The American Dream (Film)

I just saw a fantastic film on the Federal Reserve which I must share :

The Herd Moveth Goldwards ...

For those of us who have been advocating gold and silver for some time now, one of the 'turning points' we wait for is when the general public starts to get interested in precious metals. The trouble, currently, is with the Euro. And no doubt, many Europeans are wondering if they should 'save' with Euro bucks at all anymore. Well, America is next.
I feel like I'm at the gold party, more people have just entered the hall, the music is a bit louder, and the revelers are dancing with a bit more energy. I'm still drinking my drink and enjoying the spectacle, but if it was possible to have a nice recognizable juncture where the party goes into a new phase - this is it.

America Wakes Up to Gold

The 'Great Depression' and It's Consequences

Below is a lengthy but worthwhile article on the troubled economic times we live in and the myriad negative effects we can expect it to have on society.

One troubling thing is that men are affected more than women. This is a bad sign for me because revolutions are always started by men - especially young men. Unemployment (and its accompanying anger and disillusionment) is perfect fodder for uprisings. Not that I'm saying America couldn't use a little 'change we can believe in', it's just that such change is unlikely to be frictionless.

From an investment perspective, such conditions would favor precious metals (among other things), while anything CNBC pushes should be regarded with extreme suspicion!

How a New Jobless Era Will Transform America

Inflation

Here is a great article outlining the basics of inflation, how it works, who benefits, and who is responsible for it.

Another effect of inflation that the article didn't mention is that many people feel they have little choice but to invest in the stock market because they cannot depend on their savings to retain value over the years. This would benefit the Wall Street gang.

One thing I get from this article is that one cannot hope to invest intelligently unless one has a good understanding of how out society works, and that it is always in the interests of the powerful to lie to you. The standard condition of a society is to be run not for the general good but for the benefit of some elite group.

They want your money, they want your dependence and they want your continued ignorance. Let us all strive to leave them disappointed.

http://www.financialsense.com/editorials/saxena/2010/0115.html

Pig Slaughter

Dr. Faber lowers the boom, gloom and doom!

Here Swiss investor Marc Faber expresses concern that the PIIGS (Portugal, Ireland, Italy, Greece, Spain) might default and that the Euro could be hit hard by such an occurrence. He points out that before a country defaults they often print a lot of money and this results in hyperinflation.

He also mentions how one way for a government to distract attention from the destruction of the country's economy is to go to war. I guess there comes a time when even the Super Bowl halftime show cannot keep them all in awe. Unfortunately the United States has a penchant for invading certain countries these days. If I lived in the Middle East, I'd get ready to duck. If I lived in the PIIGS, I'd buy a little gold and silver.

The Winds of Change ...

... they are a blowin'.

Bill Bonner summarizes many of the problems facing the world economic system today in this foreboding article. These 'we don't know what's around the corner but it might have big pointy teeth' articles are getting to be routine. Not that folks don't need to hear them.

"A rising power acquires gold. A fading gives it up." Here he is referring to other countries (primarily the BRIC boys) buying gold and western countries selling. I think it's true of people as well. Someone who owns some gold or silver (or other things like land) has more power than someone with a bank account. If you own some tangible assets than you are not 100% dependent on the monetary system and you are somewhat protected from its convulsions.

A Warning

Dr. Faber Discusses US Dollar

Marc Faber is back in the guest chair at Bloomberg Asia and talking about the economic state of affairs. I always find it interesting how much his comments on the future diverge from the slick BS of CNBC. He has made some pretty harsh comments on the US dollar in the past - such as saying there will be Zimbabwe-like inflation.

Here he speaks about the dollar and the future of the US. He points out that the US can be expected to continue to devalue the dollar in order to pay for all their imperial excursions in the mid-east. It is important to note that just about every empire has devalued their currency as they decline into insignificance. Simply chanting "USA, USA" at the sight of the star spangled banner, like the proverbial Pavlovian dog, could cause one to be fleeced - whether they are in dollars or the DOW.

Dr. Faber also talks about how the dollar shouldn't be seen as a store of value, but perhaps something like property or other tangible things could be used to save - a point that has been made on this humble blog and many other websites.

He also mentioned the concept of a currency 'based on discipline'. If only there were such a thing! Many have argued for a currency that is printed and issued by the government, rather than one issued by a cartel of private banks (The Fed). That would certainly be better than the current system, but I don't really trust government to exercise much discipline in any field, especially not in the greedy realm of money. I think things like precious metals and land should always be seen as stores of value above money.

Poor Mr. Buck

I and many other gold/silver folks believe there is a long term, concerted move away from the dollar - by the Chinese, the Russians and even regular investors that don't think it will be a good vehicle for saving. These two articles are just a couple of examples of the bearish outlook for the dollar.

The first is just a general prognostication by some investment folks at PIMCO and the second is about how Russia is looking to get away from exposure to the dollar, just like the Chinese. In this case, they are shorting the dollar in a kind of indirect way that would not be quite as obvious as if they were to alter their central bank reserves.

I hope more people begin to see the US dollar as only a medium of exchange for goods and services but not a way of saving. People ought to save with things that will retain their value, like precious metals (in sensible quantities) and land, which is real wealth.

Dollar to Extend Slide as Global Economy Recovers, Pimco Says

Russia Prepares to Short $18 Billion USD

Interview with Byron King

This fellow worked as a geologist in the exploration and production division of a major oil company, so he has some views on gold from a 'geological' point of view. I never looked into the concept of 'peak gold' that much but it is something I've heard before. Byron King brings it up in this interview. In response to a question about why gold would go to 2000$ he said :

"Because we're in a world that appears to have encountered peak gold as well as peak oil. If you look at historical production, worldwide gold output reached a top right around the year 2000–2001. Overall output has declined and we're not replacing output from the big mines of the past. Despite discoveries here and there, miners have to dig deeper and deeper into the reserves."

He also mentioned inflation and interest in gold from China as reasons for being long gold.

His opinion on silver is that it should outperform gold percentage wise, an opinion I agree with. In fact I think many of us overlook silver, perhaps because decades of watching the Olympics have conditioned us into thinking gold is somehow better. I think everyone should have at least a sock full of coins stashed somewhere in their house.

Endless Stimulus and 2000$ Gold

The Arguments for and Against Gold

This is a good article that condenses a lot of the arguments for gold and finishes with a few links to a guy who does not like the metal. In it you will find comments from such luminaries as Alan Greenspan, Marc Faber, Adrian Ash and others.
I found the comments on gold in a deflationary environment interesting. I never really thought of deflation as being good for gold, I just knew I did not want to be at the mercy of a currency that I fundamentally do not believe in as a store of wealth. I wanted the stability of gold, and regardless of whatever deflation there was, I was sure that in the long run we would have inflation due to all the paper and digital dollars being created. But some of the pundits in this article say it doesn't matter if there is deflation or inflation, gold is a 'go-to' asset that will be much sought after.

Is Gold a Reasonable Investment?

Lorax2013 on the Importance of Taking Action

I posted a video by this fellow awhile back. I just thought I'd put this one up as well, as he makes the point that people who are aware of the problems with the dollar and the general direction of the US economy should not just sit and worry about it - they should take some very simple steps to control their own situation as best they can.

It's a point that ought to be emphasized. An individual has a surprising amount of control over the conditions in their life. The election of 'The One' (Barrack Obama) highlights the tendency of people to look to others, often politicians, to save them or to change the conditions they feel assailed by. Loren Howe (aka 'Lorax2013' on YouTube) explains this well in this video, where he talks about a book by a well-known Libertarian.

Taking control of your finances and mitigating (or eliminating) the influence of the banking industry on your life is one of the reasons to invest in gold and silver. This blog is not just about investing, but about financial freedom and self-governance. I think taking your fiat dollars and converting them to something (not just precious metals) that retains value is one of the most important steps you can take.

Is Gold in a Bubble?

I would say not. Too many people are either ignorant of gold or view it negatively. (I like when the talking heads on CNBC refer to gold bugs as crazy survivalists sitting in a hole in the wilderness clutching a shotgun).

I will look for fear buying as a sign we are heading into a new stage with gold. When large numbers of people start seeing it as some kind of last available shelter from the falling sky I might want to edge closer to the exit door.

I remember back in the fall and winter of 08', alot of investment advisers for wealthy, high-end people were saying their clients were asking about Krugerrands and gold Maples. Those were the upper-class folks. I think we need to see more average joe-six pack types buying coins before we can talk about a real bubble.

Gold: Signs of a Bubble?

Even More on China and Gold

Yet another article on the influence the Asian elephant could have on gold.

Interesting how it is mentioned that gold is being promoted to the common man in China. (I bet Jim Cramer is giving the ole' bullish 'boo-yeah' to some financial stock as we speak) :

"As recently as 2002, the private ownership of gold was prohibited in China. You could be jailed if caught with any in your possession. Beginning in 2009, in a stunning about-face, the central government removed all restrictions. In fact, as Mineweb and other sources report now it’s actively pushing folks to buy some personal metal, with China's Central Television, the main state-owned television company, running news programs cum[sic] infomercials, letting the public know just how easy it is to purchase gold and silver as an investment."

Article : What The Heck Is Going On With China

Gold in the News ...

Gold has been going sideways for awhile now and somethings gotta give. Here's an article speculating on where the give might go.

More crystal ball peering here.

Meltdown 2.0?

An article like this on a main-stream site like Marketwatch.com is worth a look. Mr Farrell argues that we are getting set up for a bigger meltdown in the near future. (Here is the article, it has two pages).

I have heard the argument made that we will have a big bull run as a result of all this money being created and all the CNBC types will pump it as the return of good times. Then we will have an even bigger crash. Based on the enthusiasm with which the powers that be have provided more dope to the addict rather than let the bastard sweat the junk out of his system, I concur.

I also think that the social mood has a significant effect on the stock market. And this article is one example of the darkening of that mood. I think Obama will be a 'one-termer'.

Mr Farrell also writes about how this will happen :

"The culprit? The Fed, Ferguson says: "Without easy credit creation a true bubble cannot occur. That is why so many bubbles have their origins in the sins of omission and commission of central banks." So the next bubble (and meltdown) is virtually certain, thanks to Washington's $23.7 trillion explosion in debt."

It is too damn easy for people to get credit these days - too easy to go into debt. This does not make for a sound economy (though I imagine it makes certain parties quite rich).

I wish I knew exactly how to trade gold in light of all the inflation vs. deflation debate going on. No one can say for sure how it will play out. (Marc Faber has said there will be deflation first - then inflation through the roof). I think he's right and I would have no problem putting 5-20 % of my net worth in gold and silver and leaving it for 5 or 10 years. But he also has predicted volatility in all asset classes, just as a natural part of navigating the rough seas we find ourselves in there days.

For many of us, the best advice is probably to try not to figure out the short term and focus on the fundamentals : FUBAR.

Silver Panic Coming?

The appropriately named David Morgan (Morgan silver dollars) writes about the potential for silver as a safe haven from paper money.

"I have been on record as saying I see silver going over $100.00 an ounce in US Dollar terms. Now I want to be very clear here: I'm very practical. For something to get to $100.00 it means it must get past $20.00 again and then it needs to get to $30.00 and $40.00 and $50.00 and on and on, so certainly I'm not trying to give any false hope or false indicators. But when the US Dollar goes this time, I believe, the panic of 1980 will look like a warm-up event."

The rest of the article.

Advice on How to Invest in Precious Metals

The decision to invest in precious metals is always followed by a series of additional decisions that must be made. What to buy, in what form, from who, etc ...

Here is a good video about different ways to get into precious metals, and different things that must be considered. I believe it contains some good advice and the speaker also has some other good videos on money and investing.