US Mint Gold Coin Price Decrease Likely
As a consequence of the US Mint's new pricing policy, the prices for gold coins will likely decrease this week.
Will collectors use this as an opportunity to buy US Mint gold coins?
http://mintnewsblog.blogspot.com/200...se-likely.html
Gold This Week . . . from The Privateer
The Return Of "Risk Appetite"
Last week, we talked about the huge rally in global stock markets over the past month. This week, coupled with increasing talk - especially in the US - about the "end" of the recession, we have seen a surge of reports that investors are now reassured by the stock market and that their "risk appetite" is returning. One major piece of evidence for this is, of course, the falling $US Gold price. As you know, spot future Gold could not break back above the $US 900 level early in the week and then fell away to close on April 17 at $US 867.90. That is its lowest spot future close since January 22. For the record, the lowest spot future close so far in 2009 was $US 805.20 - reached on January 15. That's right, Gold has moved in an almost $US 200 range so far this year.
In reality, of course, there was very little in the way of "risk appetite" over the 25 years (1982-2007) when paper assets - stock market assets in particular and real estate in the later stages - were in their great boom. Most of the participants in these markets didn't see themselves as taking risks at all. When a market keeps setting new (nominal) highs for a quarter of a century, an attitude becomes entrenched. And once entrenched, it takes a HUGE amount of contrary evidence to destroy it.
A recent article in Bloomberg illustrates this point very well. The Boston College "Center for Retirement Research" has recently shown that a median-income worker who put money into an all stock retirement plan over the decade ending on March 31, 2009 would end up with 26 percent less than he or she had contributed. This has changed the investing habits of most people hardly at all. In the fourth quarter of 2008, 6.1 percent of retirement fund participants changed their asset allocation. This was up a mere 0.3 percent from the fourth quarter of 2007.
The Dow hit its all time high in the fourth quarter of 2007.
Nor has it changed the asset allocation of most of the big US retirement or mutual funds. To give one example, the Vanguard Group still maintains a 90 percent weighting in stocks for all investors under the age of 42. And that is after the already mentioned 26 percent haircut suffered over the past decade. The old mantra - "in the long run, stocks ALWAYS go up" - is not going to go away without a fight.
Even more to the point, it is an all but universal attitude in the US and in many other "developed" nations that stock market investments are actually "savings". When asked about the implications of the Boston College findings, the director of the college center which compiled the data said she was not surprised that most investors were still feeding their 401K plans as before. "What is the alternative", she said."Are you not going to save at all?"
Compare, for just a moment, the alternatives to putting one's "savings" in two other types of asset rather than stocks. Someone who had merely held cash in hand - earning no interest at all - would be 26 percent better off. Someone who had bought Gold ten years before March 31, 2009 would have seen their holdings appreciate from $US 287.80 to $US 922.60. That's an increase of 220.6 percent. Here's the scorecard, using $10000 as a constant.
In stocks: $10,000 on March 30, 1999 becomes $7,400 on March 31, 2009
In cash: $10,000 on March 30, 1999 remains $10,000 on March 31, 2009
In Gold: $10,000 on March 30, 1999 becomes $32,060 on March 31, 2009
Show this simple list to almost anyone who is dutifully keeping up his or her monthly contributions to a mutual fund or 401K fund which still allocates 80-90 percent to the stock market and they would not believe it. Don't forget, we are talking about a DECADE of comparative returns here, this is not a short term situation. Yet the attitudes of most people have not changed at all from what it was when stocks were peaking in early 2000 or peaking again in late 2007. They still see paper assets as the only viable means of either getting ahead or saving. The halving of stock indices and the much worse performances of many individual stocks since late 2007 has not dissuaded them. They did not sell out when stocks fell nearly 50 percent in the US last year. They did not sell when they plummeted even further in the period up to March 9 this year. And now, six weeks later, their "risk appetite" is returning??
They never had a risk appetite. They were sure they were onto a sure thing. Most of them still are. If anything, they are even more sure of it since now they believe that the government will always be on hand to bail out anyone or anything that gets into any kind of financial grief. It is a sad and tragic phenomenon to watch unfold.
US Treasury funded debt is now on the verge of being 100 percent of (real) US annual GDP. No nation has ever recovered from such a position without a gut wrenching valuation collapse. Even though the Fed cut official US rates to effectively ZERO last December and announced plans to directly buy (with US Dollars created out of thin air) Treasury debt a month ago, longer-term Treasury bond yields are inexorably rising. On April 17, the yield on the 30-year bond hit 3.8o percent. When the Fed cut rates to ZERO it was just over 2.5 percent. The yield on the ten-year bond has gone from 2.10 percent to 2.95 percent over the same period. Somebody out there is certainly not regaining their "risk appetite".
It is impossible to know how long US and world stock markets will continue their rally. It is crystal clear, however, that most holders of paper assets have sold little if any of them and that this rally has seen many of them buy more. No bear market ever ends before the majority of investors give up and sell in a panic. There has been no vestige of that yet in this paper bear market. That means that it has a LOT more to fall. And somewhere in that fall, the "no risk" attitude of those who have spent their lives watching paper assets go higher is going to crack right down the middle. Until then, Gold is going cheap.
Gold is good insurance; Gold derivatives are better investments
The chat here about gold (physical metal) would be better informed in the context of insurance than investment. Looking at it from an investment point of view misses the objective of owning gold. Invest and trade in Gold derivatives (options futures ETF's stocks etc) if you will, but discussing physical precious metals like they're an easily traded investment asset class isn't helpful.
BAA
From Gold This Week 24/04/09 at The Privateer . . .
The Value Of Money
No we are not talking about the fact that one can buy item A for $100 or item B for $1000. We are talking about something far more fundamental. We can start by making a few basic observations. First, money can perform its function only in a situtation where property rights are recognised and scrupulously upheld. There are two types of economic transactions - direct exchange or barter or indirect exchange with the use of money as the MEDIUM of exchange. Please note the term common to both types of transaction - the term exchange. By definition, an exchange presupposes three states of affairs. First, that each potential party to the exchange OWNS the good, service or sum of money put into the market. Second, both parties to the exchange can without let or hindrance of any kind choose to exchange or refrain from exchanging. Third, that when the two parties DO choose to exchange, each party values the goods received MORE THAN the goods offered in exchange.
The value of money lies in the fact that it makes the process of exchange almost infinitely easier and more efficient than would be the case if there was no medium of exchange. By doing this, it enhances to the maximum the institution of private property, a principle without which no free or prosperous civilisation can come into existence, let alone grow. Before one can exchange, one must have something to exchange. Before one has something to exchange, one must employ the effort, energy, knowledge and most important time necessary to produce it. The triumverate - life, liberty and property are indissoluble. To understand the true importance of property, only one simple question is required: "Who owns my life?"
In reason if not always in reality - slavery has a long and sordid history - there is only one answer to that question. And there was a time not so many years ago when, at least in certain parts of the world, the right to life, liberty and property was acually upheld. The nations which upheld it had certain features in common. There was no (or extremely minimal by modern standards) income tax. There was no "welfare state". Government and its bureaucracies were small and, in the main, were instituted to defend the lives and freedom of their citizens. The extent to which these features held fast varied from nation to nation. But there was one feature which did NOT vary at all. All free nations before the outset of WWI were based on SOUND money.
Sound money - Gold (or Silver) has one vital attribute. Like other economic goods or the time, energy and effort needed to create them, money if it is sound cannot be "created" out of thin air. The value of - sound - money lies in the fact that no free nation can stand on anything else. Nor can any prosperity or any viable provision for the always uncertain future. And today, as prosperity is being destroyed and as the future becomes an ever more daunting prospect that few want to look at too closely, the value of money is being displayed as never before in our lifetimes. It is being displayed by the fate of what has taken its place.
To anyone who truly understands money, the antics of the world's governments and central bankers today would be comical were it not for the tragic legacy they hold for the future. Having destroyed any semblance of a rational price system, they are now pretending that the "valuations" of assets which are in reality valueless can be maintained by creating "money" out of thin air. Having debauched the money, they have now all but eliminated any reward for holding money while exhorting their citizenry to get off their behinds and start borrowing more of it. While watching unemployment skyrocket and tent cities spring up in their midst, they maintain that the path to prosperity is to consume what has not yet been produced.
And what is the ONE item of discussion and debate which they refuse to even contemplate, let alone address? It is of course the nature of the "money" which they are "borrowing into existence". Their contempt for the VALUE of money is shown by every new regulation they pass for its redistribution. And of course, it is shown by every new $TRILLION they conjure in an increasingly doomed attempt to prolong their power to control what people use as their medium of EXCHANGE! It is a sad fact today that most people see themselves as being dependent on government, when in reality the situation is in exact reverse. Government produces NOTHING.
Slowly but surely, more and more people all over the world are coming to realise that, having blocked off almost all the avenues which remain towards the production of WEALTH, about all governments are producing these days is "money". From that, it is but a short step to the realisation that the ONLY thing that gives this fiat money any facility at all is the government's power to force its acceptance and to ban anything else from being used as a medium of exchange. From that, it is a short step to the realisation that every new unit of "money" forced on us is impoverishing us still further.
There is only one cure for what currently ails the world's economies. That is the re-introduction of two things. The first is a proper respect for money. The second is a money worthy of respect. In all of history, only Gold has earned that respect. And, having earned it, it has never faltered in providing a sound money. The issue is as basic and as important as it has always been. You can't have a free country without a sound money.
Ultimately, there will never be a free and prosperous commonwealth until the principle of the separation of money and state has achieved the same status as has the separation of church and state. The government, in principle, has no business in meddling in either. And it is a moot point as to which form of meddling has resulted in greater human tragedies and disasters in history.
Gold this Week . . . from The Privateer
Attachment 1531
Here is a very ominous chart indeed. It will be familiar to all Privateer subscribers as being one of the charts we update with each new issue of the newsletter. Please note the far right column of "Os". This is the fall in the USDX which as taken place over the past week, sending the US Dollar well below the trading range in which it has been trading for most of the year. This week, the USDX lost 2.06 points or 2.4 percent. Most of that fall came on Friday, May 8 when the USDX lost 1.46 points. What happened to Gold on the day? Almost nothing, the spot future contract fell by $US 0.60. Longer-term Treasury yields were quiescent too. After rising precipitously for most of the week, yields on the Treasury's 10 and 30-year paper fell slightly on the day. And of course, over on the stock market, the Dow bounded upward another 165 points to a new post March 9 high of 8574.
Last week was the week of the "swine flu" distraction. This week, the whole thing has evaporated and the "economy" has come back onto centre stage. The reason for this is, of course, a plethora of "encouraging" numbers. While the latest US unemployment RATE is up - to 8.9 percent - job losses are reported to have fallen from an average of 700,000 in the first three months of the year to 539,000 in April. Three hundred million people in the US are asking each other - "do you know anyone who's been employed lately?" - with overwhelmingly negative results. But these figures are OFFICIAL - and as such, not to be either questioned or examined.
In another development, the major US banks have all passed the "stress test" administered by the US Treasury. Again, this is OFFICIAL. Any suggestion that the tests were specifically designed to be "passed" by the banks is not to be discussed by anyone. Certainly nobody on Wall Street would be so crass as to question them.
And so, we have the fatuous claim that the "green shoots" of economic recovery are now starting to poke into the sunlight above the detritus of the now soon to be nothing but a memory "recession". This must be true. All the government numbers say so. Mr Obama, Mr Geithner and Mr Bernanke say so too. And in case anyone has any qualms about the possible future implications of the $US TRILLIONS which have been thrown at the economy already, Mr Obama has recently declared that he has found $US 17 Billion worth of "cuts" which he is going to apply to his 2009-10 budget. That should fix everything.
Do you read the financial news? You should - one can estimate pretty closely the true situation from the lengths the powers that be are going to in order to hide it. It is tempting to conclude that the government and their sycophants in the financial system regard their "audience" as ready and willing to swallow literally ANYTHING. In reality, of course, they are stuck with their policies, from which they dare not veer, so they have no choice but to dress them up as best they can and hope that they can continue to be made palatable. The last resort is to rely on the old conviction that "you can't fight city hall", no matter how absurd their actions become. But the problem for the powers that be is that they have to "deliver", and on their present policies, that is impossible. You cannot "fix" a collapse in credit by refusing to value so called "assets" which are dependent on the continuing flow of this credit to have any value at all. Nor can you do it by throwing worse "money" after the bad has already been exposed as worthless. But you can destroy a financial system and a money with such policies.
This week, we have seen the two biggest markets in the world, the market for Treasury debt paper and US Dollars, take a severe hit. Treasury yields have been rising inexorably since the Fed lowered its rates to the vanishing point last December. This week, that rise accelerated. That proved too much for the exchange value of the US Dollar which plummeted this week. Gold did no more than "mirror" this US Dollar fall, it barely moved in terms of most other world currencies. In terms of some of them, the Gold "price" actually fell this week.
It has been said here many times but cannot be repeated too often. There is a gargantuan global consensus that the "price" of Gold in terms of all paper "moneys" in general and against the US Dollar in particular MUST be kept under control. The global and monetary system which has been built up since the last official connection between Gold and ALL forms of paper money was erased in 1971 would be utterly impossible under any type of Gold discipline. The level of power which has been amassed by governments released from this discipline would likewise be impossible. "They" have got it. "They are not going to give it up lightly.
There is only one recent historical precedent for an entrenched political establishment in control of an empire giving up their power without a (literal) fight. That is the abdication of the Communist party of the USSR in 1991. The equivalent at present would be for the governments and central banks of the world to give up, get out of the way, and let inexorable economic LAW run its course. It will anyway, but the longer it is delayed, the harsher the final sentence will be.
Fort knox's gold no much left .....
Doc 100.0.5.2..........10 of 37...
About Fort Knox Gold: http://www.fgmr.com/right2know.htm
In the 1970's a very courageous gentleman named Edward Durrell claimed that
substantially all of the US Gold Reserve being stored at Ft. Knox was gone.
Only 1,000 tonnes or so of the 8,500 tonnes supposedly being stored there
remained. The rest had been secretly taken from Ft. Knox and shipped to
London in 1967 and early 1968 for sale by President Johnson in an ill-fated
attempt to keep the price of Gold at $35 per ounce.
http://hardtruth.topcities.com/nelso...noxscandel.htm
First, about Fort Knox. You know, the Fort Knox Gold Scandal is just like
the Watergate Scandal in one respect: There is a desperate cover-up going on
right now just as happened with Watergate. The Fort Knox Gold Scandal
cover-up really passed the point of no return last September when the United
States Treasury perpetrated the Fort Knox gold inspection hoax in an attempt
to discredit my charges that there's no gold in Fort Knox because it had all
been illegally removed. Since that time the Government has been getting in
deeper and deeper and deeper, involving more and more people in all sorts of
maneuvers to try to keep the lid on. For example, when the Congressmen and
newsmen visited Fort Knox last September, news stories promised everybody
that the visit would be followed up by an audit of the Fort Knox gold by the
General Accounting Office, but what they actually did was just a very
superficial exercise just to make the record look good, and the group of 15
men that did it had only two (2) General Accounting Office representatives
on it. All the rest were from the Treasury itself--in other words, the fox
went into the henhouse to count our chickens for us.
http://www.skolnicksreport.com/hoodwink.html
It may come as a shock to some, but the U.S. has very little so-called
"U.S. government" gold bullion in Fort Knox. A brave outspoken journalist,
Tom Valentine, in the 1970s, exposed as a fraud that there was
world-trade-quality gold at Fort Knox. All they have left are poor quality,
orangish-looking, melted down coin metal from the seizure in 1934, of gold
coins from America's common people. [The American aristocracy, warned in
advance, shipped THEIR gold out of the U.S.] The U.S. governmentt gold is
gone. Why? Because it was shipped, under the supervision of a ply-able U.S.
General, to the private central octopus called the Bank of England, in 1968,
to stem a run on that bank which had somehow lost all their own gold.]
http://www.freedomdomain.com/News/nnorfed.html
The organization chaired by Alan Greenspan is a coalition of private
international banks, that does not answer to the United States Government.
And there is no precious metal warehoused in Fort Knox or elsewhere that
backs the money that they issue.
http://www.anomalous-images.com/text/NAZNWO08.TXT
Large shipment of gold leaves Fort Knox, public doesn't know that their
national gold 'reserves' are being secretly depleted by one-world national
socialist agents working in U.S. government. Gold at Fort Knox replaced with
gold-plated lead bars, making it the biggest heist in history. Rockefellers
involved. James MacDonald becomes critical of Air Force and the CIA.
http://hardtruth.topcities.com/treas...orld_order.htm
Throughout the 20th century this movement toward a one world government has
been marching on. This is not new or recent. In his book Critical Path
Buckminster Fuller gives a very impressive sweep of the 20th century, about
the large corporations and their agents and the lawyers who basically
control the country far more than the people understand. He talked about how
all the gold was removed from Fort Knox by the 1960's.
Where did it go?
It went to the banks. They own the country. Fuller called the CIA,
"capitalism's invisible army."
Gold this week from the privateer . . . 15/05/09
Can't Spend - Can't Save - Need MONEY!
On May 15, spot future Gold in New York rose $US 2.90 on the day to close at $US 931.30. This is Gold's highest close in nearly two months - since March 26. With the exception of a $US 10.40 jump on May 12, Gold's rise this week has been slow and steady, seemingly impervious to the goings on around it in other investment markets. Gobal stock markets have been inreasingly erratic this week. The US Dollar saw ominous weakness before a turnaround at the end of the week. US Treasury bond yields, although they fell this week, remain distressingly high. Through it all, Gold has climbed gradually in $US terms.
This is ominous - for the financial powers that be - since the distractions have calmed down for the moment. Two weeks ago it was the flash in the pan which was the "swine flu" scare. It is difficult to decide which aspect of this phenomenon was more outlandish, the speed of the buildup to global hysteria or the even greater speed with which it dissipated. Last week there was the (obviously preordained) "results" of the US Treasury's bank "stress tests". To expect any of the banks to have "failed" this test is tantamount to expecting the US rating agencies to downgrade the AAA rating of US Treasury debt paper. Yes, they occasionally make noises in that exact direction. But that's as far as it ever goes.
Without distractions, the inherent contradictions of the global financial and economic collapse are getting harder to ignore by the day. On the one hand, we have governments and central banks growing ever more profligate in trying to fill the hole which has been left by the collapse of the credit money system. How? By creating out of thin air grotesque amounts of new credit money. On the other hand you have the rest of us, those who do NOT have the ability to "print" our way out of debt or to create "markets" which maintain the value of our paper assets at levels which nobody is willing to pay - unless they can create the means of payment out of thin air.
This contradiction is slowly but surely seeping into the consciousness of more and more people everywhere. The questions being asked - if not out loud then definitely in the privacy of the mind - are getting harder to answer.
"Why do I have no choice but to cut my borrowing and spending when 'they' are borrowing and spending like there's no tomorrow?"
"Why is it that I can see the REAL economy where I live slowing down every day while the paper markets are not reacting to any of it?"
"Why do I read about the situation getting better when it is obviously getting worse?"
"Why are 'they' still rewarding people who borrow and spend while making it totally uneconomic for those of us who want to save?"
"And if I do save, what will happen to the purchasing power of what I am saving if the government persists with these policies?"
This last question is the most dangerous one, to the financial powers that be. In the English-speaking nations in particular but to varying degrees all over the world, "saving" is a concept which has been all but obliterated over the past three decades. Less than forty years ago, the exchange rates between currencies were actually fixed. In the twenty years before that, prices in most advanced economies were relatively stable. The combination of these two factors meant that anyone could actually save "money" in the confident expectation that the purchasing power of that money would remain relatively stable over time. Amazing as it might seem from the perspective of the almost four decades since 1971, most consumer prices moved hardly at all in the period between the end of WWII and the mid 1960s.
Even more amazing, there were a huge number of individuals in the US and everywhere else who never concerned themselves with the state of the stock market or bond market or the exchange value of the currency or the rates of interest available to them. They simply went about their business, consumed less than they produced, and stuck the difference in their savings accounts in the expectation that when they needed the money, it would be there - AND IT WOULD BUY THEM THE SAME AMOUNT OF GOODS AND SERVICES AS IT HAD AT THE TIME THEY WERE SAVING IT!
In short, they had the incentive to save and they had a money worth saving.
Contrast that to the present situation. The global collapse is in the process of radically changing the attitudes of most people. For three decades, living beyond one's means was regarded as the norm. It was taken for granted that in order to keep one's head above the inexorable erosion of the purchasing power of money, the investment markets had to be utilised up to the hilt. "Risk aversion" was whittled away progressively until, by the mid 1990s, it had all but ceased to exist. At the height of the insanity, less than two years ago, everyone was routinely using amounts of leverage that would have made the most daredevil investors in the futures markets of the 1980s (let alone the 1950s and 1960s) recoil in horror.
Now, that whole outlook has changed - RADICALLY. But it has ONLY changed amongst the individual citizens of the nation concerned. Those in charge of the "system" have not changed their methods of operation in the slightest. They have merely accelerated them to a grotesque and unsustainable extent. They are, in their attempt to "save" the system, destroying it.
Anyone who wants to preserve his or her purchasing power today faces two seemingly insoluble problems. First, with official interest rates at or below 1.0 percent in nearly all major nations, it is all but impossible to gain any type of a return on savings unless one takes HUGE risks. Second, and much more important, the actions of governments and central banks everywhere is guaranteeing a catastrophic collapse in the purchasing power of the money they are borrowing into existence. Inexorably, the only financial safety is to be found OUTSIDE the financial system altogether. There is the alternative of putting one's wealth in physical economic goods. And there is the choice of putting one's wealth in an alternative medium of exchange, one which CANNOT be created out of thin air. In essence, the choice is between real wealth and government promises.
As the choice becomes more stark, the attraction of the precious metals will increase. Just as real physical economic goods cannot be created out of thin air, neither can a viable money. And until the debate over what constitutes a viable and SOUND money emerges to centre stage in the current frantic debate over how to "solve" the current crisis, that same crisis will continue to worsen.
TA on Gold & Silver charts
You can find TA and some discussion on precious metals here http://forum.sharechat.co.nz/showthr...7896#post17896 ... todays' chart is the ST USPOG arithmetic scale, which shows the current decline and immediate support.
Enjoy, discuss it with me and others on the dedicated 'Precious Metals' threads.
BAA