By Dr. Ron Paul, GoldSeek

Last week, the Financial Crisis Inquiry Commission kicked off their first round of hearings on the causes of the economic meltdown on Wall Street.  The commission is being compared to the the Pecora Commission launched in 1932 to investigate the causes of the Great Depression.  The Pecora commission is beloved by those who believe the solution to every problem is more laws because it was used to justify a number of new laws, including Glass-Steagall.  Of course, none of those laws addressed the real causes of the Great Depression.   It was the introduction of unsound monetary policy and central economic planning pursued by the Federal Reserve that really threw everything off balance.  The Fed was founded in 1913 to stabilize the economy and prevent a recurrence of the short-lived Panic of 1907, but instead it promptly produced the Great Depression which lasted more than 15 years.

The Pecora Commission was stacked with big government sympathizers who blamed the free market and the gold standard without question, and without any consideration of government interference in the economy.  This panel is no different.  Never will they contemplate how government steered us into this crisis, and what perverse incentives can be removed or repealed so that the market will function more smoothly.  Never will they discuss how investment should come from savings, not debt.  Never will it occur to them that fiat money, artificially low interest rates and the whole Federal Reserve System might be unwise and unstable, not to mention unconstitutional.  The answer will always be more government regulation and oversight.  It is predictable that this government panel will eventually come to the firm conclusion that government needs to be bigger, and that the market is just too free.

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Even though multitudes of American investors have lost faith in Wall Street and our nation’s banking system, they can still show their patriotism by purchasing American gold bullion, as they convert their wealth into precious metal diversification. Traditional investments in stocks and bonds have had their overextended course of contrived prosperity, now it’s time to pay the piper. As we all prepare for the treacheries of an indeterminate inflationary period, many investors are claiming financial independence from our banks and brokers by diversifying with American gold bullion like Engelhard brand, one-ounce, and ten-ounce bars, and American gold bullion coins like 22-karat American Eagles, or 24-karat American Buffalos.

Engelhard 24-karat bars are manufactured in New Jersey, and make great items for personal possession, as well as short-term diversifications for rare coins like $20 Lady Liberty’s, or $20 Saint Gaudens, which are traditionally used for long-term stability. Bullion prices usually hover just above the current spot price, and investors can also use this affordability for long-term financial safety, as government approved, gold-backed IRA contributions. Rare coins are not permitted for precious metal IRA storage, but the aforementioned American Eagles, and Buffalo coins are permissible, along with proof, and “Ultra-High” proof versions of the modern American Eagle bullion coin. Investors may also wish to round off their budgets with fractional denominations of the $50 American Eagle, which include ½-ounce, ¼-ounce, and 1/10-ounce coins. These investors are encouraged to complete their research, and then to contact one of our friendly specialists, who offer institutional discounts on bullion, and rare coin.

Danny Burns

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ASX-listed iron-ore producer Gindalbie Metals has received its final environmental approval for the development of its Karara iron-ore project, in Western Australia.

The decision by the Federal Government’s Department of Environment, which followed the announcement of state environmental approval on September 9, represented the final regulatory approval required for on-site construction and development work at Karara to proceed.

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The diminishing nature of some land-based mineral resources (the resource determines where you mine and whether you mine – not a nongovernmental organisation focus which is, in fact, a welcome interest) has increased the importance of marine mining and has reignited the interest of mining houses in this new frontier.

Although Southern Africa has a relatively long history of marine mining, the focus was mostly on land-based natural resources during the commodity boom as the emphasis was placed on large volumes when weighed against the cost of mining.

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Newmont Mining continues to hold talks with the government of Indonesia, ahead of a November 12 deadline for the sale of a total of 24% of the Batu Hijau copper/gold mine, CEO Richard O’Brien said on Thursday.

The company understands that the local government will buy the initial 10% (the 3% and 7% stakes which were to have been sold in 2006 and 2007 respectively), and a price has been fixed for the transaction.

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Clive Corcoran submits:

The following are some musings on the U.K. economy, prompted by an adage that seems quite appropriate for our times of thinking the unthinkable.

1. The U.K. public finances are in dire straits with a likely deficit this year well in excess of £200 billion and with red ink as far as the eye can see. It seems highly likely that within the next three or four years outstanding public debt will exceed 100% of GDP.
2. The U.K. is still in recession with a -0.4% GDP reading for Q3, 2009
3. The fact that the U.K. faces a national election within the next nine months means that there is no immediate political will to address the problem or even to spell it out to the electorate.
4. The markets are expected to fund the deficit through the continued purchase of gilts despite the fact that the Bank of England has indicated that it is winding down its Quantitative Easing program.
5. Sterling recently has exhibited as its default mode a tendency for sudden plunges against other major currencies.
6. A recent posting here reveals that the price of gold as expressed in terms of a variety of currencies showed that holders of the U.K. currency had lost the most purchasing power vis a vis the precious metal over the last five years. The real point of this is to highlight that the U.K. economy has historically been more inflation prone than many others.
7. Could the U.K. government – whatever flavor it takes after June 2010 – be faced with the awkward choice of having to approach the IMF for an emergency loan to bail out the gilts market and prevent a collapse in sterling, or to adopt the euro to seek some safety under the umbrella of a more globally acceptable currency?
8. Will Tony Blair, as the possible new President of the European Union, find that he has been provided with the unique destiny of rescuing the U.K. economy by facilitating the early adoption of the euro in place of sterling?

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Many short-term investors prefer the liquidity of gold American Eagle bullion, since our government backs these modern coins for weight, and precious metal content. These 22-karat coins contain a full Troy ounce of pure gold, and their obverse design is among the most exquisite in existence. The obverse design on gold American Eagle bullion coins are near replicas of the legendary, rare, $20 Saint Gaudens Double Eagle gold coin, minted from 1907 to 1933. The original Saint Gaudens rare coins are vastly more expensive than the modern Eagles, which carry a face value of $50, so bullion investors can enjoy the artistry of a valuable, rare coin at prices that are only slightly higher than the spot price of gold.

The classic design that modern, gold American Eagle bullion coins share with their rare coin counterparts is the image of Lady Liberty walking into view, wearing a long, flowing gown. She is carrying a torch in her right hand, and an olive branch in her left, with the capital building in the background. The reverse designs on both coins portray American Eagles, but are completely different designs from two different artists.

Many household investors are making long-term investments in rare coins like the aforementioned $20 Saint Gaudens, or the $20 Lady Liberty, which is the original Double Eagle gold coin. These investors are diversifying their rare, Double Eagle holdings with gold American Eagle bullion, to capitalize on short-term gains while their rare coins appreciate over time. Investors can receive institutional discounts on their bullion, and rare coins by contacting one of our friendly specialists, who offer these institutional discounts to household investors like you.

Danny Burns

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By Kim Kyoungwha

Oct. 28 (Bloomberg) — Gold may rise to a record $2,000 an
ounce in the next three years as investors hedge against
“massive” inflation sparked by governments printing money,
according to Superfund Financial Singapore Pte’s Aaron Smith.

“In the next few years, after the deflation cycle, we’ll
see massive inflation,” Managing Director Smith, 30, said in an
interview. “Soon, when you go to buy a cup of coffee, you’ll
pay $20 or $30 because the dollar won’t be worth anything.”

The company’s Superfund Green Gold A Fund, which has more
than doubled since its inception in 2005, has lost 15.6 percent
this year because of higher volatility, said Smith, who joined
in 2002. Gold rose to an all-time high this month as governments
including the U.S. boosted debt to combat the global recession.

“When the U.S. dollar crashes, all the paper currencies
have to crash, otherwise if their currencies are too strong,
their economies will be weak,” said Smith, who issued similar
gold forecasts in May and earlier this month. “Another
excellent buying opportunity for investors is silver.”

Gold for immediate delivery, which touched a high of
$1,070.80 an ounce on Oct. 14, traded at $1,039.32 at midday in
Singapore. The metal has strengthened 18 percent this year,
while the Dollar Index, a six-currency gauge of the dollar’s
strength, fell 6.4 percent.

Gold Forecasts

Smith joins investors including Shayne McGuire, director of
global research at the Teacher Retirement System of Texas, and
Jim Rogers in forecasting higher gold prices. Pension funds will
increase gold holdings as currencies decline, McGuire said on
Oct. 22. Gold will probably top $2,000 in the next decade as the
dollar weakens, Rogers said Oct. 7.

Superfund, founded in 1995 and backed by $1.6 billion in
assets, specializes in so-called managed futures, using its own
trading system to generate buy and sell calls on stock, bond,
currency and commodity futures. Still, the company’s flagship Superfund A, which gained 35.4 percent last year, has lost 24
percent this year, Smith said.

The ratio of silver to gold, currently at 62.35, will be
“cut in half” in the next three to five years as millions of
people in South Asia and China buy the metal as an alternative
because they can no longer afford gold, Smith said. Silver has
soared 46 percent this year to $16.65 an ounce.

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India’s Sesa Goa, a $5-billion unit of London-listed metals group Vedanta Resources, is being investigated by the Indian government for financial and other irregularities.

India’s largest iron-ore exporter said on Thursday it and its unlisted Sesa Industries (SIL) subsidiary were under investigation by the Serious Fraud Investigation Office (SFIO), and the probe had to be completed in six months.

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Sesa Goa is being investigated by the Indian government for financial and other irregularities

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