Liberty Maven

The price of gold rises for the 8th year in a row, although it is more accurate to say the purchasing power of the fiat dollar is eroding.

by Jake, the Champion of the Constitution
Originally published on Sunday, January 4, 2009 at http://www.nolanchart.com/article5747.html

Although certainly it was not my intent to share investment ideas when this column was first started, some readers who took my advice this year are cackling with glee.

You see, James Turk of goldmoney.com in his latest newsletter noted that despite the losses in the commodity and equity markets, the price of gold managed to rise for the eighth year in a row in nominal dollar turns. The gains in 2008 were +5.8% as compared to +16.3% average since 2001.  Silver had its first down year since 2002 with a loss of 24%, although its average since 2001 is a very healthy +13.7%.

The interesting take-away from Turk’s report is that over the long run, other fiat national currencies are losing roughly 13% annually to the yellow metal, while dollar and British pound are noticeably worse at 16-17%. Why?  Perhaps I am wrong, but history doesn’t repeat, but it does rhyme. The shotgun marriage of the FED and Bank of England led the world into the Great Depression following the Great Inflation of the 1920s as I wrote about in this 2-part series, possibly in our contemporary time something similar is occurring.

One must remember the theory that I support, which is that the gold and silver markets are manipulated by the central banks. You can read about it in this 5-part series. What this means for the saver is that the price of gold could easily rise OR drop say $200 in a single day. However, remember a gram of gold one day is the same the next. However, this does NOT hold true for paper gold or silver, like the GLD and SLV ETF funds. STAY AWAY from the ETF’s, these paper promises are not for savers, they are for day-traders who think they know what they are doing and central banks’ bullion traders and large banks like the corporate raiders from the Great Depression, JP Morgan Chase.

In my humble opinion, physical gold at today’s price is dirt cheap financial insurance and physical silver is super dirt cheap. One word of caution though: please do not expect to get rich by saving gold or silver. However, in the long run these silly feeble-brained Keynesians are barely able to think ahead more than a week these days, try thinking 5, 10 years gold and silver will protect your purchasing power. The paper Dollar, the paper Euro, the paper Whatever will not.

As we are learning in the Money Matrix series (hint I will write more if there are more comments), when a commodity becomes used as money or currency, its purchasing power increases. In this crazy Keynesian world, I suppose the closest example is the American petrodollar. Since it is still, to this day, used as the world’s major reserve currency, and must be used to buy Middle Eastern oil, the dollar still has a monetary premium attached to it. In the event that gold and silver recover even more of their premium as monetary metals, it is possible that their purchasing power will increase.

At any rate, we can take another look in a year’s time and see what happened. And, again, the above is just my opinion and I am clearly fallible, so trust your judgment, not mine. There may be trouble ahead, but possibly also a very, very bright future.

GO GATA!

Jake, the Champion of the Constitution                 [Reach the Author Here!]

www.CampaignForLiberty.com

www.YALiberty.org

endthefedusa.ning.com

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Actual Conversation between a close friend and I

A Close Friend: “I voted for Obama in the election.”

Me: “WHAT?  I told you all about him!  You agreed with me he was up to no good!”

Friend: “I thought you said Obama was ‘Change I Could Believe In’!”

Me:  “WHAT?  NO! I said “CHAINS YOU CAN BELIEVE IN“!!!”

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We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.

Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.

Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it.

“In the beginning of a change, the patriot is a scarce man, and brave, and hated, and scorned. When his cause succeeds, the timid join him for then it costs nothing to be a patriot.” – Mark Twain.

“You’ve been affected by a social disease!  Take your medicine!!”

- Shinedown, “The Sound of Madness“  An ounce of gold and two ounces of silver works like a charm!

As a disclaimer of sorts, I am a supporter of owning physical gold, physical silver, www.gata.org and www.goldmoney.com. Any investment or financial views expressed in the article are mine and mine alone, so make your own financial decisions by educating yourself. All I am doing is sharing my views to help you decide, even if its just to become aware that you do have a decision to make. You can even say its a charitable but naive act, given the historical tendency of the US government to oppress and steal. Any questions, feel free to email me. [Reach the Author Here!]

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Nolan Chart Facebook Group Page Created

Summary of Articles and Bibliography for Jake, the Champion of the Constitution (1/1/2009)

New source list inside!

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Other Recommended Articles by the Author

Israeli Conscientious Objectors – The Shministim (The Gaza Slaughter PART 1/6)
Published: January 1, 2009
This series is dedicated to your self-respect. Modern slavery still exists. Just look at Israel – prisons inside and outside Gaza. America, is this what you really want?

The “Great Slump” of 2008 (PART 1/2)
Published: December 20, 2008
One of Lord John Maynard Keynes’s essays “The Great Slump of 1930″ is extremely relevant today as we look forward at the 2009 economy and future governmental antics. Let’s take a look!

Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)
Published: December 25, 2008
The claim that the “gold standard” caused or worsened the Great Depression debunked.

Rioting at the Gates of Thermopylae: The Ramparts of the FED & Central Banks Shudder
Published: December 14, 2008
M1 hits 37% growth!! “Most of the significant American banks, the larger banks, are bankrupt, totally bankrupt.” – Jim Rogers, 12/11/2008

Calling All Wheelbarrows: Hyperinflation in America? (Part 2/2)
Published: July 16, 2008
“Let it not be said that No One Cared, that No One Objected, once it is realized that our Liberties and our Wealth are in Jeopardy.” – Dr. Ron Paul

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The Money Matrix Series

America, Were Michael Phelps’ Eight Olympic Gold Medals Worth Winning?
Published: August 24, 2008
Michael Phelps and other American athletes are bringing back loads of Gold, Silver, and Bronze Medals from the Beijing Olympics. A young libertarian economist asks if it was worth it.

The Money Matrix – Prelude (PART 1/15)
Published: August 1, 2008
Prelude and Source List to a Series on Global Monetary Policy of Control and Explaining Big Government’s Finances

The Money Matrix – What is a Dollar Bill Worth? (PART 2/15)
Published: August 2, 2008
“Living so free is a tragedy when you can’t see what you need to see!” – Powerman 5000 ‘Free’

The Money Matrix – What Makes Money Money? (PART 3/15)
Published: August 3, 2008
A quick history of money per Rothbard followed by the properties of money per Ron Paul

The Money Matrix – What is Honest Money? (PART 4/15)
Published: August 7, 2008
“If You Don’t Know Who the Sucker Is, Then It’s You!” The Money Matrix series rolls on by asking ‘What are the Types of Money?’ and ‘What is the “Best” Currency and Why?’

The Money Matrix on the Grand Deception of Seigniorage (PART 5/15)
Published: August 24, 2008
“Do not give in to evil, but proceed ever more boldly against it.” The Money Matrix explores Seigniorage as Legalized Silent Plunder with an introduction into medieval and modern banking.

The Money Matrix – How the FED Works (PART 6/15)
Published: November 17, 2008
A step-by-step explanation of how the Federal Reserve, America’s Central Bank, can manipulate monetary policy.

The Money Matrix – What the Heck Are Derivatives? (PART 10/15)
Published: December 9, 2008
This article seeks to define financial derivatives and why they are so important. Future and spot market basics are also examined so the Reader understands how the price of gold and silver is determined.

A Money Matrix Addendum: Citigroup and GATA Call for an End to the Suppression of the Gold Market
Published: September 22, 2008
The Suppression of the Gold Market Goes Mainstream, Thanks to Citigroup. And a few interesting back-of-envelope calculations about where the price of gold could go.

Save Ron Paul’s Voice – A Money Matrix Addendum
Published: September 28, 2008
Learn how by reading. Article is intended as a poke-in-the-eye for members of the Ron Paul Revolution who complain about the bailouts and the financial, banking, and housing crises and do not realize that they may in fact be hypocrites.

MY PROPHECY – The Federal Reserve Will End! A Money Matrix Addendum
Published: October 29, 2008
Many of the Prophecies of Ferdinand Lips from 2005 are becoming true. “Right now [the FED] is creating the biggest housing bubble in history. This may lead to economic collapse. I expect that a revolution will one day take place against the Fed. It must be abolished. After all, its founders were not that intelligent but rather stupid men. Or they were devils. It is a tragedy. Not only that: It is the biggest tragedy in world history, even worse than wars. Yes, worse than wars. It made most people poor. It damaged America. It caused wars and then helped to finance them.”

The End for the Dollar and all Fiat Currencies (1/5)
Published: December 6, 2008
Gold is now in backwardation. I submit to you, Reader, the US Dollar is now officially a DEAD MAN WALKING.

The Next Bubble to Pop! (2/5)
Published: December 7, 2008
“These days, I am more concerned with the return OF my capital, not the return ON my capital.” – attributed to Mark Twain or Will Rogers

On Gold and Market Manipulation (3/5)
Published: December 8, 2008
“Gold is Money, and Nothing Else.” – JP Morgan before Congress’s Pujo Commission, 1913

The Significance of Gold Backwardation Explained (4/5)
Published: December 11, 2008
“The [gold] bulls are on the warpath.” – Dr. Antal Fekete, December 10, 2008

More on Gold and Silver Backwardation and Manipulation (5/5)
Published: December 14, 2008
“Gold going to permanent backwardation means that gold is no longer for sale at any price, whether it is quoted in dollars, yens, euros, or Swiss francs… To put it differently, all offers to sell gold are being withdrawn.” – Dr. Antal Fekete

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Gold and Silver Investigation Source List

Fellow Nolan Chart columnist Republicae really has a wealth of experience on honest money and government control far exceeding my own, and is one of my favorite authors here at the Chart.  Here are a few articles to take a look at:

“The Hyper-Inflationary Trigger“

“Fiat Money – Inflationary / Deflationary”

“When Our Money Was Our Property”

“A Fabian Socialist Dream Come True”

“Statism: The Bankrupt Ideology“

“The Death Knell Rings For The Federal Reserve”

A Quick History of Gold

GO GATA! The premise of the Gold Anti-Trust Action Committee that the world gold market is artificially suppressed by central banks in order to make their currencies look stronger.

www.GoldMoney.com – GoldMoney is an international gold and silver warehouse with insured vaults in London and Zurich.  Ability to hold and pay interest on four major fiat currencies, issue payments in goldgrams, etc. Think of them as an alternative way to diversify where and how  your physical metal is stored, but I urge you to be wary and thoroughly investigate this and ANY method where someone else holds your metal for you before investing.  The best is always physical possession  (or pay for storage at a Brinks-type depository) although you should always be creative with your storage locations

The World Gold Council – A wealth of information on central bank holding, gold derivatives, supply and demand statistics and more.  Free login required.

Rothbard, Murray N. “What has the Government Done with Our Money?” (1990) A 50-page document that describes Austrian economics.  Rothbard has written a host of other great sources as well, like the 1994 work “The Case Against the Fed.”

www.jsmineset.com Expert Jim Sinclair shares his thoughts on gold investing, financial markets, and trading.  For free!

www.DollarCollapse.com This site’s main use is as a newsfeed for dollar, gold, and housing market current events.  They explain their dollar collapse theory here, which I partly agree with.

www.SilverSeek.com I particularly enjoy reading the columns of Theodore Butler and Jason Hommel

www.GoldSeek.com The sister site of SilverSeek.  The Mogambu Guru’s (aka Richard Daughty) column has tunnel vision but hilarious and educational..

www.professorfekete.com A seriously pro-gold scholar.

www.lemetropolecafe.com Offers timely gold market advice and a daily “Midas” column.  Try the 2-week free trial.

Paul, Ron. “Pillars of Prosperity.” (2008) A 400+ page compilation of Dr. Paul’s writings. After reading these, one realizes that Dr. Paul did very little recent work in putting together his best-selling “The Revolution” as most of this book was written 20+ years ago.

Millar, Peter. “The Relevance and Importance of Gold in the World Monetary System.” (2006). Self-explanatory title. Understanding Graph 2 on page 3 is key.

Greenspan, Alan. “Gold and Economic Freedom.” (1966) Interesting work from the Maestro prior to his conversion to inflationary Keynesian theory.

Fellow Nolan Chart columnist Brutus in his column, Death to Caesar has an interesting article “The Case for a 100% Gold Standard“

I also like these articles from the Chart’s Gene DeNardo “MV=PT A Classic Equation and Monetary Policy“  “Corporations and the Free Market” “Fiat Monetary System Harms Environment“