Monday, December 31, 2012

My Happy New Year Present To All

The Fiscal Cliff farce will be "fixed" one way or another.  All you have to do is look at where the carrots are hanging in front of the Asses and Elephants.  In fact, Obama just gave the children in Congress a nice pay raise, but they won't get any pay if the "Cliff" kicks in and the debt ceiling limit isn't raised/eliminated.
In the meantime,  most serious students of value/fundamental investing like to focus on long term trends.  The long term trend for gold has been 12 years in a row of gains.  And we all know the fundamentals become stronger by the day to support several more years of gains.

With that in mind, I recently went to the Van Gogh exhibition at the Denver Art Museum.  It is probably one of the best art exhibitions I've ever seen (after spending time in museums in NYC, Chicago, Paris, Italy, etc).  The exhibit uniquely spans Van Gogh's entire artistic career and I learned aspects of his artwork and its development about which I had no prior knowledge (like a heavy influence of Japanese art underlying his color scheme and strokes).  The exhibition truly blew me away in depth, scope AND the fact that it was assembled in Denver (not exactly an art mecca).

In honor of one of the greatest master artists of all time, I have to say that I don't think even Van Gogh could reproduce this 12-year, weekly visual of a raging bull market in process:

(click on chart to enlarge)

Not much to say about that chart - it's pretty much self-explanatory.

Have a safe and happy New Year celebration.  I suspect that the 2013 will be a very happy year for precious metals and mining stock investors.


  1. Thank You Dave for posting the longer term chart. I know when looking at Gold from a longer fundemental view point it seems like we should go much higher. Let hope that the market is able to price Gold to it's true value vs. the dollar in 2013. Happy & Healthy New Year to you & yours.

  2. My stocks for 2013: ANV,, AUQ, HL, NGD,, I decided to go with producers in safe geographic areas with growth and cash flow potential and no developers.

    Happy New Year to all and thanks to Dave for a GREAT BLOG!

  3. A very Happy New Year Dave,,,

  4. At its most basic, the rule of law requires universal applicability. There can be no immunity, and no indulgences handed out by bureaucrats. No person should ever stand above the law.

    NYU Press released my new book, Lawless Capitalism, last week. See The book argues that capitalism needs a more robust economic rule of law to assure a level playing field and rationalized law and regulation. I offer mechanisms for achieving this and demonstrate how the failure of law to curb economic power and channel it productively caused the financial crisis of 2007-2009. Basically, corporate and financial elites subverted law and regulation for profit, at the expense of virtually everyone else. This constituted a type of lawlessness–bending law to their will for profit at the great expense of society.

    But, the government’s position today, if the NY Times front page and editorial page, are correct is something more sinister than mere corrupted law. Our governing elites now arrogate the power to place some above the law, no matter how specious the reason. Simply stated, this unprecedented and ill-founded.

    The rule of law is dying in America and the people need to know ASAP. I would very much like to appear on your show to discuss this grave development.

    So, the government has yet to even proffer a colorable claim why it does not pursue criminal charges against criminal bankers.

    But, aside from the patent nonsense that DOJ now peddles to justify its abuse of prosecutorial discretion, is MF Global. MF Global was the largest bankruptcy since Lehman. Yet, the failure of MF Global had minimal impact on the stability of the financial system. It failed, and MF Global declared bankruptcy on October 31, 2011, but still the DOJ brought no criminal prosecutions against the firm or any individual.

    Basically, the DOJ jumps from excuse to excuse for why criminal charges are not pursued in the financial sector. Sometimes they argue no crimes were committed--even when criminality is manifest. Other times they try to use the prospect of systemic risk to justify non-prosecution--even though going after individuals actually reduces systemic risk by bolstering confidence. The only thesis that makes sense is this: rich and powerful senior bankers now hold immunity for white collar crime. There is no policy at work, just pure political power.

    Whether future jobs, lobbyists, campaign contributions or board seats are used, Wall Street elites simply hold too much sway in Washington to go to jail. Jon Corzine epitomizes this. He was one of the Obama campaign's top fundraisers. He raised over $500,000, although the campaign did return Corzine's direct contributions of $70,000. According to Bloomberg and the Government Accountability Institute, Attorney General Eric Holder's former law firm, Covington & Burling, represented MF Global (as well as virtually all of the megabanks). As of the date of bankruptcy, MF Global owed Covington over $114,000. (p. 26, para. 23).

    This must qualify as the most under reported story of 2012. A new lawlessness grips the apex of the American economy and its scope remains highly obscure. The new lawlessness can only be discerned through leaks to the NY Times, like this and this. Between MF Global and HSBC there is is no longer any doubt that rich and powerful financiers enjoy criminal immunity from white collar crimes.
    Compare this American reality with the Icelandic legal system's response to the financial crisis. Iceland just jailed a bank CEO and CFO for their role in the meltdown. As I highlight in Lawless Capitalism the rule of law in the US is collapsing.

    In recent weeks the situation has gone from bad to worse.

    Maybe we'll have a "universal" rule of law in 2013?

    1. Accurately stated.
      But what can we do about it?
      These people 'own' our legislators AND the courts.
      They seem to be able to dictate the outcome of any of our elections too.

      I can see only two outcomes for those of us who are not in the ranks of the very wealthy:
      1) violent revolution
      2) a painful death from either starvation, disease or execution by the elites

      What will each of you choose to allow and when will you do something about it?

  5. Happy New Year you too, first time i celebrated new year with so much fun. Whole day was good specially at night i attend a party held in our town, It was held outdoor in open sided marquee and was fully decorated with lighting and also burnt firecracker, sparklers and fireworks. It was the best ending of 2012.
    Wedding Marquee Hire Manchester

  6. I've been trying to understand this "economy" for a while. Gold bugs, especially you (only gold blog I read anymore), have definitely made the most sense. But there's always been a few gaps for me. These guys in power are corrupt but they're not stupid. As much as we'd like to believe Bernanke has no clue at all, I have a feeling he's smarter than he's given credit for but no one is in a position to save the status quo (which is what the public demand). In the absence of a larger picture I feel like they would have begun to rescue at least part of the economy in order to save the inevitable riots that will ensue if it dips a lot further.

    That larger picture for me has come to be fossil fuel inputs. Hovering at decade highs and only relenting as the economy worsens and demand slackens off, it would seem to me to tie the knot as the cause of this depression and it's continuation. Oil just isn't going to be as cheap again. If we could get cheap energy inputs from the magic hat we could build this economy again tomorrow. Absolutely any idiot in government could pull it off (and has done in the past).

    I wondered what you're thoughts were, it seems to be something you don't look into on this blog. It is a gold blog in fairness, but I think oil plays an important part in every sector of the economy.

    1. No gold bugs here, only gold bulls.

  7. Buon Anno Dave!

    Godiamoci il 2013 perchè sarà senz'altro migliore del 2014!

    Il Folletto

  8. Buon Anno a te, IF.

    Sono d'accordo con la tua previsione.

  9. Euros discarded as impoverished Greeks resort to bartering

    Communities set up local currencies and exchange networks in attempt to beat the economic crisis

    It's been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.

    But not a single euro has changed hands – none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.

    "It's all about exchange and solidarity, helping one another out in these very hard times," enthused Ioanitou, her hair tucked under a floppy felt cap. "You could say a lot of us have dreams of a utopia without the euro."

    In this bustling port city at the foot of Mount Pelion, in the heart of Greece's most fertile plain, locals have come up with a novel way of dealing with austerity – adopting their own alternative currency, known as the Tem. As the country struggles with its worst crisis in modern times, with Greeks losing up to 40% of their disposable income as a result of policies imposed in exchange for international aid, the system has been a huge success. Organisers say some 1,300 people have signed up to the informal bartering network.

    Greece's deepening economic crisis has brought new users. With ever more families plunging into poverty and despair, shops, cafes, factories and businesses have also resorted to the system under which goods and services – everything from yoga sessions to healthcare, babysitting to computer support – are traded in lieu of credits.