December Podcast Archive


12.28.12 -- Inflation as Taxation -- Listen

Gold settled modestly lower on Friday amid thin holiday trading and the rapidly approaching "fiscal cliff". Stocks slipped as budget talks resume. Gold closed at $1,656 an ounce. Silver traded at $29.98 an ounce. Gold’s on track for an annual gain of about 6%.

Your editor is out on assignment today in preparation for 2013. Below are some important news stories and commentaries you may have missed, which we think are worth revisiting as we reflect on the events of 2012 and future economic trends.

Meanwhile, with just days left to prepare for big changes coming next year, we recommend calling your Swiss America broker to discuss your 2013 financial strategy at 800-289-2646.

bernanke money BEST OF 2012 NEWS & VIEWS

EMPEROR BEN HAS NO CLOTHES - Steve Forbes
The Federal Reserve’s announcement last month that it would continue Operation Twist -- selling short-term Treasury securities and using the money to buy longer-term bonds -- vividly demonstrates the intellectual bankruptcy of Ben Bernanke. The stresses of the current economic troubles threaten all that’s been achieved since the early 1950s. The current crisis is not a result of a lack of fiscal union or deeper political integration. Major fiscal and monetary errors based on bad economic ideas are to blame.

BIG CHANGES AHEAD: GOLD JUST BECAME MONEY AGAIN - Featured Commentary
A momentous change for the gold market. Now banks will be allowed to hold bullion in their vaults and count it among their Tier 1 assets – in other words, the least risky assets. As banks that recognize gold's unique characteristics seek to stockpile more of it. Bank's Tier 1 holdings must rise from 4% of assets to 6%. That means that banks may not only replace a portion of their existing paper with bullion, but may use it to meet some of the extra 2% as well.

LOST DECADE FOR SHRINKING MIDDLE CLASS - WSJ
The middle class — defined as households with between two-thirds and double the nation’s median income — has shrunk considerably over the past few decades, a decline been greatly exacerbated by the recession and housing bust, according to a new Pew Research poll. In 2011, the nation’s middle class income bracket held 51% of households, down from 61% in the 1970s. Pew notes the median middle class income fell 5% over the decade, but total wealth — assets minus debt — fell 28%.

THE PRINTING PRESS HAS REACHED ITS LIMITS - Telegraph
Faith in central banks as guarantors of macro-economic stability has been shaken to breaking point by the events of recent years, a crisis which they utterly failed to see coming, much less were able to prevent. It is unwise to place too much faith in central banks. The most they can hope to do is paper over the cracks. Without politically painful supply-side reform to correct these failings, we can look forward to years of stagnation or worse.

THE PATH TO $10,000-AN-OUNCE GOLD - Daily Reckoning
Is there a “reset button” that central bankers can push that would restore balance to the system? We know central bankers would never want to deflate the economy or crash the value of debt, which would destroy the banking system. So how about inflating the money supply to dilute the value of debt? All in one fell swoop? Right now, central bankers are diluting the value of debt very slowly by pushing interest rates below the rate of inflation. What is an alternative, since all attempts to “fix” the current system with more borrowing and printing are failing? How about the classical gold standard, which stands out as the least flawed of all the systems we’ve tried.

U.S. DOLLAR MAY BE WORST PLACE TO SEEK SAFETY - News Release
“Many are jumping from the frying pan into the fire by converting all their assets into U.S. Dollars,” say Lowell Ponte and Craig R. Smith, co-authors of the widely-praised recent books, "The Great Debasement" (2012), "The Inflation Deception" (2011) and "Crashing the Dollar" (2010). “This is a huge mistake because the once-solid U.S. Dollar has become a flimsy shelter made only of paper,” says Ponte. “It's no longer the 'flight-to-safety' asset it used to be. The Dollar is being manipulated, losing value and at risk of crashing.”

More: Swiss America Gold Market News


12.27.12 -- The Secret Tax - Listen

Gold prices are modestly higher Thursday amid holiday dealings. Stocks slip as budget talks resume. Gold last traded at $1,664 an ounce. Silver traded at $30.20 an ounce.

Your editor is out on assignment today in preparation for 2013. Below are some important news stories and commentaries you may have missed, which we think are worth revisiting as we reflect on the events of 2012 and future economic trends.

Meanwhile, with just days left to prepare for big changes coming next year, we recommend calling your Swiss America broker to discuss your 2013 financial strategy at 800-289-2646.

taxes

BEST OF 2012 NEWS & VIEWS

BILLIONAIRES BET BIG ON GOLD - ABCNews
Once again John Paulson is choosing to heavily invest in gold and fellow billionaire George Soros is making a similar bet. According to Bloomberg News, Paulson & Co. and Soros Fund Management bumped up exposure to SPDR Gold Trust to 21.8 million shares and 884,000 shares, respectively. Paulson & Co. now has 44 percent of its $24 billion fund exposed to bullion.

TIME FOR ECONOMISTS TO ADMIT ECONOMIC IGNORANCE - Reuters
It is time for economists to admit that they are stumped. Four years after being blindsided by Lehman Brothers’ collapse, the profession is still stumbling in the dark. Policymakers and pundits still make confident pronouncements, but the conclusions are radically different. The expert disagreements give away the truth: ignorance reigns. Here are six crucial questions which professionals should stop pretending they can answer.

BEWARE THE FLAWED STATISTIC THAT IS GDP - Forbes
In the first place, it is hard to know which GDP numbers to trust because they are often calculated using inaccurate data and are subject to perpetual revision. Additionally, GDP includes large amounts of government spending, which by nature does not reflect real productive activity. Such spending is not funded by the voluntary purchases by those who earned the money, but by taxes forcibly taken from them.

U.S. GOVERNMENT DEBT GROWS $10 MILLION A MINUTE: DAVID WALKER -Yahoo! Finance
Total public debt; excluding student loan, mortgage and credit card debt, exceeds $15.9 trillion. The national debt has been growing faster than GDP and some experts are saying the debt burden could push the country towards insolvency over the next few decades. The U.S. government owes $70 trillion, and grows at a rate of $10 million a minute.

ECONOMIC LESSONS FROM THE OLYMPICS - WashTimes
Do you admire what the Olympic athletes have been able to accomplish, and do you think they should be applauded for their outstanding performances? Civilization can only advance when individuals are both encouraged and rewarded for excellence. The good side of humanity is revealed when we praise and reward such people. A society that rewards envy and punishes success is not kind, fair, or pleasant. A society that rewards excellence with acclaim, and yes, money, will see more excellence that lifts and betters everyone.

WILL YOU EVER BE ABLE TO RETIRE? How to Escape ‘Retirement Age Inflation’ - NewsRelease
Comics joke that “80 is the new 65,” but for millions of Americans, it's no laughing matter. New retirees today are the first generation who will receive less in Social Security benefits than they paid in, according to a new analysis by the Associated Press. People who retired in 1960 could expect seven times more in benefits than they’d paid, depending on how long they lived, and as recently as 1985, workers at every income level could expect to get more than they paid in Social Security taxes.

More: Swiss America Gold Market News


12.26.12 - 2012 Hat Tricks vs. 2013 Realities - Listen

Gold prices rose Wednesday amid year-end bargain hunting and a weaker dollar. Stocks slip on data and outlook. Gold last traded at $1,660 an ounce. Silver traded at $30.03 an ounce.

MARKET NEWS HEADLINES
-The Stock Market Bulls May Be Getting Set Up - Marketwatch
-Data Show Weak Holiday Sales - WSJ
-Stocks Slump Amid 'Cliff' Woes - CNBC
-Obama returns to D.C. seeking 60 votes on cliff deal - Marketwatch
-The Best and Worst Deals Made In 2012 - NYT

CATASTROPHIC LOSS OF CONFIDENCE TO SPIKE GOLD & SILVER - KWN
What to expect in 2013? Chief investment strategist at Sprott Asset Management John Embry responded, “In terms of the economy, I don’t think there is any vitality in the world because we (the West) have infinitely too much debt. This debt is further levered by the derivatives, which are unfathomable in terms of scale.

This is why they have to keep creating more liquidity because as the derivatives go, the banking system goes with them. So we will continue to see increased liquidity, but it will have minimal, if any, impact on the economies which will be sluggish to put it politely.

2012 But the key here is that at some point confidence will be lost in the paper markets. At that point gold and silver will be seen for what they are, the true safe havens. This catastrophic loss of confidence will be sufficient to push the prices to levels that most people can’t even fathom.

A REPUBLICAN SELLOUT INVITES STAGFLATION - RCM
While it may not be a surprise that the Republicans are preparing to yield on their vow to oppose tax hikes, it should raise investor concerns the world over that an upcoming budget agreement will likely involve a Congressional surrender of its authority to set the federal debt ceiling.

Given the drift in Washington, those who had hoped for a significant improvement in the United States fiscal prospects will have nothing but lumps of coal in their Christmas stockings. At the same time, the Fed continues to hold its foot to the floor with increased quantitative easing that will pump massive liquidity into the system. The combination can lead to stagflation and a debased U.S. dollar.

Last week, The Economist magazine published a list of 80 countries, ranked in order of quality of life as determined by such elements as economic well-being, intrusive government and crime. The United States has now fallen to sixteenth position (with Switzerland in first position). The combination of $1 trillion of new taxes and the likelihood of increased financial and commercial regulation will likely push the U.S. further down the list.

INTERNET LEAVING CHILDREN BRAIN-DEAD: INVENTOR WARNS - MailOnline
One of Britain's leading inventors has warned that a 'Google generation' who rely on the internet for everything are in danger of becoming 'brain-dead'.

Trevor Baylis, who invented the wind-up radio, said children are losing creativity and practical skills because they spend too much time in front of screens.

The 75-year-old said he fears that the next generation of inventors is being lost, with young people often unable to make anything with their hands.

OBAMACARE TAX HIKES MAY JUST BE GETTING STARTED - CNBC
If the value of job-based health insurance were taxed like regular income, it would raise nearly $150 billion in 2013, according to congressional estimates. By comparison, wiping away the mortgage interest deduction would bring in only about $90 billion.

"If you are looking to raise revenue to pay for tax reform, that is the biggest pot of money of all," said Martin Sullivan, chief economist with Tax Analysts, a nonpartisan publisher of tax information.

It's hard to see how lawmakers can avoid touching health insurance if they want to eliminate loopholes and curtail deductions so as to raise revenue and lower tax rates.

More: Swiss America Gold Market News


12.24.12 & 12.25.12 - Putting time & money on your side - Listen

Swiss America will be closed on Dec. 24th and 25th in observance of the Christmas holiday and will reopen on Dec. 26th. On behalf of the entire brokerage and staff we would like to wish you and your family a very special and meaningful celebration.

This year more Americans will be giving and receiving gifts of gold and silver coins as an expression of their everlasting love. Indeed wise men (and women) are learning from history why real money stands the test of time.

30 years 2012 marked Swiss America's 30th anniversary of inspiring Americans to rediscover gold for safety and growth. We are thankful that gold is proving to the world what we have known all along: Gold stands alone as the asset to preserve wealth as universal money. Owning gold and silver from Swiss America puts both time and money on your side!

BEST OF 2012 NEWS & VIEWS

GOLD: 2013 'FISCAL CLIFF' SAFETY NET - Craig R. Smith
According to Swiss America Chairman Craig R. Smith, who first began warning of the dangers of a steep recession on Fox News' Neil Cavuto show last August, the future of gold will be bright - whether we renew Bush tax cuts or not.

Mr. Smith says if we tumble off the 2013 fiscal cliff; taxes will go up, spending will be slashed and we will cut the 2013 deficit by $600 billion. BUT we also will face a massive recession, which will likely prompt the Fed to provide liquidity. Both of which will push gold prices higher.

If, on the other hand, we kick the can down the road for months or years, or if Congress arrives at a compromise, then taxes will still go up for those earning $1 million+ a year. This will give businesses a new sense of certainty, which will move the $3.2T in corporate cash and $3T of individual savings now sitting on the sidelines. If $6T is suddenly injected into the economy, it will likely cause price inflation and higher gold prices. Cliff or no cliff, gold wins.

SILVER PRICE TO 'INCREASE 400% IN THREE YEARS' - Telegraph
Silver will increase in value five times over the next three years, according to mixed asset fund manager Ian Williams.

"Silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015," he predicted.

ECONOMIC BOOMS & BUSTS OF THE GOLD STANDARD ERA - Forbes
Did “booms and busts” take place during times when a gold standard system was in use? Of course. These were caused for all manner of reasons, none of which include a currency that was stable in value.

What gold standard critics are really talking about when blaming gold for “booms and busts” is that a gold standard system prevents “macroeconomic management” via currency manipulation. These economists are convinced that they could deal with any sort of economic problem with their funny money toolkit.

THE SECRET RETURN TO THE "GOLD STANDARD" - MoneyMorning
The world's central banks have quietly – almost secretly – returned the world to a new version of the gold standard. Back in 2010, the world's central banks became net buyers of gold for the first time since 1988. Buying ramped last year and net purchases exceeded 455 metric tons (tonnes). That was the largest net purchase since 1964.

FEARFUL INVESTORS SHOULD STOCK UP ON GOLD - FT
Gold usually rises in times of fiscal uncertainty, especially when such times lead to a big increase in money-printing and very low interest rates. On the supply side, gold miners are running out of high-grade ore, there are problems with labor in South Africa, and both working and capital costs have risen. Central banks have stopped selling their gold and become big buyers.

The tipping point will be when overseas creditors realize the best they can hope for is to be repaid in much-depreciated US dollars. Bill Gross of Pimco believes that unless the fiscal gap is closed soon, “the damage will be beyond repair”. Pimco counsels investors to hold gold “as a compelling inflation hedge and store of value that is potentially superior to fiat currencies”.

More: Swiss America Gold Market News


12.21.12 - Much Ado about Nothing - Listen

Gold prices rebounded above $1,650/oz. Friday amid year-end profit taking and bargain hunting. Stocks retreat on fiscal cliff fears. Gold last traded at $1,653 an ounce. Silver traded at $30.03 an ounce.

MARKET NEWS HEADLINES
-Consumer Sentiment Falls as 'Fiscal Cliff' Woes Weigh - CNBC
-The Mayans Predicted This Stock Sell-Off, You Know -WSJ
-World Aghast at DC Ineptitude - CNN Money
-Insider Trading Spreads in U.S. - Bloomberg

Much Ado about Nothing is the title of a famous play by Shakespeare - which also seems like a wise title for all of the end of the world chatter, the fiscal cliff standoff, and even minor fluctuations in the price of gold.

The end of the Mayan calender could however mark the beginning of a U.S. stock market sell-off and the tendency by some to trust in the stars and paper money.

The fiscal cliff debate is more about political posturing than catastrophe. Heck, even the gold price is saying, "relax, it's time for a season of rest".

chart THE TRIVIAL DIFFERENCE BETWEEN OBAMA AND BOEHNER - Marketwatch
There really isn’t much difference between President Barack Obama’s and House Speaker John Boehner’s respective plans to cut the deficit, when put into perspective.

This chart shows the projected federal government deficits — not including the adjustment for whatever plan is agreed — set out with the reported differences between Obama and Boehner, which appear to be over $350 billion in interest saved over a decade.

As you can see, those faint blue bars show the difference is not much. And remember, this chart doesn’t even factor in existing debt of over $16 trillion — only on the new debt that’s expected to accumulate.

MARKET NEWS OF THE WEEK

FINANCIAL SURVIVAL REQUIRES NEW HOLIDAY TRADITION, SAY EXPERTS - NewsRelease
For the first time in American history, millions of parents worry that their children will have fewer opportunities than they did.

“Today's children will face a lifetime average tax rate of 83 percent to pay for America's fast-growing European-style welfare state,” says monetary expert Craig R. Smith in his just-published latest book The Great Debasement.

“This holiday season, no matter how young your children are, you can start teaching them financial survival skills that can protect them for a lifetime,” says Smith. “It's a lot smarter than investing in some toy that will be worn out and forgotten in a few weeks.”

“To a manger in Bethlehem long ago, three wise men brought three gifts, one of which was gold. This began a long tradition of giving such gifts to honor that same birth,” says Smith's co-author Lowell Ponte. “That gold was a wise gift that helped a family escape the wrath of a wicked ruler”.

“An educational gift of gold, and a new family tradition of giving and saving this Biblical standard of genuine money, could prepare your children for financial survival in a future that could bring many severe challenges,” says Smith.

QE 4: FOLKS, THIS AIN'T NORMAL - PeakProsperity
The markets are now well and truly broken...because they are no longer sending useful price signals. Instead, the markets are now just a giant and rigged casino, where a relative handful of big firms and other tightly coupled players are gaming their orders to take advantage of this flood of money.

When your central bank badly misprices money and then bids up everything related to bonds, nothing can be reasonably priced. Risk is mispriced; the few remaining investors (as distinct from speculators, which are now the majority) are forced to accept both poor yields and higher risk – so we know the price of everything, but the value of nothing.

The Fed is most likely on track to increase its balance sheet by another $3-4 trillion. Ugh. That's 300% to 400% more money created in the next year than was created than during the entire 200 years following the signing of the Declaration of Independence... the rise of inflation will signal the beginning of the end of this slow-motion tragedy.

JOB CREATORS IN THE ANCIENT WORLD - TimesofIsrael
The [Old Testament] story of Joseph is very relevant to the debate over the role of government in the economy today. The relentless narrative theme at the core of the Five Books of Moses is that life in Egypt, even as a slave, offers many temptations that each generation must struggle anew to resist.

What starts as a grain shortage brought on by natural cycles in the east wind and the Nile’s ebb and flow is leveraged by a government with authoritarian ambitions to utterly enslave the people – better yet, to have the people beg the government to enslave them!

Of course, the state cannot give anything it does not first take by threat of force, yet when the meal comes back to us, we still often think we are getting something for nothing. We may only hope that the free societies of the world internalize the lessons of biblical Egypt soon, reversing steps they’ve already taken down a road to serfdom.

MILLENNIALS SHOULD SUPPORT RETURN TO THE GOLD STANDARD - WashTimes
My generation, the so-called “millennials” between the ages of 18 and 29, is looking toward the future, and we don’t like what we see. Capitol Hill is overrun by progressive politicians ready to pillage the wallets of young people to atone for government’s shortcomings in payments to our parents and grandparents.

Anchor Millennials must encourage the return to a precious-metals-backed monetary system. In 1971, gasoline was 36 cents per gallon. Today it’s near $4. This means that in just a little more than 40 years, we have witnessed an elevenfold increase in the price at the pump.

As millennials become aware of the extreme inflation associated with soft money and begin to focus on the gold standard, politicians of all stripes would be wise to regard our calls for transformation.

More: Swiss America Gold Market News


12.20.12 - Early Christmas gift: Best buying opp since summer! - Listen

Gold prices dipped below $1,650/oz. Thursday amid year-end profit taking and upbeat growth data. Stocks inch up despite cliff. Gold last traded at $1,648 an ounce. Silver traded at $29.93 an ounce.

Despite short-term speculative profit-taking, which has shaved over $100/oz. off of gold prices and nearly $5/oz. from silver prices in the last month, gold is still up over 5% in 2012 and silver over 7%. This offers investors the best buying opportunity since the end of August! Thank you Santa- an early gift for last minute shoppers!

coins MARKET NEWS HEADLINES
-US Economy Grew 3.1%; Jobless Claims Rise - CNBC
-Get ready for 'Cliffmas': House to vote on Plan B - Marketwatch
-UBS Admits Rigging Interest Rates - WSJ
-School Districts Cancel Class Due To Doomsday Talk - CBSDetroit
-Biden pledges 'action' against gun violence - USAToday

GOLD IS NOT IN A BUBBLE - 24/7Bull
Egon von Greyerz [of Matterhorn Asset Mgmt.] said that it’s not the gold price that is going up, but rather the fiat currencies that are constantly losing their purchasing power, as gold has maintained its purchasing power for the last 5,000 years. Only one per cent of world financial assets are in gold, so gold is nowhere near a bubble.

"Sadly the whole banking system is interconnected. So, every bank deals with another bank worldwide. So if somebody puts US dollars into an Australian bank, that bank will put it back in New York. So, I believe every bank in the world is at risk."

"Take all the measures you can to protect your assets by buying outside of the banking system, storing it outside of the banking system, eliminating counter party risk and having direct access personally to the vault where you store your gold.”

UNCLE SAM BOOKS 50% LOSS ON GOVERNMENT MOTORS BUYS BACK - ZeroHedge
General Motors today said it will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share.

Treasury intends to begin its disposition of those 300.1 million common shares as soon as January 2013 pursuant to a pre-arranged written trading plan. The manner, amount, and timing of the sales under the plan are dependent upon a number of factors.

Assuming a price in the $27.50 range, this implies a nearly 50% loss on the government's breakeven price of $54. So much for the "profit" spin. One hopes all those Union votes were well worth the now booked $40+ billion cost to all taxpayers.

AMERICA'S DANGEROUS POWERBALL ECONOMY - WSJ
What can the state lottery teach us about how to deal with the fiscal cliff? Quite a bit, actually. Unearned income—as from the lottery or entitlements—doesn't buy happiness.

Hitting the jackpot generally leads to unhappiness. A famous 1978 study of major lottery winners in the Journal of Personality and Social Psychology showed that while the winners experienced an immediate happiness boost right after winning, it didn't last. Within a few months, their happiness levels receded to where they had been before winning. As time passed, they found they were actually less happy than they had been before winning.

Before us today is a chance to improve the true welfare of our nation while changing our overspending ways. By reforming entitlements and the tax system instead of extracting more money with higher tax rates, the economy could be reoriented away from unearned transfers to earned wages. This would make the economy fairer and sounder. And in the process it could build a happier country for ourselves and our children.

SAVE CHARITABLE TAX DEDUCTION! - NRB Congress and the White House have about a week left to make a last-minute deal to avert the so-called fiscal cliff.

That means there is even less time for Americans to call leaders of Congress to stand up for tax incentives for charitable contributions, which could be eliminated or reduced to avoid the fiscal cliff.

“Our society could undergo a radical adverse transformation as a result of these next seven days,” noted NRB President & CEO Dr. Frank Wright during a recent interview on the WallBuilders Live! program.

More: Swiss America Gold Market News


12.19.12 - A golden anchor for sinking currencies - Listen

Gold prices steadied below $1,675/oz. Wednesday amid year-end profit taking and a weaker dollar. Stocks slip as cliff's edge nears. Gold last traded at $1,668 an ounce. Silver traded at $31.14 an ounce.

MARKET NEWS HEADLINES
-Fiscal Cliff Could Cost US Its AAA Rating - FitchRatings
-Benghazi: The Buck Stops...Nowhere - DrudgeReport
-California teachers retirement fund threat triggers sale of gun company - Edsourcetoday
-Public 'deluded' about comfortable retirement, says top civil servant - Telegraph
-Market timing: Not a good retirement strategy - CNNMoney

"Gold is having a correction — it's been correcting for 15-16 months now — which is normal in my view, and it's possible that [the] correction is going to continue for a while longer," said longtime gold bull Jim Rogers to CNBC. Conclusion: buy the dips!!

MILLENNIALS SHOULD SUPPORT RETURN TO THE GOLD STANDARD - WashTimes
My generation, the so-called “millennials” between the ages of 18 and 29, is looking toward the future, and we don’t like what we see. Capitol Hill is overrun by progressive politicians ready to pillage the wallets of young people to atone for government’s shortcomings in payments to our parents and grandparents.

anchor Millennials must encourage the return to a precious-metals-backed monetary system. In 1971, gasoline was 36 cents per gallon. Today it’s near $4. This means that in just a little more than 40 years, we have witnessed an elevenfold increase in the price at the pump.

As millennials become aware of the extreme inflation associated with soft money and begin to focus on the gold standard, politicians of all stripes would be wise to regard our calls for transformation.

FISCAL CLIFF'S DIRTY SECRET: IT'S NOT ABOUT TAXES AT ALL... - IBD
The current debate over tax hikes is an empty one built upon a false premise. The debate is whether raising tax rates will address our current crisis. The premise is that it is a lack of taxation that has led to the crisis. Both are hopelessly wrong.

Instead of sitting around trying to think of new ways to vote away someone else's money, Washington leaders should finally begin to address the real crisis that has threatened us long before the current hand wringing: spending.

With a $16 trillion national debt and well over $1 trillion annually in deficits, we barreled over the edge of fiscal insolvency long before this month.

JOB CREATORS IN THE ANCIENT WORLD - TimesofIsrael
The [Old Testament] story of Joseph is very relevant to the debate over the role of government in the economy today. The relentless narrative theme at the core of the Five Books of Moses is that life in Egypt, even as a slave, offers many temptations that each generation must struggle anew to resist.

What starts as a grain shortage brought on by natural cycles in the east wind and the Nile’s ebb and flow is leveraged by a government with authoritarian ambitions to utterly enslave the people – better yet, to have the people beg the government to enslave them!

Of course, the state cannot give anything it does not first take by threat of force, yet when the meal comes back to us, we still often think we are getting something for nothing. We may only hope that the free societies of the world internalize the lessons of biblical Egypt soon, reversing steps they’ve already taken down a road to serfdom.

More: Swiss America Gold Market News


12.18.12 - The price of everything, the value of nothing - Listen

Gold prices slipped nearly 2% Tuesday amid year-end profit taking and short-term technical selling. Stocks rise despite cliff fears. Gold last traded at $1,668 an ounce. Silver traded at $31.58 an ounce.

MARKET NEWS HEADLINES
-Republicans moving to Plan B on fiscal cliff - Politico
-Here Comes the Santa Rally - Minyanville
-Recession may be coming regardless of 'cliff' - Marketwatch
-Rick Santelli: No $22 Trillion Band-Aid! - CNBC

Kitco reports, Tuesday’s sell off in the gold market, amid no major, fresh fundamental news, once again has many scratching their heads. The past few weeks have seen similar, unexpected and seemingly inexplicable quick downside price moves in gold and silver. Many are wondering regarding the role of “manipulators” in the gold and silver markets.

GOLD TO HIT HISTORIC HIGHS IN 2013 ON FED QE... - Forbes
Gone are the days when gold investing is confined to conspiracy theorists and doomsday soothsayers. One need only look to the variety of investment products on the market for investors looking to add a glimmer of gilt to their portfolios.

Bullion, or physical gold, has increasingly taken on a monetary role, trading sometimes as a safe-haven in times of global volatility and in others as an inflation hedge. Central banks, for example, became net buyers of gold in 2011 after 20 years selling the precious metal, World Gold Council data showed.

Bank of America’s research team estimates gold prices will average $2,000 in 2013, and then continue its rise to $2,400 by the end of 2014 on strong demand from China.

wilde QE 4: FOLKS, THIS AIN'T NORMAL - PeakProsperity
The markets are now well and truly broken...because they are no longer sending useful price signals. Instead, the markets are now just a giant and rigged casino, where a relative handful of big firms and other tightly coupled players are gaming their orders to take advantage of this flood of money.

When your central bank badly misprices money and then bids up everything related to bonds, nothing can be reasonably priced. Risk is mispriced; the few remaining investors (as distinct from speculators, which are now the majority) are forced to accept both poor yields and higher risk – so we know the price of everything, but the value of nothing.

The Fed is most likely on track to increase its balance sheet by another $3-4 trillion. Ugh. That's 300% to 400% more money created in the next year than was created than during the entire 200 years following the signing of the Declaration of Independence... the rise of inflation will signal the beginning of the end of this slow-motion tragedy.

FED PROVES OLD MONEY-PRINTING HABITS DIE HARD - MSNMoney
It is ironic that the Fed is far more rabid now when it comes to conjuring dollars out of thin air than it was when the financial system threatened to seize up in late 2008, but that is what central planning committees do. They eventually overreact when they don't get the response they want.

The amount of confetti that the Fed is printing is staggering, but that is only part of the mosaic, because the Swiss National Bank, the European Central Bank, the Bank of England and the Bank of Japan are printing massive amounts of money as well.

Just imagine what will happen the Fed finally gets the citizens of the United States (and the rest of the world) to expect regularly rising prices. It will be impossible to put that genie back in the bottle. The Fed has been playing with gasoline in front of a blazing fire for a very long time, and it is impossible to know when the two will meet, but when they do, it is going to be an enormous mess.

More: Swiss America Gold Market News


12.17.12 - Thinking like the Three Wise Men - Listen

Gold prices steadied below $1,700/oz. Monday on year-end profit taking and bargain hunting. Stocks rise on cliff hopes. Gold last traded at $1,697 an ounce. Silver traded at $32.24 an ounce.

MARKET NEW HEADLINES
-Brace yourself for a decade of meager stock returns -MarketWatch
-Republicans Edges Toward Tax Hikes - Reuters
-Should We End Tax Deductions for Charity? - WSJ
-2013 Economic Forecast Is Sunnier, but ... -NYT
-Mayan apocalypse looms large this week - Guardian

FACEBOOK EDITORIAL: MEDIA PLEASE STOP!- Newswire
As our 24/7 news cycle continues to "report" on this tragedy, attempting to "understand" how this could happen; as our politicos now debate gun control and rights, I would respectfully ask that they all pause, until the dead are buried, at the very least.

It is pointless and futile to attempt to rationalize the irrational; to find reason in the unreasonable; to find logic in the illogical. We will never be able to "understand" what drove the killer to do what he did, so PLEASE stop attempting to do so. PLEASE allow these victims to rest in peace.

And regardless of one's religious affiliation, or lack thereof...believing and living the motto of "loving one another, as you love yourself" is never the wrong way to live. Let's stop focusing on the aftermath, the tool, and the criminal, and let's use every ounce of who we are, to start loving. Start with your family, live by example, and pass it forward.

FINANCIAL SURVIVAL REQUIRES NEW HOLIDAY TRADITION, SAY EXPERTS - NewsRelease
For the first time in American history, millions of parents worry that their children will have fewer opportunities than they did.

“Today's children will face a lifetime average tax rate of 83 percent to pay for America's fast-growing European-style welfare state,” says monetary expert Craig R. Smith in his just-published latest book The Great Debasement.

three kings “This holiday season, no matter how young your children are, you can starting teaching them financial survival skills that can protect them for a lifetime,” says Smith. “It's a lot smarter than investing in some toy that will be worn out and forgotten in a few weeks.”

“To a manger in Bethlehem long ago, three wise men brought three gifts, one of which was gold. This began a long tradition of giving such gifts to honor that same birth,” says says Smith's co-author Lowell Ponte. “That gold was a wise gift that helped a family escape the wrath of a wicked ruler,” says Ponte.

“An educational gift of gold, and a new family tradition of giving and saving this Biblical standard of genuine money, could prepare your children for financial survival in a future that could bring many severe challenges,” says Smith.

WE’VE BEEN ZIRPED - WeeklyStandard
My son got ZIRPed. Senior citizens living on fixed incomes are getting ZIRPed. We all are. Since December 2008, when Ben Bernanke’s Federal Reserve started buying mortgage backed securities in order to “solve” the financial crisis, we have all been subject to a zero interest rate policy.

Conceptually, ZIRP has worked. The stock market is up 12 percent in 2012. Bank stocks like Bank of America’s have doubled off their lows. Real estate investment trusts, or REITs, are up 15 percent. Yet in the real world, ZIRP is a huge FAIL.

ZIRP is the problem, not the solution. Money is not stupid. Corporations are sitting on almost $2 trillion in cash. The humps in strategic planning or business development at every Fortune 500 company run spreadsheets that forecast the return potential of new projects or factories and compare that against the cost of capital or the risk-free rate of return before pitching said projects to upper management.

But because of ZIRP, the risk-free rate of return is zero, so, in Excel anyway, it looks like every project or factory makes financial sense. But that can’t be right. This is what causes uncertainty, a financial compass that spins round and round rather than pointing to value creation. Which means managers sit on their hands. So in the real world, none of the projects makes sense. In other words, the very Fed policy aimed at growing the economy and creating jobs is instead causing cash to be held until morale improves.

THE BONDAGE OF REDISTRIBUTION IDEOLOGY - RCM
"Not since the days of slavery have there been so many people who feel entitled to what other people have produced as there are in the modern welfare state." -Thomas Sowell

The idea that we should take from those who have and give to those who don't is viewed as proper and just among liberals. In fact, if you do not subscribe to redistribution ideology, you are attacked as being greedy at best and racist at worst. The problem is that income redistribution in practice promotes one of the same moral injustices found under slavery.

A simple inquisition will explain. If morality is defined by private property; meaning a person has a right, based on natural law, to their person and their possessions. And if property is generated by the productive and wealth creating behavior of a person's labor; then immorality is defined as any force that seeks to injure or take away one's property (murder, theft, rape, etc). As such, using the productivity of another for one's personal gain is immoral.

More: Swiss America Gold Market News


12.14.12 - Markets Frozen on the Fiscal Cliff - Listen

Gold prices steadied below $1,700/oz. Friday on profit taking and bargain hunting. Stocks flat despite Fed pump. Gold last traded at $1,695 an ounce. Silver traded at $32.28 an ounce.

MARKET NEWS HEADLINES
-U.S. Stocks Erase Weekly Gains -WSJ
-U.S. inflation under wraps - Marketwatch
-Why Central Banks Can't Let Up on the Stimulus Pedal - CNBC
-UNIMAGINABLE SCHOOL SLAUGHTER LEAVES DOZENS DEAD - DrudgeReport

santa SANTA EXPLAINS "THE GREAT DEBASEMENT" - Editor
Your editor volunteered to play Santa at a Christmas/birthday party this week. And what did Santa bring for all the good boys and girls? You guessed it, a copy of our newest book, "The Great Debasement". I sat down and explained to one and all what has happened to our money over the last century in a nutshell. Most were surprised to learn that our modern "dollar" retains a mere 1-2 cents of its original buying power. As Mark Twain says, "The truth is stranger than fiction!"

TOP STORIES OF THE WEEK

OBAMA CUTTING BACK, WE SHOULD TOO! - Editor
I saw this simple analogy in an email recently and wanted to share it with our readers. President Obama recently ordered the cabinet to cut $100,000,000.00 ($100 million) from the $3,500,000,000,000.00 ($3.5 trillion) federal budget. So, if I took his lead how much would I need to axe from my personal $2,000/month budget?

Well, instead of spending $2,000 a month, I'd have to cut that number by six cents. Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about.

FED HANDS OBAMA POWER TO SHAPE MONETARY POLICY - NewsMax
Clearly the fabled Fed "Bazooka" of stimulus has become a mere pop gun — unable to rescue our wallowing economy, yet now required to prevent it from falling asleep.

The Fed intends to hold interest rates near zero until 2015 or beyond, a policy that economists call "financial repression" because it means that banks will pay savers less than the rate of inflation. Savers will continue to lose money by having bank accounts, and will feel pressure to move their money into riskier investments.

Americans may get a lump of coal in their Christmas stockings for the next four years, along with a bill for President Barack Obama's pending carbon tax. The Fed this week, history may record, virtually handed its power to shape and regulate monetary policy to President Obama.

[Above column is by Lowell Ponte, co-author of The Great Debasement]

FED ACCELERATES 'GREAT DEBASEMENT' OF U.S. - Craig R. Smith
"The Fed policy statement today, focused on tying interest rate moves to the unemployment rate, is unprecedented", according to author and Swiss America Chairman Craig R. Smith. Mr. Smith asks...

-What if unemployment never goes below 6.5%? Will Fed funds be zero forever?

-What if more people leave the work force and unemployment falls below 6.5% as a result? Will that be the right time for the Fed to raise rates?

-Why are interest rates now tied to unemployment and inflation, but the purchases of MBS and Treasury debt are tied to nothing?

Smith says the Fed's move is bullish for stock, gold, silver and commodity prices. This represents a double-pumping of money from a year ago. The Fed, in his opinion, has decided to attempt to print their way back to financial health.

"This is like pumping more heroin into a junkie to make him better. Until the junkie dies, he might look and feel great, but this type of treatment plan in reality will only hasten the junkie's demise."

GOLD AND SILVER POISED FOR MAJOR MOVE - GoldSwitzerland
Gold and Silver poised for major move, according to GoldSwitzerland's Egon von Greyerz. The fundamental and technical picture could not be better for gold and silver.

Most governments’ deficits are escalating at a fast rate. Money printing worldwide is likely to accelerate rapidly and could reach exponential rises in the next 1-3 years.

Gold and Silver will continue to reflect the destruction of paper money but must be held in physical form and stored outside a very fragile financial system.

The next target for Gold is still $4,500-5,000 and for Silver $150. These targets could be reached in the next 12-18 months. Longer term targets are much higher.

More: Swiss America Gold Market News


12.13.12 - If Government Giveth... It Can Also Taketh - Listen

Gold prices dipped below $1,700/oz. Thursday on profit taking and a firmer dollar. Stocks flat despite Fed pump. Gold last traded at $1,695 an ounce. Silver traded at $32.44 an ounce.

MARKET NEWS HEADLINES
-Retail Up; Jobless Claims, PPI Down - CNBC
-Stocks fall after fiscal-cliff briefing - Marketwatch
-U.S. Terror Agency to Tap Citizen Files -WSJ
-AETNA CEO Sees Health Law Doubling Some Premiums - Bloomberg

"THE GREAT DEBASEMENT is very educational...explaining how politicians have used deceptive ways to tax, control and debase our money. It is a shame and crime what has happened to America! I will share this book with others! Keep up the good work!" -Sylvia J., Elkins, WV more rave reviews!

santa OBAMA CUTTING BACK, WE SHOULD TOO! - Editor
President Obama recently ordered the cabinet to cut $100,000,000.00 ($100 million) from the $3,500,000,000,000.00 ($3.5 trillion) federal budget. So, if I took his lead how much would I need to axe from my personal $2,000/month budget?

Well, instead of spending $2,000 a month, I'd have to cut that number by six cents. Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about.

FED HANDS OBAMA POWER TO SHAPE MONETARY POLICY - NewsMax
Clearly the fabled Fed "Bazooka" of stimulus has become a mere pop gun — unable to rescue our wallowing economy, yet now required to prevent it from falling asleep.

The Fed intends to hold interest rates near zero until 2015 or beyond, a policy that economists call "financial repression" because it means that banks will pay savers less than the rate of inflation. Savers will continue to lose money by having bank accounts, and will feel pressure to move their money into riskier investments.

Americans may get a lump of coal in their Christmas stockings for the next four years, along with a bill for President Barack Obama's pending carbon tax. The Fed this week, history may record, virtually handed its power to shape and regulate monetary policy to President Obama.

[Above column is by Lowell Ponte, co-author of The Great Debasement

GOVERNMENT, NOT MARKET, CREATED FINANCIAL CRISIS - IBD
Suppose you saw a building on fire. Would you seek counsel from the arsonist who set it ablaze for advice on how to put it out? But that's precisely what we've done: turned to the people who created our fiscal crisis to fix it.

Free-market capitalism is unforgiving. In order to earn a profit and stay in business, producers must please customers and wisely use resources to do so. If they fail to do this, they face losses or go bankrupt.

It's this market discipline of profits and losses that many businesses seek to avoid. That's why they descend upon Washington calling for government bailouts, subsidies and special privileges.

A BRIEF HISTORY OF AMERICAN PROSPERITY - CityJournal
Fixing an ailing economy can be difficult in a democracy. Politicians running for office, pundits, and incumbent administrations will always be tempted to promote quick fixes, which aren’t really fixes at all. Indeed, as history shows, many popular responses to economic crises—closing borders to immigration and free trade, hiking taxes, or printing money excessively and driving up inflation—can do incredible damage to long-term growth.

In the current sluggish economic environment, the remarkable history of American dynamism is thus more instructive than ever. America’s economic might is rooted in an entrepreneurial culture and a passion for innovation and risk-taking, traits nourished by the nation’s commitment to the rule of law, property rights, and a predictable set of tax and regulatory policies. Policymakers have lost sight of these fundamental principles in recent years. The next era of American prosperity will be hastened when they return to them.

More: Swiss America Gold Market News


12.12.12 - Fed Doubles-Down on Dereliction of Duty

Gold prices rose Wednesday on bargain hunting and safe haven buying. Stocks flat despite Fed pump. Gold last traded at $1,712 an ounce. Silver traded at $33.48 an ounce.

MARKET NEWS HEADLINES
-Fed pegs low-rate pledge to U.S.'s unemployment rate - Marketwatch
-Fed Gives Stocks a Lift, says WSJ, then deflate by the close.
-Fed projects high unemployment for next 3 years, adds AP.
-'Cliff' Talks at Standstill: 'It's Getting Worse, Not Better' - CNBC
-Right-to-Work Set to Ripple Across the Country - CNBC

more money FEDERAL RESERVE TO SPEND $45B A MONTH TO BUY BONDS - Wash Post
The Federal Reserve will spend $45 billion a month to sustain an aggressive drive to keep long-term interest rates low. And it says it plans to keep a key short-term rate near zero until unemployment drops below 6.5 percent.

The Fed said it will direct the money into long-term Treasurys to replace an expiring bond-purchase program. The new purchases will expand its investment portfolio, which has reached nearly $3 trillion.

FED ACCELERATES 'GREAT DEBASEMENT' OF U.S. - Craig R. Smith
"The Fed policy statement today, focused on tying interest rate moves to the unemployment rate, is unprecedented", according to author and Swiss America Chairman Craig R. Smith. Mr. Smith asks...

-What if unemployment never goes below 6.5%? Will Fed funds be zero forever?

-What if more people leave the work force and unemployment falls below 6.5% as a result? Will that be the right time for the Fed to raise rates?

-Why are interest rates now tied to unemployment and inflation, but the purchases of MBS and Treasury debt are tied to nothing?

Smith says the Fed's move is bullish for stock, gold, silver and commodity prices. This represents a double-pumping of money from a year ago. The Fed, in my opinion, has decided to attempt to print their way back to financial health.

This is like pumping more heroin into a junkie to make him better. Until the junkie dies, he might look and feel great, but this type of treatment plan in reality will only hasten the junkie's demise.

GOLD AND SILVER POISED FOR MAJOR MOVE - GoldSwitzerland
Gold and Silver poised for major move, according to GoldSwitzerland's Egon von Greyerz. The fundamental and technical picture could not be better for gold and silver.

Most governments’ deficits are escalating at a fast rate. Money printing worldwide is likely to accelerate rapidly and could reach exponential rises in the next 1-3 years.

Gold and Silver will continue to reflect the destruction of paper money but must be held in physical form and stored outside a very fragile financial system.

The next target for Gold is still $4,500-5,000 and for Silver $150. These targets could be reached in the next 12-18 months. Longer term targets are much higher.

More: Swiss America Gold Market News


12.11.12 - World's Only Cliff-Proof Currency - Listen

Gold prices steadied above $1,700/oz. Tuesday amid bargain hunting and profit taking. Stocks rebound on cliff hopes. Gold last traded at $1,710 an ounce. Silver traded at $32.99 an ounce.

MARKET NEWS HEADLINES
-U.S. stocks rise on hopes for budget deal -Marketwatch
-Companies Seek to Beat Obama Tax Increases - Bloomberg
-101 new federal employees PER DAY since Obama took office - DrudgeReport
-Jim Cramer: "We're Done, We're Going Over the Fiscal Cliff" - CNBC

truth about money Jim Cramer believes Gold is the only currency that will survive the imminent cliff-diving and he's desperately urging investors to turn to gold as their fiat money quickly depletes in value.

We agree. And would invite you to discover the truth about money from a historical and Biblical perspective here. Remember, it was St. Nickolaus who first started the noble tradition of placing gold coins into children's Christmas stockings. Real U.S. silver coins also make a great stocking stuffer!

SALES OF AMERICAN EAGLE GOLD COINS SOAR - CNBC
Demand for gold coins in the US has soared since the presidential election, as small investors fret about the lack of action to address America's ballooning debt.

The US Mint's sales of American Eagles, one of the most popular gold coins, jumped 131% in November, hitting their highest level in more than two years.

The political gridlock in Washington and the prospect of further quantitative easing when the Federal Reserve's "operation twist" expires at the end of this year have fueled demand for precious metals. "They don't believe in Uncle Sam any more," said the head of precious metals at a large bank.

HOW FED'S NEXT TRICK WILL HURT BONDS - MSNMoney
Another bond-buying program seems likely as the Federal Reserve tries to boost the economy. But long term, it will lead to higher interest rates, inflation and bond market turmoil.

The [Feds] new plan would resume the rapid growth of the Fed's balance sheet and push it to $3 trillion sometime in 2013. How does the Fed shrink its balance sheet back to something like normal size without crashing the U.S. and global economies?

The Federal Reserve pays for these purchases, essentially, by creating money with the government's printing presses. That's why its purchases of bonds in the open market add to the money supply -- those purchases are paid for with newly printed money. Seen from this perspective, the Fed's balance sheet consists of "assets," such as Treasury bonds, purchased with money conjured out of thin air.

The big problem comes when the economy starts to pick up speed. Then, all that created money that was intended to speed up growth becomes the source of inflation and threatens to push up not just prices (consumer inflation) but also the prices of financial assets (asset-price inflation). Neither is good.

NEED HELP WITH MONEY? PLAY A GAME - CSMonitor
That's the goal of a new crop of personal finance applications, including Financial Football and SaveUp. The game makers hope that by playing the games, people will learn good personal finance habits that will translate to the real world.

"What concerns me is the notion of nudging people, linking savings with gambling behavior," says Victor Ricciardi, a finance professor at Goucher College in Baltimore. The gaming aspect can muddle motivation and, perversely, encourage risky behavior.

More: Swiss America Gold Market News


12.10.12 - Trillion-Dollar Platinum Coin Debt Solution? - Listen

Gold prices rose above $1,700/oz. Monday amid bargain hunting and safe haven buying. Stocks struggle for gains. Gold last traded at $1,712 an ounce. Silver traded at $33.25 an ounce.

MARKET NEWS HEADLINES
-U.S. and U.K. join forces for too-big-to-fail bank plan - Marketwatch
-Poll Shows Support for Taxing High Incomes -WSJ
-Fed Is Likely to Sustain Its Stimulus Program - CNBC
-76% Favor 'Cutting Government Spending Across the Board' - Politico

PREPARE FOR 2013 FISCAL CLIFF NOW! - NewsRelease
As the U.S. rushes toward the 2013 fiscal cliff's edge - just 21 days from now - investors big and small are scrambling to find alternative locations for their hard-earned money, according to author and Swiss America Chairman Craig R. Smith.

Mr. Smith says traditional, financial safe havens may be at risk of being stripped from citizens like they have been in other countries, such as Argentina and Venezuela. Today in the US, $18.5 Tr. in pension funds and even your home mortgage deduction are in the cross-hairs, as a desperate Federal government seeks new tax increases to help feed its spending addiction. The solution? Transfer more funds into physical gold for safety, now!

giant coin THE TRILLION-DOLLAR COIN - CNBC
Guggenheim Securities, a Washington Research Group, has resurrected the idea of using a trillion-dollar coin to avoid the debt ceiling. Although there are statutory limits that prevent the Treasury from printing paper currency to fund its operations, there's a quirk in the law that allows the Treasury to mint platinum coins of any denomination.

There could be a long-term inflationary problem, if the government fell in love with the idea and used platinum coins to finance ever larger deficits.

[Ed. Note: At today's price a platinum coin valued at $1 trillion would need to be over 50' in diameter and weigh 25 tons - which would be twice the size of this 12 ton, 25' pop metal coin statue in London promoting the British lottery. Based upon a 7 mill. oz. annual platinum supply, such a coin would require 88 years of the total platinum production. DC wonks: dream on!]

RETIRING ON THE EDGE OF THE FISCAL CLIFF - Marketwatch
One of the biggest risks retirees and pre-retirees face is that of taxes; not just paying them but the risk that tax policy will change and throw a big wrench into one’s plans. That risk—in the form of the fiscal cliff—is now upon us.

IS THE ECONOMY CREATING A LOST GENERATION? - Real Clear Markets
This is not a good time to be starting out in life. Jobs are scarce, and those that exist often pay unexpectedly low wages. Beginning a family - always stressful and uncertain - is increasingly a stretch.

More: Swiss America Gold Market News


12.7.12 - Silver Lining in Darkening Economic Climate - Listen

Gold prices held at $1,700/oz. Friday amid safe haven buying, despite a firmer dollar. Stocks mixed on jobs data. Gold last traded at $1,702 an ounce. Silver traded at $33.07 an ounce.

MARKET NEWS HEADLINES
-Consumer Sentiment Falls Off Cliff -CNBC
-Jobless Rate Falls to 7.7% -NY Times
-73% of New Jobs Created in Last 5 Months Are in Government -CNSNews
-Detroit Planning Bankruptcy -Detroit News
-Fiscal Cliff Talks Spur Charitable Giving -WSJ
-Flags fly at half-staff on Pearl Harbor Remembrance Day -Examiner

DESPITE CHOPPINESS, GOLD TO HAVE MASSIVE BREAKOUT IN 2013 - KingWorldNews
With continued volatility in gold and silver, today King World News wanted to share what top Citi analyst Tom Fitzpatrick released concerning the action in the gold market. Fitzpatrick has been incredibly accurate regarding his forecasts for both gold and silver.

The [gold] price action over the past year reminds us of the correction / consolidation seen on Gold in 2006 before a break to higher highs. While choppy price action may be seen over the weeks ahead, we believe that overall the trend is still up and higher highs will be seen in 2013.

Politics on the Rocks WHY GROVER NORQUIST'S TAX PLEDGE WORKS - Forbes
Listening to the media these days, it seems Grover Norquist is Public Enemy No. 1. His insistence lawmakers keep their promises to voters—in the form of the Tax Pledge—is blocking the “reasonable” compromises needed to avert the dreaded fiscal cliff.

Grover Norquist’s organization, Americans for Tax Reform, has long promoted less-distorting tax policies. This is much needed. Though taxation surely slows economic growth and wealth creation, so also do government spending and regulations.

Norquist’s genius has been to recognize politics can be disciplined only by qualitative rules, such as the “No Tax Increase” pledge. Bureaucrats and politicians have proved far too creative at gaming quantitative disciplinary rules.

[Ed. Note: I had the pleasure of meeting Grover Norquist last night at a Politics On the Rocks event in Phoenix, AZ. We are pictured exchanging a copy of "The Great Debasement" book for a copy of his latest book, "Leave Us Alone: Getting the Government's Hands Off Our Money, Our Guns, Our Lives".]

SILVER GAINS FAVOR AS AN INVESTMENT ASSET - Marketwatch
Silver prices are up around 19% year to date. Gold has gained nearly 9% for the year so far. Silver’s more popular and volatile than ever, ready to finish the year with gains more than double those of gold, as the industrial staple wins more favor as an investment asset.

“The evidence is clear that investment, not industrial demand, is what is driving silver prices higher,” said Mark Thomas, chief investment strategist of Silver Price Advisor.

“Silver is increasingly seen as an undervalued asset and its strong consolidation levels around $30-$33 are seen as a buying opportunity,” said Paul Mladjenovic, author of Precious Metals Investing for Dummies.

$3 TRILLION FED EXIT PLAN MAY BE REDRAWN - Bloomberg
A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month-old blueprint for an exit from record monetary stimulus.

“There is certainly an issue about unwinding the balance sheet” in a way that “is effective and continues to support the recovery without creating inflation,” St. Louis Fed Bank President James Bullard said in an interview in October.

More: Swiss America Gold Market News


12.6.12 - A Pinocchio Recovery built on Goldilocks Money - Listen

Gold prices rebounded to $1,700/oz. Thursday amid safe haven buying despite a firmer dollar. Stocks inch higher. Gold last traded at $1,699 an ounce. Silver traded at $32.99 an ounce.

MARKET NEWS HEADLINES
-Unemployment back above 8% - Gallop
-Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny -NYT
-Amid 'Fiscal Cliff' Stalemate, Main Street Deteriorates - CNBC
-Pinocchio recovery: It moves only when somebody pulls a string - WSJ
-Banks gird for new world as Citi cuts 11K jobs - USAToday

HOMES MIGHT SOON NO LONGER BE TAX SHELTERS, SAY EXPERTS - NewsRelease
“The American Dream will soon be put to death by President Barack Obama and lawmakers of both parties who are planning to end the tax-deductibility of interest that homeowners pay on their mortgages,” says Craig R. Smith, author of The Great Debasement: The 100-Year Dying of the Dollar and How to Get America's Money Back.

big question “This has been the biggest tax break widely used by hard-working Middle Class Americans, but greedy, money-hungry politicians are now quietly plotting to snatch it away – first tightly capping it for the Upper Middle Class, and soon thereafter phasing it out for the Middle Class,” says Smith.

“In 1913 Congress began allowing citizens to deduct interest paid for many things, including homes,” says Smith, whose new book focuses on the creation of the income tax and Federal Reserve by Progressives in 1913, and how the U.S. Dollar has over the 100 years since then lost 98 percent of its purchasing power through money and tax manipulation.

2013 TIPPING POINTS - TheGreatDebasement
Here are a few quotes from "The Great Debasement" by Craig R. Smith and Lowell Ponte; “Goldilocks money – today's U.S. Dollar or the Euro are prime examples – looks like money, exchanges like money and serves as units of exchange like money.”

“Yet in today's Keynesian world, where the government does not want people slowing down the velocity of money by saving it, Goldilocks money is, by design, increasingly unreliable as a store of value.”

THE PINOCCHIO RECOVERY AT THE EDGE OF THE FISCAL CLIFF - WSJ
If the economy tumbles over the fiscal cliff, it could trigger a recession, the CBO warned. Or, it could plunge the entire globe into recession, the OECD warned.

The stories have focused on how the political battle impacts the economy, but they’ve largely missed a pretty obvious point – how weak this recovery has been and how dependent upon government spending this economy has become.

What we’ve got on our hands is a Pinocchio recovery, a puppet that wants to be a real boy, but remains just a wooden toy that moves only when somebody’s pulling the strings. It needs massive amounts of stimulus — government spending, cheap interest rates, tax holidays, tax breaks on equipment purchases, and so on – to move it.

QE: THE MONETARY POLICY OF THE ADOLESCENT - RealClearMarkets
Parents often tell their children that "money doesn't grow on trees," but that's exactly the assumption on which the Bernanke Fed is operating. QE creates new money-tickets out of nothing and deposits them in the banking system in return for interest-bearing assets.

Empirical evidence reveals that new money creation leads directly to devaluation of the dollar. That's already been a visible result of the Fed's actions. The Fed is mistaken to presume, as a child might, that money is wealth.

The message from a policy of zero interest rates and devaluation to those whose prudence might otherwise fuel future production, and with it a true multiplication of credit, is that saving is for fools. Better to consume now and reduce the capital stock. Fed policy does not reward thrift; and worse, it results in dollars that buy even less down the line.

More: Swiss America Gold Market News


12.5.12 - Corruptible World Seeks Incorruptible Money - Listen

Gold prices hovered below $1,700/oz. Wednesday amid year-end profit taking and safe haven buying. Stocks mixed on earnings. Gold last traded at $1,694 an ounce. Silver traded at $32.95 an ounce.

Today's Headlines
"Fiscal cliff" talks frozen, Obama lobbies big business
Obama to Stress Need to Raise Debt Limit
Why 'Cliff' Talks Will Take Longer Than 4 Weeks
For the poor, ‘recovery’ is a mirage
Obama's Economic Policies Not Even Keynesian

safe harbor IS GOLD STILL A SAFE HARBOR? - Marketwatch
“The volatility that the price of gold has seen lately gives the illusion that it is not a safe haven, but in reality investors still view it as a place to protect their wealth,” said David Beahm, vice president at precious-metals investment firm Blanchard & Co.

Fundamentally and technically, analysts blame gold’s recent volatility on everything from hedge-fund liquidation, technical price triggers and year-end book squaring to economic, U.S. fiscal cliff and euro-zone developments and inflation and deflation prospects. Through it all and despite the selloffs, however, investor interest in gold hasn’t wavered.

SOUTH KOREA CENTRAL BANK STOCKING UP ON GOLD - Reuters
The Bank of Korea bought 14 tons of gold in November for $780 million, the fourth purchase in about one-and-a-half years and lifting the proportion of gold in its total foreign reserves to 1.2% from the previous 0.9%, it said in a statement. "Gold is a physical, safe asset and allows (the country) to deal with changes in the international financial environment more effectively."

THE MOST AND LEAST CORRUPT COUNTRIES - CNBC
The U.S. ranked 19th out of 176 countries in this year's index, scoring 74 on a scale of zero to 100, where zero is "highly corrupt" and 100 is "very clean." The data suggest worsening corruption in some countries in turmoil. For example, Greece fell to 94th place in 2012 from 80th last year. Egypt ranks 118th in 2012, compared to 112th in 2011. Italy drops three places to 72nd.

Despite a long history of pronouncements about corruption and a major crackdown after 9/11 attack, the U.S. has never been a stellar performer in the rankings. Last year, it recorded its worst finish ever at 24th. New Zealand, Denmark and Finland, by contrast, have consistently finished at or near the top.

WHO THE REAL SCROOGE IS - Bloomberg
The theme of “A Christmas Carol” is that economic redistribution, sharing more of your shillings, is the only move for a rich man to make. The president assumed that Americans, especially more vulnerable ones, love economic redistribution as much as they love the greats of literature. That is not what the evidence suggests.

From 1913, when the [progressive tax] code was introduced, tax scholars assumed people endorsed progressivity. Studies showed that many said they did. In the 1950s, for example, 71 percent of pastors surveyed disagreed with the proposition that a “steeply graduated income tax violates the moral principle that man is entitled to the fruit of his labor.”

The assumption in “A Christmas Carol,” and of Obama, is that the most vulnerable members of society, the Cratchits, want Scrooge to cough up a little extra. It turned out that less-educated Americans, those least likely to earn the kind of income subject to top rates, endorsed progressivity less often than more educated Americans.

Democrat or Republican, Americans overwhelmingly opposed the taxing of bequests. The poorer the respondents were, the more they supported estate-tax abolition. These Cratchits didn’t want Scrooge’s money.

DOLLAR CLIFF? - Merk
In our assessment, the fiscal cliff, that is the looming simultaneous tax increases and spending cuts, is mostly a distraction. It's a distraction because it does not solve our long-term fiscal problems.

As Europe has shown us, the only language policy makers appear to understand is that of the bond market; as long as the bond market lets policy makers get away with excessive spending, we see little chance entitlement reform is tackled in earnest. As such, the risk of a dollar cliff may stem from the bond market acting up to provide "incentives" for reform.

THE COMING DERIVATIVES PANIC THAT WILL DESTROY GLOBAL FINANCIAL MARKETS - MensNewsDaily
When financial markets in the United States crash, so does the U.S. economy. Just remember what happened back in 2008. The financial markets crashed, the credit markets froze up, and suddenly the economy went into cardiac arrest. Well, there are very few things that could cause the financial markets to crash harder or farther than a derivatives panic. Sadly, most Americans don't even understand what derivatives are.

Warren Buffett once referred to derivatives as "financial weapons of mass destruction". Nobody really knows the total value of all the derivatives that are floating around out there, but estimates place the notional value of the global derivatives market anywhere from 600 trillion dollars all the way up to 1.5 quadrillion dollars.

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12.4.12 - Gold dip offers holiday buying opp - Listen

Gold prices dipped below $1,700/oz. Tuesday on year-end profit taking and "short squeeze". Stocks mixed up on fiscal cliff. Gold last traded at $1,697 an ounce. Silver traded at $32.93 an ounce.

saving Right on cue, the short-term speculative analysts and gold bears announced to CNBC that the gold bull market is over for now and that investors should avoid "getting taken" by gold coin dealers with high commissions. We agree that buyers should be educated, and fully disclosed about commissions, etc., but to say all gold dealers are crooks and that you are safer buying ETFs or stocks is downright false.

Paul Ryan addressed the fiscal cliff crisis on Tuesday, telling a Milwaukee radio host: “We’re nowhere. We’re farther than where we started ... He took 40 minutes to reject the deal,” Ryan said of Obama’s dismissal of a compromise offered by Republicans on the fiscal cliff on Monday, reports Daily Caller.

WHY PRESIDENT OBAMA'S TAX HIKE WILL HURT THE 98% - Forbes
President Barack Obama’s campaign to raise tax rates on the top 2% will cause far more economic pain to the 98% than to the truly rich. First, the truly rich have already demonstrated their ability to avoid much of the Obama tax hikes. At the same time, the higher marginal tax rates he demands will reduce the opportunities for economic activity, leading to slower growth and fewer job opportunities for the 98%. Finally, those with high incomes inevitably will shift much of the burden of Obama's tax hike to those with lower incomes.

THE HOLLOWING OUT OF AMERICA -TheNation
“Debtpocalypse” looms. Depending on who wins out in Washington, we’re told, we will either free fall over the fiscal cliff or take a terrifying slide to the pit at the bottom. The hollowing out of the United States was well under way long before anyone dreamed up the “fiscal cliff.”

For some long time now, our political economy has been driven by investment banks, hedge funds, private equity firms, real estate developers, insurance goliaths and a whole menagerie of ancillary enterprises that service them. But high times have depended on the downward mobility of working people and the poor...living in the “pit of austerity.” Soon many more of us will join them.

More: Swiss America Gold Market News


12.3.12 - The Tale of Two Cliffs - Listen

Gold prices inched higher Monday on bargain hunting and a weaker dollar. Stocks fall on weak data, fiscal cliff. Gold last traded at $1,717 an ounce. Silver traded at $33.64 an ounce.

U.S. manufacturing shrinks in November to 3-year low, adding stress to recovery hopes. Fiscal cliff talks are at a stalemate, reports Washington Post, but Treasury Secretary Tim Geithner predicts Republican opposition to tax increases on rich will eventually crumble.

Meanwhile, analyst Michael Dudas tells CNBC, "Gold should be in everyone's stocking this year." Mr. Dudas sees $1,850 gold by year end and $2,000 gold by next Christmas. He points out gold price dips are supported by Central Bank buying worldwide. Gold is global money.

THE CHART THAT KEEPS BEN BERNANKE UP AT NIGHT - SeekingAlpha
The last 30 days have seen the largest physical gold sales on record. Many fear what is to come while, "Congress fiddles as our economy burns." Maybe investors are beginning to understand Paper Gold is just like allocated, unambiguously owned physical bullion... until it's not.

THE WORLD'S COMMODITY SUPERCYCLE IS FAR FROM DEAD, writes Ambrose Evans-Pritchard in London Telegraph. We may find that the supercycle is still in good health next year as China cranks up construction again, and America turns the corner.

fiscal cliff CLIFF JUMPING WITH BARACK, writes Fox News contributor Charles Krauthammer.
Where are the spending cuts, both discretionary and entitlement: Medicare, Medicaid and now Obamacare (the health care trio) and Social Security?

Social Security adds $165 billion to the deficit. Democrats pretend that Social Security is covered through 2033 by its trust fund. Except that the trust fund is a fiction, a mere "bookkeeping" device, as the OMB itself has written.

Republicans must stop acting like supplicants. If Obama so loves those Clinton rates, Republicans should say: Then go over the cliff and have them all. And add: But if you want a Grand Bargain, then deal. If we give way on taxes, we want, in return, serious discretionary cuts, clearly spelled-out entitlement cuts and real tax reform. Otherwise, strap on your parachute, Mr. President. We'll ride down together.

DEBT CEILING IS A CLIFF HANGER - NY Post
The entire podium-posturing about the fiscal cliff has really been nothing more than a fig leaf for raising the debt ceiling. The country will once again max out its taxpayer-funded credit card and bump up against its borrowing limit very early in 2013 — close to Inauguration Day, coincidentally.

If they raised taxes per the Obama administration’s ridiculous request, it would cover 5 to 7 percent of the problem. So they’ve spent 90 percent of their pompous podium-posing time talking about less than 10 percent of the solution.

If they are serious about cutting deficits, why not have a pro-jobs program? For each person who gets back to work in the non-government world, our deficit shrinks by a factor of two. First, he or she no longer needs unemployment benefits or food stamps. And second, that individual, even if a low-to-moderate earner, now.

More: Swiss America Gold Market News

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