The anti-globalization movement has global ambitions far in excess of those entertained by the merchants and manufacturers who drive globalization. The latter want to acquire or produce their goods at the best possible costs and sell them for the best possible prices. Not only are these relatively modest ambitions, but they are also perfectly normal: merchants and manufacturers down the centuries have always traded on these assumptions.

A main platform of anti-globalizers against the despoliation allegedly caused by capitalist enterprise is environmentalism, and this vision is entirely holistic – i.e. global! They also embrace goals far in excess of what any economy can bear, especially a developing one: the grandest is the demand that carbon emissions are reduced by an improbable amount in an unachievable time…

The reason: “global warming”. However, this is an ideology and can have no bearing on what real people struggling in real economies must do to survive and prosper. Hence the refusal of India and China to sign up to carbon quotas; hence the puzzlement of Africans and South Americans that they should be sacrificed, denied the possibility to improve their lot because of the perceived “fate of the earth”.

Global warming is now a legislative fact, and it is so because the wrong science is used: the study of the “greenhouse effect” is based on the composition of gases, i.e. chemistry. However, what drives the climate is convection, i.e. physics. The Earth is 70% water, and the land mass that makes up the rest contains high mountain ranges: the effect is the creation of a planetary climate which helps regulate temperatures over time.

“Environmentalism” is merely another attempt by those who despise wealth creation, and all the benefits that flow from it, to reduce western economies and suppress emerging ones.

Yet are there not serious ecological problems such as the unclean and illegal gold mines discussed earlier? Of course there are, but refusing to be blinded by environmentalism means approaching such eco-crises more circumspectly. That is, each crisis must be seen on a case-by-case basis, and not dove-tailed into a wider and misleading perspective. Why should what needs to be done – and more to the point that can be done – to alleviate a local problem, be deferred until globalization and the environment are “fixed”? The attempt to co-opt the unclean gold mines into a productive framework, would demonstrate that such problems can be solved on their own terms – and give true value not only to the gold extracted but to the lives and work of the extractors.

By Mark Rogers

The loss of the triple A is only one of the superficial symptoms of the trends of 2012. The economic crisis continues to deepen, which may well cause the price of gold to climb more quickly than envisaged, but not initially.

The consequences for the economy…

This is not due to having been warned of the possibility of such a loss. Since October last year, the agency Moody had been holding the sword of Damocles over Gallic heads.
The downgrading of the French credit rating from AAA to AA by the credit rating agency Standard & Poor’s has far graver consequences than would be implied by the speeches of leaders who wish to give reassurances, a mere few months ahead of the elections.

The interest rates at which France borrows and which are already twice as high as those of Germany will increase, to cover the risk of default. The first direct impact on the economy is the flight of investors and thus a fall in the CAC 40 index.
And for individuals
Higher interest rates on mortgages, tax hikes, diminished access to credit… the French will have to curb their spending. All the large companies in which the State has a stake (EDF, GDF, France Telecom, Renault, SNCF…) will see their financing costs increase, which inevitably will impact the expenditure of individuals, not to mention the degradation of public services.

Is the A lost forever?

Of course, France can regain its triple A, but how soon and, especially, at what cost?
The corporate VAT plan is only a tiny initiative when viewed in the light of the catastrophic impact of such a downgrading. According to Norbert Gaillard, consultant at the World Bank, France can only recover its AAA at the expense of important social reforms and “a drastic reduction in public expenditure”. Flexibility of the job market for greater competitiveness, extending the period of contributions to pension funds, elimination of the 35 hour working week… Are the French ready to give up their social gains whilst increasing their daily expenditure? Working more and earning less money?

The consequences for gold

As soon as the credit rating of a country is downgraded, the cautious markets fall, demand for gold increases and hence its price. Initially, the need of banks for liquidity can result in a massive withdrawal following the resale of credit and a fall in the price of gold on the markets, as has been already more or less the case since December. One should therefore take the opportunity to strengthen one’s position on gold and buy now because the secondary effect once the selling off stops will see: gold reach new highs this year breaking the $2000 an ounce barrier and beyond.

Fools or Gold?

Once the dominoes of Debt start to tumble the skies the limit but more importantly, when states fail, currencies collapse or sovereign debt strangles everyday life, where would you rather have your “money”?
In a tangible precious asset with perennial true value?
Or tied up in the worldwide web of debt derivatives, Special Purpose Entities (SPEs) and untraceable off-ledger accounts?

The choice is simple, give your money to the crooks you’ve been conditioned to trust with blind faith and risk losing everything or buy something solid that you own and trust yourself to manage it properly?

It’s what they call a no-brainer!

As the eurocrisis deepens, measures antipathetic to savings are being mooted across the continent, involving amongst other things bans on the purchase of gold over certain amounts and bans on cash transactions. Any attempt by savers to convert increasingly worthless cash into solid investments like gold are to be thwarted, raising fears that a Franklin D. Roosevelt style confiscation of privately owned gold may be on the horizon.

Certainly measures proposed or drafted into law in the last quarter of 2011, in Italy, France and Austria, give cause for concern: in Austria there is a restriction on the purchase of more than 15,000 euros’ worth of gold; in France, all metal sales over 450 euros must be paid for by credit card or bank transfer; in Italy it is proposed to ban all cash transactions over (the figures vary) 300, 1,000 or 5,000 euros. The effect of these measures would be to render all significant purchases of precious metals recorded and therefore traceable to their owners.

It has been claimed that the various reasons for these measures are an attempt to rein in credit, to comply with U.S. requests for assistance in combating money laundering, or to help prevent the theft of ordinary metals: in the case of the latter there have been widespread spates in recent months of the theft of metals from anything ranging from telephone poles to industrial plant. While these may all be true goals (whether the proposed remedies will work is another matter – it always is), there is the significant problem that nowhere are the precious metals excluded from the measures. Hence the fears of confiscation.
Gold is a safe haven competitor against fiat money; this may not cause problems when economies are genuinely booming (i.e. the boom is not fuelled by easy expansions of credit). Yet when the fiat money system is collapsing and inflation is rampant the idea that people may protect their assets and their pensions by converting their cash into gold becomes a serious “problem” for the state: savings are seen as a threat.

We have seen how Keynes thought “wealth accumulation” a vice (Austerity for you – privileges for Politicians, December 16th, 2011). He further mockingly remarked: “The duty of ‘saving’ became nine-tenths of virtue and the growth of the cake the object of true religion.” Reckless governments are hardly likely to admire or condone prudence in their peoples; whatever the ultimate reason for this, such an attitude on the part of the authorities will only widen the gap between the political elite, unable to admit the error of its ways, and nervous private citizens wondering whether they have a future.

Finally, savings based in fiat currencies or related to debt-ridden financial institutions have the possibility to fall to zero in a crisis. Savings based in physical assets that you own help protect to preserve your accumulated wealth as they retain worth through a crisis.

The best physical asset to own during a crisis is gold which has proved its perennial purchasing power for over 6000 years – no fiat currency has ever existed that long to compare it and no other asset can compete with the value retention of gold. After all Gold can never be worth zero – it has intrinsic value, it is relatively rare on the planet and it has always been revered as precious because it is and has chemical and physical properties unmatched by any other metal.

By Mark Rogers

The curious aspect of the demand for regulation is that it is MPs who are to be the overseers of this legislative campaign against greed. There is a strange dichotomy in the democratic mind: nobody much trusts politicians (though like bankers there are eminently worthy men and women to be found amongst them); nevertheless we entrust our health, our education, and all manner of things the state really has no business being involved in, to just these unloved politicians.
The question arises as to whether playing to the masses, which is what democratic politics now largely consists of, is likely to produce viable policies to prevent another crisis. In an editorial in the London Evening Standard, 19 December 2011, concerning the likelihood that parliamentary and public pressure will force the Chancellor to accept the Vickers recommendation on banking reform that banks must separate their investment and retail banking operations, it was pointed out that “[s]ome of the banks most exposed to the sub-prime crash – notably Northern Rock – did not conduct investment bank-style ‘proprietary trading’. Conversely, Lehman Brothers conducted only such activity, having no retail arm. Then again, Barclays Capital, Barclays’ investment banking arm, survived the crisis.”
In other words a key recommendation is based on prejudice and not the facts. So much for financial probity!

By Mark Rogers

There are many theories surrounding the manipulation of the Gold Market and the Gold Spot price but few doubt that it takes place, orchestrated by some greater beings that seek to control the money supply.

In a recent cynical twist, gold has been effectively censored off the air of a host of major US TV Networks working in collusion with the Obama administration and the Fed.
An established gold investment company recently made two TV ads to be aired across the networks. The ads feature caricatures of Obama, Bernanke and Pat Boone who narrates the story. The latter works for the company Swiss America and has long been an advocate of the virtues of gold versus dollars.
The first of the ads takes a humorous jibe at Bernanke’s Wall Street reputation for being “helicopter Ben” , ready to dump money on a crisis.

“made-up” reasons for ban?

The reasons given for rejecting the ads vary from ;
• Comcast who explained that it “doesn’t meet our standards on public symbol. The Comcast Public Symbol Policy apparently specifies that the “use of the name or likeness of the President of the United States and/or the Presidential Seal for endorsing commercial purposes must be authorized by the White House.”
• Fox News said the “representation of public figures is something we try to avoid.”
• CNN/HLN told Swiss America the commercials were “not appropriate for the current political landscape.”

Swiss America CEO Craig Smith said “The networks’ reaction shocked me,” Smith said. “It’s a threat to First Amendment rights when a commercial message is rejected not because it is inaccurate or misleading, but because it makes what is perceived to be a political statement the networks want to avoid.”

Smith told WND he was concerned that the networks were protecting Obama and Bernanke.
“All we are saying in these two commercials is what dozens of responsible professional economists are saying every day,” Smith said;

“Gold investment as a responsible diversification strategy when governments printing of fiat currencies with abandon risk unleashing inflationary principles.”

Inflationary pressures are building globally and no-one has an answer to them rising and the consequent economic impact.
It is a common known fact that storing gold through a crisis and inflation is the BEST way to protect your wealth value and its purchasing power. This has been the case for 6000 years.

Gold can never be worth zero – it has intrinsic value.
Fiat currency can become worthless – its only value is that of a piece of paper

The Ban backfires

However, the censorship has backfired as Google TV accepted the ads which will eventually be shown throughout the networks via Google TV!
These humorous videos tell a very straight and simple story and the only possible reason for banning them is because of how close to the TRUTH they really are – and that hurts the Politocrats who believe they are all supreme and mighty to judge over us, control us and bankrupt us.

They are so desperate to cling on to power they will do anything – except we are not the fools they take us for – are we?

The crisis of the Euro is demonstrating a fundamental lack of credibility in the institutions of the European Union. Throughout, the European Commission has consistently taken a back seat, as if it really had no idea what was going on, let alone what to do about it.

All parties to the state of the single currency share this lack of credibility and not least because the euro was never credible anyway. Its launch was deferred for a year because the poorer member nations were nowhere near the narrow margin either side of parity with the Deutsche Mark which was the fundamental condition for entry into the new currency.

That fact alone shows what a queer creature the Euro is. The Maastricht Treaty created the European Union to give Europe a single market, a single currency – to become a single State. That there are rules as to who was in the single currency already beggars the question as to what forms a cohesive state.

The rules were for a time adhered to; a year on from the original date of the launch, though nothing had changed, political ambition got the upper hand and the Euro was born: the claim was made that delaying any longer would only call the project’s credibility into doubt.

What was done, however, was incredible: this attempt to unite anyway widely disparate economies by breaking the first rule of admission generated an educated scepticism on the part of several British economists, who outlined the demise of the Euro, down to the detail that Greece would collapse first.

A week after the summit which agreed new fiscal rules (the problem with the old ones, apart from the whole air of unreality investing the project, was that they were never adhered to, a fault it is hard to see the new ones mending), a leader in The Times of London (16 December 2011) pointed out that “Mr Sarkozy secured his goal of framing the new fiscal rules as an inter-governmental agreement rather than a treaty backed by the European Union’s institutions.”

Eurozone Union?

This is even more incredible: in order to commit to more binding state-like ties, in order to chase that ever-elusive credibility, the Euro currency nations are going their own way outside the boundaries of the European Union’s institutions – yet still blithely calling it “The European Union”. What, in this light, is one to make of the European Central Bank’s position? What is the status of the Commission? What does the old cry “further and deeper union” mean now?

The other side of this coin is that there can now be no question that what is driving all this is the national interests of the two most powerful states, which are determined to pull the poorer nations, whether or not it is in their interests, after them, and in doing so divide the Union.

As with all advanced democracies, and this is something the euro crisis has exposed mercilessly, there is a further division within the nations between the political class and the ordinary public: the politicians persist in their unreal aspirations, risking jobs and investments.

The People decide while Politics prevaricates?

A little item of Christmas realism? Vendors at a Christmas market in at least one German town are advertising their willingness to accept – Deutsche Marks! (Exchange rate €1 = 2 DM)

by Mark Rogers

“In the long run we are all dead”

There is about Keynes’s famous maxim just a smack of the superior viewpoint (I will not call it wisdom) of the Bloomsbury Group, but this is because it was he who said it. It is indeed a singularly commonplace remark, and surely had no place in the thoughts of an economist. After all, the economist’s stock in trade is getting and spending, the provisioning, manufacturing, storing, and distributing of the very stuff of Life!

While a truism, taken as the premise of moral counsel the remark is pernicious. There is also a sense in which it isn’t even true. You and I may be soon for the grave, but that isn’t yet true of our children, or of those generations unborn. No human being is conceived in isolation: we are born into webs of family connections, which expand into webs of friendship, business and social ties. Behind all those webs, lies the vast concourse of mankind…. There is much to be said for Burke’s idea of an unbroken chain of inheritance and responsibility, encompassing all life, past, present and to come: it reminds us that in the long run the end of life is – living.

Good things are still possible in the future, as long as you have tangible, physical assets that are still worth something – your survival depends on their value when the economic crisis deepens and money as we know it reverts to its true value – bits of printed paper.

Euro RIP

By Mark Rogers

So, you mortgaged your salary and have been fortunate enough with your earnings to stay the course of a twenty-five year mortgage repayment plan. However, the asset which you now possess has cost you something like three times its original price. You are inclined to think that this, plus the profit on any potential sale, is what your house is now “worth”. However, your house will only be worth its inflated price (a price entirely created by debt) relative to a booming economy which puts a premium on home ownership. That is, it is worth this potential only if there is sufficient activity in the economy to fuel someone else’s borrowing to purchase your house to further inflate the value of that property.

One point to clarify, at the risk of stating the obvious (though there is little that is obvious about the modern mortgage): where does the borrowing come in – you have paid for your house out of your earnings on a monthly payment plan. The bank/building society has lent you the money by buying the house, and the repayment plan reflects the cost of, and length of time that, the money is out on loan in the form of bricks and mortar.

Thus house prices become grossly inflated. If the cycle continues, the house at the end of each twenty-five year period will keep tripling its nominal value – but this is unsustainable in the long run, and, despite Keynes’s dictum that “the long run is a misleading guide to current affairs”, that is exactly the view that should be taken: in the long run, the mortgage inflates the value of the asset, and it is entirely foreseeable that it should do so. In fact, that it does so renders the word “asset” in this context potentially meaningless. What happens if you cannot sell the house, and no-one wishes to rent it at a price that reflects anything like your “investment” in it?

Of course, there are many who buy their houses as homes and a long-run inheritance for their children. But the trouble with the modern mortgage is that it is sold largely on the basis that the asset is a tradable good. This is not a natural assumption for most people to make, especially families, and was not something that our forefathers generally assumed – unless they were builders, property developers and speculators.

There is a serious and somewhat sneaky consequence of the inflation of house prices: the government under New Labour changed an important measures of inflation, the Retail Price Index which included mortgage interest repayments, that is house prices, (and was used, amongst other things, to adjust selected benefits, including state pensions) by switching to the Consumer Price Index, which does not (interestingly, the latter also omits Council Tax, which is a concern for pensioners, who may well own their homes, but are not free of this major property cost). The measure of inflation used by those who make public policy does not include a major source of inflation.

Has the desire to own one’s own home become a mania of the Tulip or the Railway kind?

It is also worth remembering that inflation rates currently higher than interest rates, thus all monies stored/saved in this type of way are effectively losing value daily and their purchasing power rapidly eroded.

There are few “inflation-proof” savings or savings plans on offer but one to consider is the purchase (and ownership) of the only safe haven tangible asset – Gold in physical form. Historically gold has always protected wealth against periods of inflation and crisis. One important aspect is to ensure that you own your gold as this gives you complete control over its eventual resale which is the most important moment for your investment.
We strongly advise against the purchase of “paper” gold such as ETFs as these are so oversold that only 5% could be redeemed against physical stocks. These types of investments are extremely vulnerable in an economic crisis and the risk of significant losses is increased.

True value is an asset that maintains its worth at all times – during prosperity and austerity.

Choose yours wisely!

By Mark Rogers

The scandals over inflated expenses could, perhaps, have once been regarded as a small price to pay to avoid professional salaries; besides, of course, in those days Parliament only convened when there was business to conduct. The MPs expenses scandal of recent years shows how right Burke was: here were professional MPs, on fairly generous salaries, with expense accounts that allowed them to employ family members as staff – and capable of being stretched to cover all sorts of things not related to their duties.

This corruption must be seen as just one element of the moral corruption of the contemporary political class, as well as a wider corruption of the parliamentary system. For the question needs to be asked: what are professional politicians? Are they persons, scholarly of mind, who are learned in the history of the Common Law Constitution? Far from it; so far indeed that they are not even versed in the legislation that they pass: for example, when Gordon Brown as Chancellor introduced his unnecessarily complex Income Tax return forms, it was found that a sizeable number of MPs did not understand them. They were not, however, thrown back at the government on the grounds that if MPs couldn’t understand them, it was fair to assume that many of their constituents wouldn’t either.

One particularly corrupting influence is the habit of delegated legislation, now so widespread that it could be said that all legislation has become delegated legislation. Delegated legislation entails framing the intentions of an Act of Parliament in obscurely wide-ranging terms and concluding that for all practical outworkings and impositions of the Act, the relevant Minister is empowered, without further consultation with Parliament, to act as he sees fit.
That is, MPs pass the supervisory function over the executive that they are supposed to exercise, straight back to the executive. Presumably so that they can spend more time with their moats, ducks, first class railway tickets and McVitie’s biscuits, while lying to their mortgage providers….

This is not only moral corruption but dereliction of duty, indeed outright subversion of the very functions of a representative parliament. Burke’s prophecy has come to pass: a salariat professing political virtue and competence has become a self-interested cabal whose interests are diametrically opposed to those who elected them. Are these the people to be entrusted with overseeing the wealth of nations?

by Mark Rogers

With most people unable to purchase a property outright, a “mortgage loan” is arranged, which is actually the opposite of a mortgage: you choose the house you would like to rent from your bank/building society, which purchases it and rents it to you for a fixed term (typically 25 years in the U.K.). If you maintain the “rental” payments, after the term has elapsed you get to keep the house.

If you do not maintain them, the house is “repossessed” – another odd term, given that you do not possess it, your bank/building society does – and all that money paid over by you has done no more than what an ordinary rent would have achieved, somewhere to live pro tem, rather than an investment and/or a property you can pass on to your children.

At the end of the boom of the mid- to late-1980s, a wave of “repossessions” swept South-east England: young upwardly-mobile traders had bought substantial properties in the Home Counties on mortgages paid out of the commissions they were earning on City of London trading floors.

This was not all: they invested in furnishings and adornments appropriate to their new and their properties’ traditional status. All was lost! Bailiffs repossessed the properties and took possession of antiques, period furniture and antiquarian books and first editions.

A colleague of mine owned a small bookshop in the heart of a traditionally affluent part of west Surrey, a natural place for these traders to gravitate to. Bailiffs knew the value of the furniture they were appropriating: that went into auction. My colleague benefited from their lack of interest in books, and for months at the end of 1989 and well into 1990, estate cars would stop at his shop, packed with books at a tenner a box. Each box contained several valuable books.

A home is not just a house: it is how you decorate it and what you put in it, the sum creating a value you would, presumably, wish to preserve and cash in when the assets have appreciated, and/or pass through your family unto the last generation… So why would one try to do so on a modern mortgage? Especially as if anything is being “mortgaged”, it is your earnings. If your earnings are in an already precarious sector – such as the trading floors, with their complete lack of job security (one reason commissions are so high: compensation for potential instant dismissal) – this only increases the risks of property ownership. The matter is just as serious for the average earner on a wage: there is no guaranteed future in any job.

Of course there is value in realty, but the modern mortgage gets it exactly the wrong way round: your earnings dry up, you lose everything.

So why mortgage your salary?

By Mark Rogers