🕐25.06.10 - 23:52 Uhr
Gold over Fiat Currency, Eskay Creek II
Q.: Critics say that historically, under the gold standard, the world
economy languished, trade was sluggish, technological and therapeutic
innovation was unexciting, in a word: the gold standard has never worked
well.
How do you answer that?
A.: This allegation is just the opposite of the truth.
The heyday of the
gold standard was during the 100 years period between 1815 (the end of the
Napoleonic wars) and 1914 (the start of World War I).
This was the age of
transcontinental railways, intercontinental shipping, when all the key
inventions were made that ushered in the age of electricity, of the internal
combustion engine, of aviation, of wireless telecommunication, of the X-ray,
etc.
Financing these discoveries and their applications in transportation,
telecommunication, and therapeutics would have not been possible without the
gold standard and the accumulation of honestly valued capital that it
facilitated.
Dr.
Antal Fekete responding to the contention that gold remains a barbaric
relic of the past.
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New_LM_Logo.jpg
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June, 2010 (Update)
The Business of Gold, is the message stale-dated?
.not by a long shot!
If something is working, isolate the human need that is driving it and
amplify it.
Conversely if something is not working; either get rid of it
entirely or minimize it.
The something that is working around the world? The
common sense drive to secure a safe financial future by owning gold and
silver.
What is not working is the tattered illusion of security by
accumulating the soon-to-fail US dollar.
* Business of Gold in todays market
* Thomas Kaplan, all in on gold
* Buying gold and silver a vote against fiat currency?
Full Report
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Global Rebound Anemic: Roubini
SAO PAULO (Reuters) - Advanced economies face years of, at best - anemic
growth and the very real risk of a double-dip recession as their citizens
cope with sluggish employment and highly indebted governments, according to
renowned economist Nouriel Roubini.
A sovereign debt crisis in the euro zone has rattled financial markets in
recent weeks as investors worry that fiscal austerity measures dictated by a
$1 trillion European Union-International Monetary Fund rescue plan could
stifle already hobbled global growth.
In contrast, some emerging markets risk overheating and are showing symptoms
of a potential asset bubble.
"Labor market conditions will remain very weak in some advanced economies,"
said Roubini, known as Dr.
Doom and most famous for having accurately
predicted the U.S.
housing crisis.
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Why tens of millions of Europeans want
as much gold as they can get their hands on
And why tens of millions of Americans will soon
be doing the same thing.
The European Union and the euro are beginning to disintegrate because the
incompetent bureaucrats who designed the euro in 1998 thought they could
take some paper, print some ink on it, and turn it into a currency that
everyone would trust.
They effectively crammed the euro down the throats of 500 million people
from 27 different nations and cultures speaking 26 different officially
recognized languages.
That in itself was a recipe for disaster, a disaster I
warned about right from the get-go of the euros birth.
But the seeds of the unfolding euro disaster go even deeper.
The bureaucrats
in Europe had more than five years before the euro launched to put in place
the necessary fundamental infrastructure for a union and a single currency
to work.
But they failed to do so.
They failed to unify the tax codes of the 12 different founding countries.
Or even the now 27 members.
They even failed to put in place uniform labor laws and welfare policies.
They even neglected to make the European Central Bank a true central bank.
All 12 original national central banks of the founding states of the
European Union the Bank of France, the German Bundesbank, just to name two
still exist and still have their own independent policies.
The people of Europe as well as investors and traders around the world gave
the bureaucrats their chance.
Initially, they even bet the European Union
could succeed, and helped push up the value of the euro on international
markets over the last few years.
But the plans and best expectations for the euro are now failing miserably,
the result of initially, the real estate crisis, and now Europes sovereign
debt crisis.
Either way, when you build a house of cards, sooner or later its going to
fall.
Unemployment in the euro zone has now reached 10.1%, its highest level since
the euro came into existence in 1999.
More than 23 million European men and women are unemployed.
In debt-riddled
Spain, unemployment among those under age 25 is a nightmarish 40.3%.
The German economy considered to be the pillar of the European Union and
the euro is now mired in its worst recession since World War II.
Frances economy is also in dire shape.
The countrys deficit is set to hit
8% of GDP this year, more than two and a half times the European Unions 3%
limit.
Frances budget minister Francois Baroin is now worried that his own
country could lose its AAA credit rating.
So its not just Greece, Spain, Portugal or Italy that are in trouble.
Its
the entire euro zone.
Is it any surprise that tens of millions of Europeans now despise the euro
and are dumping it in increasing numbers? Hardly!
Is it any surprise theyre talking about bringing back their francs, marcs,
liras, guilders and drachmas? Is it any surprise tens of millions of
Europeans are buying gold hand over fist? Hardly!
Will it be any surprise then when tens of millions of Americans buy gold
like crazy? No way!
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Our Future?
If you want to get a glimpse into the future of things to come in the United
States, you need look no further than recent events in Greece.
The protests and riots that have been underway because of the unpopular cuts
in pensions, wages, and benefits (along with increased taxes) are a
precursor of things to come for the world at large.
The reason this is happening is that Greeces government spent and borrowed
themselves into oblivion, and must now submit to harsh terms in order to
receive a bailout.
They have no choice in the matter.
They either rein in their spending and raise taxes or suffer the horrible
consequences of not getting a bailout, which essentially would mean the
death of Greece as a country.
Be safe, be sure.buy physical gold and
silver.
Living in the USA or Canada? Miles Franklin comes highly
recommended.
Also worth a comment; Ben Bernanke spoke recently about gold.
What he had to
say should simply astound you.
Apparently he admits to knowing nothing about
the precious metal!
Well the signal that gold is sending is in some ways very different from
what other asset prices are sending.
For example, the spread between nominal
and inflation index bonds remains quite low suggesting just 2% inflation
over the next 10 years.
Other commodity prices have fallen recently quite
severely including oil prices and food prices.
So gold is out there doing
something different from the rest of the commodity group.
I dont fully
understand the movements in the gold price, but I do think theres a great
deal of uncertainty and anxiety in financial markets right now and some
people believe that holding gold will be a hedge against the fact that they
view many other investments as being risky and hard to predict at this
point. Ben Bernanke (2010)
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>From time to time I will share my due diligence efforts with you.
Considering the amount of subscriber interaction I enjoy, I do not think I
have to mention this; but I will anyway if you have any questions, never
hesitate in contacting me.
Our strength continues to come through the
sharing of information; keep the anecdotal information coming! As always,
buy gold on the dips.
Speaking of due diligence efforts I do not want anyone to forget Copper
Creek Ventures! (TSX.V: CPV ).
Copper Creek Ventures is exploring for gold just a few kilometers away from
the world-class Eskay Creek Mine of Barrick Gold Corp.
I always enjoy the
debate with my friends from Eastern Canada, as it galls them to have to
admit that Eskay Creek was Canadas premier high-grade gold mine and was the
fifth largest producer of silver in the world; producing 3 million ounces of
Gold and 160 million ounces of Silver.
I must admit that my favorite deals are small juniors that have the
propensity to morph into elephants; and that is exactly what the management
of Copper Creek has delivered onto us the Bonsai property.
A property that
could very well turn out to be another Eskay Creek.
The story is simple and
sweet; raise the money and drill the holes.
Everyone involved with Copper Creek has the expertise to get the job done
and the goal will be to add to the library of knowledge with positive assay
results after the late-summer drill program.
I figure ten holes might not
tell the entire story, but the results should get us to the point that it
might very well be a given that we are talking about Eskay Creek II?
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Is there a way....yes!
Or at least the narrative has started: "To say that the gold standard is not
practicable is the same to say that honesty is not practicable, and
Constitutions are made to be blithely ignored when convenient.
The American
Constitution, for example, mandates a metallic monetary standard for the
United States in the clearest possible language.
Opponents of the gold
standard have never been able to muster up the moral fortitude to amend the
Constitution so as to formalize the abolishing of the gold standard." Dr.
Antal Fekete
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Gold to go parabolicyes, but what about silver?
No wishful thinking here! As I see it gold is going to a parabolic top of
$10,000 by 2012 for very good reasons - sovereign debt defaults,
bankruptcies of too big to fail banks and other financial entities,
currency inflation and devaluations - which will all contribute to rampant
price inflation.
Money manager, Peter Schiff, told Business Week recently that, "Gold could
reach $5,000 to $10,000 per ounce in the next 5 to 10 years and highly
respected economist David Rosenberg is of the opinion that "There is no
doubt that gold can easily double from here."
THE CAUSES
1.
History is No Guide
Gold has only been trading freely since President Nixons 1971 decision to
deny gold to the French and others attempting to repatriate their paper
dollars for the metal.
As such, there has been a scant forty years of gold
production and trading since it was detached from supporting paper money.
This period has also been marked by substantially higher monetary and price
inflation as well as currency devaluation.
2.
Market Manipulation
The Commodity Futures Trading Commission (CFTC) recently held a major
hearing which blew the doors off bullion metals futures trading markets in
terms of what was revealed publically.
I predict this public hearing will be
viewed in the period ahead as the precious metals price liberation event of
the decade.
It is commonly known that JP Morgan Chase in the major player in commodities
futures markets trading.
Not only do they take massive naked short positions
(betting that prices will fall), they do it with large substantial leverage.
What isnt as well known though is that Chase acts as the agent for the
Federal Reserve Board and other central banks in managing the markets on
their behalf.
Central banks want orderly precious metals markets and
prices and currencies which dont gyrate wildly.
Only then can they achieve
stealth inflation in their monetary policy which is so beneficial in
servicing debt.
It also makes for good (meaning effective) politics.
3.
Insufficient Physical Inventories
While it is normal for traders to roll their expiring contracts over into
new paper trades, some traders accept cash in settlement rather than the
metal.
To the amazement of everyone the recent hearing of the CFTC -
specifically Jeff Christensens comments - inadvertently confirmed that
there is little bullion in storage at the London Metals Exchange or New
Yorks COMEX to back the metals trading.
He justified this fact by noting
that only one ounce of one hundred traded is paid out in physical metal.
This revelation confirmed a much worse reality than even critics, such as
the Gold Anti-Trust Action Committee (GATA), had expected.
It seems that the
Asian and Mid East buyers and owners of bullion have been removing gold from
their dealers vaults and are taking it "home" thus leaving much less than
previously thought in the London, New York and Toronto vaults.
In addition to what looks like a production peak in the gold mining industry
(production has fallen in 5 of the last 8 years), central banks have for the
first time recently become net purchasers (having bought more gold last year
425 tons than at any time since 1964).
The single largest purchasers of metal these days, other than central banks,
are the bullion ETFs (Exchange Traded Funds) which ostensibly have their
metal inventories in vaults.
These relatively new investment vehicles,
unfortunately, are not transparent in their business practices.
Regular
audits by reputable accounting firms and allocated and segregated bullion
inventories stored in reputable vaults are opaque at best.
This begs the
question: Do the large ETF bullion funds actually have the metal they
purport to own, or is their inventory more the paper gold variety in which
bullion trading exchanges seem to specialize?
THE EFFECT
1.
The revelation, outlined above, that there is insufficient physical
inventory to meet new investment demand for ownership and delivery of
physical bullion, is about to blow the price lid skyward.
2.
As public awareness of sovereign debt mounts, it will drive home the
reality of mounting government insolvency.
3.
Confidence in currencies will wilt commensurately.
4.
Investment demand for real gold and real money as a safe haven
investment will expand exponentially.
5.
These events should take place from mid 2011 through 2012 and extend
further out toward 2015 before demand is satiated.
6.
The dramatic price increases in gold and silver will at that point
also satisfy the unstated desire of central banks and politicians to devalue
their currencies in order to assist them in meeting their debt and unfunded
liabilities.
After the 2008/2009 crash, governments bailed out their failing financial
institutions and investment banks through a variety of innovative measures.
The next time round most governments will not be in a position to do so
again.
Even more troubling, the IMF (International Monetary Fund) will not
be capable of rescuing the increasing number of insolvent governments and
their financial institutions.
Conclusion
I am increasingly confident that the consequences of fragile sovereign debt,
precious metals market manipulation, insufficient physical supply, and the
need for a safe haven investment refuge, will drive precious metals bullion
and mining stock to unimagined heights.
The circumstances immediately ahead are largely unprecedented.
History is
therefore only marginally useful as our guide to the future price of
precious metals.
We are now in genuinely unchartered territory.
Get yourself positioned to take advantage of this event of a lifetime.
Both
Gold and Silver will rise significantly in the coming months and years.
But
Silver will far outperform Gold! Stanislaw Vardy (Gold Focus, Inc.)
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Who is Miles Franklin.
For my new readers, here is some information on Miles Franklin background.
Miles Franklin was founded in January, 1990 by David MILES Schectman.
There
is no Miles Franklin; they just thought it was a wonderful sounding name to
use for their new company.
Davids son, Andy Schectman, joined Miles
Franklin in 1991.
Miles Franklins primary focus from 1990 through 1998 was
the Swiss Annuity and they were one of the two top firms in the industry.
They were also a well respected precious metals dealer.
In November, 2000,
they decided to de-emphasized their focus on off-shore investing and moved
primarily into gold and silver, which they felt were about to enter into a
long-term bull market cycle.
Their timing and new direction proved to be
the right on the money.
Miles Franklin sells over $100 million a year in gold and silver.
They are
rated A+ by the BBB.
They are recommended by many prominent newsletter
writers including David Morgan, Jean Paul Louvet, Larry Myles, LeMetropole
Caf and by Richard Maybury in the 90s when they focused on Swiss Annuities.
Their reputation for service, education, quality product and pricing is
outstanding and I feel confident in recommending
Miles Franklin as your source for gold and
silver bullion.
Larry Myles
Larry Myles Reports
Governments lie; bankers lie; even auditors sometimes lie.
Gold tells the
truth.
- Lord Rees Moog, former editor of The Times of London
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At LMR , my intention is to inform,
never to annoy.
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