Happy Anniversary

263
Mon, Aug 15, 2011 - 10:31am

In case you missed it, today is the 40th anniversary of the decision by the great republocrat criminal, R. Milhous Nixon, to remove the U.S. from the "gold standard". The Turd was only five when it happened so I cannot be held responsible for my inaction.

Nixon Ends Bretton Woods International Monetary System

I wrote about this some time ago. For your enjoyment, here's a link:

https://tfmetalsreport.blogspot.com/2010/12/preparing-accordingly.html

OK, enough of that. All of the commodities are up this morning but gold is down. That is about to change so let's get started. We have a few things to cover.

First up, gold. In January, near the bottom of a nasty correction and with gold near 1340, I gave you "1600 by 6/10/10". When the call came up either $22 short or six weeks early, depending on how you look at it, I took a rash of sh*t from people who, apparently, expect perfection. Several weeks ago, when gold broke through 1600, I gave you "1800 by Halloween". That seemed to work out pretty well. Hmmmm. Lots of crickets out there. Now, I'm on the line with "$44 silver by Labor Day". Lord help me if silver only makes it to 43.92. Anyway, back to gold. As you can see on the chart below, it is clearly forming a short-term bottom. It has twice tested and held key support between 1725 and 1730 and has since gone flat. This won't last long. Your first clue that gold is heading back to 1800 will be a breach of 1750. Watch that level closely.

Silver faces a moment of truth later today. It is getting ever-so-tightly wedged into a pennant. All signs point to silver breaking UP and out of the pennant. The fundos are extraordinarily strong and on a short-term basis, all of the other "commodities" are up today. Watch the 39.50 level for clues.

Lastly, I found this earlier today on ZeroHedge. As you know, I have a penchant for historical trends and patterns. As Shakespeare said, "what is past is prologue". In the case, the author has found some startling similarities between the current day U.S. and the late stages of the French monarchy. Before getting started, I suggest a stout cup of coffee or some other mental stimulant. Though the information is well-researched, I found the manner in which it is presented to be somewhat challenging. But, what do I know? I'm just a turd.

https://www.zerohedge.com/news/sun-chairman-whats-future-prologue-and-why-second-french-revolution-coming-america

At any rate, here's the paragraph the bast relates to what we do here. If you're still living in some dream world where you follow the "stock market" in the hopes of growing your "retirement account", the passage below should help raise you from your slumber:

"Painted in oscillating shades of red and green on our dealing screens, we can also see the full, epileptic frenzy of our broken financial markets, no longer evidence of the rational allocation of hard-spared capital to the enriching process of patient and diligent entrepreneurship, but a wild, computer-driven video arena where countless billions swarm into and out of the sea of tickers from one micro-second to the next, with each successive ebb and flow of this leveraged flood further reducing the informational content of the associated prices and so defeating the very purpose of the capital market itself."

I have lasts of 1745 and 39.51. It's going to be a very interesting day. More later. TF

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  263 Comments

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Rui
Aug 15, 2011 - 10:43pm

No way around HARD money

  • A viable economy lives on production.
  • The more and better products we produce the more we get to consume and thus the higher our living standard.
  • People are willing to produce when they are rewarded to do so.
  • The way to reward producers is paying them honest, hard & undiluted money and allow them to keep it (AKA little tax).
  • If they are paid with diluted monopoly money then they are robbed by the diluters.
  • Productive people will first call for fairness and demand the dilution to stop.
  • If government strong-arms producers into accepting the diluted money they lose the incentives to produce.
  • "If you cannot beat them join them." Some producers decide it might be better to join the diluter camp to steal from others.
  • So less and less people are willing to produce. More and more are interested in gaming the system as well.
  • The end result is less and less products are made available, thus economy begins to tank.
  • Our living standard starts to flatten out, then stalls and eventually rolls over to fall, which is where we are NOW.
  • No amount of GOVT coercion/monopoly can generate a nation of happy productive people (just ask the old Soviet Unions).
  • The only way out toward prosperity again is rewarding productive people once more.
  • That means going back to sound money, low tax and small government.
  • FIAT and sound economy are mutual exclusive no matter what kinda "gold" lip stick is put on it.
  • If it's another form of inflatable FIAT then it's doomed to benefit the diluters at producers' expense again.
  • Call it "my gold", "your gold", "mother-in-law's gold" or whatever the only viable one has to be undiluted hard gold.
Eric OriginalIrene
Aug 15, 2011 - 10:40pm

Me too!!

Me too!!

Irene
Aug 15, 2011 - 10:35pm

Eric

Say it ain't so! Collectibles? They say gold is a collectible? I don't collect gold, I hoard it!

¤
Aug 15, 2011 - 10:34pm

Kenklave

I agree with your view on $12,500 being low if it gets to that point where gold needs to be drastically reevaluated. I picked a pretty high number I heard J. Sinclair and others mention. I just didn't want to go too high.

I don't think any Govt. would allow or give it's people that much money for gold if it were confiscated or available for conversion into who knows what currency at that point. If they were smart they would set the price really high like you said and then tax it at 50%.

I'm definitely not into taxes and especially high taxes but I have to ask myself...If gold were at $50,000-$100,000 per oz. and they taxed me 50% would I care a whole lot (even if it does suck)?

$25K-50K free and clear after taxes on a oz. of gold? You bet I would sell it if a alternative currency was established that was going to be in place for maybe the next 50-100 years like the USD. As strange as it might sound, the USD might be around a lot longer then we anticipate. It won't die easily unless we (Govt.) allow it to do so for whatever sinister plan the Central bank has to clear the debt off their books in the biggest accounting gimmick in history.

Tesla
Aug 15, 2011 - 10:30pm

@Save America1st

E-bay with some fiat raised by selling extra clutter and useless schwag around the house. I bought a whole roll.. although there were some nice ones mixed in that one in particular really stood out as exceptional.

(5 pesos each... I'l trade you 50 of my Pesos for your 50 Pesos!)

Mudsharkbytes
Aug 15, 2011 - 10:20pm

About that gold revaluation to $7,000 deal

Methinks I would want to trade my silver in for gold before this happens.

I mean, as it stands now, if gold were revalued to $7,000, the G/S ratio would change to a whopping 175!

Seriously, If this ever happens, I would think it would lead to a severe silver shortage, as folks of my mindset would want to swap their silver for gold ahead of the revaluation, then afterwards, swap back into silver and wait for the G/S ratio to normalize, which should happen soon enough.

Wouldn't take that many people doing this to deplete the available silver inventory and send it through the roof, maybe.

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Eric Original
Aug 15, 2011 - 10:18pm

Collectibles

Here's the verbiage from the IRS instructions:

"Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible property."

Clearly, bars would be bullion. Coins or Bars, you are screwed either way.

¤
Aug 15, 2011 - 10:16pm

Real Estate for Gold Mandated by Law

Nice to hear from you Irene. Your right, they could care less.

I'm hoping that gold becomes so integral (finally) that it won't be necessary to sell it to profit from it. And if the Fed. Govt. was smart about it they would let gold be accepted for property exchange or land purchases etc. to help clear the real estate market a bit.

I've been thinking about this a bit and it's a incomplete thought so far but it goes something like this.

1) Lots of available real estate and it's not really moving despite low interest rates. A lack of liquidity or available credit from gun shy banks keeps credit tight.

2) Banks (and the Govt. via Fannie/Freddie) have lots of foreclosed and underwater properties on their books and can't dump them fast enough o provide clear title or documentation to do so.

3) Banks want gold and silver badly and want to offload properties anyway possible. Gold and silver would probably be preferred by them if it were allowed by law as payment for said properties. (pretty sure you all had a light bulb go off there)

4) The Govt. (Central Bank) allows gold and silver to be used for major transactions including real estate and land purchases. Congress passes the law to allow it.

5) Banks are happy with the gold, and the properties and land that the banks (Govt.) hold will start to get sold off at bargain rates in lieu of gold and silver into the banks vaults. The Govt. mandates that titles and documentation on those properties sold for gold/silver get Federal guarantees of a clean final deed and title that is declared valid and enforceable by law.

6) Banks eventually get control of prime tracts of real estate through use of other peoples gold and buy properties from themselves (wtf?) just like our Fed. is buying Treasuries from the US in the form of asset purchases. (someone please explain how that really works and how it makes any sense) They repay themselves with the same gold. (GLD and SLV come to mind?)

Since the Fed. Govt. is essentially run by the Fed. Reserve, all gold and silver that go to a bank is collected from those banks in exchange for fiat or more lax Fed. lending to those banks. The Gold and silver end up in Govt. vaults.

It could work but that would mean that they would have to give us an even break, and they won't. Plus it's too outside of the box for them to even conceive of. Just look at how Ron Paul is treated and has been for many years.

What the Pols. are good at is mocking things that frighten them or they simply don't understand or get. They have successfully done so (so far) with Ron Paul but I think the closer we get to the election the more traction he will pick up.

latcho
Aug 15, 2011 - 10:14pm

vegeterians

get fed up with virtual ham...

Bohemian
Aug 15, 2011 - 10:11pm

Kenklave

"Keep in mind Europe has no vat on gold. They are not stupid..."

I think that's not correct, kenklave. Every year they make a LIST of gold coins and gold bars which are considered an "investment gold". I mean, every member state makes such list of investment gold without VAT, and then they put it together as one list. Some coins in one state could be without VAT, the same coin in another state might be with VAT. Usually, all those well known world-wide accepted coins are without VAT. All other forms of gold and silver are with VAT. if you would try to sell your U.S. or Canadian coins, they might ask you for a proof of ownership (the bill is enough, but it is also a tax reporting issue).

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Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

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