MONEY: Default is unavoildable

Tuesday, February 19, 2013

http://lewrockwell.com/north/north1264.html

—  begin quote —

Will the federal government default? Yes. Will investors learn their lesson? Not for long. But for a time, yes.

Here is the lesson: Do not trust a politician who says America cannot, must not, and will not default.

Here is the rule: “Never believe a rumor until it is officially denied by the government.”

Obama has officially denied it.

It’s coming.

— end quote —

Regardless of how you define “default”, what the FED is doing in buying debt with more paper, is de facto default.

So what the individual to do?

Buy assets that are not dollar denominated.

Bullion coins are my favorite. Nickles too.

Diversify. Pay off debt. And “get small in your hole”. (Any vet knows what that means!)

–30–

 


RANT: The four insideous taxes

Sunday, February 3, 2013
‎”“Florida is a state of choice,” said Thalius Hecksher, global development chief for Apex Fund Services, who moved many of his operations to Palm Beach. “It’s organically grown. There’s no need to drag people down here. It’s a zero-income-tax jurisdiction.”” http://buff.ly/WszLB0 Should have done it year ago!!!

‘Wall St.’ flees NY for tax-free Fla.

http://www.nypost.com

The city’s hedge-fund executives are flying south — and it’s not for vacation. An increasing number of financial firms, especially private equity and hedge funds, are fed up with…
–30–
Don’t forget FOUR insidious taxes that you don’t see: (1) the inflation tax — the FED has destroyed 99%of the value of the dollar in the last three or four decades; (2) the gas tax — gets added into every product sold and into every capital good used to make products, or deliver them; (3) the corporate tax — corps don’t pay tax, people do, they just pass it on; and (4) the estate tax — that turns productive assets into legal fees and schemes to avoid it as opposed to capital investment that improves society’s wealth — say goodbye to the family farm or a families’ small business. I’d assert that (a) the true tax rate is incalculable because it’s so well hidden; (B) it crushes the poor and middle class; and (c) some years we pay more than 100% of an annual year’s earnings in taxes! The loss of purchasing power means real savings goes down DESPITE rising account balances!!!!!!!!!

–30–

MONEY: What have we allowed to be done?

Sunday, December 9, 2012

http://www.cmi-gold-silver.com/blog/government-money/

Book Review: What Has Government Done to Our Money?

*** begin quote ***

In the United States we currently have a stated policy by the Federal Reserve to create higher levels of inflation while artificially lowering interest rates. This is a policy devastating to savers and those attempting to live off of the proceeds of their capital. How did we arrive at the point where a government created agency can arbitrarily opt to destroy the value of people’s savings?

Murray Rothbard’s What Has Government Done to Our Money? lays out the step by step process by which the commodity based monies of the free market are slowly and deliberately usurped by governments and their central banks. The end result of this control is the ability of government to take purchasing power from the savings of its citizens through inflation.

Understanding money and its creation are essential to understanding how inflation originates. Rothbard assumes no prior knowledge of the subject and begins with first principles to derive what money is and how it is used in a free market. He then covers the manipulations used by government to wrestle control of money away from the free market. Finally he finishes with a two hundred year history of money and currencies in the Western world. It is through this history he demonstrates how government abuse has resulted in a series of breakdowns of the dollar with respect to gold that have inevitably led to our current global monetary crisis.

*** end quote ***

We have allowed the politicians and bureaucrats to inflate the paper currency and silently steal from everyone — rich and poor  alike — their wealth. For the poor, it’s the value of their labor. For the rich, it’s the value of their savings.

argh!

–30–


ECONOMICS: Tweedle dee and Tweedle dumber!

Monday, October 22, 2012

http://cafehayek.com/2012/10/no-debate-both-are-economically-ignorant.html

No Debate: Both Men are Economically Ignorant

by DON BOUDREAUX on OCTOBER 17, 2012

in SEEN AND UNSEEN, TRADE

*** begin quote ***

Each man insists that America’s economy can be harmed by inexpensive imports – in other words, harmed by opportunities for voluntary exchanges that lower Americans’ cost of living.

By promising to raise taxes on Americans who buy Chinese-made goods, Mr. Romney again promised to break his campaign promise to not raise taxes. That he is unaware of the contradiction isn’t promising.

Mr. Obama is no better. He bragged that he “saved a thousand jobs” with his “tough” trade action that – by raising taxes on Americans who buy Chinese-made tires – ensured “that China was not flooding our domestic market with cheap tires.”

By this logic, the President’s policy is inexcusably lame. If creating more jobs in U.S. tire factories justifies forcing consumers to pay higher prices for tires, the Obama administration should also outlaw the sale of used tires (which, like low-priced imports, are “flooding our domestic market”). Indeed, the president should seek legislation mandating that all rubber used to make tires be non-vulcanized. The resulting decline in tire durability will create even more jobs in U.S. tire factories by “protecting” our market from being “flooded” with cheap tire durability – that is, with tires that last for tens of thousands of miles before needing to be replaced.

*** end quote ***

It’s hard to imagine that there is any rationale for restrictions?

Do we want to be a nation of tire makers?

In the Sixties were more expensive for a poorer quality. Now they are “cheaper” and more durable.

(Remember that the value of money has been inflated away. Gas is up by a multiple of 100 in dollars but about 50% cheaper in silver. Tires in the Sixties ran about $20 each; some more some less. Priced in gold a tire was 20/35 = 4/7 = 0.57 oz. So today, just recently I paid over 100$ per tire; where as I should have paid over a 1k$ each. SO tires have gotten 90% cheaper. It’s the value of money that obscures our vision.)

I want Americans to have cheap tires so they can spend their money on other needs and wants.

If it means the tire industry has to go to China, all well and good.

If the Chinese are so dumb as to give us tires for worthless green pieces of paper, great!

The market will peacefully decide what gives us the most bang for our buck. With out a politician “helping”.

Argh!

—30—


MONEY: Financial planning with old memes

Sunday, October 21, 2012

http://www.businessinsider.com/the-coming-retiree-crisis-2012-10

Take Action Now To Prepare For The Great Retiree Crisis

Jeff Voudrie, See It Market | Oct. 10, 2012, 8:30 AM

***** begin quote *****

The financial planning community has largely relied on assumptions regarding equity, debt and inflation percentages that have been experienced over the last 30 years.

There are 3 problems with these assumptions:

Equity returns the last 30 years have been extraordinarily high as a result of the longest and greatest Bull market in the history of U.S. stock markets. Accordingly, many financial plans used projections that assumed equity returns of 8-10% a year.

Debt returns over the same period are equally skewed. Remember the double-digit interest rates of the 1980’s? In 1989, as a young broker, I was selling 30-year TVA bonds yielding 10%! Financial plans the last 5-10 years have used interest rate assumptions around 5-6% a year.

The scenarios that led to the historic markets the last 30 years are very unlikely to EVER be repeated in today’s retiree’s lifetime. And those who are taking distributions based on these outdated assumptions may soon run out of money.

For instance, let’s assume that someone retired 5 years ago at age 60 with a $500,000 investment portfolio. Based on financial plans popular at that time, the retiree is taking $2500 a month in distributions—money they need to maintain their current standard of living. Since the plan anticipated the ability to average a 7% return on a portfolio with close to 50% in equities, the retiree expects to be able to take those distributions and never run out of money.

Adjusting those assumptions based on what many believe resembles more reasonable assumptions going forward requires decreasing the rate of return assumption for a similar-risk portfolio to around 4% and increasing the inflation assumption from 1-2% a year to 3-4% a year (which may still be too conservative). Suddenly, the portfolio that should last forever is now projected to be exhausted in only 16.8 years! That means that the entire nest egg and what it earns cannot sustain the current withdrawal rate. Since the retiree started the withdrawals five years ago, now they are down to 11.8 years—running out of money around age 76!

***** end quote *****

Clearly, the political class has screwed up the American economy.

Pity the poor, the elderly, the middle class, those on fixed income.

Inflation is grossly understated by the “official” stats.

Are we headed to be like Europe or pre-WW2 Germany?

Clearly, everyone needs to update their financial plans.

I’ve recommended to my turkeys that they adjust their “money reserve requirements”.

Everyone better plan to work for a longer time.

— 30 —


MONEY: PT is less than AU?

Thursday, October 18, 2012

KITCO Metals quotes

 

 

Take a look at the price of platinum versus gold.

What does this signal?

Price manipulation in the commodities markets in advance of the election?

Wonder when we’ll hear about the derivative contracts that are used to move the market.

Argh!

—30—


FUN: Luddite submits a “gas” joke!

Saturday, October 13, 2012

Every once in a while, Luddite comes up with a good one!!!

LUDDITE GAS PRICES

 

Yeah, and there’s no inflation!

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MONEY: How can anyone not count food and gas in the CPI?

Sunday, February 12, 2012

http://www.veteranstoday.com/2012/02/05/hows-that-change-working-out-for-you

How’s that “change” working out for you?
Sunday, February 5th, 2012
Posted by Ed Mattson

*** begin quote ***

These government “number slingers” are the same bunch that tells you the Consumer Price Index increased 3.0 percent before seasonal adjustment to end 2011. Let’s see… 3% inflation. Do you really believe that? Have you been shopping lately? Have you purchased gasoline or diesel for your vehicle so you could go to work (if you still have a job)? Oh, that’s right.  THEY DON’T COUNT GAS AND FOOD IN THE INFLATION RATE!  I guess we don’t need food or gasoline.

In most families the women do most of the grocery shopping right? Men usually aren’t always up to current grocery store prices. Next time anyone talks about politics and how things are going, just ask them if they have purchased ten pounds of potatoes this past year, or stopped in at a gas station.  In 2009, 10 lbs of potatoes cost about $3.50 in Western Michigan (about $3.00 at Wal-Mart). Today the cost is over $5 any place you want to shop. Gas was $1.79/gal when Obama’s entourage slithered into Washington and today, down at the local discount gas station here in North Carolina, it’s $3.59. Is it any wonder they DON’T CALCULATE FOOD AND GAS INTO THE CPI?

*** end quote ***

Excellent point. If they did then they’d have to give a COLA to all the old folks.

It’s like the scam with ZERO interest rates by the FED. That keeps Uncle Sam’s 15T$ debt as a near zero expense.

When do “We, The Sheeple” wake up?

When does the World wake up?

You’ll know the scam is over when we have to pay for oil in gold or someone else’s national currency.

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MONEY: Confiscation Through Inflation

Thursday, February 2, 2012

http://www.youtube.com/watch?v=DObOzOMhXvE&feature=colike

Confiscation Through Inflation

Uploaded by DollarDazeDotOrg on Dec 8, 2010

Through continual issuance of the currency, the U.S. dollar has depreciated in value when compared to gold.

# – # – #

Spot on!

It gets even worse when you consider the debt being run up. It can never be repaid.

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MONEY: No meaningful way to save

Sunday, January 29, 2012

http://www.forbes.com/sites/charleskadlec/2012/01/23/gingrich-the-gold-standard-and-the-florida-primary

ForbesOp/Ed|1/23/2012 @ 4:33PM
Gingrich, The Gold Standard, And The Florida Primary Charles Kadlec, Contributor

*** begin quote ***

There is no meaningful way to save for your retirement, for your children’s education, or for the future if you don’t know what the dollar will be worth when you will need to spend it.  That makes us insecure and more dependent on government.  Sound money — a dollar that can buy the same amount 10, 20 or 30 years from now — increases our ability to take care of ourselves, our families and to be far less dependent on government.  That goes to the heart of our ability to live in liberty.

The gold standard also reinforces the constitutional limits on the power of the federal government.  When the dollar is linked to gold, the Federal Reserve cannot finance federal government deficits by printing excessive amounts of money.  If it were to try to do so, holders of dollars could over-rule the Fed by turning in the extra dollars for gold, forcing the Fed to reverse its policies.  Except in times of war, the Federal budget deficits were tiny.  From 1947 to 1967, they averaged just 0.1% a year.  In today’s economy, that would be the equivalent of $15 billion.

Finally, making the dollar as good as gold, and restoring gold to the center of the international monetary system, will give the Unites States an enormous boost in soft power.  According to a recent study by the Bank of England, when compared to even the flawed, post World War II gold standard, the paper dollar standard has been a disaster whose true dimensions have been disguised by the time over which it has been inflicted on people all over the world.   Since 1971, real per capital growth rates have been cut by 1 percentage point a year, even as world inflation increased 1.5 percentage points to average 4.8% per year.  Meanwhile, the frequency and severity of economic downturns have increased, as have the number of banking crises.

*** end quote ***

As far as I know, Gingrich doesn’t support a Gold Standard; only Ron Paul wants to start the process. And, it would have to be a process. A complete process of unwinding the “Era of Big Government”.

There’s a TV commercial on about the old couple at the bank being congratulated about their retirement. The teller is counting out blank pieces of paper. How true is that? In my mind, very.

Social Security was sold to “We, The Sheeple” as “insurance”. Unlike real “insurance”, the politicians and bureaucrats took the “contributions” and spent them on the welfare / warfare state. And, put IOUs in the “lockbox”. What a joke! A fraud. At least Ponzi didn’t force people to participate. If MetLife did what the Gooferment did, all the executives would be jail. The politicians and bureaucrats collect a big Gooferment pension for <synonym for the act of procreation in real time> us.

And, Social Security was never supposed to be taxable. And, inflation adjusted. Until the Gooferment decided that energy and food shouldn’t count towards inflation. Right!

And, good luck saving on your own for your retirement. The FED, to hold down the Gooferment’s borrowing costs, has by diktat keeps interest rates at zero. Or pretty close to it.

401Ks and IRA were introduced to induce savings for retirement and take pressure off Social Security. Since “it was never intended to entirely fund a person’s retirement”. That would surprise “We, The Sheeple” circa 1935.

But then a lot would surprise them!

So, perhaps, youngsters might be better off saving for their retirement in gold or silver bullion coins.

Remember that in ancient Rome two gold coins would buy a fine man’s outfit. Pretty much the same today.

Remember that in 1964, three silver dimes would but a gallon of gas. I can PERSONALLY attest to that. And, they cleaned your window, gave you a free class, and trading stamps. Today, those three silver dimes would be worth about SIX DOLLARS; enough for almost TWO gallons of gas.

So, what has changed?

The dollar!

So returning to that old couple at the bank with a lifetime of paper savings. They’ve been defrauded by society. Hard to imagine, but visualize if they’d put those savings into gold bullion coins that they kept in a kitchen pot. Each week, instead of “saving” with paper, they put some gold or silver away in that pot. Hard to imagine that they would nt be better off.

Finally, returning to Gingrich, I agree he could ignite a fire of reality. But, that’s not going to happen. Because at the end of the road, these guys are all suits who want to control people.

Vote Ron Paul. A return to sanity begines with a single step.

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LIBERTY: Gooferment fails to protect property rights

Friday, January 27, 2012

http://lewrockwell.com/napolitano/napolitano37.1.html

How Much Economic Freedom Do We Have in the United States?
by Andrew P. Napolitano

*** begin quote ***

The root of economic freedom is the recognition of the right to own private property. That includes the right to utilize it unmolested, to dispose of it without anyone’s permission and to exclude anyone from it, even the government. Suffice it to say, no American president since the advent of the income tax and the Federal Reserve 100 years ago has fully accepted or meaningfully defended that right. The more the government extracts in taxes and the more it inflates the money supply, the more it rejects and assaults property rights.

*** and ***

There is not a single example in human history of central economic planning producing more prosperity than a free market. The framers understood that. That’s why they wrote a Constitution that prohibited an income tax, forbade the states from interfering with contracts, and prevented the feds from taking life, liberty or property without due process. All those constitutional prohibitions have been nullified by amendment or disregarded by consensus.

*** end quote ***

From the diktats (i.e., what the politicians call “laws” and “regulations”) that deprive folks of their property, to the taxes and inflation to just steal their wealth, we have no property rights.

In New Jersey, the real estate property tax mostly to support the Gooferment Skrules turns owners into defacto “renters.

How can you think we are free?

# – # – # – # – #  2012-Jan-20 @ 09:32


GOLD: Unfunded liabilities

Monday, January 9, 2012

http://lewrockwell.com/spl3/gold-chart-walk-2012.html

Gold Chart Walk 2012
by Morris Hubbartt

*** begin quote ***

Unlimited government requires unlimited funding. The unfunded liabilities of the USA are staggering. Over the next 20-25 years there is probably a gigantic $75 trillion unfunded liability problem for the US government. Think of the move in gold against the dollar with a debt of $15 trillion. Can you imagine the action in gold with a debt five times the current size?

The United States could be headed towards decades of dollar devaluation. With all of the problems in Europe, why isn’t the euro hitting new lows? Why can’t the dollar mount a real rally, instead of this tiny bit of strength?

The answer is that the dollar isn’t really very strong at all. If America goes into a crisis like you’ve just seen in Europe, the fall in the dollar could dwarf the euro’s fall, because America is the largest debtor nation in the history of the world.

The nature of all fiat currencies is to be competitive, with each currency group looking for an advantage in trade, and more importantly, an advantage in debt relief for the governments that issue these currencies. Fiat currencies are designed to be depreciated over time. Buy Gold in this time of gold price weakness, because your opportunity won’t last forever.

*** end quote ***

Regardless of how you feel about gold — the magic mineral, an obsolete anachronism, or something in between — this quote should strike fear into the heart on anyone who understands “real life”.

As if “unlimited government” was NOT scary enough, “unlimited funding” should be down right terrifying.

The national debt stands at 15T$ and growing every second.

Then you hit the guesstimate of 75T$ of unfunded liability, which should knock your socks off. It does mine.

How did “we” get in this mess? Even a crooked accountant, with two sets of books, has one that tells him the truth. Even Bernie Made-off knew he was “underwater”. We don’t even have ONE set that tells us the truth.

“Jobs created or saved”, “unemployment” stats that don’t account for the “99 week”-ers, and an inflation rate that doesn’t include food or fuel.

These are the statisticians that you’re looking to tell you “the truth”.

Can you even handle “the truth”?

“The truth” is that we’re going to be like Japan, the Soviet Union, and Zimbabwe all rolled into one.

As one of those war movies said: “Tell everyone to get small in their holes because trouble is coming.”

Argh!

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MONEY: Rich people buy new cars. Poor people do not

Wednesday, January 4, 2012

http://dailyreckoning.com/the-corruption-of-america

The Corruption of America
By Porter Stansberryleadimage
12/21/11

 

*** begin quote ***

 

All we’ve done is convert the government’s nominal GDP stats into a fixed currency value that’s based on real-world purchasing power. The fact is, our data are far more accurate than the government’s because they represent the real-world experience. That’s why our data are far more closely correlated to other real-world studies of wealth in America.

Consider, for example, annual sales of automobiles. Auto sales peaked in 1985 (11 million) and have been declining at a fairly steady rate since 1999. In 2009, Americans bought just 5.4 million passenger cars. As a result, the median age of a registered vehicle in the U.S. is almost 10 years.

Our data shows that real per-capita wealth peaked in the late 1960s. Guess when we find the absolutely lowest median age of the U.S. fleet? In 1969. At the end of the 1960s, the median age of all the cars on the road in the U.S. was only 5.1 years. Even as recently as 1990, the median age was only 6.5 years.

Rich people buy new cars. Poor people do not.

 

*** end quote ***

 

Once again we have the “underground” confirming what we know in our gut, the country is getting poorer day by day.

 

“Penny candy”! Remember that? Like the recent Ron Paul point about 1964 dimes and gas, “penny candy” is a similar point.

 

One tenth of one single silver dime in the Sixties would get you one or more pieces of loose candy at the cash register. (Amazing in light of today’s focus on germs and health hazards that anyone survived.) Fast forward to today. That silver dime is worth about two of today’s dollars. So a tenth is about 20 cents. “Penny candy” is sold in quarter “gum ball” dispensers. So all that’s changed is the value of the money with respect to the  goods available.

 

Who wins in this inflation? No surprise there. The politicians and bureaucrats!

 

Argh!

 

# – # – # – # – #

 

 


MONEY: Just take two zeroes of FRBies?

Sunday, July 17, 2011

http://bigpeace.com/nmachiavelli/2011/07/15/irans-economic-spiral-country-to-cut-4-zeros-off-of-national-currency/

Iran’s Economic Spiral: Country To Cut ‘4 Zeros’ Off Of National Currency

Posted by Niccolo Machiavelli Jul 15th 2011

*** begin quote ***

TEHRAN — Removing four zeroes off the national currency will not have any inflationary impact on the economy, the deputy governor of the Central Bank of Iran, Hossein Qazavi, said here on Wednesday.

*** end quote ***

Is this the vision of how it could happen here?

Old dollars to new “improved” Federal Reserve Bank Notes. They could have contest to who would appear on the bills. Big winners those who have change.

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MONEY: The US$ is worth less; dramatically less

Wednesday, January 12, 2011

http://seekingalpha.com/article/244020-coins-vs-bags-comparing-two-options-in-physical-silver

Coins vs. Bags: Comparing Two Options in Physical Silver – Seeking Alpha

*** begin quote ***

The 90% Silver Bags consist of coins — dimes and quarters — that were once used as money in the United States. In 1964, one could take a dime to the store and buy a loaf of bread (if you are old enough to remember). Today, that same 90% silver dime is worth $2.10, enough to buy a loaf of bread.

*** end quote ***

Interesting? It’s not that the cost of that loaf of bread has increased. It’s that the value of the money has decreased. Even though, I KNOW that, and I think I UNDERSTAND that fact, still concrete examples like this are a punch to the solar plexus. Leaves you sucking wind. By the same formula, I bout gas for 40¢/gallon. That equates to $8.40/gallon. So, gas has gotten “cheaper”! Argh! Makes me sick to my stomach. And, it’s only getting worse.

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RANT: How can you exclude energy and food?

Monday, December 20, 2010

http://online.wsj.com/article/SB10001424052748704828104576021262542609064.html?mod=djemalertNEWS

*** begin quote ***

News Alert from The Wall Street Journal

U.S. consumer prices barely gained in November, rising just 0.1% from the prior month, as energy prices saw their smallest increase in five months. So-called core inflation, which excludes energy and food prices and is closely watched by the Fed, inched ahead by 0.1%, the first move after three flat months.

The annual underlying inflation rate was 0.8%, well below the Fed’s informal target of between 1.7% and 2%. The central bank’s policy-making committee Tuesday signaled that it thinks core inflation remains too low–a key factor in last month’s decision to start buying $600 billion in Treasury bonds.

*** end quote ***

How can you exclude energy and food? Planing to stop eating any time soon? And, “energy” is in EVERYTHING that moves. Just between you and me, and the Western World, my gasoline price has gone up a dime in the last few weeks!

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MONEY: We need to return to Constitutional money — gold and silver

Wednesday, November 10, 2010

http://nicholasnigro.blogspot.com/2010/11/quantitative-easing-just-got-easier.html

Sunday, November 7, 2010
Quantitative Easing Just Got Easier
Nicholas Nigro

*** begin quote ***

This roundabout way of printing money will, apparently, guarantee only one sure thing that you can take to the bank: the further weakening of the once Almighty Dollar and a corresponding rise in critical commodity prices because of it. Translation: From the grocery store to the gas pump, those who can least afford it will pay more and more for basic necessities. But I imagine the government measuring sticks will continue to tell us that we are living in a period of very low inflation for the foreseeable future, and that we should be more concerned about the prospects of deflation.

*** end quote ***

What “they” have fooled everyone into thinking is that a “dollar”, a “Federal Reserve Note”, that green piece of linen cotton “paper”, is actually worth something tangible. In elementary economics, we learned that humans transferred from barter to money because money had certain useful characteristics. Most notably it permitted the butcher to trade directly with the candlestick maker without trading with the baker first. From whence all the good things that the division of labor provides — specialization.

Quoting from my favorite novel (Mine!) “Money is a matter of functions four, a medium, a measure, a standard, a store.” He repeated that four times like poetry. “Six Characters in Money: Portable – Durable – Divisible – Uniformity – Limited Supply – Acceptability.” CHURCH 10●19●62 (Vol 1) 978-0-557-08387-9 page 110

“We, The People” have forgotten that. As well as the Dead Old White Guys Constitutional admonition that only gold and silver should be money. Along with a bunch of other stuff, like the Bill of Rights, Declaration of Independence, and a general dislike for oppressive Gooferment.

So, now, the politicians and bureaucrats are riding high on the hog and the taxpayers have been laid low. Like the host of a parasite weakened to near death.

Gooferment is the meme that kills people. It’s time to awaken from our economic nightmare and throw out the FED and return to “Constitutional money” — gold and silver. And watch the global economy rebound when the world isn’t paying the “inflation tax”.

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MONEY: Competing currency is an inflation hedge

Thursday, July 29, 2010

http://www.connectmidmichigan.com/news/story.aspx?id=481793

Competing currency being accepted across Mid-Michigan
by Dan Armstrong
Posted: 07.12.2010 at 8:13 PM

*** begin quote ***

Jeff Kotchounian says he’s used this Ron Paul half troy ounce of silver to get $25 worth of gas from a local station. While the government and banks don’t accept them, many others do. So why is there interest in these competing currencies?

*** end quote ***

Pretty simple.

INFLATION!

The Federal Reserve Bank is going to enable the politicians and bureaucrats to inflate their way out of the debt.

Of course, those on fixed income, the poor, and anyone with savings in dollars will be totally screwed.

A silver round may make the difference between eating and not.

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MONEY: The Pope should lead the way to “honest money”

Tuesday, July 27, 2010

http://www.catholicnewsagency.com/news/vatican-coin-now-in-circulation/

Vatican coin now in circulation

*** begin quote ***

Vatican City, Jul 23, 2010 / 05:02 pm (CNA/EWTN News).- Coins bearing the image of Pope Benedict XVI are now in open circulation within Vatican walls. As of this month, Vatican visitors will find that 50 cent pieces are being given as change at places such as the gas station, pharmacy and post office.

*** end quote ***

Imagine the impact on the world if the Pope led the way to “honest money”?

Hard to imagine.

Gooferments, around the world, steal the people’s wealth by inflation. They claim the “King’s right”, the “Soverign’s duty”, or the “Tyrant’s Treasure Chest” to produce “honest coins” or “money”. (Like the marketplace could not figure out what “money” was “honest” on its own. Gresham’s Law http://en.wikipedia.org/wiki/Gresham%27s_law would demonstrate whats good and what’s not, without any “inspectors”. The Gooferment steals the wealth by printing more paper money, called “fiat currency”. Fiat because it has value because the Gooferment says it has value. No conflict of interest there.

Now here’s why the Pope should care. Inflation, the printing of “extra” money, impoverishes the poor, middle class, savers, and old age pensioners. That’s why he should care.

Inflation results in higher prices in the marketplace. Wages lag inflation. If they rise at all, it won’t be proportional. Investment, similarly, never “catch up”. So pensioners get hit with a triple whammy: their pensions are usually fixed and so don’t go as far as they used to, their savings are eroded, and prices go up.

So that’s why the Pope should act.

The Church has always been the traditional refuge for the serf from the abuses of the King. (I’ve seen enough Robin Hood and Zorro movies to know that.) It’s time for that to happen again.

Imagine if the Pope ordered all Vatican coinage to be in gold or silver?

First impact, that they’d be selling like hot cakes to the tourists. Then would come the folks overseas. As an example of “honest money”. The Vatican could even show a profit; much more than what they rip off coin collectors for meaningless proof sets.

And the little people would have money that could not be stolen silently by the King’s printing press.

Even the most illiterate dumber-than-a-rock parishioner could see the benefit of using the Pope’s money for savings.

It would be the ultimate control on the power of the King — the Gooferment.

IMHO one of the reasons, or possibly THE reason that Old Sadam got knocked off his horse was NOT wmd; the tyrant had the audacity to suggest that he wanted to be paid for his oil in gold. Rumor was that he was months away from starting an oil exchange denominated in gold. Remember the “Gold Dinar”? Not that he had a religious bone in his tuckus, he was pushing the religious aspect too. Hey, he realized that the FED was going to “tax” him on his dollar holdings. Silently. With no muss ‘n’ fuss, as the printing presses kept rolling out dollars.

So, Holy Father, the little people of the world would like you to end the tyranny of the King, who steals their little bit of wealth, give us honest money. If you truly believe in the workman being worth his wage, then make sure he get it in something that is worth something. Honest money is Godly money. And, slapping on a few saint’s pictures on the coins wouldn’t hurt morality either.

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GOLDBUG: a store of value

Monday, July 19, 2010

http://economist.com/node/16536800

Gold
Store of value
Low returns on other investments and fears about the world economy have caused the price of gold to soar. Don’t count on its continued rise
Jul 8th 2010 | Delhi and london

*** begin quote ***

The appetite for gold arises partly from the paltry, uncertain returns from more conventional investments. Gold’s main drawback is that it pays neither a dividend, like a share, nor a coupon, like a bond, nor a rent, like property. But monetary policy has been keeping official interest rates, and thus the opportunity cost of holding gold, low and seems set to do so for a while. The yields on the government bonds investors regard as safest, notably America’s and Germany’s, are also thin. Equity markets are weighed down by worries about economic growth. Investing in property, which lay at the root of the financial crisis, requires a boldness that many still lack.

At the same time, the looseness of monetary policy has made many investors fear the eventual resurgence of inflation. The wretched state of many governments’ finances makes some worry about states’ ability to repay their debts—or about the temptation to inflate them away. Banks’ exposure to sovereign debt and to a still-fragile world economy adds another layer of concerns. And when all governments would like their currencies to be weaker rather than stronger, whose paper money do you trust? Hussein Allidina, head of commodities research at Morgan Stanley, reckons: “Gold looks better every day with growing sovereign risks.”

*** end quote ***

Over the past few years, the market’s net return has been zero or maybe negative depending upon the interval, so gold and siler look good.

Cheap insurance.

If inflation spikes, it’ll really pay off.

Depending upon what loon you listen to predicting the price of gold, it could be essential.

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GOLDBUG: Just because there’s an obvious bias, doesn’t mean what being said is wrong

Tuesday, May 18, 2010

http://www.kitco.com/ind/GoldReport/may32010.html

*** begin quote ***

In terms of preserving the purchasing power of your assets, the best thing I can think of is physical gold. That’s worked over the millennia. I’m not per se a gold bug. It just happens to be a circumstance in which it’s the cleanest asset around for that. You don’t need to put all your assets into gold, but hold some. Hold some silver. I’d look to get some assets out of the U.S. dollar and look to get some assets out of the U.S. When I say outside of the U.S. dollar, again, I look at the Canadian dollar, Australian dollar, Swiss franc in particular. I think they will tend to do particularly well, whereas the U.S. dollar is going to become effectively worthless.

As the dollar breaks down, you’ll also likely see disruptions in supply chains, including shipments of food to grocery stores. People should consider maintaining stockpiles of basic goods needed for living, much as they would for a natural disaster. I sit on the Hayward fault in California. I have a supply of goods and basic necessities in case something terrible happens—natural or man-made—that will carry me for a couple of months. It may take that long for a barter system to evolve, which I think is what you’re going to end up with; at least until a new currency system is reorganized and you get a government that’s able to bring its fiscal house into order. No currency system in the U.S. is going to work unless the fiscal conditions that drove it into oblivion are also addressed.

*** end quote ***

Ignoring for the moment Kitco’s inherent bias, (just because they’re biased, doesn’t mean they are wrong), it would seem that buying 1,000 ounces of silver rounds (about 19K$) is good “inflation insurance”. Remember Zimbabwe used silver, gold, and American dollars when their currency collapsed. A lesson form the Mormons about food storage; it’s be nice to keep a year’s worth. And, an urban yute discouragement device or two with a sufficient of individual reminders to go away, and you have a nice “insurance police” in case crazy as a loon Ferd is right once in his life. Remember forewarned is fore armed. Or, four armed. As I see it, fjohn

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MONEY: Sneering at Ron Paul and “End the Fed”

Friday, January 8, 2010

http://curiouscapitalist.blogs.time.com/2009/12/29/visiting-ron-pauls-fed-free-utopia/?xid=rss-topstories

Visiting Ron Paul’s Fed-free utopia
Posted by Justin Fox
Tuesday, December 29, 2009 at 2:22 pm

*** begin quote ***

As for his welfare state argument, there’s surely something to it, but not nearly as much as Paul seems to think. In the post World War II era, Germany has followed much more of a hard-money (that is, Ron-Paulish) line than the U.S., yet it has a much bigger welfare state. So the growth of government can be a political choice, not just the result of the machinations of central bankers.

*** end quote ***

It’s hard to imagine the Germans creating their welfare state WITHOUT a fiat currency. That’s what enabled them to create the state without seizing the nation’s wealth silently. If there was a non-fiat monetary base (i.e., gold or competing currencies), then the German politicians would have had to inflict pain on the wealth holders to acquire the funds to give away. With a fiat currency, they can silently inflate away wealth without taxes.

Note that gold isn’t necessary. Repealing the legal tender laws would allow the folks to use a non-inflating alternative.

From times long past, sovereigns always debased the currency to serve their needs. I cite the French Franc from Louis 1 to 17. And rest my case.

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MONEY: M note; not C note

Tuesday, October 27, 2009

http://www.bloomberg.com/apps/news?pid=20601039&sid=aY6fyCTnmgh0

Dollar’s Doom Puts a Face on New $1 Million Bill
Commentary by David Reilly

*** begin quote ***

Oct. 23 (Bloomberg) — Forty years ago, the U.S. government said the $100 bill would be the highest-denomination note. With the Federal Reserve now trying to print its way out of the financial crisis, it may be time to revisit that decision.

*** end quote ***

Guess we’ll need trillion dollar notes like Zimbabwe!

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GOLDBUG: Never ask a gold bug for comments!

Wednesday, October 21, 2009

http://tslrf.blogspot.com/2009/10/buying-gold.html

Friday, October 16, 2009

Buying Gold?

*** begin quote ***

We may or may not face serious inflation but I would like to hold as much gold as possible either way. It might cost me a couple bucks more for the same thing but worst cast I will just laugh about that when I buy for less in a few months.

Thoughts?

*** end quote ***

Gold — bullion; not “collectibles” — currently has a 10% premium. Silver seems to be about 12%. (Palladium is an “interesting” play; rarer than platinum, but priced 60% below gold?) Unfortunately, that’s a lot of “commission” to pay. (A loan shark’s vig?) In the past it was as low as 2%. A mutual fund with a 10% load would be found unacceptable; why should we treat bullion any different. Hold it for 10 years and it doesn’t feel as bad.

The other consideration is what are your protecting against. In an “orderly” inflation scenario, other investments may “surf” the riding tide of inflation (i.e., real estate; stocks). In a “disorderly” inflation scenario (e.g., hyperinflation like Rwanda or pre-WW2 Germany), then you want the bullion coins in your possession. (Or, where you can get to them in a pinch.)

Bottom line: In hyperinflation, bullion coins will overcome the premium in a heartbeat. But what’s the probability of it happening? Tough call.

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MONEY: When the shoe drops

Tuesday, September 29, 2009

http://www.lewrockwell.com/rozeff/rozeff313.html
*** begin quote *** My bet is this. One fine day the bottom is going to drop out of the dollar. There will be a swift and sharp order of magnitude change. The recognition of the problems will reach a point at which it starts to go exponential, not just in terms of people being vaguely conscious that things are not right, but in terms of actually taking action to protect themselves. Foreign central banks may be reluctant to dump their dollar securities and think it better to liquidate them slowly so as not to drive prices down and break the market, but when they observe that others are running for the exits, they will run too.*** end quote ***
I agree that there will be a “run”. But it will look differently.
The Chinese are leading it NOW. The recent swap of Chinese held dollars for IMF gold, their “strategic reserve” acquisition program, and their stated “strategic rebalancing of their portfolio” is happening now.
Since there is nothing backing the US dollar, there is no “bank” to “run” on. So by definition, it will look differently than the Great Depression.
IMHO, (and I’m an injineer by education and know it all blogger by avocation), the “run” is happening now.
US borrowing is in trouble. I think we are seeing the FED quietly, carefully, and with malice aforethought manipulating with the assistance of the bailed out Wall Street firms manipulating the Treasury bond sales. They are selling debt at what appears to be record low levels. But by using shills, they are quietly buying it back from their accomplices on the street after the auction.
That’s why the FED coudn’t stand an audit as Ron Paul and others have asked for. It’s a Ponzi scheme.
So, what will the run look like?
Foreigners will exit the Treasury market. (Didn’t the Chinese students laugh at Geithner?) The dollar will tank against foreign currencies. Commodities rise in dollar terms, but not as much in other currencies. The world “readjusts” to a trading pattern that excludes or minimizes the US since everything will be much more expensive in dollars that no one wants.
Here at home, the fixed income people are screwed — the old, the retired, the elderly, the “savers”. The elite political class continues to spend other people’s money which is fast drying up. (Without access to foreign credit, all they can do is run the printing press.) Hyperinflation will destroy the dollar. As the welfare spending drops, there has to be riots in the inner cities. As the crisis expands, warfare spending has to drop. Eventually the government has to default on its debt. Unfunded liabilities like social security are defaulted on as well.
I hope that commodity money reemerges from the “return to barter” and the chaos of the “American default” like Zimbabwe. And, we can begin the long climb back up.
It’s going to be messy.fjohn


MONEY: Coins may be an inflation hedge?

Thursday, August 13, 2009

http://www.survivalblog.com/nickels.html

Mass Inflation Ahead — Save Your Nickels!
By James Wesley, Rawles — Editor of http://www.SurvivalBlog.com
Updated, April, 2009

*** begin quote ***

In five years, the circulating nickel as we now know it, will be history, and it will be treated with nearly the same reverence that we now give to pre-’65 silver coinage.

*** end quote ***

Wonder if I buy some bags of coins from TD. They have the free coin sorter. Hmm.

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