"Gold Seen Luring Wealthy As Central Bankers Expand Stimulus"

Right now, the best expression of our macro view is still to own gold and silver because we believe this is ultimately going to be the survivor of this Debt Supercycle.  We believe it’s going to be the surviving collateral...You have to countenance into the largest Debt Supercycle that’s known to man, that what happened in the late 1970s could pale in significance relative to what could happen in the next five years here. I think September 12th might well have marked the day the world embarked on serial debasement of the reserve currency, and set the train in motion for a really gigantic move in gold over the next five years.  There is no limit to the price.  - Ben Davies, King World News LINK

I think most people are aware that Ron Paul's legislation requiring a thorough, independent audit of the Fed has passed in the House.  I also think most people are unaware that Senate Majority Leader, Harry Reid, is trying to kill this legislation in the Senate.  Does anyone see the irony here?  The Democrats stormed DC in 2008 on a campaign platform of "Change."  Obama promised to clean up the corruption on Capitol Hill and make Government more transparent.  After all, isn't it supposed to be a "Government of the People, by the People, for People?"  It seems Obama and Harry Reid skipped over that part of the history lesson in grade school.  In fact, Obama is supposedly a Constitutional Law expert.  But from the legislation and Executive Orders signed by Obama during his 1st term, I have every reason to believe he's never even read the Bill of Rights (the first 10 Amendments).  As an example:  Sayonara habeas corpus

At any rate, there seems to be significant resistance from the Democrats for legislation requiring an audit of the Fed.  This makes no sense because aren't the Democrats supposed to be the party of the 99%'ers?  What gives?  It took getting the swishy Democrat, Barney Frank, out of the way of the House Finance Committee in order to get Ron Paul's legislation out of committee and to the House floor, where it passed overwhelmingly.  But now Harry Reid stands in the way.  If you want to voice your opinion on this matter, please fill out this form and hit "send my fax:"  LINK  I don't know about anyone else, but at the very least I would like to see what the Fed is doing with the gold swap transactions alluded to by former Fed Chief Counsel, Kevin Warsh, and I would like to see how the dollars are being directed in Europe from the Fed's massive currency swap facility.

A news item in the Financial Times - and likely one that will not be repeated by U.S. media sources - that caught my eye this morning was the Brazilian Finance Minister lashing out at the Fed over QE3:

Guido Mantega, Brazil’s finance minister, has warned that the US Federal Reserve’s “protectionist” move to roll out more quantitative easing will reignite the currency wars with potentially drastic consequences for the rest of the world.  LINK

Brazil?  A lot of people might dismiss commentary like that from Brazil's Government.  But Brazil is one of the faster growing economies of the world right now, it's a large trading partner with the U.S. and it has begun to economically and financially ally itself with China/Russia.  This China alliance includes the implementation of a currency swap facility which enables China and Brazil to conduct trade in their respective currencies, thereby bypassing the U.S. dollar as the trading medium and rendering the dollar irrelevant for such purposes. The point here is that the U.S. dollar is losing its status as the world's reserve currency.  And more quickly than most realize, I might add.

The only way to protect your wealth against the incipient currency wars (see the quote above), is to move as much of your paper wealth as possible into gold and silver.  It seems this is becoming a trend among the so-called 1%'ers - of the world:

Gold has historically been considered to be a store of value and an inflation hedge and increasingly it is being utilized as a monetary instrument,” said Mark Smallwood, head of Asia-Pacific wealth-management solutions. “There is a growing interest among our clients to gain exposure,” he said, with an increased preference for physical holdings

Here's the source of that quote from Bloomberg News:  LINK  Please note the direct and explicit reference to "physical holdings."  That is the most important aspect of holding gold as a currency and wealth hedge.  This is a point that is completely dismissed and ignored by 99% of all financial advisers and 99% of all people who think they own gold by owning GLD, SLV, CEF, GTU.   With those vehicles you only own a security certificate and when you sell it you are left with - fiat dollars.  This is a tragic misunderstanding of the gold dynamic and it will end badly for those who remain blind to it.

It's a football Friday and the Broncos have another tough match-up this week, hosting a big game this Sunday vs. the Houston Texans.  Manning had a rough outing last week against the Falcons, but despite four 1st half turnovers, the Broncos had a shot at winning that game late in the 4th quarter.  The Texans won't be as lucky as the Falcons were against Manning and I expect that Denver will easily cover the 2 points Vegas is giving them.  Have a great weekend: