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Tuesday, March 22, 2016

Credit Suisse Gold Bars and Gold IRAs

June 30, 2010 by · Leave a Comment 

By Chris Swiss, Fine Suisse Gold Bars

Diversifying an IRA over several products is a popular choice for many Americans as it allows them to spread their risk over several different markets. One such product that has performed spectacularly in the last decade is gold bullion. With the long-term outlook still looking very rosy for gold, this article discusses how you can add gold bullion to your IRA.

Adding Gold Bars to an IRA
Prior to the 1997 Tax Payer Relief Act, the only gold bullion allowed in an IRA was the American Gold Eagle coin. The Act however made it permissable to add gold bullion bars as well. This is a great advantage for investors as gold bars generally carry a smaller mark-up or ‘premium’ than gold coins. In other words you get more gold for your money when buying bars.

When buying gold bars, there are also a couple of legal issues to bear in mind:

# 1 – Purity
Gold bullion bars for IRA must have a minimum purity of 99.50% or what is also know as 9950 fineness. Credit Suisse gold bars fit the bill perfectly as they are 99.99% pure/ 9999 fineness (also known in the industry as ‘Four 9′s Gold’).

# 2 – Accreditation
The bars must be hallmarked by assayers approved by NYMEX, the biggest bullion exchange in the US. One such approved assayer is Valcambi. Based in Switzerland, Valcambi is one of the largest and most famous refineries in the world. Exclusively manufacturing Credit Suisse gold bars for over 40 years, their hallmark ‘CHI Essayeur Fondeur’ decorates every single bar.

So how do you actually go about adding gold bullion to your IRA? Two reputable companies with expertise in this area are Goldstar and Entrust. They can help you restructure or establish your IRA. Hopefully you now have a better idea how you can add gold bullion to your IRA and why are an excellent choice. Bear in mind this is just one avenue to owning gold. You can also buy gold directly and store it in the bank.

Do you want to profit from the massive increase in gold that is yet to come?

In the past 2 years, gold has increased a whopping 50%, yet more is to come! This truly is a once in a lifetime opportunity. With the right knowledge you can be a part of it.

Click on the link for lots more FREE information on and how you can be a part of the greatest bull market of this decade.

If you think you’ve missed the gold boat…Think Again.


Is Gold About To Peak And Nobody Knows It?

June 30, 2010 by · Leave a Comment 

By David A. Banister, Active Trading Partners

Let me first start by saying I’ve been a long term “Gold Bull” since the fall of 2001, based both on economic factors as well as Elliott Wave patterns that I think are clear on Gold’s Bull rise.  As we are now almost in a Fibonacci 21 months of Gold rally off the October 2008 bottom, I think this pattern is getting long in the tooth.

Gold has risen from $681 at the nadir of the fall of 2008 to $1265 so far, with potential to run to about $1300-$1325 an ounce on this final leg up.  It stands to reason, as with any Bull Market that the Bull gets tired and at some point has to hibernate.  This wave pattern is clearly 5 waves since the October 2008 lows, and we are in the final stages of the 5th wave of this pattern in my opinion.  That means we can have a blow-off top, or we truncate here and start correcting hard.

Bull patterns tend to peak when most are not expecting it, and I forecasted a market top in Mid January and again in Mid April this year in the SP 500 index just prior to huge drops.  These forecasts were based on sentiment and Elliott Wave patterns.  I am now viewing the $681 to $1,265 rally in Gold as a 5 wave bullish structure that is in the final stages of ascent. Fifth waves are notoriously difficult to predict, but taking some off the table here for intermediate traders is probably a wise decision.  Correcting 38% or 50% of the $600 rally would take Gold back to $1030 to $965 area plus or minus, and not invalidate a larger bull structure.

If you would like to view a video forecast with a chart and audio commentary on this Gold forecast, and the preceding wave patterns, go to www.activetradingpartners.com/articles to view for free.

FOCUS, Gold, Stocks, Currencies

June 30, 2010 by · Leave a Comment 

By Sean E. Blair, fastmkt.com

Hello All,

We had quite a day on Tuesday.  Gold started out getting smashed, then recovered.  The recovery may have been due in part to the Stock Indices crashing. Even with a $20 recovery from its lows, I expect we’ll see lower prices in the (near) future.  I was surprised to see the Gold recover without taking out the rest of the stops (arrows pointing at the lows of the bars) that hang in a row just below the market, down to about the 1212.1 area.  In the short term, it’s going to take some real strong new (panic) buying to move it up much further than Monday’s highs of 1246.0.  One thing that comes to mind might be some anticipation or result of the Unemployment Report on Friday.  (Gold chart below)

The S&P took a real dump on Tuesday.  Closing near its lows, I expect one more bump down, to clear out any sell stops below Tuesday, and then a short term recovery back toward its moving averages. The S&P cleared out long term stops below the 1032.25 area and after a move to clear out anything hanging below Tuesday’s lows, I expect the market to turn its attention to knocking out the buy stops from people that have been selling / shorting / chasing the market down. The S&P is far away from its moving averages and I expect it to make a move back toward them.

Below is an example of a market (Cocoa) that got far away from its moving averages and then retreated back. On this particular chart the market got far away on the upside, then went down.

(Remember, there’s no guarantees with any strategy though.)

(Below) I’m looking for the Canadian Dollar to act the same way as the S&P….. Retreat to its moving averages.  If not already long, buy new lows (or perhaps around the 9423 area) for a nice short term spring back up toward the MA’s. Don’t get greedy on the upside, we’re in a downtrend (at least for the short to medium term).

The word, believable or not as it may sound, was that there were a lot of people short the Euro Currency, hence its long term drop, and when the World Cup started people covered their positions so they could focus on the Soccer tournament.  That was the move we saw when the EC bounced from its lows in the 118.84 area up to around 124.77.  Notice that the move started when the EC was far away from the MA’s.

The arrows point out a magnificent row of sell stops (beneath the lows of the bars) that can be taken out as the market resumes its downtrend. Perhaps as the teams leave the tournament the stops will get taken out and the market moves lower. (Hey, fundamentals are fundamentals, but “technically” those lows / stops are goners…. in my opinion.)  The anticipation of further crumbling of the Euro zone might have something to do with it too.

Discussion of strategies and analysis is welcome. My door is always open.

Sean E. Blair

Adler 747, Inc.

Go Here to Open an Account Online: http://fastmkt.com/

Will Debt Forgiveness Work?

June 30, 2010 by · Leave a Comment 

By Rick Ackerman, Rick’s Picks

[Today we present the second of two radical proposals for dealing with debt. Yesterday, Ben Rositas, a frequent contributor to the Rick’s Picks forum, argued for the redistribution of America’s gold bullion to households and to all who are owed.  Today, Rich Cash, another forum regular and blogger, broaches the idea of a return to Biblical Jubilee, or something like it. Although we’ll concede that neither idea is even remotely feasible politically, consider the alternative: a debt deflation that locks the economy into a grinding Depression for the next twenty years. RA ]

Here’s Rich, with a message of (debt) forgiveness in his heart – and a plan:

“One Friday in the San Francisco Financial District after work, a group of movers and shakers got together at Harrington’s Pub for a liar’s dice game that rocked their foundations and changed their lives.  There was such intense play, they ran out of Federal Reserve Notes. They played with cigarettes, matches and pieces of paper IOUs until stakes reached trillions. They worked in an industry where the credit of their word was

When Bono ment with Jesse Helms to talk about debt forgiveness in Africa, it was reported that Helms wept

their bond, yet the stakes of the game became so high, they agreed to forgive each other’s IOUs so they could live to work and play again.

Leviticus 25

“In the Jubilee Year of Leviticus 25, those enslaved because of debts are freed, lands lost because of debt are returned, and community torn by inequality is restored. U2’s Bono invested a lot of time with the Jubilee2000 organization and World Economic Forum, arguing the best way to promote the development of poor countries was to forgive their debts. Bono met with Conservative Senator Jesse Helms, saying Helms wept when they spoke: “I talked to him about the Biblical origin of the idea of Jubilee Year…. He was genuinely moved by the story of the continent of Africa, and he said to me, ‘America needs to do more.’ I think he felt it as a burden on a spiritual level.

“Trevor Neilson of the Bill & Melinda Gates Foundation noted that the battle for development is going to be won at the backyard barbecue, not at the Council on Foreign Relations.  Fast forward seven years, a Sabbatical. Seven Sabbaticals are a Jubilee. Now the irony is it is not developing nations like Brazil, China, India, Korea and South Africa looking for debt-forgiveness to move ahead, but everyday Americans, socked silly by auto loans, credit cards, food prices, medical care, mortgages, taxes, utility bills and nagged by the suspicion their corporation, government or union already spent their pension or Social Security before laying them off.

Bernanke’s Ambitions

“That this is a timely discussion was perhaps signaled by Ambrose Evans-Pritchard’s article last week in the UK Telegraph: ‘Ben Bernanke needs fresh monetary blitz as US recovery falters’. The article claims the Fed Chair now wants to more than double the Fed balance-sheet monetary base from $2.2 Trillion to $5 Trillion, after almost tripling it from 2008 to 2010.  With a 9% decline in the monetary base this year, the alleged economic recovery, measured by Consumer Sentiment, Cost of Living, Employment, Foreclosures, GDP, Home sales, Manufacturing, and Tax Revenues, is rolling over again.

Regional Fed Hawks, echoing the 1930s, don’t want to blow the US Credit rating or Dollar out of the water with yet another insider asset bubble popping. Member banks and Americans cannot afford it. They want the Fed to start unloading $1.75 Trillion of Treasury bonds and mortgages the Fed bought during the crisis, which would pull more money out of the system and let people go back to work.

“The AEP article correctly observed the money multiplier is below 1 (83.8% to be exact), meaning for every additional debt dollar the Fed creates, the M1 supply loses 16.2 cents.

AEP cites the major mistake of the Fed as ignoring the broad economic money supply, buying assets from banks rather than people, as Paulson promised. M3 in fact contracted the last three months at a 7.6% annual rate, in case We the People were wondering why the reported recovery felt like a decline. Despite widespread talk of cutting government spending, taxes and war, nothing happened.  Despite usury prohibitions in the Bible, Quran and Torah, it is clear America can no longer service her debt, and borrowers are slaves to lenders.

‘Slow Crash’ Wins

“What it may come down to is this: Bilderberger Bankers met in Spain and Turkey, reportedly to discuss whether the inevitable corrective crash should be fast or slow. When they decided slow, events including BP, California and Greece overtook them. G-20 just met in Toronto to face the facts. Financial reform subsequently announced last Friday supposedly made bank stocks rally, but they didn’t get very far. Is it over already? We wonder if the economy and market will make it to November elections to remove incumbents who got us into this fine mess.

“While we are not proponents of ripping the band-aid off with a pound of flesh, we think the damage way beyond a superficial cut or scratch that can be covered with more paper debt IOUs.  The body politic is systemically riddled with cancerous debt-dollar usury.

Breaking legs, cement shoes or more economic hits by government mafia will not work.

It is clear after decades of failure the correct way to cure the malaise is not government amputation, monetary chemo or fiscal radiation, but letting free, natural markets do their healthy work to clear bad assets with creative destruction.

“Many may breathe a sigh of relief when Ben Shalom Bernanke and Barack Hussein Obama give up their quest to borrow, spend and tax their way to prosperity. We encourage everyone to read this link and call or write their representative to replace the failing 1913 Fed and IRS with this productive 28 basis point tax. Before our governments create Amnesty for Illegals, Drugs for Warlords and Revalued Chinese Yuan, let them first get our house in order.

“He who does not put out his money at usury, Nor does he take a bribe against the innocent; He who does these things shall never be moved. (Psalm 15:5)

(If you’d like to have Rick’s Picks commentary delivered free each day to your e-mail box, click here.)

Rick’s Picks is a trading newsletter for stock, gold, silver and mini-indexes. All trades are based on the proprietary Hidden Pivot technical analysis method.

© Rick Ackerman and www.rickackerman.com, 2010.

"Smart Money" Shorts Gold

June 30, 2010 by · Leave a Comment 

Bullion Vault
But does that mark the end of gold’s bull market? Hardly…

YOU NEED both buyers and sellers to make a market, says Brad Zigler at Hard Assets Investor, especially in markets like the one in which gold is traded.

There’s no shortage of players in the gold market presently. And there are, in fact, sellers aplenty. Commercial traders, as they’re known, have been building up a net short position that could soon outsize the one which set up gold’s December sell-off.

At last count, commercial traders held the equivalent of 326,571 futures contracts short,  betting that prices would fall. As of October 20, 2009 – six weeks ahead of an eventual $183 swoon – commercial traders were short of 328,344 Gold Futures.

Who are these commercial traders? Well, you can, as the Commodity Futures Trading Commission does, break up commercials into two groups.

  • The producers/merchants/processors/users contingent includes entities that produce, process or deal in gold and use futures to manage or hedge the risks associated with those activities;
  • The other lot, swap dealers, use the futures market to hedge the risk of dealing in contracts for gold known as swaps. A swap is a contract calling for the exchange of cash flows. The buyer of a gold swap might agree to pay the dealer a money market return (typically a spread above interbank lending rates) in exchange for the return generated by gold from a designated starting point.

Swap dealers are primarily investment banks that use futures to manage residual exposures left over after matching long and short commitments internally on their books.

Over the past four years, producers/merchants/processors/users have accounted for 69% of commercials’ net short positions. Swap dealers weigh in at 31%. And the current surge in commercial short positions is an indication that the so-called smart money – those that actually deal in Gold Bullion – are growing increasingly concerned about possible weakness in gold’s price.

Selling Gold Futures at today’s value, after all, provides them a hedge against the receipt of lower prices in the cash market later. But does this mean we’re due for a gold sell-off? Given current market circumstances, probably. Is this the end of gold’s bull market? Hardly. There’d have to be a substantial decline – down to the $830 level presently – to put gold’s long-term trend in jeopardy.

Given the six-week lag between the last high net short position and the market’s top, we might not see a price break immediately. But its likelihood has increased substantially. You can use this as an opportunity to lighten up or to add to your gold positions as you see fit.

Add to your Physical Gold position at the very lowest costs – with maximum safety – at Bullion Vault here…

Europe’s Cracked Dam

June 30, 2010 by · Leave a Comment 

Bullion Vault
"Buy gold" to defend against the collapse of the Euro project…

CALL IT the "broken dam" indicator, says Tom Dyson in Daily Wealth.

Imagine trying to dam a powerful river. You build the thickest dam you can afford. For a while, the dam holds the water back and a reservoir forms. As the reservoir gets bigger, the water’s pressure grows. Eventually, the weight of the reservoir exceeds the strength of the concrete, and the dam starts crumbling…

…and sooner or later, the reservoir ends up in the valley…along with your dam.

Governments build dams in the financial markets all the time. They use currency controls to prevent citizens from taking money out of the country. They hold interest rates at low levels to encourage consumption. They order pay freezes to stop wage inflation. They use subsidies to prop up failing industries.

You can find thousands of examples of failed government dams. But my favorite example is from 1992, when a British government dam failed in the currency markets.

Britain had joined a currency system with the other European countries. To stay in this system, Britain had to keep its currency at a high level. Economic fundamentals didn’t support the pound’s high valuation. So the government built a dam. It spent $50 billion buying the pound and set interest rates at 10% to entice investors to buy it, too.

The problem was, the forces pushing down the pound were too great for the government’s dam. The pressure kept growing, and on September 16, 1992, the central bank raised interest rates from 10% to 15% in a last-ditch effort to shore up the dam. It didn’t work. The dam burst. The pound fell from $2 to $1.42 over the next six months.

Legendary hedge-fund manager George Soros rode the flood and famously made a billion dollars in profit.

Right now, the Euro is in exactly the same place as the pound was in November 1992. Five European countries borrowed too much money. Now they’re struggling to service their debts. The fundamentals call for a much lower valuation for the Euro… or even a complete disintegration of the currency union.

The Germans and the French are the main architects of this currency union and they don’t want their currency to lose value. So last month, they built a dam to prop up its value. They created a $1 trillion fund to guarantee the debts of the weakest economies.

This dam is already crumbling. Greece is the weakest of the troubled countries. Interest and insurance rates on Greek bonds have totally ignored the European bailout plan. They both hit new record highs last week. The markets now give a more than 50% chance Greece will default on its bonds sometime in the next five years.

In other words, investors have less confidence in Greek debt now than they did before the European bailout. This tells me the dam is too weak to hold back the reservoir. I’m sure the dam is going to burst and the Europeans will give up fighting the markets. When they do, the Euro will take another big step lower.

I first covered this idea in the May 15th DailyWealth. In that essay, I suggested three ways for you to bet on a fall in the Euro…including an inverse Euro fund. The Euro was trading around $1.30 then. It’s now at $1.23, having been as low as $1.19. Steve and I both recommended this fund to our subscribers back in December 2009. I took profits last month near the lows. So did Steve. (Our readers pocketed more than 30% gains.) Right now, in contrast, my top recommendation for the average investor to take advantage of the "broken dam" indicator is to simply buy and hold Gold Bullion.

Gold is anti-paper currency that rises when government dams break. Gold has climbed higher every year for the past nine years. And thanks to boondoggles like Europe’s trillion-dollar bailout program, it will rise for many more.

Buy gold live online in open exchange – no dealer mark-up! – only at world No.1 BullionVault…

Master Minds of 1930

June 30, 2010 by · Leave a Comment 

Bullion Vault
Can you guess the speaker…?

"The doctrine of regulation and legislation by ‘master minds,’ in whose judgment and will all the people may gladly and quietly acquiesce, has been too glaringly apparent at Washington during these last ten years. Were it possible to find ‘master minds’ so unselfish, so willing to decide unhesitatingly against their own personal interests or private prejudices, men almost godlike in their ability to hold the scales of justice with an even hand, such a government might be to the interests of the country; but there are none such on our political horizon, and we cannot expect a complete reversal of all the teachings of history."

A friend sent the above quote with an invitation to guess the speaker, says Bill Bonner in his Daily Reckoning.

We could not have guessed it was Franklin Delano Roosevelt, in 1930, when he was still governor of New York.

Which goes to show that the people who rule us are no dopes. It also provides more evidence of our dictum: people come to think what they must think when they must think it.

As last as 1930, Roosevelt was still among the living. He campaigned for president on a conservative platform, arguing that Herbert Hoover was a spendthrift. Roosevelt pledged to balance the budget.

Was he a liar? Probably no more than anyone else. Between being governor of a state and president of the US, his thinking changed. He found that the times no longer called for it. When the Great Depression began, people thought it was just a ‘recession.’ They thought the economy would recover quickly.

It was only when that didn’t happen that the voters demanded the government ‘do something’ to bring the depression to an end. Actually, the government had already done more than enough. It had practically caused the boom of the ’20s…and then the depression of the ’30s all by itself. First, the head of the Federal Reserve at the time had decided to help out his English friends by delivering a ‘coup de whisky’ – lower interest rates – to the financial sector. Stocks soared.

Then, after the bubble burst, the Hoover administration intervened heavily in the markets, refusing to allow the economy to adjust quickly. Not only that, but two errant members of Congress – Smoot and Hawley – set off a trade war, putting further pressure on international commerce and economic growth.

And once again, the feds are meddling. The New York Times:

"The action at the Group of 20 summit meeting here signaled the determination of many of the wealthiest countries, after enacting spending programs to counter the worldwide financial crisis, to now emphasize debt reduction. And it underscored the conviction of European nations in particular that deficits represented the biggest threat to their economic stability.

"President Obama and Treasury Secretary Timothy F. Geithner had consistently advocated a measured approach to debt reduction that would not stymie growth and lead to a double-dip recession.

"The United States, however, joined other countries at the summit meeting, which was met by protests and several hundred arrests, by endorsing a goal of cutting government deficits in half by 2013 and stabilizing the ratio of public debt to gross domestic product by 2016. Canada’s prime minister, Stephen Harper, had proposed the targets, backed by Germany and Britain."

Stabilize public debts by 2016? By then, the US and other major economies will have more government debt than GDP. It is bound to be too late for many of them.

And even this modest goal presumes that economies are able to grow faster than their debt – in real terms. When you get debt equal to 100% of GDP, you’re over a barrel. If interest rates were to return to the double digit levels of the ’70s, it could cost more than 10% of GDP just to pay the interest.

That’s not going to happen. Things fall apart before they get that far out of whack. Something else will have to happen. But what? Don’t know…

But we can take a guess.

The ‘recovery’ won’t work. Instead, as in the economy of the ’30s, the feds will keep trying to help it. They will come to think what they need to think – that they need to spend more and more…until they have spent too much.

Maybe they already have.

Looking to buy Gold Bullion today…? "If there’s an easier way, I’ve yet to find it," says one BullionVault user…

India’s Fragmented Gold Market

June 30, 2010 by · Leave a Comment 

Bullion Vault
How Gold Prices have slowly been unified across the world’s No.1 source of demand…

HISTORICALLY, the gold market in India – now the world’s largest consumer market –has remained fragmented and unorganized, writes Rutam Vora for Commodity Online in Mumbai.

Price disparity is a major concern, the distance between major trading centers playing a key role in price differentiation for Gold Bullion and jewelry. But with electronic exchanges rapidly taking shape, and the number of participants in professional Gold Trading seen rising, the price disparity within India has started wearing away.

Having faced price disparity in the domestic retail gold market, India is now successfully implementing uniform prices in the entire nation. Mumbai remains the most costly place to Buy Gold from, however.

In a bid to create a one-country, one-price mechanism for gold pricing in India, the exchanges have been successful in quoting uniform prices to different participants. The Indian Bullion Market Association (IBMA), jointly promoted by National Spot Exchange Ltd (NSEL) and bullion trade organizations across the country, had taken the task to announce a uniform benchmark price twice during the day. And the difference, if any, will only be due to varying taxes levied by the different state governments, as put by Suresh Hundia, president of the Bombay Bullion Association (BBA):

"The Gold Prices are almost uniform across the country. Only thing is Mumbai is a bit costlier than any other place in India, and that is due to high local taxes."

India’s leading electronic spot exchange, NSEL is at the forefront of bringing uniformity in commodity prices by setting up electronic spot platforms across the country. This platform reflects uniform Spot Gold prices for trading across the country.

The result is similar to that enabled by the London Bullion Market Association, whose largest members agree and publish the global reference price twice every day, first at 10:30am London time and then at 3pm – known as the London Gold Fix.

India’s gold retail market has been fragmented and grossly unorganized. Considering this fact, price deviation between two different locations was obvious. However, with the formation of IBMA, price uniformity has become possible. The association also approves local refineries’ gold output, and certifies whether the metal produced can be traded on the NSEL.

India imports around 400 tonnes of gold annually, which constitutes the major part of the country’s total consumption. Local Gold Prices are therefore pegged to international prices, led by London’s Fix, and to the value of the Rupee against the US Dollar – in which global prices are typically quoted.

But the question arises, when India remains the No.1 consumer of gold, why its demand has no say in price determination in the international market. India has simply remained a price taker as far as Gold Prices are concerned.

The BBA’s Hundia has a different argument on the issue:

"Five years back it was a time when India looked at overseas prices to determine its local Gold Prices. But today the time is such that there won’t be much movement in the international ticker boards till Indian exchange MCX opens in the morning. However the New York Mercantile Exchange (NYMEX) still seems to be ruling the game."

Indeed, according to Hundia, India’s Gold Prices are determined by purely demand and supply factors.

India consumes about 25% of global Gold Mining output every year. For wholesalers, Gold Prices are now almost uniform across the country, thanks to electronic exchanges and ticker boards. But the question still persists for consumers:

How far do these exchange-driven prices reach, and how many people actually followthe prices quoted by the exchange? And still there are differences, even though marginal, among prices quoted by exchanges themselves.

Simply want to Buy Gold at live, international prices online? Go to BullionVault now…

Popular Economic Delusions

June 30, 2010 by · Leave a Comment 

Bullion Vault
Trusting politicians to run the currency and economy responsibly…

SCANNING through my local paper this week, writes David Galland of Casey Research, I came across a letter to the editor that speaks volumes about the popular misconceptions that are dragging this country, and the world, to its knees.

The letter writer, a retired public school teacher, unleashed a litany of solutions for making America’s children better citizens. Summarizing his list (the exclamation points are his, too):

  • Give parents a livable wage!
  • Provide excellent subsidized childcare!
  • Guarantee parental leave with full pay and wage protection.
  • Institute a single-payer health care system.

Regrettably, the gentleman’s perfect-world vision of how things should work is not his alone, but is widely shared. Unfortunately for him and his demanding ilk, it is a vision now made obsolete by the facts on the ground.

Simply, the nation – and most of the so-called developed world – is broke. As is the model that these modern-day economies have been built on – a model that foolishly assumed that politicians could be trusted to manage a currency in a responsible fashion.

Consider, in the 1940s central bank reserves were 70% in Gold Bullion. Today, official reserves are only about 10% gold, even though the price of gold is far higher. The balance of those reserves, for all intents and purposes, is nothing more than IOUs.

Out of a justifiable fear of being repetitious, I’m not going to belabor the point. But I am going to comment that it’s time for people to grow up…to get real about the situation we are in.

To believe that a government that produces nothing can paper over every crisis, as well as provide succor and sustenance to meet every human desire, and can do so infinitely and without a serious consequence, is to believe in tooth fairies and magical beasts that dance through distant woods.

Even so, like the letter writer, there is still a large block of Americans who persist in believing in such a fantastical world – a world where government’s largess should be extended even further. From this crowd you would get rousing cheers to the suggestion that the state should also provide a free and top-notch education to all, quality foodstuffs for both the domestic and foreign needy, high-quality computers (and free Internet connectivity) to every young student, housing subsidies, and open-ended unemployment benefits. And that’s just the short-list.

Back in the real world, the declarative statement "I want" has to now be followed with "and here’s how I’ll be able to save up for it." That’s because even a casual glance at the nation’s finances confirms that the government’s fiscal, monetary, and social policies have been an abject failure… an unmitigated disaster.

While I could illustrate that contention with enough citations to fill a large book, in the interest of brevity I’ll point only to an excerpt from a Globe & Mail article today on the dire state of California’s finances, a fast-moving crisis that can be considered the off-Broadway version of the larger drama now playing out in these United States…

"It’s a story that’s being repeated all across California – and throughout the United States – as cash-strapped state and local governments grapple with collapsed tax revenues and swelling budget gaps. Mass layoffs, slashed health and welfare services, closed parks, crumbling superhighways and ever-larger public school class sizes are all part of the new normal…

"California’s fiscal hole is now so large that the state would have to liberate 168,000 prison inmates and permanently shutter 240 university and community college campuses to balance its budget in the fiscal year that begins July 1.

"None of this would matter much to anyone outside the not-so-Golden State except that California’s budget crisis is a harbinger of a grim dilemma that all Americans will soon confront. The country has built an elaborate and costly government machine, tied to a regressive tax system that can’t generate enough revenue to pay for it all."

Naturally, we want to think of America as America the beautiful. Taking off the rose-tinted glasses, however, presents a different image altogether…that of a bankrupt, highly militarized, and hair-triggered socialist empire that is daily finding new ways to tax its struggling citizenry and tramp all over the Constitution.

Not to be overly dramatic, but the real face of America is increasingly like that of an early-middle-aged woman I saw the other day. She was wheelchair bound, with only one leg, her overweight body covered in poorly rendered tattoos. With a cigarette hanging from the corner of her mouth, she rolled out of a liquor store, a telling brown paper bag in her lap. In other words, the very picture of a life dominated by bad decisions.

While America hasn’t yet been laid so low, it would be a mistake to think it can’t – and won’t – happen. If its leaders and a majority of the population persist in their ignorance of the causes and effects of economic failure, it is all but certain.

And it’s not just economics. Over the weekend I re-read both the Declaration of Independence and the Bill of Rights, and it struck me that if the Founding Fathers were alive today, they would be considered terrorists and rounded up. Furthermore, because the Bill of Rights has been all but voided at this point, they might be dropped into the equivalent of a dark hole with no right to a speedy trial, or any trial at all, for that matter.

Trading our freedoms for security is a bad decision because, in the end, the nation will be neither free nor secure. Much in the same way that, to paraphrase one sage, a government that habitually saves all fools from their bad decisions, ultimately creates a nation of fools.

Fools that, like the letter writer, are clearly not self-made but rather look to the coddling nanny-state to guarantee an agreeable lifestyle. By virtue of the massive wealth that its post-WWII hegemony provided the United States, the nation’s finances could support – for a time – an increasing crowd of moochers. But that wealth is now gone, leaving in its place the world’s largest debtor.

And so it is that in the world now emerging, one where reality trumps fantasy, when talk turns to further stimulus, the conversation should no longer revolve around the ways that the government can prime the economic pumps with yet more borrowing and spending. That’s how we got here in the first place, and a sure road map to an even worse catastrophe.

The continued failures of the government’s misguided efforts can be seen in the latest bad news on the housing market – bad news we warned subscribers to The Casey Report to expect for months now.

"June 23 (Bloomberg) – Purchases of new homes in the US fell in May to a record low as a tax credit expired, showing the market remains dependent on government support.

"Sales collapsed a record 33 percent to an annual pace of 300,000 last month from April, less than the median estimate of economists surveyed by Bloomberg News and the fewest in data going back to 1963, figures from the Commerce Department showed today in Washington. Demand in prior months was revised down."

In the new world, the conversation should – must – turn to the proven ways that government can stimulate the economy; mostly by removing itself and its tax and regulatory burdens from as many areas of the economy as possible.

The world is only going to get more competitive – witness Russia’s decision to eliminate capital gains taxes on foreign investment in that country – and an America dominated by a government lacking all fiscal restraint, urged on by a populace without even a basic understanding of economics, has little chance at remaining in contention. The situation is only made worse by a weakening of the rule of law, concurrent with a regulatory jungle that is only growing more tangled by the day.

Unfortunately, Paul Krugman, reigning champion of the crowd calling for saving the economy by pumping out yet more unbacked government stimulus, is now being trotted out as a possible replacement for the soon-to-be-vacated job of White House budget director. If he secures the position, then all may not be lost, but it soon will be.

The outlook isn’t rosy – but there are still things you can do to protect your assets. Betting on rising interest rates is one of them.

Buying gold today? Make it simple, secure and cost-effective by using Bullion Vault…

US Mint 2010 Product Schedule Changes, Proof Gold and Silver Eagles TBD

June 30, 2010 by · Leave a Comment 

Mint Coin CalendarThe United States Mint on Tuesday published a new 2010 product schedule that offers collectors a full preview of its remaining releases with specific projected dates.

Up until this point, the U.S. Mint had been providing release dates for two months into the future and then general monthly time lines for other coin issues.

Still notably absent from the schedule are exact dates for the uncirculated and proof 2010 American Gold and Silver Eagles, providing a reminder that they may be canceled for a second year. The 2010 bullion versions (investor-intended, non mint marked) have been available since January 19, 2010. The collector uncirculated and proof 2009-dated eagle were canceled due to the enormous bullion coin demand and the resulting shortage of gold and silver coin blanks.

Read the rest of US Mint 2010 Product Schedule Changes, Proof Gold and Silver Eagles TBD (729 words)

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