Tuesday, July 31, 2012

Mr Draghi, Show Us the Money

Gold and silver prices were up a bit last week. Gold up 2.5% and silver 1.5%. Maybe the lows have come  in early this year, the usual August lows occurring in June. Time will tell.

Anyway, it appears those still around with the stomach to invest in these markets, (rather than being happily long) did a bit of 'short covering' on the news that Mr Draghi, of European Central Bank fame, was about to unleash unlimited liquidity to buy as many Spanish, Greek and Italian bonds it takes to calm the market.

If you are short, ie betting on the price of gold and silver going down, you would definitely want to rush to buy as much precious metals as possible before your tipping point.

Sure enough, this short-covering rally caused the prices to ping upwards.

This week we will see if these Central Banks have what it takes to go head-to-head with European governments, like Germany,  and do what they were created to do. That is, stop financial panics and hence bank runs by providing liquidity to banks.

Remember, already the equivalent of 5% of Spanish GDP in euros has fled Spain in recent times. Capital flight is a banks worst nightmare. Confidence is lost and that spreads like wildfire to all sectors. Depression ensues (see 1931). Unless banks act in the next few weeks, the euro could very well be toast.

Come on then, Mr Draghi, talk is cheap, show us the money.

Gold in New Zealand dollars: $2006.43 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.88 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 30, 2012

Silver Running Out!

Here's a great summary of the current silver inventory situation worldwide. Written by expert Ted Butler of ButlerResearch.com.

"A reader asked me a question as a result of Saturday's review and I knew immediately that I had been guilty of assuming that everyone would know what I meant when I wrote something that wasn't fully explained.

The question (and it was a darned good one, to boot) was asked in connection with my description of how much different things were in silver today versus in 1941, when the British cargo ship Gairsoppa was sunk by a German U-Boat. I mentioned that there were 10 billion oz of silver bullion inventory in the world back then (with the US Government holding almost 6 billion oz) and today the total world inventory was closer to one billion oz. Jon's question was  "What happened to the 9 billion silver ounces that were available in the world 70 years ago? Did it just vaporize? Maybe you have written about this before, but somehow these words hit me harder and left holes in my memory."

I have written about this before but, clearly, not recently and not often enough. In fact, this is arguably the most important consideration for holding silver. I'm just glad to have the opportunity to attempt to explain where I had only assumed before.

Yes, in a manner of speaking, the 9 billion silver ounces were vaporized in that they were taken from world inventories, never to be returned in any of our lifetimes. These silver ounces were physically removed from world bullion inventories and converted to a completely different form, like the coating of an electrical contact or a bracelet for an Indian bride. The 9 billion ounces weren't accidentally misplaced or destroyed; they were deliberately consumed or put into another and higher value physical form.

The reason that I chose to use the ship sinking in 1941to highlight the difference in the world of silver between then and now is because, by coincidence, that year approximates the key timeline of demarcation in the history of silver. Prior to the start of World War II, the amount of silver in world inventories had only grown larger. I'm talking about the history of the world civilization, when man first discovered and produced and used silver, through the thousands of years up until (around) 1941. During that sweep of time, the world added more silver to inventories each year than the year before. No, I wasn't around in 1941, nor was I present for the thousands of years before that, so let me explain what I am saying.

From the dawn of civilization, silver and gold have been coveted by man. Neither was destroyed, but only saved in various forms of jewelry, utensils and coinage. Therefore, the amount of above ground gold and silver only increased every year for thousands of years. World trade and conquest revolved around silver and gold. For instance, back in the 1500's the budget for Spain was financed for decades with the silver and gold plundered from Central and South America. I'm sure such a solution for that country's current financial difficulties would be most welcome today.

But something occurred to radically change the pattern of ever-increasing amounts of silver being added to above ground world inventories around the start of World War II. What occurred actually began well before WW II, but that's when it became clear that we were in a new world for silver. I'm referring to all the incredible inventions involving photography and electricity and the thousands of other modern industrial applications that were based upon silver's unique physical and chemical properties. These discoveries, starting about 150 years ago, reached a climax around 1941 when the world began to consume more silver than it produced. This necessitated that the metal accumulated in silver inventories be depleted in order to balance supply and demand. This was the seminal moment in the history of silver and I was negligent for assuming that everyone would instinctively know this.

It took the world thousands of years to accumulate 10 billion ounces of silver bullion in inventories. Then, starting around 1941, the world began to use more silver than it produced for the next 65 years and to the tune of 9 billion ounces. That's where the 9 billion oz went, namely, to silver consumption heaven. Starting around 2006, the world began to produce more silver by mining and recycling more than it consumed and the depletion of inventories ended. I reported on this at the time and many were worried that the ending of the silver consumption deficit of 65 years was the end of the silver investment rationale. I thought otherwise, namely, that investment demand would provide all the push needed for higher silver prices.
http://www.investmentrarities.com/ted_butler_comentary/01-22-08.html

The important point is not that the silver consumption deficit ended around 2006, but rather that it lasted for as long as it did and destroyed 90% of the world inventories that existed in 1941. That should be foremost on every silver investor's mind. The inventory damage was done and couldn't be undone quickly. All the nonsensical talk of silver surpluses and overabundance must be measured against the glaring fact of unprecedented inventory destruction. This inventory depletion should be the prism through which silver is viewed. The lessons of history are too valuable to be disregarded.

Every week I report on the gold/silver ratio and invariable conclude, no matter what the ratio is at, that I prefer silver over gold. Just like I mistakenly assumed last week, I assume that everyone understands why. Let me not assume today, especially as the gold/silver ratio has widened to the highest level in almost two years. My reason for favoring silver over gold is directly related to the 90% reduction of world silver inventories from 1941 to 2006. This is not a knock on gold, as I have been bullish on the price prospects for gold. Simply stated, there was no corresponding decline in world gold inventories as there was in silver. That's the reason I prefer silver over gold.

It is not the case that gold doesn't have excellent potential industrial applications. While gold doesn't have as many potential applications as silver, no other metal does either. In fact, industrial applications do absorb as much as 10% of annual gold production. The reason gold isn't consumed more industrially is because it is too expensive to be widely used industrially. Instead, gold is mostly used for jewelry and investment purposes. There is nothing wrong with that and those uses have carried gold sharply higher in price over time. I think that should continue.

However, because gold is used mostly for jewelry and investment purposes that also means it never experienced the inventory depletion that occurred in silver. Whereas silver's world bullion inventory declined by 90% (9 billion oz) from 1941 to 2006, the above ground gold world inventory more than doubled over that same time span, from 2 billion oz to almost 5 billion oz. In 1941, world gold inventories were close to 2 billion oz, meaning there were five times more silver ounces than there were gold ounces.  After the next 65 years that reversed completely and today there is about three times as much gold bullion in the world than there is silver bullion. This is the key fact that few recognize to this day. As more come to learn this (and I stop assuming everyone already knows it), objective investors will choose silver over gold. This should propel silver prices to move much higher, relative to gold.

I'm not going to dwell on what silver and gold prices were back in 1941 compared to today, because neither price was derived from free market factors, then or now. But relative to each other, gold and silver were roughly equal back then to what is reflected in the gold/silver ratio today. In other words, the gold/silver ratio is roughly the same today as it was back in 1941 (around 59 to 1). But wait a minute - didn't I just write that world silver bullion inventories fell by 90% since then, while world gold inventories more than doubled? I did write that and therein resides a coming price adjustment that is more than half a century overdue. As remarkable as it may sound, it is impossible for two similar items (and nothing is more similar than gold and silver) to not have a commensurate price adjustment when the inventory of one falls by 90% while the other's inventory doubles. Impossible, that is, in a free market environment; in a manipulated market, any price relationship would be possible. Yes, no matter how one looks at silver, in any variety of objective measurements, the issue of manipulation always raises its head.

Not only is silver mispriced relative to gold, it is mispriced on every other reasonable metric as well. But it is silver's mispricing relative to gold, particularly considering the drastic change in their respective inventories, that stands out most clearly to me. And it is this mispricing to gold that offers unimaginable potential for a silver investment score. Not only do few recognize the almost incredible changes in the relative silver and gold world inventories or what caused those changes; just as few recognize what this means for price going forward.

I know that JPMorgan and their collusive COMEX fellow manipulators have a death grip on silver prices on a daily basis; you can see that with your own eyes. That's why we are near a 59 to 1 on the gold/silver ratio, a ratio they control in the short term. But they are not above the law of supply and demand and relativity, nor are they above the sweep of history.

Sometimes historical changes occur with little general notice and it is only much later that those changes are recognized and more fully appreciated. I am convinced that is the case with silver and gold inventories and I am also convinced that this will come to be recognized and appreciated in time. When that recognition and appreciation come about, there will be a massive and historic revaluation in the price of silver relative to gold. Throw in all the other bullish factors lined up for silver and the investment implications are staggering. Anyway, yes, the 9 billion silver ounces were vaporized."

Gold in New Zealand dollars: $2003.46 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.29 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 27, 2012

European Disaster Looms

We are peculiar when it comes to nationalism. We can complain long and loud about our country and its foibles, but if someone else criticises us, then watch out.

Just look at the latest comments from Mitt Romney regarding the Olympics. He criticised the organisation claiming there were  "disconcerting" signs in London and there would be more errors occurring. Well, strike me down, after whinging and complaining for 6 years about the olympics, the English finally found somone more worthy to harrange. Seems it is OK to lambast your own citizens, but having an up-start American politician do it, well, that's 'just not on'.

Europe's current financial crisis is a bit like this. The European experiment seemed on track before 2008. The French and the Germans appeared to be forming strong ties. England even entertained the idea that the Italians were good at more than just food preparation, making cars and bunga bunga.

But the wheels have truly fallen off the European experiment now. The uniformity and comradery of the first ten years is but a memory of a dream for a united Europe.

The costs of a European breakup are now being calculated. From outright collapse of the banking system and civil war to a slow and painful restructuring of the fiscal compact and business as usual.

If Europe was to break up, the fractured nature of the outcome would cause scenarios that would be unthinkable now. If countries went back suddenly to their own currencies, there would be huge dislocation. Unemployment would rise considerably as businesses and systems adjusted to new valuations.

The worst case scenario is civil war; and maybe war across borders. Europe is by no means a settled place a mere 67 years after WW2. How many of us were surprised at the violence caused by old scores being settled after the old Yugoslavia disintegrated?

The next few years will be racked with uncertainty. World markets will be extremely volatile and unpredictable. The time has come when we all need to realise that big government is finished and that they won't be around to help us any time soon. The responsiblity for the future is now completely in our own hands.

-------------------------------------------------------------------------
Duncan Cameron and Alex Stanczyk, from The Anglo Far-East Company, are here in Auckland on August 20 to talk about this and more. This event is FREE.

Event Information:

Monday, 20 August 2012 AUCKLAND : REGISTER FOR EVENT
Stamford Plaza Auckland
22-26 Albert Street
Auckland, 1001
New Zealand
Telephone:  +64-9 309 8888
Toll free NZ:  0508 658 888
Facsimile: +64-9 379 6445
Email: reservations@spak.stamford.com.au

Gold in New Zealand dollars: $2018.36 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.39 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 26, 2012

Hang On To Gold

By Tim Price of  PFP Group:

Equities, of course, are only part of the bigger picture. Gold remains attractive. Although it has had a less-than-stellar year so far, I’m willing to be patient. Consider what asset manager Simon Mikhailovich said during a recent interview with US financial newspaper Barron’s.

When asked if he could imagine another Lehman Brothers-style event, he responded: "It's just a matter of time. This financial system is completely unsustainable… The ability of governments to sustain the unsustainable ultimately rests on their ability to maintain faith in their creditworthiness...

“If this devaluation of financial assets proceeds apace and the moment of clarity comes for many investors in the West who realise they need to diversify into assets that can protect against devaluation, demand for physical gold has the potential to rise dramatically."

The beauty of gold is that it offers a chance to protect against both deflation and inflation. It's difficult to point to gold's credentials as a deflationary hedge because prior historic periods of deflation occurred when its price was fixed. The most recent deflationary period was limited to Japan, at a time when the rest of the world economy was booming.

But as deflation (in financial asset terms) is associated with acute financial stress, it seems reasonable to expect gold to provide some diversifying relief from that stress. Particularly because (unlike sovereign debt, for example) it is nobody else's liability.

And as an inflationary hedge, it is worth noting that gold has remained a store of value for literally thousands of years.

Gold is also now getting attention from the unlikeliest of sources. Bond fund manager Bill Gross of Pimco recently wrote: "As [investors] question the value of much of the $200 trillion which comprises our current [monetary] system, they move marginally elsewhere – to real assets such as land, gold and tangible things, or to cash and a figurative mattress where at least their money is readily accessible."

In short, investors are faced with a choice between vast abundance (in paper assets and all things debt-like), and genuine scarcity (tangible and real assets, especially gold). In a deleveraging world and in light of the ongoing financial crisis, it makes sense to vote for scarcity. 

Tim Price

Tim Price is director of investment at PFP Group. He also writes The Price Report newsletter. To find out more about Tim’s current views on the eurozone and the wider markets, watch this presentation.

Gold in New Zealand dollars: $0000.00 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $00.00 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 24, 2012

Spain Close to Collapse

Ever been in an argument you know you should have backed out on minutes ago because you knew you were losing. The hole you dug got bigger the more you said.

Well, let's pretend this is how Spain feels.

Prime Minister Rajoy came to power a mere few months ago amidst high expectations. Here he is now wondering if he should have taken that job as a caddy in Madrid. Spain is on the brink of total disaster. The more the EU and Spain try to dig their way out of this morrass, the more the situation gets worse.

Last Friday, the IBEX in Spain, plummeted nerely 6% and the euro went out in sympathy. Now down to 1.21 to the US dollar. There have been many attempted confidence boosters for Spain. The €100bn bail-out fund has not calmed the markets. In fact, the opposite. Bond holders saw the writing on the wall; with this deal, they would become subservient in rank to the new government bondholders. As private creditors, they baulked and sent Spanish bond interest rates up well above the 7% critical line.

So nobody is wanting to buy Spanish bonds. With no money from the private sector forthcoming, Spain is now dependant on the EU powers. Funds like the EFSF and the ESM and whatever new acronym can be dreamed up to redefine 'money printing'. Some say as much as €500bn will be needed for a full sovereign bail-out. But remember, that only keeps the debt-ponzi scheme going for another wee while until others feel the pinch.

And those 'others' are likely to be Italy and then France. Both are huge clouds on the horizon. Already, there are 10 cities in Italy at risk of bankruptcy.

Are you protected?

Remember the Anglo Far-East experts Duncan Cameron and Alex Stanczyk are here in Auckland on August 20 to talk about this and more. This event is FREE.

Event Information:

Monday, 20 August 2012 AUCKLAND : REGISTER FOR EVENT
Stamford Plaza Auckland
22-26 Albert Street
Auckland, 1001
New Zealand
Telephone:  +64-9 309 8888
Toll free NZ:  0508 658 888
Facsimile: +64-9 379 6445
Email: reservations@spak.stamford.com.au

Gold in New Zealand dollars: $2001.65 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.35 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 23, 2012

Gold and Silver Events

August 17-27, 2012. Auckland, Brisbane, Sydney, Melbourne, Perth AFE Gold and Silver Seminars.

Learn the Secrets That Generationally Wealthy Families Have Used Throughout Time to Protect Their Wealth, and Prosper During Great Change.
AFE is pleased to announce an educational seminar tour covering Auckland, Brisbane, Sydney, Melbourne, and Perth. This tour provides an excellent opportunity to get the insider information on the markets that only those who work in the private custodial bullion industry have access to.
This is your chance to listen to the most up-to-date Macro economic factors of what is happening in the Gold and Silver world. Both Alex and Duncan attend many of the world’s major economic gatherings, and have unique insights into the real action happening in these markets. You will have the opportunity for question and answer sessions in real time. Finally, there will be limited slots to speak with Duncan Cameron and Alex Stanczyk in private consultations for current clients or qualified potential clients wishing to learn more about private gold ownership.
With Gold and Silver currently in a substantial correction since the highs of last year, many who feel they missed the boat will be wondering if they should enter this time round, should they increase what they have, or should they sell and get out while they are still in profit. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that’s not the whole story. The original quote is believed to be, “Buy when there’s blood in the streets, even if the blood is your own.” This is contrarian investing at its heart – the strongly-held belief that the worse things seem to be in the market, the better the opportunities for profit. Gold and Silver are the best wealth protection assets to own and among the best performing investments to have in such times, thereby fulfilling both categories.
Monday, 20 August 2012 AUCKLAND : REGISTER FOR EVENT
Stamford Plaza Auckland
22-26 Albert Street
Auckland, 1001
New Zealand
Telephone: +64-9 309 8888
Toll free NZ: 0508 658 888
Facsimile: +64-9 379 6445
Email:reservations@spak.stamford.com.au

Wednesday, 22 August 2012 BRISBANE: REGISTER FOR EVENT
Stamford Plaza Brisbane
Corner of Margaret & Edward Streets
Brisbane, QLD 4000
Australia
Telephone: +61-7 3221 1999
Facsimile: +61-7 3221 6895
Reservations email:
reservations@spb.stamford.com.au

Thursday, 23 August 2012 SYDNEY: REGISTER FOR EVENT
Sir Stamford at Circular Quay -Sydney
93 Macquarie Street
Sydney, NSW 2000
Australia
Telephone: +61-2 9252 4600
Facsimile: +61-2 9252 4286
Email:reservations@sscq.stamford.com.au

Saturday, 25 August 2012 MELBOURNE: REGISTER FOR EVENT
Stamford Plaza Melbourne Hotel
111 Little Collins Street
Melbourne, Vic 3000
Australia
Telephone: +61-3 9659 1000
Facsimile: +61-3 9659 0999
Email: sales@spm.stamford.com.au

Monday, 27 August 2012 PERTH: REGISTER FOR EVENT
Duxton Hotel Perth
No. 1 St George’s Terrace
Perth WA 6000, Australia
Telephone: 61 8 9261 8000
Facsimile: 61 8 9261 8020
Freecall Reservation: 1800 681 118
Gold in New Zealand dollars: $1985.43 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.10 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 20, 2012

Gold and Silver: Dark Torment?

So here we are, looking at the price movements in gold and silver and wondering if our 'investment' will ever hit a positive return. Asking ourselves if we had listened to the right advice or once again been the victims of forces way out of our control.

There's a lot to be said for the old adage, 'go away in May'. If you are the type to check your portfolios daily, you would probably be depressed and ready for a dose of counselling. Perhaps a 'portfolio' holiday is in order for you? Check again at the end of August.

But there are a few things to remember in your dark torment.

Check out these headlines:

The Gold Price will not Drop to Lower Lows Physical Demand Too Strong.
Eurozone breakup Fears.
US nearing recession. Retail Collapse Accelerates, annual rate of 16%.
Fiscal cliff approaching.
China's economy slowing down.
UBS Issues Hyperinflation Warning For US And UK, Calls It Purely - A Fiscal Phenomenon.
American Cities Going Bankrupt.
Spain Goes From Bad To Worse.
IMF loses all faith in the euro project.
Italy's Monti says serious worry Sicily region may default.

OK, so that's enough bad news. You get the picture. Is there any good news from the markets? Queue wind blowing and tumble weed....

Now read these snippets:

"The LIBOR scandal is further eroding confidence in the global financial system and will lead to safe haven gold demand"

"Hungry people do not stay hungry for long. People suffering from inflation and receiving very low yields on deposits in unsound banks will continue to turn to gold as a store of value."

"Gold bullion is set to benefit from the axing of commission for IFAs and the implementation of the RDR - should be regarded as a game changer - for gold as an investment in the UK, according to the World Gold Council."

"Germany must draw the proper conclusion: either abandon the euro or accept the revolutionary step towards a European superstate."

We could go on, but your time is short.

Just to reiterate what has been said often here, previous fiat money systems have never lasted. All fiat money systems, those backed by nothing but faith, have always reverted to their true values. Zero.

Why? Because, ultimately, you cannot trust people who get a glint of greed in their eye. These people will quickly turn into sociopaths and forget the very morals they may have possesed. The love of money does horrible things to people. Just look at the headlines regarding LIBOR and the corruption at large banks like JP Morgan and noted brokerage firms; even to the highest echelons of power.

This causes the trust and confidence necesssary in our system to begin a slow trickle out. The brown stuff will inevitably hit the fan. The corruption ingrained in the fiat money system will destroy its foundations. The rot that you can just barely smell will become overwhelming.

At these times in history, the only chance that you had to preserve you life's wealth, and maybe intergenerational wealth, was to hold hard assets. The ultimate of these being gold and silver.

Gold in New Zealand dollars: $1969.49 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $33.97 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 18, 2012

Gold and Silver Summer Doldrums

If you are 'down under' it's the winter doldrums. Anyway, sounds better than 'summer doldrums' right now. What we wouldn't give for some warm weather in New Zealand!

Here's an article that Anglo Far East have highlighted regarding the cycles involved in precious metal pricing. Excerpt:

"For speculators and investors aware of this tendency, all it takes is a little patience to weather precious-metals summers.  But sadly the majority of traders refuse to study the markets and advance their knowledge, so every summer their depression returns anew and they foolishly sell low.  Thankfully we can take advantage of this mistake, and buy low to load up our books ahead of the big autumn rallies."

More here.
Gold in New Zealand dollars: $1984.71 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.25 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 16, 2012

What to Make of the Libor Fiasco?

Firstly, what is LIBOR? Most people have never heard of it or care. (Rightly so, mind you, as most people put their trust in the people that administer such complex regimes on their behalf).

LIBOR is the London Interbank Offered Rate. It's basicly an interest rate market and one that has global significance. Every day around 11am London time, a group of participating banks get around a 'table' and decide what each would like to offer in the market for short term interest rates. A rate is then set and the banks charge each other this rate for short term borrowing, usually overnight.

The flow on effects of this rate are enormous. LIBOR is used to price many other financial derivatives; interest rate futures, swaps and Eurodollars. Now these instruments are for the hardiest of financial minds to understand. They mostly trade in the 'over the counter' market. A market far less opaque than it should be.

Anyway, the furour lately has been around the rate setting process. Those with huge derivative positions have been influencing some of the participating LIBOR banks into pushing their asking rates higher or lower depending on how the market is affecting them.  It appears from emails, that the banks (Barclays was one of the ones first caught) obliged willing to requests from commercial banks like JP Morgan.

The reason this incestuous relationship was harmful to Joe Sixpack, and anything he touched to do with banks, was that his interest rate could have been higher than would otherwise be expected because of this manipulation.  He paid the Piper for the sins of the banks; again. And the figures could run into the billions of dollars. Already many entities are preparing lawsuits.

The main lesson to take from this fiasco is that another significant amount of nails have been hammered into the coffin of the western monetary system. Institutions, like Banks, create the stability that we rely on to produce a sound, trustworthy climate in which business can be done according to contract and law. When trust and confidence in these institutuions eb away, we move closer to the precipice to chaos.

Gold in New Zealand dollars: $1997.74 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.36 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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.
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Thursday, July 12, 2012

Rothschilds and Knowledge

The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages...will bear its burden without complaint, and perhaps without suspecting that the system is inimical (harmful) to their best interests  - Mayer Amschel Rothschild, 1863

This quote has been moving around the fringes of the financial blogosphere for a while now. But what does it really say?

Conspiracy theories regarding the Rothschilds abound. Illuminati and Bilderberg spring to mind. Even involvement in every major war since 1812. But what I think people fail to see is that wealthy families, like the Rothschilds, were able to gain a special and targeted type of knowledge, and were able to keep it close, which then enabled them to create and maintain great wealth.

And there lies the main message of this quote. The Rothchilds had knowledge of the system and how to use it for their own benefit and wealth creation. Many do not completely understand the nature of wealth creation and the concept of generational wealth. I'm not sure of the reason for this. Perhaps lack of financial education or maybe people are really so busy bringing up kids and working to pay the bills, they simply have no energy left to gain worthwhile knowledge and wisdom in this area.

Who knows, there are probably a miriad of reasons.

But that's not to say that you, the reader of this piece, cannot begin to forge your own way into the knowledge of true wealth creation. If not for you, but may be for the next generation that you have influence over.

Now this piece did not start out as an advertisement, but a good beginning would be to contact The Anglo-Far East Company here and see if seminars they will be taking in New Zealand and Australia this August, may be suitable for you in this journey.

If indeed the system is harmful to your best interests, then beginning to preserve your wealth outside the system while you study and learn, may be a good option in these 'burdensome' days.

Gold in New Zealand dollars: $1976.93 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.03 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 10, 2012

House Prices in New Zealand v Gold - June, 2012

The statistics are in for the housing market here in New Zealand for June.

As placed against gold ounces, house prices are showing a slight uptick in value. Now back to 59.42% from the highs of May, 2005.


Down from 61.97% in May, 2012
Auckland houses prices showing a 16 ounces of gold rise in value in June

NZ houses prices showing a 8 ounces of gold rise in value in June

So what do we make of this? After giving Olly Newland a bit of a serve a week ago, it seems even he has grown a cautious leg on this. He can see a bit of froth and bubble, but it's too early to tell. If I interpret him correctly, it means that when the unsustainable prices occuring at the the top end of the Auckland market start to fail, then get out of the way, a crash is coming.


Also, don't forget the major uptick in mortgagee sales last month. Add to this the dynamics of the global Financial Crisis and the sure-fire effects on New Zealand, namely, higher unemployment, then now is still the time to sit and preserve your wealth and be ready for the opportunities that may come.

As an aside, gold may have suffered from a bit of 'high net worth' liquidation. This occurs when individuals, who have significant holdings in gold (usually to provide collateral for bank funding), need to liquidate gold and use the cash to settle other investments they may need to opt out of.

Conclusions. According to Nouriel Roubini, the perfect storm will happen early next year. Debt accumulation becoming untenable (think 7% rates for more than just Spain and Italy), China in a deflationary spiral and the US economy shrinking alarmingly coupled with their tax armageddon in January.

No need to worry, just be careful.

Gold in New Zealand dollars: $1992.59 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.32 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 9, 2012

Jeff Christian and The Gold Markets

OK, so Jeff Christian isn't exactly 'flavour of the month' with gold-bugs. Why? He doesn't think there is evidence for the market manipulation of the gold and silver markets.

What ever side of this fence you are on, you would probably benefit from this pod cast from The Financial Sense News Hour with Jeff explaining how the gold market works.

Enjoy.

Gold in New Zealand dollars: $1984.45 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.07 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 3, 2012

Presenting: The Keystone Cops and Harry Hedgefund

The deal last Friday meant that insolvent governments in the eurozone could shift the stinking pile of bank debt from their books to the books of the variously named bailout funds to be soon available.

This to bring down the cost of sovereign bonds, allowing governments to borrow more to pay off past debt and to continue funding their political ambitions.

So up goes the appetite for risk, a small window of opportunity for high-frequency algorithms, rulers of the markets, to allow Harry Hedgefund to make a quick buck or two.

Which he will, for now. Because this meeting number 19 of eurozone leaders, hasn't achieved anything but put off for another day, the inevitable fact that all this debt must be extinguished somehow, sometime.

I have some accounting background and know that placing liabilities outside your books in a 'bad bank' type company, doesn't make problems go away. In the end if you don't have the ways and means to pay your bills with cash earned through profits, you are dead in the water.

This plan looks rosy as you gaze into its eyes across the dim light of an expensive restaurant table. But wait till morning when the makeup has worn off.

The fateful day has been simply pushed out further. How much further we don't know. However, the meetings seem to be coming in shorter intervals and the 'great plans' coming in ever desperate times. How long will this latest wee foray into madness last? Probably less than last time and maybe a week or too before the next eurozone panic meeting.

All rather Keystone Cops really.

But at least it gives you and I the chance to restructure our wealth and lives to be ready for the big debt pop.

Gold in New Zealand dollars: $1988.05 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.25 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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, July 2, 2012

Don't Listen to The Property Spruikers

Do not buy a house as an investment. Do not listen to the property spruikers in the New Zealand press.

Olly Newland and his ilk are dangerous.

Here are statements from a man who will drag many New Zealanders to financial desperation:

"Olly Newland is convinced interest rates will stay low for the foreseeable time and it makes sense for young property buyers to borrow as much as they can to get on the property ladder. His advice to first home buyers is to "stretch as much as possible to get into a leafy suburb". He says "borrow till it hurts" just to get on to the property ladder "because prices are rocketing ahead".

Borrow till it hurts. Now let's think about that, Olly didn't, but let us do the thinking for him. Without the vested interests.

Prices are rocketing ahead? Now regular readers of this blog know that prices are increasing, but not rocketing ahead. More importantly, NOT going up in value. Look at the latest figures of housing as against gold. Ponder this, since mid-2005, house prices have decreased back to where they were valued in 1991, the start of the current housing 'boom' (read credit boom).

There is much scope left on the downside as there is much scope left for credit expansion going forward. Does anyone believe the Keynesian Central Bankers will stop printing and let this crisis get worse?

Let us also look at these salient statements from Stuff yesterday.

"The rampant cost of living means two-income families are increasingly worse off than single-income families were a generation ago – and it is threatening to put them under. "

"It is increasingly clear that two incomes have trapped many families under a mountain of long-term financial commitments," said economist Gareth Morgan.

"Borrowing in order to purchase an investment [didn't mention housing] can be a positive approach to wealth creation," said a recent Families Commission report. "Where debt is difficult to service and hampers family functioning, however, it can become problematic."

"What has buried so many families is the level of household debt. In 1980, it accounted for 47 per cent of a family's disposable income. Today, the debt mountain is equivalent to 143 per cent of disposable income."

Buried; now that is a dramatic word and one which the spruikers should be morally aware of. New Zealanders fell into the worldview that housing is an investment as house prices 'always' go up. NZers borrowed more and then believed the second lie. Leave the old house and get something bigger and better. It makes you look and feel wealthy, does it not?

Debt is a trap, the housing investors associations want to lead you into the snare with all the honey talking swankyness of a fox juicing a chicken.

With mortgagee sales on a steep curve upwards and interest rates likely to balloon soon (does Olly really think our debt is going to be this attractive to overseas buyers for the 'long term'?), buying a house will bury you.

Sure, you may get lucky, but please do not let these spruikers get an advantage from your financial death.
Gold in New Zealand dollars: $1984.41 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.07 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
_____________________________________________________________

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 when you order: 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.
_____________________________________________________________