Monday, April 30, 2012

Germany Losing the Euro War?

Just a few years ago, Germany's seeming answer to the debt laden Euro was to move it's politics East ward. The old 'trusted' foe, Russia, was being courted to begin a closer relationship in case the euro went bust and the fact that Germany needed to shore up its energy needs going forward.

Britain and France appeared to counter this with public displays of mate-ship.

Then along came Mr Francois Hollande. The likely new leader of France. He seems to have correctly called the frustration of all of Europe, except the Germans, that austerity dictated from Germany is not working. It also appears that he has surprised the Germans. Their staunch school-ma'am type of disciplined austerity, has caused much pain in the eurozone periphery since 2008. This probably to protect the years of trade-imbalance that Germany has enjoyed to the positive with the rest of Europe. Now other countries in the pact want a more even playing field and a chance to compete and grow.

If the plan by Mr Hollande, to re-negotiate the fiscal pact, comes about, then the euro, already showing remarkable strength against the USD, could be seen as a shining light amongst the BRIC countries. Perhaps the Russians and the Chinese will see a better opportunity in the euro to pound the US dollar reserve status rather than forming their own alternative to the dollar. Although they are likely to continue down that road as a secondary fall-back mechanism.

Maybe, with Hollande likely to be at the helm of France in two weeks,  the ECB will have the mandate to do 'whatever it takes' to pull the eurozone out of the debt laden quigmire of slow and negative growth. Yes, this will mean printing money and devaluation which the Germans won't like. But it may mean a chance for growth and strength if new debt is used to build infrastructure rather than just plain debt and interest repayments.

Interesting times indeed.


Gold in New Zealand dollars: $2021.64 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.02 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, April 27, 2012

QE Not Coming to New Zealand

This is the headline in the mainstream press today. Seems our Finance Minister here does not want "to follow in the footsteps of a number of larger economies and print money".

"Actions taken by the US, UK, Japan, and Switzerland were not relevant in New Zealand's context, as the Official Cash Rate here was still at 2.5%, while rates in those economies were at, or near, zero. Such a policy would also artificially pump up the values of certain assets, undermine the Reserve Bank's balance sheet, and create the possibility of future high inflation, English said."

"Artificially pump up the value of certain assets". Hmm. Now there is a man talking sense. This you would not hear from the likes of Tim Geithner or Ben Bernanke.

On the other hand, we don't have to print money here anyway. After all, what possible good would it do? The result would be our currency losing value in a mere blip of time. The 'big currency boys' have very much larger bazookas than us. Our pop-gun currency battle would end in tears.

Perhaps another reason Bill English knows we don't need to print money is the fact that we can inflate our money supply by converting, into NZ dollars, all the USDs and Euros that flood into this country. Just borrow more of those, after all, they are at very cheap rates. To prove that we are already doing this and have "artificially pumped up the values of certain assets", just look at the price of gold over the last year in New Zealand dollars. Today one ounce of gold sits at NZ$2037, this time last year it sat at NZ$1860. Are we already flooding our small economy with converted NZ dollars? You be the judge.

What New Zealand does hardly matters in the arena of global finance. However it does matter to New Zealanders. High deficits and misplaced property 'investing' are killing off capital available for growth. I will say this once again, there is no way we can ever pay off our debt. Selling state owned assets and private farms will not cut it.

The wolf is clawing at the door wanting it's dues. It would not like bags of fresh, devalued money thrown out to feed it.

Gold in New Zealand dollars: $2037.50 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.23 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, April 26, 2012

Sneeky Gold

Gold is money and as much as central banks would like to keep a lid on their competition (gold) they seem to be losing the battle. Furthermore, they aren't even doing it surreptitiously as now gold's resurgence is open for all to see.

Central Banks are again buying gold and using it as real money. Here are the latest figures:

Central-bank reserve managers reported bullion reserves by 439.7 tons last year - the biggest annual increase in almost five decades.

China - difficult to assess, but averaging around 75 tons per year
Mexico - 16.8 tons in  March; 98.8 tons purchased in 2011.
Turkey - 11.5 tons
Russia -  15.6 tons last month. Another 1 ton in the first three weeks of April.
Kazakhstan - 4.3 tons last month.

Note who is buying here. Central banks of countries that are in direct competition with the USD. Countries like China, India, Brazil and Russia.

Then there is Iran. The draconian measures undertaken by the US in closing down the SWIFT inter-bank transfer system to Iran, has upped the anti for these global currency wars and the use of gold. To survive, Iran needs to use another method of monetary settlement in order to transfer goods and services abroad. Naturally they will be using gold. Already agreements to do so have been setup with India and China to use gold as the medium of exchange for oil and other goods.

It is likely that the large central banks of Europe and the USA will not sit idly by and let gold take over as the de-facto standard for international monetary settlements. There is likely to be continued manipulation of gold price levels going forward. A fast rising gold price would be an indicator that these central banks are losing control over price, albeit the paper price only.

These are interesting times. We see a de-facto gold standard emerging and the fight by the US to keep hold of the privileged position it has held for 70 years; the luxury of controlling the global reserve currency.

As an aside, if gold is becoming the means of payment for international settlements, then what does this say about Ben Bernanke's recent statement that central banks only hold gold for 'traditional purposes' and it is not money?

By the way, gold refined to 999.5 purity and certified within the LBMA system, is classed as money internationally. There's not central bank that doesn't know this.

Gold in New Zealand dollars: $2016.81 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $37.68 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, April 24, 2012

Everything Will Fall Against the Dollar and Gold

Here is an excellent picture of how assets are leveraged and what would happen in the event of a run on paper assets to gold.
Click to enlarge

"As the higher layers are liquidated – indeed, evaporate (h/t Trace) as the market for them simply stops existing -  in search of the “most marketable good” or the most liquid asset, initially everything will fall against the dollar and Gold. In fact, as I’ve said before, this pyramid is the reason why - as capital accelerates its flow down the pyramid - we can expect more and more instances of the dollar and Gold going up together. Indeed, a final spectacular rise in the dollar – lulling many dollar-deflationists into a false sense of complacency - will be our signal that the show is about to end. It is this collapse of the second-last layer – the dollar or the “Federal Reserve Note” layer - that will manifest as hyperinflation."
 
Gold in New Zealand dollars: $2012.68 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $37.79 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, April 23, 2012

The Next Great Depression

A challenging interview has been posted on the interest.co.nz website today. Of course the headline is, "The Property Market is a Trap". Like we won't read any article unless it has the word 'property' in it. But that aside, Nicole Foss has some pertinent things to say about the coming depression worldwide.

Firstly, though, the reaction to such statements is largely that of ridicule. And who amongst us preaching this sort of scenario, has not been unfairly judged and ridiculed; given the silent, 'You can't be serious" John McEnroe treatment?

But that aside, Nicole Foss lays it all on the line. Lays out the worst case scenario. The portrayal of coming tough times, caused by the realisation that debt is unsustainable and resources are scarce, will not be comments which many have the capacity or energy to think through. Most will cast her off as part of the looney brigade. This is common for those who come across such large issues which challenge their worldviews (or business direction).

Here is the synopsis of her prophecy: "The euro will become a footnote in history, civil unrest will sweep Europe, nations that are not self-sustaining will be thrown into total chaos, oil will plummet to US$20 a barrel and the remaining housing bubbles including New Zealand, Australia and Canada will burst violently.

Let's look at some of these areas.

Housing

"She describes the property market here as "a trap" that will leave thousands helpless, homeless and bankrupt when the bubble bursts and interest rates rise."

The big 'known unknown' here is rising interest rates. Unknown when they will rise; known that they will. The costs of money (interest) here, and worldwide, is artificially low. Kept that way by monetary easing in the US and the EU and the flow through of that easy money in loans to New Zealand. It cannot last.

Her advice, "If you have a job, by all means rent. Don't jump in to the property market especially not in Auckland.'

Is this good advice? What do you think?

The Eurozone

"I'd be surprised if the single currency lasted more than a couple of years. It could go all at once or shed members. Various countries on the periphery of Europe look poised to go over the edge pretty much immediately."

Not much to add here. This pretty much says it all. The ECB and soon the new ESM, have carte blanche control over money-printing in order to save the euro. They print, the banks take, the banks buy sovereign debt, the banks get further into balance sheet trouble. The only way out is back to the marks and drachmas of Europe past. And soon.

USA

"Interest rates are very, very low because the U.S. is perceived to be a safe haven. Rightly or wrongly there is a perception that the U.S. will never default on its debt. And that's enough to make it the recipient of capital flight from Europe."

This capital flight to the US dollar is understandable. They are the best house in a bad neighbourhood. However, when confidence to invest in this bad house goes, where to then? Gold may just be the last safe-haven out there.

I find this story fascinating, and as I stated above find the reactions to it unsurprising. We may soon see the demise of this fiat money experiment. Even if half of Nicole's predictions come true, we had better be prepared.

Gold in New Zealand dollars: $2006.84 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.73 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, April 20, 2012

The Latest Ponzi: Simple Debt

We like normality. We don't like what we are comfortable with to be shaken. We develop a whole way of life around what is normal and to walk to the edge of something new and step over is against our instinct.

These may be such times. What we knew before 2008 is changing rapidly. If you have lived in the post-World War Two era, more so beyond the 1960s, there has been a steady increase in living standards worldwide with the help of a fiat money system and the stability granted by firstly detente, between the USA and the USSR, and now with the sole superpower the USA.

But the fiat money system always had the seeds of its own downfall inscribed on its DNA. It was too loose a value measure for it not to be the focus of politicians seeking power. The signs of its inherent problems were the bubbles it created. Fiat money can be created at will and, once created, must 'go' somewhere to attempt a return on money higher than the amount of inflation price rises it creates.

We had the stock bubble ending in 1987, the tech stock bubble ending in 2001 and the housing bubble ending in 2007. This latest bubble caused the world economic ship to list badly. We have not recovered.

Then again, it seems we have recovered to a point where we are comfortable with blowing yet another bubble. You see, central banks, instead of letting these bubbles burst and the results settling where the market willed, have inflated the money supply to fill the gaps. Here's a chart of the money stock growth in the USA. This looks exponential by any classic techinical chart analysis.



So where is the latest truck load of bubble cash heading now it has been created. For New Zealanders, and probably others, check the stuff coming through the mail from your bank. For New Zealanders, check your credit card on the interent. For me, the bank has added a wee button (see below).



Yes, there it is. Want more debt? Easy, just hit the 'adjust limit' button, choose your limit and go for it. Hardly any qustions asked.

So banks are encouraging you to go into easy debt. Yes, the next bubble is probably an easy debt bubble and the banks are gunning for the good old dumbo consumer with their latest ship-load of cheap money courtesy of the ECB and the Federal Reserve.

If we have learned anything in this new post-2008 paradigm, it should be that life isn't going to be the same again. Ever. My advice, don't listen to those who want to keep you in your pre-2008 safe living space. Don't play their game, be bold and face the new paradigm where debt is dangerous.

Gold in New Zealand dollars: $2017.32 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $39.01 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
_____________________________________________________________


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, April 19, 2012

Banks, the Titanic and Your Money

With all the talk of the one hundred year anniversary of the Titanic's sinking, I thought I'd mention Banks.

What have Banks got to do with the Titanic? Nothing really, except that they both involve risk.

You recall how everyone thought the Titanic was unsinkable, yet on its maiden voyage it did indeed sink. This was the stuff of legend and the mystique of this story has grown over time.

Yesterday, I was listening to an interview by Chris Martenson with Paul Tustain of Bullion Vault fame. A small thow-away phrase at the end of the interview caught my attention.

The gist of it was this. Next time you get a bank statement take a look at the little two letter description next to your ending balance figure. If you have savings it will say 'CR'. This means you are in credit to the bank and you are a creditor to the bank. On their balance sheet they owe you that balance. But also remember, once you are on their balance sheet you hold counter-party risk to all other creditors who may rank ahead of you and all debtors (eg mortgage holders).

Once you enter the hallowed halls of a balance sheet, you hold counter-party risk to that organisation. If mortgage holders begin to default or if assets do not perform (or are undervalued) the Banks financial situation could deteriorate and you would find your savings at high risk.

This is why our Government here in New Zealand setup the deposit guarantee system during the height of the GFC in 2008. Finance companies found themselves in the unenvious position of not being able to pay their creditors.

This concept of counter-party risk, also holds with gold bullion companies. When you buy gold or silver, you need to make sure that the physical precious metals are stored in an independent vault and are allocated to you. That you hold the bar numbers and the gold/silver in your name. This means there is no counter-party risk if either the bullion company or the vault go into liquidation.  The precious metals are yours.

Now possession is 9/10ths of the law, so nothing is 100 % sure in this world, short of holding the stuff in your hot wee hand. But that isn't applicable to most as it's just too darn dangerous these days to hold too much in your home.

Be careful out there.


Gold in New Zealand dollars: $2013.98 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.80 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, April 18, 2012

The Implications Of A Failed Monetary System

Here's an interesting video from Santiago Capital. I can't verify these guys, but I'd be interested in your thoughts. The figures appear to stack up, especially with reference to Chris Martenson's "The Crash Course".

Click here to take you to the video

Gold in New Zealand dollars: $2021.16 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.49 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, April 16, 2012

House Prices in New Zealand - Some Thoughts

The thinking that housing is a fantastic investment is far from dead.

Apparently, when you get to the 'top' of a market cycle, you hear the phrase, "buy now, the market is slow, prices are soon to rise" quite often. It can be merely a desperate attempt to get the last suckers in.

I think we need to ponder about what is really going on. Looking at other aspects of the figures and try to clear the fog of the property spruikers.

Remember, there is always a hidden motive for spin (and admittedly, precious metals salesmen can be good at this also). Property needs people coming in at the bottom in order for those at the top to flourish. In this sense it has the many hallmarks of a ponsi scheme. But then most markets in the speculative category probably do.

Firstly, interest rates may well be about to break its shackles. The low interest rates in the US, Japan, the UK or Europe are the results of money printing by central banks caused by wild drunken debt orgies of the same governments. Italy, Spain and Greece are telling us the result of too much debt is higher interest rates. While the NZ Government has done much to reduce debt levels, it is now beyond impossible for them to create enough wealth to pay it back. The costs of money for NZ will rise. And the cost of money is called interest.

If interest rates rise, then more investors will be squeezed out of the market with higher costs causing supply to outpace demand and prices to fall. This cost of borrowing money overseas, strickly for housing, increases the total indebtedness of the country and hence the credit risk. The resulting interest rate spikes will put a knife to the heart of the housing market, killing off any semblance of equity value mum an dad investors thought they had. The empty foreclosure ghettos of Detroit may be coming to a NZ city near you.

Renting is often classed as dead-money by property sales people. If interest rates rise and equity falls, renting may look quite good for the short term.

However, a positive for the costs of overseas bank borrowing, is the likelihood of the NZD moving to the 90c level against the USD this year (see ASB forecasts). Money could be cheaper. Mind you, will these costs of borrowing will be passed on to the money consumer?

So why is it we buy houses? Primarily to live in, but lately to invest in. The mantra that prices always go up is simply a bet on the future. It has no real basis in history. Sure, 'prices' have increased since the late 80s, but value has not. The only real way to look at an investment house is as an income creation facility, not a price appreciation investment. Put you money to work in an affordable house to create positive income from rents, not for the motivation to create expenses to keep taxes down. If you invest for the wrong reason and if house prices move against you, you will suffer.

Anyway, the tax system related to housing is not good for this country. It skews where capital is best used for investment. However, if the government were to reform housing tax breaks, then house prices would likely drop considerably. That is not good for getting re-elected.

There of course may be a case for higher house prices and to argue that all will be the same as before. The latest figures from the Real Estate Institute below, may point to there being a slight uptick in housing value right now. But I don't see this being a long term trend. March is often followed by seasonal downtrends.

Now is the time to sit and wait and be safe. The time to move with new opportunity will come.

NZ House Prices v Gold Ounces as at March 2012


Gold in New Zealand dollars: $2015.92 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.29 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, April 13, 2012

Fed-Speak and The Power of Words

Words have power, make no mistake. Once said, they are impossible to retract. When words are negative or hurtful, we can spend lots of emotional energy trying to come up with more words to fix the brokenness.

Lesson: Always think about what you say before you say it as words can create a reality that you might not like.

Note to Federal Reserve. Be careful what you say from now on. We hear your words and we know your game.

You see, the Fed has a way with words, a method of saying things that are brilliant in their execution and content, and leave just a little room for interpretation.

When the markets are showing signs of going against them, they trott out various heads of regional Reserve Banks in the USA and signal to the market their next moves. Yoday, they signalled more QE (actually 'steralized QE, but what is that other then an oxymoron). The S& P 500 and Dow had been going down below critical moving averages, so they 'speak' and boom, up they go.

Just last month, they 'spoke' no QE and down went commodities and risk investments declined. Oh, if only our words were that powerful. Speak and trillions of dollars flood one market, speak again and trillions flow back out. I guess if you are first to hear the words you could easily make billions; but no one would be in that position, would they?

It's all rather a nonsense and a desperation to keep the sick beast alive. Soon, the words spoken will have to be dealt with. Have to be 'fixed'. The market will die and correct, its the way it always works. No amount of talking will substitute for hard reality.

Too much debt. Too many promises. No substance. When no one believes your words anymore, you may as well be a hermit. Now there's a thought; Saint Ben.

This all leads to a piece I want to do next week on the housing market here in New Zealand. The market is still quite bouyant. The important words to note going forward in this market though are 'interest rates'.

Gold in New Zealand dollars: $2024.18 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $39.03 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, April 12, 2012

2008 Again?

Here's a great article from Chris Martenson's site. Particularly the section on the global housing bubble. Here is an excerpt:

"If $1 of collateral is supporting an inverted pyramid of $33 of leveraged debt, which is then the collateral supporting an even larger pyramid of derivatives, then when that $1 of collateral vanishes, the entire edifice has lost its base.

And that's at the heart of current central bank policy: “Extend and pretend” is all about keeping the market value of various assets high enough that there appears to be some collateral present.

In our example, the mortgage is still valued on the books at $450,000, but the actual collateral — the house — is only worth $250,000. The idea being pursued by central banks around the world is that if they pump enough free money and liquidity into the system, and buy up impaired debt (i.e., debt in which the collateral has vanished), then the illusion that there is still some actual collateral holding up the market can be maintained."

Understanding the nature of collateral and its real value is imperative to understanding the housing market. Just a reminder, that house prices in New Zealand, for example, are priced exactly the same now as in 1992 in gold ounce terms. Yet house prices always go up? Yes, but  in value?


Gold in New Zealand dollars: $2029.23 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.64 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, April 11, 2012

Money Printing Madness Right Now

So we thought the recovery was on, did we?

How about we peruse a few stories from the mainstream media and blogosphere today and attempt to get to the truth.

The IMF is suggesting this today. "State-sponsored debt forgiveness plans for the most hard-hit families (should be looked at). Although the policies might initially be expensive, they would be beneficial by reinvigorating consumer spending and helping the economy"

Simply put, the IMF is putting an idea out there for governments to pay down mortgage debt for it's citizens thereby forgiving that debt and putting money in pockets for spending.

Oh dear money printing to infinity, Zimbabwe-like. The madness.

This from the Telegraph.  "Italy's leading MIB index plunged 5pc and Spain's Ibex fell 3pc amid fears that the eurozone's third and fourth biggest economies were in the grip of a deadly and uncontrollable spiral of debt and recession.

The borrowing costs of both "sinner states" soared. The yield on Italy's benchmark 10-year bonds jumped to 5.7pc, heading into the danger zone that is considered unsustainably high. The equivalent Spanish debt climbed to 6pc. Meanwhile, the yield on safe-haven German bunds was pushed to an almost record low of 1.6pc. UK gilts benefited, too, dropping to 2pc.

The yields reflected a level of fear on the bond markets not seen since the fraught period before Christmas when traders bet that the eurozone could collapse."

Italys' economic stats are looking grim, with a 1.5% contraction this year. Did anyone really believe the official 0.4 % figure anyway? So an economy contracts and debt is still rising. How does that math add up when repayment time comes around? It doesn't. More LTRO money for Italy a-coming. Printing by any other name.

So also for Spain, a mess by anyones' definition.

And don't forget Potugal. How could we. I hope I'm not boring you with all this negativity, but Portugese Banks borrowed a hefty €100 billion from the European Central Bank in February and March. Nobody else wants to touch the debt of these countries with barge-pole. The only source is now Central Bank funding. At the extreme risk of being repetitive...more printing for Portugal.

Oh, and sorry, but then there is Australia. The golden boy of the commodities boom. Debt in Australia is now going exponential. A media report states, "the Australian government lifted the debt ceiling from $75 billion to $200 billion two years ago. Then, in the middle of last year it lifted the ceiling again to $250 billion. With $11 billion in borrowing this year alone, the government is on pace to hit the ceiling soon, at which point they will obviously raise it again."

I could go on, but you get the idea. No real production of wealth is happening to cover the increasing debt. Does this ensure a type of QE3 from the Federal Reserve, the bailouter for the world?

You bet.


Gold in New Zealand dollars: $2035.94 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $39.02 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, April 10, 2012

Fund Management Wars


Today we hear a report in New Zealand that our Government pushed retirement scheme, called Kiwisaver, has over 4% of contributors on' 'holiday' from making payments. Most attribute this to financial hardship.

The figure has grown by 1.5% each year. The age-group doing this? 25-34 years.

Now, I don't like to bash fund invesments too much. After all, these vehicles are nearly all we have in order to invest and try to create a return for our retirement.

Retirement funds will be unable to be provided by government even as many baby boomers get older. Let alone those younger headed for retirement. Now with the likes of Kiwisaver getting hit, retirement plans are looking grim.

As with Kiwisaver, there is a lack of ability for members to keep up payments in investment funds in general. In talking to any of my 'middle-class' and 'upper middle-class' contacts, you get the distinct impression that their reality is less income and higher expenses, but not understanding the causes. They are worried and concerned as budgets do not end positively week after week.

Complaint: Thanks Ben and the boys for letting the system bust while on your watch and trying to fix it with money printing.

However, the big issue going forward is confidence in the fund investment arena. Especially Finance Companies and Investment Banks et al. People not only have less funds to invest, but have less confidence in where to invest. Worldwide, many finance companies went bust taking with them billions in retirement funds. Now those trusty investors don't trust fund managers and don't know where to put savings.

Not only that, their decisions are clouded by lack of return on investment. One needs to make extraordinary returns just to keep ahead of the incidious negative real interest rates the market has been manipulated to produce.

As many articles have alluded to over the past twelve months, we are all speculators now. In and out of the best performing asset classes. Hopefully in and out at the right time. Risk is the order of the day.

Be prepared for war on the investor by smoothe tongued managers wanting every last drop of financial blood from your savings. Already they are talking you out of precious metals (bubbles anyone?) and into the US stock market. Snakes they are. They know the stock market is juiced with comapnies buying back their own shares and they know this will not last.

As with most wars, you don't want to be on the losing side. Hold your ground.


Gold in New Zealand dollars: $1996.11 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.37 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.
_____________________________________________________________

Thursday, April 5, 2012

Today's Gold Price Action

Today's price action is more than liely a hangover from the action yesterday when the FOMC released it's minutes from its January meeting. Yes, January. The market now reacts to Fed Speak from two months ago. No more QE just yet, was the word.

Just yet.

However, the price is heading south, so I repeat a comment from Turd Ferguson's site today. Well worth the reading.

"Look, the gold market that we chart is a physical gold derivative market. This derivative market sets the price of physical gold that we should all be stacking. This market is dying. Upon its death a physical only market will take precedence and the true price of physical gold will emerge, untainted by derivative paper gold supply that cannot provide a path to real and physical ounces.

The Comex will collapse along with the price of gold established by it. This is nothing more than the market rejecting a derivative that cannot possibly perform in favor of the underlying asset. Stackers should be quite pleased with the current price action because as long as this market can remain liquid they are getting more ounces of real and physical gold for their dollars. Additionally, the path to Freegold as described at the FOFOA blog, is through the collapse of the price of "paper gold", not via a moonshot in price. If price is falling we always face the possibility that the US Dollar International Monetary and Financial System is finally approaching its last gasp. That means Freegold valuation and a physical gold price that is many multiples of the current price.

Understand that the process of Freegold price discovery will not occur as a result of continuous market action where we watch our gold climb up and to the right on the chart. It will result following a discontinuity in the market when the paper price discovery mechanism collapses and ceases the possibility of physical delivery. There will be the mother of all waterfalls and then a period where you will have no idea what physical gold is worth. Just try buying a physical ounce when all the "claims" for gold try to perform. At some point some entity of size, likely a central bank will initiate a physical only market where the bid and ask will water your eyes. Then the stacker will know the value of his gold in currency terms.

The hand wringing about the gold price is symptomatic of paper gold traders and their belief that paper gold can save them and their wealth. It is also symptomatic of someone who knows their stack is not yet big enough and who is afraid that access to physical gold may be coming to an end too soon.

Turd says that people should quit trading and simply acquire physical gold in hand. I agree. I am quite pleased that Comex gold is plunging. I will be buying physical below $1600 WITH CREDIT. I hope Comex gold crashes all the way to 3 figures. It will mean Freegold is at hand and I am retired. If this kind of thinking doesn't make sense, I suggest a thorough examination of the FOFOA blog and the concept of Freegold."

And then this comment from Jim Sinclair:

"I really think ego has overcome the profit motive in the last two days. This changes nothing as to where gold is going in 2012 and beyond. It just makes trading impossible and charts useless, leaving only international fundamentals that will not be MOPEd away to make the final determination of the gold price.

It coils the spring in the market even tighter than physics will allow, making the break out to the upside when it comes something to behold."

Then this from Truth In Gold, "How will the U.S. Government fund all of the additional budget deficit spending that has already been built into this year's spending plans if the Fed does not print money in some fashion in order to help finance all of the new Treasury debt issuance in 2012? "

Remember, these are unprecedented times, the markets are not normal. Do not be shaken out of holding physical gold and silver.

Gold in New Zealand dollars: $1991.41 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.43 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, April 4, 2012

Thoughts about 'Value' and the Stock Market

I spent a small amount of time looking around the internet on the concept of value. It appears the term value is a nefarious kind of concept. A bit like ghosts in castles. There are great scientific models and equations that measure value and there are opinions that measure value.

So what are we to make of where we are, right now, in the sense of monetary value and especially the value we place in gold and silver?

Perhaps the stock market is a good place to begin?

In a podcast this week, Chris Martenson interviewed Charles Biderman. In this podcast, there is discussion around liquidity and value. Charles talks about the current stock market rally in the US, which has replicated around the world. The liquidity provided by the Fed to 'goose' the markets higher has allowed large companies to buy back their own stock hence creating demand and sending prices of those stocks higher. According to Charles, this is about to end.

Perhaps he's right, as today we see 'anaylsts' excitedly spouting the merits of Apple Computer shares and the likelihood of those stocks moving to $1000 each, thereby making Apple a trillion dollar company. So yes, once the wholesale investors move out of the stock market, try with all the media frenzy you can muster to get the schmuzy public retail investors onboard and buy the shares. Must have it always going up!

No doubt, as with the tech stock boom in the late 90s, there will be quite a few sucked in. Maybe if you are first and get out soon enough, you'll make some fiat dollars. But urging people on hype to enter markets rather than looking at fundamentals, like PE ratios and the like, is dangerous.

The liquidity sloshing around the system causes a rigged market. Bubbles form in the usual suspect places. It's happened to commodities in some sense, but don't believe that gold and silver are in bubbles. They are merely reacting to the increase in money supply and some speculative forces. These precious metals markets are tiny compared to stock markets.

No, gold and silver will be the value touchstones for the financial system as we go forward with this new round of destructive money printing. Perhaps they will see a bubble, like the late 1980s, who knows.

In these times, value is very difficult to define. But holding hard assets, especially gold and silver, which have defined the transfer of value for over 5000 years on human monetary history, is probably important right now.


Gold in New Zealand dollars: $2008.79 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $39.89 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, April 2, 2012

Contract and Law; Kinship and Custom

For most of the past history of the Anglosphere, trust in business relationships has been the mainstay of success.

Contract and law have been the means by which business has flourished. Through good business contract law, the anglosphere (mainly the USA, England, Canada, Australia and New Zealand) have maintained stable business environments with steady growth .

But this is changing slowly and subtlely. As the latest financial crisis, beginning in 2008, has eaten away at trust built up over centuries.

Enron and MF Global epitomise the slide into a state of uncivilised behaviour in the financial community. You see, trust in the 'hand-shake' of contract law is the foundation for navigating through business. Contract law gives us the ability to trust the word of the counter-party to whatever transaction takes place. If we cannot trust the word of the counter-party, then business suffers mightily.

The other side of the equation to contract and law is kinship and custom. This has been the mainstay of how the East does business. Now this is all a bit broad in definition and influence, but generally, Asian culture is big on familial relationships and custom. Generally, in a business deal, these aspects override contract and law. Not to say that these cultures break the law, but the importance of kinship and custom can take precidence.

Contracts are likely to become secondary if family relationships or custom get in involved.

The Anglosphere appears to be moving towards a type of kinship and custom, but in a negative way. It's called cronyism. Big money interests appear to be able to override contract law when the saving of our 'social fabric' calls for it. This has also been called 'too big to fail'.

Companies like MF Global has so far been allowed to break rules and contracts and some have pointed to cronyism as the perpetrator of this. This behaviour immediately affects the markets those particular entities were involved in. Market participants begin to lose confidence in those markets and shift their capital investment elsewhere. This can currently be seen in the commodiites exchanges worldwide.

If contract and law is allowed to further deteriorate in the West, and not allowed to increase in other cultures, then we may be doomed to a system stacked full of laws and regulations covering all sorts of eventualities and a lessening of our ability to do business confidently.

In this environment, not even our money system will be trustworthy. It may be moving rapidly to this conclusion now.

Got gold?

Gold in New Zealand dollars: $2034.72 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $39.46 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.
_____________________________________________________________