New global currency or new regional trade units?

Rumblings out of the Kremlin for the creation of a new global currency.
click here

At the other end of the spectrum, bartering makes a comeback…
click here

First gold nugget EVER SEEN on CNBC

CNBC snowjob team headline this video as “Invest in Ancient Money”. Ancient money? Wouldn’t you rather own ancient money than obsolete money like euros or USDs? Only the first 10 seconds of this useless video are interesting. Gold or bonds? Neither pay any dividends but which one has credit risk?click here

More gold snowjobs again on CNBC. Here at “gold parties” woman of Orange County sell bling for cash. What do these woman do with the cash? Who knows, but more gold just moves into stronger hands and likely out of US hands. click here

Gold and Silver go Bonkers – Time 1980

A guy named AmericanPatriot posted this on Marketwatch:

“Gold and Silver Go Bonkers” TIME

“In one hectic week, the long surge in gold, silver and other precious metals crested into a wild pay-any-price frenzy. While bullion traders from Hong Kong to Zurich to Kansas City gaped in amazement, panicky investors big and small reacted to the worsening turmoil in the Middle East and the increasingly troubled world economy. They sent precious metal bars, coins and trinkets on the most dizzying roller-coaster ride in memory. Prices touched levels that were inconceivable a few months ago. Said a New York commodities expert, George Clarke, in a revealing if overwrought explanation of the market’s extreme volatility and nervousness: “In my opinion what is happening is that the world is looking at World War III.”

On a single day, gold climbed $74.50 per oz., or more than twice its total value as late as 1971. During the week, it climbed an incredible $148, to hit $660 per oz. before slipping back suddenly at week’s end to a still dazzling $603, or an overall gain of 18% in only five days.

The sell-off was spurred partly by rumors that the U.S. was planning a surprise gold auction of as much as 6 million oz. in an effort to break the price runup. Though the Administration denied the rumors, the U.S. could well afford such an auction. The nation’s gold reserves are still far and away the largest on earth, totaling some 276 million oz. At last week’s closing price, the reserves were worth some $165 billion, or more than twice as much as those of second-ranked West Germany. By comparison, the Soviet Union’s official reserves, though never disclosed, are estimated by the U.S. Central Intelligence Agency to be less than 45 million oz.

…full article

All roads lead to gold

Don’t be so sure to call a short term top in gold just because some hedge fund bought on grandpa’s recommendation. Private sector funds are furiously swapping paper for safe havens before the iceberg bid from Team Hope is pulled. After the grand mugging of 2008, the master financial planner of working class America will have levered their future with insolvent firms and fraudulently valued paper. So while the public’s wages of tomorrow are tied up in this ingeniously malicious buy-and-hold, financial institutions position themselves and their new-found liquidity for the final take down. They have backed up the truck and are loading up on precious metals WITH YOUR MONEY!

Team Hope is set on a course of feel-good inflation. Equities, real estate, and wages may eventually rise but lost purchasing power will be devastating, more than offsetting paper gains in 401Ks. The desperate attempt to shore up equities is an act meant only to quell civil unrest. The banking elite know how difficult it will be to enjoy their booty when their cleaners, drivers, chefs, and groomers are setting the streets ablaze.

Educate yourself and don’t be a fool. If the elite control gold they control you.

More fraudulent accounting turned into law

Give it up for Team Larceny

First, some background courtesy of wikipedia:

Robert Edward Rubin (born August 29, 1938) served as the 70th United States Secretary of the Treasury during both the first and second Clinton administrations. Before his government service, he spent 26 years at Goldman Sachs. His most prominent post-government role was as Director and Senior Counselor of Citigroup, where he performed ongoing advisory and representational roles for the firm[1]. From November to December 2007, he served temporarily as Chairman of Citigroup.[2][3] On January 9, 2009 Citigroup announced his resignation, after having been criticized for his performance.[4] He received more than $126 million in cash and stock during his eight years at Citigroup.[4] In January 2009, Rubin was named by Marketwatch as one of the “10 most unethical people in business”

Making money and managing money are two entirely different professions. What this guy Rubin is really saying is that when these firms are directed by law to properly value their assets it’s a real drag on earnings. Much better to show big profits so the banking elite can keep raking off massive compensation for “performance”.

From Bloomberg:
“I spent my whole life at Goldman Sachs believing in mark- to-market accounting, and having said that, if you look at the experience from the last two years, I think mark-to-market accounting has led to terrible vicious cycles in asset prices,”more here

Some respite – Financial prose from Pangloss

Good job boys

Today my friend Pangloss dug up some prescient financial prose to post here on the snow job. Check out these rhymes from 2005 – the days when everybody had the banker swagger.

08-27-2005
Pangloss On Fiat and Silver

Silver polished bright and clean,
Like a mirror how you gleam.
Fiat spawned at an alarming pace,
To bankrupt the human race.
I’m obsessed I must admit,
To fiat I won’t submit.
The federal reserve printing press,
Is not the cause of all this mess.
The fault it lies in us my friend,
for we refuse to buck the trend.
Trading in a promissory note
Is what got us in this boat.
Trade in paper if we will,
A promise we can not fulfill.
So take my silver it’s fair trade,
for the promises I’ve made.
Then in the end my debt is paid.

08-29-2005
Where We Began

Nature your a cunning creature
Past experience the teacher
Chicken little sky is falling
Dollar dropping, wars a calling
Pump the Saudi oil wells dry
Burn one drop price hits the sky
Print more money as wallpaper
Greatest ever federal caper
Like a sprinter from the block
To gold and silver people flock
This is not about endurance
They just want to buy insurance
Silver arrow from the quiver
One death blow will you deliver
To that promissory note
Keeping all the lies afloat
And you’ll wonder when it’s done
Why we’re back where we begun
Trade in silver said the preacher
Nature your a cunning creature

Pangloss

Is Gold a Commodity?

Marc Faber’s latest comments on Bloomberg that gold was overvalued relative to other commodities got me thinking if gold was really a commodity. When most of us think of commodities we think corn, sugar, oil, base metals and even precious metals. Even clean water and computers are commodities when no premium is being paid for any particular brand. All commodities are a store of value but their value is discounted by cost of storage and shelf life. Gold is the most accepted commodity to store value because of its liquidity and relatively concentrated form. Wheat – probably not so good. One big difference between gold and all other commodities is that it is not consumed. Almost all gold ever mined is available at the right price. The same cannot be said for oil, copper, nor the other precious metals consumed industrially. Since commodities are driven by supply and demand (and a little paper manipulation) and the supply of gold is really quite massive, why isn’t gold undervalued relative to other commodities? When there is a bumper crop in the wheat fields, the price of wheat drops. This, despite perennially bullish fundamentals such as dwindling global supplies, weakening US dollars, and population growth. Can gold then even be considered a commodity?

With a continually increasing supply and almost zero destruction, gold really has more in common with fiat currency than with it’s peers in the commodity pit.  If you don’t like the definition of gold as a currency, then you must be defining US dollars as a commodity (think wheelbarrows full of them and the commodity title isn’t far off). Being rectangular and made of paper are not the exclusive properties of currencies. Throughout history gold, along with sticks of wood and seashells, have all served as exchangeable stores of value. Unlike other commodities, all of these examples shared the quality of being essential purely for commerce and not for life. Gold endures because it is difficult to counterfeit, difficult to extract, more appealing than sticks and beads, and concentrated. It is the currency of currencies.

Of course with gold having limited growth in supply, it’s role as global currency extends into fiat currency markets where it serves as a barometer. One need only look at the price of gold relative to any fiat currency to determine growth in that nations money supply.  Despite gold hitting record highs in many currencies around the world, such as ruble, Canadian dollar, or pound, its performance is too often described in US dollar terms.  With massive monetary expansion greatest in the USA, it is more likely that gold remains undervalued, not overvalued as Marc Faber is now stating.

Yes, gold is barbaric and wars will be fought over it.  But a relic, it is not.  Gold continues to be the longest running currency in existence. Fiat based nations will continue trying to diminish gold’s perceived usefulness the only way that paper wars can be fought – in the paper gold market. Those that understand this game are quietly exchanging fiat currency for gold currency as fast as they can.

Battle of the Gurus

Although Marc Faber and Jim Rogers have pretty good track records, I gotta say Faber’s latest comment that gold is overvalued relative to other commodities is absurd. That’s really like saying the USD is undervalued relative to other commodities and NOBODY is saying that! It’s equally absurd to toss in gold with the rest of the commodities. This is the only commodity NOT consumed.

Faber, the original gloomer, must have screwed up a trade or two recently and now can’t get back into gold. Rogers on the other hand won’t budge on his losing long bond trade, but ultimately he will be proven right.

Faber talks here