers
 

Ok we have this guy in the UK & is having a big following here but please bear in mind when the video was done ie before everything got more news worthy. Sure he won't be advising people to buy cars now.


Some more details here
Should I pay off my mortgage. Though he doesn't mention owning gold YET!
http://www.moneysavingexpert.com/mor...ges-vs-savings

A cash emergency fund

Good old fashioned budgeting logic says it�s always worthwhile having a cash emergency fund. While for people with expensive card and loan debts I generally disagree (see Should I Pay Off My Debts?), for those who are debt free apart from a mortgage, this is a good idea.

It�s worth having three to six months worth of cash stored away. Enough to live on if you lost your job or had other issues; even if mathematically you would be slightly better off repaying. Mr Hallis, my A Level economics teacher would probably have called this �a premium for liquidity�, in other words you�re sacrificing some interest for easy access to the cash if needed.

Consider the potential outcome with no emergency fund. Put all your cash in the mortgage, and if something happens and without savings you would need to fund this with credit card or loan borrowing for easy quick cash � and that�s expensive. Therefore only start dumping cash in the mortgage once your emergency fund is up and running.

This has become more pertinent with recession looming. If you overpaid now, then left your job and couldn't meet standard mortgage repayments, you'd go into arrears. So...

Ensure you've enough cash put aside to meet mortgage repayments for at least 6 months

Re: A must see for All Newbies & lurkers
 

Debt Guide

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Mike Maloney, precious metals analyst of Robert Kyosaki : gold and silver predictions part 1/5

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Re: A must see for All Newbies & lurkers
 

Part 4

Re: A must see for All Newbies & lurkers
 

Part 5

Re: A must see for All Newbies & lurkers
 

Specific regulations discussed also for the USA. For newbies worldwide good video.

Re: A must see for All Newbies & lurkers
 

Thanks to Silver Moon Rising who originally posted these video's, I thought it would be a good place to store them here for those new to real money. The series "The Ascent of Money" was shown recently in the UK on Channel four & there are 6 episodes in all.

Part 1
Part 2
Part 3
These video's below have been removed from the net sadly but I have found these above though not complete to give others a chance to catch them until these get removed yet again.


Episode 1: Dreams of avarice

From Shylock's pound of flesh to the loan sharks of Glasgow, from the 'promises to pay' on Babylonian clay tablets to the Medici banking system, Professor Ferguson explains the origins of credit and debt and why credit networks are indispensable to any civilisation.

Re: A must see for All Newbies & lurkers
 

Episode 2: Human bondage

How did finance become the realm of the masters of the universe? Through the rise of the bond market in Renaissance Italy. With the advent of bonds, war finance was transformed and spread to north-west Europe and across the Atlantic. It was the bond market that made the Rothschilds the richest and most powerful family of the 19th century. And today governments are asking it to bail them out.

Part 2
Part 3
Part 4
Part 5

These video's below have been removed from the net sadly but I have found these above though not complete to give others a chance to catch them until these get removed yet again.

Re: A must see for All Newbies & lurkers
 

Episode 3: Blowing bubbles

Why do stock markets produce bubbles and busts? Professor Ferguson goes back to the origins of the joint stock company in Amsterdam and Paris. He draws telling parallels between the current stock market crash and the 18th-century Mississippi Bubble of Scottish financier John Law and the 2001 Enron bankruptcy. He shows why humans have a herd instinct when it comes to investment, and why no one can accurately predict when the bulls might stampede.

Part 1
Part 2
Part 3
Part 4
Part 5

These video's below have been removed from the net sadly but I have found these above though not complete to give others a chance to catch them until these get removed yet again.

Re: A must see for All Newbies & lurkers
 

Episode 4: Risky business

Life is a risky business – which is why people take out insurance. But faced with an unexpected disaster, the state has to step in. Professor Ferguson travels to post-Katrina New Orleans to ask why the free market can't provide adequate protection against catastrophe. His quest for an answer takes him to the origins of modern insurance in the early 19th century and to the birth of the welfare state in post-war Japan.


Part 1
Part 2
Part 3
Part 4
Part 5
These video's below have been removed from the net sadly but I have found these above though not complete to give others a chance to catch them until these get removed yet again.

Re: A must see for All Newbies & lurkers
 

Episode 5: Safe as houses

It sounded so simple: give state-owned assets to the people. After all, what better foundation for a property-owning democracy than a campaign of privatisation encompassing housing? An economic theory says that markets can't function without mortgages, because it's only by borrowing against their assets that entrepreneurs can get their businesses off the ground. But what if mortgages are bundled together and sold off to the highest bidder?

Part 2
Part 3
Part 4
These video's below have been removed from the net sadly but I have found these above though not complete to give others a chance to catch them until these get removed yet again.

Re: A must see for All Newbies & lurkers
 

Episode 6: Chimerica

Since the 1990s, once risky markets in Asia, Latin America and eastern Europe have become better investments than the UK or US stock market. The explanation is the rise of 'Chimerica', the economic marriage of China and the United States. But does it make sense for poor Chinese savers to lend to rich American spenders?


Part 1
Part 2
Part 3
Part 5
These video's below have been removed from the net sadly but I have found these above though not complete to give others a chance to catch them until these get removed yet again.I haven't added them to the end of the thread sadly as this may just entice them to be removed quicker as the volume of traffic here increases.

Re: A must see for All Newbies & lurkers
 

Scary stuff but could be bullish for Gold in pounds sterling prices.

http://www.telegraph.co.uk/finance/n...k-secrecy.html

Reform plan raises fears of Bank secrecy
The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.

By Edmund Conway, Economics Editor
Last Updated: 9:59PM GMT 10 Jan 2009

The Bank of England will be able to print extra money
The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet � a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel's Government in 1844 which originally granted the Bank the sole right to print UK money.

The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority.

However, some have warned that it means: "there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses."

It comes after the Bank's Monetary Policy Committee cut interest rates by half a percentage point, leaving them at the lowest level since the bank's foundation in 1694.

With the Bank rate now at 1.5pc, most economists suspect the Government and Bank will soon be forced to start quantitative easing � directly increasing the quantity of money in the economy � in a drastic attempt to prevent a recession of unprecedented depth.

Although the amount of easing is likely to be limited, news of this increased secrecy will spark comparisons with Weimar Germany and Zimbabwe, where uncontrolled use of the central banks' printing presses ultimately caused hyperinflation.

The Bank said it will still publish details of its balance sheet, but, significantly, the data � the main indicator of the extent of quantitative easing � will not be presented until more than a month has elapsed. For instance, under the new terms of the law, if the Bank were to have embarked on a policy of quantitative easing last month, the figures on this would not be published until the end of this month.

The reforms, which are likely to be implemented later this year, will make the Bank of England by far the most secretive major central in the world, experts said.

In the US, where the Federal Reserve has already cut rates to close to zero and started quantitative easing, the main way to track its purchases of securities and the expansion of its balance sheet is through precisely these same weekly accounts.

"Quite why the Bank has to keep its operations so shrouded in secrecy is a mystery to me," said Simon Ward, economist at New Star. "This [reform] will make it much more difficult to track what the Bank is doing."

Among the details which will no longer be published are those revealing the extent to which London's banks are using the Bank's deposit facilities � a yardstick of pressure in the financial system.

Debating the issue in the House of Lords recently, Lord James of Blackheath, a Conservative peer, said: "Remove [this] control and there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses.

"If we went down that path we would be following a road which starts in Weimar, goes on through Harare and must not end in Westminster and London. That is the great fear that the abolition of that section will bring about � but the Bill abolishes it."

Re: A must see for All Newbies & lurkers
 

There is some short video's in response to the Ascent of Money video's. Hope everyone can see them.

http://www.channel4.com/history/micr...ion/index.html

Re: A must see for All Newbies & lurkers
 

Something to consider for those not in the US who buy physical gold, as we have seen our currency get trashed it is still the best asset to preserve wealth. Like many waiting for a pullback as the spot price reached about �628this week :bawling: & it is not good when you are still trying to accumulate when the dollar is so strong.

http://finance.yahoo.com/tech-ticker...IP,GLD,TLH,SHV

Re: A must see for All Newbies & lurkers
 

Blindingly good article :biggrin:

http://www.thisismoney.co.uk/investi...in_page_id=166

Meet the savers queuing up to buy gold
David Jones, Daily Mail
10 October 2008

To avoid the attention of would-be muggers, the punters arrived with an array of unostentatious bags. The women seemed to prefer their old shopping baskets, while one elderly man - dressed as though he'd dashed here straight from the golf course - brought a Sainsbury's carrier.

Then there was the balding, middle-aged chap who kept glancing around furtively as he waited to make his purchase, and would only say that he 'worked in the emergency services'.
He had just bought a grey rambler's rucksack and hoped it would weigh considerably heavier by the time he boarded the train back to his home in the Kent suburbs.

They were all such ordinary people but they had come flocking to central London with an extraordinary aim born of these desperate times.

All were determined to make sure that their hard-earned nest eggs didn't get swallowed up in the credit crunch crisis - by cashing in shaky savings accounts and parlous pension funds and turning them into that most reassuringly durable commodity: solid gold.



--------------------------------------------------------------------------------



- How to buy gold coins and bullion


- Queues for coins as gold rush starts, again



--------------------------------------------------------------------------------



Their Klondike-style mission had brought them to ATS Bullion, one of London's most prominent gold merchants, whose deliberately anonymous-looking office nestles beside the Savoy Hotel, just off The Strand.

They were clamouring for sovereigns and crowns, or mobile phone-shaped bars - anything made from the alluring yellow stuff. But with the run on gold approaching stampede proportions, some disappointed customers left with empty bags.

In the real world of plunging share prices and broken banks, the major gold suppliers are unable to keep pace with demand. 'I have never seen a market like this in my 33-year career,' says Jeremy Charles, chairman of the London Bullion Market Association. 'The gold refineries cannot produce enough bars.'

For many London dealers such as ATS, it means that, for the first time in many years, supplies of some standard bullion products have simply run out.

The emergency services worker from Kent was clearly crestfallen after failing to fill his new rucksack.

'I'm due to retire next month and I don't want my savings to disappear, so I did some research on the internet and decided to invest in gold,' said the 55-year-old man, who declined to be named.

'I've just paid out �32,780 on my debit card for two kilo-bars, and I had hoped to take them with me and keep them in my safe. But as they've sold out they'll just have to deliver it to me when they get some more.

'They will store it for you for �100 a year, but with things as bad as they are, I want to be able to see it and touch it.'

It is a sentiment that the overworked staff at ATS have heard often in recent days.

Managing director Sandra Conway says trade has trebled since the crunch began to bite, and many new customers are Mr and Mrs Averages who ordinarily would never have dreamed of dabbling in the rarefied gold market.

'I have seen booms before, in the early Eighties and again when people were scared that their savings might disappear down a black hole caused by the Millennium Bug,' said Ms Conway, who has been in the gold trade for 26 years. 'But this time it's different.

'For one thing, the volume of trade is much bigger. And in the past, the investors were mainly big institutions, whereas now we are getting lots of ordinary people.

'They want to invest in something tangible that they can take away, and sell easily if the need arises.

'They can buy gold over the phone, but many people seem to have become suspicious of parting with their money to anybody, and want to see in person the gold they are buying. Normally, we have two or three customers at a time but in the past few days we've had queues outside and it reached the point where we've had to ask clients to wait downstairs.

'Some are worried that their savings might not be secure, even if they keep them under the mattress. One man told me he could see the time coming when paper money will be worthless and he will only be able to buy a loaf with a sovereign.'

The new gold rush is creating some most unlikely gold speculators, Ms Conway smiles.

Grannies have marched in waving dog-eared old chequebooks; others have arrived with cash withdrawn from wobbling banks. Some have even sold their houses and put all the proceeds into gold.

'One retired gentleman said he owned two properties, one of which he rented out. He was worried that the housing market would crash, so he'd moved into the smaller house and sold the bigger one for a �250,000 profit, which he used to buy gold.'

But at a time of such uncertainty on the financial markets, why is everyone so certain that gold is a sure-fire bet?

First, though its value can be affected by fluctuations in the global markets, it does not depend on them. Its price is fixed against the US dollar twice daily, by a coterie of leading London banks which take many other factors into account - not least, of course, rising and falling demand.

Given this latest rush, therefore, one might have expected the price to have reached an all-time high.

Ironically, however, the strengthening of the dollar against the pound has pushed prices down in recent weeks, and it fell a little further to around $888.50 (�516) an ounce - after the US Senate passed George Bush's �400 billion bailout plan.

But according to the received wisdom, Britain's new middleclass Midases needn't fret. Experts agree that it is sure to recover soon. Some even predict that the price could treble to $3,000 (�1,750) an ounce before the decade ends.

One doesn't need to know much about the metal markets to understand why. Gold has been extracted from the ground since prehistoric times, yet it remains so rare that the total amount that has ever been mined - about 150,000 tonnes - would comfortably fit into a cube-shaped tennis court.

It is estimated that a further 50,000 tonnes remain below ground - principally in South Africa and China (now the world's major producer).

With extraction becoming increasingly expensive, and some 75% of aboveground stocks locked away in the vaults of private investors, however, it is unlikely that there will ever be a gold glut.

All of which makes Gordon Brown's decision to off-load more than half of the UK's gold reserve in 1999, at a time when the markets were stagnating and the price was at a 20-year low, seem extraordinarily short-sighted. One leading analyst estimates that Brown's great gold sell-off cost taxpayers �1.2bn.

Armed with homespun knowledge gleaned from the internet and library books, the modest punters thronging to ATS aren't intending to make the same mistake.

Clive Smith, 35, an unmarried, London-based IT contractor earning roughly �60,000 a year, has been investing as much as �100 a month in gold since 2004, but splashed out �4,500 on bullion in August.

And on Thursday, he was back in The Strand - to snap up a few extra ounces for his mother.

'My mum knows a good thing when she sees one, and she isn't the only one,' he told me. 'My two best friends have just invested between �5,000 and �10,000, and two work colleagues are buying gold, too.

'I wanted to buy gold bars today, but they had none, so I settled for some Royal Mint sets instead. One reason I like gold so much is because I can actually sit there and look at it - unlike a Barclays account or an online shares account.

'The price may go down for a while, but I don't regard that as losing money - just an opportunity to buy more at a good price. And it's something you know will never vanish.'

It is indeed. In any marketplace, however buoyant, though, there is always someone who bucks the trend. Bill Morris, a genial hospital technician from Hertfordshire, is such a man.

Mr Morris was the only customer to be selling gold at ATS when I visited.

He arrived with three 1973-minted Krugerrands, each worth �460, wrapped in tissue paper and stuffed inside an envelope. The coins were a reward from his father for passing his O-levels, but he had decided to part with them because he needed the money to service his classic Italian motorbike.

On seeing that the price had dropped $30 (�18), however, he relented and sold only one of the coins.

'I'm sure I'll get more for them if I just hang on for a while,' he said knowingly, stuffing the heavy envelope back in the obligatory rucksack and heading towards the Tube.

He probably will. For when thousands of families fear their cash savings are no longer safe - even stashed under the mattress - it seems that this very ordinary gold rush has quite some way to run.

Re: A must see for All Newbies & lurkers
 

http://www.thisismoney.co.uk/investi...ge_id=166&ct=5

Will the gold rush continue in 2009?
Philip Scott, This is Money
12 January 2009

Gold bullion beat all other asset classes yet again in 2008, the second year running and the third time since 2005.

A �1,000 investment in gold bullion on New Year's Eve last year would now be worth more than �1,427, according to new research from BullionVault, a gold dealer.


During the same period, the FTSE 100 index of the UK's top firms has dived by almost one-third of its capitalisation, turning �1,000 into less than �689.


Then there was residential property, which before tax, maintenance and mortgage costs has transformed every �1,000 invested in bricks-and-mortar into �870, according to Nationwide figures.


For their part, cash Isas have added �46 in average interest payments, according to BullionVault, just outstripping retail price inflation of 3.7%.

However, gold's rise over the year has been largely dependent on the pound tumbling in value against the US dollar, the currency gold is priced in. In dollar terms gold rose just 3% in 2008.


Longer term, the gold success story stands up. The Footsie has plummeted by 36% since its record peak of 6930, on New Year's Eve 1999, while putting cash in a tax-free Isa has returned 52.5% over the last nine years.


On the other hand, since the turn of the century, gold has risen by 246% against Sterling, beating even residential property, up by 210% on Nationwide data.


'Since Gordon Brown sold half the nation's gold reserves at rock-bottom 10 years ago this May,' says BullionVault's, Adrian Ash, 'gold bullion has been by far the best-performing asset class for British investors overall.'


With interest rates now crushed down to 1.5% - their lowest level since the Bank of England was founded in 1694, savings' rates are becoming less and less attractive to many and confidence in stock markets has been battered.


One school of thought says that gold looks very attractive in 2009 - if for no other reason that the year looks bad for everything else.

Notably gold rose during the last bout of sharp deflation in the Great Depression of the 1930s when Roosevelt revalued gold by 60% and devalued the dollar by 60%, from $22/oz to $35/oz.


What's the outlook for 2009?


Communications giant Bloomberg conducted a Precious Metals Survey across 20 leading firms, to ascertain the outlook for gold and other metals in 2009. After hitting record highs in summer 2008, gold pulled back in the second half of the year but was at an average of $872 an ounce last year. There is a relatively wide disparity between the forecasts of the many participants and between the bulls and the bears. There are more bulls than bears with only seven of the 20 participants calling for a lower average price in 2009.


Most bearish are the online trading platform Finotec, bullion dealer Kitco and the bullion banks JP Morgan and Barclays. They all forecast an average price of between 6.3% and 11.8% below the average in 2008. The most optimistic estimate is from Dallas Commodity Co., which predicts a mean price of $1,200 per ounce. The average amongst the 20 respondents is $910.


UK and Ireland based, bullion dealer, Gold and Silver Investments, are the fourth most bullish on gold. Mark O'Byrne, of Gold and Silver Investments, says: 'We believe our estimates to be conservative as the average price of gold in 2008 was some $872/oz and thus an average price of some $1,020 is only some 20% above the 2008 average price. Similarly a high of $1,250 is only 21% above the 2008 high.'

O'Byrne points out that many of the bears have been bearish for a number of years and have failed to realise that we are in a bull market for gold. He adds: 'Given the deflationary headwinds assailing us early in 2009, they may be proved right this year as further massive deleveraging could affect the gold price.


'We believe that should the deflationary pressures continue throughout 2009, then most commodities and asset classes will again fall sharply in 2009 but gold will again outperform. As gold did in 2008 when it was up 6% in US dollar terms and by far more in most other currencies. It promises to be a very uncertain and likely volatile year and it will be interesting to see how gold and silver actually perform.'


BullionVault's Ash adds: 'The only certainty about the gold price in 2009 will be volatility. The financial crisis has seen daily swings in the gold price widen five times over for US-Dollar investors. So whatever the longer-term price trend in 2009, anyone making a gold investment should expect gut-wrenching moves on a daily basis. But that doesn't mean the 2009 gold price will cause more sleepless nights than owning stocks, bonds or currencies.'


Gold Supply

Supply is always an issue � it is commonly acknowledged that going into 2009, gold mining supply worldwide has failed to grow during the seven-year bull market in gold � and failed badly. Global gold mining output peaked in 2003. Even the record gold price of 2008 saw world supply fall.


In the third quarter of 2008, the World Gold Council reported that supply was down by 9.7% from the previous year. As such many commentators do not believe the gold price can stay depressed given these fundamentals.

Bullion


The Mint has brought out a brand new UK sovereign issue for less than �50 but experts point out that such a coin, which weighs in at just under two grammes, has perhaps more of a novelty value rather than as a hard investment, simply because they have never been produced before.


Sandra Conway, managing director, of London based dealer ATS Bullion, admits that since the crunch began back in August 2007, business has probably tripled. At times the dealer has been besieged with queues.


She says: 'It has been very busy with huge demand and very limited supply. The majority of people are looking for krugerrands and sovereigns but they have been buying bars too because of the shortage of coins.'


Some dealers believe sovereigns are worth paying a slight extra premium for, because of their more diminutive size and the historic and aesthetic values which act as a valuable bonus.

Sovereigns can benefit investors as they are smaller, more attractive, especially given their historic value, and are arguably better known coins than krugerrands. As such experts tend to believe that it is worth paying a slight extra premium over and above krugerrands notes Lawrence Chard, of Chard, a specialist coin and bullion dealership.

The British Sovereign displays the Queen's head and a horse and dragon and has the advantage of being exempt from Capital Gains Tax in the UK. Other popular options are the Britannia, the Canadian Maple Leaf, the American Eagle or older British coins such as Georgian, Edwardian or Victorian coins.

Expect to pay just under �19,000 for a kilogramme bar of gold. A krugerrand, weighing in at an ounce, costs �633 and a sovereign, which weighs just under eight grammes costs �150.

But remember

Only do business with a reputable dealer. Check on the World Gold Councils � 'Where to buy directory' which can be found on its website at gold.org and the London Bullion Market Association members list which can also be located online at lbma.org.uk. Both list reputable gold dealers. And it is important to remember that you will also have to pay a fee to store gold with your bank or broker.

Re: A must see for All Newbies & lurkers
 

A good source to further links in the article about the UK so I will just post some of the stuff.

http://www.thisismoney.co.uk/credit-crunch

Credit crunch, financial crisis and recession: Impact, analysis and predictions
Last updated:
23 January 2009, 7:51pm

We round up our most recent reports of how the financial crisis is affecting the man in the street, together with bang-up-to-date advice on how to minimise the impact on your money. There's also expert comment and analysis from the Daily Mail, Mail on Sunday, and Evening Standard...
A 30-second summary of the latest on the financial crisis:

Problems with the repayment of subprime mortgages in the US triggered a tidal wave of concern about lending around the world in August 2007. This was the beginning of the credit crunch, which can be measured with Libor.

British house prices began falling soon after and haven't stopped since.

Northern Rock ran into trouble in September 2007 and was finally nationalised in February 2008.


Secondly, while this was going on consumers felt a price squeeze: commodity prices rose rapidly in 2007 and the first six months of 2008, driven by demand from booming China and India, making petrol, food and other basic costs more expensive. This surging inflation hindered central banks from cutting interest rates to help ease the effects of the credit crunch.


Fears were increased by the collapse of Bear Stearns in January 2008 but the financial crisis proper began in September with the collapse of Lehman Brothers. That was followed in early October by a UK bailout, including a merger proposal for Lloyds and HBOS. The UK bank rate was also slashed from 4.5% to 1.5% between October 2008 and January 2009.

Despite all this, and bank bailout II in January, recession was inevitable: US recession | UK recession. The prospects for 2009 are grim. Even Gordon Brown admitted in early January that it may be a two-year recession. Then Darling agreed. Others are far gloomier. Legendary investor Jim Rogers, to name one.

How to end the crisis

The UK Government proposes to borrow and spend its way out of recession. Leaders in other countries have since come round to the idea. Germany, with its high savings rate and low consumer borrowing, was the notable exception. (Economy: Germany vs UK).


There are concerns of a return to protectionism by President Obama in the US. But he does subscribe to the Keynesian approach of spending out of recession.

The impact
Markets have had a roller-coaster ride since late September with big swings in the Dow Jones and the FTSE 100 stock market indices and in currencies: Interactive FTSE 100 charts | Latest currency rates

The key to easing the credit crisis is the Libor rate (three-month sterling). It has been falling relative to the UK bank rate since a peak of 6.3% on 1 October: See the latest Libor rate

Other effects have been a falling oil price, as demand falls, and a rise in gold, seen as a safehaven in tough times - try the links below. And don't miss: Simple signals of a recession.

How to measure the credit crunch

Libor is a rate that banks lend to each other in the UK and is therefore a measure of how much they trust each other and a measure of the state of the credit crunch. Libor and swap rates are used to price new mortgages.
Pre-crisis, the three-month Libor rate was 0.1 to 0.2% higher than the bank rate. But it soared far higher in August 2007, marking the start of the credit crunch. It recovered over the summer of 2008 (see the chart below) as some trust returned but then spiked on the collapse of Lehman Brothers (15/16 Sept 2008). News of the $700bn US bank bailout failed to move Libor in the UK - it actually rose above 6%.

However, the UK's �40bn cash injection into banks (13 Oct) appeared to have a positive but moderate effect, as have aggressive bank rate cuts...

And how is all this likely to affect the average British consumer? Read the latest news, and analysis, and see how you can profit from the credit crunch and avoid rising costs in the squeeze...


LATEST ON THE CRISIS:

- What happens if all UK banks default? (23 January 2009)
Alan O'Sullivan looks at an unlikely but worrying scenario in the financial crisis.


- It's official: The UK is in recession (23 January 2009)
Government figures confirmed what we all already knew... recession is upon us.

MOST IMPORTANT CREDIT CRUNCH READS:

Could failing banks bring the economy down?
The Daily Mail's Sam Fleming examines whether UK plc could actually go bust.


Should we let a bank go bust?
Simon Lambert on the pros and cons of the ultimate in coporate tough love.


Deflation winners and losers
Mail on Sunday Economics Editor Dan Atkinson on the effects of falling prices.


'We're on the brink of bankruptcy'
Respected commentator Peter Oborne with a gloomy forecast for us all.


It's not as bad as all that!
The Evening Standard's respected financial commentator Anthony Hilton on why the economy should pick up in late spring.


Economic prospects for 2009
Adrian Lowery examines the outlook for the economy, the pound and interest rates for the year ahead


Where will the FTSE 100 end 2009?
Philip Scott looks at the impact of the credit crunch on stock markets.


The price of the $50bn Madoff pyramid scheme
An alleged 'Ponzi scheme' run by a leading US hedge fund guru stunned the markets in December - and left British banks with something else to worry about.

Maybe it's not as bad as you think
The Mail on Sunday's Economics Editor on why house prices, retailers and other parts of the economy may be doing better than official figures suggest.

A recession map of Britain
Research claims to calculate which areas will be worst hit by the recession.

How to fight the recession
Howard Flight is author of the Centre for Policy Studies paper 'From Boom to Bust'. Here are his suggestions for avoiding a long recession.

Keynes: Did he really help end the Depression?
John Maynard Keynes and his notion of spending as a cure for economic hardship is back in fashion. But one historian argues that depression was shallow in the UK in the 1930s and deep in the US despite a massive splurge of American state investment.


A brief history of recession
The Mail on Sunday's Economics Editor gives a quick overview of recent recessions, including ideas on how to end them.


How Gordon saved the world
Gordon Brown's rescue plan was hailed worldwide. But the most notable endorsement came from Paul Krugman, who yesterday won the Nobel Prize for economics.


Reasons to be cheerful (No.1)
We must tighten our belts, but it's not all doom and gloom. Historian A.N. Wilson tells us how you may just 'enjoy' the economic slump.

Reasons to be cheerful (No.2)
The City's superficial glamour has overshadowed the essential work of engineers and scientists, inventors, craftsmen, creative artists and manufacturers, says Vince Cable. Amid this frightening drama there are some positive developments.


Are we seeing 1929 all over again?
This is Money's Dan Hyde finds some startling comparisons between this credit crunch crash and the boom and bust of the 1920s and 1930s.

After the crisis...
The Evening Standard's Financial Editor paints a picture of how the banking crisis and credit crunch will change the world.

B&B is nationalised
What the B&B failure means for savers (who have been sold on to Abbey), shareholders and mortgage borrowers.

How the credit crunch will bite next
The Evening Standard's Anthony Hilton on the point where the credit crunch starts to hit other assets... the things rich people spend their money on.

Credit Crunch: One year on
'Life changed on August 9. That was the day all the markets simply froze. London, the most liquid market in the world, was effectively closed': Philip Scott looks back over the past 12 months of economic misery.

The woes of the Bank of England's Mervyn King
King may have compromised over bailing out UK banks, but he is not going to give way on liquidity.

Credit crunch 30-second guide
What the credit crunch is: the quick and snappy version.

Beat the credit crunch: Boost your income
A second job or a canny ploy to get some extra income could be the answer for squeezed households.

Haggle your way to a bargain
It's no secret that retail is in trouble, with sales falling over the past five months. So will haggling on the High Street bag you a bargain?

Michael Winner: How to survive the credit crunch
'You think you've got problems? My debts are �6m': some unorthodox tips on the credit crunch from one of life's big spenders.


A dozen tips to beat the crunch
We're facing the toughest economic challenges since the early Seventies. Jo Thornhill and Helen Loveless offer 12 tips to ensure you're protected against the credit crunch.

Re: A must see for All Newbies & lurkers
 

http://www.dailymail.co.uk/news/arti...recession.html

Minister unleashes savage attack on 'masters of the Universe' over recession
By Daily Mail Reporter
Last updated at 12:36 PM on 24th January 2009
Comments (32) Add to My Stories Outspoken: Lord Myners blames the 'mismanagement' of the banks on overpaid senior executives

Britain's banking system was less than three hours away from collapse before
the Government's first bail out, Gordon Brown's City Minister revealed last
night.

Lord Myners said that 'things were very bad, nervous and fragile' in the moments before the Government announced a �500billion rescue package last October.

In an interview with the time, Lord Myners revealed that the financial crisis was far worse than released.

The government pumped up to �37billion into Royal Bank of Scotland, Lloyds TSB and HBOS in an attempt to prevent the UK's banking sector from melting down last year - resulting in the part nationalisation of Britain's banking system.

Lord Myners revealed: 'How close were we to a systemic collapse of the banking system? We were very close on Friday, October 10.
'There were two or three hours when things felt very bad, nervous and fragile. Major depositors were trying to withdraw ­ and willing to pay penalties for early withdrawal ­ from a number of large banks.'

The City minister's comments came as new figures revealed that Britain is heading into a longer and deeper recession than feared.
In a furious onslaught, Lord Myners blamed banking's 'masters of the Universe' for the crisis.

He said that too many top bankers fail to realise they are grossly over-rewarded and have no sense of society around them.
Lord Myners added that there will have to be fundamental changes in the way that banks operate and that 'the golden days of huge bonuses in the investment banking arms are gone'.

The minister went on to argue that there was no economic justification for senior executives� pay rising 'exponentially' in the past 20 years.

Asked whether they should pay back their bonuses or lose their knighthoods, he says 'that�s a decision for individuals' and adds that if people have committed crimes they should be prosecuted.

Lord Myners says: 'I have met more masters of the Universe than I would like to, people who were grossly overrewarded and did not recognise that. Some of that is pretty unpalatable.

'They are people who have no sense of the broader society around them. There
is quite a lot of annoyance and much of that is justified.

'Let us be quite clear: there has been mismanagement of our banks.'

His comments are the most ferocious yet by a Labour minister on Britain's banking bosses.
Lord Myners joined the Government from the City in October.

The former chairman of Marks & Spencers and hedge fund manager went on to admit that more bailouts could be in the pipeline.
He added that the Government still did not know the scale of 'toxic debts' on the books of Britain's banks.

George Osborne, the Shadow Chancellor, said: 'The Government�s endless announcements and summits are commanding neither public confidence at home nor confidence abroad.'

Re: A must see for All Newbies & lurkers
 

This might be interesting to some on prices of things over the years covering many countries & items.

http://www.foodtimeline.org/foodfaq5.html

How much did a box of Kellogg's Corn Flakes cost?
Notice the packet size shrunk too.
[1980] 19 oz, 99 cents
[May 10, 2008] 12 oz, $2.99

http://www.measuringworth.com/calculators/ppowerus/

To determine the value of an amount of money in a particular ("original") year compared to another ("desired") year, enter the values in the appropriate places below. For example, you may want to know: How much money would you need in the year 2007, to have the same "purchasing power" of $500 in year 1970. If you entered these values in the correct places, you will find that the answer is $2,669.18.

Re: A must see for All Newbies & lurkers
 

Some more interesting stuff on prices of food & goods.

http://www.thepeoplehistory.com/

1970's Prices
Toyota Corola $3,698 New York 1979 ---- Todays Price $


JVC VHS Video Cassette Recorder !!!! $695 !!!! New York 1979 ---- Todays Price $ ???


Heinz ketchup 19 cents California 1970 ---- Todays Price $ ???


Split Level on Hill Top $32,400 Iowa 1972 ---- Todays Price $ ???


Wrangler Jeans $9.95 Illinois 1978 From 1970's Clothes


1980's Prices
Logitech Mouse !!!! $89.99 !!! New York 1988 ---- Todays Price $ ??? From 1980's Computers


Hands Free Operating Car Phone !!!! $788 !!!! New York 1988 ---- Todays Price $ ???

http://www.thepeoplehistory.com/80sfood.html

White Sliced bread 50 cents Pennsylvania 1981


Who pinched my stars? :biggrin:

Re: A must see for All Newbies & lurkers
 

http://www.rumormillnews.com/cgi-bin...es;read=125180

RICHARD C. COOK SEES TWO AMERICAS AS WELL, AND THE END OF EMPIRE

Richard C. Cook writes about the end of empire... the US Empire.

This is NOT the end of America-our America, but rather the beast that has grown like a cancer from this nation's beginnings, the continuation of the power struggle between the People and the inbred psychotic blueblood "elite" that appropriate our beliefs, our symbols, and in our name conquer, destroy and murder.

I myself wrote about there really being TWO Americas here:

http://freedomguide.blogspot.com/200...-americas.html

Resistance is never, ever futile. Never futile! Read on:

Will We See The End Of
Empire In Our Time?
By Richard C. Cook
5-28-8

The following is based on a talk given by the author at the "End of Empire" session of the "Building a New World" Conference of the Prout World Assembly at Radford University, Radford, Virginia, on May 22, 2008.

I believe we have had two Americas. One started with the imperialist state which Alexander Hamilton tried to put into place in the 1790s with the First Bank of the United States. Thomas Jefferson overthrew this early expression of empire in the Civic Revolution of 1800 and created a strong and free America which lasted until 1913 in spite of the convulsion of the Civil War.

In 1913 the empire came back through the Federal Reserve Act and the 16th Amendment to the Constitution authorizing the income tax. Franklin Roosevelt dealt it a blow during the New Deal, but now it has taken over again, starting with the Vietnam War, continuing with the Reagan Revolution, and ending with the catastrophe of Bush II.

Though the America we know and love is in agony, I believe the 'real' America is still there, somewhere, among the people, particularly those who remain true to the teaching of the Master, "to love your neighbor as yourself." Whether and how that America will now come to the fore is, for me, the next big question.

A few weeks after I retired from the government in January 2007, I published a book entitled Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age.

I had gone to work at NASA in the summer of 1985 as the lead resource analyst for the space shuttle solid rocket boosters.

My first major assignment was to talk with the solid rocket booster engineers and find out about the problems they were having with the O-ring joints. They told me that these joints, located between rocket segments, were being eroded by flame leaks almost every time the shuttle was launched.

The engineers said that if the flame leaks burned all the way through the joints, then the shuttle would blow up. Documents showed that if this happened the astronauts all would die. The engineers said they were trying to redesign the joints but that for now they "held their breath" each time there was a launch.

On January 26, 1986, space shuttle Challenger did blow up for the reason the engineers had described. Among the seven astronauts who died was Christa McAuliffe, the Teacher-in-Space and the first civilian shuttle passenger. I became the only NASA official to testify publicly to the Rogers Commission that NASA had known for a long time this could happen. For my testimony I later received the Cavallo Foundation Award given to whistleblowers for moral courage in business and industry.

After my testimony, the engineers for Morton Thiokol came forward and told how they had tried to stop the launch the night before, because they feared the unusually cold temperatures would prevent the O-ring joints from sealing. NASA refused to accept the engineers' recommendation for a delay, and their own company managers approved the launch in writing.

This was as far as the Rogers Commission went with its investigation. After four more years of personal investigation, I was able to determine that NASA approved the launch against all expert opinion in connection with the TV publicity for the Teacher-in-Space mission and under pressure from the Reagan White House.

I was also able to show that the reason NASA kept flying, despite the knowledge that the O-ring joints were flawed and that their performance was further compromised by cold temperatures, was so as not to interfere with military launches the shuttle was going to be making in support of President Reagan's Star Wars weapons-in-space system.

I tell you this story because it is a concrete example of what happens when a nation goes from being a democracy to an empire. For one thing, human life no longer matters. They don't care if people live or die. They'll kill millions, whole nations, entire cultures, to get what they covet. And they will give it fancy names, like "The War on Terror." Or they'll tell you the earth is overpopulated so hundreds of millions must starve, which is starting to happen even as we speak.

Also, there is always a great leader whose image and prestige matters more than common sense and the truth-a Great Communicator, a Decider, a Unitary Executive. And that leader is going to be good at scaring you and making you do things out of fear you would never do in your right mind.

Finally, under an empire, ideas of science and knowledge-which is to say, Truth-are sacrificed to the imperatives of militarism and national security. What was happening at the time of the Challenger disaster was that the manned space program, which had given mankind some of its greatest triumphs during the Apollo moon landing program, was now being subverted to begin launching weapons into space. Today, no nation in history has been as proficient as ours at inventing things to kill their fellow human beings.

Returning to my personal circumstances, I left NASA a few days after my testimony and spent the next twenty-one years working for the U.S. Treasury Department. There I learned more about what it has meant for us to become an empire, because it has affected public finance as much as space science. And I have studied this topic seriously for years. I publish articles regularly on Global Research and other websites and have a new book coming out this fall entitled, We Hold These Truths: The Hope of Monetary Reform.

The issue of whether we in the U.S. want to be an empire or a democracy goes back to the founding of the nation. In the 1790s, our first Secretary of the Treasury, Alexander Hamilton, got Congress, with President George Washington's approval, to pass legislation setting up the First Bank of the United States. Hamilton was frank at the time in telling people that the purpose of the Bank was to allow the creation of what he than called an "American empire" in order to compete with the European nations in controlling the world.

The Bank would do the same for the U.S. as the Bank of England did for Great Britain. It would buy government debt and use it as collateral for private lending. The debt would then be used to fund a large standing army and navy, even though in the long run, this could bankrupt the nation. The army and navy began to be built through the 1790s, until Thomas Jefferson and his followers stood up and said this is not the kind of nation we fought to create during the Revolutionary War.

Hamilton and Jefferson split, and that split has defined U.S. politics ever since. Hamilton became the de facto head of the Federalist Party, the ancestor first of the Whigs and then of the Republicans. Jefferson called himself a Republican at first, then a Democratic-Republican, then finally his party became the Democratic Party that has lasted until today. Of course we know that the two parties have come more and more to resemble each other in recent decades in supporting policies of imperialism.

Jefferson was elected president in what was called the Civic Revolution of 1800. The first thing he did was cut military spending. He did what no one has done since, which was to balance the federal budget for eight consecutive years. Then he took an action which defined our nation to a considerable extent all the way into the 20th century. In 1803 he doubled the size of the nation overnight through the Louisiana Purchase.

So for the next century, instead of competing with the European nations for overseas colonies, our energies were devoted to settling the North American continent, to the detriment, of course, of the Native American peoples. We became, as did Russia in Eurasia and Brazil in South America, a continental land power. And we stayed that way for over a century.

But empire finally caught up with us. Across the sea in South Africa a man named Cecil Rhodes was devising a plan to make the British Empire the ruler of the globe. He created a secret society to accomplish this, called the Round Table, using money provided by the Rothschild family, who had controlled the British economy since the Napoleonic wars.

The U.S. was integral to their plans. Following is the relevant passage from Cecil Rhodes' will of 1877. His aims, he wrote in the will, were:

The extension of British rule throughout the world, the perfecting of a system of emigration from the United Kingdom and of colonization by British subjects of all lands wherein the means of livelihood are attainable by energy, labour, and enterprise,the ultimate recovery of the United States of America as an integral part of a British Empire, the consolidation of the whole Empire, the inauguration of a system of Colonial Representation in the Imperial Parliament which may to tend to weld together the disjointed members of the Empire, and finally the production of so great a power as to hereafter render wars impossible and promote the best interests of humanity.

Think about that: "the ultimate recovery of the United States of America as an integral part of the British Empire." In fact, as Professor Carroll Quigley made clear in his celebrated book, The Anglo-American Establishment, the British planners, whose descendants still rule that nation, acknowledged that a time would come when the U.S. would be the senior partner in the empire, which is exactly what happened over the century that lay ahead.

The Russian writer P.D. Ouspensky said all the history you read about in the history books is "the history of crime." This is what he was talking about.
The takeover of America was accomplished when the British, European, and American bankers created the Federal Reserve System in 1913. That year our nation was hijacked. Congressman Charles Lindbergh, father of the future aviator, called it "the legislative crime of the ages."

The Federal Reserve is a privately-owned central banking system modeled on the Bank of England. >From that day onward we got all the accoutrements of empire which have burdened our nation ever since: an enormous national debt, a crushing tax burden, permanent inflation, constant warfare, a gigantic and overweening military-industrial complex, a national character marked by arrogance and violence, and today, the enmity of the world.

Our wealth has been based, first, of course, on our own industriousness and natural resources-a positive-but, when that has proved insufficient, on taking it from others. Until recently our businesses and industry have dominated the globe-ever since World War II. The American dollar has been the world's reserve currency and the denominator of trade in the "black gold" known as oil.

Through the neocolonialist institution known as the International Monetary Fund, we dominated the economies of the developing world. And we backed up our hegemony with military might. Since the start of World War II in 1941 we have been at war with somebody, either overtly or covertly, continuously. This pattern of warfare accelerated with the Reagan Doctrine of fighting proxy wars starting in the 1980s.

Today our military is based in 166 nations. Our economy is dominated by two industries-banking and armaments. Egged on by Israel and the U.S.-based neocons, we are engaged in the military conquest of the Middle East. This began after the 9/11 attacks through use of off-the-shelf plans to invade Afghanistan and Iraq. We are also seeking "full-spectrum dominance" by planning, once again, to put weapons into space.

And we are bankrupt-morally and financially. We gave away our manufacturing industries to the operators of overseas sweatshops and have tried to live on our investments and the inflation of our homes and paper assets. Our secret intelligence agencies are heavily involved in the illicit drug trade, and we carry out our foreign policy with assassinations, subversion, and torture.
Yet we have a national debt approaching $10 trillion and a total societal debt of $50 trillion, neither of which can ever be paid off. Meanwhile the world's financial controllers, still mainly based in London along with Wall Street, have gotten unbelievably rich from the proceeds of empire over the decades and are probably laughing up their sleeves as they watch us inch toward the next world war.

Because it's a fact that the threat of nuclear war which we thought had been dispelled by the end of the Cold War today has come back. Remember talk of the "peace dividend"? What a joke! In our name, and with our money, the U.S. military-industrial complex is seriously preparing for a world war that would be fought with nuclear weapons against Russia and China.

The trigger could be a U.S. attack on Iran, which seems to be in the works and may take place before the November presidential election. Disgusting and corrupt corporate media outlets like the Washington Post are again beating the drums for war on behalf of the financiers and Israel as they did in the run-up to the war against Iraq.

Is there still a chance for us to step back and become the nation we once were, the home of liberty and the hope of mankind? Although I have tried to address these and many other issues in my writings, I honestly do not have the answer to that very pertinent question.

Re: A must see for All Newbies & lurkers
 

Interesting numbers

http://finance.yahoo.com/news/Gold-D...-14394747.html

Press Release Source: World Gold Council
Gold Demand Pushed Through $US100 Billion Barrier as Investors Turned to Recognized Store of Value
Wednesday February 18, 2009, 2:00 am EST
Yahoo! Buzz Print NEW YORK & LONDON--(BUSINESS WIRE)--Sustained investor interest in gold over the course of 2008 against a backdrop of the worst year on record for global stock markets and many other asset classes, helped push dollar demand for the safe haven asset to $102bn, a 29% increase on year earlier levels. According to World Gold Council�s (�WGC�) Gold Demand Trends, identifiable gold demand in tonnage terms rose 4% on previous year levels to 3,659 tonnes.

As shares on stock markets around the world lost an estimated $14 trillion in value, identifiable investment demand for gold, which incorporates exchange traded funds (ETFs), and bars and coins, was 64% higher in 2008 than in 2007, equivalent to an additional inflow of $US15bn. Over the year as a whole, the gold price averaged $872, up 25% from $695 in 2007.

The most striking trend across the year was the reawakening of investor interest in the holding of physical gold. Demand for bars and coins rose 87% over the year with shortages reported across many parts of the globe.

The figures compiled independently for WGC by GFMS Limited, showed jewelry demand up 11% in dollar terms at almost $US60bn for the whole year, but down 11% in tonnage terms at 2,138 tonnes. The adverse economic conditions across the globe paired with a high and volatile price impacted jewelry buying in key markets, but resilient spending on gold jewelry indicated the strength of underlying demand when the market offered attractive price points.

Industrial demand in 2008 was another casualty of the global economic turmoil, down 7% to 430 tonnes from 461 tonnes in 2007. With the electronics sector the main source of industrial demand, reduced consumer spending on items such as laptops and mobile phones had a direct impact on gold demand.

Aram Shishmanian, Chief Executive Officer of World Gold Council, said:

�These figures confirm that investors around the world recognize the benefits of holding gold during this time of unprecedented global financial crisis, recession and concerns regarding future inflation. Gold has again proven its core investment qualities as a store of value, safe haven and portfolio diversifier and this has struck a chord with uneasy investors.

�While current market conditions have impacted consumer spending on jewelry, purchasers in many of the key gold markets understand gold�s intrinsic investment value and continue to buy.

�The economic downturn and uncertainty in the global markets that has affected us all is unlikely to abate in the short term. Consequently, we anticipate that gold, as a unique asset class, will continue to play a vital role in providing stability to both household and professional investors around the world.�

Total demand remained very strong in the fourth quarter of 2008, up 26% on the same period last year at 1036 tonnes or $26.5bn in value terms.

The biggest source of growth in demand for gold in Q4 was investment. Identifiable investment demand reached 399 tonnes, up from 141 tonnes in Q4 2007, a rise of 182%. The main source of this increase was net retail investment, which rose 396% from 61 tonnes in Q4 2007 to 304 tonnes in Q4 2008. The most dramatic surge was in Europe, where bar and coin demand increased from just 9 tonnes in Q4 2007 to 114 tonnes in Q4 2008, a 1,170% increase. ETF holdings broke new records during the quarter. Although the net quarterly inflow was down from the level of the previous quarter, the growth rate on Q4 2007 was a strong 18%.

Total demand in India, the world�s largest gold market, in the fourth quarter was up 84% in tonnage terms, led by a very strong 107% rise in jewelry demand, underpinned by investment attributes of gold. This phenomenon has to be set against a very weak Q4 2007, however. Total gold demand in Greater China in Q4 was resilient to the global turmoil. Total off-take was up 21% on the same period last year, with investment the main contributor to growth but jewelry demand also holding up well.

Investment demand in Thailand soared during the quarter, from a net outflow of 8 tonnes in Q4 2007 to a net inflow of 21 tonnes in Q4 2008. As with many other parts of the region, this turnaround was underpinned by safe haven buying.

Demand in the Middle East in Q4 2008 was up 1% on year earlier levels, with the strong growth in the bar and coin market (up 139%) offset by 7% decline in jewelry demand, which makes up 90% of the market in this region. A combination of gold price volatility, a sharp fall in the local currency, and exchange rate uncertainty led to a 59% fall in overall gold demand in Turkey in the fourth quarter.

In the United States, the deteriorating economic conditions produced a mix result for gold demand. Fourth quarter jewelry demand was down 35% as consumer spending plummeted. In stark contrast demand for gold bars and coins rocketed by 370% in Q4, representing 35 tonnes of gold.

Gold supply in Q4 was up 5% relative to year-earlier levels and year-on-year, declined 1%. Slightly lower mine production, higher levels of scrap and lower levels of gold producer de-hedging, were partly offset by lower net central bank sales in Q4 2008, which totaled 71 tonnes, down from 97 tonnes in Q4 2007.

The full 2008 Q4 and Full Year Gold Demand Trends report can be viewed at:

http://www.research.gold.org/supply_demand/