The Golden Truth: You Have To Be Kidding Me...

Monday, December 6, 2010

You Have To Be Kidding Me...

The Washington Post reported this evening that Obama and congressional Republicans have reached an agreement for the extension of all tax breaks set to expire on Dec. 31, AND a 13 month extension of jobless benefits.

I believe now that those who qualify for jobless bennies can now get them for 3 years and 7 months. What the heck is the difference between welfare and unemployment insurance? Seriously. And how do our policy-makers propose to pay for this? Oh wait, Bernanke was on 60 Minutes last night explaining how our Government's excessive spending will be funded: MORE MONEY PRINTING.

It just amazes me when I still get comments like "isn't gold too high to buy now?" LOL. Let's see, would I rather hold something that has been used as honest currency for the better part of 5,000 years or a piece of paper that loses value everyday because its supply increases everyday. As long all global fiat currencies continue to increase rapidly in supply, it will take more of each of those currencies to buy an ounce of gold. It's really that simple.

The bull market in gold/silver will be over when both metals are reinstated as the global reserve currency. This will likely entail a significant upward revaluation of the price of gold/silver to a level which is representative of the marginal level of global wealth. I've seen estimates from well-respected analysts of what this price level could be that range from $8,000-$38,000/oz.

Here are some great quotes I wanted to share. The first one was sent to me by a reader of this blog:

"...silver and gold have their value from the matter itself, they have first this privilege; that the value of them cannot be altered by the power of one nor of a few Commonwealths; as being a common measure of the commodities of all places. But base money may easily be enhanced or abased." - Thomas Hobbes

"Building gold as the basis of solvency has been used through history...Having a corresponding amount of solvency is a necessary precondition and indispensible safeguard in the long-term strategy for the internationalization of the yuan," -Xia Bin, advisor to the Peoples Bank of China

"The printing of money makes gold more valuable. You don’t have to be a genius to figure this out...I think gold is the reserve currency today. There is not a currency in the world that it hasn’t appreciated against by at least 300 per cent. And it has beaten every stock market. You can’t even rent a safety deposit box in Germany because they are all full of gold and silver." Eric Sprott, Srott Asset Management.

9 comments:

BillTuesday, 07 December, 2010
Jim Rickards: At Least One Swiss Bank Has Started Refusing To Hand Over Physical Gold To Clients

www.businessinsider.com/jim-rickards-take-gold-out-of-the-bank-2010-12

As far as Taxes, I am all for reducing taxes as long as spending reductions are equal or greater than the tax reduction.
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AnonymousTuesday, 07 December, 2010
Dave,
My order for a Silver bar went thru delivery process on MCX.

But the process is not at all investor friendly. It is easier to walk to a local Bullion dealer negotiate price/premium and BUY.

I would confirm once the bar goes in my Demat.

From India
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JoeTuesday, 07 December, 2010
I like this one from Finance and Economics.org:

"Owning fiat cash is the speculative position, not ownership of precious metals."

Joe M.
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AnonymousTuesday, 07 December, 2010
Dave,

Are you sure that 13 month extension is on top of 99 weeks? Nathan's blog, in the comment section said that they believed it was not on top of. This extension will only help those who have not hit 99 weeks, but were getting emergency extension benefits when this last one ran out and they were cut off.
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MarkTuesday, 07 December, 2010
Correct, 99 weeks is still max.
http://www.calculatedriskblog.com/2010/12/tax-negotiations-no-help-for-99ers.html

Mark
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AnonymousTuesday, 07 December, 2010
Dave, et al.,

A good 47 minute documentary on the history of banking, what money is, and how the structure of today's financial system evolved is "Money as Debt." It's presented in animation for dummies like me.

http://www.patriotflix.com/movie.aspx?MovieID=a5104e3b-0da2-408f-b03b-809fc19d6428

Frankly, I was dumbfounded how our global financial system really works. If the average person worldwide watched this film I wouldn't be surprised if the entire system collapsed virtually overnight.
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CarresianWednesday, 08 December, 2010
Is gold to high to buy? No.
The question is not how high gold priced in fiat will go, but how low fiat priced in gold will go.
The 60 minute interview gives insight into the answer. Ben believes that he is not printing, and that prospective inflation is under his able control. These are blatant absurdities.
The FED is on a path via QE1,2,etc. to fund the Treasury. There is NO end in sight to this misguided prescription.
The debt overhang has not been liquidated, and printing to enable reckless deficit spending will cure nothing.
Gold will remain a store of value.

Gold is money, nothing else.
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AnonymousWednesday, 08 December, 2010
Dave,

Any comments on the t-bond market? It's not looking good.

thanks
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Dave in DenverThursday, 09 December, 2010
See my post later today
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Add comment

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.