Watch the Ads they didn’t want you to see here – read on

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?

Last month Belarus witnessed the effects of a collapsed currency when the Government cut the rouble’s value against the US dollar by almost half. Previously 3155 roubles would buy a dollar but in the blink of an eye they decided 4930 would be needed. This was not even the reality because perception of the collapsing currency meant the situation was even worse as people scrambled for foreign exchange on the black market where you needed at least 6000 roubles to buy a dollar.

So what sparked this crisis?

President Lukashenko had promised to raise public sector wages by a third during his election campaign, which he duly carried out. This was sustainable only because of the support Belarus received from Moscow in terms of loans. However, as fears grew about the country’s finances, support from Russia waned and even near neighbours from the EU didn’t fancy the risk thus sparking a sharp drop in confidence in the currency.
To exacerbate the problem there was a shortage of foreign exchange currencies, dollars or euros, in the country.

The consequences of a collapse

Wide spread panic broke out as the economy effectively became paralyzed and people suddenly realised their currency was of diminishing worth. Shops were quickly emptied of everything that could be bought. Everyday food was snapped up at “luxury” style prices as people thought of survival but also they also bought electric goods like toasters, microwaves, canned goods and virtually anything that was for sale as they rushed to convert their currency into “any tangible assets” that were not losing value as quickly as their roubles.
The empty shelves throughout the towns seemed eerily reminiscent of the Soviet controlled days.
Shoppers knew that anything they could purchase could be more useful as a form of barter than the diminishing currency in their purses and wallets.

The human cost was quickly evident from the stories of employees sent on unpaid leave as companies also struggled to cope and comprehend the impact. Andrei, a computer company employee explained how he queued for a week in Minsk trying to buy dollars but didn’t even get one. “In just one month, I have been made bankrupt, the entire country is bankrupt” he said, adding that “even during the Soviet collapse we never suffered such a nightmare”.

There are many more stories of hardship, families without food or the means to buy any, shops without stock for them to buy even if they had the means.

Dmitry who is a 48 year old factory worker explained how he closed his bank account to get out 5 Million roubles in cash so he “could buy something before my money turns to dust”.

Tensions are growing as many people blame the President for mismanaging the economy.
Staple food supplies are now hoarded but people feel anxious that unrest is starting that could spill over into conflict at any time.
Revolution is always more likely when the population are starving.

Which country is next?

This may all seem so far away from wherever you are reading this but the causes of currency collapse may be closer to your doorstep than you think.

How many countries are in deep debt and reliant on support loans and bailouts right now?
Greece, Ireland, Portugal, Spain, Italy, Japan, USA, Belarus and virtually all of Eastern Europe and the Euro zone (only they never put it in the headlines!)

What happens when the support cannot be maintained?
Currency Collapse.

It could be the US Dollar, the Euro, the Yen who knows?
But even if it isn’t your currency that collapses what will be the knock on effects in every developed country if one of these currencies collapses?
The same as in Belarus.

Globalisation has been the buzz word for expanding Capitalism but it also means that economies are now inextricably linked and inter-twined to such an extent that when one sneezes they all catch a cold!

Remember the level of Sovereign Debt is spiralling out of control in the US, Greece, Ireland, Portugal and others are close behind such as Spain and the UK. Austerity measures in all countries are hurting normal folk badly – they are losing their jobs, suffering pay freezes, inflation and pension erosion. Social unrest and industrial action looms large across Europe and this will itself impact the recovery and debt repayment. This has already started in Greece, Portugal, Ireland and large scale protests in the UK are gathering momentum with the Autumn likely to be the boiling point of anger.

The discontent and despair of regular folk is understandable as they are bearing the brunt of all the hardship and it just isn’t fair.
Politicians spout their practiced rhetoric about how to fix things but the reality is they just don’t care that much as they are not the ones affected. They have means to isolate them from the hardships and many of them are actually responsible for producing the mess. How can they care about regular people or preach what we need to give up when they don’t – ever met a poor politician? Enough said!

There is now even talk of a “sub-prime” type problem in China because of over-indulgence in property speculation, leaving huge swathes of developments empty or under-occupied and therefore leaking money and ready to default.

We need more than lip service!

Mainstream news outlets are all controlled by self-interest groups (private and Governments) and they never provide the whole story about global economic frailty as there would be worldwide panic if they told the truth. The situation right now is on a knife edge and the next Belarus is not far away. Politicians won’t admit it but then again they won’t suffer like the rest of us as they’re all rich enough and well connected to see out any storm. They care too much for their own popularity to be honest.
Posh boys and rich kids rule the world and their assets are well protected in advance.

Remember what happened when panic struck in Belarus, people bought any tangible asset they could because it would maintain value better than their currency.
This phenomenon is happening daily – your bank account is the best place to keep currency if you want it to devalue!

Currency is not a means of preserving wealth because it has no inherent value especially when confidence is lost – then it is just a piece of paper.

The only real money available is a tangible asset that maintains its value whatever happens to printed bits of paper currency – and that is gold!

A lesson on Money and currency

We need to understand the difference between money and currency as one is real and the other a promise. Money can be defined as a medium of exchange and a store of value and until fairly recent times was in fact coins made out of precious metal with an intrinsic value or for ease of use, notes backed by precious metal.
Money, when considered as the fruit of many years’ industry, as the reward of labor, sweat and toil, as the widow’s dowry and children’s portion, and as the means of procuring the necessaries and alleviating the afflictions of life, and making old age a scene of rest, has something in it sacred that is not to be sported with, or trusted to the airy bubble of paper currency. Thomas Paine (1737 – 1809)
Currency is still a medium of exchange but is not a store of value as it only derives its value by government degree or “fiat”. It’s value is based on the issuing the authority’s guarantee to pay the stated (face) amount on demand, and not on any intrinsic worth or extrinsic backing. All national currencies in circulation, issued and managed by the respective central banks, are fiat currencies.

The problem is that fiat currency runs the risk of central bankers printing too much and causing large inflation or worse. The more that is printed the more the currency is debased just as the Fed is doing now with the dollar. This has been going on for decades with central banks indiscriminately creating money to cover expenditure and ever increasing debt. There are examples throughout history and in the 20th Century most of us are aware that in Germany in 1923 it would take a barrow load of Deutschmarks to buy a loaf of bread but an ounce of gold could buy a reasonable house and one dollar was worth 4 trillion marks.

This irresponsible printing of money has eaten away at the value of the world’s reserve currency the USD dollar and dollar based assets, to such an extent that they have lost 82% of value since 1971, the year the US cut links with the gold standard. The GBP has fared even worse that the USD losing around 85% of value since 1971. There are many illustrations of then and now and how owning gold with intrinsic value would have more purchasing pro rata than currency. E.g the latest model Cadillac Eldorado would have taken 180 ounces of gold at $42.02 to pay the showroom price of $7,546. This same 180 ounces is now worth over $200k and would buy two Cadillac convertibles with enough left over to fuel to first service. In the UK an average family car cost £1000 around 60 oz of gold and now the same would cost £17000 around 23 oz of gold. The 60 ounces would have bought the same family car for you a sports car for your wife and a hatchback for your son or daughter. Gold retains its purchasing power year after year.

Not long ago the gold standard imposed monetary discipline on countries as they had to hold enough gold to cover the money in circulation but this all changed with the Jamaica agreement in 1971 when the decision was taken by President Nixon on the 15th August 1971 to suspend the direct convertibility of dollars into gold, the keystone of the financial system created in July 1944 (the Bretton Woods Agreement). On the 1st October 1971 the general assembly of the IMF asked the board of trustees to study and propose a comprehensive reform. This would be adopted by member States during a meeting held in Kingston (Jamaica) on the 7th and 8th January 1976, and included a set of provisions which put an end to the reign of gold. The US money supply in 1971 was $776 billion and quickly became an upward curve which rose dramatically over the last decade where the US money supply doubled from below $7 trillion to $14.3 trillion indicating that spending is out of control.

The US National debt is now greater than this!

The US though still likes to play the rich kid on the block and bizarrely gives aid to those supporting its debt as a report in the Daily Mail of London illustrates:
The U.S. is providing hundreds of millions of dollars of foreign aid to some of the world’s richest countries – while at the same time borrowing billions back, according to report seen by Congress.

The Congressional Research Service released the report last month which shows that in 2010 the U.S. handed out a total of $1.4bn to 16 foreign countries that held at least $10bn in Treasury securities.

Four countries in the world’s top 10 richest received foreign aid last year with China receiving $27.2m, India $126.6m, Brazil $25m, and Russia $71.5m. Mexico also received $316.7m and Egypt $255.7m.

And yet despite the massive outgoings in foreign aid, the receiving countries hold trillions of dollars in U.S. Treasury bonds.

China is the largest holder with $1.1trillion as of March, according to the Treasury Department.

Brazil held $193.5bn, Russia $127.8bn, India $39.8bn, Mexico $28.1bn and Egypt had $15.3bn.
Maybe it’s just additional interest on the debt to keep them sweet!

Greece figures predominantly in the spotlight and unrest is growing – will the Government have to mortgage the Acropolis and Parthenon or even sell them off to pay their debts?
Clearly they can never work their way out of this debt because they would have to increase GDP by 12% a year for 30 years in order to grow their way out of debt.
The Sovereign Debt crisis is well and truly out of control and the only solution will be to default on the debts and devalue currencies.

As discussed in the example of Belarus, chaos ensues when currencies collapse and regular folk suffer badly as they don’t see it coming or refuse to believe it could happen to them.

Be warned: A currency collapse is coming near you.
Be prepared: don’t put faith in bits of paper which have no inherent value.
Protect yourself: Invest in tangible assets that hold real value at all times, especially during a crisis.
Remember: Real money has inherent value, it is worth something because of what it is not because of what is written on it.
Now you know why people buy gold to protect themselves from crisis – it always holds value and is the only real money.

In summary:
• Currency is not money and its value can be changed by monetary policy makers
• Currency can be created and printed at will with no substance to support it
• Currency depreciation in value is accelerating with subsequent loss of purchasing power
• National debt is increasing to disastrous levels with threat of sovereign debt default
• Confidence in the USD is waning and its use as a reserve currency is under threat
• Countries and investors are shedding their dollar assets
• Central Banks are diversifying into gold and out of dollar assets
• Smart investors are diversifying their portfolios with a proportion of gold
• The value of gold has been consistent in retaining its purchasing power
• Gold is insurance for your wealth
• Gold is the only real money

I rest my case!

Recently, a wave of panic swept the precious metals markets and there was talk about the end of the cycles of mega-rise in raw materials! And whereas some thought there was a bubble on gold, it was on silver that the bubble inflated, then burst: The Wall Street Journal talked about the sudden   fall in the grey metal which “ fell 12% in just 11 minutes when the fall was at its most severe. Spot silver saw its informal open at $47.863/oz before rising to a peak of $48.150/oz; it then sold off sharply to a base of $42.210 before stabilizing.

The move down is the first break in an extraordinary run for silver, which has more than doubled in price over the past six months as investors bet on rising prices from renewed industrial demand and as a cheap safe-haven alternative to gold.”.

A piece in the  Financial Times asked  “Did the Silver bubble just burst?”,  illustrating with a chart that “the grey precious metal has tumbled 20 per cent in a week”.

The feeling was that a rapid rebound would be unlikely as expressed by Phillip Klapwijk, executive chairman of the precious metals consultancy GFMS, who said of silver’s position, “I think it could be over on the upside for the next little while.”

The FT also explained the extent of the early May slump saying “Silver prices plunged for the fifth consecutive day on Friday(6th May) as the grey precious metal suffered its biggest correction since the billionaire Hunt brothers cornered the market in 1980.” As the week drew to an end they summarised “The reversal of fortunes for silver – which until this week’s 25 per cent drop had been up 56 per cent since January – has led a wider sell-off in commodities markets, which were heading towards one of their worst one-day falls on record.”

Market manipulation rumours were rife and silver faced additional challenges because of rule changes by the CME Group. “The volatility in silver has been exacerbated by a series of increases in margin – or the amount of cash that investors must set aside to trade each contract – by CME Group, which runs the silver futures exchange in New York.

CME has raised its margin requirements five times in the past 15 days. Investors must now set aside $14,000 per silver futures contract, worth about $180,000 at current prices. The rate will rise to $16,000 on Monday (9^th).”

The grey metal, with a predominantly industrial use, is traditionally much more volatile than gold.

So where does gold feature in all this?

According to the FT “gold has managed to remain relatively unscathed compared with its poorer cousin”

It remains on top, as always!

Silver has never been able to compete with gold

For a long time, these two precious metals have been linked by a ratio of 10 to 15.5. In the time of the Pharaohs, it was said that there was a ratio of 13.3 between gold and silver. In 440 BC, this ratio was of 13 during the Roman Empire it was set as 12.

In 1876, Henri Cernushi wrote in “The Bimetallic Currency” that “gold and silver are two natural and eternal currencies. Nobody can produce them artificially nor by decree and this is why they remain a trustworthy guarantee”. During this era most fiduciary systems fixed the parity between gold and silver at 15.5.
In 1840 Europe, the situation was tense because almost everyone felt that there was a tendency to believe that the ratio of 15.5 tended to overvalue silver.  Indeed the grey metal was abundant due specifically to heavy production in the United States.

These historical references are interesting because they are not too distant from geologist’s estimates that Silver is 17 times more abundant than Gold in the earth’s crust. This has given rise to some investors believing this ratio is the natural balance between the two metals and that one day we should somehow return to it.

Many traders, speculators, and investors focus on the gold/silver price ratio in determining which metal is under or overvalued. In recent weeks and months the ratio has collapsed from above 65:1. The ratio of gold to silver prices is at its lowest since 1980, and has plunged from 46 in January this year to 33

Throughout the twentieth century, the gold/silver price ratio went to nearly 100:1, occasionally dipped below 30:1, and only briefly hit a ratio of 17:1 in 1980.

Put against gold, silver does look distinctly volatile and vulnerable.

Simone Wapler (Editor of MoneyWeek France) writing in La Chronique Agora explains why this ratio dropped:

“The gold/silver ratio collapsed because gold, like silver, has been demonetarized. Silver even more than gold. The central banks still have some gold in their coffers, but not silver. Gold is always popular in the jewellery market, but aside from  monetary uses, the uses of silver are in decline (traditional  photography, silverware). For many silver is just a poor man’s gold. When one cannot afford gold, one buys silver.

However this argument although valid is not strictly true because of innovations that make gold investments even more accessible and in a way that is not restricted by individual budgets.

Investors no longer need to settle for second best when they can have the real thing.

It is now possible to start investing in gold by the gram including a savings account that encourages investment in physical gold (that you own outright) with a plan to start from as little as 1g of gold per month.”

Similarly this form of investment is finding increasing favour from businesses looking to protect their contingency funds against inflation and the risk of traditional portfolio investments that are vulnerable to sovereign and national debt issues. Holding physical gold as an owned asset has an increasing appeal   as an investment with security and profits.

But when the figures speak for themselves…

Simone Wapler also adds that “when gold goes up, so does silver, but to a lesser degree. When gold drops, so does silver, but to a greater degree”.   Furthermore, gold gains twice as much as silver during a rise yet silver loses twice as much as gold during a fall. Before the bubble on silver this rule was proved, clearly meaning that something was going on. The sharp current correction reminds us that there was an unfounded rush on silver- and today the rate should be around 25 euros. Above that it is overheating.

If you are not convinced, here is a brief outline of the evolution in the rates for silver and gold, in recent days and over the last 5 years.

In short, when gold sneezes, silver catches a cold, and when silver starts to take take-off, gold reaches towards its peak!

Gold remains a safe haven

According to the French daily Le Monde, one reads that in spite of the fall in rates, “gold should remain protected by its status as a safe haven when faced with inflationary threats, and a prolonged decline in oil prices does not appear very likely. Worldwide demand remains solid and supply remains under the shadow of tensions in the Arab world, with light crude from Libya still cruelly lacking.”

In MoneyWeek France we are told that “Falls are necessary and compulsory in a large bull market we are more than ever convinced that gold has a promising future ahead. Let’s give time for the new world order to be created, for the former rich countries to become aware that they are the new poor and that they live well above their means… in short, there is still quite a while to go”.

Arguments in favour of gold

Indeed, gold has recorded a slight fall recently, but if you need additional arguments to be convinced of its role as a tangible asset;

• gold is “reconverting into money”: it is clearly not the case for silver
• silver has lost its status as a safe haven contrary to gold
• silver is a rare industrial metal, very volatile just like other raw materials.   Let us take for example palladium: the market for palladium remains confidential and prices extremely volatile. The production of palladium is concentrated within Russia and in South Africa. This concentration of production confers a certain instability in the market with regards to price and reliability of supply. And uncertainties with regards to its provision have even caused the price of palladium to rise in October 2010, reaching its highest level since June at 605.13 dollars an ounce. Demand is increasing consistently, mining development is limited, a hold by the Russian State on reserves and lack of investors: such are the characteristics that have led to the palladium market finding itself in deficit.
• silver is not a product for protection against crisis. It is rather comparable to platinum which had fallen in 2008 because the automotive industry was at its lowest point (noteably platinum is used in catalytic converters)
• silver is increasingly rare and difficult to revalue. Silver is a non-renewable resource and experts agree that by 2021 -2023 the exhaustion of silver supplies will be final.  In any event, silver is a metal which cannot be synthesized and for which no substitute exists. And even if the exact date of a drain in the metal market still remains on hold, in 2010, with a production of 19,300 tons, and demand standing at 25,200 tons, reserves are clearly running low. Remember that principle industrial uses consume the silver
• silver takes up space in storage, and savers prefer gold which in value and in volume is better
• because of its scarcity, industrialists are trying to replace silver as soon as possible. This  linked article deals  with the uses of silver in particular in the manufacture of RFID Tags for stock control and identity cards. If we imagine that one day industrialists find another metal or synthetic to replace this need what leeway will remain for silver? This article is based on a completely biased study of silver. All industrialists say if one day they are able to do without silver, they will do so because it is expensive. The use of gold in industry itself remains limited compared to its use for investment purposes and jewellery.

This is exactly what one is looking for from gold, once again it becomes  a private currency, regardless of form.

Let us leave silver to those who want to get their fingers burnt with molten metal…

“A black swan is the illustration of a cognitive bias (error in decision-making or of behaviour adopted when faced with a given situation).

If one encounters or observes only white swans, one will quickly deduce in error that all swans are white and that is what Europeans believed, for a long time, before making the discovery of the existence of black swans in Australia, in the 17^th century.

In point of fact, only the observation of all existing swans may give us the confirmation or invalidation that these are indeed still white but taking the time and means to observe all swans on Earth before confirming that they are all white is just not possible.

It is thus preferable to make the hasty assumption that they are white, in the expectation of seeing the theory dropped by the observation of a swan of another colour.

Thus we create arguments by starting off with incomplete information, which leads us ending-up with false certainties.”

What is the relevance of this story to the economy and your investments?

Quite simple really. Read on and observe the trend emerging.

- The University of Texas uses gold for its cash-flow….
Important information that has gone unnoticed is that the University of Texas has just invested approximately 1 billion of its cash-flow in gold. You will find below the article by Bloomberg.

The Board members see gold “just as another money but one which cannot be devalued by an additional printing of notes”.

Interestingly, they asked to take delivery of their gold – 6,643 gold bars,  which is stored in a New York vault because of the fear of a Comex paper gold scam.

It should be noted that this university also trains economists.
So what should one think of such a strategy?  Only that more and more private individuals and institutions are starting to have increasing doubts on the continuity of the global economic system in its current make-up. It also suggests that those in the know prefer hard physical assets to “paper promises”.
Yet “experts” previously thought that this was unimaginable and impossible!

.

But that is not all. These last weeks have been exceptional in terms of alarm signals.

- Two year rates for Greece exceed 25% for the first time ever. It means that Greece is perhaps only a few days away from a re-scheduling of its debt over which inevitably world banks, starting with French banks, will ruffle a few feathers. For information purposes, it is the Crédit Agricole which is the most exposed to the Greek risk, with all banks being nevertheless concerned.
Yet “experts” previously thought that this was unimaginable and impossible!

- The monitoring of the US debt by the credit rating agency Standard and Poor’s,

For those who have not yet understood or who really do not wish to understand, the US economy remains the leading global economy. A US default in payment would lead the world into an economic chaos without precedent. Inveterate optimists tell us that they do not believe in it. The very same people who did not believe in a seism of a magnitude higher than 9, followed by a tsunami of more than 15 metres in height, coming to destroy 6 reactors of a nuclear plant… and which exposed a whole country to radiation if not making people tremble with fear over the prospect of the entire contamination of the Northern hemisphere.

Yet “experts” previously thought that this was unimaginable and impossible!

- So what else have we learnt? –  that the Morgan Stanley Bank has just made a voluntary default in payment of $3.3 billion on a 32 storey tower building which it owns in Tokyo. This repayment failure is significant because it was the largest of its kind in Japan and marked the latest fallout from a series of highly leveraged investments by Morgan Stanley, one of the most aggressive investors in worldwide property markets before the global financial crisis In short their loss seems of little importance to them because the value had plummeted and they just had to get rid of this building. What can be the motive of such a decision which is a historical first for this “venerable” institution?

Yet “experts” previously thought that this was unimaginable and impossible!

- To this we can add that CDSs (Credit Default Swaps) currently reflect an anticipation of cancellation of debt of some European countries able to reach 75% (CDSs act as “insurance” against the risk of bankruptcy).

Yet “experts” previously thought that this was unimaginable and impossible!

- And then there is China which wishes to diversify its foreign-exchange reserves and significantly reduce its holding in American dollars. Indeed, the depreciation of a currency is a means of refunding one’s debts only in devaluated monopoly currency. But it is done at the cost of the currency holder. Our Chinese friends no longer seem to want to be the guinea pigs and are looking to diversify into the Euro.

Yet “experts” previously thought that this was unimaginable and impossible!

- More dramatically, Mc Donald’s (the restaurant chain) launched a big campaign to recruit  50,000 jobs in a single day. Pathetic scenes showed to what extent the situation of many American families is disastrous. Almost 3 million people turned up to get work, some even camping the day before just to be sure of being interviewed. The situation simply turned to drama in Cleveland (click here to see video ) when a crazed driver ran over 4 people in the car park!.

Yet “experts” previously thought that this was unimaginable and impossible!

- And finally, on a lighter note, after the initiative by ex-footballer Eric Cantona even Mayors are having a go, at least the Mayor of the city of Ghent in Belgium for one, who has just taken  the decision to withdraw his funds from two banks, namely Dexia and KBC, in order to protest against the policies of these two institutions and has invited all cities to follow his example…

Yet “experts” previously thought that this was unimaginable and impossible!

It is now obvious that more than ever before how vital it is to adopt a particularly defensive investment strategy.

I invite all private investors to take their potential profits out of the share market and to quit the financial markets. Particular caution is advised with regards to all the securities of insurance companies and banks.
A share in gold of approximately 10% of the total financial assets is to be seriously considered in order to protect one’s financial assets.
It is also strongly advised to get out of bond investments, except from a speculative point of view, starting first with Euro funds in life insurance contracts. These Euro funds are overwhelmingly made-up (approximately 75%) of sovereign debt, i.e. government bonds. Imagine how vulnerable they are to default and complete collapse.

… and remember this is NOT impossible, unimaginable or unthinkable – it is highly likely to the point of being inevitable.

I do not know if you have noticed, but I find that lately we can see more and more black swans.

Yet, as everyone knows, swans are white…. until proved otherwise.

Translated and Adapted from an original article by Charles Sannat

Here’s a Goldcoin.org summary of events moving and shaking the markets supplied by our regular Gold Guru Bill.

In Wednesday nights website update initial resistance was listed at 1457-1465 and the high so far today is 1462.50  — support was listed at 1441-1447 and the low so far is 1450.50

London Gold Fix $1458.25 -$3.25

In yesterday’s update gold prices dropped right at the 9AM est timeframe and supported on the 1444 price support area.  Since that time, the gold market has rebounded into early Wednesday morning US trade but has yet to overcome the resistance area’s that it will need to in order to forge higher.

So far this morning, gold is tracking with equities, as the fear of slowing was at least part of the reason behind the aggressive selling in markets on Tuesday. The markets opened

The trade bounced higher on improved US retail sales release this morning, as investment demand for gold is likely to remain somewhat dependant on the prospect of inflation, which in turn can be dependant on the pace of the economy.  Business Inventories were up .5%
The key will be whether the stock market and gold will be able to hold those early gains as the day wears on.

The pressure for USA to work the budget deficit has President Obama addressing the nation this afternoon after the metals market close. Tax hikes and healthcare cuts are the speculation going into the speech –and as news trickles out  there is speculation of 100-150 billion dollar cuts in military spending proposed and entitlement spending.  Expectations are to suggest curbing domestic spending …. all the usual “talk” that one would expect.  This expectation might act to quell the upside on gold today going into the speech.

While the gold market saw evidence of rising gold production at Fresnillo in the first quarter, that news was offset by expectations of lower annual 2011 gold production from Kingsgate.

The gold market might also be garnering some lift from a survey released overnight that suggested many think central banks will be net buyers of gold in the near future. With the US Beige book, US retail sales up .04% , a Treasury auction and a Presidential speech/testimony today the gold market looks to have an active trade today.

The Dollar is near unchanged levels against most of the major currencies during overnight trading and is just sitting at the on the index.

The Spanish Prime Minister stated that China has reaffirmed their support for purchasing Spanish sovereign debt. Euro zone Industrial Production during February was up 0.4%, lower than projections. UK Unemployment during February was 7.8%, lower than forecasts. French CPI during March was up 2.2% year-on-year, higher than expectations. The second leg of the Treasury’s monthly refunding, the 10-Year Note auction, will have data announced at 1:00 PM EST

Going to the charts:

Yesterday low at 1444 was a retest of the breakout price we had been watching last week.  We can see on the chart that today’s price has moved back above that red trend line and price is hanging around that line as it tries to make it support.   So we could see a lot of price activity mostly in the 1453-1463 area today.

Support is the 1444-1450 area and resistance is the 1463-1468 zone.

In summary — markets may pullback from their early morning start and drift sideways as we approach the presidents speech on deficit reduction. As long as price is above the red trend line — its trying to forge support from yesterday’s pullback.   The lower PURPLE line is key to this price breakout and price needs to retain closes above the 1425-1430 area to keep the price  breakout move alive.

by Bill Downey

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Here at Goldcoin.org we have regularly championed this view which is explored below in an article written by our guest writer Angela Brown.

With the present condition of the United States, most people are looking for ways to boost their income resources and protect their savings. As the debt level is rising, more and more people are finding themselves drowned in an ocean of credit card debt. While some of them are choosing debt management as an option, some are trying their luck in the investment industry to augment their income and help themselves come out of debt. Inflation is a general increase in the price of commodities when your money is worth less. Well, you need not fret as there are ways of safeguarding your savings by investing in gold. Gold has been a haven for the most fearful investors to protect their savings from financial crisis.

How can gold act as a hedge against inflation?

In case of inflation, the prices of commodities rise and this reduces the value of money. $1 will be able to buy fewer amounts of things during inflation. The pressure that is created on the Federal Reserve in America and the European Central Bank in Europe ensures that money has lost its value. The side effect of such inflation is that more money is injected into the economy but with lesser worth.

Gold, the most precious metal, in recent times is seen as the safest haven for investors who are spending sleepless nights due to the fear of a crisis and the devaluation of the money. Most often you will see that whenever there is a decrease in the value of a dollar, the price of gold will rise. A falling dollar is most often directly proportional to the surging gold price. As an investor, therefore you can certainly invest in gold to stay protected during any financial circumstance. Inflation can not take a toll on your financial life if you have already invested your money in gold.

As gold is bought and sold in US dollars, any decline in the value of the currency will lead to a price rise. The US Dollar is the world’s reserve currency and the primary medium of all transactions. But without the backing of gold, the US dollar is worth nothing more than a fancy piece of paper.

Gold has often been referred to as the crisis commodity as it has the capacity to outperform all the other investment forms. The very same factors that can have a positive effect on the other investment vehicles can have a positive effect on gold. Therefore, if you’re a debtor who wants to invest money to make money, you can try gold investment and stay protected against all financial odds. You may also try getting help from a debt management program to combine your payments and repay your creditors.

If this article has encouraged you to think about gold please consider the following;

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The Trend for Gold continues upward and the Dollar is falling again – so says Bill Downey of GoldTrends.net, our regular expert Analyst. Her’s the latest from Bill for April 8th:
In last nights website update initial resistance was listed at 1462-1468 and the high so far is 1473. Support was listed at 1443-1449 and the low so far is 1466.

London Gold Fix $1470.50 +$14.00

The June gold contract in the early Friday action has moved to fresh new all time highs. In addition to ongoing concern of a US government shutdown, the gold market also saw a sharp range down extension in the Dollar overnight and therefore the bulls have a lot of fundamental arguments for the upside. In addition to the potential failure to reach a budget deal, the gold market might also be rising off the fact that the US budget cuts are minimal in the grand scheme of the multi-trillion dollar US budget! In other words, leaving US government spending high and the deficit growing is seen as an inflationary development, and as a development that weakens the Dollar and lastly increases the move to quality sentiment in the gold market off the rising prospect of a US credit rating downgrade. Those same ratings agencies that were grilled by Congress over their slack pre-sub prime ratings efforts, should probably slap US debt with a downgrade once the puny US spending cuts are put in perspective.

While the gold market could have been held back by news of a rise in Gold Fields quarterly gold production for their 1st quarter, that potential production gain actually follows a decline in gold production from that company in the previous quarter. Nonetheless, the gold market hasn’t paid that much attention to the supply side of the equation recently.

With some budget negotiators calling for a mid morning deadline on a deal this morning, there could be two volatility events today, one this morning and another into the afternoon closes in the event that no deal is reached.

The Dollar has GAPPED lower against most of the major currencies during overnight trading as the credibility is fast eroding and the break at the price chart is causing selling and shorting. Problems in Libya and Nigeria as well as escalations in Syria and the middle east continue to add pressure on oil prices as well.

In summary — the metals continue higher as the gold breakout of a five month pattern is suggesting the move will continue higher. We may see some traders taking some profits off the table as we go into the weekend —and that could keep prices range bound going into 11:30AM est as London comes up on the close — but there seems to be buyers in the mid 1460’s.

Support for the remainder of the day is the 1457-1464 and resistance is the 1475-1480 area.

Going to the gold chart, the consolidation over the past few days has held the initial breakout and the upside continues to be favored. The next upside target is the upper purple line near the 1500 area. Pullbacks today should be limited to the mid 1460’s. As long as price is within the purple channel lines — the trend remains up.

If the US government come to terms later today — it could produce some volitility — but the bottom line is that none of the problems are going away — deal or no deal.

A CLOSE ABOVE 1466 is an important number today to set the pace for next week. The trend remains up.

by Bill Downey

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We have long since championed the benefits of investment in Gold coins because of their dual leverage – gold price and premium. We have also explained the concept of premium differential (elevated premium during a crisis – normal premium) and the potential of certain coins to have significant investment qualities because of their elevated differential.

Well the Half- Napoleon 10 Francs is one such coin which can have a premium differential of 80%. These coins can literally be worth almost twice their price in gold content because of their high premium. This makes them attractive gold investments and they are always in demand.

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They have now added a unique product to this Plan using the Half-Napoleon 10 Francs. They have taken a batch of 100 coins which equates to a pure gold content of 290g and then made sections available in 1g portions. These can be bought for €43 and kept as part of the LinGold Saving Plan (LSP) which offers vault storage free of charge.

This means that Members can now benefit from the premium differential of Half Napoleons as part of their LSP and without needing the means to buy coins outright.

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Anti-inflation and anti-devaluation

Again the benefits of being able to save in physical gold bullion or gold coins is that you are protecting your wealth in the safest refuge against a crisis and notably the precious metal that allows you to protect the value of your wealth against inflation and the devaluation of currency.

History has confirmed this time and again – when crisis hits it is those people protected by durable, valuable assets that survive the best. Paper currency eventually becomes a worthless piece of paper, good for burning, but Gold has been and always will be the real measure of value.

Why? Because you cannot print more of it to suit your politics – and its properties and finite quantity will always bestow real worth on its owners.

To start saving in gold now and for further information visit LinGold.com.

In last nights website update resistance was listed at 1437.50-1446 and the high so far is 1439. Support was listed at 1419-1425 and the low so far is 1430.

London Gold Fix $1434.50 +$2.00

There is a lot of cross current news this morning moving gold.

Gold prices were showing some positive action initially overnight despite minor strength in the Dollar versus the Euro and a few others. The gold market got marginal support from suggestions from the US Fed Chairman Monday night who labeled inflationary pressures as transitory, as that seemed to suggest that the Fed chief was a little less confident that inflation would indeed remain in check. In other words, the trade seemed to take the Fed comments overnight as a sign that inflation pressures were being acknowledged but were not fully entrenched yet. However, the Fed Chairman also suggested that recent price gains were probably temporary and that left the gold market somewhat confused. Indeed — he looked nervous during the discussion.

The gold market garnered some support from news of a credit downgrade of Portugal overnight, especially since the ratings suggested that the status of that debt remained under review.

Gold traded in the 1434 to 1439 area up until the London open. However, outside market action have limited gold prices early in the trade today, as some commodity markets like corn corn and soybeans started out on a softer footing–at least initially.

The gold market was also undermined by news of further Chinese tightening action overnight. The Chinese moved 25 basis points on lending and deposit rates and that event probably increased overhead resistance in the US gold market this morning near the 1440 area. Still — the last few rate increases from China had almost no effect — pretty much about what we’ve seen so far today. Over the last four hours — gold has tried to break below the 1430 area. Each hour has

The gold market will also be watching the GOP budget proposal release later this morning, as aggressive deficit reduction efforts could also be seen as a limiting development for gold prices. Paul Ryan has rolled out the plan and the big number is 6.2 TRILLION DEFICT REDUCTION OVER 10 YEARS —– The proposal was just released — so it will take a few days to see how the market absorbs this and how the debate unfolds.

Meanwhile the US BUDGET DEFICIT CEILING runs out FRIDAY — and the politicians are going back and forth in threats to not extend the ceiling on the Republican side.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally lower this morning. The Dollar was slightly higher against most of the major currencies during overnight trading, although posting a substantial loss versus the Pound.

A credit ratings downgrade of the sovereign debt of Portugal by one level this morning. Euro zone Retail Sales during February were down 0.1%, lower than expected. Major US economic numbers released this morning include a survey of US non-Manufacturing industries grew less than expected, but it wasn’t a barn burner.

GOING TO THE GOLD CHART — today we show the daily chart and the short term cycles we follow on the website. Orange circles are when the stronger trends usually peak — and the blue circles are when the weaker trend usually ends. While not all points work — take February for example — there is enough to at least keep an eye on developments. The trend is still up —- watch 1439-1444 as a key area.

On the downside — there has been a test every hour since 7AM EST of the 1430 area but so far it is holding— and that puts SUPPORT for the remainder of the day at 1425-1430. As long as price is above that area — its still up.

In summary —- the trend remains up —-We think that 1439-1444 is the PIVOT PRICE AREA TO WATCH — and closes above 1444 would increase the potential for the upside. PRICE ALWAYS RULES — but these short term trends need to be watched going into Wednesday. AS LONG AS PRICE HOLDS 1425-1430 support today — continue to favor higher.

by Bill Downey

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In last nights update resistance in gold was listed at 1437.50-1446 and the high so far is 1439. Support for today was listed at 1419-1425 and the low so far is 1427.60

London Gold Fix $1432.50 +$1.50 LME

While the Dollar is slightly higher early, the Greenback remains within striking distance of last week’s lows. With the gold market overnight seeing a rather hot ECB inflation reading and seeing crude oil prices claw out another fresh new high for the move and a host of commodity prices trading higher, the gold bulls feel somewhat confident to start the new trading week.

Some players in the market expect some dovish comments from the Fed’s Bernanke today and after dovish dialogue from the Fed’s Dudley at the end of last week, the threat of rising US rates may become an issue but so far — it seems to be just talk. There is a G20 meeting mid-month so that’s something we’ll have to keep in mind.

Some players think that news of a release of RAD into the ocean in Japan is a limiting issue for gold, but one could also suggest that development could ultimately be inflationary if Japan is forced to seek alternative protein in the grain and livestock markets.

The Commitments of Traders Futures and Options report as of March 29th for Gold showed Non-Commercial traders were net long 213,983 contracts, an increase of 3,448 contracts. The Commercial traders were net short 264,085 contracts, an increase of 1,242 contracts. The Non-reportable traders were net long 50,103 contracts, a decrease of 2,205 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 264,086 contracts. This represents an increase of 1,243 contracts in the net long position held by these traders.

While equity markets in Asia and Europe were mixed during overnight trading, early indications are for the US stock market to open today’s session with moderate gains.

The Bank of Japan’s Tankan survey of Japanese manufacturers projects that business conditions in Japan will worsen during the next three months as a consequence of the Sendai earthquake.

A Libyan envoy has traveled to Greece to begin discussing an end to hostilities in that nation. The US State Department is flying their employees out of Syria due to continued unrest.

Euro zone PPI during February was up 6.6% year-on-year, in line with market forecasts.

Going to the charts ……………..

On Friday’s update we discussed the tendency for gold to move higher after the USA unemployment data and after hitting a low of 1412, gold rallied back to the 1430 area for the close.

Coming into today and the 1439 high — it really comes down to whether gold is going to burst through the 1444 area this week. A WEEKLY Friday close above 1436 — and 1444 is needed to add to the upside potential. Although the trend is still up — the stronger trends we watch are due to peak here between today and Wednesday and a weaker trend is scheduled to begin and last into mid-month. Price always rules — and turn points are secondary — so we would want to see price begin to react and show weakness before we consider that the weaker trend has kicked in. But it’s something we need to be aware of should gold begin to trade lower. First Targets for this coming week to watch for is the 1440 to 1453 area. I’m looking to sell 1/2 my long short term gold positions from 1406 and 1418 should we trade up to the 1450 area.

The chart shows two red arrows —- the lower arrow shows the Feb lows how the market pulled back to 1325 on four occaisions in one week but was not able to break lower. The same condition happened last week — where there were four pullbacks to the 1410-1412 area — all of which produced a nice bounce back up. The lows were right on the lower purple channel line on the chart. This kind of action usually favors higher prices.

Thus, from a swing trade standpoint — as long as we remain above the 1408-1410 price area on a closing basis — the trend is still up.

Resistance is the 1439-1447 area today and first support is the 1427-1432 area.

In summary — the gold market trend is still up. A daily close above 1436 and/or 1444 would be helpful and favor higher prices into Tuesday/Wednesday. Going forward —- as we mentioned — the potential for gold to peak this week and begin a sideways to lower trend into mid month is a consideration when we look at short term cycles. However the seasonals do favor higher overall into the month of May so an April pullback — should still garner higher prices into month end and early May should we get a pullback. The trend is still up.

by Bill Downey

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Here at Goldcoin.org we have previously discussed the moves in Utah to introduce its own gold currency, Gold currency is making a comeback! In Utah, they could soon be buying a hamburger with gold! and noted that progress was made by the passing of a bill in Utah Gold Currency a step closer.
However, Utah is not alone.

There are no fewer than 12 other States which are pushing for a return to gold currency by introducing bills before the Legislature in the form of the ”Constitutional Tender Act”.
The 12 States are:
Colorado
Idaho
Indiana
Montana
Missouri
New Hampshire
North Carolina
South Carolina
Tennessee
Vermont
Virginia
Washington

The “Constitutional Tender Act”

The United States Constitution declares, in Article I, Section 10,
“No State shall… make any thing but gold and silver coin a Tender in Payment of Debts”. This means that no State can make something a “tender in payment” (which means they cannot “make something an offer as payment”) for any debts, which would include debts owed by and to the State.
However, EVERY State in the United States of America HAS made some other “Thing” an offer as payment – they have by law declared that they will accept, and pay out, Federal Reserve Notes for any debts owed by or to them.
Therefore, every State is in violation of Article I, Section 10 of the U.S. Constitution.
Thus the need for the “Constitutional Tender Act” — a bill template that can be introduced in every State legislature in the nation, returning each of them to adherence to the United States Constitution’s actual legal tender provisions.

Most importantly the bills are aimed at protecting the people from the continued devaluation of the dollar and almost certain hyperinflation which is due in the future.
It is also seen as a way for States to insulate themselves from the policies and practices of the Federal Reserve which seems to be pursuing the inflationary practice of monetizing the national debt to address the consequences of runaway federal spending.

The Privately Owned Central Bank

Did you know that the Federal Reserve is a private institution with link shareholders? Most folk believe it is a federal agency.

Fed shareholders earn 6% interest “by law” and as for reserves, well they have none. The only thing the Fed does is create paper and charge the government interest for doing so. It also has licence to print “paper money” that is not backed by assets. The more it produces the more the value of the dollar is diluted. The $800 Billion it has printed for QE2 are merely bits of paper with ink on them that eventually some average Joe will be charged interest for using or borrowing. In reality the money doesn’t exist just the debt it creates.

Individual states have not issued legal tender for over a hundred years so why now?

Because the weakening of the dollar by the Fed to essentially reduce the size of the national debt has also eroded the savings of citizens, the price of their houses, the worth of their pay cheques and eroded their purchasing power at a time when inflation is rising but wages are stagnant. Enough is enough.
History is on the side of the people here. In the original drafting of the Constitution the Founders disliked “paper” money so much they provided specific wording against it.
The transcript of the debates in the original Constitutional Convention shows the attitude of the Founders toward paper money was one of disgust. In debate one delegate, Roger Sherman, called for the insertion of an absolute prohibition against states issuing their own paper money.

Mr. Wilson and Mr. Sherman moved to insert after the words ‘coin money’ the words ‘nor emit bills of credit, nor make any thing but gold and silver coin a tender in payment of debts’ making these prohibitions absolute…

Mr. Sherman thought this a “favourable” crisis for crushing paper money.

The Founders voted to adopt Sherman’s “crushing” of state-based paper money.

As for the federal government, the original draft of the Constitution included language permitting the federal government to issue unbacked paper money. The Founders objected strongly to this power. The objections were summed up by delegate Oliver Ellsworth:

Mr. Elsesworth thought this a favourable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By witholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else. Paper money can in no case be necessary. Give the Government credit, and other resources will offer. The power may do harm, never good.

Those who wrote the Constitution decisively stripped the federal government of the power to issue inconvertible paper money. And stripped it stayed… until, temporarily, during the Civil War. Saving the Union was of transcendent importance.
For most of American history dollars were convertible into gold or sometimes silver.
It is a 20th century innovation to have unconvertible money

On April 19 1933 Franklin D Roosevelt took the US off the Gold Standard and Americans had to exchange their gold for paper dollars at $20.67 an ounce (so a dollar was approximately equal to 1/20th of an ounce of gold). This was the start of the Great Confiscation which lasted until 1975.
In 1945 The Bretton Woods Agreement created a “Gold exchange standard” whereby the US promised to fix the price of gold to $35 an ounce (the dollar therefore was worth 1/35th of an ounce). The dollar therefore became the world’s reserve currency and was used for international trading and commerce, notably for the quotations of oil. Therefore all other currencies were effectively pegged to the dollar and therefore gold. At this point “paper” money had a reference value and theoretically could be exchanged as originally intended for a specific weight in gold.

However, in 1971 Richard Nixon suspended the convertibility of the dollar into gold because of the huge US debts following the Vietnam War. This was another nail in the dollars coffin. The gold price was approximately $41 an ounce ( so a dollar was worth 1/41th of an ounce). This also effectively unhinged all the other currencies from a gold standard as they had all been pegged to the dollar. The Demonetization of gold was completed by the Jamaica Agreement. This meant currencies could freely float in value up and down which they did. It marked the first time in history that only Fiat currencies existed (i.e. unbacked currency).
President Nixon announced this as a temporary suspension.

Nixon Lies again and again

President Nixon made certain promises to America when he suspended convertibility of the dollar. August 15, 1971:

“I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold ….

Now, what is this action–which is very technical–what does it mean for you?

Let me lay to rest the bugaboo of what is called devaluation.

If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”
The dollar has actually lost 3848% of its value when measured against Gold since Nixon declared this.
An ounce of gold is today quoted at $1420 (rounded up) which means that a dollar is technically only worth 1/1420th of an ounce compared to 1/41th of an ounce when Nixon made his declaration.
This steady erosion of the worth of a Dollar is exactly why there are calls for a return to gold currency or gold-backed currency in 13 States with others already contemplating the same.
One can understand the concerns and the choice between paper dollars or a piece of gold to preserve your wealth seems self-evident.
Just in case let’s check the value of the Dollar expressed in Gold.

Value of US Dollar expressed in Gold (ounces)
1933	1945	1971	2011
1/20	1/35	1/41	1/1420
0.0500	0.02857	0.02439	0.00070

From Confiscation until Bretton Woods 12 years later the Dollar lost 175% of its value against gold (an average of 14.58% per annum).
From Bretton Woods created the standard until Nixon removed it 26 years later the Dollar lost 117% of its value against gold (an average of 4.5% per annum).
In the last 40 years since Nixon unhinged the Gold Standard, the US Dollar has lost 3484% of its value against gold (an average of 87.1% per annum).
In a total of 78 years since confiscation in 1933 the US Dollar has lost over 7142% of its value against Gold (an average of 91.56% per annum).

So the period of greatest stability for the Dollar was with a Gold Standard and Confiscation still in place.
The most unstable period for the Dollar was when neither of these was in place as is the case today.

If the Dollar continues to falls by at least the average for the last forty years, bearing in mind that current world events could add to its woes, then it would be worth 0.00009 ounces of gold or 1/11111th of an ounce within a year – that gives a gold price of $11,111 an ounce.

It is especially pertinent when one considers the strength of an investment over time – Gold is anti-inflation and anti-crisis. It will always maintain real value, worth and purchasing power which can be traded and wilfully accepted in exchange for the necessities of life. This cannot be said for paper money which as history has proved time and again eventually becomes a worthless piece of paper whose only real value is its calorific heat value for burning!
This illustrates exactly why the peoples of Thirteen States are leading the charge to convert to a gold currency that maintains real value rather than be chained to the US Dollar which will only be of value for fire-lighting very soon.
It is inevitable that currency must be established against a fixed reference for it to have any real value and this road will always lead back to Gold as history has proved.
If you’ve never bought Gold before then maybe now is a good time before your savings literally go up in flames.

No-one has a crystal ball to look into the future. However, this did not stop Rob McEwen, Chairman and Executive Director of Minera Andes and US Gold Corporation, from voicing any doubt in his belief that if the current trend continues the price of gold might reach $5,000 an ounce over the next three to four years.

McEwen based his predictions on the constant demand for gold from sovereign states, central banks and investment funds which are quoted on the stock market. Moreover, he justified this time frame and the forecast of $5,000 based on the historical price of metal and the ratio for the Dow Jones share gold index since 1970.

“Gold is used as an insurance by poor governments”, stated the executive during a mining conference being held in Hong Kong. What is certain is that no-one is in a position to say that McEwen does not put his money where his mouth is: this businessman has ensured that some 90% of his own personal assets are deposited in physical gold and he added that he owns a 31% shareholding in Minera Andes and 20% in US Gold Corp, both based in Toronto.

Currently the price of gold is over $1400 an ounce owing to the fear of investors about the situation in Libya and Japan. Since last year, the doubts caused by a global economy not managing to recover from the international financial crisis which broke out in 2008, has made gold into the asset preferred by investors who are looking to get out of “paper money”.

In these times, the economic uncertainty has become more accentuated owing to the risk of default by Portugal which is in the middle of a political and economic crisis which has led to the fall of the Prime Minister José Sócrates. According to some European sources, the financial rescue of Portugal will cost in the region of $100 Billion.

Last nights website update listed resistance at 1437-1446 and the high so far is 1436.50 — support was listed at 1419-1425 and the low so far is 1413.

The big factor supporting gold recently has been inflationary expectations, which were given a boost yesterday by strong rallies in grains and livestock as well as ongoing strength in crude oil. Comments yesterday from the Wal-mart CEO that consumers face “serious inflation” seemed to be laying the groundwork for higher retail prices ahead.

With a new month — and a new Quarter — the Media is really spinning the data of a US economic recovery as the new hires came in at a plus 212K this morning. The spin of course is that the feds are going to be able to stop printing and supporting the economy……….and to carry it further, they will also begin to talk tough on how they are going to curb inflation — when in fact they are the reason for inflation. Media is spinning that the stock market had its best quarterly gain in 13 years, and manufacturing is having a great year and the unemployment rate is going down. This spin of course is to lead the market to one conclusion — that the feds could increase interest rates…………….to which we say………….. not at the moment.

Underneath it all —- the US Dollar — has rallied very strong against the yen again this week in what must be considered intervention. But it has been enough to rescue the dollar from its precarious position on the charts.

The news has produced a hard sell off in the metals so far this morning. One item we discussed last night was that the short term stronger cycles were due to peak between today and this coming Wednesday. But since the Metals usually exhibit strength at the beginning of a new month — the key now will be to see if Gold can stabilze here and regain it’s composure going into today’s close. This has also often occured on these report days for the metals so it is not out of the question for gold to bounce back as the day wears on — and is another factor we discussed in last night’s update.

Going to the chart — we can see that today’s sell off was once again a 4th TEST of the 1410-1412 area and another hit on the lower purple channel line.

Perhaps more important is the failure for gold to have closed above the 1436 area we’ve been watching for. This remains an important price point. Support is the 1410-1415 area for the remainder of the day —-and resistance is the 1423-1429 area and then 1436.

In summary — a bounce back from the lows is underway — and if gold can remain firm and push up into the close it will keep the trend up. Any close below the lower purple line will put the upside in question.

From a historical standpoint — short term trends are due to peak in the first week of April — and last into mid month. Closes below the lower purple channel line will add to that potential. We’ll pick it back up next week. Lets see if gold can push back up as we move into the close. As long as we remain above the purple channel line — the trend is still up.
What we want to see now — is a strong finish for the metals.

by Bill Downey

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We have previously reported at Goldcoin.org in Chinese queue at malls to beat Bernanke’s inflation with gold that the a Chinese Gold rush is underway from investors who are looking to beat inflation and devaluing currencies by buying and hoarding gold bullion and gold coins.

In January 2010, China recorded an inflation rate of 1.5%. But just 12 months later, the rate of Chinese inflation has climbed to 4.9%.

Rising inflation has sent food and property prices in China skyrocketing.

The price of food in China has increased 10.3% on an annual basis. The price of grain rose 15.1% and fruit prices were up 34.8% since January of last year.

Chinese inflation has been fuelled by an economic stimulus during the financial crisis two years ago of $585 which has resulted in excesses of liquidity in the economy.

The Chinese Government has tried to curb the inflation with measures such as raising interest rates several times and tightening lending requirements but so far this hasn’t worked. Even worse is the fear sweeping through the Chinese economy that inflation could go out of control and even lead to hyperinflation.

This has already prompted Chinese citizens to buy gold and their appetite for the yellow metal is insatiable.

This trend is not only set to increase but possibly explode into action following recent reports that the People’s Bank of China (PBOC) is actively recommending that over 1 Billion Chinese citizens buy gold as a way of preserving and protecting their wealth against inflation, economic crisis and the falling values of major currencies .

This recommendation was given in the Financial Markets Review from the PBOC and its publication coincided with the decline of several major currencies against the value of gold notably, the Swiss Franc fell 2.5%, The Japanese Yen 2%, The Pound Sterling 2% and of course the US Dollar  which fell 1%.

Chinese buy almost half the Gold produced in the world

According to the gold-specialising Swiss Bank UBS the Chinese demand for gold in the first 2 months of 2011 exceeded  7.05 Million ounces.

This unbelievable demand is the equivalent of 47% of all gold produced in the world during the same period. So the Chinese are buying almost half of the world’s gold production.

If this continues then the Chinese are set to buy in excess of 42.3 Million Ounces of Gold this year!

To put this quantity into context it is more gold than China’s Central Bank officially stores in its reserves.

The Financial Times recently quoted a senior executive at the Industrial and Commercial Bank of China ICBC, who spoke of the “voracious” appetite for gold in China…

China’s largest bank started a physically-backed gold savings account in December with the World Gold Council. Account openings have already surpassed 1 million, with more than 12 tonnes of gold already stored on behalf of investors.

Zhou Ming, deputy head of ICBC’s precious metals department, said the nation’s largest bank sold nearly 250,000 ounces of physical gold in January — the equivalent of 50% of all the bullion ICBC sold last year.

Added to this is the continuing diversification out of Forex by the People’s Bank of China into gold and other precious metals. They have around $3 Trillion which they would like to change because the weakening dollar is eroding its real value. How much gold will they need for $3 Trillion?

We know that China has been accumulating gold surreptitiously by buying up its own domestic production.

This suggests that increasing gold production was part of a long-term strategic plan to become a global leader in gold investments among governments.

The World Gold Council even reported:

Some market participants believe that China may also be continuing to buy local mine production, which it has done regularly in the past. There is certainly no shortage of experts, both domestic and from overseas, advising China to do so.

The World Gold Council estimates China’s gold demand could double in 10 years as more investors embrace precious metals.

But even in the short term, the expected demand for gold in China over the coming month will be enough to put significant strain on global supplies.

According to Tom Bulford  “China has spent the last decade buying every ounce of gold it can lay its hands on.

In fact, the Chinese have increased their deposits by 1,054 tonnes since 2001.

That’s 76% more than it was buying just a decade ago!

And it’s not just the Government we’re talking about here.

Ever since private gold ownership was legalised in China…and the Shanghai Gold Exchange opened – regular Chinese citizens have also started buying up gold in a BIG way”.

Quite simply, the Chinese seem to want to buy ANYTHING gold…

…gold coins…gold bullion…even foreign gold miners.

In fact, according to Want China Times…

“Chinese state-owned gold miner China National Gold Group announced… that it will step up overseas mergers and acquisitions in an effort to increase its gold stockpiles by 100 tonnes this year.”

Chinese production figures

China Produced $35 Billion in Gold in 2010

According to China’s Ministry of Industry and Information Technology, gross output from domestic production increased 67% to 230 billion yuan ($35 billion) in 2010.

Of this, China’s gold industry earned 5 billion yuan ($3.8 billion) in profit — 78% more than in the previous year.

China’s gold mines produced 9.9 million ounces of gold in 2010 — an increase of 7% over 2009.

Meanwhile, total domestic gold output grew 9% to 12.0 million ounces. (source WGC)

India is also encouraging Gold acquisition

Traditionally there has always been a strong demand for gold in India  with its specific seasonal demands for weddings and a cultural attachment to jewellery. However, they are also strengthening demand in Asia which is fast becoming the most important Continent for gold investment.  Gold is selling extremely well to the ordinary citizens looking for wealth protection and preservation. There are over 460 Post Offices that sell gold direct to the people. India also has public companies that offer credit to anyone wishing to purchase gold – in other words you can get a loan to buy gold!

This incredible demand throughout Asia is sure to impact the price of gold which may not have been factored in to the so-called expert calculations/ predictions/guesses.

Gold Price set to go skyward with Asian demand and World events

Similarly there are other significant factors that cannot have previously been factored in to annual gold price predictions such as;

• The continuing European Sovereign debt crisis with Portugal the latest Eurozone country in difficulty,
• The on-going Japanese catastrophe following the Earthquake, Tsunami and nuclear crisis,
• The popular uprisings in North Africa and around the Middle East with Syria and Yemen on the brink and the conflict in Libya worsening by the day. This has drawn military (and therefore financial)  resources from France, the UK and the US which have their own deficit problems and now has involved NATO countries.

It is becoming increasingly difficult to see how all of this can be paid for or accommodated in a World Economy already faltering.

It is no wonder that the Chinese are hedging against another crisis and with their ever increasing hoards of gold they are aiming to back the Yuan with gold and ultimately replace the Dollar as the world’s reserve currency.

We are heading for a spot of $1500 within weeks – and then…..$3000+

In view of the colossal demands for gold already discussed, the possible collapse of the dollar and the unknown outcomes of other world events a crisis bigger than 2008 looms large and we cannot predict which event will trigger it but be sure that it will happen. When it does make sure you have copied the Chinese and secured your wealth in the only safe haven for the crisis ahead. Buy Gold and buy now before the price takes off exponentially surpassing $2000 and even £3000 an ounce before the end of the year. The worthless dollar, hyperinflation, extraordinary demand and debt crisis dictate the course of gold to re-establish itself as the only real measure of currency and wealth. When the dust settles and re-evaluations have been made just pray you have gold as it will be worth upwards of $3000 an ounce.

I am sure it will not come as a shock to learn that there is an on-going investigation into a host of « big banks » who are accused of fixing their inter-bank lending rate (LIBOR) to effectively disguise and downgrade their indebtedness. The period involved reveals this was taking place pre-2008 crisis.

The investigation is well under way and involves the major Financial Service Regulators of the US and UK amongst others.
The scale is breath-taking and the accusations extremely serious as indicated by the issuing of subpoenas to retrieve sensitive documents for the prosecutor’s evidence.

Here are the details as reported by C Powell of GATA following a report in the Financial Times:

Regulators in the United States, Japan, and UK are investigating whether some of the biggest banks conspired to “manipulate” the benchmark interest rate used to calculate the cost of billions of dollars of debt.

The investigation centres on the panel of 16 banks that help the British Bankers’ Association set the London interbank offered rate, or Libor — the estimated cost of borrowing for banks between each other.

In particular, the investigation was looking at how Libor was set for US dollars during 2006 to 2008, immediately before and during the financial crisis, people familiar with the probes said.

The probe came to light on Tuesday when the Swiss bank UBS disclosed in its annual report that it had received subpoenas from three US agencies and an information demand from the Japanese Financial Supervisory Agency.
The bank said the regulators were focusing on “whether there were improper attempts by UBS, either acting on its own or together with others, to manipulate Libor rates at certain times.”
All the panel members are believed to have received at least an informal request for information — an earlier stage in an investigative process before a subpoena.

Witnesses had been interviewed by investigators from the US Securities and Exchange Commission, the Department of Justice, and the UK’s Financial Services Authority, people familiar with the probe said.

The inquiry has been under way for some months. At least one bank received its initial request for information in October, people familiar with the matter said.

The BBA produces Libor rates for 10 currencies using eight to 20 contributor banks. The contributors submit the rates at which they think they could borrow on the open market. Outlying submissions are tossed out and the reported rate is the mean of the middle values.

Critics of the process for setting Libor — which is used as a reference rate for about $350,000 Billion in financial products — have long claimed it is antiquated and lacking in transparency. Commentators complained bitterly during the financial crisis that the rates were distorted because they believed weaker banks were unwilling to admit higher borrowing costs.

UBS declined to comment beyond its disclosure. The regulators declined to comment. The other banks on the panel at the time covered by the probe either declined to comment or spokesmen could not be reached.

They are: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, Rabobank, Royal Bank of Canada, Bank of Tokyo-Mitsubishi, Norinchukin Bank, Royal Bank of Scotland, and West LB.

HBOS, which has since merged with Lloyds, was also a member.

The BBA said: “We are committed to retaining the reputation and integrity of BBA Libor, which continues to be the authoritative benchmark of the wholesale money market. It has a straightforward and unambiguous calculation method, which excludes any rates which are significant outliers. It is fully transparent — all of the data inputted by the contributor banks is publicly available, as is our methodology.”
(By Brooke Masters, Patrick Jenkins, and Justin Baer , Financial Times)

Banks outside the law?

This type of activity is typical of the banking sector who operate amongst themselves as if they are untouchable and above law and regulation.
They believe in their own importance because of their size and apparent power which disregards national boundaries because of their global clout. They play by their own rules and we know where that leads us.

Even then, when they cause misery, mayhem and crisis for the whole world by their own greedy practices and mistakes they still come begging for more money to play with – and the worse thing is that incompetent governments full of over-educated, posh, millionaires who have absolutely no notion of the real world because of a privileged, sheltered, upbringing give them our taxes. I believe this should also be investigated as it stinks of incestuous, undeclared interests by senators and ministers who post politics suddenly appear on boards of directors doing nothing (consultants) for some enormous salary.

Do you trust your bank?

Do you know what they do with your money?

If there’s another crisis where will your money be?

If your bank gets into trouble will they have enough money to pay back all their customers?

Who do you think they will pay first? You? Yeah right!

If you’re not part of the Politocrat & Banking club you’ve got no chance.

I believe that Bankers should be personally responsible for their actions, decisions, judgements and huge mistakes they make and personally bankrupted to repay some of the missing funds. It should be in their contracts and not some huge retirement pay off for complete incompetence like Fred Goodwin (RBS).

Let’s face it they’re quick enough to give themselves performance related bonuses (when there’s the slightest positive news) so why doesn’t it work both ways? When a bank underperforms they should be responsible and pay for it just as they like to cream off their “rewards” for guessing right.

Stop bailing out incompetence – Let them fail!

I also believe that Banks that get themselves into a mess should get themselves out of it or let them go bust like any other business that fails – after all that’s why we have the word Bankrupt isn’t it?

It is two words combined – Bank & Corrupt! That about explains it!

The increasing problems of disasters and political unrest are putting further strains on all these large institutions that are exceptionally nervous because they know they are exposed and overstretched as pre-2008. Another feature is they never learn by experience!
In 2011 we will witness an economic crisis on a scale not yet seen.

The foundations of Countries economic policies and Financial Institutions “Good Practice” have not been prepared for the shock that is gathering strength and they will not withstand the shock and its magnitude.

Can you afford for them to go down with all your savings?

Should you wait until it starts and it’s on the Tele before you do something?

Should you buy fire insurance before or after a fire?
Act now and preserve some of your wealth by investing in tangible assets that will survive a crisis.

Act now to put your money into something that you own, that is not linked to a failing or devalued currency that will be a means of survival when you need it most.

Put your wealth into gold which has been the universal “currency” throughout history.

Don’t invest in “paper promises”.

Get Physical!

Own gold and gold coins.

People survived wars, crises, recession and depression because they owned Gold.

People also perished – because they didn’t!

What would you rather do? Survive or Perish?

Make your choice!