Roosevelt understood that he must apply the full force of federal power to suppress the natural desire for gold in troubled times. The Emergency Banking Act, signed into law March 9, amended the Federal Reserve Act by adding a new subsection (n), which empowered the secretary of the Treasury to demand that all Americans surrender their gold and receive paper money. The following day, Roosevelt issued Executive Order 6073, which made it illegal for Americans to take gold out of the country.

In his first “fireside chat,” delivered on March 12, Roosevelt didn’t say a word about his backstage maneuvering to seize gold. He remarked that “hoarding during the past week has become an exceedingly unfashionable pastime.”

Less than a month later, on April 5, 1933, Roosevelt issued Executive Order 6012, which expropriated privately owned gold. He ordered Americans to surrender their gold to the government by May 1, 1933. Violators would be subject to a $10,000 fine or as many as 10 years in prison.

Read the article here.

One of the key ingredients in attaining some semblance of freedom is to become financially independent. A new book, “5 Steps To Freedom“, by Jeff Nabers and Phoebe Chongchua supplies us with some extremely effective tools to escape financial slavery. Take elements of Tom Wood’s “Meltdown“, Ron Paul’s “Manifesto“, and Peter Schiff’s “Crash Proof” all rolled into one and you come very close to describing “5 Steps To Freedom”.

The five high level steps are:

1. Measure
2. Move
3. Maintain
4. Multiply
5. Mention

The first portion of the book is an education on topics such as:

• How to evaluate your wealth by creating your own currency without using the fluctuating values of federal reserve notes as your only measure.
• Knowing what inflation is and how it affects your wealth.
• Why investing in precious metals like gold is a great way to help protect your existing wealth.
• How the government manipulates economic statistics to make us believe we are more prosperous than we really are.
• And much more.

The final part of the book gives us several case studies that demonstrate how we should think about investments. This portion is extremely useful because it shows how seemingly good investment ideas can end up being much more risky than you think. It’s an effective method to teach an investment mindset geared toward income rather than speculation-a running theme in the book.

The principles of freedom are apparent throughout the book. It becomes obvious, even before he is mentioned several times, that the authors are huge fans of Ron Paul. The book can be thought of as a no-nonsense guide to investing for libertarians and freedom-seeking individuals of all flavors.

The only negative regarding the book is that I found the transition between the first part and the case studies to be a bit like an infomercial, but once the case studies started that quickly disappeared. Jeff Nabers promotes the Solo 401K in the book, but he does so mostly by example and never tries to force it upon the reader. It is offered as a tool for those looking for an alternative, freedom-oriented investment direction.

The philosophy of liberty is an ongoing theme and applying that to investment decisions makes this book indispensable in today’s freedom-eroding world. I recommend it highly.

Purchase “5 Steps To Freedom” and be sure to visit the accompanying web site: 5StepsToFreedomBook.com for more information.  Your financial net worth will thank you later.

I apologize for the poor audio, but that’s how the stream came across.

by Jake Towne, the Champion of the Constitution
Originally published on Sunday, June 14, 2009 at http://www.nolanchart.com/article6535.html

“When gold speaks, all tongues are silent.” – Italian proverb

This article will briefly review the history and aftermath of the infamous London Gold Pool. For those unfamiliar with monetary history, let me quickly establish the events framing the London Gold Pool.

In 1933, the FED’s monetary inflation caused the Great Depression which was also America’s first bankruptcy. FDR plundered the American people’s gold and one month later outlawed the private possession of gold, an illegal act that existed until 1975. From 1933 onwards, America was on a “gold bullion standard.” A “gold bullion standard” exists when gold coins are not minted and owned by the people, but large international transactions with foreigners are handled in gold bar. However, the FED, America’s central bank, continued inflating the monetary supply which debases the currency and likewise increases the foreigner’s redemption of gold.  (emblem)

Following the chaos of World War II, the heads of the world’s 44 industrialized nations gathered in New Hampshire, and made the Bretton Woods agreement. The Bretton Woods agreement made the dollar the world’s reserve currency, and stipulated that all member nations’ reserves had to consist of either physical gold or currency convertible into into gold (domestically the private ownership of  “monetary” gold remained a felony until 1975). These member countries then had a “gold exchange standard” and manipulated their currencies on their national level, often trying to devalue their currencies at the same or slightly higher rates than what the dollar was being devalued, or inflated, at.

The Bretton Woods system began to break down very quickly. In the 1950s, the United States found itself having to redeem vast sums of gold. In the recession of 1958, the FED created $2.25 billion of excess credit, which was redeemed by foreign central banks. This annual loss of 2,000 metric tons of gold still remains the largest known loss of gold in one year by any nation in history – currently, on paper the United States is still the largest official owner of gold at about 8,100 metric tons categorized as “Custodial Deep Storage Gold.” (see note 1)

By 1971, President Nixon had declared America’s second bankruptcy.  The FED had inflated the money supply by too much to fund the Vietnam War and President Johnson’s “Great Society,” and America was no longer able to redeem foreign-held dollars into gold. The world entered the twilight zone of freely floating exchange rates. In between 1958 and 1971, the several governments and central banks fiendishly created the London Gold Pool to suppress the price of gold.

THE LONDON GOLD POOL

In October of 1960, gold trading on the London gold exchange reached $40/ounce, which was $5 higher then the central bank’s target price. Rampant speculation that a Kennedy presidency would lead to more inflation, along with the building of the Berlin Wall and the U-2 spy plane incident, triggered fears about economic stability.

To curtail these fears, President Kennedy pledged in February 1961 that America would maintain the official price to our foreign creditors, and the price of gold fell to $35/ounce. Fearing a relapse, the international bankers of the BIS and the FED-US Treasury secretly formed the London Gold Pool. Each member of the Pool would pledge some of their gold to keep the London market suppressed. The Bank of England would dump their gold on the London market whenever necessary, and at the end of each month the other members would reimburse the BoE in accordance with the percentage of the pool they owned. The members were:

• 50% – United States of America with $135 million, or 120 metric tons
• 11% – Germany with $30 million, or 27 metric tons
• 9% – England with $25 million, or 22 metric tons
• 9% – Italy with $25 million, or 22 metric tons
• 9% – France with $25 million, or 22 metric tons
• 4% – Switzerland with $10 million, or 9 metric tons
• 4% – Netherlands with $10 million, or 9 metric tons
• 4% – Belgium with $10 million, or 9 metric tons  (Photo)

By acting in secret, the governments hoped to stagnate the market and keep potential buyers away. In 1962, a series of events involving Soviet sales of gold led to a change in strategy by the Pool. They found themselves able to profit off the changes in gold supply, and at one time in 1965 the Pool even reached $1.5 billion, or a five-fold increase over the initial Pool gold. However, the Vietnam War expenses after 1965 combined with the French shipping its’ $3 billion in gold from the New York FED to Paris, and leaving the Pool in 1967 led to catastrophic losses.

The FED’s meeting minutes from December 12, 1967 reveal the full extent of the central bank’s panic. Here are several excerpts:

“The announcement on Thursday, December 7, of a $475 million drop [422 metric tons - auth] in the Treasury’s gold stock seemed to have been accepted by the markets as about in line with prior expectations of the costs of the gold rush following sterling’s devaluation. What the market did not know, of course, was that only a $250 million purchase of gold from the United Kingdom saved the United States from a still larger loss in the face of some foreign central bank buying… The logistical acrobatics of providing sufficient gold in London were performed with a minimum of mishaps, although the accounting niceties were still being ironed out.

“Of greater concern, however, was the fact that the drain on the pool was accelerating again… the measures taken by the Swiss commercial banks and by some other continental banks to impede private demand for gold worked quite well, although it was clear from the start that such measures could serve only as a stop-gap until some fundamental change was agreed upon. Persistent newspaper leaks–mainly from Paris–about current discussions on this subject and their reflection in gold market activity Monday and today pointed up the need for speed in reaching a decision. ” (3-4/107) (photo of then-FED Chairman William Martin)

On page 15/107, the group then discusses placing “restraints on access to the London gold market” and it was commented that Italy and Belgium were “not prepared to stay in the gold pool indefinitely if that would mean continued substantial gold losses.” The group did agree to then implement “some program of restraints on demand, particularly in the London market, should be worked out; in the meantime, all of the participating countries were willing to stay in the pool… In particular, the British were concerned that limitations on access to the London market, by diverting demand elsewhere, would work to the detriment of that market which for the past 13 years had been the world’s principal market for gold.”

These excerpts also serve to remind us all that the central banks love their hold on the money power. However, from some of their perspectives, they may well believe they are simply doing “what’s best,” blindly disregarding the fact that all of their interventions and controls are only made necessary from their prior meddling with the free market:

“Although the German case was the most striking example of central bank operations following the meeting in Frankfurt, the availability of forward cover into guilders and Belgian francs at reasonable rates had also helped to reassure the [gold] market.” (7/107)

“Under Secretary [of Treasury] Deming, who had led the U.S. delegation to Frankfurt, made the necessary arrangements, and the group met with him in Basle yesterday. Meanwhile, representatives of the countries in the gold pool met in Washington last week to make a preliminary review of possible additional measures to keep the gold market situation under control. Not unexpectedly, the gold pool also was the main topic of conversation at the regular Basle [Switzerland, the home of the BIS - auth.] meeting on Saturday and Sunday, and it was discussed in detail by the governors on Sunday evening.” (12-13/107) (see note 2)

On pages 13-14, the FED also mentions the “gold certificate plan” which I personally believe is a likely prototype for the emergency fall-back position of today’s gold cartel after the price of gold spikes on the modern futures market. A particularly damning passage concerning the erosion of America’s sovereignty from Congress to the unelected Treasury Department to the cabal of international bankers is here:

“Governmental structures differed among countries, and the United States was almost unique in assigning to the Treasury sole responsibility for external matters involving gold. In many countries the central banks had primary responsibility in that area, although they often were required to consult with their governments. Moreover, central bankers commonly felt that they had greater knowledge and understanding of the practicalities of gold markets than did officials of their governments. Accordingly, it was probably the view in most countries that a meeting of central bank governors was the most appropriate forum for discussions of the type in question. The governors recognized, of course, that in the United States the Treasury had central responsibility with respect to gold, and accordingly they were willing to meet with Mr. Deming yesterday.” [Deming, of course, was quite literally a FED stooge, just like today's Timothy "Turbo Tax" Geithner, see note 2]

Following these minutes, on Sunday, March 17, 1968, the London Gold Pool collapsed and the global gold markets were closed for several weeks. The central bankers then decreed a “two-tier” gold price for “monetary” gold at $35/oz. and “non-monetary” gold. This system remains in place to this day, although it is clearly just an accounting sham. (see notes 3 and 7)

THE AFTERMATH OF THE LONDON GOLD POOL

On Monday, March 18, 1968, Congress removed the 25% gold reserve backing requirement for Federal Reserve Notes. In April, despite further panicked attempts to suppress it, the gold price reached $44/oz. The price was then kept bottled up by actions by the Swiss, American, and English central banks, including massive gold sales from the Soviets to the Swiss and gold redemptions by America.

By 1971, more than half of the gold illegally stoled by FDR from the people had been delivered overseas, mostly winding up in the vaults of European central banks. On August 15, 1971, President Nixon was forced to declare national bankruptcy and closed the Gold Window. This meant foreigners could no longer redeem dollars for gold.

The world’s central bankers and governments rushed to Washington, D.C. and made the Smithsonian Agreement, where, against all reason, all parties agreed to go on pretending as if the gold window had never been closed and merely set new fixed exchange rates. Finally, with the gold price at $90 and the turmoil resulting from the debasement of the dollar leading to a major recession, the system of fixed exchange rates completely collapsed, marking the final nail in the coffin of the Bretton Woods monetary system. From this point onward, all currencies “floated” against each other, opening wide the door to non-stop currency debasement, inflation, and FOREX market speculation. (note 4)

In 1974, New York’s COMEX futures market was opened to gold trading, paving the way to the “paper gold” derivatives and ETF’s of our modern day. In December 2008, the nominal value of all gold derivative contracts was $395 billion USD, or roughly equivalent to 15,000 metric tons of gold. In 2007, the last reported year, the LBMA, or the London gold market, exchanged over $20 Trillion USD in gold – the 2008-9 annual market turnover will likely dwarf this.

My message is a third American, possibly global, possibly even final, bankruptcy is imminent in the coming years as I first clearly denoted in this series. Similar to the closing of the gold window in 1971 being preceded by the demise of the London Gold Pool, this bankruptcy has been preceded by former Treasury Secretary and current Director of the National Economic Council Larry Summer’s gold price suppression plan enacted in the 1990s. (photo) (see note 5 and 6)

The “Summers Suppression Plan” has been bolder, more clever and more clandestine than the London Gold Pool, but may well be on its last legs. Though they may wear Brooks Brother suits and meet in corporate boardrooms and the highest political offices in the land, those who suppress gold are no different than mafia thugs in suits. For in doing so, they also suppress the free market and the prosperity it could deliver if the “money power” once more resides with We the People. More on Summers Suppression Plan in the upcoming parts of the Money Matrix series.

In the meantime, please mark my words. When gold speaks again, the Summers Suppression Plan will be no more.  As sure as night follows day, its fate is the same as that of the London Gold Pool.

Jake Towne is running for U.S. Congress in Pennsylvania’s 15th District in the 2010 election as a citizen unaffiliated with any political parties.  Jake also writes at www.LibertyMaven.com and www.CampaignForLiberty.com.  A master campaign presentation for internet viewing is available. [Reach the Author Here!]

For further reading on this subject, please see:

Lips, Ferdinand. 2001.  Gold Wars.  New York: The Foundation for the Advancement of Monetary Education.  Amazing perspective on gold from an ex-Rothschild banker.  The main source for the above information on the London Gold Pool.

Powell, Chris. “There Are No Markets Anymore; Just Interventions.” (2008) Article focused on the modern suppression of the gold market.

Gold Anti-Trust Action Committee. 2008. “A New Summary of GATA’s Work.”

Note 1 – The suspicious re-categorization of America’s gold hoard as “Custodial Gold,” then “Custodial Deep Storage Gold” is a critical topic in its own right and has been left unchallenged save for the efforts of a valiant few, Reginald Howe and the Gold Anti-Trust Action Committee (GATA). See  the US Mint’s 2008 gold audit, “Howe vs. BIS” and “The “Smoking Gun”” for more details.

Note 2 – Of course, Treasury Under-Secretary Frederick Deming was handpicked by the FED, which is similar to having NY FED President Timothy Geithner become Treasury Secretary.  In this “Memorandum for the President” from FED Chairman William Martin in 1964, Martin recommended Deming be named as a Federal Reserve Governor, but was instead assigned to the critical “gold” position in the Treasury in 1965.

Note 3 – The FED’s reported “gold stock” of 261 million ounces is currently listed as an asset of $11 billion USD, or $42.22/oz. At current market prices, this gold would be valued at nearly $250 billion.

Note 4 – Even though the government paper of today’s fiat currencies are completely unchecked by the discipline of gold, the below quote is from the same above FED meeting minutes. Back then central bankers at least attempted to not drink from the same punch bowl they served the financial markets:

“The excessive demands for goods and services and the accompanying rise in interest rates were, once again, beginning to curtail the availability of funds for mortgage financing. The longer the excessive demands persisted, the more certain it was that a serious “credit crunch” would come. Temporarily pacifying the financial markets by rapid injections of bank reserves, bank credit, and money was no real solution. Continued provision of bank reserves at the recent rapid pace only reinforced the excessive spending and market expectations and induced even more urgent demands for credit.

“Unfortunately… vigorous fiscal action to help reduce total spending, huge credit demands, high interest rates, and inflationary pressures had not been forthcoming. Economic stabilization depended on avoiding further excessive monetary expansion. Both domestic needs and the international balance of payments position of the United States called for the same policy prescriptions. Restraint on total spending was essential to relieve financial market pressures, to foster sound economic growth, and to protect the strength of the dollar at home and abroad. Moderate monetary restraint could contribute to achievement of balanced economic expansion.” (54/107)

Note 5 – In his paper “Gibson’s Paradox and the Gold Standard” from 1988, Summers realized that when real interest rates are positive, the price of gold declines as people prefer the government’s paper currencies.  The converse is also true – when real interest rates are negative, the price of gold increases.  Therefore, when the government embarked on a lengthy period of negative interest rates, they were aware that the price of gold must be suppressed.  This isn’t exactly the work of a genius, but Summers is no dummy either.

Note 6 – In the interests of fairness, Summers claims in his June 12 address to the CFR (Council on Foreign Relations) that “we only act when necessary to avert unacceptable — and in some cases dire — outcomes… Our objective is not to supplant or replace markets.  Rather, the objective is to save them from their own excesses and improve our market-based system going forward.” in relation to his actions for the Obama administration.

Note 7 - In the March 14, 1968 FED minutes (page 3/28) “the international financial system was moving toward a crisis more dangerous than any since 1931. The hurricane of speculation that had occurred on the gold market was likely to be succeeded by a similar hurricane on the exchange markets.”  The FED then made plans to increase swap lines and ‘inject liquidity’ – or print money and extend massive amounts of credit – to continue the scheme.

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Summary of Articles and Bibliography for Jake Towne, the Champion of the Constitution (6/8/2009)

Instead of answering the question directly the author analyzes the behavior of gold during times of inflation. The conclusion is that gold (at times) goes down during inflationary events:

Zoom out and the big picture gets even more interesting: The March 20, 2009 high in gold is below the February 20 high, which itself was well beneath the March 2008 all-time peak. Since then, the Fed’s campaign to breathe new life into the economy via cash infusions and credit creation has been tireless. (Last estimate: $12.8 trillion.)

In the end, the evidence speaks for itself. Gold has not fulfilled its promise as hedge against “inflation,” or an economic safe-haven. This scenario, while shocking to the bevy of gold bugs who swarmed around the metal at the onset of the Fed’s bailout binge — is no surprise to EWI subscribers.

While the stats given do not lie, I take issue with the general claim that “Gold has not fulfilled its promise as hedge[sic] against inflation or an economic safe-haven“. The author makes the mistake of assuming that “trading” in gold is the same as accumulating gold for wealth preservation. Sure, if the value of gold goes down it is worth less and those who are trying to trade gold for profit are going to be hurt. But those of us accumulating gold will just purchase more.

Why? The simple answer is, because gold always has value. It certainly has fluctuations in value, but it has always had value and it will likely always have value. No one can make that claim about fiat currencies with a straight face.

Perhaps an extreme hypothetical scenario is in order to answer the EWI article’s question effectively. Let’s say it’s 1997, you live in Zimbabwe, you have a bank account with Z$100,000,000  in it, and a safe with one ounce of gold in it. Your Z$100,000,000 would be totally worthless today. Your one ounce of gold would be worth around US$900.  Now US$900 may not seem like much, but what if we compare apples to apples and convert that to Z$  (as of 4/4/2009) using this conversion calculator:

US$900 = Z$33,711,099,300

I think that speaks for itself. Sure, these days 33+ billion Z$ are completely worthless, but 900 US$ are not.

The conclusion is that gold does protect wealth. It not only protects wealth but enhances wealth because it allows for flexibility. It may not always be worth US$900 but it will always be worth something. There may be better trading/investment options at any given time, but accumulating and holding gold in a portion of an investment portfolio is an insurance policy for wealth no matter what happens with inflation.

Making the decision to hoard gold for wealth preservation is akin to choosing what to do on 4th down while on your side of the field in football. Punting is hoarding gold to fight another day. “Going for it” is trading gold like a stock against all the odds. If you know football then you already know what choice the best coaches make. It is truly the difference between winning a little or losing it all.

I choose to punt. What do you choose?

(Check out The Great Credit Contraction Book for more information about our monetary system and wealth preservation. It is an excellent read. See our review here. A portion of sales go into supporting this site.)

by Jake, the Champion of the Constitution
Originally published on Sunday, March 29, 2009 at http://www.nolanchart.com/article6226.html

This article and charts is an update to an earlier article “18 Days and Counting – Silver Backwardation Persists in the London Market Place“. In “Silver and Gold ARE Money (PART 1/2)“, I charged that both silver and gold are money and shared information on the very important concept of gold’s “stocks-to-flow” ratio and the size of the LBMA markets for both metals.

[In case you do not yet understand futures markets, "backwardation" means that silver to be delivered today is now being priced higher than metal to be delivered later. This article refers to the LBMA, or London Bullion Market Association's futures market in London, England. For more details on backwardation, please refer to my five-part December series which starts here "The End for the Dollar and all Fiat Currencies (1/5)". Contango is the opposite of backwardation and exists when futures price is higher than the spot price as I explained for those new to futures terminology here "The Money Matrix - What the Heck Are Derivatives? (PART 10/15)". [As you read, please also note that I am NOT a commodities trader, I am just an engineer by trade, so feel free to help me out with my analysis or mistakes.] ( Photo) (2)

As we learned in “The Significance of Gold Backwardation Explained (4/5)“, backwardation is a sign of a very tight market, and a market that will be tight for sometime into the future either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties that the short positions can deliver the goods on time per the contract, or vice versa that the long positions will not have the cash.

Please refer to the below graphs of LBMA’s silver mid rate, which is the midway point between the bid and offer prices. Here is what I note:

• Silver was in backwardation for the 47 trading days since January 21. On March 27, silver finally dipped out of backwardation.
• Most of this backwardation period was about three times more severe than the mild backwardation than existed from December 8 through December 24 in 2008.
• Although this backwardation was very long – most likely the longest in LBMA history – it was relatively mild. The 1-month contract was the most severe, but its average level of backwardation was only -0.20%, or about $3 USD per 1000 oz bar.
• Also, the disparity between the rates seen in 2006-2007 has largely disappeared; the market appears to be treating a trade on silver 12 months later as quite similar to a trade on silver 1 month later.

[All graphs in this article were created by me from this LBMA source and this US Mint source and my file is available by request.]

Let’s now also look at the LBMA Silver Fix price history for a 1000 troy ounce bar. Despite all of the tightness in the market as demonstrated by the SIFO chart, the Dollar price of silver is still well below the average price for 2006-2008, while the Pound is nearing a new high due to the FOREX market. The Pound price reached £995 within 5% of its March 2008 high. The current dollar price of $13.22/oz. is 37% below its $20.92/oz. high. From the chart, I speculate the Pound price may have been surreptitiously “capped” at £1000, or perhaps is a psychological barrier, similar to gold’s three recent tries at $1000/oz.

Let’s now take a quicker look at gold traded at LBMA. The GOFO, or Gold Forward Offered Rate, represents the rates at which dealers will lend gold on a swap basis against US dollars. From the below charts, I note:

• Recently, gold has only gone into minor backwardation once, in November 2008, for 3 days.
• As GOFO started its plummet in roughly September 2007, the prices began to diverge, and currently the 1-month GOFO rate is lower than the 12-month rate.
• The buckling of the British pound can be easily seen. The British pound set an all-time high of £690 per ounce of gold on February 23, 2009.
• The Euro set an all-time high of 782 Euros per ounce of gold on February 23, 2009 as well.
• Gold priced in Dollars is 10% below its 2008 high of $1,023, as of March 27.

It is simply too early to tell if we have seen the “Last Contango,” but as Dr. Fekete notes in “The Last Contango in Washington” (2006) and “Keeping Our Eyes Peeled for the Silver and Gold Basis” (2007), the consequences could be very stark for the dollar and hence all fiat currencies.

Now, of course, there are many other factors as silver guru Theodore Butler points out in “Tightening Production“. Industrial demand has been slammed by the economic fallout. However, since about 70% of all silver is typically mined as a by-product with other base metals like zinc, the supply is also greatly affected by the market conditions of zinc, copper, lead, and nickel. While the backlog in demand has greatly increased the inventories of these base metals causing a drop in their prices the inventory of silver is growing smaller while the price has increased over the past three months from $10 to $13/oz. Butler also relates that many of the base metal mines have been closing due since they are no longer profitable. At the same time, Butler reports that the American COMEX silver futures market is under investigation by the CFTC (Commodities and Futures Trading Commission) for market manipulation and price suppression. It is also possible the London market backwardation is temporary due to the severe loss of purchasing power (relative to others) of the British pound.

[For the Reader, NYMEX Gold Session Futures chart, Silver Session Futures chart. Gold spot price chart. Silver spot price chart. When the spot price is greater than the futures price, backwardation exists.]

There is some debate about whether backwardation is bullish for gold and silver. Due to the aboveground stocks-to-flow ratio of 60 years stock to 1 year of mine production, I maintain that LBMA backwardation in gold in is not only a bullish signal, but, more importantly it is blaring siren signaling trust in the Dollar is being lost. Since the aboveground stocks-to-flow ratio of silver (1.5) is more typical of other commodities and industrial metals, LBMA silver backwardation is also bullish, for the commodity but may not be as relevant to the Dollar unless the reasons for the backwardation are clearly understood. Up to roughly 12%, or 81 million troy ounces of silver are currented effected by strikes or slowdowns at Penoles, Hochschild’s, and Doe Run. As an amateur, I do not claim to know to what degree each of the aforementioned three possible causes (tight current supply, tight future supply, or counterparty distrust) effected the backwardation although the Pound’s recent relative devaluation and possible “capping” at £1000.  My educated guess is tight future supply combined with FOREX declines are the dominant factors, but I please remember I also subscribe to the price suppression theories of GATA and Ted Butler.  However we can look at what happened to the price of silver and gold during each of the three backwardation periods from 2006-2009 and we can see that backwardation has caused significant increases each time.

In addition to the annual supply-demand figures put together by the World Gold Council and the Silver Institute, another interesting item is US Mint-issued gold and silver bullion sales. As can be seen by the below, the 2008 gold demand quadrupled from its 2007 level, while silver demand doubled. In 2009 YTD, gold is on track to beat the 2008 mark, and silver demand is on track for roughly 24 million ounces, which would shatter its 2008 record level.

The inventory of SLV has leapt from 218 million ounces since January 1st, and reached 267 million ounces on March 26. This exceeds the limit of 264 Moz that the trust had set for the custodian, JP MorganChase (one of the “Pirates of the COMEX” as GATA’s Adrian Douglas recently wrote about here). In the new prospectus (pg 8/44), the text reads:

The custodian has no obligation to accept any additional delivery on behalf of the trust if, after giving effect to such delivery, the total amount of the trust’s silver held by the custodian exceeds 264,550,265 troy ounces. If this limit is exceeded, it is anticipated that the trustee, with the consent of the sponsor, will retain an additional custodian… As a result, the new agreement may differ from the current one with JPMorgan Chase Bank N.A., London branch, with respect to issues like duration, fees, maximum amount of silver that the additional custodian will hold on behalf of the trust, scope of the additional custodian’s liability and the additional custodian’s standard of care.

I have not been able to find out who SLV has named as the new custodian.  My flat-out guess is the new custodian will be HSBC since as Douglas highlights, they are the other big player in the paper gold and silver market.

For many reasons, I view SLV and GLD with distrust.  The Central Fund of Canada (third-party storage of gold and silver, CEF) and Central Gold-Trust (GTU, gold bullion only) are two ETF’s you could also check out, as well as goldmoney.com and bullionvault.com.  GTU and CEF currently traded at significant premiums compared to the spot price of the amount of bullion they store.  Physical metal can even be placed into an IRA and stored by a third party. All I can say on any of these options is to be VERY careful, there is no simply substitute for physical gold and silver in hand or even stored at a Brinks-type depository or safety deposit box. I view all of the above as simply ways to diversify storage.

As far as the immediate future, in manipulated markets it is impossible to tell.  Long-term, it is my belief the current fiat monetary system will fail, and this depression will likely not end until this occurs. Antal Fekete recently warned the quantitative easing phase of this Gold War could take quite a long time, but please prepare yourself and your family.

Let me close with a quote from Thomas Paine’s “Dissertations on Government.”

“When an assembly undertakes to issue paper as money, the whole system of safety and certainty is overturned, and property set afloat. Paper notes given and taken between individuals as a promise of payment is one thing, but paper issued by an assembly as money is another thing. It is like putting an apparition in the place of a man; it vanishes with looking at it, and nothing remains but the air.”

For the Republic,

Jake Towne, the Champion of the Constitution

[Reach the Author Here!] www.CampaignForLiberty.com (Banner courtesy Mike Burke)

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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.

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Summary of Articles and Bibliography for Jake, the Champion of the Constitution (2/1/2009)

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. These articles reflect the my opinion and are by no means a guarantee of future economic conditions. My articles are provided for INFORMATIONAL PURPOSES ONLY and are actually NOT MEANT to provide investment advice to anyone. You can even say its a charitable but naive act, given the historical tendency of the US government to oppress and steal.

by Jake, the Champion of the Constitution
Originally published on Sunday, March 29, 2009 at http://www.nolanchart.com/article6228.html

While gold trades as a currency (or “medium of exchange”) and also is a “store of value,” and even a “unit of account” for some, and very little is actually consumed. Economically speaking, gold trades even in the modern world as money. Gold is a luxury good with insignificant industrial usage. Its major market as a luxury good is Indian women’s jewelry, but to these women gold is their money or insurance if their mate leaves, dies, or is disabled so the metal is not consumed – it can be easily recovered. ( Photo) (2)

To make my case that gold is money, what seems to be little known is that the gold market is also quite large – the LBMA in 2008 traded about $80 billion USD per trading DAY per the data collected by the IFSL 2009 Bullion Markets Report p3/8 – which I took the time to verify to be correct from its original sources – or $20.3 Trillion in turnover in 2008 and 254 LBMA trading days. However, the IFSL makes a significant note that this volume is quite likely three-to-five times larger since much of the transactions are increasingly netted out and cleared without appearing in the statistics. Please compare this to the 2008 GDP of the United States at $15 Trillion and understand the rough estimate that 75% of the world’s trade in gold (and half of the world’s silver) is traded via the LBMA.

Silver, on the other hand, serves as both an industrial metal and a “store of value” for silver investors. As we learned here, both silver and gold are precious metals since there is very little aboveground stock. All of the gold stock in the world would fit into a cube 20.5 meters to a side. Due to high amounts of industrial usage, the silver stock is even smaller, less than 14.5 meters to a side.

However, as seen below, the silver market size at $10 billion is minuscule – just a tiny fraction of a percent – compared to the gold market. What is really mind-blowing is that the LBMA traded the entire annual mine production of silver every 6 days, while the annual mine production of gold was traded every 4-5 days, despite the fact that silver is priced as if it were a commodity similar to wheat, corn, or copper. You see, the aboveground stock of gold valued at about $4100 billion is equivalent to roughly 5.2 billion troy ounces of gold, but the annual mine production is only 0.087 billion. The aboveground stock of silver valued at $10 billion is estimated at roughly 1.0 billion troy ounces of silver and the annual mine production of silver is about 0.671 billion. (IFSL report, pages 5-8/8)

So the annual “stocks-to-flow” ratio of gold is 60, meaning that there is the equivalent of ~60 years of production aboveground for every year of production. In contrast, for silver the ratio is about 1.5, which is much closer to typical commodities which all lie around one year of production in aboveground stocks for every year of production. Gold is not just another commodity; mankind will never achieve perfection in all things, but nature’s “metal of the sun” is as close to perfect money as mankind is going to get. Modern-day gold mines are lucky to exceed 1 gram of gold from each metric ton (24,250 pounds) ground and processed. If you never have, try holding a one troy ounce (31.1 gram) gold coin in your hand. It’s 2.5 times denser than steel and took a lot of effort and risk to mine.

So, the equivalent of the entire aboveground stock of gold is exchanged every 269 trading days while the equivalent of the entire aboveground stock of silver is exchanged every 9 trading days at the LBMA.

I interpret the all of the preceding information to mean that gold has never stopped being used as both a money and a currency, even in the last 38 years of floating fiat exchange rates. Silver is money as well, but is not traded in high enough volumes, in dollar terms since the price per ounce is too low, to be considered a currency. Jason Hommel reinforces my point in his recent speech “Why Silver is Money.”

Folks, this “stocks-to-flow” fact is well understood, but remains unstated, by the financial elite, most notably Obama’s chief economic advisor, Lawrence Summers. If the world population widely understands the above and begin to both acquire the physical metal and clamor for the restoration of gold and silver as honest money, governments and central bankers could very well lose what is amounting to a stranglehold over the global economy. The world would realize that central banks are not needed whatsoever.

“Financial crisis”? Screw that, this is an all-out Gold War. Go GATA!!

For the Republic,

Jake Towne, the Champion of the Constitution

Per the Constitution of the United States, Congress and all states are forbidden to “make any Thing but gold and silver Coin a Tender in Payment of Debts.”

Part 2 will be finished shortly on silver backwardation and yet another new concern on the ETF SLV.

PS I realize I have a strong stance on the subject but please offer any rebuttals or feel free to ask any questions. I suppose another conclusion is that since gold trades around a quarter-quadrillion dollars every day, if you have saved money, depending on your circumstances it may be extremely foolish to not at least have some gold.

[Reach the Author Here!] www.CampaignForLiberty.com www.EndTheFED.us (Below is mine, photos linked above, graphs created by me from the same data the IFSL used.  Feel free to use the below anywhere to promote Honest Money!)

___________________________________________________________________________

Nolan Chart Facebook Group Page Created

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

___________________________________________________________________________

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.

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. These articles reflect the my opinion and are by no means a guarantee of future economic conditions. My articles are provided for INFORMATIONAL PURPOSES ONLY and are actually NOT MEANT to provide investment advice to anyone. You can even say its a charitable but naive act, given the historical tendency of the US government to oppress and steal.

by Jake, the Champion of the Constitution

Originally published Saturday, February 14, 2009 at http://www.nolanchart.com/article5998.html

This article and charts is an update to an earlier article “Silver in Backwardation! Has the Last Contango Been Danced in Washington?“. The new text starts after the fourth paragraph.

[In case you do not yet understand futures markets, "backwardation" means that silver to be delivered today is now being priced higher than metal to be delivered later. This article refers to the LBMA, or London Bullion Market Association's futures market in London, England. For more details on backwardation, please refer to my five-part December series which starts here "The End for the Dollar and all Fiat Currencies (1/5)". Contango is the opposite of backwardation and exists when futures price is higher than the spot price as I explained for those new to futures terminology here "The Money Matrix - What the Heck Are Derivatives? (PART 10/15)". [As you read, please also note that I am NOT a commodities trader, I am just an engineer by trade, so feel free to help me out with my analysis or mistakes.] ( Photo) (2)

As we learned in “The Significance of Gold Backwardation Explained (4/5)“, backwardation is a sign of a very tight market, and a market that will be tight for sometime into the future either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties that the short positions can deliver the goods on time per the contract, or vice-versa that the long positions will not have the cash.

While gold traded as a “store of value” (a currency, really), very little is actually consumed. Silver, on the other hand, serves as both an industrial metal and a “store of value” for silver investors. As we learned here, both silver and gold are precious metals since there is very little aboveground stock. All of the gold stock in the world would fit into a cube 20.5 meters to a side. Due to high amounts of industrial usage, the silver stock is even smaller, less than 14.5 meters to a side.]

Please refer to the below graphs of LBMA’s silver mid rate, which is the midway point between the bid and offer prices. Here is what I note:

• Silver has been in backwardation for the 18 trading days since January 21. The mid-rate for the longest contracts is now slightly positive.
• This backwardation is about three times more severe than the mild backwardation than existed from December 8 through December 24 in 2008.
• We can see that since 2006-2007 where rates were about 4-5%, this state of backwardation is fairly unusual. (The LBMA only lists data back to 2006, but I believe it is a fair comment to say that on an even longer timeline, this is unusual.)
• Furthermore, starting in roughly June 2008, the 12-month SIFO rate flipped over from being the lowest rate to, in general, the highest.
• Also, the disparity between the rates seen in 2006-2007 has largely disappeared; the market appears to be treating a trade on silver 12 months later as quite similar to a trade on silver 1 month later.

[All graphs in this article were created by me from this LBMA source and this US Mint source and my file is available by request.]

Let’s now also look at the LBMA Silver Fix price history for a 1000 troy ounce bar. Despite all of the tightness in the market as demonstrated by the SIFO chart, the Dollar price of silver is still well below the average price for 2006-2008, while Euro/Pound are nearing new highs due to FOREX market. During this latest backwardation, the Euro price is within 12% of its March 2008 high, while the Pound is within 23%. However, the dollar price of $13.37/oz. is 36% below its $20.92/oz. high.

It is simply too early to tell if we have seen the “Last Contango,” but as Dr. Fekete notes in “The Last Contango in Washington” (2006) and “Keeping Our Eyes Peeled for the Silver and Gold Basis” (2007), the consequences could be very stark for the dollar and hence all fiat currencies.

Now, of course, there are many other factors as silver guru Theodore Butler points out in “Tightening Production“. Industrial demand has been slammed by the economic fallout. However, since about 70% of all silver is typically mined as a by-product with other base metals like zinc, the supply is also greatly affected by the market conditions of zinc, copper, lead, and nickel. While the backlog in demand has greatly increased the inventories of these base metals causing a drop in their prices the inventory of silver is growing smaller while the price has increased over the past three months from $10 to $13/oz. Butler also relates that many of the base metal mines have been closing due since they are no longer profitable. At the same time, Butler reports that the American COMEX silver futures market is under investigation by the CFTC (Commodities and Futures Trading Commission) for market manipulation and price suppression. It is also possible the London market backwardation is temporary due to the severe loss of purchasing power (relative to others) of the British pound.

[For the Reader, NYMEX Gold Session Futures chart, Silver Session Futures chart. Gold spot price chart. Silver spot price chart. When the spot price is greater than the futures price, backwardation exists.]

Let’s now take a quicker look at gold traded at LBMA. The GOFO, or Gold Forward Offered Rate, represents the rates at which dealers will lend gold on a swap basis against US dollars. From the below charts, I note:

• Recently, gold has only gone into minor backwardation once, in November 2008, for 3 days.
• As GOFO started its plummet in roughly September 2007, the prices began to diverge, and currently the 1-month GOFO rate is lower than the 12-month rate.
• The buckling of the British pound can be easily seen. The British pound set an all-time high of 666 pounds per ounce of gold this week on February 12, 2009.
• The Euro set an all-time high of 740 Euros per ounce of gold on February 12, 2009 as well.
• Gold priced in Dollars is still 8% below its 2008 high of $1,023, as of February 13.

There is some debate about whether backwardation is bullish for gold and silver. Due to the aboveground stocks-to-flow ratio, I maintain that LBMA backwardation in gold in is not only a bullish signal, but, more importantly it is blaring siren signaling trust in the Dollar is being lost. Since the aboveground stocks-to-flow ratio of silver is more typical of other commodities and industrial metals, LBMA silver backwardation is also bullish, for the commodity but may not be as relevant to the Dollar unless the reasons for the backwardation are clearly understood. As an amateur, I do not know the root cause of the backwardation although I listed three possible causes earlier, plus the Pound’s recent relative devaluation. However we can look at what happened to the price of silver and gold during each of the three backwardation periods from 2006-2009.

In addition to the annual supply-demand figures put together by the World Gold Council and the Silver Institute, another interesting item is US Mint-issued gold and silver bullion sales. As can be seen by the below, the gold demand quadrupled from its 2007 level, and silver demand doubled. Adam Hamilton wrote an interesting article recently here.

Another sign of investor demand is the GLD and SLV ETF’s, which are probably fraudulent paper derivative scams as both James Turk and Jim Sinclair claim. The “inventory” of GLD has skyrocketed 205 tonnes to 985 tonnes since 2008 ended, which is within striking distance of the central bank reserves of Switzerland, the planet’s #6 holder of gold. The “inventory” of SLV has leapt from 218 million ounces to 244 million ounces since January 1. In several weeks SLV will likely hit its allotted maximum of 264 Moz per page 8/48 of the prospectus. Not sure what happens after that, but if there are any SLV experts out there, please assist!  I’ve also noted some erratic behavior with the ETFs while LBMA is in backwardation, but I profess I do not have the expertise to dissect it further.

From the latest COT report, non-Gold Cartel traders should be wary of another initial pullback-breakout-retest-blastoff in the COMEX market which is how gold historically trades, as shown by Jordan Roy-Bryne. Others (like myself) of humbler means who do not like to play with the fire of the “Gods of the Market Place” should be quite content with holding the mythological metals of the sun and moon in the palms of our hands. For did Rudyard Kipling not warn:

“As I pass through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all…

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: “If you don’t work you die.”

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!”

Fortune favors the brave. GO GATA!

Jake, the Champion of the Constitution

[Reach the Author Here!] www.CampaignForLiberty.com www.EndTheFED.us (Below is mine courtesy me, photos linked above, feel free to use anywhere to promote Honest Money!)

___________________________________________________________________________

Nolan Chart Facebook Group Page Created

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

___________________________________________________________________________

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.

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!]

___________________________________________________________________________

Other Related Articles by the Author

Silver in Backwardation! Has the Last Contango Been Danced in Washington?

The Money Matrix – Who Owns the FED (PART 7/15)

The Year of the Ox Arrives in China, Land of “Currency Manipulation” (PART 1/2)

GATA’s Message on Gold and Silver Manipulation to Barack Obama (PART 2/2)

Rioting at the Gates of Thermopylae: The Ramparts of the FED & Central Banks Shudder

• The “Great Slump” of 2008 (PART 1/2)
• Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)

___________________________________________________________

Gold and Silver Investigation Source List

The People’s Money – a Facebook group that I assist with news postings.

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.  25 minute intro Part (1) (2) (3)

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 six major fiat currencies, issue payments in goldgrams, silver ounces, 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.

by Jake, the Champion of the Constitution
Originally published Friday, January 30, 2009 at http://www.nolanchart.com/article5916.html

[In case you do not yet understand futures markets, "backwardation" means that silver to be delivered today is now being priced higher than metal to be delivered later in the London Bullion Market Association's futures market in London, England. For more details on backwardation, please refer to my five-part December series which starts here "The End for the Dollar and all Fiat Currencies (1/5)". Contango is the opposite of backwardation and exists when futures price is higher than the spot price as I explained for those new to futures terminology here "The Money Matrix - What the Heck Are Derivatives? (PART 10/15)". [As you read, please also note that I am NOT a commodities trader, I am just an engineer by trade, so feel free to help me out with my analysis or mistakes.]  ( Photo) (2)

As we learned in “The Significance of Gold Backwardation Explained (4/5)“, backwardation is a sign of a very tight market, and a market that will be tight for sometime into the future either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties that the short positions can deliver the goods on time per the contract, or vice versa that the long positions will not have the cash.]

While gold traded as a “store of value” (a currency, really), very little is actually consumed. Silver, on the other hand, serves as both an industrial metal and a “store of value” for silver investors. As we learned here, both silver and gold are precious metals since there is very little aboveground stock. All of the gold stock in the world would fit into a cube 20.5 meters to a side. Due to high amounts of industrial usage, the silver stock is even smaller, less than 14.5 meters to a side.

Please refer to the below graphs of LBMA’s silver mid rate, which is the midway point between the bid and offer prices. Here is what I note:

• Silver for all traded futures contracts (whether 1 month or 12 months) have been in backwardation for seven trading days since January 21.
• This backwardation is about three times more severe than the mild backwardation than existed from December 8 through December 24 in 2008.
• We can see that since 2006-2007 where rates were about 4-5%, this state of backwardation is fairly unusual. (The LBMA only lists data back to 2006, but I believe it is a fair comment to say that on an even longer timeline, this is unusual.)
• Furthermore, starting in roughly June 2008, the 12-month SIFO rate flipped over from being the lowest rate to, in general, the highest.
• Also, the disparity between the rates seen in 2006-2007 has largely disappeared; the market appears to be treating a trade on silver 12 months later as quite similar to a trade on silver 1 month later.

[All graphs in this article were created by me from this LBMA source. I'd be happy to provide my MSExcel file by email if you wish.]

Let’s now also look at the LBMA Silver Fix price history for a 1000 troy ounce bar. While at the end of the graph, the loss of purchasing power relative to the Euro and Dollar by the British Pound can easily be seen, I remark that despite all of the tightness in the market as demonstrated by the SIFO chart, the price of silver is still well below the average price for 2006-2008.

It is simply too early to tell if we have seen the “Last Contango,” but as Dr. Fekete notes in “The Last Contango in Washington” (2006) and “Keeping Our Eyes Peeled for the Silver and Gold Basis” (2007), the consequences could be very stark for the dollar and hence all fiat currencies.

Now, of course, there are many other factors as silver guru Theodore Butler points out in “Tightening Production“. Industrial demand has been slammed by the economic fallout. However, since about 70% of all silver is typically mined as a by-product with other base metals like zinc, the supply is also greatly affected by the market conditions of zinc, copper, lead, and nickel. While the backlog in demand has greatly increased the inventories of these base metals causing a drop in their prices the inventory of silver is growing smaller while the price has increased over the past three months from $10 to $12/oz. Butler also relates that many of the base metal mines have been closing due since they are no longer profitable. At the same time, Butler reports that the American COMEX silver futures market is under investigation by the CFTC (Commodities and Futures Trading Commission) for market manipulation and price suppression.

[For the Reader, NYMEX Gold Session Futures chart, Silver Session Futures chart. Gold spot price chart. Silver spot price chart. When the spot price is greater than the futures price, backwardation exists.]

Let’s now take a quicker look at gold traded at LBMA. The GOFO, or Gold Forward Offered Rate, represents the rates at which dealers will lend gold on a swap basis against US dollars.  From the below charts, I note:

• Gold has only gone into minor backwardation once, in November 2008, for 3 days.
• As GOFO started its plummet in roughly September 2007, the prices began to diverge, and currently the 1-month GOFO rate is lower than the 12-month rate.
• Again, the buckling of the British pound can be easily seen.
• The British pound set an all-time high of 656 pounds per ounce of gold this week on January 26, 2009.
• The Euro set an all-time high of just under 700 Euros per ounce of gold this week on January 26, 2009.
• The Dollar is still 14% below its 2008 high of $1,023, as of January 29.

The reader should be aware I highlighted in my last article “GATA’s Message on Gold and Silver Manipulation to Barack Obama (PART 2/2)” and support the group known as GATA in their battle to bring about an end to the suppression that I perceive exists from the evidence GATA has gathered. As the GOFO rate is just barely positive (+0.2%) as I write, I warn you of what will happen if gold lapses into permanent backwardation. Or rather, I will let James Turk of goldmoney.com warn you:

“If gold does trade in backwardation against US dollar for a protracted period…, it will mean that a collapse of the dollar has begun. Think about it. How could gold go into backwardation for any prolonged period? If it does, it would mean that no one is willing to take the risk of selling their hoard and instead hold US dollars. It would mean that no one is willing to accept the risks that come with holding dollars while waiting until they can be used at a future date to exchange back into gold.”

Got silver? Got gold? To those I believe who are suppressing free market of these two monetary metals, my message is from this Offspring video full of gold and silver coins:

“So dance, ******, dance!
…Hit ‘em right between the eyes!
Hit ‘em right between the eyes!
When you walk away,
Nothing more to say!
See the lightning in your eyes!
See ‘em running for their lives!”

Everyone else, get some while it is still cheap!

GO GATA!

Jake, the Champion of the Constitution

[Reach the Author Here!] www.CampaignForLiberty.com http://www.yaliberty.org/ endthefedusa.ning.com (Banner courtesy Mike Burke)

___________________________________________________________________________

Nolan Chart Facebook Group Page Created

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

___________________________________________________________________________

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.

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!]

___________________________________________________________________________

Other Recommended Articles by the Author

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

• The “Great Slump” of 2008 (PART 1/2)
• Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)

___________________________________________________________________________

The Money Matrix Series

1. America, Were Michael Phelps’ Eight Olympic Gold Medals Worth Winning?
2. The Money Matrix – Prelude (PART 1/15)
3. The Money Matrix – What is a Dollar Bill Worth? (PART 2/15)
4. The Money Matrix – What Makes Money Money? (PART 3/15)
5. The Money Matrix – What is Honest Money? (PART 4/15)
6. The Money Matrix on the Grand Deception of Seigniorage (PART 5/15)
7. The Money Matrix – How the FED Works (PART 6/15) (A must-read, this article’s content is important as I haven’t seen its information compactly put together in one place)
8. The Money Matrix – What the Heck Are Derivatives? (PART 10/15)
9. Save Ron Paul’s Voice – A Money Matrix Addendum
10. A Money Matrix Addendum: Citigroup and GATA Call for an End to the Suppression of the Gold Market
11. MY PROPHECY – The Federal Reserve Will End! A Money Matrix Addendum

___________________________________________________________

Gold and Silver Investigation Source List

The People’s Money – a Facebook group that I assist with news postings.

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.  25 minute intro Part (1) (2) (3)

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 six major fiat currencies, issue payments in goldgrams, silver ounces, 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.

by Jake, the Champion of the Constitution
Originally published Thursday, January 29, 2009 at http://www.nolanchart.com/article5832.html

“Gold is Money, and Nothing Else.” – JP Morgan before Congress, 1914.  Notice he forgot to mention silver.  GO GATA!

In Part 1, I meandered a bit but one point I belabored was that the United States under Obama will refer to China as a “currency manipulator.”  In this article, please also me to meander again, but if you care to research any of the links I will introduce, you might agree with me that first Obama and “Turbo Tax” Tim have to defend my claim that America is itself a “currency manipulator.”

The Gold Anti-Trust Action Committee was organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities.  GATA opposes collusion against a free market in gold, other precious metals, currencies, and related securities.  Their main theories center around demonstrating that governments, central banks, bullion banks, and even some major miners have colluded to suppress the price of gold.  By doing so, they make their own fiat currencies appear stronger. ( photo) GATA’s evidence is summarized here and an 25-minute introductory movie is here Part (1) (2) (3)

My first two pieces of evidence are taken from a very upbeat letter celebrating the 10th anniversary of GATA written by Bill Murphy of lemetropolecafe.com.  You can read the full version here.  First is a description of Obama’s “new” Clinton-era, anti-gold central planners.  Second is a 1961 Federal Reserve document found by researcher Elaine Supkis that clearly outlines secretive currency manipulation as standard operating procedure for America’s quasi-private central bank.

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“Robert Rubin coined the phrase “US Strong Dollar Policy,” and flaunted the phrase. Rigging the price of gold was that policy’s lynchpin… Robert Rubin hatched the gold price suppression scheme while running Goldman Sachs’ operations in London. This was many years ago, when interest rates were very high (say from 6 to 12% in the US). Rubin had Goldman Sachs borrowed gold from the central banks at about a 1% interest rate. Then he sold the gold into the physical market, using the proceeds to fund their basic operations. This was like FREE money, as long as the price of gold did not rise to any sustained degree for any length of time.

“He continued his innovative money ploy as CEO of Goldman Sachs in New York and then put his Strong Dollar Policy ploy on steroids as Treasury Secretary under President Clinton.” (source Murphy letter)

[Rubin was forced to resign by Citigroup earlier this month, and was an Obama advisor during his election campaign, and is the current Chairman of the Council on Foreign Relations (CFR) - Jake]

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“Lawrence Summers followed Rubin as Clinton’s Treasury Secretary, and who could be more qualified to continue Rubin’s gold price suppression scheme than him? After all, while at Harvard he co-authored a paper,”Gibson’s Paradox and The Gold Standard.” The bottom line of Summers’ analysis is that “gold prices in a free market should move inversely to real interest rates.” Control gold and it will help to control interest rates.”  (source Murphy letter)

[Summers is now Obama's White House National Economic Council Director, or central planner.  He also was Chief Economist at the World Bank for 3 years.  Summers finished off the Glass-Steagal Act that was put in place to prevent another Great Depression, and was a big supporter of Greenspan's decision to deregulate derivatives.  - Jake]

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“Which brings us to Timothy Geithner, who is President-elect Obama’s nominee to be U. S. Treasury Secretary. Geithner was named president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the Vice Chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation’s monetary policy.  ( Photo) (2)

“Mr. Geithner joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions. He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001 under Secretaries Robert Rubin and Lawrence Summers.

“Geithner is also happens to be a member of the Bank for International Settlements and since 2005 has been Chairman of the Committee on Payment and Settlement Systems. You might want to see what the CPSS undertakes “at their own discretion” here.  (source Murphy letter)

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“Gary Gensler was nominated that day to be the new chairman of the CFTC. Gensler was Undersecretary of the Treasury (1999-2001) and Assistant Secretary of the Treasury (1997-1999).

“Gensler spent 18 years at Goldman Sachs, one of the ringleaders of The Gold Cartel, making partner when he was 30, becoming head of the company’s fixed income and currency operations in Tokyo by the mid-90’s.

“As the Treasury Department’s undersecretary for domestic finance in the last two years of the Clinton administration, Gensler found himself in the position of overseeing policies in the areas of U.S. financial markets, debt management, financial services, and community development. Gensler advocated the passage of the Commodity Futures Modernization Act of 2000, which exempted credit default swaps and other derivatives from regulation.

“… It is also important to keep in mind that chairman of the CFTC is one of the four members of the President’s Working Group on Financial Markets. Now why does a bureaucrat need to participate with the President and US Treasury Secretary on the markets? I thought the CFTC was supposed to regulate them, not be a part of policy.”  (source Murphy letter)

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Now, why is GATA so optimistic?  Well, their work has indicated that the gold suppression scheme will fail in this Obama term, and Murphy has given a full counter-proposal to the CFTC chairman with the message that Obama can find out whatever he wants to know by simply asking his current advisors.

Next, with perfect timing, FED researcher Elaine Supkis has uncovered an exciting document from the archives. The April 1961 document, which is marked “Confidential,” is from the papers of William McChesney Martin, Jr. The title of this confidential report is: Confidential – - (F.R.) U.S. Foreign Exchange Operations: Needs and Methods

GATA consultant James Turk (of goldmoney.com) has brilliantly dissected this document in an essay titled, “The Federal Reserve’s Blueprint for Market Intervention“  James Turk notes:

“In short, it lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by the Gold Anti-Trust Action Committee and its supporters — namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.

“This document provides primary, original source supporting evidence that GATA has been right all along.

“I have long hoped that a “confidential” document like this one would eventually emerge. There are no doubt countless more like it, as evidenced by the Federal Reserve’s and the Treasury’s refusal to provide all the documents requested by GATA under its recent Freedom of Information Act request. Maybe those documents will eventually see the light of day too.”

James makes a key points regarding one of the assertions of this report

“The basic purpose of such operations would be to maintain confidence in the dollar.”

“This statement confirms one of the basic planks of much of the work by me and others that has been published by GATA over the years. The efforts to cap the gold price have one aim. It is to make the dollar look worthy of being the world’s reserve currency when in fact it is not.”  (source Murphy letter)

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One response to Turk from Adrian Douglas:

“It got me thinking as to whether the heist they have pulled is bigger than we think. The BIS as we know, and as mentioned in this memo, is the organization that allows for cooperation behind the scenes of the Central banks. We know they went private to prevent any need for public disclosure seeding the opportunity for Reg Howe’s lawsuit. We have plenty of evidence that Central Bank gold holdings have been depleted. We keep saying that the gold is “gone”. But what do we mean by “the gold is gone”?

“Gold is not like crude oil, expensive wine, even silver it does not get consumed. It has not “gone”; it has changed ownership. The Central Banks leased out gold to the bullion banks. Now who did the the bullion banks sell the gold to? We know that the bullion banks can’t get the gold back. If the central banks ask for the gold back the bullion banks can declare bankruptcy or settle in cash. How convenient! The Central bank gold has gone into someone else’s hands that are unknown and the loss will eventually be written off.

“We know that Central Banks are owned or controlled by some of the richest families and/or entities in the world. Is it possible that these “bankers” can benefit from a fiat ponzi scheme while it can be maintained AND still end up with the gold in which case they can benefit from a return to a gold standard and when the gold standard eventually gets abused and abandoned in the future they will play the whole fiat game over again? It would certainly require cooperation between central banks to pull off such a heist.

“It would be great to have the whole world sitting in a room and ask those who own more than 10 million ozs of gold to raise their hands!

“The crime may be more than manipulating the price of gold to “defend the US dollar” and concealing the evidence from the public. The Cartel may well have aided and abetted embezzlement of the citizens’ gold of the Western world. And who ever has it, they bought it perfectly legally from the bullion banks with fiat currency.

“This seems to make sense because Central bankers and the “elitists” (Rockefellers, Rothchilds, Morgans, Mellons, Carnegies, Vanderbilts etc etc) are not stupid. They must know gold is real money. They can study monetary history too. The fiat money game in this context is a decoy for the theft of sovereign gold.

“It is not without precedent, the great inflationist, John Law, was arrested escaping with a coach loaded with gold and silver!”  (source Murphy letter)

Then from GATA Board member Catherine Austin Fitts:

“My hypothesis since 2001 is that the NWO is shifting assets out of sovereign governments and shifting liabilities back in. The goal is to reengineer global governance into the hands of private banks and corporations in a manner that dramatically centralizes control. This is why the creation of a genetically controlled seed and food supply, etc.

“If you use fiat currency to acquire ownership and control of all the real assets on the planet, then you need a gold standard to make sure you keep them. So, it would not surprise me to see G8 and GATA start to move into alignment, strange as it may sound.”  (source Murphy letter)

“To achieve such centralization requires the centralization of the gold and silver stores. Whoever has the gold has the most powerful financial asset. So if you want a new centralized currency, you need a monopoly on gold and silver. I think part of the end game is to shift back to something involving some kind of gold standard.“

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What?  This central banking cabal, this “New World Order” elite, or as GATA refers to them, the Gold Cartel, might have actually studied monetary history too?  Huh?  And actually they consist of two segments – one of the Keynesian/Monetarist brainwashed masses who have really have little clue, and an inner circle that has studied Austrian economics and is just doing whatever they believe necessary to defeat it for their own comparative advantage?  Cough! Cough! Reminds me, Cough! Of Alan Greenspan!  Cough, cough!  He wrote “Gold and Economic Freedom“!  Cough, cough!

Well, I am so sure that the above could never occur, so I have merrily continued my midnight studies of ancient economic texts in the hopes they will shed some further light on the future.  One such book is from 1894, called COIN’s Financial School by W. Hope Harvey.  [Recommend the B&W PDF since its well illustrated.]

In its heyday, COIN’s sold over 1 million copies, and was a key piece of propaganda for the silver populist movement.  It relates the story and dire effects of the demonetization of silver, which was causing Panics – the 1800s equivalent of recession and bank runs combined.  However, for the entire book (save parts of the conclusion) it aims to be solely a work of  flawless scholarly logic, and actually has me rethinking some aspects of bimetallism and the “Austrian standard” I introduced here.

Boy, was I surprised to see this big 1894 Rothschild spider thingey looking back at me!!  Darn it, didn’t we get RID OF the British in the 1700s?  The caption for this claims that the Rothschilds controlled over half of the global gold stock back then.  (photo from COIN’s Financial School, not in copyright)

I’ll probably refer to COIN’s in my later writings, but let me relate one pretty amazing fact, which is the relative amounts of gold in the world.  Per the World Gold Council (free subsciption required, see page 15/16), their widely accepted estimate of 5.3 billion troy ounces of aboveground gold stock may sound like a lot – current dollar value of $4.7 Trillion @ $890/oz, but its pretty much what the United States government will spend next year.

However, what is shocking is that ALL of the gold ever mined by mankind (very little has been been consumed) would fit inside of a cube that is only 20.5 meters to a side!! (Specific gravity of 19.3 grams per cubic centimeter, 31.1 grams per troy ounce)

What happens when we look at silver?  Well, there is no “World Silver Council” to look at what used to be known wide and far as “The People’s Money” and is a very special precious metal in its own right as I wrote about here. The best authority I have found on silver is not some elitist “Council” it’s just a smart dude named Ted Butler.  In a recent column, he reiterates his estimates of 40 billion troy ounces mined BUT ONLY about 1 billion ounces exists as unconsumed aboveground silver stock, and even grants his estimate is probably a bit high.  At about $11.90/oz., this amounts to a dollar value of just $11.9 Billion!  This is just a small fraction (0.25%!!!) of the dollar value of the world’s gold stock!

All of the world’s aboveground silver stock would fit inside of a cube that is only 14.5 meters to a side! (Specific gravity of 10.49 grams per cubic centimeter)

No wonder investors like Michael Maloney are heralding the possibility of the “Greatest Wealth Transfer Ever!”

It is also interesting to take a look at COIN’s view of what causes Panics.  He relates that although the value of silver and gold are insignificant when compared to the “Property of the World” and the “Debts of the World,” the world does more or less OK when the Debts are half the size of the Property.  However, he cautions that from his studies if the Debts ever reach two-thirds the value of the Property, wars and revolutions will ravage the planet. (photo from COIN’s Financial School, not in copyright)

Well, as a person living 115 years after COIN in the technologically advanced year of 2009, I can surely scoff at COIN’s naivety, right? It’s not as if the size of the world’s Debt – its debt-based fiat currencies and $684 Trillion of OTC “dark” derivatives does not now DWARF the value of its Property, right?  It’s not as if we are in the grips a global Depression, right?

I mean, its not AS IF the United States has launched a war for control of the oil supply like Iraq, right? Or attempted to place a total global blockade on  another major oil supplier like Iran, right?

Or has occupied and attacked countries like Afghanistan and Pakistan where the oil and natural gas pipelines from the Western-friendly former Soviet republic dictatorships could flow to our waiting oil tankers in the Indian Ocean protected by the US Navy right?  Or via the Georgia-Turkey pipeline, right?

It’s not AS IF major political rioting continues in Greece and Latvia, and a revolution has just toppled the government in Iceland, right?

It’s not AS IF the world is so scared of Somalian “pirates” that Blackwater is sending its mercenaries to protect merchantman vessels, right?  There are no other wars and revolutions in Africa besides Somalia, Sudan, Congo, the Ivory Coast and a few others, right?

It’s not AS IF a whole race of people have been barricaded inside a wall and are being shot at like some kind of a sick WWII Polish ghetto, right?

It’s not AS IF the whole British banking and equity markets weren’t just 3 hours from complete collapse in October 2008, right?

It’s not AS IF Edwin Vieira did not explain in 100 minutes of excruciating detail why our current crappy paper money is unconstitutional per  Article 1, Section 10, Clause 1 of the Constitution of the United States and what needs to be done to bring about change!!

And it’s not AS IF our government isn’t going to try to paper over the ravaging of our economy by passing a $850 Billion spending bill that will certainly not work while the banking system is helplessly insolvent… right?

Join the rEVOLution!  Restore the Republic!  My advice if you decide to buy precious metals is to buy some ounces of gold and buy a lot more ounces of silver!  No ETF or “paper metal” junk!

Jake, the Champion of the Constitution

[Reach the Author Here!] www.CampaignForLiberty.com http://www.yaliberty.org/ endthefedusa.ning.com (Banner courtesy Mike Burke)

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The Year of the Ox Arrives in China, Land of “Currency Manipulation” (PART 1/2)
Published: January 27, 2009
A few interesting contrasts between life in China and life in the United States as I ramble from the Chinese Yuan to Fireworks to Freedom of the Press to Global Warming

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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)

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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.

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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Other Recommended Articles by the Author

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

• The “Great Slump” of 2008 (PART 1/2)
• Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)

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The Money Matrix Series

1. America, Were Michael Phelps’ Eight Olympic Gold Medals Worth Winning?
2. The Money Matrix – Prelude (PART 1/15)
3. The Money Matrix – What is a Dollar Bill Worth? (PART 2/15)
4. The Money Matrix – What Makes Money Money? (PART 3/15)
5. The Money Matrix – If You Don’t Know Who the Sucker Is, Then It’s You! (PART 4/15)
6. The Money Matrix Explores Seigniorage – Do not give in to evil, but proceed ever more boldly against it. (PART 5/15)
7. The Money Matrix – How the FED Works (PART 6/15) (A must-read, this article’s content is important as I haven’t seen its information compactly put together in one place)
8. The Money Matrix – What the Heck Are Derivatives? (PART 10/15)
9. Save Ron Paul’s Voice – A Money Matrix Addendum
10. A Money Matrix Addendum: Citigroup and GATA Call for an End to the Suppression of the Gold Market
11. MY PROPHECY – The Federal Reserve Will End! A Money Matrix Addendum

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Gold and Silver Investigation Source List

The People’s Money – a Facebook group that I assist with news postings.

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.  25 minute intro Part (1) (2) (3)

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 six major fiat currencies, issue payments in goldgrams, silver ounces, 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.