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.


  1. Jim Rickards: At Least One Swiss Bank Has Started Refusing To Hand Over Physical Gold To Clients

    As far as Taxes, I am all for reducing taxes as long as spending reductions are equal or greater than the tax reduction.

  2. 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

  3. I like this one from Finance and

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

    Joe M.

  4. 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.

  5. Correct, 99 weeks is still max.


  6. 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.

    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.

  7. 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.

  8. Dave,

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