Fri, Jan 18, 2013 - 11:44am

Watching the metals battle horizontal and MA resistance made me think of our theme song at the old "Watchtower" site. Clearly, it still applies today.

Video unavailable

So, where are we on this fine Friday? Well, first of all, those we're some perfect and beautiful FUBMs yesterday. And don't let the silly name throw you. The FUBM is an extremely powerful and important chart formation. Why? It shows that, even though The Cartels would like to rig prices lower, they are unable to do so because of strong demand for both paper and physical at the discounted/rigged prices. We saw a bunch of FUBMs back in early 2011, when prices were preparing to stage their massive rallies. Here are just a few examples:

  • (12/29/10)
  • (1/26/11)
  • (2/3/11)
  • (2/16/11)
  • Do yesterday's FUBMs signal that a similar move is coming over the horizon? We'll see, I guess.

    Another bit of circumstantial evidence of the impending rally comes from the sales of ASEs out of the U.S. Mint. The biggest January on record was January of 2011 with sales of 6.4MM ounces. Yesterday, as we crossed the 6MM mark on just the 17th of the month, The Mint suddenly "suspended sales" through at least the 28th. ( This looks and smells pretty fishy to me. Are they trying to mask and conceal demand OR are they simply out of metal? Actually, who cares?? Either situation is extremely bullish for silver. Since silver has proven to be a rare "Giffen Good" where demand actually increases as price increases, this overwhelming investment demand is just another, very strong indicator of future price.

    But if the U.S. mint is having so much trouble finding silver that they have to suspend sales, how on earth can the SLV find and secure 18.4MM ounces (572 metric tonnes) in just one day?? ( Pretty amazing, huh? Let's see, you can only load and transfer about one tonne at a time, maybe two if your truck is big enough. But the logistical magicians in the Custodial Department of JPM are able to transfer 300 truckloads in a day. Wow! No wonder they make the big bucks!

    Even more amazing is the fact that this (alleged) addition brings the new silver added to SLV up to 650 metric tonnes, year-to date. On 1/2/13, the total tonnes in trust were 10,085. As of last night, the number was 10,735. That's an increase of 6.44%.

    More amazing still is the fact that these (alleged) additions have taken place while the GLD has seen a huge drawdown. On 1/2/13, the total gold held in the GLD was 1348.92 tonnes. As of last night, it was down to 1332.61. That's a drop of 16.31 tonnes or 1.21% in just the past two weeks. So, silver is magically appearing while gold is disappearing. Hmmmm. What do you make of that? The most obvious answer is that it's all just a big charade and scam, but, what do I know? Who am I to question something that seems so obvious? I'm sure that everything is completely on the up-and-up. That JPM is custodian for SLV and HSBC does the same for GLD only inspires confidence, right? Right???

    Back to silver, a Turdite named "Ballyale" graciously shared with us an interesting, if anecdotal, tale last week regarding his interactions with Apple and their production delays in producing Imacs, etc. Ballyale speculated that these delays were due to the current scarcity of available silver (though it's clear that plenty is available for the SLV). The good guys over at SilverDoctors took the story and ran with it, today producing a post that neatly sums it all up. I encourage you to read this thoroughly.

    And this is fun. Jeff Nielson at BullionBullsCanada has written another excellent and well thought-out piece on silver manipulation and he discusses it in the context of platinum which, as you know, we are currently watching very closely here at TFMR. (Retreating from its fourth attempt at $1700 as I type.) Please read this article and support Jeff's site. He's a good dude and he works very hard, trying to expose and publicize the manipulation.

    Then there's this. On Wednesday I received an email from a longtime Turdite. I found it so alarming that I immediately wrote him back to ask if I could share it with the entire community. Thankfully, he obliged. Presented below without comment. Please give your full consideration to this, too.

    Thank you again for your dedicated service. I'm a daily reader and a big fan.
    I wanted to take a minute and share with you a very scary experience I had yesterday (Jan 15). I keep a portion of my rock collection at JP Morgan Chase in safety deposit boxes. This has been my bank since I moved to this town, I have had these boxes for nearly 10 years. Several years ago I was given 2 of them for "free" as a thank you for the various accounts I had with this branch. There seems to be quite a bit of turnover at the retail level and the branch manager that gave me these boxes left 2 years ago. I have been to the bank many, many times since then and got to know the new people to a lesser degree than the previous manager. I confirmed with the new manager that the same arrangement was in place, she agreed.
    Yesterday I went to my JP Morgan Chase branch to make a deposit and touch my collection as I often do. The teller looked puzzled and said "We've been looking for you!". My address hasn't changed, my phone number hasn't changed and they volume of junk mail/account statements sent by them hasn't changed. "We've been sending you letters for the last year about your boxes, they are going to be drilled on 1/31 with the contents sent to the State of *******. Once they go to The State, it can take up to 2 years to get your property back after you pay the levies, fines and fees". Needless to say, the blood ran out of my face. The teller explained to me that my payments were past due for the boxes and it was their policy to drill the boxes and send the contents to The State after a year. Needless to say, I stopped caring about the deposit and began moving the contents. She assured me that she would wipe the issue clean and we'd be fine so I wouldn't have to move anything. Yeah right, my pockets and quickly emptied briefcase nearly gave out as I left 20 minutes later.
    How is it that I 5 pieces of mail from The Morgue each week but not these critical pieces? How is it they'd just drill the lock and send the contents away (probably in the trunks of their cars to their homes) when my phone number and address is the same as it's been? Why would they not just call me? Maybe just debit my account which they do for the other boxes and nonsense? I know most of these people by first name and they know me the same. I often see these people at Starbucks and the grocery and we exchange handshakes and pleasantries. Nice.
    I thought that some of the collection in The Morgue wasn't a bad idea for diversification's sake and that they're probably the last to go as an organization so it was safer there. Wrong!
    Here is just another example of why not to trust banks and why not to let phyzz out of your control.
    Keep doing what you're doing and we'll keep stacking and thanking you for your sound guidance daily.

    Next, Jim Quinn has a great, new piece that you should be sure to read over the weekend:

    And, finally, the charts. I'm delighted to report that both gold and silver look terrific on their respective dailies. Yesterday's failed raids only made them look better in that both metals were able to paint bullish, engulfing candles, too.

    Today, both metals are dealing with horizontal AND moving average resistance (silver 50-day is $32.03 and gold is $1697) and this has momentarily stalled the advance. Additionally, we've got a 3-day weekend ahead here in the U.S. and that usually means that there are more sellers than buyers hanging around. That's OK. I'm confident that we'll put these levels behind us early next week and then we'll move on to The Big Test. This event, subsequently known as "TBT", will set the stage for the rest of the spring. IF the meals can pass this test...meaning IF the metals can break resistance and get above all of their respective moving averages...the stage will be set for a very strong rally. Could it be a repeat of 2011? Possibly. Many of the same conditions exist (ongoing QE, tight supply, strong demand, etc). All I know is that nothing happens until and unless the metals pass TBT. For now, sit tight and watch. Get ready for some fireworks and unnerving volatility. But, be optimistic for there is much to be excited about.

    OK, that's all for now. Please be sure to check back later as I will be releasing a special and very important podcast dealing with the German Gold story. I'll also have some thoughts on this week's CoT, once it's released at 3:30 EST.

    Have a great day and a relaxing weekend. Get ready for next week and the start of TBT.


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    El Gordo
    Jan 20, 2013 - 9:07pm

    As usual, I tend to agree (Mr. Fix & Z)

    As usual, I tend to agree with you up and down the line. My thoughts are that the price explosion will be the result of a collapse rather than a cause. Which ever way it happens, if it holds true to form, it will come without warning and happen quickly. My desire for a larger stack is merely to be better prepared when/if it does happen. Accordingly, I am a beneficiary of low prices so long as they are available. Once on the other side, we may be required to dip into our stack to provide for ourselves, thus the larger the stack, the longer I can go. You have to benefit of excellent craftsman skills for your own use as well as to barter to others. I on the other hand am a worn out old fart who can hardly get around, but perhaps my heirs can benefit from my actions here (they will probably look and say "...that old coot didn't leave us a damn thing except a few shiny trinkets. I told you we should have taken over his finances and put him away years ago)....... "

    Jan 20, 2013 - 9:14pm
    Hagarth ¤
    Jan 20, 2013 - 9:24pm

    "Silver-tongued ventriloquist"

    upon viewing the old propaganda instantly my wonder was directed towards those behind the scenes directing stackers away from gold to silver.

    What has changed in the world in the last 120 years re: the human condition? Those with vested financial interests will always try to sway those people with the inability to spend time doing the research they must for a positive gain in their endeavor.

    Trust in ones ability to parse out the culprits of misinformation and alliances develops over time. If I hadn't gotten into the PM scene 2 years ago this dynamic play would have gone unseen. Detective novels & police who dunnits have never been something of interest, alas this is what has developed in the PM scene.

    Jim Sinclair recently admitted to hiring actors during the 70's to influence trades in Gold, I wonder how many people he calls these days to Prime the gold market in an attempt for making a short term trade that is lucrative. Jim Cramer admitted doing the same thing on many occasions a few years ago, there is a video file of this still on the u tube.

    Developing conviction is Primary to gaining traction on an idea, and this is where the culprits lie to gain Influence. 2013 Bullion Dollars are in short supply "Ramp up the press to get people buying the metal", all to influence a spike in the metal price.

    Those persons that espouse the idea that silver will crush any evil are nuts. Sure I read some of their stuff because knowledge addresses leverage, I feel sorry for any newbies that wishes to watch the play by play in the PMs markets without discretion.

    Silver Bullet Max Keiser seems to have leveraged his fame with northwest territorial mint, sure I don't have proof, but they are selling the silver bullet bullion items. Ranting on all the evil things that are having effect in the financial world including oppression in the US while promoting the PMs is a red flag. It does seem odd that the crackdown on weapons ownership at the same time that these bullion bullets are released is serendipitous.

    Silver is a commodity not an Ideology.

    • Identify the culprits by how they attempt to incite an emotional response to an action.
    • Clarify your views BEFORE taking action
    • Exercise caution when acting on emotions

    To those just getting into addressing their need for PMs, be patient when others are excited, G. Soros (puppet master extraordinaire) says investing is boring, and when things get exciting its time to exit the position.

    Jan 20, 2013 - 9:27pm

    NWO- Confessions of an Economic Hitman

    I posted a bleak world view in an earlier post. Some, if they actually read it must of thought, Wow, what a Cynic!

    Maybe they thought, New world Order is just conspiracy theory Tin foil hat stuff, what a wacko!

    Well, watch this video and delve into corporate fascism a little, see the Evil that is running rampant?

    Now, reread what I wrote and see how it rings now.

    Thank you.

    Kudos to AG1969 and his previous post, I reposted.

    He is on a 36 hour poconos wedded Bliss extravaganza and will be unable to retain certain mental functionality for a prolonged term.

    Gods Speed Man!

    Well wishes to both the Blisser and Blisee

    Confessions of an economic hitman

    Mr. Fix
    Jan 20, 2013 - 9:30pm

    Reply to foggyroad,

    I just watched your video on the confessions of an economic hitman, I can't say that I learned anything new,

    but I was once again confronted with his disdain for Thatcher and Reagan.

    I have a serious mental block when it comes to those two.

    I've always viewed them as a couple of the “good guys”.

    Hearing otherwise just messes with my worldview.

    I'm sure I'll figure it out,

    at least I know what I'm looking at now.

    By the way, I myself am far too cynical to ever view you as such.

    I prefer to look at it as having a better grasp on reality than most people.

    Jan 20, 2013 - 9:30pm

    @ Mr. Fix

    Well said sir. I feel the same way. I am young and stacked all throughout college and worked 35 hours a week to fund it (just graduated). The opportunities on "the other side" will be beyond belief for the people who have taken the time to preserve their assets.

    That being said, we are both assuming one thing: the good guys are going to prevail.

    Anytime there is a systemic collapse there is a rush for power, whether it be bloody or not. We are all welcoming a collapse because we think it will rid of us the corrupt system, but what if we lose? What if the other side is infinitely more organized than we are and are planning a collapse on purpose. When the collapse happens, they flip a switch, and just like that, a new system comes about (Obamacare? Dodd-Frank? Patriot Act? NDAA?). All of those bills were several hundred pages, if not thousands of pages long. How do we know that we aren't being played and that the foundation for a new system has already been laid and all they are waiting for is an excuse to flip the switch?

    Guys that are reasonably talented like you and I will definitely have it better on the other side, assuming we win. If the collectivists win, I assure you we will be much worse off.... even when each ounce of silver we have is worth 1,000 dollars instead of the mere 32 dollars we were complaining about just a decade earlier, if we are allowed to own gold or silver.

    Jan 20, 2013 - 9:31pm
    Jan 20, 2013 - 9:32pm
    Jan 20, 2013 - 9:32pm

    New Thread

    You could be first

    Jan 20, 2013 - 9:33pm

    Gregor Macdonald: What the

    Gregor Macdonald: What the End of Cheap Oil Means

    We better get smart about using our remaining fossil BTUs

    by Adam Taggart, Peak Prosperity:

    On the heels of Chris’ recent report clarifying the global net energy predicament, he and contributing editor Gregor Macdonald sit down to talk in depth about the broken relationship between energy costs and economic growth.

    For much of the twentieth century, the developed world saw a steady march upwards in wages and living standards, due primarily to huge quantities of cheap, high-yielding liquid hydrocarbon. As we find ourselves bumping along the plateau of Peak Oil’s apex, suddenly we find that “growth” is a lot harder to come by.

    Of course, if you follow the news today, this is not the story you are hearing. Talk of an energy bonanza and imminent energy independence (in the U.S.) are everywhere, thanks to gas fracking and tight oil production. What is missing from the headlines is the cost side of the equation and a blindness towards future demand.

    Jan 20, 2013 - 9:34pm

    Why Shale Oil is Not the Game

    Why Shale Oil is Not the Game Changer We Have Been Led to Believe – Part 1

    by Chris Martenson, Oil Price:

    There has been a very strong and concerted public-relations effort to spin the recent shale energy plays of the U.S. as complete game-changers for the world energy outlook. These efforts do not square up well with the data and are creating a vast misperception about the current risks and future opportunities among the general populace and energy organizations alike. The world remains quite hopelessly addicted to petroleum, and the future will be shaped by scarcity – not abundance, as some have claimed.

    This series of reports will assemble the relevant data into a simple and easy-to-understand story that has the appropriate context to provide a meaningful place to begin a conversation and make decisions.

    Since completing the Crash Course in October of 2008, much has gone as I anticipated in the way of money printing, official neglect of the main predicaments we face, and generally higher petroleum costs (2012 was the record so far on a yearly basis).

    Read More @

    Jan 20, 2013 - 9:42pm

    Geez, Tough Crowd

    Phil Mickelson's comments after the Humana Challenge. (Don't want to write another full post.)

    Jan 20, 2013 - 9:52pm

    Eeeeek! Mr Fix.

    "I was once again confronted with his disdain for Thatcher and Reagan.

    I have a serious mental block when it comes to those two.

    I've always viewed them as a couple of the “good guys”."

    I can't speak for Reagan, but Thatcher (a puppet, not to point the finger) was the mouthpiece the started the handing-over of the UK's energy-producing companies and put it into private hands.

    Oh, it was done because it was said it would promote genuine competition and keep prices competitive.

    All bullshit. They've put prices up and up and up ever since the handover, and this has accelerated massively, particularly in the last 10 years.

    The Thatcher era was the start. In the UK now the majority are suffering from what the gov't at that time did - by handing over the wealth of the country, by putting it into private hands.

    Total privatisation leads to plutocracy. That's where we are now.

    Mission accomplished.

    Jan 20, 2013 - 9:57pm

    Four horseman

    In my opinion they nailed it.

    I was all Rand; Atlas shrugged. But way too brutal as survival of fittest.

    Game of Monopoly - winner takes it all - yet there was enough wealth to go round. Not right

    Yet socialism is not my thing AT ALL. Completely inefficient.

    I have been attempting to think there is some other form of Capitalism. This movie nailed it for me. Very well done.

    Capitalism without compassion and win win does not work for civilization or our planet.


    Jan 20, 2013 - 10:18pm

    Visit to new coin store in Portsmouth NH

    Went away for the weekend with the Mrs. and visited a great coin shop in Portsmouth, NH. Really nice guy, gave me a really good deal. I bought $2 face of Merc Dimes, $5 face of Franklin halves and a US Mint 90% Ellis Island commemorative dollar. All told it comes to 5.775 ounces for $192.

    He was very forthcoming, said he had way more buyers than sellers, and said that silver was manipulated and should be $50 an ounce right now. I agreed it was manipulated and said I thought it should be $150 an ounce.

    I asked him if he had ever heard of He had not but wrote it down and said he would check it out.

    We then had one of the best dinners I have ever had at a Sushi restaurant in Portsmouth called Shio. If you are ever in Portsmouth, you have to eat at this place. Simply awesome!!

    Bollocks, that is not my car, it's my truck.

    I am now going to spend 5 minutes crying over my Patriot's demise today, and then I won't think about them again until next year.

    Puck Smith
    Jan 20, 2013 - 10:20pm

    The Four Horsemen: I am disappointed.

    After an afternoon nap, I finally finished watching The Four Horsemen. From an encouraging beginning, I must say I was ultimately disappointed. As with many other documentaries on social and economic issues it does a good job of pointing out the problems, but then offers solutions which are futile at best, destructive at worst. The filmmakers themselves pointed out that many would dismiss their solution as socialism or even Marxism. Indeed, I think such an argument could be made, but I won't make it myself.

    What they are actually proposing is a school of political economy known as Georgism or Geonomics. The basic idea, as the Wikipedia article I just linked states, is "people own what they create, but that things found in nature, most importantly land, belong equally to all." I would not argue that is Marxist. Indeed, according to the the referenced Wikipedia article, Marx himself dismissed it as little more than a patch on his conception of capitalism. I might say it is a form of soft socialism, but that is not really my critique.

    Once again, I am drawn back to Murray Rothbard. He addressed Georgism in For A New Liberty. To understand Rothbard's reasoning you have to begin with his argument for self-ownership, i.e., a person's property right in his own body.

    The right to self-ownership asserts the absolute right of each man, by virtue of his (or her) being a human being, to “own” his or her own body; that is, to control that body free of coercive interference. Since each individual must think, learn, value, and choose his or her ends and means in order to survive and flourish, the right to self-ownership gives man the right to perform these vital activities without being hampered and restricted by coercive molestation. Consider, too, the consequences of denying each man the right to own his own person. There are then only two alternatives: either (1) a certain class of people, A, have the right to own another class, B; or (2) everyone has the right to own his own equal quotal share of everyone else. The first alternative implies that while Class A deserves the rights of being human, Class B is in reality subhuman and therefore deserves no such rights. But since they are indeed human beings, the first alternative contradicts itself in denying natural human rights to one set of humans. Moreover, as we shall see, allowing Class A to own Class B means that the former is allowed to exploit, and therefore to live parasitically, at the expense of the latter. But this parasitism itself violates the basic economic requirement for life: production and exchange. The second alternative, what we might call “participatory communalism” or “communism,” holds that every man should have the right to own his equal quotal share of everyone else. If there are two billion people in the world, then everyone has the right to own one two-billionth of every other person. In the first place, we can state that this ideal rests on an absurdity: proclaiming that every man is entitled to own a part of everyone else, yet is not entitled to own himself. Secondly, we can picture the viability of such a world: a world in which no man is free to take any action whatever without prior approval or indeed command by everyone else in society. It should be clear that in that sort of “communist” world, no one would be able to do anything, and the human race would quickly perish. But if a world of zero self-ownership and one hundred percent other ownership spells death for the human race, then any steps in that direction also contravene the natural law of what is best for man and his life on earth. Finally, however, the participatory communist world cannot be put into practice. For it is physically impossible for everyone to keep continual tabs on everyone else, and thereby to exercise his equal quotal share of partial ownership over every other man. In practice, then, the concept of universal and equal other-ownership is utopian and impossible, and supervision and therefore control and ownership of others necessarily devolves upon a specialized group of people, who thereby become a ruling class. Hence, in practice, any attempt at communist rule will automatically become class rule, and we would be back at our first alternative.

    Starting from that argument, Rothbard then applies the same reasoning to property rights in land. Assuming the Georgist position that one is indeed entitled to retain the fruits of one's own labor...

    ...if the gatherer has the right to own the acorns or berries he picks, or the farmer the right to own his crop of wheat or peaches, who has the right to own the land on which these things have grown? It is at this point that Henry George and his followers, who have gone all the way so far with the libertarians, leave the track and deny the individual’s right to own the piece of land itself, the ground on which these activities have taken place. The Georgists argue that, while every man should own the goods which he produces or creates, since Nature or God created the land itself, no individual has the right to assume ownership of that land. Yet, if the land is to be used at all as a resource in any sort of efficient manner, it must be owned or controlled by someone or some group, and we are again faced with our three alternatives: either the land belongs to the first user, the man who first brings it into production; or it belongs to a group of others; or it belongs to the world as a whole, with every individual owning a quotal part of every acre of land. George’s option for the last solution hardly solves his moral problem: If the land itself should belong to God or Nature, then why is it more moral for every acre in the world to be owned by the world as a whole, than to concede individual ownership? In practice, again, it is obviously impossible for every person in the world to exercise effective ownership of his four-billionth portion (if the world population is, say, four billion) of every piece of the world’s land surface. In practice, of course, a small oligarchy would do the controlling and owning, and not the world as a whole.

    If, as The Four Horsemen purports to, the real issue to be addressed is one of social order and the reduction of conflict it can be demonstrated, using Rothbard's reasoning, that the Georgist approach does not reduce conflict, it actually encourages it. Hans-Hermann Hoppe has made that very argument in The Idea of a Private Law Society. As with the above excerpts from Rothbard, some initial premises must be clarified before his argument can be presented. I have to begin with Hoppe's a initial formulation of "the problem of social order" before presenting the reasoning he uses to arrive at a solution. In this case Hoppe begins with classic "Crusoe Economics" while adding a little twist in that he assumes Crusoe's Island to be one one which there is no scarcity of material resources.

    Suppose the island is the Garden of Eden; all external goods are available in superabundance. They are "free goods," just as the air that we breathe is normally a "free" good. Whatever Crusoe does with these goods, his actions have no repercussions — neither with respect to his own future supply of such goods nor regarding the present or future supply of the same goods for Friday (and vice versa). Hence, it is impossible for there ever to be a conflict between Crusoe and Friday concerning the use of such goods. A conflict is only possible if goods are scarce. Only then will the need arise to formulate rules that make orderly, conflict-free social cooperation possible. In the Garden of Eden only two scarce goods exist: the physical body of a person and its standing room. Crusoe and Friday each have only one body and can stand only at one place at a time. Hence, even in the Garden of Eden conflicts between Crusoe and Friday can arise: Crusoe and Friday cannot occupy the same standing room simultaneously without coming into physical conflict with each other. Accordingly, even in the Garden of Eden rules of orderly social conduct must exist — rules regarding the proper location and movement of human bodies. Outside the Garden of Eden, in the realm of scarcity, there must be rules that regulate not only the use of personal bodies but also of everything scarce so that all possible conflicts can be ruled out. This is the problem of social order.
    Hoppe states that problem of social order in the special circumstance of Crusoe and Friday in Paradise can be addressed by a single rule: "everyone may place or move his own body wherever he pleases, provided only that no one else is already standing there and occupying the same space." For the real world of material scarcity he elaborates four rules. It is here that he expands on Rothbard's argument against collective ownership.
    First, every person is the proper owner of his own physical body. Who else, if not Crusoe, should be the owner of Crusoe's body? Otherwise, would it not constitute a case of slavery, and is slavery not unjust as well as uneconomical? Secondly, every person is the proper owner of all nature-given goods that he has perceived as scarce and put to use by means of his body, before any other person. Indeed, who else, if not the first user, should be their owner? The second or third one? Were this so, however, the first person would not perform his act of original appropriation, and so the second person would become the first, and so on and on. That is, no one would ever be permitted to perform an act of original appropriation and mankind would instantly die out. Alternatively, the first user together with all late-comers become part-owners of the goods in question. Then conflict will not be avoided, however, for what is one to do if the various part-owners have incompatible ideas about what to do with the goods in question? This solution would also be uneconomical because it would reduce the incentive to utilize goods perceived as scarce for the first time. In the third place, every person who, with the help of his body and his originally appropriated goods, produces new products thereby becomes the proper owner of these products, provided only that in the process of production he does not physically damage the goods owned by another person. Finally, once a good has been first appropriated or produced, ownership in it can be acquired only by means of a voluntary, contractual transfer of its property title from a previous to a later owner.
    Now, the Marxist, the socialist or the Georgist might argue that private property is just one of many different approaches to social organization, but Hoppe demonstrates that private property is not just a solution, but the only solution to the problem of conflict over scarce resources.
    The institution of private property and in particular the establishment of private property by means of original appropriation are frequently referred to as "conventions." However, as should have become clear, this is false. A convention serves a purpose, and it is something to which an alternative exists. For instance, the Latin alphabet serves the purpose of written communication. There exists an alternative to it, the Cyrillic alphabet. That is why it is referred to as a convention. What, however, is the purpose of action-norms? The avoidance of possible conflict! Conflict-generating norms are contrary to the very purpose of norms. However, with regard to the purpose of conflict-avoidance, the two mentioned institutions are not just conventional; no alternative to them exists. Only private property makes it possible for all otherwise unavoidable conflicts to be avoided; and only the principle of property acquisition by acts of original appropriation performed by specific individuals at a specific time and location makes it possible for conflicts to be avoided from the beginning of mankind on.
    The idea of collective ownership of natural resources espoused by the Georgists stipulates that no individual can own land, they must pay for the privilege of using it in the form of "ground rent." It may sound good in principle, but how would it work in practice? Who would collect the rent and who would distribute it? Obviously a miner or farmer cannot just send a check for each person share to everyone in the world. As Rothbard pointed out it would devolve to a group of individuals to administer such a system, effectively putting them in control of the worlds resources--essentially that group would be the owners. The net result would be an oligarchy distributing wealth in the manner of their own choosing. In short, it would be no different than the predatory corporations the film is criticizing. So, as I said above, the solution offered by The Four Horsemen, while it may appear to offer an equitable and just solution to the problem of social conflict over scarce resources, it would in fact exacerbate conflict by concentrating the control of world's resources. In fact, on close examination, it might be seen as arguing for an elite body with authority over the resources and people of the entire planet. That is a world government. Isn't that what the book of Revelation said the four horsemen would precede?
    Note: I'm pretty sure I've violated the rules of research writing in that the material I've quoted makes up a larger percentage of this essay than my own words, but I'm not writing this to establish myself a an original thinker building on the work of other who came before me. I'm simply trying to present the arguments of men who were far more qualified than I am to address the topic at hand.
    Jan 20, 2013 - 10:21pm

    @Santa's Comments

    I respectfully disagree with Santa's latest comments that because of ongoing QE the USD will decline. Logically that is correct BUT currencies are relative to each other so if all major CB's are playing the samee "Race to the bottom" game, which they are, then all currencies will remain the same relative to each other. This explains why, despite QE1-QE4, the USD has remained in a narrow trading range around 80.

    I also believe that if the Fed is determined to push down the USD to inflate away the debt, which in their view is a better alternative to default and reset, they will need to allow commodities to rise and take advantage of the inverse correlation with commodities mostly being priced in Dollars. This will make life even harder for ordinary folks BUT, as we all know, The Fed is there to support its shareholders, the TBTF Banks, not "We the people". It can also hide behind "Benign CPI data" which, of course, does not include "Volatile" Food and Energy prices. Of course, such a position would be positive for PM prices, The Fed CAN'T have it every which way so it may have to let PM's appreciate in the greater interests of allowing the USD to fall and create inflation.

    I have floated this hypothesis on several prior occasions with very little, if any, response and would be most interested to receive critical comments.

    Jan 21, 2013 - 2:49am

    @Bugzy: I'm not sure if

    @Bugzy: I'm not sure if everyone bailed to the new thread before I posted my final review of The Four Horsemen, but if you didn't read it I'd appreciate it if you would and let me know what you think. My main critique was of one of the solutions they put forward, the political/economic philosophy know as Georgism, but I also also fleshed my review out and posted it on my blog. There I added the following note:

    There are other flaws in this film. Notably the references to government regulation of the economy championed by Theodore and Franklin Roosevelt and worker ownership of the means of production. Each of these can and should be addressed, but I am concentrating on Georgism as it is the most egregious of the errors presented. It is also something with which people are least familiar.

    So I would have to ask: do you think hyper-regulation of the economy, worker ownership of the means of production and the concentration of authority over natural resources into the hands of an oligarchy would be viable solution to the current situation? Personally, I find these things to be just the opposite of a free society and I would resist it to my dying breath.

    Jan 21, 2013 - 7:18am


    is big in 'fractals'.............while sometimes somewhat useful, shrinking or expanding both 'X' and 'Y' axis' ....................and comparing the price of a main street blow job to a russian ticket to the space usually a stretch.

    Green Lantern
    Jan 21, 2013 - 8:26am

    @Philipat In the short term,


    In the short term, a currency might trade relatively stronger then a competitive currency because it is in fashion. The thread of the Euro tanking brought people into the US Dollar creating a perception that
    the US dollar was a favorable place to hold money. AT some point any investment even a currency will realize it's fundamental value. It doesn't matter that Tulips are trading at a $1000 per tulip. AT some point a bubble will collapse an the investment realizes it's value. Devaluing ones currency might
    provide a temporary advantage at best.

    The United States succesfully brought other economies to their knee's when there was a bimetal standard and the US Stopped using silver. China for one. Currency wars have been going on for a long time.

    Your theory only looks at one side of the equation, internal monetary policy. The world at large has the power to cripple the US economy. You can control internal factors ie interest rates, inflation, but largely you cannot control external factors and the world dissing your currency. Under Jimmy Carter, he created conditions which I discussed before that almost created a run out of the dollar until Volker came into the fed. Nobody saw it coming. We came inches away from a currency collapse.

    All the conflicts we are seeing are actually currency wars.

    Also a countries ability to pay it's bill's is a result of it's credit worthiness. Who rates various
    countries credit worthiness? In the US, Moody's, Fitch's, S&P which are all regulated by the US Government and paid by the US government. A credit agency walks a tight rope. Say something terrible
    about a countries credit worthiness, and go out of business. We are seeing over and over again that
    credit agencies are useless. Nobody warned of the 2008 crisis. An imminent crisis in bonds will catch
    a great many by surprise, if it happens. And a quick exit out of any currency will drive people out of bad money as they give it away, and hoard good money. With all this repatriation of gold going on it seems to me that we are seeing the process of countries now wanting to hoard good money. Once China and
    the BRIC countries have all their gold. Watch out. Bad money gonna fly out of international windows.

    thurd aye
    Jan 21, 2013 - 8:34am

    She's just biding her time folks

    Nice to see a 2 handle!! ;O))

    Jan 21, 2013 - 6:17pm

    What's all the fuss about

    What's all the fuss about, they should have known, why they gave us Johnny 7 OMA when we was just carpet creepers and crum crunchers.

    Video unavailable
    Jan 21, 2013 - 11:54pm

    Patrancus blast from the past

    LOL My folks deemed that to be off limits on my Christmas wish list .*(

    But my cousin's got one each, yee haw what fun!

    Thanks for the memories.


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