Wednesday, March 27, 2013

A Hair-trigger away from Disaster


Here's a wee interaction I had with Trader Dan Norcini today:

"Hi Dan. Well written and I note your frustration! Here in New Zealand, our illustrious Reserve Bank will be bringing in a tool called the Open Bank Resolution policy (don't you love these names that crooks come up with) to respond to future bank failures. It works the same as the Cyprus theft of depositors funds. But get this PR spin. It is for OUR good as it enables the banks to keep open for trading in the event of a failure. Oh how happy we are.

Trader DanMarch 25, 2013 at 4:45 PM

Andrew- don't you feel better now that the officials are working in "your" best interests? I am sure that you are sleeping more soundly, your stress levels are normal and your blood pressure is perfect!

Seriously, we used to read about this sort of thing in the novel, "1984" and such. We are now living it!"

Dan is right. You can't make this stuff up. With gold coiling and ready to burst, and the fiat money debt bomb fuse running towards the business end, it appears we are a hair-trigger away from disaster.


Gold in New Zealand dollars: $1907.02 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.30 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, March 25, 2013

Cypriot economy stuck between Brussels and Moscow

A very useful addition to the debate on Cyprus from 'Thesmith' blog last week:

"The small Mediterranean island of Cyprus is suddenly became newsworthy across the globe this week, for all the wrong reasons.  Their financial situation is dire, which is why Nicosia asked for assistance from Brussels, but it is the sudden spotlight on the island’s relationship with Russia which is turning many heads.

This week, after Brussels preliminarily agreed to some form of bailout package for the island nation, it is the depositors instead of creditors feeling the heat in the troubled European Union for a change. After Tuesday evening’s vote in the Cypriot parliament, not a single official voted in favour of Brussels’ strict bailout package"
..more

Gold in New Zealand dollars: $1926.720 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.43 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, March 21, 2013

A Country With No Money

Oh dear, so Cyprus closes its banks till next Tuesday. They have run out of money and the EU is threatening to leave them high and dry. Welcome to the new Europe where friends have money and old friends, well, see ya later.

And then Germany had the audacity to complain when desperation leads the Cypriots to Moscow's door. Wadayagonnado when Mum and Dads, armed with pitchforks and torches, are threatening revolt and the Russian mafia have been sending not so cryptic emails.

Simply put. It's a mess and a dangerous one.

So back to New Zealand.

The Reserve Bank of NZ has always had the powers to close banks, but not the means to do it quickly and silently..like overnight when you are sleeping contently in bed. The latest law change will now mean they have the power to close banks and take your money whenever they deem necessary.

I don't usually have much time for the Green Party here in NZ, but bringing this one out of the shadows was good work.

Gold in New Zealand dollars: $1952.38 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $35.04 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, March 20, 2013

Cyprus Won't Happen Here

Well it might in New Zealand (and elsewhere) and here's why:

"Kiwis with money in the bank could see their nest eggs and savings dwindle in a government move the Greens say is a "Cyprus-style solution" to help out failing banks.

New Zealand banks are readying their IT systems for Open Bank Resolution, a Reserve Bank policy that in extreme cases like insolvency would see a bank's losses shouldered in part by its shareholders and creditors - including everyday depositors."
- NZ Herald

It appears the 'theft from depositors disease' is rapidly being put in place around the world. If you think your wealth is safe in the bank. Think again.

Are we not being told of some very near impending doom? Maybe, but why is are these new laws happening now?

Gold in New Zealand dollars: $1954.91 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $35.04 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, March 19, 2013

What Should You Do?

A suggestion from Dan Norcini:

Put yourself in the place of an average European citizen who is watching this debacle unfold before their eyes. Would you feel the least bit secure if you had now been awakened to the fact that your government's leaders had spent the nation into bankruptcy and were suggesting that as part of the solution to their folly that those same fools who ran up the debt in the first place now be permitted to raid your personal savings account to somehow solve a problem of their creation? What would you do in their situation? I tell you what I would do; I would immediately begin transferring money out of banks in any of those nations which had been on the receiving end of bailouts from the ECB and the IMF. I would move that money into gold and would not think twice about doing it. If those deposits are no longer sacred, then what is to prevent futures politicians from raiding them whensoever they please?

Gold in New Zealand dollars: $1942.01 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $35.06 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.
_____________________________________________________________

Comments on Cyprus

"Daylight robbery (10% confiscation tax) or night-time robbery (inflation) - you choose" - Anonymous

You wake up one morning. Over the radio, you hear that the government has said that all the banks are bust. Everyone is going to have to sacrifice 10% of their savings to bail the system out. It’s the only solution. - Money Morning

Jim Sinclair:  Well, it should have frightened many of the players involved, and served as a wake-up call.  There was a great miscalculation made with regards to Cyprus, and the situation has quickly turned into a catastrophe.  There was no real understanding of the entities that were behind the Russian corporations which have money in Cyprus, and the effect of what is in reality the confiscation of Russian ex-KGB money.

The Telegraph: The danger may not be immediate but if the economies of Portugal, Spain, and Italy languish through this year in deep slump with no green shoots of recovery starting to sprout in the second half – as many fear – this new dispensation will be tested. The fatal precedent of haircuts for depositors will start to matter a great deal. Hell hath no fury like a saver robbed.

As depositors across Europe realize that they are potentially next in line for a similar (or worse) "haircut" if their bank fails, the realization will dawn upon them that keeping money in said bank, at 0% interest no less, is not a very good idea. As depositors begin to withdraw their cash, the entire fractional reserve system begins to seize up - Turd Ferguson

This is a complete game-changer.  It means that even money in the bank is not safe.  It implies that money in pension and money market accounts is not safe, either.  It means that rule of laws and contracts really don't matter.  Of course, MF Global taught us that.  It finally means that trust is no longer a part of the equation - Peak Prosperity

Gold in New Zealand dollars: $1942.89 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.97 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.
_____________________________________________________________

Monday, March 18, 2013

Theft By Any Other Name - The Cyprus Effect

I'm your trusted friend. I come to you for some help.

You see, I have pretended to have more assets than I physically have and have created loans from those. My lender has found out, I'm in a bit of a pickle. I notice your savings jar on your kitchen table. You must have left it there because you trust me with your money and thought it was safe. You even insured it.

I snigger at the confidence you have in my goodness. I reach in and take out $10 of the $100 you have in there. You complain, but I spin you lies of the dire consequences of my pending doom. You are angry but believe me.

I walk out still sniggering. Off to my next friend.

The latest bailout plan for Cyprus could spook the markets this week. Anything from a mass panic to a complete nothing as depositors do the 'they won't let it happen here' self-talk.

Gold in New Zealand dollars: $1925.19 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $34.77 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, March 13, 2013

House Prices in New Zealand v Gold - February, 2013

In February, 2013, the gold ounce to house price ratio has moved in favour of houses. It now takes 10 gold ounces more to buy the median priced Auckland house than it did in January, and 7 1/2 ounces more to buy a median priced house in New Zealand.




Gold in New Zealand dollars: $1931.53 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $35.42 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, March 11, 2013

The Investment Case for Gold

By John Hathaway
Portfolio Manager and Senior Managing Director
© Tocqueville Asset Management L.P.

The investment case for gold, in our opinion, rests squarely on the prospect for U.S. sovereign credit, and by extension, the value of the U.S. dollar. The prospect, in short, appears poor. Therefore, we find that the rationale for gold remains solid. In fact, it seems stronger than ever.

One could argue that there has been a bull market in bearish commentary regarding U.S. fiscal issues and that therefore, worst cased outcomes have already been priced in at roughly $1575/oz. (2/28/13) Three years of steadily rising equity prices could suggest that there is an argument opposite to the bearish case which will only be fully evident years from now.

What follows is a compendium of my beliefs, observations, inferences, opinions and perceptions that lead me to conclude that the gold price is headed substantially higher in terms of all paper currencies. The thesis rests on considerations which I feel are categorically ignored by mainstream commentary. In our opinion, gradual, and to most, imperceptible evolutions of economic and political realities preclude a return to “normal” cycles of economic growth. We believe that expectation is a web of fantasy produced by major financial institutions, government officials, academia, and made possible by the complicity of an uninformed public.

We view assessing the long term direction of the gold price correctly as a big part of our job as the manager of a gold strategy. It is our view that the lengthy correction from the 2011 peak is nearly over, and that a solid base for future advances has been established. Any price that attempts to go parabolic, as gold did in August of 2011, is bound to suffer from a hangover (as noted several times by John Mendelson of ISI) and we believe that gold’s hangover is in its final stages. All sentiment measures that we monitor are at rock bottom levels. The demoralization of gold investors is a sign, however painful and understandable, that further downside risk is minimal.

In 2002, we wrote in our website article “The Investment Case for Gold” that the rationale rested “on the notion that the overvaluation and excessive supply of the U.S. currency has funded a decade’s worth of uneconomic investment and unsustainable consumption.” The only revision that we would make today to our statement of ten years ago is that another decade of overvaluation and excessive supply has come and gone with no resolution of the basic problem. Economic rot has been repackaged in sovereign credit, which it could eventually corrupt.

What is the case for further upside? During the crash of 2008, we argued in our website article “Is Gold Still in a Bull Market?” (October 2008, click here to view) that the consequences of massive Fed intervention would cause alarm among investors and broaden interest in gold as an alternative to paper currencies. Then, as now, it was necessary to reckon the basis for a further advance in gold that had not already been articulated:

What will drive a further advance in gold? Let’s start with the implausible assumption that the worst of the credit crunch had been already discounted when gold scaled $1000. Let’s also assume an even greater stretch that the Paulson bailout succeeds in restarting the wheels of lending and commerce. Finally, let’s toss in an end to the decline of asset prices and the commencement of a bull market in equities. The unequivocal precondition for these felicitous events would be the transformation of the dollar and other paper currencies as we know them. The socialization of credit in the U.S. may well work the miracles as its proponents claim, but not without stiff costs. We suspect that two inescapable costs will be inflation and negative real interest rates as far as the eye can see. Both of these outcomes are friendly to gold. Neither is likely to improve the credit rating of the dollar or increase the desire of non U.S. investors to increase their holdings of U.S. Treasuries.

We believe that a future downgrade of U.S. sovereign credit is a strong possibility. It would defrock U.S. Treasuries of their safe haven status. In the late 1970’s, they were dubbed “certificates of confiscation”. We fully believe they will once again be referred to in a similar manner as a direct result of current and still to come interventions by the government to shore up financial markets.

Those who seek to find the rationale for owning gold in the growth of the Fed and other central bank balance sheets, future inflation, the prospects for a deflationary collapse, the flight to safety or other macroeconomic themes only touch on ephemeral aspects of the forces that drive the bull market in gold. The narrative for gold has evolved several times since the bull market began in 1999. At first, central bank selling and producer hedging was the focus of most commentary. The attack of 9/11/01 added a geopolitical dimension. In 2006 and 2007 a thirst for “hard assets” premised on emerging market growth co- opted the investment thesis. The crash of gold during 2008 was explained by the specter of deflation. The dollar price of gold rose from its bear market low of $250 in 1999 to more than $700 according to several different narratives as voiced by conventional wisdom.

Post the 2008 meltdown, media commentary on gold flourished. High profile investors proclaimed the merits. Quantitative easing with implications for future inflation dominated investment thinking. The sovereign debt crisis in euro land and the 2011 showdown over the debt ceiling in Congress culminated the frenzy. The bull market, unnoticed by most for the previous eight years, became front page and hostage to popular perceptions.

To be caught up in a debate dictated by the explanations of mainstream commentary is, in our opinion, a waste of time. The rationale for further advances is destined to change. What needs to be addressed, as in any investment analysis, is not what is on the tip of everybody’s tongue, but rather what is it that has not been articulated; positive or negative.

The DNA of the bull market in gold is bad money, which in turn is evidenced by negative real rates of interest. In our view, one only needs to return to the notion of an overvalued and over abundant dollar for a starting point. Is the dollar less over valued and in less oversupply than it was ten years ago? Will it become more or less so during the coming decade?

Gold at roughly $1575 most certainly reflects the negative evolution of dollar fundamentals since 2000. Gold’s advance suggests that the dollar is worth substantially less, but in terms of what? The dollar buys 80% less gold than it did ten years ago. It buys 25% less of the DXY basket of foreign exchange than ten years ago. Because however reported, inflation remains tame and most do not seem to grasp or feel the dollar’s loss of value.

In addition to reflecting history, the dollar-gold price also discounts the future. The dollar’s decline versus gold is, in our opinion, a market expression of uncertainty as to its future purchasing power. In this sense, the dollar’s crash in gold terms is similar to a previously highly valued equity that investors have soured on. The multiple has contracted. Former cheerleaders are forced to become value players. The facts have to be reconsidered. We believe the rise of gold should be considered a warning.

At the moment, capital markets are calm. Stocks have doubled over the past three years. Interest rates are at historic lows. The world economy, according to most, is on the mend. The Obama regime appears to have consolidated power in its second term. Optimists seem to have the upper hand.

According to the recently published Congressional Budget Office (CBO) ten year base line projections, the budget deficit will shrink to 2.5% of GDP in just three years from the current 7%. Stated in dollar terms, the $1.15 trillion deficit of 2012 will become only $433 billion in 2015. The economy will grow at 3.1%, 3.5%, and 5.9% in nominal terms. Tax receipts will rise and spending will be held in check. Interest on ten year treasuries will not rise above 3.5% by 2015. Interest on 90 day treasuries will not rise above 20 bps, as promised by the Fed. Inflation will remain tame and the interest component of the consolidated budget willrise from $223 billion to only $273 billion (For details, go to CBO website-Baseline Budget Projections). If this forecast turns out to be accurate, gold is no place to be.

We have our doubts and believe that the CBO ten year forecast will miss the mark by a wide margin. Looking back at prior forecasts, in 2001 the CBO baseline projection called for a ten year cumulative surplus of $5.6 trillion. Instead, there was a cumulative deficit of $9 trillion. The real question is whether the miss will be on the upside (smaller deficits) or downside (much bigger deficits). The upside case is based on economic growth. A healthy private sector and a deleveraged consumer sector would more than offset the well- advertised problems of the public sector. After all, the private sector is much larger (2/3 of GDP) than the public sector (1/3 of GDP). A move towards less dependence on foreign energy would shrink the troublesome trade deficit, and that seems to be happening. There is a renaissance in American manufacturing. Perhaps a restructuring of the public sector still lies ahead which could lead to a more efficient government with unimagined benefits for the private sector. Is the prospect conceivable? Maybe, but count us as skeptics.

The case for a miss on the downside is the prospect of sputtering global economic growth or even a recession on nobody’s horizon. That would balloon the 2013 deficit and force even more money printing. We are fairly certain that economic growth is destined to sputter and would not be surprised by a recession.

Investment demand is the swing factor that sets the gold price. As we and others have often shown, the mechanism that activates or stifles investment demand is real interest rates. Positive real rates are bad for gold, negative real rates good. The condition that applies today is negative real rates; a condition that we believe is likely to continue for years to come. The inability of capital to earn a competitive return in liquid investments that are free of credit or duration risk opens a very wide door for capital to migrate into gold. 90-Day treasuries are the competition for gold, not ten year treasuries (duration risk) or the stock market (multiple risks of other kinds) or “alternative” investments such as fine art, real estate or farmland (liquidity risk). Below, we provide a long term chart of the inverse correlation between gold and real interest rates. It should be noted that the relationship depicted is based on the CPI as if the official government measure of inflation were the gospel. It is useful only as an illustration. We believe the CPI does not accurately measure the true rate of inflation, which we believe to be higher. For more on the real rate of inflation, please refer to John Williams’ Shadowstats service.

It is certainly possible that the correction in the gold price is discounting a return to competitive real interest rates, but we don’t think so. When it comes to cornering a market, the Fed is no slouch. They have taken a page right out of the book written by the Hunt brothers who cornered the silver market in 1980. Owing to a strategy of manipulating long term interest rates lower to help revive the housing industry, the Fed now owns more than 40% of all Treasuries with a maturity greater than 5 years (Peter Tchir-TF Market Advisors in Business Insider 2/10/13). Compared to what the Fed has done, the outrageous scheme of the Hunt brothers was small potatoes. Unwinding these positions will be difficult and not, we believe, without adverse consequences. For the Hunts, damage was limited to their creditors and their personal net worth. What will happen to long term interest rates when the Fed is no longer buying the lion’s share of Treasury issuance? At stake is the economy, employment, and asset valuation to mention a few possibilities for collateral damage.

Interest on gross federal debt is projected by the CBO to be $224 billion in 2013 and $272 billion in 2015; more or less proportional to the projected increase in debt outstanding of $16.5 trillion currently to $18.5 trillion in 2015. The blended interest rate across all maturities is 1.7%. Even though Treasury debt outstanding has tripled since 1998, the sum total of all interest paid by the Federal government on that debt has barely budged. A return to competitive real interest rates seems highly difficult given these facts. Each swing of 1% on $ 17 trillion is $170 billion. A blended interest rate, for the sake of argument, of 4% across the yield spectrum instead of 1.7% would add $390 billion to the projected budget deficit. We believe that a free market blended interest rate of 4% is conceivable only if measures to check the rise of government spending are credible. If the credibility of austerity/efficiency measures yet to come remain suspect, the market interest rate on federal debt in our opinion will be much higher than 4%, absent government intervention. Evidence of progress will be revealed in the remaining years of the Obama administration. Investors who choose to maintain positions in gold can be excused for their skepticism.

It seems to us that government finances and the economy are in no position to afford real interest rates that would allow 90-day Treasuries to compete with gold. Those who are trashing gold must be convinced that government spending will be revamped and that the credit outlook for the U.S. will show material improvement over the intermediate term.

We disagree with the current bearish consensus on gold. It is not the first time in the past 14 years that we find ourselves almost alone in our stance. We believe the repercussions and consequences of the current posture of the Fed balance sheet, zero interest rates, manipulated long term interest rates, unprecedented liquidity in the banking system, which seems unlikely to be withdrawn on a timely basis (thereby risking high inflation), and manipulated currency exchange rates remain unknown and unarticulated. The narrative for gold is highly likely to undergo another transformation during the next two years, most probably having to do with the negative consequences of the foregoing. While the private sector may be poised to do well, bad economic policy and bad money could constitute serious headwinds to sustainable real economic growth.

Gold can provide insurance against the very plausible possibility that the credit of the U.S. government will be no better, and quite possibly worse in four years than it is today. We are comfortable with our gold positions on that basis alone.

We also find comfort in the fact that gold seems as contrarian at this moment as it did in 1998 and in 2008. A few sentiment readings, as compiled by 13-d Research illustrate the point:

-Market Vane’s bullish gold consensus dropped to 49% in February, the lowest reading on record and only seen previously for a single day at the important gold bottom in 2008.

-the DSI (Daily Sentiment Index) dropped to 3%, a new record low since the index was started in 1987.

-GLD’s bullion holdings dropped 1.55% on 2/20, evidence of capitulative selling. -finally, speculative Comex shorts rose to the highest on record:

We count ourselves among the few that perceive a steady and stealthy erosion of the present and future purchasing power of what is commonly described as “money”. The degeneration of the utility of currency is almost never considered as a factor in economic forecasting. However, it destroys capital and inhibits and misdirects investment. We believe that the erosion has been camouflaged by a debasement of the slew of government and private sector yardsticks purporting to measure that purchasing power. For the most part, the yardsticks, such as the CPI, have been crafted and contorted by bureaucrats and PhD’s in a way that is unintelligible to most, and to our thinking, meaningless against the test of common sense. What is reflected in the dollar price of gold, despite the meandering rationalizations of conventional wisdom, is the ongoing and potential future loss of utility in the dollar as the cornerstone of global credit. In our view, the next stage of the bull market in gold will be marked by a widely shared awareness of the lost purchasing power of paper money. Such an outcome is, after all, the design of Fed policy which has set upon a course that could prove extremely difficult to alter. When the fog clears and, as we expect, the dollar’s loss of value becomes broadly palpable, we look for the gold price to advance to new all- time highs against all paper currencies.

John Hathaway
Portfolio Manager and Senior Managing Director
© Tocqueville Asset Management L.P.
March 1, 2013

Gold in New Zealand dollars: $1919.86 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $35.25 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.
_____________________________________________________________

Thursday, March 7, 2013

Too Big To Fail

ATTORNEY GENERAL OF THE UNITED STATES, ERIC HOLDER, JUST SAID THIS - UNDER OATH IN FRONT OF CONGRESS:

"GRASSLEY: On the issue of bank prosecution, I'm concerned that we have a mentality of too-big-to-jail in the financial sector of spreading from fraud cases to terrorist financing and money laundering cases -- and I cite HSBC. So I think we're on a slippery slope.

HOLDER: The concern that you have raised is one that I, frankly, share. And I'm not talking about HSBC now. That (inaudible) be appropriate.

But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large."

Gold in New Zealand dollars: $1912.38 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $35.00 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.
_____________________________________________________________

Friday, March 1, 2013

S&P Warns of Property Price Drop in New Zealand

This from the NZ Herald today:

"New Zealand is at risk of a sharp fall in property prices, an international ratings agency has warned.

Standard & Poor's has highlighted the "significant risk" of a sharp correction in property prices in its latest report on New Zealand's banking outlook.

S&P said the most likely scenario was that real estate prices would continue to stabilise at current levels over the medium term.

"That said, given the uncertain short- to medium-term outlook for the global economy, we are of the opinion that there remains a significant risk of a sharp correction in property prices."

A deterioration in the terms of trade or a widening of the current account deficit could heighten the risk of a sharp depreciation in currency and a sharp fall in property prices, analyst Nico DeLange said.

The warning came as Auckland's property market continues to boom. Real Estate Institute figures for January showed Auckland's median price up 8.1 per cent compared with 2012"... rest here

Note the spruiking from the property masters in the article. Sure, if you need to buy a house, for whatever reason, then do it, but to leverage up an already overpriced housing asset to buy another as an investment, then maybe you should think again.

Gold in New Zealand dollars: $1906.90 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.
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