Archive for June, 2011

Fed Benefits from Global Fears

June 25th, 2011 10:55 pm  |  by  |  Published in Economics, Federal Reserve, gold, inflation, Money, precious metals, silver  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

This week, in the second in a series of less-than-impressive press conferences, Fed Chairman Ben Bernanke offered market observers little hope that any additional quantitative easing programs are on the horizon. The Chairman continues to cling to the position that the economy is improving (with the recent “soft patch” attributable to external forces) to the extent that additional Fed support will be unnecessary. Left unsaid was any guidance as to who the Chairman believes will buy the massive amounts of Treasury debt formerly swallowed up by the QE II program?

The logical conclusion is that Bernanke believes that there will be massive private sector demand for U.S. Treasury securities. If so, how long can it be expected to last? If the economy improves, as Bernanke expects, would it not be logical to assume that private investors would direct capital to more promising sectors than ultra low yielding U.S. sovereign debt? Clearly something does not add up. Judging by the Chairman’s halting delivery and sheepish demeanor, it appears as if he knows his position is untenable.

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Ron Paul influence in 2012 worries John McCain

June 19th, 2011 4:10 pm  |  by  |  Published in Big Government, Blowback, Constitution, Election, Foreign Policy, Maven Commentary, Ron Paul  |  59 Responses

As if we needed further proof that it didn’t really matter if you voted for McCain or Obama in 2008. McCain appeared this morning  on “This Week” and vocalized his displeasure at the growing “isolationism” (his word, not mine) being expressed by the 2012 GOP candidates. Of course it was McCain, who during a debate in 2007, accused Ron Paul’s “isolotianism” of being the kind of policy that brought about WWII and the rise of Hitler. Here’s a video of that exchange:

This morning McCain sounded a similar tune when talking about Obama’s recent support of actions in Libya.

“There’s always been an isolation strain in the Republican party, that Pat Buchanan (a former Republican presidential contender) wing of our party. But now it seems to have moved more center stage, so to speak,” he said.

There is no question that President Barack Obama, a Democrat, made the right choice in lending US military support to the NATO mission in Libya, McCain told ABC television’s “This Week” program.

“If we had not intervened, Kadhafi was at the gates of Benghazi. He said he was going to go house to house to kill everybody. That’s a city of 700,000 people. What would be saying now if we had allowed for that to happen?

“That’s not the Republican party of the 20th century and now the 21st century,” McCain said.

McCain is a neo-con Republican dinosaur with a jingoist broken record roar of, “America F&%K YEAH!” It is as tired as it is desperate. He also, along with much of the media, needs to learn the proper definition of isolationism. For more see this excellent video on isolationism from Jack Hunter.

It is a testament to Ron Paul that his message of non-interventionism is now being echoed, in various forms, by his 2012 GOP opponents. However, let’s not kid ourselves, not a single candidate in the field other than Ron Paul can be trusted to put action behind the words.

In 2008 I wrote that I didn’t think America was ready for Ron Paul. Here in 2011-2012, America just might be ready. Even if Dino-McCain isn’t.

Hard to Take a Bone from a Dog

June 18th, 2011 12:24 am  |  by  |  Published in congress, Debt, Economics, national debt  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

Most people, provided they have a minimum of experience, know that taking a bone from a dog is a risky proposition. In terms of political power, few dogs are bigger than the American voting public. Taking away, or even threatening to take away, the major entitlements to which they have become accustomed could expose politicians to a mauling at election time. As the American leadership begins to grapple with very large issues of entitlement reform in “sacred” programs such as Medicare and Social Security, many may recoil from the task once the fangs begin flashing.

According to polls, 77% of Americans feel the U.S. Government must cut spending. But when it comes to specifics, the support melts away very fast. Until recently, the strongly Republican 26th District of upstate New York had elected only three Democrats since the Civil War. But in a special election held this month (to replace the resigned Republican Chris Lee) the district fell to the Democratic column for the fourth time in 150 years. Many have theorized that the political upset was based on fears that the budget plan put forward by House Budget Committee Chairman Paul Ryan would restrict entitlements, particularly Medicare.

If there is any truth to this, it shows how difficult the process may be for politicians who want to seriously trim the Federal budget. But any glance at the enormity of the problem should provide the necessary courage. This assumes, of course, that there is any courage at all left in Washington.

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The Feds Threaten to Make Texas a No-Fly Zone

June 16th, 2011 10:57 pm  |  by  |  Published in Activism, Big Government, Civil Liberties, congress,, privacy  |  6 Responses

Quote of the Day: “It was bad enough when the TSA agents would go through your underwear in your luggage. Now they’re going through your underwear while you’re wearing it.” –Jay Leno

The Texas House unanimously passed a bill holding Transportation Security Agency (TSA) agents accountable for touching people’s private parts without probable cause. In response, the Department of Justice threatened to ground flights in Texas. DoJ’s threat caused the bill to die in the Texas Senate.

It’s possible the bill will be revived in a special legislative session. While we support the purposes of this bill, we believe the best solution is for Congress to just get rid of the TSA altogether.

That’s why I sent the following letter to my Representative and Senators. We encourage you to send a letter as well, and you may borrow from or copy this . . . Read More »

The Extinction of Retirement

June 16th, 2011 10:31 pm  |  by  |  Published in Big Government, Economics, government spending, Social Security  |  Comments Off

by Michael Pento, Senior Economist at Euro Pacific Capital (

For the better part of a century the foundations for a semi-comfortable retirement for many Americans have rested on the financial pillars of rising real estate and equity prices, positive real interest rates on savings, the continued solvency of public and private pension plans, and the reliability of national entitlement programs (Social Security, Medicaid). But in the last few years, the economic sands have fundamentally shifted and these pillars are no longer sturdy, some have cracked completely. For many Americans, the traditional idea of a comfortable retirement, filled with golf carts, cruises, and fishing trips, is going the way of the dodo bird.

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Cap the Debt: How Congress Can Learn From Truman

June 13th, 2011 9:55 pm  |  by  |  Published in Big Government, congress, Debt,, Economics, government spending, Liberty, national debt, Obama, War  |  Comments Off

Quote of the Day: “History clearly shows the government that stimulates the best, taxes, spends, and intrudes the least. In particular, the lesson from 1945-47 is that a sharp reduction in government spending frees up assets for productive use and leads to renewed growth.” – Economists Jason E. Taylor and Richard K. Vedder

On May 31, the House rejected President Obama’s request to raise the debt limit with no spending cuts. In addition to every Republican, 46% of Democrats opposed this bill.

* This demonstrates the power of polls, which shows even a substantial percentage of Democrats oppose raising the debt ceiling
* But it also demonstrate the power of your RELENTLESS PRESSURE on Congress

More and more Democrats realize the U.S. is on an unsustainable path and that reforms must be implemented NOW instead of putting them off any longer.

The vote was good news, but this is only the beginning of the fight. WE ARE HOLDING THE LINE . . .

NO increase on the debt ceiling.

Unless you tell your Representative and Senators where you stand, they may be tempted to cut a deal which will raise the debt limit while making only symbolic and marginal spending cuts.

Both Democrats and Republicans need to learn from history, particularly the Democratic Truman Administration. That’s why I sent this letter to Congress, from which you may borrow or copy . . . Read More »

Fed Stimulus Leads to Stagflation

June 5th, 2011 4:14 pm  |  by  |  Published in Economics, Federal Reserve, government spending, inflation, Money  |  Comments Off

by John Browne, Senior Market Strategist at Euro Pacific Capital

Despite the full onslaught of Keynesian economic policies, including the injection of unheard of sums of printed money into the financial system, state sanctioned accounting tricks, negative real interest rates, massive deficit spending, and debasement of the U.S. dollar, the American economy is slipping back fast towards recession. This week’s release of dismal employment figures, in which the entire economy could only muster 54,000 new jobs, confirms that fact.

It is certainly reasonable to assume that more jobs would have been lost in 2008 and 2009 if the government had not steeped in as aggressively as they had with this Keynesian barrage. But if we had chosen the less interventionist path our present reality may have been quite different. We had the opportunity then to lay the ground work for a real recovery. This was a theme that I continually stressed at the time.  Instead, our leaders chose the time worn strategy of inflation as an economic cure all. It hasn’t worked, and our economy is far worse now as a result.

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The Ron Paul Oasis: Smell the Liberty!

June 4th, 2011 10:24 pm  |  by  |  Published in Activism, Constitution, Election, Free Market, Liberty, Maven Commentary, Ron Paul  |  7 Responses

Ron Paul is an oasis in a dry-mouthed desert of 2012 choices for president. No one can question his integrity or his principles without looking like a fool. Indeed anyone who tries ends up revealing more about themselves than Dr. Paul. What is it going to take for enough people to truly wake up and smell the liberty?

Between now and the primary season we need enough Republicans to have a eureka moment if they aren’t already on-board the Ron Paul liberty train. Enough Republicans need to vote for the only candidate who realizes that the Constitution is not just a banner to wave above your head during debates and media appearances. Ron Paul knows the Constitution has depth. He knows that it is meant to protect human liberty.

His effort is and always has been a tall task. He is ostracized by the “America F$%K YEAH!” neo-cons on foreign policy. He is ostracized by the “emo” liberals for championing the free market.

It is up to us supporters of liberty to do every single damn thing in our power to help Ron Paul make the ostracism irrelevant. It’s up to us to help Ron Paul win. If Ron Paul wins liberty wins. If Ron Paul wins the Constitution wins. If Ron Paul wins the individual wins. Yes, that means you win.

In 2012 the GOP primary campaign season is money bomb season with several money bombs for Ron Paul scheduled throughout the 2011-2012 time frame. The next one just happens to begin tonight at midnight. The June 5th money bomb also will include an all day radio show.

Please support the money bombs and give some of your earned treasure to support liberty through the candidacy of Ron Paul. Think of it as a down payment for all the taxes you’ll save once he wins.

June 5th Money Bomb Details

Listen to the radio show (Live: 9am – 12am) with many stellar guests all day long.

After the Dollar: What Comes Next?

June 2nd, 2011 4:17 am  |  by  |  Published in Big Government, Debt, Economics, inflation, Money, national debt  |  7 Responses

by Peter Schiff

My readers are familiar with my forecast that the US dollar is in terminal decline. America is tragically bankrupt, unable to pay its lenders without printing the dollars to do so, and enmeshed in an economic depression. The clock is ticking until the dollar faces a crisis of confidence like every other bubble before it. The key difference between this collapse and, say, the bursting of the housing bubble is that the US dollar is the backbone of the global economy. Its conflagration will leave a vacuum that needs to be filled.

Mainstream commentators often discuss three main contenders for the role: the euro, the yen, or China’s RMB (known colloquially as the “yuan”). These other currencies, however, each suffer from a critical flaw that makes them unready to carry the reserve currency role in time for the dollar’s collapse. When it comes to fiat alternatives, it appears the world would be going out of the frying pan and into the fire.

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Stimulus Wears Off

June 1st, 2011 10:36 pm  |  by  |  Published in Big Government, Economics, government spending, jobs, unemployment  |  Comments Off

by Michael Pento, Senior Economist at Euro Pacific Capital (

The artificially engineered U.S. recovery is already starting to falter as a continuous procession of disappointing data continues to confirm the sad truth. Recent numbers on GDP, durable goods, housing, regional manufacturing, initial unemployment claims and leading economic indicators all indicate a sharp slowdown in GDP growth. Just today the ADP Employment report showed that the private sector added a paltry 38,000 jobs in May, down from 177,000 jobs in April, significantly below expectations, and the weakest number since September 2010. Just yesterday Case Shiller announced that the U.S. housing market had officially achieved a “double dip,” in that national home prices have given up the entire 5% bounce that they had achieved after the May 2009 lows. These signs of continuing malaise comes at a time when the government is contemplating ways to dramatically cut spending. But given the economic weakness, is America really ready to accept the short term consequences that a government spending cut would cause?

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