Sunday, November 21, 2010

A Picture Is Worth A Thousand Words

Just a quick post before I get up from the computer.  Sometimes a simple visual is all that's needed

Is Gold A Bubble?

US Money Supply (Above)

Gold Price In USD (Above)

Notice any similarities.  Look at the trend.  Gold isn't simply a "hedge against inflation".  The price of gold flows with the supply of money in the market.  
Gold isn't a bubble, but simply a reflection of the USD.

So, will gold decrease? Only if our government reduces the money supply.  Look what happens to the money supply as of 1970.  It exponentially jumps.  That's when the gold standard ended completely.

Until our government drastically changes it's monetary policy, there will NOT be a long term drop in the price of gold.  

During the Roman Empire, you could purchase a new, nice toga, a new belt, and new shoes with a 1 ounce gold piece.  In the 1920s in the United States, you could walk into a nice men's store and purchase a new suit, a new shirt, and a new pair of shoes for the same price of a 1 ounce gold piece (about $20.80 at the time).

Today, with gold hovering around $1200-$1400 an ounce, you can still buy a nice suit, a shirt, and a pair of shoes for about the same price.

You tell me if gold is a bubble.

Let Freedom Ring!

P.S. Please, Allow Me Deliver My Final Knockout Punch.  Does This Look Like A "Bubble" To You...

Saturday, November 20, 2010

The President Who Told The Truth...

I'm not sure exactly what to make of this to be honest.  I do know this.  JFK was assassinated shortly after this speech.  Listen to the content and what he speaks of about secret societies and how they will be the downfall of our country.


As I've mentioned before, Kennedy not only gave this moving speech about secret societies, but was also responsible for initiating sound money (aka money backed by gold and silver).

Money backed 100% by gold and silver cannot be manipulated and printed on a whim like the money we now have today.  The beauty is not in the fact that gold and silver itself are "valuable" (although they are).  But, the real value of gold/silver backed money is that it cannot be manipulated by governments to overspend and print for bailouts, unnecessary wars etc etc.

I believe Kennedy was the last US President to support the people and not the bankers.  And, look what happened to him.

Let Freedom Ring,

SPOILER ALERT: I May Not Know Who, But WHY JFK Was Assassinated...

Yea, I know.  Just for even bringing up the subject, I'm now going to be labeled a "conspiracy theorist".  It's inevitable.  One mention of a reason or idea behind this automatically gets you thrown into the pot of "crazies".

Well, I'm going to share some interesting information anyways.  It seems that you learn something new everyday.  I don't claim to know everything, and I certainly do NOT claim this information to be absolute truth, but, it does have some interesting connections.  Most of the information around his death focuses on "Who" shot him and "How" was it done and other information.  But, the real mystery lies in WHY.  That's the real question.

I'll be the first to admit that there were most likely overlapping reasons as to why many would want JFK dead.  But, let's just entertain this one idea for now.

Prior to his assassination, Kennedy enacted an executive order called E.O. 11,110.  The subject of the executive order was very simple.  Kennedy believed in the "Gold Standard" or simply a check on the Federal Reserve that prevented them from printing money at their own discretion.  So, instead of allowing the Federal Reserve to continue down the path of printing money with no checks or balances, he decided to take matters into his own hands.  Executive Order 11,110 is a little know order, and it goes as follows...

In practice, this bill was going to put the Federal Reserve out of business.  It was a very strong first step to completely eliminate the need for the Federal Reserve.  It did not completely eliminate the Federal Reserve, but it DID give the government (not the federal reserve) the right to print its own money backed by silver.

If this money were allowed to begin circulating, the results would be obvious.  No longer would the American people trust the currency issued by the Federal Reserve, because it was not backed by anything.  Kennedy's new money would be backed by silver 100%. Therefore, it would be superior, and thus, create no practical need for the Federal Reserve and its printing press.

5 months later, Kennedy was assassinated.  Shortly after, his new "Silver Notes" were repossessed from the market.

Allow me to reference  The Final Call, Vol. 15, No.6, On January 17, 1996

"On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11,110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver. 

After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. The Final Call has learned that the Executive Order was never repealed by any U.S. President through an Executive Order and is still valid."

It makes you wonder, did the following presidents get the message that the money was not to be messed with? 
Where it gets MORE interesting...



One point I'd like to make is that the video references that Kennedy was about to circulate $4 Billion dollars into the money supply of new dollars backed by silver.  Well, by today's standards that would barely be a drop in the bucket. 

But, let's take a look at how much money was in circulation at the time of this move.  As you can see by the chart below, injecting $4 Billion dollars into the money supply would have a HUGE effect on money in circulation.  My best guess, and this is by only looking at this chart (which by the way is from the Federal Reserve website) is that only $10-$30 billion of money even existed when Kennedy attempted to back the money by silver again.  So, $4 billion would be a very large amount of silver backed funds to inject into the economy.

Despite the evidence, there is evidence to refute this theory.  Other evidence suggests that McCloy was a seasoned, trusted government official thus it "made sense" that he be on the Warren Commission (commission setup to investigate JFK's assassination).  In addition, some say that JFK's act wouldn't have had that much of an impact on the monetary system.  What still eerks me is that when you look up the members of the "Warren Commission" and google their names, most of them, if any, were truly investigators of any type.  Most were lawyers, bankers, government officials etc etc.  Where are all the specialized, skilled investigators trying to get to the bottom of the assassination?

You be the judge and decide what happened.  Research the matter for yourself, and draw your own conclusions.

That's it for now,

Friday, November 19, 2010

Stricter Gun Control? Here's why that is totally pointless...

Gun control is a huge issue in the United States (worldwide for that matter).  However, the United States has the most guns per capita for its public citizens than any other place.

I'm not going to get into some philosophical discussion and debate whether gun control eliminates violence from countries and all of that because there's plenty of websites with this data that will show various numbers and statistics.  You can research this topic and decide for yourself.

I'm going to present this one piece of information...

Ask yourself this question...

Do you believe that these guys, and the criminals in the US would change anything about whether they possess firearms or not based on a law enacted by our government? Do they look like they're ready to hand them over for the good of the country?

My guess is no.  Instead of trying to create stricter gun laws and prevent law abiding citizens from protecting themselves, their families, and their personal property, let's continue to give law abiding citizens a fighting chance and let them keep their guns.  Why?  Because I think these gentlemen plan on doing the same.

Let Freedom Ring,

Saturday, November 13, 2010


Please wait until he goes to the library.  This is priceless.  Even if you don't believe what he's saying, it's worth watching.

Friday, November 12, 2010

Afghan War Exposed

Every once in awhile, I'll break away from my posts on finance and monetary policy.  So, here it is.

I don't know about you, but I'm getting sick of hearing on CNN about the US and trying to "preserve" democracy in Afghanistan.  All you hear about is how we "need to maintain a presence" in order to protect ourselves from Al-Quaeda.



In my opinion, these videos are complete propaganda.  As you'll see below, I'm going to post a link to an article that discusses the real issue of the Afghan war.  We aren't there anymore to "preserve" new democracy, fight "war on terror" or to monitor Al-Qaeda (if we were ever doing any of these things).
There are two real reasons why we stay in Afghanistan:

1. It's a strategic position geo-politically and as you will notice, there's plans to build more military bases in Afghanistan.

2. Protect the US position in the Opium drug trade.  If we really wanted to "eliminate Opium" don't you think the US military would wipe out the crops? Instead, US military troops patrol opium fields in Afghanistan as if they're more on security duty to protect the Opium.  There's countless pictures online.  If you don't believe me, Google it to find more pictures....

Fast Forward To 3 Minutes On This One...

Also, here's an article that's an absolute must read detailing the situation.

Another case of the American Public being spoon fed the propaganda of a "threat of national security" when really, there's a whole separate reason.  It's all smoke and mirrors.  But, with our falling economic and monetary system, what choice do we have but to prop up our financial system and government with drug money? You've just received a dose of the hard truth. Take it or leave it.

Let Freedom Ring!

Thursday, November 11, 2010

Tuesday, November 9, 2010

Wealthy Elite Flee To Physical Gold By The Ton

It's interesting to me that something like this actually appeared on Lamestream media.  The context is that the wealthy have fled from paper assets like ETFs for gold, and want the real thing in physical form.  If gold isn't the true currency, then why the panic?

Saturday, November 6, 2010

"Gladiator Games" & The Ignorance Of The American Public

I'd like to share a video from one of the most brilliant investing minds of our time.  If there's any doubt, allow me to share his documented track record.  The following predictions can be found on his The Underground Investor blog.  J.S. possesses an extremely deep understanding of real world economics, and I follow his information religiously.  Here are his past predictions.

June 2006: “The dollar has to weaken not a little, but considerably, for the massive U.S. trade deficit to close considerably. And a stronger U.S. dollar of course makes this less likely to happen (a stronger dollar means that U.S. goods become more expensive for foreign countries, so U.S. exports would be likely to decline). However, because American individuals are burdened with debt as well, Bernanke’s hands are tied as to the number of times he can continue to raise interest rates without causing an economic recession. In the early 2000’s many American’s overextended their credit, taking advantage of historically low interest rates to buy huge houses with low mortgage payments that were really over their budget.” 

Outcome: The sub-prime mortgage fiasco and currency fiasco that we warned about became a reality. Within just one year, the U.S. dollar lost 15% against the NZ dollar, 5% against the Sing, and 16% against the Thai baht not to mention huge losses against major currencies like the Euro and Pound Sterling.

August 16, 2006: “Over seven and a half years, if your portfolio has tracked the S&P 500’s index as some 97% of U.S. professional money managers aim to do, you have about the same amount of money you had seven and a half years ago – only with the rapid devaluation of the dollar, your same amount of dollars buys much less today, so in all actuality, tracking the index has lost you money. That’s a whole lot of waiting for a whole lot of nothing. And that’s the good news. The bad news is, as of 2006, the U.S. stock market’s performance will likely become even worse for the rest of this decade.”

Outcome: When I made this prediction, every single one of my former colleagues in the investment industry with whom I discussed this prediction laughed (and some quite literally, laughed out loud) at this prediction. In fact I remember one investment industry professional stating that the probability of the S&P 500 closing lower than its August 16th, 2006 level at the end of the decade was ZERO, even if one took the effects of inflation into account. Today, at the near end of this decade, four years after
my prediction, the nominal S&P 500 level stands at 1,183.08, down from its nominal level of 1,295.43 on August 16, 2006. Factor in real inflation rates of 10% to 13% between 2006 and 2008 and more recent inflation rates of 8% to 9% (as calculated by and the REAL losses in the S&P 500 in the past four years become quite substantial.

September 6, 2007: “Increased volatility in stock markets will occur as $370 billion in sub prime mortgages re-set to higher rates, starting with $50 billion in September and $30 billion every month thereafter for the next 18 months to 2 years. Triple-digit losses in the Dow during single day trading sessions will become commonplace…2007, and possibly into very early 2008, will present the last opportunity to buy gold at less than $700 an ounce, but not without some volatility in between….We will see a strong rebound in the U.S. markets after a deepening and scary correction. The rebound will be manufactured again by the U.S. Treasury with the help of the U.S. Federal Reserve.”

Outcome: Although it’s hard to think back this far, on September 6, 2007, gold was trading at $685 an ounce. I presented the above opinions at the Pan Pacific Hotel in Asia at an investment forum, after which several investment professionals approached me and told me they believed that gold was too expensive and that they would wait until gold dropped below $600 an ounce again before they would consider buying. These professionals may still be waiting to buy. Gold rose from the $680 level in September to over $1,000 a troy ounce by March of 2008. The London PM fix never closed below $700 an ounce since then, even when the Fed Reserve engineered its now infamous attack against gold prices in October of 2008. Triple-digit losses in the DJIA happened almost daily or several times a week to open January of 2008 just as I had predicted.

November 16, 2007: “With financial and housing stocks slumping and big corrections in many major global stock markets, much of the easy money shorting markets has already been made, though more will come in the future. I think mutual fund companies are the next best bet for now. As the crisis widens, I expect outflows from mutual funds to occur. There have been some funds whose share price has defied current trends and those would be the best bet, Janus Capital among them (JNS). Janus has a trailing 12-month P/E of more than 40 versus the 29 of its peers. But there are others as well.”
Outcome: During the next four months, Janus Capital’s share price plummeted more than 38%.

January 2008: “We can be assured that in 2008, that the destruction of monetary value in both Europe and the United States will occur…when smart investors finally realize that no fiat currency is safe, I believe that investors (at least the savvy one) will begin to dump the Euro and the Pound as well.”

Outcome: In August and October of 2008, both the Euro and Pound plummeted in value, both losing about 25% in value in a very short time period.

July 22, 2008: “The global financial crisis is not under control and becoming better as [bankers and gov’t officials] continually publicly state. My downside target for Fannie Mae right now would be $4 a share.”

Outcome: Though U.S. Treasury Secretary Henry Paulson stated that “[Fannie Mae’s] regulator has made clear that they are adequately capitalized,” Fannie Mae dropped from $19 a share at the time I made my statement to near nothing (turned out my $4 a share prediction was too optimistic!). On September 10, 2007, the US Gov’t nationalized Fannie Mae.

March 11, 2008: “If you are an “old-school” person that believes in the sacredness of and credibility of banking institutions and view Money Market Funds as “safe”, I urge you to re-assess that belief right now. Many Short-Term MMFs invest heavily in Asset Backed Commercial Paper (ABCPs), many of which are backed by these very shady Mortgage Backed Securities.  If the MBS’s go belly up, so does the ABCP, and your MMF, which everyone believes can never lose value, WILL lose value.”

Outcome: It took a little bit longer for this prediction to come to fruition, which of course, opened the doors for people to state I was crazy once again. On September 16, 2008, one of the first and largest US money market funds put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1. Shortly thereafter, two more money market funds also announced their inability to redeem the fund at a net asset value of $1.

March 6, 2009: I stated to my Platinum clientsnow is a good time” to add MORE to physical silver holdings. I further emphasized that this was a long-term play and that while “it is always impossible to determine the timeframe for exactly when these great leaps higher in price will occur, [this] is always why I seek what I feel are low-risk, high-reward entry prices.” 

Outcome: Since then, silver has risen 78% from $13.12 an ounce to $23.31 an ounce
May 31, 2009: I stated to my clients “It’s time to be very cautious with your precious metal stocks”. I explained the reasons why I believed danger was imminent (reasons that have to do with gold price suppression schemes) and why the time was ripe to apply tight trailing stop losses on PM stocks.
Outcome: The AMEX gold bugs index (HUI) plummeted from 398.06 on the first day after I issued the bulletin to 318.27 in the next 15 trading days, a 20% rapid fall.

Later, I'll post Bernake's predictions.  Not surprisingly, they're laughable.

Anyways, without further adieu, J.S. Kim's recent video post.

Thursday, November 4, 2010

Monopoly Money vs. US Dollar- What's The Difference?


One of my favorite economists, J.S. Kim, refers to our US dollar as "monopoly money".  Is it?

Let me ask you a question.  What makes our US dollar different than monopoly money?  It's slightly different colors.  The US paper currency is made of cotton while monopoly money is made of paper only.

Here's a better question.  As a thought provoking exercise, let's say one day everyone substituted the US bills in their pockets, and exchanged them for Monopoly money of the same currency. So, now, ZERO US dollars as we know them exist, and everyone used the paper monopoly money.

What would change? Think about it? What would really change?

In my opinion, nothing would happen.  Why? Because if everyone else has the same paper currency, and accept it as currency, then life would continue as usual.

So, what's really going on here? 

This thought exercise reveals to me that really the only thing that makes the dollar worth anything at all is confidence.  Confidence that the dollar is an accepted store of value.  It doesn't matter if you replaced the picture of Benjamin Franklin with a picture of Michael Jackson, it's still a US treasury note, and it still holds the same value because of confidence.
On to my next point.  What do you think happens to the confidence in the dollar bill during inflation?  When the currency is inflated and debased as much as it has during the last 3-5 years, confidence goes down!  When confidence goes down, people don't trust it, including foreign investors. 

A currency is based on confidence, and quite frankly, with this much printing and money creation going on, I'm losing my confidence, and fast.  How are we supposed to save money, when the currency is printed at a rate like this?

Let Freedom Ring!

Tuesday, November 2, 2010

They Call Our Gen Y Generation... The Boomerangers

Boomerang Kids: 85% of College Graduates Move Back Home

That's what they're calling our generation.  We go to college, and come right back home.  As you will find out, this isn't true for everyone.  Many of the top students will go on and get great jobs out of college, and that's great!  But, if you aren't at the top of the class, or at a prestigious university, is it always the right decision?

Let me give you a few excerpts from this article...

"nearly 15% for those ages 20-24 -- has made finding a job nearly impossible. And without a job, there's nowhere for these young adults to go but back to their old bedrooms, curfews and chore charts. Meet the boomerangers. "

" hard that a whopping 85% of college seniors planned to move back home with their parents after graduation last May, according to a poll by Twentysomething Inc., a marketing and research firm based in Philadelphia. That rate has steadily risen from 67% in 2006."

"..."It's peaking at levels we have not seen before," said David Morrison, managing director and founder of Twentysomething."

 I'm HAPPY with my decision to go to college, but, I'm starting to believe it's not for everyone.  There's only a finite number of jobs that actually need the skills of a college degree. So, with millions and millions of fellow students flocking to college in hopes that it's the ticket to success with a high-paying job, and a happy life, maybe we should think again.  The decision becomes even more clouded when you consider tacking on $10,000, $20,000, $50,000, or even $100,000+ in debt.  For some students, that's not an issue.  But, what about for the ones that it IS an issue?

Trust me, I also understand and can relate to the pressure.  If you come from a middle-class, fairly well-to-do family, it's almost expected that you go to college, quite frankly.  People think of you as a "slacker" or someone with "no ambition" should you even think about not going to college.

I'd like to share with you a video on a short news segment.  It's John Stossel and, if I may say, he's awesome.  For the most part, he tells it like it is, and gives some really thought provoking stories.

So, who should go to college, and how to benefit the most from it?

Personally, after watching this video, and pondering on the subject, I think those that are either:

a. Exceptionally Gifted Intellectually
b. Can go to college without much debt

other than that, you may be wasting your time.  In addition, I'd like to add that I believe college is just as much about making connections and friends, and developing yourself in areas outside of school, as it is the school books. At the end of the 4 years, does it really matter whether or not you have a 3.15 GPA or a 3.55?

Again, if you have a high GPA (like top 10%) from a semi prestigious school, then yes GPA does matter. This video is great!


Let Freedom Ring!