New McAlvany Video

Mon, Jan 21, 2013 - 1:37pm

We've previously posted parts 1 and 2 of this series. Part 3 certainly comes at a most opportune time.

If you watched all or part of the ceremonies in Washington today, you'll likely find the themes of this latest McAlvany video to be rather timely. David addresses many of the issues near and dear to the hearts of Turdville and does so in his usual pleasant, scholarly and convincing fashion. 

Toward the end, the message of the video turns to investments and investing in this challenging environment. Having personally met David and come away impressed, I would encourage you to consider seeking the advice and counsel of McAlvany Financial if you feel your current financial advisors just don't seem to "get it". You may recall that he was a podcast guest here at TFMR back in August. After watching the new video, you might also re-listen to the interview.


The Fuse is Lit Part 3 An American Reckoning

About the Author

turd [at] tfmetalsreport [dot] com ()


nminihan · Jan 21, 2013 - 1:52pm


Love your work

Anonymous · Jan 21, 2013 - 1:52pm

Removed comment

Removed comment.

paulindoon · Jan 21, 2013 - 1:55pm

To ALL our American

To ALL our American neighbours, May this (holi)day and all others o follow, be good to you - & us up here in the frozen North. Although I must report that today has mostly been a SUNNY day. Cold (-10C) but Sunny.

To TF: What an absolute wonderful, useful and invigorating site YOU have made available to all. Thanks so much and we'll keep our periodic contribution omgoing.

balz · Jan 21, 2013 - 2:04pm

Kitco ASE premium (reposted from last thread)

American Silver Eagle, right now : USD $ 38.57 ea.

This is a $ 6.50 premium !

I think this shortage is very real.

HappyNow balz · Jan 21, 2013 - 2:12pm

The shortage of ASE's is very

The shortage of ASE's is very real. Be careful before jumping to conclusions about silver in general.

Corsair · Jan 21, 2013 - 2:40pm

ASE premiums

Kitco's price seems high. Although is doesn't state which year, just this comment "The coin(s) you receive may be from a different year's mintage and may appear different from the one illustrated here."

2013 ASE price at these trustworthy online dealers:

Gainseville Coins ($36.54), APMEX ($37.55), Goldmart ($35.56), Provident ($36.91)

Road_Scholar · Jan 21, 2013 - 2:46pm

32 and 1690

it's amazing what happens when they don't open Globex trading for a nightly raid. Imagine how high the metals would be priced if every night was a flat-line. I like Turd's idea of eliminating "after-hours"...

Live 24 hour Gold Chart

· Jan 21, 2013 - 3:25pm

Please pay particular

Please pay particular attention to the section that begins at around the 9:00 mark. Recall these stats the next time you hear some bubblehead or Fed Goon declare that QE will end sometime very soon.

Road_Scholar · Jan 21, 2013 - 3:27pm

And, as is almost always the case...

...on U.S holidays, look for the $5 "gain" of today to be quickly reversed and taken out, soon after trading resumes at 6:00 EST tonight.

· Jan 21, 2013 - 3:30pm

And some help here

When was it announced that The Fed would no longer return all interest payments to the Treasury? David says 2010! If this is true, it's absolutely criminal!!

That The Fed can print dollars to buy bonds...where the citizens have to pay taxes to cover the interest...but then The Fed keeps the interest payments for itself and its member banks?!?!

Loud Noises · Jan 21, 2013 - 3:50pm

I have enjoyed every one of

I have enjoyed every one of these videos and this one is no exception. They are well done and I feel that they are articulate enough to send to family and friends that need to wake up.

Xeno · Jan 21, 2013 - 4:02pm

Let Me Get This Straight

First of all, thanks Turd for this post with David's video. He is the most direct, clear, and concise without hype person I've ever seen. A walking talking example of someone able to keep a cool head when everyone else is losing theirs.

A lot of good facts and points in this latest video and it was a big surprise that the Fed is not returning interest payments to the Treasury Dept.

So now let me get this straight... the US has not had an approved budget for nearly 5 years and even if everyone was taxed at 100% it would still not alleviate the debt and obligations, and furthermore, people are still paying taxes?? [yes, I'm still an idiot]

How about a real protest? How about nobody pays taxes unless and until a budget is approved and finalized?

Or at the very very very least, reduce tax withholding to as near 0% as you can! Sure you may owe tax next year but if they can't get a budget passed why pay anything?

It seems the politicians understand only one thing - citizen action. Not signing a petition, not writing or calling your rep., action is all they respond to. They sure as hell never listen otherwise.

¤ · Jan 21, 2013 - 4:20pm


One hand washes another.

 I view the Fed as something Uncle Sam created with the purpose of it appearing to be a private (and supposedly detached from Govt. control) banker of preference that conducts the US's monetary business in an unofficial and unelected way.

It's been a near perfect set-up for 100 years between them both. The amount of levers they can still pull or the way they account for their off the balance sheet gimmicks gives them lots of unaccounted room to still maneuver.

 It's little wonder why they'll never allow a audit of any type to take place. The Fed is like a Siamese twin banking appendage the Treasury created for themselves yet kept detached/private for good reason. Money printing and accounting reasons.

So that when Uncle Sam needed a hand he could just help himself out as needed (printing USD) and keeping it ( the Fed.) separate or private so no conflict of interest was seen.

We can see how that turned out.

sweet cheeses · Jan 21, 2013 - 4:23pm

‎"Never forget that

‎"Never forget that everything Hitler did in Germany was legal.
- Martin Luther King, Jr."

Sneakdoggiedog · Jan 21, 2013 - 4:27pm


I don't think that point in the video is completely correct (or it is miscommunication).

Latest Fed press release on the issue (this is issued regularly):

and the chart here:

foggyroad TF · Jan 21, 2013 - 4:39pm

TF asked..When was it announced A little help here..

When was it announced that The Fed would no longer return all interest payments to the Treasury? David says 2010! If this is true, it's absolutely criminal!!

That The Fed can print dollars to buy bonds...where the citizens have to pay taxes to cover the interest...but then The Fed keeps the interest payments for itself and its member banks?!?!

The trick is that the Fed led the reader to assume that "the balance in its surplus account" would be positive. In other words, the Fed was dealing with the standard case where its assets grow over time (because of interest earnings on its bonds, etc.). That would lead the left-hand side of the balance sheet (i.e., the "Assets") to grow, and so something on the right-hand side of the balance sheet (i.e., "Liabilities and Capital") would need to grow by the same amount.

Prior to the announcement, the immediate move would be to mark up an increase on the "Assets" side with a corresponding credit to the "Capital" (or "Shareholder Equity") items on the right-hand side. But now, the Fed is saying that when its assets appreciate, it won't credit the capital accounts. Instead, it will make the right-hand side of the balance sheet go up by entering a new liability, titled (paraphrasing) "Earnings We Need to Send to the Treasury."

(To understand the big picture, keep in mind that after the Fed pays its bills, any excess earnings are remitted to the Treasury. As I argued in this piece, that mechanism means that Uncle Sam effectively pays no interest on those bonds held by the Federal Reserve.)

So far, so good. It seems as if the Fed is simply eliminating one of the steps in the accounting. Before, the Fed would earn income on its assets, would then recognize that jump in its holdings by marking up its capital, and then would transfer some of that increment in capital over to the Treasury.


Denial Is Normal after a Traumatic Loss

Ah, but as Bank of America's Misra pointed out, the real fun happens when the Fed suffers losses on its assets. In normal accounting, when the market value of a company's assets goes down, the firm marks down its "Assets" (left-hand side of the balance sheet) and correspondingly marks down its "Capital" by the same amount (right-hand side of the balance sheet).

The danger is that if a firm loses too much, then it might wipe out all of its capital. At that point, the firm would be insolvent, because its remaining "Assets" would be smaller than its "Liabilities." Remember the basic accounting truism:

Assets = Liabilities + Capital (or Equity)

If the company suffers such large losses that its "Capital" (or "Equity") becomes negative, that is simply another way of saying that the company owes people more money (i.e., its liabilities) than it has in assets. That is the definition of insolvency, and unless the situation is rectified the firm will eventually default on its obligations and go bankrupt.

Fortunately, from the Fed's viewpoint, this tragic outcome is no longer possible for the US central bank. No matter how big the hit to its assets, the Fed will never be insolvent from an accounting standpoint. Even if the Fed's bond portfolio lost $1 trillion in an afternoon, the Fed would be fine: It would mark down its "Assets" by $1 trillion, and under its "Liabilities" it would list "negative $1 trillion owed to the Treasury." Thus the left- and right-hand sides of the balance sheet would still balance, and "Assets" would still exceed "Liabilities."

Over time, if the Fed continued to earn interest income from its holdings, the Treasury would "work off" its debt to the Fed. For example, if the Fed's excess earnings — which would normally be remitted as a payment to the Treasury — were $10 billion in the next quarter, then the Fed's books would show that its liability to the Treasury had increased to "negative $990 billion." (Note that when negative numbers get bigger, they move toward zero.)

Jan 06 2011

Dagney Taggart · Jan 21, 2013 - 4:42pm


I posted back on the Resistance thread. Worth repeating now that my American friends are returning to business....

"SMI is a supplier of blanks to the US Mint.

7600 Mineral Dr. Suite 700
Coeur d’Alene, Idaho 83815 USA Pacific Time Zone
Phone: (208) 772-9592
Toll Free: (800) 274-5837


I have bought directly from them on a few occasions. Call and ask for a quote for 10,000 or even 50,000 Sunshine Rounds and expected availability for customer pick-up."

Good podcast, Turd. Have a good week all. The light at the end of the tunnel approaches....

Steam Train Erupting From A Tunnel
Xeno · Jan 21, 2013 - 5:05pm

Thank You Foggy

Thank you foggyroad for the refresher on govt. accounting. So it seems they are not remitting because there is nothing to remit, kind of like deductions for losses on you taxes.

Now that opens up some interesting question like when (not if) interest rates rise, how much do they deduct for losses going forward and for how long before remittance to the Treas. dept. resumes?

I'm sure that a more discernable answer could be had with a finalized budget out of D.C.

foggyroad TF · Jan 21, 2013 - 5:13pm

TF more help from Zerohedge

To all who thought that the FASB gives leeway only to banks when fudging their numbers, and boosting their equity capital in ways previously unheard of, we have a surprise. The latest entrant in the "accounting gimmickry" club is none other than the Fed. And since the Fed is not auditable by anyone, it gives itself permission to change and bend the rules in any way it desires. Following on recent speculation that the Fed could in theory have a equity capital deficiency due to its massive asset book, and its tiny equity buffer, both discussed many times previously on Zero Hedge (here and here), the Fed recently announced as part of its January 6 H.4.1 release "an important accounting policy change with the release of its weekly H.4.1 report on January 6 that effectively prevents it from facing a negative capital position even in the event that it incurs substantial losses." Here is how Bank of America's Priya Misra explains this curious, and most certainly politically-motivated development: "The Fed remits most of its net earnings on a weekly basis. Prior to this accounting change, any unremitted earnings due to the Treasury would accrue in the "Other capital" account, but will now be shown in a separate liability line item called "Interest on Federal Reserve notes due to the Treasury.” As a result, any future losses the Fed may incur will now show up as a negative liability (negative interest due to Treasury) as opposed to a reduction in Fed capital, thereby making a negative capital situation technically impossible regardless of the size of the Fed’s balance sheet or how the FOMC chooses to tighten policy." And there you have it: instead of reducing the left side of the balance sheet upon the incurrence of losses, the Fed has decided to fudge the right side. And presto. No more possibility of insolvency ever again. Which only means that the Fed's now ridiculous DV01 of just under $2 billion will in no way prevent the world's biggest hedge fund from taking proactive steps to actually mitigate rate risk, and in fact will likely encourage it to gamble even more with taxpayer capital.

note/ ZH commentors are some of my favorite people..

posted jan 21 11 under this article :)

Turd Ferguson
Turd Ferguson's picture

Last year, I gave you $1350 by Halloween.

Today, I give you $1600 by Memorial Day.

· Jan 21, 2013 - 5:29pm

I really hate to do this...

...but the quote from "Alexander Tyler" is bogus. Once again, the idea is valid, at least sort of. More on that below. As to the "Tyler," or sometimes "Tytler," there was a Scottish historian named Alexander Fraser Tytler, BUT HE NEVER WROTE THOSE WORDS!

The Mythical Alexander Tyler and His Theory of Democracy by Gary North You have probably received a letter in your email box sent by some well-meaning defender of liberty. It goes something like this. At about the time our original 13 states adopted their new constitution, in the year 1787, Alexander Tyler (a Scottish history professor at The University of Edinborough) had this to say about "The Fall of The Athenian Republic" some 2,000 years prior: A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the worlds greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to complacency; From complacency to apathy; From apathy to dependence; From dependence back into bondage. Educated people have a fondness for stage theories of social development. The Communist Left embraced Marx's theory for over a century: primitive communism, barbarism, slavery, feudalism, capitalism, socialism, and stateless communism (somewhere, over the rainbow.) The Right has produced a number of stage theories, but none of them nearly so popular as Marx's, nor so inaccurate. When I first read the extract from Tyler's work, I thought it sounded strangely contemporary. He had listed the stages in a tightly written format, rather like a direct-mail advertisement. All that was missing was a bold-faced bullet at the beginning of each line. It just did not "smell" right to me. But I ignored the scent. At the same time, I did not forward a copy to anyone on my various mailing lists.

You can read the rest of Dr. North's article here.

This demonstrates what I said in an earlier post on another thread and on my blog. It's one thing when someone floats a meme on Facebook, but David McAlvany is a respected authority, at least in our circles. Suppose you sent this video to someone in hopes of waking them up, but that someone happened to know the Tyler quote was bogus, or maybe the thought it was great and looked it up only to find out it was bogus. At that point could you blame them if they said this guy was wrong about that, why should I listen to anything else he says? Making stuff up does no one any service at all, and can actually be very counter productive. Now, back to the cycle of civilization. In my research it is no a matter of the form the state takes, it is the very existence of the state itself that guarantees a civilization will fall. The following is something I derived from a Stefan Molyneux video. In my opinion is is far more descriptive of the cycle of civilization than any other. It has nothing to do with politics and everything to with economics.
The Cycle How many times till we learn? 1) In an environment of relative freedom, entrepreneurship and trade produces wealth and prosperity. 2) Increased wealth and prosperity leads to increased tax revenue. 3) Increased tax revenue leads to a stronger state. 4) Increased state intervention and restriction cripples economic activity. 5) The state outgrows the economy and eventually collapses from overreach. 6) In an environment of relative freedom...

It happened to Athens, it happened to Rome, it happened to Spain, it happened to England and it is happening to the United States. It is not the form the state takes. It is the state itself. Any time you grant legitimacy to an organization that is able to perform actions that would be considered immoral for everyone else that organization is going to be come a center of immorality. You'd think after several thousand years of doing the same thing over and over people would have figured it out.

Now that I've finished ranting, I'll finish Mr. McAlvany's video.

ballyale paisan · Jan 21, 2013 - 5:36pm

We just got some 27" iMacs, our first in over the weekend.

We still have some backorders and BTOs yet to arrive, though, 1 BTO (Build To Order) has shipped. Certainly, we still have a substantial B.O. of both the 21.5" and the 27" so they are still constrained, which, in itself, neither proves now disproved my thesis of a silver shortage for Apple. I'll keep the board updated.

I think what might be helpful is, if board member post about other electronic B.O.s (backorders) that they may be experiences or for Apple aficionados to visit their local Apple store or Apple reseller and report what they say.

I would think the retail electronic industry as a whole would be the bell weather that can most easily be observed by the ordinary person in order to ascertain whether there is truly a silver shortage.

The board routinely reports about their LCS's. I think if enough members report on immediate or routine availability of the electronic purchases vs. a longer than usual delivery date, the board might get a clearer and more concise idea of the state of a silver shortage in the electronics industry, if, there really is one.

Supposition #1. I think if Apple can fulfill and clear its B.O.s effectively over the next 4 to 8 weeks and IF silver's spot price goes to $40. within that time span, then I think that Apple will be forced to do a price increase. I think that, if that scenario plays out, it would be a pretty good piece of evidence that Apple had experienced a momentary silver shortage. JMHO.

WHY? There are are three fundamental reasons based on a totem pole top down reasoning.

1. Top of the pole, Solar Power. China is embarking on an enormous expansion of its Solar Power infrastructure in order to increase its power grid while at the same time trying to replace its coal burning power stations. Why? Because the Communisti power elite are dying early and painfully of emphasema, lung cancer, etc. They know that, if they do nothing, their children and their families will follow the same fate, but even earlier. That is not to mention an army of lung diseased city soldiers who might only be able to march 5 miles before collapsing. Training in smog and coal dust doesn't help.

2. The Citizenry. The Chinese Gov't has vociferously advocated that the Chinese citizens start and have started to accumulate silver and/or gold in order to protect themselves against inflation, global financial shocks and surreptitiously, imo, to create a domestic hoard of silver and gold over and above what the Gov't could purchase and hoard.

2a. While a last resort, this above ground hoard could be disgorged into the State coffers for any number of reasons. It is and will swell to greater than Ft. Knox proportions and it will be disbursed such that it could never all be seized by any power other than the Chinese Gov't. and then, but a large fraction.

While the US citizen and Western Europe blithely ignore acquiring truly historic and internationally understood money that has withstood the ages, the Chinese are acquiring an above ground hoard of gold and silver that can buffer their purchasing power through the worst of global financial crises, if each has enough.

One might want to read the "Good Earth" by Pearl S. Buck, in order to get a glimmer of the Chinese mind. Certainly, the Chinese mindset has changed since the writing of this remarkable novel, though I doubt any more than American mindset has done so since its writing.

3. Ah! The bottom of the Totem Pole. Manufacturing requiring silver for it processing.

3a. Put yourself at the head of the Chinese Gov't with the two issues posed above? The Chinese Gov't. as is well known, doesn't think myopically no further than in terms of Corporate Quarterly Reports but in years and decades. When a civilization has existed since the beginning of civilization, a decade or century is not so long. They think of themselves as the "Middle Kingdom" after all, i.e. the center of the World, certainly in terms of culture and cultural achievements. Now they they think in terms of industry, finance and military power.

Given the choice, why would the Chinese allocate more than what is strictly necessary to satisfy Western and even Chinese electronic companies to conduct business, if it were at the expense of the first two from a long term view?

The Chinese Gov't. only get taxes, nice, from the electronics companies. Other than domestic use, The Chinese electronics Co's. ship most of that silver abroad. Worse, the silver in each electronics piece is, at these prices uneconomical to recover. Silver is currently selling at $32./oz at spot. Since there is such miniscule amounts of silver used in each electronics piece, I suspect, that it would take 100 to 200 times the price of current silver prices to economically extract the silver from the heaps of electronic equipment around the world. Just a guess, really. Perhaps, some genius could invent a silver magnet. Perhaps, rather than spending Billion on a useless CIA, that hasn't got anything right in 3 decades, because they don't care. Suppose we take 75% of it's useless, worthless UnDemocratic, Unconstitutional, Treasonous, Anti US anti Every People Budget and spend 10% of the savings on creating recycling electronic equipment and use the rest to help pay off the debt and retire and make redundant the majority of the CIA to go and seek gainful employment, rather than terrorizing the Congress, the POTUS and the People of the US the the rest of the World.


pourty · Jan 21, 2013 - 5:40pm

Links to part 1&2?

I must have missed these, if someone could kindly post them?

Nigel Black · Jan 21, 2013 - 5:46pm

first two videos are excellent

Part One:

The Fuse is Lit | European Perils | Part 1
The Fuse Is Lit Part 2 Asian Ascendance
pourty · Jan 21, 2013 - 5:49pm
tyberious · Jan 21, 2013 - 5:55pm
tyberious · Jan 21, 2013 - 6:00pm



UnconventionalFIN, Published on Jan 21, 2013

This is part 6, continue to part 7:
or Start with part 1:


UnconventionalFIN, Published on Jan 21, 2013

Part 7 is the final segment of this interview, start with part 1:

pbreed · Jan 21, 2013 - 6:03pm
· Jan 21, 2013 - 6:06pm

My take on the David McAlvany Video

Aside form the fact that he is as susceptible to pseudepigrapha as most everyone else seems to be, I thought it was very informative and sobering. As to asset management and protection I find myself asking what about us little guys? If I were to liquidate everything I owned, including my stack, I might be able to scrape together fifty or sixty thousand dollars. If I called somebody like David McAlvany would he even give me the time of day? What good would it do to have my assets in Switzerland or the Cayman Islands or anywhere else offshore if I can't even afford the price of a plane ticket to get there? This is the question I ask myself whenever I see a video like this. Doug Casey's Argentine Galt's Gultch sounds great, God bless him, but it is so undoable for me that I might as well try to move to the Moon.

I guess I'll just keep stacking.

tyberious · Jan 21, 2013 - 6:10pm

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