Gold and Silver

It is September 24th 2011 and something happened in the markets this week that caused gold and silver to drop. In two days gold dropped 9.3% the most since 1983. Has growth slowed? Have the markets been manipulated? Why are stocks dropping as well? I don’t know the answers to this but want to find out. Understanding this market will help make sense of when these dips happen and when I can take advantage of them.

There was a sell off and Jim Rogers said in a interview that Brazil started a trade war that put on big tariffs. http://www.youtube.com/user/JimRogersChannel  How does a trade war bring down gold and silver? Well, it is apparent that Brazil hit China with 30% tariffs which is causing some markets to stumble and bring down the prices of commodities and stocks. People are panicking because of this and are moving into the dollar and selling off their metals. The sell off was similar in 2008 when Lehman Brothers collapsed.

What is interesting about this dip is that gold is usually the safe haven when the markets collapse and this time money is moving into the dollar and frank. Again I ask why? Investors must feel that the dollar will help them in the short term until the dip in commodities and stocks subsides. Cash is king these days and it shows on the books of many companies and investors.

Bob Chapman http://www.youtube.com/user/TheSchiffReport has some good insight on this recent dip. He remembers what happened in 1987 when they had a similar dip and feels there is some manipulation and he sticks to his prediction of gold hitting $3,000 by February. It still doesn’t give me the answer of why the dip happens when the stock markets also dip.

The Federal Reserve has also made some announcements that have hurt the market. It seems as though every time Bernanke gives an announcement the markets do something crazy. Maybe that is a good indicator that people do not trust what the Fed is doing. Maybe that is also the reason that Ron Paul is making ground with his popularity. At least this time Bernanke said that the Fed has a grim outlook on the economy in the near future and markets need to be cautious. They have changed tune as to outlooks and the markets have adjusted to this with gold and silver following the downward trend. Still, why did gold and silver go down with this outlook and announcement?

Gold has been hit by global liquidity and when the global liquidity contracts it hurts the prices of commodities. This is the theory from Marc Faber http://www.youtube.com/user/DoomBoomGloom and the most believable heard this morning. Asset prices are down and gold and silver are just adjusting not dropping back to the levels before the crisis of 2008 when they started to rise and will continue to for the next few years.

This is a good time to watch and learn from the markets and what I want is not repeat some the same mistakes of the past. We have not learned from mistakes as this crisis has shown. Some of the most influential and supposedly intelligent experts have been wrong and now like to write their theory of what happened but never made an effort (with the exception of a few) speak when markets needed it the most. Therefore we have this market move where gold and silver have made a correction because of manipulation I can’t explain other than that I know it is manipulation. The tone about gold with some of the mainstream sites and channels are “told you soish” about commodities but their bonds they are paid to promote will crumble like no other soon. That is my prediction.

Debate Tonight

Another GOP debate and all I see in the press is the showdown between Romney and Perry.  Is that the case or is the press pushing for this?  It is a Fox debate and that is who they want.  Fox is not as fair and balanced as they proclaim. 

http://www.foxnews.com/politics/2011/09/22/perry-romney-head-into-decisive-third-debate//

The funny thing is that some polls show Paul as the leader.  Such as California http://articles.cnn.com/2011-09-17/politics/california.straw.poll_1_straw-poll-ron-paul-votes?_s=PM:POLITICS  but all you see is there are only two front runners.  I wonder how much difference it would make if the press was truly fair and balanced?  I also question whether Texas cancelled their straw poll because Paul was going to win making Perry look bad. http://100gf.wordpress.com/2011/09/20/ron-paul-texas-straw-poll/ New Hampshire embarrassed Perry with making him fourth.  http://thehill.com/blogs/pundits-blog/presidential-campaign/183247-ron-paul-second-jon-huntsman-third-rick-perry-embarrassed-in-new-hampshire-poll. How are people supposed to react to this?  They don’t even care or know or just go along with it. 

Are the polls wrong?  I don’t usually believe polls but there has to be some consistency to them and when it comes right down to it they are manipulated by those supporting them and disproving them.  How is the public supposed to take them seriously?  Most are like zombies!   “Whoooooh!  They said Romney and Perry are the leaders so let’s vote for them.” 

We need some changes here that people will notice.  How?  What is the point of these debates if Fox, CNN, MSNBC only put the same two candidates in the spotlight and that is all the public sees.  Why can’t the people have the debates in some warehouse somewhere so we can ask the real questions and put the pressure on.  How about conning them into thinking we really like them and are going to vote and then pull the rug out from under them.  The candidates have changed positions so many times I don’t know which one to believe.  Paul is a breath of fresh air because of how long and consistent his positions have been.  He doesn’t know what the hell to do other than speak straight to what his beliefs are.  That is what I have noticed over the years and the press does not want people to notice this.  God forbid someone is truly honest. 

That is why he likes Kucinich.  They disagree on some but not all the issues and respect each other for keeping true to their beliefs. 

That is my assessment of today’s debate.  No one gets a fair view of who the candidates are but only who the corporate press wants you to see.  It was the same for Obama.  The press wanted him to win and that was how it was.  He was their prince and now some of those talking heads are questioning things they should have been questioning when he was campaigning   http://www.washingtontimes.com/news/2011/sep/19/liberals-vow-challenge-obama-democratic-primaries/.  I don’t think “liberals” (I hate branding) will have any real questions that would matter or that they would actually run someone else against him but it is a thought and would be for good entertainment. 

The point is that politics on both sides are broken and the press is not making it any better.  When I am watching the debate tonight it will be difficult to take in the preferential treatment of Romney and Perry but one thing’s for sure.  The only one who will stick to his beliefs is Paul.   

Today's Political Thinking

The Libertarians of the day, that is in the 60s, were part of the anti-Vietnam movement that made so much attention but one never knew that that was the case. Murray Rothbard talks about it a lot in his books and gives a good description of what Libertarianism was and how it has evolved. It is great that they often times put politics aside and joined groups such as the communists and rightists for anti-war movements. Today we see so much hype around not joining the right and it is hard to pin what a politician really feels and believes in because so many of them change their views.

For example we have Perry from Texas that used to work for Al Gore in the 80s and actually wrote Hillary Clinton a letter praising Hillary care. He also forced young girls to inoculate with Gardasil through an executive order that no politician should do. He was influenced then by Merck through campaign donations and what would he do now that he is running for president as a conservative. We don’t know what he stands for and seems fake to me from all angles. He even looks like a slick Willie that no one should trust under any circumstances. There was a picture on Drudge showing him talking with Ron Paul and he looked like he was a typical Texan ready to stomp anyone who opposes him.

The politics are thrown around by so many groups that influence it is hard to follow consistently therefore keeping it difficult for the average person to understand how this system works. The one who gets the flock wins and in this case it is the one with the crony-capitalist connections and both Republican like Perry and Democrat like Obama.

Today’s politics is so focused on keeping or eliminating Obama’s presidency one way or another. People on the left have so much into this president that they feel it is a must that he succeed although they are losing faith in him. While they are losing faith in him it is mainly because they do not like the way he reacts to the “racist” right wing who only wants him out because he is black. I am detested by the constant use of “it’s because he is black” argument but I can’t say that they are all wrong but I do think it is mainly because people are caught up in this right left debate and no party wants to give the other credit where credit is due. This makes it difficult to pick who the real candidates are. The ones I guess are pure are Kucinich and Paul. They are ideologically different on the economy but together on war and civil liberties.

Is that what people should do in politics? What we see today is to oppose no matter what we see is the same view because we want you out of office. Is there any difference from the American Right or Left or the establishment we have today? Are they really influenced by the same interests that are working behind the scenes? I think so.

I never would have guessed that Obama would have pushed us more into war and continued the policies of Bush but he did. It amazes me how much he has alienated the labor groups even though he still speaks to them about their mission to help the working man. People are frustrated and what is going to happen is that they are going to riot all over the country if they don’t get their way in the next 4 years if Obama gets in. I can’t for the life of me see any difference in this because there are no jobs in the future if we keep outsourcing production overseas.

Political movements have a mission to make their views heard. Is the Libertarian view the one that makes the most sense? To me it is. For the first time I see a system and theory that makes sense and I understand better after seeing the confusing issues covered from the leaders today. There are not many Ron Paul’s out there. Obama is a great speaker and first drew me in with his teleprompter reading. It was good to see a young, good-looking guy up there saying what people wanted to hear but that is what it was. Telling people what they want to hear and never really telling us where you stand even though deep down most knew. Or maybe not!

I have recently read an article from a progressive professor and author in the NY Times who brought to light the fact that we never really vetted Obama like we should have. The hype of America brought him to power and a lot of it was because he was black even if that is not politically correct to say. He pointed out that no one really knew what Obama’s views were and he never made an impact politically when in office as well as never publish anything, other than his book, in 12 years of teaching law. He isn’t what people thought that is for sure and I don’t see him bringing the country together any time soon. The right will make sure of that either way but even some rhetoric on the left is leaning towards getting a new more progressive politician in office.

I believe he is progressive enough but was just overwhelmed by the powerful elite who have put most of our presidents in for the past 100 years. The president has become less and less powerful and more of a puppet. Obama was no different and that is what people are starting to understand even if they don’t realize it yet.

Let the Gridlock Continue

Let the Gridlock Continue

Here we are weeks into the debate on the debt and it looks like the poor Congress is stuck working through the weekend because August 2nd is a date where the economic world as we know it will end here in the United States. So the pundits say! Either way gridlock in the system is what was meant to happen by our founders.

“The public interest is the most secure when governmental institutions are inefficient decision makers.” (Marcus E. Ethridge, Cato)

That makes more sense to me than one that enacts legislation fast and without efficient debate. There are dozens of interest groups that would like to influence this debate because they set to benefit from the decision to raise the debt ceiling. I understand that it would affect people financially in many ways but when are we going to say enough is enough.

Headlines all over the internet say how inefficient the Congress is and that the “Republicans, Tea Partiers, Democrats” and other people are to blame for this indecision. Is it so bad! I know that the debt ceiling could mean changes to how the country functions and how our debt is rated but when government can’t come to a conclusion then the public wins.

Marcus Ethridge from the Cato Institute had a good paper on the benefits of gridlock. He makes the argument that when there is gridlock the general population wins because special interests have the most influence and their narrow interests gain while the general public don't. That is interesting because progressives have argued since Woodrow Wilson that having interest groups are a good way to bypass the legislative process. Is that why we have so many czars today and why the EPA has said that if Congress does not pass emissions controls than they will implement them without any measure? Both sides have their interest groups and it seems that the more these groups influence the more inequality continues.

It is something to think about. Why do pundits get so angry when there is gridlock? Probably because they have something to gain from raising the debt! There is room for both sides to debate this but almost all new organizations have some scare tactic for their headlines and in the end the people get more and more confused and only know the talking points of those pundits. America will be fine and if they want their best interests to be met then LET THE GRIDLOCK CONTINUE.

Civilization

Civilization should not be something only studied by professionals. We as Americans, or any citizen for that matter, we should understand what makes civilization function or at a minimum understand what role it has in developing our own society and culture. The west is in a critical stage of history today as the world economy is moving through a recession and the eastern countries (China, India, Thailand, etc.) are becoming more relevant in the world markets. How we adjust to this stage is critical to the survival of the west.

Niall Ferguson’s book “Civilization: The west and the rest” shows the historical relevance of western culture as a global power and how it has influenced the rest of the world. This book has helped me to think about the world stage a little different than before. There is no doubt that the U.S. and European nations have gone from creditor nations to debtor nations in record time and history has proven that the world tends to favor the creditor nations. This is a fact that doesn’t sit right with some leaders in the U.S. and other western nations but this fact is something we need to have a coming to Jesus moment about or our decline will be extreme. The west has the potential to keep its position on the world stage but only with drastic measures to bring back the motor fueled by a civilization ready to succeed.

Many factors attributed to making the west are diminishing and this book points some of those out with six main factors that helped ascend the west and other nations failed to adopt. They were competition, the scientific revolution, the rule of law and representative government, Modern medicine, the consumer society and the work ethic. These factors made the west what it was and distinguished the west from other nations throughout the past few hundred years. Lately some countries, China mainly, have copied these to now excel to a world power and the west has slowly lost some of the very factors Ferguson points out.

There are some great takeaways from this book. One is that so many politicians and leaders had hurt the east’s ability to compete with the west. The people had a resilience to dominate the world stage but it was hard for them to compete on a closed system based on ideology from both religious and tyrannical. Most Muslim nations still abide by this but have made an effort to influence parts of Europe and the U.S. knowing that western tolerance can be taken advantage of.
The west’s institutions were once the brightest and best in the world but now some of the best schools are rising in the east because of the work effort and dedication to compete with the west. Ferguson shows how east and west Germany had people of the same culture split in two and they soon took the personalities of that state. He points out that they had a “divergence in the way they behaved.” Institutions are a product of culture with clarity and the institutions of the west helped to ascend innovation while the communist countries failed in many ways.

Foreign commerce also had a huge impact on the rise of the west. This is well known but some overlook the fact that China and other eastern nations had closed their borders and thus forced its people to survive on domestic goods and services without the new developed technologies of the west. It was also very difficult for innovation with tyrannical leaders that had no interest in what the west had to offer. That with the advanced institutions showed how fast western nations could grow economically and culturally.

Another observation is that the governments of Europe were divided among many smaller units which made for strict competition and that helped to give rise to expansion. There was competition “not just between states, but also within states” and this helped the west to rule the world. It is a wonder that today’s governments have basically worked together to form a huge union connected economically creating less competition and more dependence on the system. Ferguson does a good job in addressing this fact.

The law created the corporation creating one of the “earliest examples of an autonomous commercial institution.” That and Magna Carta helped to develop a system of laws that gave confidence to the markets and helped form corporations as we know them today. Even though there was corruption and it wasn’t perfect there had never been any law system to date that offered the freedoms provided. Property, Commerce and criminal systems allowed for symmetry the east felt would ruin the west not ascend them.

The consumer society developed and influenced the world and the new money system created exponential growth. America exemplified this with new and exciting goods developed and marketed in innovative ways. Ferguson did a great job of showing how dress really helped to spread the western culture to the point where eastern countries like Japan and China were forced to copy in order to be relevant. Even though American goods are everywhere it is often overlooked how this impacted other civilizations and gave rise to the west’s stamp on the world scene.

This was done through the Capitalist system and helped give rise to the west even if many then and today frown on this influence. He gives a good example of the radicals of the sixties on college campuses claiming to hate capitalism but were wearing the cloths and driving the vehicles that made their culture stand out. Some of these people influenced the very leaders running our country today and over the past years. Other nations are taking advantage of our politically correct leaders and the culture we are turning into.

One of the most important aspects of America today is the fact that our young are not being educated enough and do not understand history let alone math and science. “Maybe the ultimate threat to the West comes not from radical Islamism…but from our own lack of understanding of…our own culture.” This chapter of the book resonates with me and should for any parent in America. One only has to talk with children today to understand that the school system is failing our society which also leads one to conclude that parents are failing their children for not caring enough to fight it. This is a concerning issue that our elders and politicians are not realizing or caring about.

Another interesting issue politically incorrect to talk about and has a lot to do with the education of our children is the Max Weber and Sigmund Freud discussions of their day. Weber had a point of showing that the west’s ascension was directly related to its Protestant background. That may be true as Britain is now considered the most “godless” of societies in Europe and it showing what effect a lack of God may have had in its decline. Freud predicted this and knew that “instinctual passions are stronger than reasonable interests.” Therefore he knew and understood that as the west grew in wealth they would leave their religion behind. Even though the church population in America is still thriving it is a result of marketing the new age church but it has left less discipline and accountability on its members. Britain never adopted the new style of church but the book addresses the issues raised by many authors about religion and the western society.

One point made in the book is that China has a huge influx of churches built in recent times as government has opened up to this ideology. Ferguson points out that the Wenzhou province is the most entrepreneurial city in China, workers work longer hours than Americans, and save a fifth of their income. Could it be because they are the largest Christian population in China? He discusses this and it is interesting to bring up and shouldn’t be ignored as the west is losing its Christian identity.

So is America and the west on the decline? Maybe! One thing is for sure. All empires of the past have had their decline and as Ferguson points out they were rather short declines at best. It is also true that no other civilization rose as fast as the United States but many suggest that the fall could be as fast and if not then even more rapid than the ascension. The book is a good look at what civilization has done to help this ascension and the future will depend on what happens in the next few years. All experts agree that the next twenty years will be different that the past twenty. Civilization needs to prepare for this or the future will be violent and grim.

A Question About Government

What is it they are doing in Government? I see all the stories and commentary about these debt talks and I honestly hope that they get nothing done and the debt limit does not go up. Will it be so bad if this country will have to learn the hard way what it takes to get back on our feet? The politicians don't think so!

If these talks don't work out and neither side gives then the American people win because less will get done.

We don't need more laws but only need enforcement or repeal of the ones we have.

We don't need to raise the debt limit but only need to get our financial house in order and figure out how to be frugal in governemnt like the rest of us do.

Both Republicans and Democrats should stop the blame game and maybe should take responsibility together. Although some people are fooled into thinking it's one side or the other others are catching on to the fact that both are to blame.

Yes! I want nothing done in the government and most of America should see that if they can get on without their help then self respect would once again arise and people would get on with their lives and bring America back to where it once was. The politicians in these negotiations know nothing about the predicament of the average American. Not even the almighty Obama understands this.

The one thing I would like to see is for Americans to realize that if we take care of our own sphere and not rely on the outside forces to help then we would get on much better. The only thing we get by depending on others is slavery. Which is what governemnt wants of us.

Article by Gary North

Great article on what's wrong with the mentality in this country regarding government and how they are duping the American people and have been for some time.

The Economy

What is it that the government is doing? Austan Goolsbee is the chairmen for the Council on Economic Advisers and he is one in many that have decided to resign before the economy gets worse and he gets some of the blame. This leaves Timothy Geitner as the only original member of Obama's economic team. It sounds as though Goolsbee had a more private market approach than other advisers (Summers, Geitner, Romer)but it remains to be seen if these professors that presidents like to rely on even know as much as their papers say.

It is a wonder that they can sit in front of the press and say that the economy is doing great and it is creating jobs, despite what is seen on the street, and then go back to their prominent positions in Universities and write books about it. Most of those books students are forced to buy at astronomical prices.

The economy is not doing well. The stimulus that is almost over (QE2) has not done nearly what it was promised to do and there is rumor that there may be QE 3 around the corner. Peter Schiff compares the stimulus with drug addiction. We can't just do a little to stimulate the economy. We get accustomed to it and want more and in the long-term and it ends up hurting our very existence.

The jobless rate is unchanged at 9.1%, 54,000 new jobs were created, and the debt in this country is already at dangerous levels. The debt ceiling will most likely be lifted but when are we going to start being responsible? It starts at home and we know that it won't start with government. People will suffer whether we like it or not and the only thing to do is prepare for it by working hard at making the best life we can for our families.

What we need government to do is to give us the platform for work and the environment to flourish with our increase. Is that what this experts are doing? I think not and most of the American public doesn't think so either. The very same advisers who got us into the financial fiasco of 2008-2009 are the same ones sitting in positions in the administration. Is that the change Obama was talking about. He has just continued everything that the Bush Administration implemented except multiplied the effects of it.

It is scary to think that there are no other candidates besides Ron Paul and Gary Johnson that get any of this.

Liberty

What does liberty mean today? It is a word that has stuck with me over the past few weeks. It means different things for different people. Many have good feelings when the word is mentioned and other have disdain for one reason or another but it is something that could help shape one's own life. People in this country should have the opportunity to shape their life but some feel that that opportunity is only for select few and not others. That is where equality comes in to the picture.

How do liberty and equality work together?

They are different sides of the same coin. Meaning that we are all equal as human beings with the ability to form our own conclusions on our individual progression in life. We do not have the same abilities but only the decision to harness the abilities we are best at. You could look at it as we are created equal by our creator as Jefferson said but this also gives us rights to pursue whatever we want in life. If we take advantage of these rights then liberty will help take equality to another level.

Is that possible today?

It is through the liberties we still have and most people don't realize. The equal rights help liberties to function but today more and more liberties are taken and most in the name of equality. Equality of how people finish will take liberties away today more than ever. Examples could be certain taxes, regulations, laws, quotas and other forms of infringement that the government has become so known for. We have some of the same people taking away liberties of others that would never give up any of their own. On that principle alone people should want to limit what liberties are taken away.

Today it is more difficult than ever to start a business. It is difficult to trust where your money goes. It is difficult to be secure in a job. It is difficult to stay in a home. It is difficult to even find out what the rules are so they aren't broken. Whatever it is people want to have the opportunity to succeed and it is there but they need to have the drive to get it.

Liberty is only good if we have the rights to practice it. Government is needed in some capacity but nothing is ever done in small quantities and that can't be good. A bill can't be simple so people understand it. It has to have hundreds of pages most of which have some form of infringements that we never find out about until it is in our face. Is that right? Whether you are a Democrat or Republican it shouldn't matter. Liberties are being taken away all the time and our country is becoming less significant as our diminished capacity to practice these liberties grows.

It should go back to the communities who help each other understand what rights we have. People withdrawn from one another will only help federal government to grow. What good is that for anyone. I live in a community that has found it difficult to function because people are withdrawn from one another. People divided only helps politicians to take our liberties away. It's not a rich vs poor thing or a right vs left thing.

Liberty means power and that is the first thing that comes to mind when hearing that word. What does it mean to you?

Depression

Is this a depression? It is in many regards but the government would not want people to know about it. The difference in this depression is that there is a whole lot more money flowing through the system making it seem like it is not as bad as it seems. The result is a jobless recovery because most indications (CPI, Stock Market, unemployment numbers) show one thing but we in the streets see another making it hard for people to see the truth.

Current politicians are addicted to creating these short term results but in the long run we are in trouble. Debt levels are extraordinary and the American public doesn't want to see the truth making the politicians more powerful than they should be. Where do we get this mentality of how to handle recessions?

Most of it is in how we handled the Great Depression. Milton Friedman thinks we did not adjust correctly to the amount of Gold therefore not having enough money supply to cushion the markets. He also states in "Free to Choose" that the government is the major source of economic instability and the main cause to the crisis that led tot he Great Depression.

Paul Krugman thinks that government is not doing enough and that it is imperative that they spend more and grow the government. He feels that spending should be ten times what it is now and has a strict Keyensian theory on economics. He states that Keynesians, and himself, believes that in a recessionary time the government should spend while in boom times they should restrain and work on creating a surplus to spend in bad times.

In this depression there is no room to spend because the politicians created a huge mess during the boom times. This was caused from addiction to debt from the top on down to the bottom. This has made it difficult to spend when people need it and has created this political firestorm that is getting nothing done. What are we to do?

The very people who created this mess are arguing on what to do to save us lowly serfs now. It makes for an argument that the whole system needs a real change and not one debated in the halls of Washington by people who know nothing of what we need or want.

Central Economic Planning

What is it with the central economic planning that is happening today? The definition of insanity is "doing the same thing over and over again and expecting a different result." Is that what our government is doing today. We are still in a crisis with no end in sight. What are we to do as the average American? Does it matter that I am writing on this blog? I see this government as doing the same thing over and over based on the economic philosophy our leaders love be influenced with. Whether it is Republican or Democrat they have the same people from the same institutions that created the financial meltdown.

For example: Does it make sense to have Timothy Geitner, Henry Paulson, Ben Bernanke, Robert Rubin, Larry Summers, Lael Brainard, Mark Patterson, Lewis Sachs, Gary Gensler, Mary Schapiro and other Goldman Sachs cronies working in the administration of Obama. Bush was not much different and most of these people had an impact on the Clinton administration as well.

The point is that we are letting the same people run our financial system who's choices helped to create the financial meltdown.

The movie "Inside Job" does a good job of showing who was associated with Goldman and how their economic planning helped create the crisis in the United States and the world. We have a situation here in the United States where things are not going to get better as long as we have people in office run by the elite that will not create a free economic market that we are constitutionally obligated to have. The regulations enacted recently do nothing but talk about helping the collective but when in reality they hurt the system because the middle class benefit not at all from what this culture has created.

Who could we elect that would change this system. Someone with REAL CHANGE.