2012 Is The Tipping Point – Results Are In, Bankers Lost
Guest post via Gold Silver Worlds.
It is highly unlikely the Mayan predictions of the end of the world referred to the bankers’ world of credit and debt. Nonetheless, with only one month remaining until December 21, 2012—the end date of the Mayan 5,125 year Mesoamerican calendar—the concomitant end of the bankers’ 300 year ponzi-scheme of credit and debt should not be dismissed as mere coincidence.
The world has entered a paradigm shift of immense proportions; and the collapse of the bankers’ economic world is a part of that shift. The bankers’ credit fueled a 300-year global expansion which transformed the world. The bankers’ credit, however, has now become debt which increasingly cannot be repaid.
Economics is not rocket science although the arcane algorithms used by Wall Street banks to predict capital markets imply that intended conclusion. Modern economics, i.e. capitalism, is merely the current iteration of the supply and demand dynamic distorted by 300 years of credit and debt—a distortion that’s now about to end.
Gold Cycle Analysis: Mining Shares Weak But Gold & Silver Bullion Strong
Guest post via Gold Silver Worlds.
A remarkable event has taken place in the gold and silver markets in the past two days. It didn’t go unnoticed to anyone following these markets. The gold and silver mining shares have been sold off hard. The drop was out of proportion and did not reflect the actions in the stock market nor in the metals. The fact that the miners have been leading bullion up since August, raises the question if this marks a structural shift in the direction of the shares and the metals, or if both assets will start moving separately in the coming weeks and months.
This article explains the answers on these questions based on the gold cycle analysis. It is an excerpt from The Financial Tap, a service specialized in cycle research (for more detailed insights, readers are invited to consider a free 15-day trial). In a nuthsell: the author is worried about the mining shares but is quite bullish on the metals.
Greece Needs to go “Dirty Harry” On the Troika
Guest post by Peter Tchir.
Go Ahead, Make My Day
Greece has negotiated like the Clint Eastwood that spoke to an empty chair for 10 minutes. It is time to bring out the Dirty Harry. Point a magnum at the Troika and tell the “go ahead, make my day’!
Greece has been asking for money in some form or another for almost 3 years now. It begs and pleads. It is forced to do things to its people. Then it is back to begging and pleading. It is time to stop. The negotiations have been stupid. Not once has Greece come up with a credible alternative to more Troika money.
The Troika actually benefits as much, or more from supporting Greece and everyone would be better off if Greece was given real breathing room for a change. Since the Troika either doesn’t see it, or refuses to believe it, it is time to make the Troika see the error of the ways.
Defaulting Takes Planning
Defaulting, properly, is as much a process as anything else. You need to plan. You need to line up post default financing. You need a credible story of why investors should come to you post default. Sovereign defaults are particularly tricky since there are few rules to begin with, and enforcing those rules is tricky.
Precious Metals Rally
Guest post by Jessie.
“You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.”
Abraham Lincoln
I have closed out the ‘short stocks’ portion of my stocks-bullion hedged trade today. There may be more downside ahead for equities, but it looks to be a bit overdone, at least in the short term. I also took some of the bullion positions down as I had taken it to a maximum on that big decline shortly before the US Presidential election. Now it is at a more comfortable ‘running’ level. As always, this is with regard to my ‘trading positions’ as I do not touch or even look at my long term holdings.
Gold has moved very nicely through the resistance around 1720 and ‘stuck a close’ for today over 1730. We *might* see a test of that resistance at 1720, which is now support below the current price. But if this is a handle in a cup-and-handle formation, then that does not matter, and it is playing out very well. However a clear break above 1800 is key.
The central banks are printing money to rescue the Western banking system. There is an enormous macro event taking place in the global currency as the US dollar reserve currency agreement, in place since World War II, has been changing for at least the past ten or more years, first slowly but soon with increasing speed.
Very few people understand what is happening, even amongst economists. Those who stand against this sort of change will find themselves swimming against a rather powerful secular tide. There is nothing cyclical about this financial crisis or the economic ills that have accompanied it in the conventional economic sense, unless one wishes to start looking at very long, generational cycles of human wickedness and folly.
The Invisible Experiment With Money And Gold
Guest post by Gold Silver Worlds.
Michael MacDonald and Christopher Whitestone did a superb Q&A with GoldSilverWorlds. In their book “The Silver Bomb” (available on Amazon.com), they wrote about their views on the world and the markets. They have summarized it and enriched with recent facts and figures.
The markets are completely bought and paid for, corrupt, and manipulated … “a farce”. We are in a corruption bubble, the largest corruption bubble the world has ever seen in modern history and perhaps in all history. This is the first time that the world has been united within instant communication, instant information, instant deposit or receipt of funds into any bank account or financial institution. Michael says: “I believe that we are already a one world order. I actually think we are already there, electronically certainly. I also think that a lot of the debates, wars and conflicts are manufactured, very similar to the presidential debates which are also manufactured. I believe we live in a one-world system, which financially is already completely manipulated.”
We don’t live in a free market. We haven’t lived in a free market for decades, if not since 1913. We have the most powerful agency in the world, the Federal Reserve, setting the interest rates and the value of the world’s reserve currency. Everything that stems from that is built upon deceit and fraud. This doesn’t bode well for the entire financial system as a whole and right now, we are seeing the ramifications of that deceit.
We are in the lengthening of this financial market topping. A lot of things are happening that point to any one of several large enough dominos falling over which is going to have a splash and pullover effect. Within three years we are going to see this farce imploding. Michael thinks that we will have something completely different and unrecognizable to what we currently have.
The Silver Supply Squeeze In 1980 Could Look Like A Warm-up
Guest post via Gold Silver Worlds.
During an interesting interview on PracticalBull.com, David Morgan made the statement that the silver supply squeeze of 1980 could look like a warm-up compared to what could be coming in the not too distant future. The bull run in the 70’s took the price of silver from less than $5 to almost $50 dollar. Of course, there is nothing shocking to this statement for long term followers of the precious metals markets or for people that understand today’s monetary catastrophe that is unfolding. But still it’s worth one’s time to look at the analysis of a respected person like David Morgan which leads him to such a conclusion. His analysis is based on today’s demand / supply structure and the dynamics in the silver market.
On the demand side, the driving forces are the industrial and investment demand. David Morgan points to the fact that 54% of the silver market comes from industrial demand. That’s huge and raises the question what would happen in case of an economic recession or depression. In David’s view, the demand for silver will fall but not significantly like most people think. The key driver behind that thinking is the fall will be offset by a faster rise in the demand for wealth preservation. Moreover, as 70% of silver today is obtained via base metal miners (through copper, lead, zinc mining and related base metals), decreasing economic activity will lead to less demand for base metals and hence less supply. Even under very bad economic conditions most miners will continue their activities (even if they are operating with losses) although less mining would be the result, because it’s cheaper to operate with losses compared to closing a mine. Important insights from the expt!
In case of economic contraction, the run to assets that are free of counterparty risk (like gold and silver) will outpace the decline in industrial demand.
Gold And A Stable Monetary Base Lead To Economic Prosperity & Peace – Germany’s Case
Guest post via Gold Silver Worlds.
We recently wrote The Case For A Higher Gold Price Based On Monetary History, which describes the analogy between the end of Bretton Woods and a potential end of the current hegemony of the US dollar as a reserve currency. Today we present another case in monetary history: Germany in the 20th century. This case is particularly interesting because it’s often cited as a prime example of hyperinflation. The key question in this case is what the root cause was of the hyperinflation and which measure(s) brought the situation back under control. Ultimately, here at GoldSilverWorlds, we are interested in understanding if therey is any link with Gold.
While researching what exactly caused Germany’s hyperinflation of 1923, we’ve found an extremely insightful paper in the scientific directory Citeseerx. The paper is entitled “Germany Monetary History in the First Half of the Twentieth Century” and is written by Robert Hetzel. The document provides an in-depth analysis of Germany’s situation before, during and after the hyperinflationary period. Below are the highlights from the paper; the full version of the document is embedded below.
The hyperinflation had its roots in the World War I. Germany, just like many other countries in the West, gave up the gold standard in 1914 in order to finance the world war. By abandoning its gold standard, a country becomes free to create theoretically unlimited amounts of money, with the only limitation the speed of the printing press. Money creation can serve short term objectives like financing a war, but there are long term effects which can be very nasty and painful mainly for the citizens, making the short term objective unworthy. The quantity of Germany’s monetary base expansion is presented in the chart below (see dotted line). The chart shows as well the rate of inflation. Source: paper page 5.
Did You Get These Warnings? Gold?
Guest post via Gold Silver Worlds.
The author does a terrific job again, this time in summarizing the most important thoughts about the current economic effects on the monetary policy of the US government (in casu QE3). Although a lot has been written about QE3, it can be difficult for people with no economic background, to connect the dots between monetary actions, economic effects, personal risks. Furthermore, with a limited understanding of monetary matters, it can be difficult to distinguish the benefits that are argued by policymakers versus the real benefits / risks. From that point of the view, the following article succeeds in bringing an understandable summary of what really is happening in our economy as a result of monetary policies.
Some essays or market commentaries contain too much jargon to easily read and understand. This article keeps things simple and understandable. And we love it at GoldSilverWorlds as it links Gold & Silver as being the ultimate ways to protect oneself, although still an extremely low percentage of the population is aware of it.
What Now For the Price of Silver?
Izzy Friedman shares some thoughts on Silver prices. Via Gold Silver Worlds.
This is an excerpt from Ted Butler’s latest commentary to his premium newsletter subscribers - www.butlerresearch.com
What Now For the Price of Silver? by Israel Freidman
Many years ago, when the price of silver was $4 to $5, Mr. Ted Butler and I wrote many articles in which we predicted that silver would be a great investment for the long term. Now that prices are 7 to 8 times higher, we can say that we were right. More importantly, the reason we were so bullish on silver had to do with supply and demand and nothing to do with inflation or the value of the dollar. I still feel that way. The only thing that has changed is the price and not the reality of supply and demand. Silver demand still is on a course to overwhelm silver supply and when that occurs in any commodity, look for higher prices.
We must first consider the state of the world today and into the future. The world population has just hit the 7 billion person mark, up from 6 billion twelve years ago. The world adds 75 million new souls each year. In addition to the greater numbers of new potential consumers, there is also a move to increased standards of living in places like India and China. Overall improvements in longevity mean that we have more people living and consuming longer than ever before. At the same time, the raw materials necessary for everyone to live better are getting harder and more expensive to produce. Will we have enough raw materials to sustain the march towards higher living standards? I say yes, but at what cost? Those necessary raw materials will not come to us cheaply. Therefore, it would seem wise to set aside and hold those raw materials which are destined to climb sharply in price.
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