Saturday, September 19, 2009

History in The Making

Governments should also decrease the role of economists – they're no more reliable than astrologers, and they do more damage.
- Nassim Nicholas Taleb

Americans Have Been Taken Hostage
By Dylan Ratigan
The American people have been taken hostage to a broken system.

It is a system that remains in place to this day.

A system where bank lobbyists have been spending in record numbers to make sure it stays that way.

A system that corrupts the most basic principles of competition and fair play, principles upon which this country was built.

It is a system that so far has forced the taxpayer to provide the banks with the use of $14 trillion from the Federal Reserve, much of the $7 trillion outstanding at the US Treasury and $2.3 trillion at the FDIC.

A system partially built by the very people who currently advise our President, run our Treasury Department and are charged with its reform.

And most stunningly -- it is a system that no one in our government has yet made any effort to fundamentally change.

Like health care, this is a referendum on our government's ability to function on behalf of the American people. Ask yourself how long you are willing to be held hostage? How long will you let our elected officials be the agents of those whose business it is to exploit our government and the American people at any cost?

As a country, we must demand that our politicians stop serving those whose business models are based on systemic theft and start serving those who seek to create value for others -- the workers, innovators and investors who have made this country great.

The 4 Key Reasons an Economic Collapse is Likely Imminent
1.The U.S. has unprecedented, massive amounts of current and coming debt.

2.Foreign countries have experienced their own crises, and they cannot offer added levels of debt funding for the U.S. Even if they could, they are unlikely to do so.

3.Productivity is declining, and everything the government is doing is further hurting productivity.

4.The U.S. is printing unprecedented, massive amounts of money and no longer has an ability to control inflation and deflation.

Four major developments all gold investors should watch
Jason Hamlin,
Gold has finally breached the $1,000 level and looks like it might hold the line on this latest attempt. I anticipate that this psychologically-important level will turn from resistance into support as gold makes new highs towards the end of 2009. If I am correct, right now is the last chance investors will have to purchase gold for under $1,000/ounce.

A series of new and significant events have unfolded over the past few weeks that have influenced the precious metals markets and will likely continue to support gold’s price advance. If you are a gold investor, it is important that you understand these events and the impact they are likely to have on your investments.

Development #1 – China Encouraging Citizens to Buy Gold and Repatriating Gold Holdings from London

Development # 2 -The World’s Largest Gold Producer, Barrick Gold Corp, Announced a Decision to Close Its Massive Hedge Book

Development # 3 – COMEX Commercial Traders Have Taken the Largest Net Short Position Against Gold & Silver Ever on Record

Development # 4 – Gold and Silver Slipped into Backwardation Last Week

Any way that you look at it, we are entering intense times in the financial markets and a reality check for the monetary system that has brought great advantage to the United States since establishing the dollar as the world’s reserve currency. With the U.S. government creating an unfathomable amount of debt in a very condensed time period and China growing increasingly impatient, I believe it is only a matter of time before we experience a severe inflationary period. Those in power might be able to manufacture one last rally for the dollar and correction for gold, but each attempt seems to be dwindling it both its potency and stamina. The “banksters” are literally running out of arrows in their quiver. Reducing your exposure to the dollar and protecting your assets with a sensible allocation of gold and silver seems like an obvious move at this juncture.

Could China Push Gold to the Moon?
by David Galland, Managing Director, Casey Research
Inside sourceshave recently confirmed the Chinese government is actively promoting gold and silver investment to the masses.

Some analysts now contend that China can no longer afford to let the gold or silver price slump. The rationale behind that contention is that with the Chinese government now telling the general populace to buy precious metals, it would be highly problematic should gold and silver subsequently take a nose dive.

In many cases, what a government wants and what ultimately occurs can be wildly different, due to unintended consequences rarely foreseen by officialdom, and because once the masses get it into their heads to break one way or another, government’s desires are largely ignored.

“You shall not smoke marijuana,” says the government. “Roll me another,” says John Q. Public.

But in the case of gold, interestingly enough, the Chinese government has the means at its disposal to actually do something about prices. Namely, at $1,000 an ounce, the total value of all the gold ever mined comes to about $5 trillion.

Of that amount, less than $1 trillion is held in official reserves, the rest under mattresses, in jewelry and family heirlooms, and in various ETFs – GLD being the biggest, by far, holding about $34 billion worth of gold.

Against these totals, China has foreign reserves in excess of $2 trillion. In other words, more than enough to push the tiny gold market around in any way it wishes. Given that much of its reserves are now denominated in fragile U.S. dollars that it would sorely love to replace with something more tangible, and that China is the world’s largest gold producer, the country’s involvement with gold is something more than just a passing fancy.

Simply, there is a new gorilla in the room in global gold markets.

Massive Inflation Has Already Arrived in the U.S.
Ben Bernanke said this week that the recession is "very likely over." Yes, therecession may be over in nominal terms, but massive inflation has just begunand prices of stocks and real estate will continue to plummet when valued inreal money, gold and silver. You can't just print your way out of a recessionwithout increasing production. Sure, if you print enough money prices ofstocks and real estate will rise when priced in dollars, but that won't mean athing when it costs $10,000 to fill your refrigerator with food.

NIA Officially Declares Gold and Silver Mania is Here
While the mainstream media has officially declared the U.S. recession over and an economic recovery here, NIA believes what the media sees as an economic recovery is nothing but inflation. We believe the U.S. recession has just begun, but declare that gold and silver mania is officially here. Of course, this is just the first inning of gold and silver mania. The mania won't reach its height until everybody you know who invested into the real estate bubble, abandons real estate and starts investing into gold and silver.

Last year during the U.S. financial crisis, Americans rushed out of stocks and real estate and into U.S. dollars as a safe haven. Unfortunately, these Americans who already lost so much in stocks and real estate, will soon get hit by a hyperinflation tidal wave that washes away what little wealth they have left. The only people who will survive are those who wake up and realize that gold and silver are the only real safe havens because the Federal Reserve can't print them out of thin air; gold and silver supplies will always be scarce.

Global systemic crisis: In pursuit of the impossible recovery
Before this summer, LEAP/E2020's team announced that there would be no recovery in sight in September 2009, and not until summer 2010 in any event. Well indeed, contrary to the claims of the media, and financial and political circles, we confirm our anticipation.

The slowdown in the speed of collapse of the global economy, at the origin of all the « good news » (1), is only due to the world's enormous public financial effort of the last twelve months (2). But the « time saved » using taxpayers' money around the world should have been dedicated to redesigning the international monetary system at the heart of the current systemic crisis (3). Yet, besides a few cosmetic considerations (4) and huge gifts to US and European banks, nothing serious has been undertaken, and, when it comes to the future, the « every man for himself » rule prevails (5).

Now, as summer 2009 comes to a close, and as the three rogue waves start impacting the global economy hard (unemployment (6), bankruptcies (7) and monetary shocks (8)), the time to mend the system, or to prepare for a soft transition towards a new global system, is over (9). The first signs of a major decoupling (10) are beginning to appear: the rest of the world is rapidly moving away from the Dollar zone. As shown by the chart below, there is a 95 percent chance that 1,000 billion new USDs will be printed in a very near future... not very attractive for the Dollar zone.!-Global-systemic-crisis-In-pursuit-of-the-impossible-recovery_a3797.html

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