Thursday, March 30, 2017

The Implication of Currency Dilution

July 31, 2012 by · Leave a Comment 

By Jeff Nielson, Bullion Bulls Canada

In our daily lives, we learn that there are many immutable principles of cause-and-effect. Drop an object from your hand and it will fall down, not up. Throw a rock at a pane of glass and it will break. Put an ice cube in the sun and it will melt.

So too it is with the cause-and-effect known as dilution. Whether we are an adult buying watered-down booze from a bar, or a child buying a watered-down beverage from a lemonade stand; we immediately comprehend that diluting the product has reduced its value – and thus we refuse to pay the same price for it.

Similarly, should a jeweler attempt to tell us that (less pure) 10-karat gold is worth as much as (more pure) 24-karat gold, we would simply scoff at such nonsense and walk away. And as I have noted several times in prior commentaries, even the dim-bulbs in the mainstream media can grasp the concept that if a company prints up a lot of shares (and thus dilutes shareholder equity) that the value of its shares must decline.

Indeed, in the entire known universe we have only one example of an item which (supposedly) does not automatically decline in value as it is diluted: the bankers’ fiat paper currencies. In fact, we have no shortage of clueless scribes claiming that it is possible for these currencies to actually increase in value as they are being diluted. Search the phrase “U.S. dollar rises in value”, and you would acquire repetitive strain disorder before you finished reading all the idiocy on that subject.

Regular readers know that I have found this logical absurdity to be positively maddening. Suggesting that (any of) our incessantly-diluted paper currencies could rise in value is just as insane as suggesting that I could drop something and it would “fall” upward…at least at first glance.

Then it suddenly occurred to me that there was one (and only one) theoretically possible scenario where a good which is being diluted could rise in value: if it was already worthless before the dilution even began. Obviously something which is “worthless” cannot possibly decline in value, as a matter of definition. So even though there is no reason to expect a worthless item to increase in value (as it’s being diluted), since it’s impossible to decline in value then it becomes at least quasi-rational to suggest that it might appreciate in value (somehow).

There is no other possible exception to the principle of dilution: the only good which would not automatically decline in value as it is being diluted is a good which was already worthless before the dilution commenced.

This brings us back to the bankers’ paper currencies. Who is it that insisted that these paper currencies ever had any value to begin with? The bankers. Who is it that leads the media choir in talking about these paper currencies “rising in value”? The bankers.

When it comes to the near-comatose drones in the mainstream media (and their “experts”), it’s not too difficult to believe that they simply don’t understand that these paper currencies were worthless to begin with. However, when it comes to the bankers who created these paper currencies, it becomes much more difficult to believe that these charlatans haven’t known all along that they have been peddling worthless paper to the masses (as fuel for their infinite acts of fraud).

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Embry, Leeb share monetary metals optimism with King World News

July 31, 2012 by · Leave a Comment 

GATA

9:15p ET Monday, July 30, 2012

Dear Friend of GATA and Gold:

Sprott Asset Management’s John Embry tells King World News today that “interference” with the gold market is blatant and, not surprisingly, gold market sentiment is just about at its worst ever. But he expects events to overpower the market manipulation in August. An excerpt from his interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/30_Em…

Also at King World News, fund manager Stephen Leeb says that “a world where you can’t earn any interest on your money” soon will send “an ocean of paper money moving into the gold and silver markets.” Of course if the paper money moves only into paper gold and silver, which is as easily created as paper money and which long has been arranged by Western central banks, gold and silver prices won’t be going anywhere. An excerpt from the Leeb interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/30_Go…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

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Got Gold Report: Most important silver COT chart for 2012

July 31, 2012 by · Leave a Comment 

GATA

9p Monday, July 30, 2012

Dear Friend of GATA and Gold:

Over at the Got Gold Report, Gene Arensberg’s assistant, Colette Chapman, reports that traders who constitute what’s called “managed money” are hugely short silver now, which Arensberg considers bullish since those traders will be especially quick to cover and go long on any rally. Arensberg thinks the key price is between $28.50 and $29. Chapman’s commentary is headlined “Most Improvement Silver COT Chart for 2012″ and it’s posted in the clear at the Got Gold Report here:

http://www.gotgoldreport.com/2012/07/most-important-silver-cot-chart-for…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Ron Paul: ‘Audit the Fed’ moves forward

July 31, 2012 by · Leave a Comment 

GATA

By U.S. Rep. Ron Paul
Monday, July 30, 2012

http://www.paul.house.gov/index.php?option=com_content&view=article&id=1…

Last week the House of Representatives overwhelmingly passed my legislation calling for a full and effective audit of the Federal Reserve. Well over 300 of my congressional colleagues supported the bill, each casting a landmark vote that marks the culmination of decades of work. We have taken a big step toward bringing transparency to the most destructive financial institution in the world.

But in many ways our work is only beginning. Despite the Senate Majority Leader’s past support for similar legislation, no vote has been scheduled on my bill this year in the Senate. And only 29 Senators have cosponsored Senator Rand Paul’s version of my bill in the other body:

http://thomas.loc.gov/cgi-bin/bdquery/z?d112:S.202:@@@P

If your senator is not listed at the link above, please contact them and ask for their support. We need to push Senate leadership to hold a vote this year.

Understand that last week’s historic vote never would have taken place without the efforts of millions of Americans like you, ordinary citizens concerned about liberty and the integrity of our currency. Political elites respond to political pressure, pure and simple. They follow rather than lead. If all 100 senators feel enough grassroots pressure, they will respond and force Senate leadership to hold what will be a very popular vote.

In fact, “Audit the Fed” is so popular that 75% of all Americans support it according to this Rasmussen poll:

http://www.rasmussenreports.com/public_content/business/general_business…

We are making progress.


Of course Fed apologists — including Mr. Bernanke — frequently insist that the Fed already is audited. But this is true only in the sense that it produces annual financial statements. It provides the public with its balance sheet as a fait accompli; we see only the net results of its financial transactions from the previous fiscal year in broad categories, and only after the fact.

We’re also told that the Dodd-Frank bill passed in 2010 mandates an audit. But it provides for only a limited audit of certain Fed credit facilities surrounding the crisis period of 2008. It is backward-looking, which is of limited benefit.

The Fed also claims it wants to be “independent” from Congress so that politics don’t interfere with monetary policy. This is absurd for two reasons.

First, the Fed already is inherently and unavoidably political. It made a political decision when it chose not to rescue Lehman Brothers in 2008, just as it made a political decision to provide liquidity for AIG in the same time period. These are just two obvious examples. Also, Fed member banks and the Treasury Department are full of former and future Goldman Sachs officials. Are we really to believe that the interests of Goldman Sachs have no effect on Fed decisions? Clearly it’s naive to think the Fed somehow is above political or financial influence.

Second, it’s important to remember that Congress created the Fed by statute. Congress therefore has the full, inherent authority to regulate the Fed in any way — up to and including abolishing it altogether.

My bill provides for an ongoing, thorough audit of what the Fed really does in secret, which is make decisions about the money supply, interest rates, and bailouts of favored banks, financial firms, and companies. In other words, I want the Government Accountability Office to examine the Fed’s actual monetary policy operations and make them public.

It is precisely this information that must be made public because it so profoundly affects everyone who holds, saves, or uses U.S. dollars.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Senate Passes Lions Clubs International Commemorative Coin Act

July 31, 2012 by · Leave a Comment 

On Thursday, July 26, 2012, the U.S. Senate passed the Lions Clubs International Century of Service Commemorative Coin Act. In order to become law, however, it needs to pass in the House of Representatives and get signed by the President. If this bill, numbered S.1299, becomes law, commemorative silver dollars would be created in recognition [...]
Related posts:

  1. Lions Clubs International Centennial Commemorative Silver Coins Proposed
  2. 5 Star Generals Commemorative Coin Act Passes House, Awaits Senate Action
  3. Senate Passes U.S. Marshals Commemorative Coins in Silver, Gold and Clad

How To Avoid ‘Lunatic’ Fiscal Cliff

July 31, 2012 by · Leave a Comment 

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CNNMoney.com
By Charles S. Konigsberg and G. William Hoagland
July 30, 2012

Two budget experts – a Democrat and a Republican , both former Hill staffers – say playing games of political chicken when it comes to the fiscal cliff is a ‘lunatic’ strategy.

Charles Konigsberg, policy chief of NEMA, was the director of the Domenici-Rivlin Bipartisan Debt Reduction Task Force and served as assistant budget director in the Clinton White House. G. William Hoagland, vice president of public policy at CIGNA, was Republican staff director of the Senate Budget Committee for nearly 20 years.
Congress and the White House face a clear choice on the “fiscal cliff.”

They can go over it and push the economy into recession in 2013, as the nonpartisan Congressional Budget Office and the International Monetary Fund have projected.

Or they can avoid it. If they do, CBO projects GDP growth of 4.4% and more than 2 million new jobs in 2013.

Unfortunately, the high-stakes game of political chicken currently under way in Congress is increasingly viewed as “good strategy.”

It is a lunatic strategy.

The fiscal cliff is a “perfect storm” of tax, spending and debt deadlines at the end of 2012. The most significant are the expiration of the Bush tax cuts, the onset of automatic budget cuts and raising federal debt ceiling.

The Bush tax cuts expire on Dec. 31. Republicans want to extend all of them. President Obama and congressional Democrats want to extend them for most Americans but let them expire on income over $250,000. Without a negotiated compromise, everyone’s taxes will go up, affecting the middle class and seriously dampening consumer spending.

We also face damaging, across-the-board spending cuts of 8% to 10% in nearly all defense and non-defense programs on Jan. 2 unless Congress acts.

These automatic cuts are mandated by the Budget Control Act, which grew out of last summer’s debt ceiling negotiations. The cuts were triggered by the failure of last year’s congressional “super committee” to develop a long-term debt reduction plan for the nation.

These severe austerity measures — along with others that make up the fiscal cliff — will further weaken the recovery and threaten national defense.

Our nation’s leaders have legitimate differences of opinion on tax policy, spending, infrastructure investment, and how to resolve our long-term debt problems. And they should debate these issues vigorously during the fall election campaign.

However, Congress and the administration should act now to avoid the cliff. They won’t have enough time to do so if they wait until the brief lame duck session after the election.

While there are many ways to avert the cliff, here’s one reasonable approach:

  • Extend all current tax rates and delay new taxes for one year
  • Cancel the 2013 automatic spending cuts but make a down-payment on entitlement savings and revenue increases by enacting a more accurate inflation rate for all indexed federal programs
  • Suspend the debt ceiling for one year
  • Extend business tax incentives and unemployment benefits for one year
  • Direct the relevant committees of Congress to report entitlement and tax reform legislation by July 4, 2013, to reduce debt held by the public to 70% of GDP within a decade and 60% for the long term.

The entitlement and tax reforms necessary to stabilize our long-term debt are by no means “easy,” as some politicians have suggested. But the bipartisan Simpson-Bowles and Domenici-Rivlin Commissions together offer a combination of solid reforms that achieve the required debt reduction.

These two actions — eliminating the fiscal cliff in the short-term and stabilizing the debt for the long-term — must be linked to be credible.

Together, they would strengthen our economic recovery, maintain our national defense and achieve long-term fiscal stability.

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Gold Hovers Above $1,620/oz, Central Bank Meetings Eyed

July 31, 2012 by · Leave a Comment 

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Reuters
By Rujun Shen
July 30, 2012

SINGAPORE, July 30 (Reuters) – Gold held steady above $1,620
an ounce on Monday, as investors wait for the central banks on
both sides of the Atlantic to give clearer cues on further
monetary stimulus.

FUNDAMENTALS

* Spot gold was little changed at $1,623.59 an ounce
by 0021 GMT, after posting a 2.5-percent weekly gain, its
biggest one-week rise in nearly two months. It hit $1,629.10 in
the previous session, its highest since early June.

* U.S. gold futures contract for August delivery
inched up 0.2 percent to $1,621.

* U.S. economic growth slowed in the second quarter as
consumers spent at their slowest pace in a year, increasing
pressure on the Federal Reserve to do more to bolster the
recovery.

* After European Central Bank chief Mario Draghi vowed to do
everything to hold the euro zone together, German Chancellor
Angela Merkel and French President Francois Hollande pledged to
do all in their power to protect the euro.

* This week, investors will wait for the U.S. Federal
Reserve’s policy meeting on Tuesday and Wednesday, for cues on
whether the central bank will launch another round of
quantitative easing, known as QE3.

* The ECB policy meeting on Thursday will also attract wide
attention after Draghi’s comments last week.

* Hedge funds and money managers trimmed their net long
positions in U.S. gold futures and options by about 25 percent
in the week ended July 24, data from the U.S. Commodity Futures
Trading Commission showed.

* Holdings of SPDR Gold Trust, the world’s biggest
gold-backed exchange-traded fund, fell 0.3 percent to 1,248.606
tonnes by July 27, the lowest since early November.

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Top-of-the-Range Mobile Batching Plant

July 31, 2012 by · Leave a Comment 

Batching plants from Thomas Manufacturing are mobile and easily transportable, and can be used for a wide range of applications within the mining industry.

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London Mining to receive royalty payment from BlackRock World Mining

July 31, 2012 by · Leave a Comment 

Blackrock World Mining Trust will pay $110m for a 2% revenue-related royalty to London Mining for iron ore sales from the Marampa mine in Sierra Leone.

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BHP Billiton may delay proposed Olympic Dam expansion

July 31, 2012 by · Leave a Comment 

BHP Billiton may delay a decision on the proposed $30bn expansion of the Olympic Dam mine in South Australia, according to local reports.

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