Wednesday, February 29, 2012

Unsustainable Debt, War and Gold

The ECB now has a balance sheet which is 35% the size of total European GDP.

Wow.

Debt is now becoming a metric that does not add up. There is too much debt being created for it to be ever paid back with more debt or with growth. We don't yet have access to the resources on new planets to up our growth and consumption. It's either go bust and see where the chips lie, or make a grab for resources by fair means or foul.

Talk this week was of the EU and the USA doing just that. Positioning themselves to grab resources. If you thought Saudi Arabia had huge oil fields, then what of the unverified (to this writer) oil fields sweeping south of Saudi Arabia and into Somalia and Ethiopia and the Sudan. These oil fields are purported to carry some 71 billion barrels of crude. Is this why piracy is now news and special forces operatives from France, England, and the US are crawling all over that area. Why Ethiopian and Kenyan forces are now crushing the Somali radical muslim militias? Hmm.

War always seems inevitable when you lose the debt game. Give your sons and daughters a hug. Heavens, is that ever gloomy!

But back to debt. Greece is being talked about a lot because Greece is a microcosm of worldwide debt problems. The maths in Greece simply do not add up. And they invented maths. This is why Greece will be cast adrift and return to the drachma. Sooner rather than later. Already the populous is getting real mad at the Germans wanting more control over them. The latest being a volunteeer group of Germans heading to Greece to show them how to budget...the German way. Oh dear, that's gonna go down well.

The good outcomes and answers are few and far between in all this mess. It has been suggested that countries get growth going by their Central Banks printing money and using it to get construction going etc. Well the days of printing and getting good results are over.

It may have been okay for Japan in the 1990s to print. But Japan didn't get inflation in the 1990s as the money printing machines were not in full operation worldwide as they are now. Japan was first off the printing block and was able to export their inflation. Much the same way the US exported theirs to China.  Another reason why New Zealand shouldn't print right now. All we would be doing is competing with the US, Japanese and European printing presses. We would lose that fight.

And just to end, here's a piece from Zerohedge this morning on debt:

"The modern, debt-based economy requires constant economic expansion if only to service all that debt. So what happens when the modern economy goes ex-growth and stops expanding? Iceland already found out. Greece is in the process of discovering. But we will all get a chance to participate in this lesson. Runaway fiscal and monetary stimulus throughout the western economies is in the process of destroying the concept of creditworthiness at the centre of the modern monetary system.  Private investors, we suspect, have little or no conception of the extent to which the state is now the predominant player in the financial markets. Central banks control the money supply and interest rates. Central banking and commercial banking interests have essentially become fused."

Gold will stay in a bull market as long as this madness continues.


Gold in New Zealand dollars: $2132.88 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $44.22 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Tuesday, February 28, 2012

On Buffet and Gold


Warren Buffet and the the website Stuff are at it again. Putting out uninformed views about gold.

Wait on, I hear you say, such an arrogant view for one who hasn't made billions in their career or isn't a 'real' writer.

True enough, but remember, even the greats among us can be misguided or wrong. Even the best scientists, with the best data, have made asses of themselves with unfortunate theories.

Anyway, can we ever be sure of our motives or even the motives of businessmen and business writers. Each of us has an axe to grind and maybe a nest to feather. It's beholden to ourselves to ensure we analyse information in an impartial manner as possible. And be humble enough to change our views.

Both the article in Stuff and Warren Buffet's recent statements are very well answered in this article from QB Asset Management.

Here's an excerpt in summary from the QB article:

"We believe true savers across the world not beholden to Western financial assets understand or will soon understand the difference between relative nominal returns and absolute real returns. They do (or will) not care about the views of very successful leveraged money changers. Yes, an inert rock today will be an inert rock tomorrow. But it will be an even scarcer inert rock tomorrow relative to the fiat currency in which it is priced (same for fine art). Levered productive assets will lose their value against both unlevered scarce inert rocks and unlevered inelastic commodities. The only things they will outperform in a period of great monetary inflation are bonds and cash (both also levered)."


Gold in New Zealand dollars: $2104.80 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $42.17 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Monday, February 27, 2012

No, It's Not Alright to Print Money

On Sunday, I read an article in the main newspaper here in New Zealand called, "The Power of Printing Money".

The writer makes the point that in the 1930s, after New Zealand followed Britain off the gold standard, the then newly formed Reserve Bank of New Zealand, printed money to get housing programs started and the economy moving. It seemed to work.

Therefore, if this worked then, it will work now.

I don't think so.

The era was different, after all we had just left the gold standard and the values of assets were where they should be. Today we have been off the Bretton Woods quasi gold standard since 1971 and in a totally fiat money world. Many more years of lost value has ensued since then. Asset prices have increased considerably. Meaning, we have already had massive inflation, tearing the heart out of savings and value. Do we want to accelerate that by debasing our currency more?

I point you to another graph below. This is what happens when currencies are debased and assets maintain value. Prices rocket higher. In 2004, you could buy 1/600th of an ounce of gold for NZ$1.00. Today, you can buy 1/2150th of an ounce for NZ$1.00. Hmm, shame we can't print gold and other assets.
click to enlarge

I am surpirsed at this commentator, perhaps tongue in cheek, putting out such ideas. Currency debasement is the last resort of governments trying to protect their power, not governments trying to protect the savers and the middle-class they are supposed to be responsible for.

Just look at oil prices and where they are headed. Because the USD reserve currency is being debased by QE and bond buybacks etc, oil prices have to go up. Remember the inflation equation: Price = Asset + Money Supply. The more money printed (inflation), the more prices rise.

But there is a catch, especially in the US at present.

There are trillions stored at the Federal Reserve in the USA, but this has yet to be 'let loose' on the economy. It has no velocity. Business is not confident to spend, so doesn't require it. You need to spend it or lend it to get the inflation moving, and hence prices increasing. If confidence does come back, watch out for velocity to increase considerably and inflation to take off.

Of course this also assumes that the curent inflation rates reported in most major economies is correct. If we measured inflation now the same way we did in the 1970s, and we can, the rate is likely to be a lot higher, perhaps around 8%. Tell me that doesn't ring a bell when you go to the supermarket and seem to get less for your pay packet.

However, to remain competitive, short term, we will probably be forced to debase our curency somehow. I don't agree with the idea, but we are all inflaters now.  That's just the way it has always worked throughout history when fiat currencies take over.

A race to the bottom and a shift in the ownership of wealth.

Gold
in New Zealand dollars: $2122.29 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $42.37 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Friday, February 24, 2012

Gold Talking

I point you to a very good all round article today by Jeff Clark of Casey Research. I agree with gold as being money, but I would like to see how it could be used on a mass scale as money. It is divisible and maleable etc, which is all well and good for one on one physical transactions, but how we would incorporate gold into the complex money system we have now still needs a lot of study and agreement.

Gold
in New Zealand dollars: $2129.31 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $42.31 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Thursday, February 23, 2012

Banks 1, Savers 0 (referee: Gold)


After years of Banks seeking high returns with high risk investments, some of it with your money and all of the risk yours, the solution is in.

click to enlarge

 Is the Greek bailout helping the the hardworking Greek citizen who's life savings have been carefully squirreled away for decades? Will this bailout make Greece prosperous again?

No.

So try and explain to me why the Europeans are printing money to bailout banks and not letting the banks take the rap for their bad investments?

Ok, so letting the banks fail would probably cause short-term pain for us all, but bailing them out causes the pain to be focused on the plebs at the bottom of the food chain. Not the rich. The savers of Europe are being defrauded of their wealth. No wonder anger is fermenting.

Someone has to pay, just don't let it be the guys who own the banks.

Gold is still rising on this news, and other factors, showing the volume of fiat money and fear is increasing. Gold is the referee. The reference point that all value feeds off. It is blowing the whistle on the unwise machinations of men.


Gold in New Zealand dollars: $2143.49 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $41.35 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Wednesday, February 22, 2012

Gold Up On Greek 'Bailout'

It appears the market may be coming to the realisation the Europeans are between a rock and a hard place. Gold has surged $25 today. The market is sniffing inflation in the air.

Reason? The only way they are going to bailout Greece is to create money. European QE, under many fancy names and guises, will replace the lost credit with new credit on banks balance sheets.

This bailout does not avoid default altogether, it merely delays the fateful day. Anyway, this is a default by any definition. They just don't want to class it as such as they do not want the massive CDS payments kicking in and taking down the system.

This deal is another 'brick in the wall' of value destruction. Remember, gold doesn't go up in value, price goes up. Added to the European inflation, the Federal Reserve is signalling they want 2% inflation each year. This probably equates to a real rate of around 4%. Note, that 4% inflation per year will destroy the value of the dollar by half in around 20 years.

No wonder we are all speculators now.

The only way to protect yourself is to buy gold. Have some gold and silver owned privately as an insurance policy or a hedge against this craziness in the system.

You can have an investment mindset in gold and silver if you wish. Looking at prices each day and be ready to buy and sell in weakness and strength. Or, on the other hand, know that holding gold is important and have little regard to the price itself.

Remember, those who are generationally wealthy own gold. If you want to know why, then I would urge you to study gold. As with anything in life, wisdom is about listening to the right people and doing what those who are successful do.

Not what the banks do.


Gold in New Zealand dollars: $2109.83 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $41.24 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Tuesday, February 21, 2012

Gold and Greece

Today, I will simply point you to Turd Ferguson's post on Greece entitled, "Why Greece Matters and What it Means to You".

Excerpt: "So, the question becomes, how does Greece stay afloat and who pays for it? The main issue in question and the primary deadline is the bond payment due on March 20. How can that payment be met without triggering a worldwide financial collapse?

"Ah...there goes Turd again, talking about worldwide financial collapse. The King of Hyperbole is back!" Not so fast, my friends. This really is very serious stuff. One of two things is going to happen."


Gold in New Zealand dollars: $2065.63 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.05 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________


Go More Raw Seven Day Raw Food Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Monday, February 20, 2012

Counterfeit Gold

"The notes, which were dated 1934, were found in three safety deposit boxes in Zurich" says the Telegraph

$6 Trillion in counterfeit US bonds is fascinating and verges on the unbelievable. Why would anyone even begin to think that a $1 billion dollar bond, dated 1934, would be useful today? Perhaps they were looking at the collectors market? Even then, did such denominations even exist in 1934 when $1 billion would have bought a small country? This find raises a few questions.

Ths interesting part of the whole find are the boxes these were found in. Why go to all the trouble creating a 1934 Chicago Federal Reserve 'treasure chest' looking box to store these in?





I don't know enough about real bonds, let alone fake ones, to comment. But here's one theory, of which I have no corroborating evidence for at all. It's probably just a good conspiracy story. An interesting read though.

I have noted many times on this blog, alchemy, or possessing the capability of turning base metals into the noble metals gold or silver, is not yet a fact. Printing gold or silver Au and Ag atoms isn't possible yet.

Find a few bars of gold and silver belongoing to the Mafia and you can use them straight away as money.

Not so the paper bonds, or for that matter, as time goes on, the Federal Reserve so-called 'real bonds'.


Gold in New Zealand dollars: $2072.37 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.01 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Friday, February 17, 2012

Gold Sanctuary

In the old days, when you were being pursued by the King's local soldiers, you could run into the local cathedral and plead 'Sanctuary' to avoid arrest. Nowadays, you need to quickly find your local embassy and dash in there.

Well, what is our financial sanctuary? Where do we run when the current system we know so well comes after us, trying to suck our financial life-blood?

Hardly a day, or minute even, goes past that we aren't bombarded with the soldiers of war, financial ruin or debt pursuing us with their sabres of doom.

These are troubling times. More troubling than other times? Perhaps not in a physical safety sense, but definitely troubling financially. Since the 1960s, the world has been relatively stable financially. Most of the world has increased their standard of living and even now, people in emerging markets like India and China, are far better off than 50 years ago.

But there is definitely a sense of unease out there. Is it real or does fear feed on itself causing a phantom problem?

The figures don't bear this out though. Scotty, in engineering, is warning that it's gonna blow.

Traditionally, investors have always turned to gold as a sanctuary because it is easily carried and packs the biggest wealth punch for it's size. It is recognisable everywhere as value in the world.

Just ask the people fleeing Europe in the 1930s and 40s. They hid there life's savings in clothing, settled in the USA and New Zealand etc and started over.

Some of us have dashed headlong (and perhaps headstrong) to the sanctuary and pled for safety.

Hear footsteps behind you?

And finally, may I point you to my wife's new 'Seven Day Raw Food Program'. If you are looing for an easy way to change your diet and lifestyle, then have a look at this program. It's great.


Gold in New Zealand dollars: $2074.17 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.18 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Thursday, February 16, 2012

Got to Put My Money Somewhere; But Not Gold

The Fund Managers lament: "So much liquidity, so many options. Where do we park this money? Where is it safe? Where are the decent returns? Oh the muddle, Oh the stress. And please, do not mention gold. You bugs just don't get it. Gold does not earn a return."

The world is awash and drowning in counterfeit money. Not only is new money being printed with gay abandon (can I say that?) it is losing value through financial repression, aka negative interest rates. Fund managers are moving large amounts of money through the system at an ever increasing pace. Looking for returns, seemingly without too much thought. Increasingly leaving the decisions to computer algorithms that move in and out of markets in miliseconds. Flash in, flash out; flash crash?

The latest incarnation of 'debt to woo' is the Local Government Funding Agency debt here in New Zealand. Yesterday it attracted bids worth NZ$1.32 bln, equivalent to 4.4 times debt sold. Funds managers were falling over themselves to get into LGFA door.

Makes you wonder if these investors are factoring in a possible bailout from the NZ Government when this debt defaults in the future. Maybe. This new issuance also makes you wonder how long this game of musical chairs can continue. This ever faster moving paper-game.

Honestly, just look at what is being offered here. Local Council debt. Let me repeat that. Local Council debt.

Debt issued by beaureucrats. Even worse than debt issued by politicians. This debt will be used for large infrastrucure projects, general running expenses, pet projects and, let us not forget, repayment of existing debt. Yes, that's the ponzi bit. As long as investors see a return and they believe they are in quick enough, they will invest. But ponzi schemes always end and the last sucker always loses.

Remember also, many kiwisaver retirement funds will have been a part of this orgy of bidding. Savers in their 30s think they will see this money when they hit 65. Good luck with that. Not that they have any control anyway. Many were just happy to think they were getting $1000 from the NZ Government kick-start. The real kicker is coming.

But not gold. Well, yes, gold does not give you a return. You cannot live on the interest. But, if you study gold, that's not why you buy it (physical gold that is). Gold is the curency of last resort. A value net when all other values fall. Buying physical gold isn't even a ponzi scheme. If you buy gold, you always have it, always have wealth preservation. Simple.

I can understand why these debt instruments are attractive to institutional investors. They have little option. But look out when the paper ponzi begins to crack and splinter. Where will they rush?

I'll leave that to your imagination.


Gold in New Zealand dollars: $2071.87 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.05 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Wednesday, February 15, 2012

House Prices in New Zealand v Gold - January, 2012

Here are the latest figures for New Zealand house prices versus gold as at the end of January, 2012


click to enlarge




click to enlarge


















Gold
in New Zealand dollars: $2066.63 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.26 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver
Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.
_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service. Your reference: an-001
_____________________________________________________________

Tuesday, February 14, 2012

Temperature Rising


I can't help thinking that New Zealanders might be living in a surreal world.

On the one hand many are worried that their weekly wage receipts don't appear to be covering those weekly bills like they used to. They watch the news and blame the Europeans and Wall Street, but really have little clue as to the underlying fundamentals that have placed them in this liquidity trap.

Then again, I might be in a surreal world and all might be OK by this time next year. The unpayable debts, the inflating money supplies, the wars without end, the increasing riots in the so-called civilised West, may all just vapourise and all will be balanced once more. Back to the old times of increasing wealth and plenty for all...at least in my world.

But, I doubt my world is surreal. Evidence can be interpreted in various ways and different conclusions drawn. But when a body of evidence begins to stack in favour of a particular idea, then one usually has to give way and change ones mind.

Today we hear of the rating agencies downgrading Italy, Portugal and Spain. Now there is simply nothing these countries can do to stop their economic death spiral and their economies imploding. It is over. The results of this catastrophe may be contained and we may all get to carry on for a few more months or years. But the debt is now too much to handle and the only answer is more money printing.

The best answer, based on the body of evidence, for you and me to portect our wealth is gold and silver. "Get thyself out of the Fiat Money System"?

But back to New Zealand. Quotable value is saying house prices have risen over the past few months by 1.1%. Banks are on the verge of lifting interest rates. Banks are also nearing downgrade territory here.  But people are still demanding higher prices for housing and people are still buying, like there's no tomorrow. When increased interest rates hit, the surreal world will flood into the real for them.

And hurt, pain and anger will ensue. Welcome to Greece?

_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Monday, February 13, 2012

The End Game Is Near?

The last days of Rome saw the then regime begin to increasingly use oppressive policies of greater taxation and greater control over it's citizens finances. In the death spiral of an empire, when a government cannot pay it's bills, it seeks to suck the financial life-blood about of its own people.

They get desperate to hold onto power. And it isn't a pretty sight to behold.

Long years of war (sounding familiar) for Rome drained it's wealth. After the prosperous years of being generous with social programs, like allowing grain subsidies to it's citizens, Rome began to "run out of other people's money". They first began to 'clip' their silver and gold coins and eventually reduced the gold and silver content. The ancient definition of 'quantitative easing'. Inflation ensued. When this was failing, the government had to do something, so it went after the wealth of it's citizens.

So forward to today. The US has announced a number of policy changes to go after wealth globally. Even our little kiwisaver schemes, when invested in US mutal funds, may be about to be hit with taxes payable in the US. Another blow for the ailing kiwisaver scheme. And don't forget the US regulations surrounding the money deposited in Swiss bank acounts by US citizens. There is no hiding anywhere and no safe harbour for wealth.

Futhermore, the FBI have recently put out a statement referring to people who believe in a gold standard (incidentally, I haven't a firm view on this) as extremists and their activities need to be watched. The reason? A gold standard would destroy the US dollar and hence financial system.

But let us not mention, not even a whisper, that since the Federal Reserve was created in 1913, the US dollar is now worth...wait for it... just 4c.

Will the Federal Reserve Bank be on the 'extremist' watch-list  for destroying the US dollar? Hmm.

New Zealand is not immune to similar draconian measures. The IRD here has spent zillions on upgrading their computer systems to better report people's income and hence tax dues. Maybe expect the heavy hand of the IRD to once again rise to strike?

Politicians and their backers like power. They make the same mistakes throughout history in order to maintain that power. As mentioned last week, the Federal Reserve is trying to devalue the US dollar via stealth using a process called 'financial repression'. Now watch the rhetoric around those who are being prudent with their savings ramp up. Especially negative propaganda surrounding those who own precious metals?

The end game is near?


Gold in New Zealand dollars: $2084.11 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.65 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Friday, February 10, 2012

There Are Burglars Lurking

"Bank of England injects another £50bn into UK economy", the BBC reports.

When normal sensible people do stupid things you shake your head. Like someone shovelling snow from a roof, untethered. You wait for the inevitable.

But when sensible people in power do stupid things, you can either get mad and active or feel helpless and do nothing.

Central Bankers are not supposed to be stupid. They are the best brains in banking. But you would be right in feeling confused about this. Especially when they keep doing something that hasn't worked long-term and also has never worked historically.

Central Banks are not supposed to be political entities. I know the NZ Reserve Bank is mandated as such. However, one has to wonder how this short term 'easing' could be anything but political. How can it not be serving political masters to leave your theory and history at the door and attempt to produce wealth by printing it?

It defies logic. Perhaps this will stimulate for a while. It may make GDP, as it's measured anyway, a little brighter next time it is reported.

But 'things' or assets that you can touch and feel and dig out of the ground, haven't suddenly and magically been printed. You've heard of 3D printers, well they aren't yet good enough to do the Star Trek thing and produce real physical assets by the touch of a button.

If only that were so. Then we wouldn't need money.

So the Bank of England prints but who gets the dosh? Who is on the other side of the trade. Remember any credit needs a debit. It's just the way it is. Light and dark, positive and negative, laws of the universe that are inviolable.

If you are the lucky few who get to use this money first, when prices haven't yet caught up with the money supply increase, then whoopie, you are extremely pleased. Buy those assets now while they are cheap.

But who is at the bottom of the this dastardly pyramid?

You guessed it, it isn't rocket science. You and me savers. We pay. Not directly, as a tax is deducted from pay, but in the leaching away of value that our hard earned labour represents.

One of those hours you worked last week? You may have just lost 2 minutes of that. Or put it this way, now you may need 62 mins work to be rewarded in the same way as last week or to just buy the same amount of stuff. The stuff hasn't changed, the amount of money has.

Ponder this? What's the difference between banks printing money and a burglar stealing your wallet?


Gold in New Zealand dollars: $2075.70 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.65 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Thursday, February 9, 2012

Coming Up With Baloney


Here are a couple of paragraphs from Dan Norcini. I like his honesty regarding the markets. As a trader of note, even he is befuddled with trying to comment on the market action for gold. I guess the best way to 'play' this market is just to have some physical metals in your name....somewhere safe, and wait till all the shenanigans are over.

Dan:
"Trying to get a decent read on many of these markets is very challenging in this environment because there is an enormous tug of war from both the forces of deflation and the forces of liquidity. That has many traders sitting with their finger on the keyboard ready to run in either direction very quickly as what remains of conviction is generally easily swayed based on the latest headline or data release. The end result is that day traders are more at home rather than trend following systems which can easily be whipsawed and caught flatfooted.

On days like this I actually feel a bit sorry for the many newsletter writers who have to come up with some sort of baloney to explain price action in order to justify their subscription fees. Truth be told, sometimes there are just "a lot of fuss about nothing" days in the market when neither side (bulls or bears) really seems to have a clear edge and the markets end up marking time. This is the sort of environment which produces choppy trading patterns where floor locals make the majority of their income scalping or otherwise generally separating novice traders from their wealth."


Gold in New Zealand dollars: $2078.30 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.71 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Wednesday, February 8, 2012

Please Don't Kick Me

The title of the blog today may seem strange, but it is a response from James to a question from Chris at the end of his interview with James Dines.

But before we get to that, here is a quote to ponder on from Chris Martenson:

"During the first part of our lives we go out into the world and collect information from around us and at some point you have to understand that the next 30 years is inward and that true mastery of the world includes mastering yourself more than facts and figures and data and information from outside."

Technical analysis, mass psychology and high states, are required in concert to make decisions. This allows you to 'drink upstream from the herd' as James Dines describes it.

Now back to the title of the blog. There is a discussion at the end of the interview (about 50 mins in) about trying to convince friends and family to take prudent precautions to protect themselves. How do we negotiate a world where you see things that others don't and how do we communicate those?

Have a listen to the interview. The answer to this is wise indeed.


Gold in New Zealand dollars: $2089.90 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.97 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Tuesday, February 7, 2012

"What is Truth?"

Yes, the age-old question that we all get a bit muddled over at times. In this age of relativism, finding truth may be all the more difficult. But that would be a discussion for another blog.

Here we want to talk about finance and statistics, those numbers based on empirical data and research. Figures obtained without bias and manipulation. Truth that we can rely and make decisions on.

Late last week, the BLS (U.S. Bureau of Labor Statistics) came up with an unemployment figure of 8.3% in the US workforce. Is this to be believed or taken seriously. Truth even?  Here is another point of view from Dave in Denver here.


Gold in New Zealand dollars: $2059.68 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.30 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Friday, February 3, 2012

England Has Gold...Don't We?

Here is a report in the Daily Mail today showing Englands hoard of gold booty stacked in a disused World War Two bomb shelter directly under the Bank of England. Actually, it was a canteen. Apparently, those pictures on the wall were for decoration during that time.


The Bank of England gold vault

The reporter states the gold is worth a  whopping £156billion and the whole stash contains around 4,600 tons.

The article does state "Some is deposited by foreign governments as well as our own. Different shapes and marks distinguish the varying sources of the wealth". So there is an acknowledgment of owners other than England, but to get all excited that this 4,600 tons is somehow going to help England out of this financial crisis is wildly optomistic one would have to say.

We have all heard the saying "possession is 9/10ths of the law" but the United Kingdom of Great Britain and Northern Ireland officially only owns 310.3 tons of the yellow metal. This according to the World Gold Council. So England can get a little excited, but 310 tons doesn't really cut it in international finance.

Unless, other countries holdings are not what they think they are and the Bank of England could make a grab for it in times of distress?

Perhaps we now see how smart Venezuela was to expatriate the gold that was theirs from this very vault. All good so far from the Bank, but what if other countries tried and what if it wasn't all there, or maybe encumbered.

I just tend to think the journalist got a bit excited with all the gold around in kinda claiming it was England's

The actual owners would hope so too.


Gold in New Zealand dollars: $2107.59 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $41.14 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Thursday, February 2, 2012

New Zealand House Prices To Go Gangbusters

Whoopee, the supply of houses are down, money is going to be cheap for some time, and buyers are lining up with their new loans. House prices are going to begin a new bubble.

Well, so said a Financial Advisor on New Zealand TV today.

Let's think about this a little, and I would be interested in your thoughts also.

Perhaps the supply is down because prices are depressed and would be sellers don't want to lose that little bit of positive equity, let alone increase the negative equity losses they already have. They are holding on before selling; just.

The prospects of cheap money announced by the Federal Reserve last week means cheap money globally. Cheap money globally means bubbles anew. So prices could go up, not wholly unlikely.

But, recall this graph of New Zealand house prices since 1992, the time when house fever started to go a little bezerk. When measured against the ultimate hard asset, gold, prices have returned to where they were back then. In other words, the bubble burst and value is back where it started.


click to enlarge

So maybe don't buy now because you think prices are a good retirement income, that prices will always go up. That little lark appears to be finished.

Housing consents may be interpreted by some to be another indication of housing shortages going forward. Housing consents last year hit a 46 year low. Yes, 46 years. But this could also be an idicator of the current malaise in our economy. Danger signs for production and jobs. With cheap money, wouldn't you think building would be up?

Australian housing prices are staring to retreat. Brisbane prices are down around 3% and Sydney 2.7%  and Perth prices are barely holding on, at least in the middle priced home bracket. There is an "orderly retreat' in house prices, as the SMH reported today A 4.8% decline nationally.

It is a similar story here. No crash in prices but a creeping orderly retreat if not a stagnation nationally. But looking at national prices here in gold terms, prices have dropped significantly from taking 227 ounces to buy the average house in December 2010 to 167 ounces in December 2011. A 36% percent decrease in housing value. Ouch.

But I guess that all depends on whether you think gold is the best measure of value.

So what is changing? Gold in a bubble? No, low interest rates, set by Central Banks, cause cheap money and cheap money is cheapened money. The more you increase the money supply, the more asset prices rise. Don't believe the money supply story? Here is a graph of the change in Central Bnak balance sheets worldwide since 2006.



You see, value is the key. Value is being whittled away by the very same forces that are causing interest rates to be low and it is catching people out. It is hoodwinking investors and new home owners into thinking that housing is a good deal right now.

Hoodwinking even Financial Advisors.


Gold in New Zealand dollars: $2094.88 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.60 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________

Wednesday, February 1, 2012

"Not My Problem" - More Positive Gold news?


Today, the gold and silver news is that Jim Sinclair is warning of a monetary event involving all Greek debt holders.

The gist of the interview with Ellis Martin is that the ISDA (International Swap Dealers Association) will not deem a 70% haircut for bondholders of Greek debt as a default (go figure). This will let them off the hook for the billions they would need to pay out to bondholders who own insurance on these debt derivatives. So the ISDA, owned by big banks, will not pay out but cut the bondholders (other large European banks) loose and let them deal with the consequences.

How will the market react to this?

Here is Turd Ferguson's summary of the possibilities of this move by the ISDA.

"If I understand this right, here is what Santa is saying:

In 2008, AIG had sold CDS on CDOs. CDOs defaulted and AIG had to pay. AIG went broke. The counterparties to the CDS were GS, JPM et al and had to be made whole on their losses that they thought were insured by AIG.
US Govt funnels TARP cash thru AIG to GS, JPM et al to cover losses
IN 2012, Greece is about to default, just like the CDOs of 2008.
ISDA (run by Big 5 banks) declares that 70% haircut on Greek bonds is not a default.
Therefore, Big 5 do not have to pay off on CDOs bought by Greek bondholders. Big 5 off the hook.
Greek bondholders who thought they had principal insurance are now screwed and left holding the bag.
Greek bondholders (big Euro banks, big Euro govts, big hedge funds) will now be insolvent.
Greek bondholders will need massive capital injection.
Short term euro negative/dollar positive.
Regardless, lots and lots of money printing to save Greek bondholders."


Gold in New Zealand dollars: $2103.83 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.26 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
_____________________________________________________________

YOUnique Gold and Silver

Buy small, affordable physical gold and silver or start a savings program towards
physical gold or silver grams for as little as US$25 per month.

_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service.
Your reference: an-001
_____________________________________________________________