Why QE Will Accelerate And Gold Will Follow - By Egon von Greyerz (18/1/13) PDF Print E-mail
Egon von Greyerz   
Friday, 18 January 2013 14:25

KingWorldNews

Some investors are disappointed as gold only went up 7% in USD in 2012. After having compounded at over 19% p.a. over 11 years, gold certainly should be allowed to just gain 7% without some people calling an end to the bull market. Those who believe the bull market is over are mainly the investors who have missed gold going up almost 7 times in since 1999.

Let me be very clear, the real move in gold hasn’t started yet, it is still to come.

I will summarise some of the reasons why:

1.    Gold is not an investment, it is money. And gold is the only honest money which reveals governments’ deceitful actions in destroying the value of paper money by printing unlimited amounts of it.

2.    In addition to massive increases in government borrowing worldwide, world central banks’ balance sheets have exploded since 2007 and now stand at $15 trillion.

3.    Most of the money borrowed or printed has been used to save the banking system and very little has gone into the real economy. In spite of this, the banking system is no sounder than in 2007 and nor is the world economy.



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The Shady Inside Deals That Are Protecting Goldman Sachs At Your Expense - By Bill Moyers [2], Michael Winship [3] (18/1/13) PDF Print E-mail
Bill Moyers [2], Michael Winship [3]   
Friday, 18 January 2013 14:22

AlterNet

In economist and New York Times columnist Paul Krugman’s book, End This Depression Now!, there’s a chapter titled “The Second Gilded Age” in which he describes the extraordinary rise in wealth and power of the very rich during this era of unregulated greed. Since Ronald Reagan’s election in 1980, the top one percent of Americans have seen their incomes increase by 275 percent. After accounting for inflation, the typical hourly wage for a worker has increased just $1.23.

Big Money, as Krugman writes in his book, buys Big Influence. And that’s why the financiers of Wall Street never truly experience regime change — their cash brings both political parties to heel. So it is that the policies that got us where we are today — in this big ditch of chronic financial depression — have done little for most, but have been very good to a few at the top.

But they’re not satisfied with having only most of it — they want it all. If Krugman were writing his book today, he could find plenty of evidence in the deal that supposedly kept us from going over the fiscal cliff. Behind closed doors, Congress larded it with corporate tax breaks worth tens of billions of dollars — everything from tax credits for NASCAR racing and the railroads to subsidies for Hollywood, rebates for the rum industry and loopholes for off-shore financing that could help giant multinationals like General Electric avoid billions of dollars in corporate income taxes.

Writing in the conservative Washington Examiner [4], columnist Tim Carney says many of these expensive giveaways were “spawned by a web of lobbyists, donors and staffers surrounding Democratic Sen. Max Baucus of Montana,” chairman of the Senate Finance Committee. As we know from the Obamacare fight, Baucus is a connoisseur of revolving door corruption [5]. “Pick any one of the special-interest tax breaks extended by the cliff deal,” Carney wrote, “and you’re likely to find a former Baucus aide who lobbied for it on behalf of a large corporation or industry organization.” Even the pro-business Wall Street Journal was appalled. They called it a “Crony Capitalist Blowout [6].”



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Of Wages And Robots - By Azizonomics (17/1/13) PDF Print E-mail
Azizonomics   
Thursday, 17 January 2013 09:20

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What Do German Central Bankers Know That We Don't? - By Phoenix Capital Research (17/1/13) PDF Print E-mail
Phoenix Capital Research   
Thursday, 17 January 2013 09:16

Ben Bernanke and the rest of the US Federal Reserve bet the farm that they could engage in countless monetary interventions, keep interest rates at zero, and print over $2 trillion in new money without damaging the US’s credibility.

They were wrong. Indeed, Germany just fired a major warning shot to the US Federal Reserve.

On Monday, Germany announced that it will be moving a significant portion of its Gold reserves out of storage with the New York Fed and moving them back to Germany.

A few background details.

•    Germany has the second largest Gold reserves in the world behind the US.
•    Since the early ‘80s, Germany has stored the largest portion of its Gold reserves with the New York Fed (45% vs. 13% in London, 11% in Paris and the remaining 31% in Frankfurt).
•    In the fall of last year, German officials began raising the issue of auditing its reserves at the NY Fed.

Why would Germany suddenly decide that it wants to change a policy it has had in place for over 30 years?



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The Trillion Dollar Trick - By Peter Schiff (17/1/13) PDF Print E-mail
Peter Schiff   
Thursday, 17 January 2013 09:14

Euro-Pacific capital

The birth, and the apparent death, of the trillion dollar platinum coin idea may one day be recalled as a mere footnote in the current debt crisis drama. The ultimate rejection of the idea (which was to use a loophole in commemorative coinage law to mint a platinum coin of any denomination) by both the the President and the Federal Reserve seems to offer some relief that our economic policy is not being run by out-of-touch academics and irresponsible congressmen. In reality, our government has been creating more than one trillion dollars out of thin air every year for the past five. The only difference is that the blatant dishonesty of a trillion-dollar platinum coin is so easy to understand that the public simply couldn’t be expected to swallow it. The American people are more than willing to be fooled, but they won’t tolerate so simple a ruse.

People have a long and intimate history with coins. Some of us collected them as kids, and we all touch and see them every day. Unlike currency bills, we know intuitively that a coin’s value is supposed to come from its metal content. That’s why quarters are bigger than dimes. As a result, most people have viscerally rejected the platinum coin idea. To assign an arbitrary, sky high, valuation to a small piece of metal strikes most people as a deceitful, desperate act. They are right.

However, the same people have no problem with images of thousands of crisp paper notes flying off the printing presses. The acceptance is not impacted by how many zeroes the bills contain. People simply believe that paper money derives value from the numbers, not the paper. This was not always so. Paper money originally entered the public awareness as promissory notes to pay different amounts of gold. Once people got used to the paper, few really cared when the gold backing was finally removed. As a result, the public would likely have been much more accepting of the Fed printing a trillion dollar bill than the government minting a trillion dollar coin. But there was no legal pathway for the Fed to simply give that money to the government.



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