Monday, June 29, 2009

Let The Countdown Begin

World Gold Council welcomes clarity regarding IMF gold sales
“World Gold Council welcomes the news that the US Congress has passed the Military Supplemental Bill thereby finalising the process allowing the IMF to sell 403.3 tonnes of gold in a manner that will have no impact on the smooth running of the international gold market.

“This process began with the Crockett Report in 2007, which recommended that the IMF adopt a new income model, including the establishment of an endowment, funded by the proceeds of limited and structured gold sales. More recently at the G-20 Leaders Summit in April of this year, heads of state proposed to use additional resources from the gold sales to provide an extra US $4 billion for poor and indebted countries over the next 2-3 years. This will not impact either the total level or the manner of the gold sales.

“The IMF has stated publicly that its gold sales should be coordinated with current and future Central Bank Gold Agreements (CBGA), whereby signatories have agreed to limit their gold sales to no more than 500 metric tons annually.

“Aram Shishmanian, CEO, World Gold Council, said: ‘We are pleased to see that the IMF’s plan to sell gold in a structured and non-disruptive manner has gone through due political process without problem, which is a credit to the responsible behaviour of all parties involved in the process. These sales will not constitute any net addition to the amount of gold the market is already expecting from official sector sources as a whole, and therefore we anticipate zero market impact.’”

BusinessWire, June 19, 2009.

This Summer May Prove Hot for Gold Prices Despite the Seasonal Tendencies
P. Radomski, Editor Sunshine Profits
I am often asked at this time whether it is a good idea to be in the precious metals market during the summer period known as the Summer Doldrums, in which demand for gold dries up temporarily while farmers in India plant crops and wait for the Monsoon rains. When they harvest in the early September, demand for gold picks up again as they are anxious to convert their profits into gold. After looking at the seasonal effects on gold one might think it prudent to wait through the summer in hopes of entering the market at lower prices. However, after considering important fundamental factors such as the increase in the money supply, it is clear that it is not a good idea to wait until summer’s end to enter a market that rather sooner than later is heading higher. Naturally, there will be pullbacks along the way, but the potential cost of being completely out of the market is too steep.

The Time Has Come
By Howard S. Katz
Well people, we are here. I am here. Gold is here.

But the question, dear reader, is are you here?

Gold is going to turn and punch through the $1000 barrier like it was not there. The U.S. dollar is going to drop like a stone. And yet, the vast majority of people are walking around in a daze. When I talk to ordinary Americans, they tell me that things are bad. This is their way of agreeing with the consensus media position of last fall which confuses falling prices with economic bad and buys the whole media line of that time.

You want to see bad? You are going to see bad. But it is not the bad of falling prices. By the time the current Administration is over, the average American will beg for falling prices.

The thing you have to keep firmly in mind is that there are many people in the world who want to steal your wealth. They go about it in many ways. The common thief is the most widely known, but he is not very successful. The police come and lock him away. As a result, more sophisticated methods of stealing are developed. For example, during the Middle Ages, the average person was reduced to being a serf. This meant that he had to go into the occupation of his father and was not allowed to quit his job. His feudal lord allowed him a bare subsistence and took the rest for himself. This was considered legal until, in the 17th century, the people rose up, established a democracy and voted in a Bill of Rights.

Ever since that time, a group of evil people have been trying to reestablish the hold which the medieval aristocracy had over their serfs. They have only been partially successful. Here in the United States, this group succeeded in obtaining the special privilege of printing money (i.e., of doing what would be called counterfeiting if anyone else did it). This was enacted on March 9, 1933 (The Emergency Banking Bill of 1933), the very first act of the new F.D.R. Administration. This gave the commercial bankers the privilege to create money. Savings banks got the privilege in the 1980s. And the banks’ big corporate loan customers benefit from the privilege indirectly (via lower interest rates). In a general sense, people who get special privileges from the government which enable them to steal your wealth are called a power structure. A power structure should be thought of as a watered down version of the medieval aristocracy. They are always dangerous. They want your wealth, and they want your freedom.

As noted, the power structure in the United States today operates by issuing paper money. They donate to both political parties and thereby get their agents installed as economic advisors. For example, Henry Paulson was the agent of Goldman Sachs, installed as the economic advisor to President Bush. It seems to run in the Bush family to know nothing about economics.

Greenspan, to curry favor with the power structure, eased credit from 6% in 2000 to 1% in 2003. At the same time he printed large amounts of money. This caused the housing bubble, which, for quite a while, made lots of money for Goldman Sachs and many other banks and Wall Street firms. It also made houses too expensive for the average American to afford. When there was finally a pause in the printing of money, housing prices collapsed. This caused what is called the sub-prime crisis and revealed Goldman Sachs and the other Wall Street houses for what they were – a collection of frauds.

It was the number one priority of Henry Paulson to prevent the collapse of his old buddies. They were in (a well deserved) crisis. So he ran to President Bush and shouted that the country was in crisis. Bush picked it up. The media picked it up. There was an atmosphere of hysteria created, and using this atmosphere of hysteria the power structure rammed through the bank bailout of October 2008.

This was called a taxpayer bailout of the banks, but there was no tax increase associated with it, and the media’s reference to it as a taxpayer bailout was another in a layer of lies. The average American did pay for the money given to the banks and Wall Street, but not via a tax increase. In fact, the money was created out of nothing by the Federal Reserve from Sept. to Dec. of last year as you can see in the above chart.

At the present time, it is better to use the monetary base as a measure of what is going on because the Federal Reserve is lying about the money supply. They are reporting the nation’s money supply as smaller than the monetary base when in fact the base is a part of the money supply.

Liar, liar, pants on fire.

So to sum up what is happening, the modern American power structure is trying to rob you. They squandered enormous amounts of wealth in the early years of this decade (because they are incompetent fools). They don’t want to pay for it. They want you to pay for it. That was the “crisis” of 2008. Their technique is to control both parties via campaign donations and get whoever is elected to steal from you for their benefit.

But their only method of stealing is via the paper money process. That is, they are counterfeiters, not conventional thieves. This is a weakness. It means that you can protect yourself from the depreciation of the (paper) currency by using gold as a store of value.

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