The Golden Truth: California Governor Declares Fiscal Emergency...

Thursday, January 20, 2011

California Governor Declares Fiscal Emergency...

Thanks to "Bill" for giving me the heads up on this. Not sure what that will accomplish other than maybe get the legislature to reduce any spending increases they are working on. Here's the news report: LINK

Fiscally California is doomed and eventually will require some kind of Federal Government/printed money bailout, as will several other States. They can raise taxes but that will accomplish little as it will further hasten the exodus of businesses and wealthy people who are legally domiciled in the State. For proof of that dynamic check out this news story from Illinois, which just raised taxes: LINK. Credit to my friend and colleague Hal for that story.

I continue to be amazed the way this country focuses on the financial issues over in Europe, when several large States in this country are technically insolvent. Someone asked me to comment on the notion that gold/silver are in a "bubble" now. That idea is little more than laughably absurd. There's a couple of good comments regarding that in the comment section of yesterday's post. Needless to say, until this country - and the world - figures out a way to engineer a financial "do over" AND create the framework by which every State/country can not spend more than it earns (i.e. that mechanism would be a strict gold/silver standard), the Central Banks will continue their inexorable fiat money flood and that will ultimately - and eventually - fuel a precious metals bubble that will stagger everyone's concept of what a bubble is. Until then, all that remains is for the final chess pieces to be played out before the world experiences a financial nuclear holocaust...

I'll be out Friday on s back-country snow-cat skip adventure in order to take full advantage of the 2 1/2 feet of fresh, untracked powder that awaits on Berthoud Pass!

Have a great weekend all - Avere una fantastica fine settimane a tutti

4 comments:

halThursday, 20 January, 2011
a couple of other issues: First, it would appear that the University Krannart Center loses a benefactor. Why are govt officials/entities so critical of high net worth folks. Kind of biting the hand that feeds them

I also know that U of I Chicago Campus has been looking for a benefactor of the $5 Mil for more than a few years. Enter stage left a young fast food company owner (and the kids on Campus really do like JJ's).

He does get some tax savings at the federal level for his contributions (not at state level). So what happens when or if we go to the fair tax where a guy like this does not get deductions--will good civic spirit alone allow someone to contribute 5 mil, vs. 3 Mil after tax?

Does anybody at either the state or Federal level "get it" or are they all dysfunctional? do any think out the end game or are they all bought and paid for.

Bueller, anybody?
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AnonymousFriday, 21 January, 2011
If some rich "benefactor" gives millions to charity and gets some "tax savings" from the government then all of us taxpayers gave that money to charity. why should we? How about we let these rich benefactors pay all their taxes and if they want to give their after tax money to charity I don't care.
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JFriday, 21 January, 2011
Dave,
The framework is set..in the EU at least. I'm sure you're familiar with his work by now but FOFOA does a great job describing this framework and http://fofoa.blogspot.com/2011/01/freegold-foundations.html his latest post is a must read IMO.

It is not a Gold Standard. It is more along the lines of what Zoelick described by using gold as a reference point
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AnonymousSunday, 23 January, 2011
Buon fine settimana a te !

Marco
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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.