Archive for April, 2011

Bernanke Falls Flat

April 29th, 2011 11:21 pm  |  by  |  Published in Debt, Economics, Federal Reserve, gold, gold standard, inflation, Money, national debt, precious metals, silver  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

Despite loud huzzahs from a variety of boosters who proclaimed that Chairman Bernanke spoke with gravitas and wisdom at the first ever Federal Reserve press conference, the wider investing public clearly saw the performance as unconvincing. During and immediately after the proceedings the prices of gold and silver rose strongly to new highs as the U.S. dollar plummeted. The affair seemed to solidify the understanding that Bernanke and his cohorts have no intention whatsoever to reverse the current trend of inflation and a weakening dollar.

With all the preliminaries swept away, it appears that the great dollar slide that we have long feared will not be interrupted. In the last year alone, the dollar has fallen 25 per cent against the Swiss Franc, (the gold standard of fiat currencies) – with one quarter of that decline coming since the beginning of April alone. Against gold itself (the gold standard of all forms of money), the decline has been even worse, 31 per cent so far this year, and 8 per cent this month.

Ominously, the dollar index (the broadest measure of dollar strength) is just a percentage point or two above the all time lows that it set before the financial panic of 2008 sent spooked investors into the apparent safety of America’s deep and liquid Treasury market. It appears that spell has now been fully broken.

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Notes on the upcoming political season

April 28th, 2011 1:57 am  |  by  |  Published in Commentary, Election, Liberty  |  Comments Off

The season approaches when our national discussion will once again turn to the relative sainthood of our would-be federal leaders. And shadowed close by, in my own community in the fair city of Los Angeles, we will be able to choose a new mayor. This political season appears at both levels with time-honored tradition, festivities and picnics everywhere, yet I react to its approach with growing fatigue and irritation.

Why? Am I running for office, so that I have to sweat every little quirk in a typically quirky conversation? No, I’m not running for office- and I’m not “in with the in-crowd,” if you know what I mean- and have no actual use for attaching my free-floating American angst to the great battles of the day. At the risk of psychoanalyzing my apathy (yes, in my youth I had a three-legged collie), I’ll just say that it isn’t so much apathy as, well…caring too much. It’s the same thing that happened to me when, on the way back from a Dodger game in which “we” had ignominiously lost, I had to ask my sulking self, “Why are you investing emotional energy in this? It’s just a damn baseball game, get over it!” Did I mention that this happened in 1969, not last week?

It was in that same year that I cast my first and last vote during the casting of which I believed that I was expressing a sort of influence on the government. That vote was in favor of Lyndon Johnson, the Democratic anti-war incumbent, for whom I had cheered in Columbus Square in San Francisco, against the warmonger Republican Barry Goldwater. (Ah, youth!). I dropped Democrats, Dodgers and Republicans within two years of each other. Whether that made me a secular humanist, well, I’m still working that out.

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Keeping up with the Pauls, Ron and Rand

April 27th, 2011 12:58 am  |  by  |  Published in Foreign Policy, Free Market, Liberty, Rand Paul, Ron Paul  |  Comments Off

Ron Paul officially announced the formation of his exploratory committee today so it was a big news day for the Pauls. Senator Rand Paul appeared on CNN and effectively painted Donald Trump as a liberal sympathizer evidenced by his historical donations to Democrats.

In the morning, Ron Paul appeared on Fox and Friends:

Then Ron Paul appeared on MSNBC with Eliot Spitzer:

And Paul then appeared within the friendly confines of Freedom Watch with Judge Napolitano:

Here is the previously promised Colbert appearance:

 

And finally, look for Ron Paul on John Stossel’s show Stossel on Fox Business on Thursday night.

Ron Paul 2012 Media Day: The View, Hannity, and Colbert

April 25th, 2011 11:47 pm  |  by  |  Published in Ron Paul  |  9 Responses

This morning on The View Ron Paul remained coy about whether or not he was running for president in 2012. The View’s studio audience seemed unsure how to act when listening to the cold hard truth emanating from Ron Paul’s liberty-loving lips. They clapped and Whoopie Goldberg seemed perturbed. Watch it below.

Ron Paul’s nighttime appearance on Hannity was a bit predictably contentious but by that time the news was out: Ron Paul is going to form an exploratory committee for POTUS 2012. Here is that appearance:

So Ron Paul 2012 is now a reality, but Paul was not finished. He then appeared on The Colbert Report. Stay tuned for that video once it is available.

Ron Paul 2012 begins… warm up the blimp!

April 24th, 2011 10:17 pm  |  by  |  Published in Activism, Election, Liberty, Maven Commentary, Politics, Ron Paul  |  14 Responses

Ron Paul will appear on The View, Hannity, and The Colbert Report tomorrow under the guise of promoting his new excellent treatise on liberty called, “Liberty Defined: 50 Essential Issues That Affect Our Freedom“; however, will he also officially announce his run for president?

If he wants to participate in the first debate scheduled for May 5th he must meet certain criteria by April 29th. It doesn’t take an expert to know that one of the first criteria is actually becoming a candidate. Jesse Benton has stated that Paul will meet the criteria to participate so that is certainly an indirect admission that the announcement will be forthcoming

So will Ronald Ernest Paul announce his official bid for 2012 on Monday? We’ll know for sure very soon.

May my fellow Paulites grow the grassroots of liberty in 2012 far beyond the inherent limitations of 2008.

Silver Set to Soar as Paper Folds?

April 21st, 2011 11:38 pm  |  by  |  Published in Economics, Federal Reserve, gold, government spending, inflation, Money, precious metals, silver  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

As a result of active “demonetization” efforts by the IMF and its member central banks, gold and silver have experienced the type of volatility that has given conservative investors reasons not to perceive the metals as dependable cash alternatives. Instead gold and silver have become known as the asset class to hold as a hedge against inflation.

However, during the 1990′s, when inflation was in general much higher than it has been since the turn of the millennium, gold and silver prices drifted lower and stagnated. However, since 2000, gold and silver have risen by over 400 and 700 percent respectively. Remarkably, this has occurred over a time frame during which, by most accounts, low inflation has prevailed.  How can this be explained?

In 1944 when the U.S. dollar was considered ‘as good as gold,’ it was made the international reserve currency. This unique status is the reason that Fed Chairman Ben Bernanke was recently able to say that, “The U.S. Government has a technology, called the printing press that allows it to produce as many dollars at it wishes at essentially no cost.”

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Inflation Destroys Real Wages

April 19th, 2011 3:16 am  |  by  |  Published in Economics, Federal Reserve, inflation, Money  |  Comments Off

by Michael Pento, Senior Economist at Euro Pacific Capital (www.europac.net)

In the same vein as medieval physicians believed bloodletting would cure illness, modern snake-oil economists still perilously cling to their claim that rising wages and salaries are the cause of inflation. With my recent debates with these mainstream economists, I’ve heard the following: “without rising wages, where does the money come from to push prices higher?” I was tempted to respond, “where do the employers get the money to pay those higher wages?” But economists tend to get a little nasty when you make them feel stupid.

It is actually the predominant belief that wages and salaries rise before aggregate price levels in the economy and thus during periods of rising inflation, real wages are always increasing. However, economic history has proven over and over again that real wages actually decrease during periods of rising inflation. Nominal incomes do increase, but this is merely a response to the inflation that has already been created.

The essence of this folly is that modern economists don’t have a firm grasp on the mechanics of inflation. At the most basic level, inflation comes from too much money chasing too few goods. The battle against rapidly rising inflation always has its genesis from a central bank that prints money in order to monetize the nation’s debt.

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Late to The Party…Once Again

April 18th, 2011 11:15 pm  |  by  |  Published in Debt, Economics, national debt, Peter Schiff  |  Comments Off

by Peter Schiff, CEO of Euro Pacific Capital, and host of The Peter Schiff Show, broadcasting live from WSTC Norwalk CT from 10am to noon Eastern time every weekday, and streaming at www.schiffradio.com

The only thing more ridiculous than S&P’s too little too late semi-downgrade of U.S. sovereign debt was the market’s severe reaction to the announcement. Has S&P really added anything to the debate that wasn’t already widely known? In any event, S&P’s statement amounts to a wake up call to anyone who has somehow managed to sleepwalk through the unprecedented debt explosion of the last few years.

Given S&P’s concerns that Congress will fail to address its long-term fiscal problems, on what basis can it conclude that the U.S. deserves its AAA credit rating? The highest possible rating should be reserved for fiscally responsible nations where the fiscal outlook is crystal clear. If S&P has genuine concerns that the U.S. will not deal with its out of control deficits, the AAA rating should be reduced right now.

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Will Precious Metals Survive the Double Dip?

April 14th, 2011 11:15 pm  |  by  |  Published in Economics, gold, inflation, Money, precious metals, silver  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

It is rare in recent history for precious metals to appreciate in parallel with the broader stock market. Yet, this has been the case in the two years since the stock market began crawling out of the wreckage of the 2008 financial crisis. Although metals have vastly outperformed US equities over that time frame, it is noteworthy that stocks have gone up at all. Since January 2, 2009, the S&P 500 stock index is up just about 50%. Over the same time, gold is up 68% and silver is up a staggering 267%. With rising interest rates, oil at over $100 a barrel, and the recovery running out of steam, many investors are wisely asking if the markets are set for a sharp pullback. Given the correlation that we have seen across asset classes, some are making the seemingly logical conclusion that metal prices are vulnerable.

The results of 2008 loom large in many calculations. In the second half of that year, when the extent of the financial catastrophe emerged into the light of day, the S&P 500 dropped some 31%. At the same time, gold dropped by more than 7% and silver almost 39%. Recent volatility in the shares of gold and silver mining stocks reveal that the fear of such reversals may be a growing concern among investors.

But one example does not a rule make, especially the example of a panic rush into dollars and US Treasuries. Wise long-term investors make decisions based upon fundamentals, and those for precious metals remain strong.

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The Real Culture War: the Federal State vs. The People

April 13th, 2011 9:08 pm  |  by  |  Published in Big Government, congress, Constitution, DownsizeDC.org, law, Politics  |  Comments Off

Quote of the Day: “I begin by taking. I shall find scholars later to demonstrate my perfect right.” — Frederick the Great, (1712-1786) King of Prussia, Frederick II

Last Friday, several functions of the Federal State nearly shut down as Democrats and Republicans fought over things like tax funding for abortion providers. It’s the usual con game . . .

* Democrats pretend that you must be “anti-choice” if you oppose tax-funded abortion
* Republicans are right to favor choice when it comes to such funding, but they’re still just cherry-picking the unconstitutional programs that they can best use to manipulate their base

In other words, the politicians are still pretending to fight a “Culture War.” But are the people following their lead? I think not.

It seems to me that times have changed. People are waking up. They’re becoming harder to manipulate. As the letter below indicates, the real Culture War isn’t the one being portrayed by the institutional media. It’s not the conservatives against the liberals; it’s the politicians against YOU.

Please let the politicians know that the main “culture war” you want to fight is against their rampant unconstitutionality. Tell them to oppose all unconstitutional laws all the time.

You may borrow from or copy this letter: Read More »