Last Updated: Feb 19th, 2012 - 13:48:57 Newsletters : 2011 Newsletters : 25 November 2011 Thought for the Day The news is not very good at the moment. Europe is the centre of attention and the EU members are behaving like dominoes standing up in a line where the spectre of debt has nudged the first one over with his scythe. Two elected presidents have been replaced with bureaucrats (courtesy of Goldman Sachs). Spain has a new government and Belgium hasn't had a government for a year or so. The contagion has reached France and their AAA debt ranking looks like falling to AA+, to join the USA. Despite all the brave talk and positive attitude and careful control of the media the bust is playing itself out as predicted by Ludwig von Mises and his fellow Austrian economists. This is why I refer to the Austrian economists as REAL Economists, as what they predict does happen. I have also found time after time that investment advisers who understand REAL Economics make correct predictions. It is definitely worth while understanding REAL Economics if we are to make sense of the world we live in. It also helps when it comes to choosing a new government. We need to be led by politicians who have some understanding of REAL Economics. Promise and borrow is just not valid any more. Read about REAL Economics here: [ Visit Website ] Nov 24, 2011, 10:28 Newsletters : 2011 Newsletters : 25 November 2011 ECONOMIST: Bernanke Is Going To End Up Bailing Out All Of Europe The Chinese have spurned the offer of bailing out the Europeans. Maybe the Federal Reserve will have to do it. We seem to be getting ourselves deeper and deeper into a debt spiral. This could get ugly. As John Kenneth Galbraith said, "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled." [ Visit Website ] Nov 23, 2011, 16:24 Newsletters : 2011 Newsletters : 25 November 2011 Scare Tactics in Greece Stories like this and worse are starting to circulate. We better have a stable government over the next few years! [ Visit Website ] Nov 23, 2011, 15:49 Newsletters : 2011 Newsletters : 25 November 2011 A Priori Theory and Sound Money Sound money was devised as a means for the protection of civil liberties against despotic inroads on the part of governments. Only gold is that sound money. A little theory for the keen ones. [ Visit Website ] Nov 23, 2011, 13:30 Newsletters : 2011 Newsletters : 25 November 2011 Cycles & Indicators Here is a very good explanation about money and politics and what is likely to happen as we continue along the present trends. All politicians should listen carefully to this. It is presented by the number one libertarian presidential candidate himself. Magic words indeed. [ Visit Website ] Nov 23, 2011, 13:23 Newsletters : 2011 Newsletters : 25 November 2011 In Defense of the Market's Worst Producers This is a wonderful little story which makes a very important point; "Everybody deserves the opportunity of work." I was recently involved in some consulting work for a charity which uses intellectually challenged workers for some very simple tasks. Far from being exploited, these workers really enjoyed being a REAL Person with a REAL Job and a REAL Pay Packet. These lovely people successfully produced a valuable and needed product which sold for money. One up for common sense, and no, I did not inquire as to whether the wage paid was the official minimum wage or not. Neither did I ask about the profitability of the venture. [ Visit Website ] Nov 23, 2011, 11:28 Newsletters : 2011 Newsletters : 25 November 2011 Cash for Gold in the Eurozone Bailout By Jack Farchy Financial Times, London Tuesday, November 22, 2011 Ever since the eurozone bond markets first started to get the jitters, hedge fund managers have been whispering that gold could play a part in resolving the crisis. Until recently this discussion has mainly been the preserve of gold market conspiracy theorists and backbench German politicians. But now the use of gold to fund a eurozone bailout is coming closer to reality. Buried within a draft of the European Commission study on joint 'eurobonds,' reported by the Financial Times this week, is the suggestion that gold could be used as collateral for these bonds. In order to "enhance" the guarantees on the eurobonds, the draft says, governments could provide collateral, including "gold reserves which are largely in excess of needs in most EU countries." Between them, the central banks of the eurozone hold 10,792 tonnes of gold -- 6.5 per cent of all the yellow metal that has ever been mined -- worth some $590 billion. Let's be clear: This does not imply central banks are getting ready to sell gold to bail out the eurozone. Beyond the numerous legal problems (selling reserves to fund government borrowing contravenes the Maastricht treaty), gold disposals just looks too desperate. But bullion could be used as collateral. In fact, if Europe's politicians truly believe that the problems of larger eurozone countries such as Italy are based on liquidity rather than solvency, the use of gold as collateral could be a neat way to regain the confidence of the bond markets. For prospective investors (no doubt including emerging market governments, sovereign wealth funds, and the like) the appeal comes from the likely hedge that the gold would provide against a default. If a country such as Italy were to default, most analysts believe, the price of gold (certainly when denominated in euros) would go sky high. For eurozone countries, gold-collateralised bonds could unlock a large pool of new financing. Italy's central bank, for example, holds 2,451 tonnes of gold, worth about E100 billion. While that pales in comparison to its total debt stock of nearly E2,000 billion, it could alleviate some of the short-term funding pressure. Italy needs to raise about E600 billion over the next three years. If it used the yellow metal as collateral for the first 20 per cent of the new bonds, therefore, it could cover its needs until mid-2014. A successful sale of the gold-backed debt would create a virtuous circle, making it easier to raise money through non-collateralised borrowing. Such a deal has precedents. Indeed, Italy has done it before, when it received a $2 billion bailout from the Bundesbank in 1974 and put up its gold as collateral. In 1991 India used its gold as collateral for a loan with the Bank of Japan and others. And in 2008, according to the World Gold Council, Sweden's Riksbank swapped its gold to raise cash and provide liquidity to the Scandinavian banking system. As Paul Mercier, then deputy director of market operations at the ECB, told a gold industry conference in 2009: "In a generalised crisis that leads to the repudiation of foreign debts or even the international isolation of a country ... gold remains the ultimate and global means of payment that is still accepted and it is one of the reasons used by some central banks to justify gold holdings." The problem is, as that statement implies, that countries have historically turned to their gold reserves only in the direst of situations. And lenders are likely to require that the gold is moved to a neutral location. India's move to ship 47 tonnes to the Bank of England in its 1991 deal caused outrage within the country. Nonetheless, as the eurozone crisis grinds into its third year, it might just be time to dust off those Roman coins in the Banca d'Italia's vaults. *** *** *** *** Which all goes to prove my point, Gold is REAL Money - Nothing more nothing less! (Ed.) Nov 23, 2011, 11:07 Newsletters : 2011 Newsletters : 25 November 2011 Contango Remember the golden rule. The more that we understand REAL Money the better we will be placed to conserve our wealth. [ Visit Website ] Nov 23, 2011, 10:39 Newsletters : 2011 Newsletters : 25 November 2011 Oral Assassin Nigel Farage Has Cannon Balls As we prepare to vote in our small democracy at the bottom of the planet spare a thought for the Europeans struggling with debt and run by bureaucrats. The EU is disintegrating and the only way the Powers-that-be can hold it together is by printing up (since they can no longer borrow) more paper money and providing bureaucrats directly to control individual parliaments. What a sad state of affairs. When we borrow too much eventually our life becomes not our own to control but belongs to the bureaucrats and the money lenders. We as a country and as individual people have borrowed too much. Time to stop. We must vote for policies that lower taxes and reduce debt. Have a listen to one of the greatest orators in the world today telling it like it is! [ Visit Website ] Nov 22, 2011, 09:10 Newsletters : 2011 Newsletters : 25 November 2011 Twice in a week, the Financial Times pays grudging respect to gold The mainstream press is now waking up to the problem with gold. It is and always has been, money. Money that retains its value as opposed to paper money which is a debt - a promise to pay a diminishing value of something. Which works as long as banks do not print too much - but human nature being what it is how can they not? And so the con game is drawing to its natural conclusion. Pity. It was fun for a while. Nov 21, 2011, 17:10 Newsletters : 2011 Newsletters : 25 November 2011 Currency Wars - The Book Jim Rickards has written a book about the currency crisis that is enveloping the world and he is interviewed here at King World News. There is also a full biography showing his extensive qualifications for this authoring job! [ Visit Website ] Nov 21, 2011, 12:01 Newsletters : 2011 Newsletters : 25 November 2011 Debt Crisis Contagion "The German statesman Otto von Bismarck once said that only fools learned from their own mistakes - he preferred to learn from the mistakes of others. At the moment, no politician or adviser in Europe has bothered to learn the lessons of the Argentine or Asian debt crises. Indeed, in Europe, they aren't even learning from their own mistakes." Our philosophy here at the newsletter desk is that WE CAN learn from what we observe in other countries. Now I know that most people merely see what massages their prejudices and therefore learn nothing but WE are not like that, are we? [ Visit Website ] Nov 21, 2011, 09:35 Newsletters : 2011 Newsletters : 25 November 2011 "Vulture Capitalism": Iceland’s New Bank Disaster I thought that Iceland's money woes were over and the banking system had been cleared up so the economy could start working again. Not so, according to Global Research. They are blaming bad advice from the IMF letting "Vulture Banks" in for little bit of good old Viking rape and pillage. The IMF seems to be solidly on the side of the paper money merchants in removing the last vestiges of wealth from the Iceland population. It will be interesting to see what happens to the PIIGS. "Neither a lender nor a borrower be"! I hope we can vote in politicians who can understand this simple philosophy of money. [ Visit Website ] Nov 21, 2011, 08:57 Newsletters : 2011 Newsletters : 25 November 2011 Gerald Celente - MF Global...What about Gold ETF GLD & HSBC? Something very serious is happening. Have a read of this blog and the credentials of Gerald Celente then click on the radio broadcast. The punters are losing faith in the paper money con game and when confidence goes the cash follows VERY quickly. [ Visit Website ] Nov 20, 2011, 11:17 Newsletters : 2011 Newsletters : 25 November 2011 Inflation and Debt The details of the American economy are of course incredibly complex. This essay is designed to help us understand just how serious the problems are while keeping the explanation as simple as possible. Not for the faint hearted! [ Visit Website ] Nov 19, 2011, 14:50 Newsletters : 2011 Newsletters : 25 November 2011 Quote for the Week Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is no escape because no paper currency has any link to Gold. All of the economic, monetary, and financial upheaval of the past 40 years is a direct result of this fact. The global paper currency system is very young. It depends for its continued functioning on the belief that the debt upon which it is based will, someday, be repaid. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system itself, is a rise (especially a sharp rise) in the U.S. Dollar price of Gold. Bill Buckler, The Privateer Watch the price of gold soar! (Ed.) Nov 18, 2011, 11:05