Real Money Perspectives 2012
GOING BACK ON THE GOLD STANDARD
TABLE OF CONTENTS
VOTE GOLD 2012
by Craig R. Smith
GOP CANDIDATES FAVOR A RETURN TO THE GOLD STANDARD
by Lowell Ponte
WORLD MUST ABANDON PAPER CURRENCIES
by Lewis E. Lehrman, Goldstandardnow.org
GOLD OFFERS "RISKLESS RETURN" SAY EXPERTS
by David Bradshaw, Editor, RMP
TV ADS SPIKED BY MAJOR NETWORKS
by Jerome R. Corsi, WND.com
CITIZENS, PLUG AND BAIL FURIOUSLY - WE'RE SINKING!
by Pat Boone, Entertainer
WHY GOLD? WHICH GOLD? WHOSE GOLD?
by Tom Rodriguez, Sr. Broker, Swiss America
HOW TO FIGHT INFLATION: STAY AT HOME AND STARVE
by Wes Vernon, Renew America
MINT-STATE $20 GOLD COINS
Safety, Growth, plus 100% Privacy!
2012: COIN OF THE REALM
by Craig R. Smith, Chairman, Swiss America
By Craig R. Smith
Swiss America Trading Corporation
Americans are awakening to a stark reality in this election year: our social and economic problems have grown so large, they cannot be solved by changing one group of today's politicians for another.
To paraphrase President Ronald Reagan, with few exceptions our politicians of both major parties are the problems.
It's time to invest our best hopes and the fruits of our labor in something far more dependable than politicians and their self-serving promises.
THE SHRINKING PIE
“The perfection of interest group politics,” wrote Judge Richard Posner in his 2010 book The Crisis of Capitalist Democracy, “seems to have brought about a situation in which...taxes can't be increased, spending programs can't be cut, and new spending is irresistible.”
The United States after World War II was so productive that we could afford both guns and butter – the world's greatest military, material abundance for working Americans, and a social safety net for those in need.
So long as the pie kept getting bigger, our two major political parties – the Democratic Party of ever-bigger government, and the Republican Party of national security and capitalist markets – could both win, providing benefits to their supporters without oppressively high taxes on the Middle Class.
The pie is now shrinking rapidly, wrote Washington Post economics columnist Robert J. Samuelson last December, and our politicians must switch from “giveaway” to “takeaway” politics. Their job is now “reducing benefits or raising taxes significantly....It is not clear that either Democrats or Republicans can navigate the change.”
“The two major political parties are enmeshed in a death struggle to protect the benefits and goods that flow to their respective bases, each attempting to expropriate the resources of the other,” writes liberal New York Times online columnist Thomas Byrne Edsall in his new book The Age of Austerity: How Scarcity Will Remake American Politics.
WHO WILL PAY THE BILLS?
We are now at the end of a century-long party of free-spending more than we produce, a century of living on borrowed money, counterfeited paper fiat currency created out of thin air, and credit cards and loans taken out against a giant bubble of home prices and easy debt.
The astronomical bills for this wild party are now coming due.
As Edsall rightly observes, American politics has turned into a nasty, no-holds-barred war between the two major political parties to determine who will be stuck with paying for these past debts and future welfare expenditures.
Democrats for the past 80 years have bought their voters and power by adhering to President Franklin Delano Roosevelt's motto: “Tax and Tax, Spend and Spend, Elect and Elect.”
For their government-dependent faithful, Democrats erected costly shrines to the liberal welfare state – Social Security and Medicare foremost among them.
Because of such edifices to ever-bigger government, roughly two-thirds of every dollar in taxes Americans pay now goes to “transfer payments,” the government taking money out of your pocket simply to transfer it into the pocket of someone the politicians deem more entitled, more deserving of the fruits of your labor than you are.
“When the people find they can vote themselves money,” warned Benjamin Franklin, “that will herald the end of the republic.”
Fully 45 percent of American homes now have someone living there who receives a government check of some kind. By the time the now-retiring Baby Boomers are on Social Security, this will rise to above 60 percent – and we can kiss goodbye any chance that a majority of officeholders in either party will vote to roll back the welfare state.
Like most sacred tombs of Egypt's ancient Pharaohs, however, Social Security and Medicare (which were supposed to protect retirees) have already been looted by the very politicians, Democrats and Republicans, who claim to protect them.
What remains in Social Security's trust fund is $2.6 Trillion of government promissory documents, IOUs. President Barack Obama likewise looted half a trillion dollars from Medicare to fund his new entitlement program known as Obamacare. No matter, say the liberals, because “we owe it to ourselves.”
Yet President Obama in 2010 and 2011 denied Cost-of-Living Adjustments to Social Security recipients by pretending that the rapidly-rising costs of food and fuel were not really “inflation.” Seniors lost hundreds of billions of dollars through Mr. Obama's looting, which lowered the payment baseline for all future recipients.
When everyone becomes a gimme pig, however, and overtaxed producers simply quit producing as in Ayn Rand's novel Atlas Shrugged, the politicians will soon run out of free goodies they can give away to buy votes.
Ultimately there really is no such thing as a free lunch. A welfare recipient might get it without cost, but somebody had to invest the money and effort to create that lunch.
Many liberals deem themselves too sophisticated to believe in God, yet they have a dogmatic belief in Santa Claus in that whatever they want can always be provided by politicians. Yet these politicians produce nothing, and get what they give by robbing Peter to pay Paul – a sure way, as playwright George Bernard Shaw observed, to always get Paul's support.
As I explained in 2011's The Inflation Deception: Six Ways Government Tricks Us...And Seven Ways to Stop It!, our government and Federal Reserve have been printing trillions of dollars – at least $5.5 Trillion since President Obama took office – as a stealthy way of taxing us, redistributing wealth and power, and bankrolling a government whose politicians find it risky to openly impose higher taxes.
The politicians will be unable to pass out free goodies much longer because, frankly, they are running out of deposits of wealth to rob. They are devouring the capital in capitalism, the seed corn from which future jobs and companies would have been grown.
Plans are reportedly already on the books to require that our IRAs, 401Ks and other pension plans be invested in government bonds – thereby forcing us to lend those savings to the government at whatever interest rate it is willing to pay. They will not say much about this until after the November 2012 election.
The politicians are also running out of creditors, such as the People's Republic of China, willing to lend our government more trillions of dollars at near-zero interest rates.
Soon only one semi-viable option will remain. Rather than put the obese government they love on a life-saving diet, many politicians will simply turn on the printing presses and, out of thin air, create enough devalued paper money to cover any and all government debt.
This “monetizing” of our debts will, of course, destroy the purchasing power of whatever portion of your life savings is denominated in U.S. dollars.
This could quickly turn us into a hyper-inflated economy akin to Weimar, Germany after World War I, where unions and other cronies politically close to the leftist government were privileged with weekly, even daily, “pay raises” that at least tried to keep up with rising prices.
In such a future, millions will quickly become “millionaires,” receiving paychecks with many zeroes on them (yet that will have less purchasing power than the checks they get now).
Politicians sold the income tax and Alternative Minimum Tax (AMT) by promising that it would hit only millionaires. President Obama now promises, like Lucy holding the football for Charlie Brown, that his latest proposed tax on the wealthy will not affect the rest of us. And many envious Americans will doubtless fall into this self-taxing trap for a third time.
CAN WE TAX, SPEND AND BORROW OUR WAY BACK TO PROSPERITY?
Our Federal Government is currently borrowing 42 cents of every dollar it spends – borrowing at a rate of $58,000 every second. If this continues, a coming tidal wave of dollar-destroying high inflation is inevitable.
Republicans say they want to stop such profligate spending and soaring debt, yet in summer 2011 they voted yet again along with congressional Democrats to increase the debt ceiling.
Then in January 2012, at the start of this election year, House Republicans ostentatiously voted for a non-binding resolution expressing their disapproval of the latest $1.2 Trillion increase in President Obama's authority to borrow more, authority they had approved the previous summer. The only thing this resolution did was to let Republicans pretend that they had voted against $1.2 Trillion in debt to be paid by our children and grandchildren.
Truth be told, the spending proposals of both congressional leading Republicans and Democrats will balloon our indebtedness far beyond $20 Trillion by year 2020.
The national lawmakers of both parties are drug addicts, spendaholics. Their drug is easy money, and until something takes away their ability to print as much as they want – and thereby takes away their no-limit credit card – their America-destroying spending spree will continue.
We used to have a constraint on reckless spending. It was called the Gold Standard. It gave individual Americans the power to redeem paper dollars for gold, which meant that politicians did not dare print more paper money than the government had gold.
Under a Gold Standard we needed no Federal Reserve. The dollar regulated itself, and retained its purchasing power reliably decade after decade for most of a century. The government had to think carefully before going to war, because unlike today it could pay a steep price for printing paper money to finance wars.
The Gold Standard put golden handcuffs on politicians, limiting their ability to conjure, inflate and manipulate the economy.
With the rise of the anti-capitalist Progressive movement around 1900, its adherents such as presidents Republican Teddy Roosevelt and Democrat Woodrow Wilson supported creation of the Federal Reserve. Both sides wanted to be able to print all the money needed to bankroll the warfare state or the welfare state.
To print the money needed for his war in Vietnam and his War on Poverty, President Lyndon Johnson severed the dollar's redeemability in silver. President Richard Nixon in 1971 ended the last vestige of central bank redeemability of U.S. Dollars for gold.
With these anchors gone, the dollar's value sank rapidly. Inflation exploded. The first oil embargo soon followed, used by oil producers to demand higher prices to offset the dollar's plunging value. What in 1971 cost $1 would by 2010 cost on average $5.65.
A restored Gold Standard would do much to restore the U.S. Dollar's value, slow reckless government spending, and push back the coming tidal wave of inflation that threatens America's economy.
YEAR OF THE GOLDEN ELEPHANTS
For decades Texas Rep. Ron Paul, who had been a member of President Reagan's Gold Commission, stood almost alone in Congress as advocate for restoring a Gold Standard.
Among this year's candidates for the Republican presidential nomination, Rep. Paul was one of seven initial candidates supporting a new Gold Standard. Others who joined an Iowa bus tour last June advocating this were business executive Herman Cain, former Minnesota Gov. Tim Pawlenty, former New Mexico Gov. Gary Johnson, Minnesota Congresswoman Michele Bachmann and former Pennsylvania Sen. Rick Santorum.
Former Speaker of the House Newt Gingrich participated on the Iowa bus tour, and in January 2012 he called for a new Gold Commission similar to President Reagan's to consider a return to a Gold Standard.
Former Massachusetts Governor Mitt Romney had not as of January 2012 joined his remaining rivals in advocating a new Gold Standard.
Two other former GOP presidential candidates took strong monetary policy positions. Texas Gov. Rick Perry was an outspoken critic of the Federal Reserve but did not formally endorse a new Gold Standard. Former Utah Gov. Jon Huntsman called for a return to “sound money” but not necessarily a Gold Standard.
Because a new Gold Standard would constrain politicians who are eager to expand the supply of money they have to spend, we should not be surprised if advocates of either the warfare state or welfare state strongly oppose it.
A Gold Standard would be one of the most powerful ways to limit government power and restore honest-money values to America.
THE LITTLE RED HEN
If President Obama wins re-election in November 2012, he has vowed that President George W. Bush's tax cuts will not be renewed. If these cuts end, then combined with increases in Obamacare, American business will be hit by at least $3 Trillion in tax increases.
That, along with the pessimism potential investors will feel at the re-election of an openly anti-free enterprise president, will snuff out both the capital and the “animal spirits” needed for economic recovery.
Even if a Republican President and congress win election, it is uncertain whether these politicians are willing to risk future defeat by rapidly cutting government spending and entitlement programs.
In the fable of the Little Red Hen, this plucky pullet does not wait for others to help her. “I did it myself,” becomes her refrain of success...or, as we discuss in The Inflation Deception, her political incorrectness in a liberal world where the productive are expected to give what they create to the unproductive.
America's independence, freedom and prosperity came not from government but from pioneers who were mostly self-reliant and were ready to do things themselves.
America's Founders would not have waited for government to provide for them, and neither should we today in restoring their values.
You can create your own Gold Standard starting today by converting a portion of your nest egg into the kind of genuine, intrinsically-valuable money that undependable politicians cannot destroy with a printing press in Washington, D.C.
In totalitarian Communist East Germany it was said that those who had no vote in choosing their leaders “voted with their feet” by fleeing into West Germany.
In 2012 you can vote for candidates who talk favorably about restoring a Gold Standard and sound money.
Even more importantly, you can “vote with your feet” by making a portion of your nest egg golden.
A little secret about democracy is that the politicians often watch where the people are already going, then rush ahead and pretend to be leading them. That is how politicians vote with their feet...and now a majority of Republican presidential candidates are rushing to get in front of the public's desire to return to money that's as good as gold, the kind of money specified in our Constitution.
Millions of Americans now look to gold as a safe haven, a secure store of value in a world where paper dollars, euros and our future seem shakier than ever in a rising flood of government debt.
You can elect to protect your savings and family right now. Vote Gold 2012.
By Lowell Ponte
Many of the GOP's candidates have given at least some support to the idea of returning the United States to a gold standard, a policy considered by President Ronald Reagan.
If one of them becomes president, we might soon see legislation to again back the U.S. dollar in some way with gold.
A new gold standard would cause huge changes in America's economy that might send the price of gold skyrocketing to $5,000 or more per ounce.
It would also slam the brakes on unchecked government spending and stop our spendaholic politicians and the Federal Reserve from printing trillions of dollars out of thin air to bankroll the welfare state and the warfare state.
Texas Congressman Ron Paul was a member of President Ronald Reagan's U.S. Gold Commission. A longtime advocate of restoring the gold standard, Rep. Ron Paul and fellow commission member Lewis Lehrman coauthored “The Case for Gold: A Minority Report of the U.S. Gold Commission,” which can be found at mises.org, the website of the Ludwig von Mises Institute.
"How long since they've taken a poll on the gold standard?" asked Rep. Paul in a speech to supporters recently. "We need a gold standard, not a paper money standard."
Former Pennsylvania Sen. Rick Santorum agreed to be part of a bus tour across Iowa last June that was dedicated to advocating the return to a national gold standard.
Other Republican presidential candidates last June also eagerly signed up to be speakers as part of this Iowa tea party-sponsored 18-day bus trip.
Two who signed up for this pro-gold tour were former Speaker of the House Newt Gingrich and Minnesota Congresswoman Michele Bachmann.
Other candidates on last June's pro-gold standard bus tour have long since departed the race. These gold advocates are former pizza company executive Herman Cain, former Minnesota Gov. Tim Pawlenty, and former New Mexico Gov. Gary Johnson, who has said he may seek the Libertarian Party's nomination in 2012.
Texas Gov. Rick Perry, who has also left the race, has not advocated a return to the gold standard. Gov. Perry has, however, been extremely critical of Federal Reserve Board monetary and stimulus policy.
Former Utah Governor Jon Huntsman "doesn't endorse the gold-standard explicitly," reported Business Insider last November 28, "but he does call for 'sound money' in his [economic] plan contending that we 'cannot devalue our way to prosperity'" by just printing more and more paper money out of thin air.
As President Obama's Ambassador to China, Huntsman in December 2010 sent a declassified cable saying that Chinese leaders are deeply concerned that the United States might re-value our dollar and then peg it to gold. This cable, published by WikiLeaks, was reported last September 14 by Tyler Durden at ZeroHedge.com
Utah last year put into law that U.S. gold coins are legal tender, thereby taking what some see as a first step back towards a new gold standard. Fourteen other states have been considering similar measures.
Former Massachusetts Gov. Mitt Romney has not advocated a return to the gold standard and has said he would not consider abolishing the Federal Reserve, which has the unlimited legal power to create as many paper dollars as it deems necessary.
With at least seven of its 10 initial presidential contenders giving at least some support to restoring a gold standard, the Republican Party may be quietly going for the gold in 2012.
By contrast, incumbent President Barack Obama supported printing more than $5 trillion in a failed attempt to stimulate the U.S. economy, something that the sound money policy required by a new gold standard would make virtually impossible.
Lowell Ponte is co-author, with Craig R. Smith, of "Crashing the Dollar: How to Survive a Global Currency Collapse"; "The Inflation Deception: Six Ways Government Tricks Us . . . And Seven Ways to Stop It"; and "Re-Making Money: Ways to Restore America's Optimistic Golden Age."
By Lewis E. Lehrman
GREENWICH, Conn. (MarketWatch) — Federal budget deficits and balance-of-payment deficits have radically increased since World War II. Today’s dollar has lost 85% of its value since 1971. Relative to gold the dollar has lost 96% of its purchasing power.
But America has experienced sustained inflation and deindustrialization because of the overvalued reserve currency role of the dollar, overvalued relative to other paper currencies, especially the Chinese yuan USDCNY +0.19%.
While China is an important trading partner of America, it may also be a mortal threat. The Chinese economy is subsidized and sustained by the pegged, undervalued, yuan-dollar exchange rate. Neither the United States nor China seem to grasp the long-term, destructive consequences of the world dollar standard. The Chinese financial system has been corrupted by tyranny, deceit, and reckless expansionism. But, like America, China is destabilized by the perverse workings of the world dollar standard.
Only monetary reform, including an end to the reserve currency system, can permanently correct the American, Chinese, and global disequilibrium. Without international monetary reform, the perverse effects of the dollar reserve currency system will continually metastasize into one financial and political crisis after another — even on the scale of the Great Recession of 2007–09. Currency wars, protectionism, and social instability will intensify.
Currently, China holds more than $3 trillion of official reserves and more than $1 trillion in U.S. government securities. These Chinese dollar reserves, earned by export surpluses, directly finance the American federal budget and balance-of-payments deficits. China has chosen to hold a significant fraction of its export surplus in the form of official dollar reserves. These dollars are promptly re-deposited in the U.S. dollar market, where they are used to finance U.S. budget and balance-of-payments deficits.
The reserve currency system of the paper dollar, whereby Chinese surplus dollars are reinvested in the United States, ignites inflation by multiplying purchasing power in China and the U.S., without associated equal production of new goods and services during the same market period. Thus, total spending, or purchasing power, exceeds the total value of goods and services at prevailing prices. When total demand exceeds total supply, the price level must rise.
The “exorbitant privilege” of the dollar is matched by the insupportable burden of America’s overvalued reserve currency role, which since World War II has tended to deindustrialize the United States. The official dollar reserves held by China amount to a massive mortgage on the work and income of present and future American citizens, gradually increasing social inequality by reducing the standard of living of lower- and middle-income families, even while the banker, speculator, and governing class is enriched.
The Fed’s response is to depreciate the dollar in the hope of eliminating the balance-of-payments deficit — by becoming more competitive abroad as America becomes poorer at home. The perversity of the official reserve currency system is endless.
Ultimately America, must choose between two options:
1.) The United States can wait for the eventual demise of the world dollar standard under chaotic conditions.
2.) Or, America could take the lead in reforming the official reserve currency system based on the dollar.
Such a monetary reform program would entail a careful windup, by agreement, of the world dollar standard. At the same time, America would reestablish by statute a dollar convertible to gold, i.e., a dollar defined in law as a weight unit of gold. Gold would replace the dollar as the world’s reserve currency. The reform would, first and foremost, establish a tested, non-national, impartial monetary standard as the basis of a stable dollar — one which reasonable sovereign trading partners could accept. Gold would become the international settlements currency, replacing the dollar as the basis of world trade and finance. Inasmuch as monetary history shows that no unstable national currency can permanently serve as the crucial world reserve currency, it follows that neither can an unstable basket of national currencies, nor can a fiction such as the SDR.
After the failures of several generations of unhinged paper-credit currencies, pegged and floating exchange rates, America should embrace a stable monetary system tested in the laboratory of human history — the cornerstone of which the elites have rejected for a century. It is time to restore the true gold standard, shorn of the economic pathology of official reserve currencies. It is time to restore the American monetary standard anticipated by the founders in the Constitution. What the Founders learned from the paper money inflation of the Revolution, the recent past has taught us again.
America and the world need a monetary standard which, unlike the paper-credit dollar, cannot be created at zero marginal cost with which to subsidize the U.S. government and insolvent financial institutions at near zero interest rates.
For America to establish the gold standard would provide the least imperfect monetary solution to the problems of a century of financial disorder.
GOLD OFFERS "RISKLESS RETURN" SAY EXPERTS
by David Bradshaw, Editor, Real Money Perspectives
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the 'hidden confiscation' of wealth. Gold stands in the way of this insidious process." – ALAN GREENSPAN
"Gold and Economic Freedom", 1966
2012 marks Swiss America's 30th anniversary of inspiring Americans to rediscover Gold for safety and growth. It has been both challenging and rewarding to stand up for the truth, rather than falling for the lies.
Since day one we have boldly proclaimed that every America should own some Gold because it is the safest and lowest risk asset in today's world awash in debt and falling fiat paper currencies.
During recent decades this message has been hotly debated among economists and in the mass media press, culminating in the announcement of the "Death of Gold" back in 1999. But through it all we stuck by our deepest convictions, based on historical evidence as well as the Constitutional mandates for sound money.
Back in December 2005, CNBC featured a raging debate over which asset would be first to cross the magic $500 level: Google or Gold? Gold won the debate that year and every year since! Seven years later, Google stock rose in value by 20% while gold rocketed 200%! That's a tenfold difference for the savvy readers who listened to our counsel and took action.
We are thankful Gold is finally proving to the world what we have known all along: Gold stands alone as THE asset to preserve wealth because it is universal money.
Of the vast number of articles singing gold's praise in recent years, this 2012 Bloomberg News story Gold Proving Safest Commodity as Goldman Forecasts Record: Riskless Return stands out.
Gold provided the best returns of all commodities in the past five years when adjusted for volatility, and Goldman Sachs Group Inc. says the rally will continue as options traders signal no change in the metal’s relatively low risk.Gold has it all; safety, liquidity and growth potential. What more can be said to the gold naysayers and skeptics? Slowly but surely over the last decade the tables have been turned on the "gold is dead" crowd. Never before has it been so clear to say many that all roads are leading to gold – both for personal financial protection and as the basis for a sound national and international monetary standard.
The BLOOMBERG RISKLESS RETURN RANKING shows the Standard & Poor’s GSCI Gold Total Return Index produced a 6.5 percent risk-adjusted return in the five years ended yesterday, the highest among 24 commodities tracked by S&P, data compiled by Bloomberg show. Silver, the next-best performer, yielded a risk-adjusted gain of 3.1 percent, while a total-return index for all raw materials slipped 0.2 percent.
Bullion, which has seen 11 years of gains as investors sought a haven amid two bear markets in stocks and a sovereign debt crisis, also posted the safest return in the past 12 months, even as it fell from a record high to a five-month low in the second half of last year and gold investors led by John Paulson suffered losses. Goldman Sachs forecasts gold will reach a record this year, and a gauge of future price swings is near a five-month low.
“Economic problems increased globally, and gold emerged as a safe-haven investment,” Walter ‘Bucky’ Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “Monetary easing by China and quantitative easing in Europe and the U.S. will help it remain a store of value.”
Gold’s longest rally since at least 1920 in London has attracted investors worldwide seeking protection from some of the most violent market swings in stock markets on record.
The risks that spurred market volatility last year will keep swaying asset prices and the global economy, Nouriel Roubini, the economist who predicted the 2008 financial crisis, said in a talk at Bloomberg’s headquarters in New York on Jan. 19. Rising commodity prices, uncertainty in the Middle East, the spreading European debt crisis, increased frequency of “extreme weather events” and U.S. fiscal issues are “persistent” problems, he said.
That’s good news for havens such as gold. Goldman Sachs said in a Jan. 13 report that futures will advance to $1,940 an ounce in 12 months. Morgan Stanley forecasts the metal will climb to a record average $2,175 in 2013, analysts Peter Richardson and Joel Crane said in a Jan. 17 report.
Central banks around the world added 157 tons to their holdings in the six months through November, World Gold Council data show.
China overtook India in the third quarter as the largest gold-jewelry market, according to the World Gold Council. The country’s consumption will continue to grow this year, according to Albert Cheng, the Far East managing director at the council. Mainland China imported a record 102.8 metric tons in November from Hong Kong, trade data on Jan. 11 showed.
“Everybody is conditioned to think of returns in a winner fashion,” said Stanley Crouch, who helps oversee $2 billion as chief investment officer at New York-based Aegis Capital Corp. “During times of crisis, volatility really spooks people, especially if it is in gold, as people look at it as a store of value. However, I believe we have put in a bottom for gold so we will see gold continue to climb.”
The next leg of gold's journey upward (in relation to paper currencies) was clearly signaled on Jan. 25th when the Federal Reserve announced their "transparent" decision to hold interest rates near zero until 2014. Gold prices immediately leaped up 3% topping $1,700 an ounce.
Fed Chairman Ben Bernanke again demonstrated to the world his willingness to sacrifice the value of the U.S. dollar, including the value of our labor, time and savings on the altar of modern economic theory (aka Keynesian economics).
"This Fed announcement is nothing short of a declaration of war against American savers," warns Swiss America Chairman Craig R. Smith. "U.S savings accounts will yield a guaranteed negative return as well as the loss of future buying power. We the People are far better managers of free markets than Bernanke, Geitner and Obama - all of whom should get real jobs before they crash the American economy."
The Fed has signaled to the world the only way out for the U.S. government will be to monetize our trillions in debt by printing tens of trillions of debased dollars, which will end in runaway inflation.
30 Years Later, Value Remains
2012 is the perfect time to move your money onto a Gold standard to protect your future from a world of declining paper currencies. Owning 'store-of-value' money adds value to your time and your life.
Thirty years ago Swiss America first began announcing Gold and Silver as "the only forms of real money in the the world, the only standards and stores of value." Gold prices averaged $376/oz. back in 1982. Today gold remains a great value, even priced near $1,700/oz.
Did Gold prices really rise over fourfold? Or did the U.S. dollar really fall by 75%? It depends upon one's perspective. Either way, Gold remains the best store of value on earth at any price. I can hardly wait to see what is in store for our great nation during this election year as Americans decide which path to follow.
Owning Gold from Swiss America puts both time and money on your side, because Gold is timeless wealth!
'Representation of public figures is something we try to avoid'
By Jerome R. Corsi
Two television spots developed by a national investment firm specializing in U.S. gold and silver coins have been rejected by major television networks, including the Fox News Channel and the Fox Business Network, for apparently political reasons.
The ads by Phoenix-based Swiss America Trading Corp., a WND advertiser, feature President Obama and Federal Reserve Chairman Ben Bernanke as animated characters engaging in the potentially inflationary policy of printing paper money with abandon to stimulate the struggling economy.
Singer Pat Boone, a spokesman for Swiss America for more than 15 years, appears in the commercials as an animated announcer who concludes that investing in gold is a prudent strategy to diversify a portfolio in inflationary times.
Swiss America CEO Craig Smith said the intent of the ads was not to make a political statement.
The goal, he said, "was to take what we thought was a humorous approach to a timely and important economic topic in order to advertise our company and promote a new book we've recently published."
Along with Fox News and Fox Business, the two commercials have been rejected by NBC, MSNBC, CNBC, ABC, CBS, CNN/HLN and the Discovery Channel.
Comcast, in rejecting the spot, told Swiss America that it "does not meet our standards on public symbol."
Comcast's Public Symbol Policy specifies that the "use of the name or likeness of the President of the United States and/or the Presidential Seal for endorsing commercial purposes must be authorized by the White House."
Fox News said the "representation of public figures is something we try to avoid."
CNN/HLN told Swiss America the commercials were "not appropriate for the current political landscape."
"The networks' reaction shocked me," Smith said. "It's a threat to First Amendment rights when a commercial message is rejected not because it is inaccurate or misleading, but because it makes what is perceived to be a political statement the networks want to avoid."
Smith told WND he was concerned that the networks were protecting Obama and Bernanke.
"All we are saying in these two commercials is what dozens of responsible professional economists are saying every day," Smith said. "Gold investment as a responsible diversification strategy when governments printing of fiat currencies with abandon risk unleashing inflationary principles."
Only Google TV accepted the commercials, for broadcast on the DISH Network and Direct TV satellite networks.
Google TV has planned a test in which the two ads will be broadcast 1,132 times on the DISH Network and Direct TV from Dec. 5, 2011, through Jan. 12, 2012.
Ironically, the Swiss America ads will be seen nationally via Google TV on many of the major networks that have refused to air them. While cable subscribers to Fox News and CNN/HLN will not see the ads, for example, subscribers to the DISH Network or Direct TV will see them on those networks during the test period.
"The silver lining," said Smith "is that many of the television and cable networks who told us 'no' have come back saying 'yes' to Google TV, which will begin broadcasting the two commercials next week. We are very thankful to Google TV for helping us keep free speech alive on the television airwaves."
In June, Smith and co-author Lowell Ponte published "The Inflation Deception: Six Ways Government Tricks Us … and Seven Ways to Stop It!" in a paperback edition.
"Welcome to the 'inflatocracy' – our new form of government of, by, and for inflation – in which deliberately debasing our money has become a tool of mind manipulation, wealth distribution, and secret taxation," the publicity for the book on Amazon.com reads.
The first Swiss America commercial, seen below, plays off the theme "Helicopter Ben," a nickname Wall Street has conferred upon Bernanke for his reputation of "helicoptering" into financial crises to dump money on a problem.
The second Swiss America commercial, seen below, evokes imagery from the classic movie "The Wizard of Oz" to portray Bernanke and Obama as "financial wizards" hiding as "the men behind the door" in an inflationary scheme to solve economic problems by printing money.
Friend, let me paint you a picture. It's an analogy to the frightful situation confronting our Ship of State, right now, today. You're in this picture.
See a large lifeboat filled with passengers who are doing all they can to stay alive. Large waves are continually sweeping over the boat, drenching all aboard and threatening to overturn the boat. Even worse, it's filling with sea water, from holes in the bottom. The situation seems almost beyond solution, and all may be lost.
The ship captain, who did not go down with the ship, is on board and is giving commands from the prow. "Quick! Tilt the boat toward the incoming waves; let the waves wash in – and maybe the inflow will wash out the other side and take some of the collected water with it. And one or two of you strong men, dive under the water and punch more holes in the bottom, to let this collected water out! I'm in charge here, and this is our only hope!"
The stunned passengers scream, "No, Captain, NO! That will sink us even faster! Don't you see? Turn the boat away from the waves, don't just invite them in! And we need to dive down and do whatever we can to plug up the holes, even with our blankets and valuables! Then let each of us bail out the water that's about to drown us all, with our hands, shoes, whatever we can find! That's our only hope! We must keep this boat afloat!"
Which advice would you want to prevail? Which might save the boat, with all on board, including the captain … and which amounts to certain death?
Surely you see the analogy to where we are in America today, economically and politically. We're awash in a storm of unpayable debt; there are four applicants for every available job; long-established programs to aid the elderly and the sick are about to be swept overboard; and the commander in chief and his aides are advocating more huge spending, more unpayable debt and even more taxes! It's lunacy!
In just the last six months, our national debt has increased 15 percent. The administration is borrowing $4 billion a day more, and we're paying $600 million a day in interest on that exploding debt!
Under Pelosi and Reid, and now President Obama and his team, we've added the debt amounts of Russia and Germany onto our sagging taxpaying shoulders. In his first two years in office, the president has increased our national debt by $3 trillion, and wants Congress to approve $1.5 trillion a year for the next 10 years.
In his speech from George Washington University April 13 – just two days before the tax deadline – he promised to raise taxes in several ways, including discontinuing the "Bush tax cuts" which have been a needed incentive for businesses to create jobs. And he was even more emphatic about spending multiplied billions more on research, innovation, infrastructure and other pet programs, to "win America's future." Spend and tax, spend and tax … sound familiar?
He said he will reduce the deficit by $4 trillion over the next 12 years – $2 trillion in spending cuts, including defense, $2 trillion in uncovering and abolishing waste, and in "projected" increased revenues (taxes on incomes). This while he intends to keep deficit spending, in his proposed budgets, $1.5 trillion a year for the next 10 years. Can you do the math? He promises to reduce the deficit by $4 trillion –-while adding at least $15 trillion in his spending!
He repeated his plan to trim $500 billion out of Medicare "waste," while expanding Medicaid by at least that much through his rammed-through health-care plan, mandating that 30 million more Americans subscribe to that program, along with the rest of us who adamantly opposed it.
In the next few months, he will lock horns with Congress over raising our debt limit and his budget for 2012. His intentions for both are to give him even greater authority for more spending on programs "dear to his heart." How he plans to cut defense – while we're involved in three wars currently in the Middle East and supposedly defending our borders here at home – he didn't say.
But the QE2 program, flooding our economy with more billions of printed money, backed by thin air, is continuing under Mad Ben Bernanke, desperately trying to create the false image that America's economy is improving. And thousands of "new jobs" contributing to that image, are government jobs, adding to the taxpayer woes. Can you spell inflation?
After weeks of haggling and jockeying for political position, both houses of Congress and the president approved a piddling $38 billion in budget cuts, to stave off a government shutdown. That used to be serious money – but compared to a current $14 trillion debt and a $1.5 trillion annual budget deficit, it's like, as someone suggested, arguing over the bar tab on the Titanic!
Some of my own family think I'm whistling in the wind, but the latest Reuters poll documents that 69 percent of Americans believe we're on the wrong track. We're not dummies, or blind ideologues; we can see and hear Niagara Falls ahead, and we want to turn this boat around.
How? Just a couple common-sense suggestions. Restructure Social Security, saving promises for seniors who paid for those promises, increase the retirement age, make contributions larger for younger workers, and make it optional for those who don't want to pay in for it. The same with health insurance; scrap Obamacare completely, make insurance plans optional for workers, grant tax credits for those who buy their own, and let insurance companies offer their plans across state lines, the good old free-enterprise way. Watch the rates come down and benefits increase, with the weight for performance on the companies where it belongs, and not on the taxpayers.
Cut government programs in half (they account for 25 percent of GDP now), and get it off the backs of businessmen, the supposed "rich," who not only create jobs, but who already pay over 50 percent of our taxes. Enough is enough!
Tell the captain to sit down, and let the passengers save the boat!
By Tom Rodriguez, Sr. Broker, Swiss America
Wikipedia, defines gold as the following...
A valuable and highly sought-after precious metal for coinage, jewelry, and other arts since long before the beginning of recorded history. Gold standards have been the most common basis for monetary policies throughout human history, being widely supplanted by fiat currency only in the late 20th century. Gold has also been frequently linked to a wide variety of symbolisms and ideologies. A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8500 m3, or a cube 20.4 m on a side.
Gold represents a direct, inverse relationship to a fiat currency like the US$. It is a store of value and a protection of one's wealth. An ounce of gold, during the depression, bought a brand new suit. It will still buy a brand new suit today while the dollar equivalent could not.
In a fiat money system, money is not backed by a physical commodity like gold. Instead, the only thing that gives the money value is its relative scarcity and the faith placed in it by the people who use it. In these systems, there is no restraint on the amount of money that can be created. This allows unlimited credit creation and therefore reduces one's buying power and ultimately destroys one's wealth unless properly diversified.
Gold has been on what many experts term a “meteoric rise” since early 2002. It has been appreciating on a year to year basis anywhere from 10% to as much as 35% an ounce. This has been happening in direct relation to the massive flooding of fiat currencies into financial systems throughout the world. The next major wave of which is expected soon after the writing of this commentary. It is because of this these experts anticipate gold's performance to be at least consistent if not significantly better in the coming months to years ahead.
The World gold Council reported the following on November 17th, 2011...
Central banks made their largest purchases of gold in decades in the third quarter as a sharp drop in prices in September spurred buying to diversify reserves.
The scale of the purchases at 148.4 tonnes on a net basis was far bigger than previously disclosed and puts central banks on track to buy more gold than at any time since the collapse of the Bretton Woods system 40 years ago, the last time the value of the dollar was linked to gold.
The WGC, which published the purchase data, declined to identify the central banks behind the majority of the buying, saying only that “a slew of new entrants emerged wishing to bolster gold holdings”. The countries that have publicly disclosed their purchases include Thailand, Russia and Bolivia. (i.e. China has also been reported as a "heavy" buyers of gold as well).
Central Banks are one of the most important drivers of the gold market but disclose few details about the changes in their bullion reserves. As a group, they became net buyers of gold last year after two decades of heavy selling – a reversal that has helped propel the price of bullion to a high of $1,920.30 a troy ounce, up 600 per cent in a decade.
The purchase of 148.4 tonnes in July-September is the largest since GFMS, the consultancy which produces the data underlying the WGC reports, began compiling quarterly numbers in 2002. Before then, the last time central banks were net buyers of gold was in 1988 when they bought 180 tonnes.
There are two types of physical gold available for purchase, bullion and numismatic. Bullion represents the physical forms of gold predominantly valued by weight. It represents the most inexpensive way to purchase gold as weight and fineness are the only contributing factors. Numismatic gold refers to gold that has an improved or increased value (premium) based on multiple characteristics such as rarity, scarcity, collector appeal, etc. Our representatives are well versed in helping our prospective clients determine which marketplace is best for one's goals and needs. No matter the form, gold is a vital part of a well diversified portfolio.
There are many entities who sell gold. In today's marketplace, it's hard to determine the long established firms vs the fly by night, temporary operations. Not all gold companies are the same. The challenging part is not finding someone to buy from, but rather knowing which choice will be best for you, your family & your family's future. For 30 years Swiss America has subscribed to a simple, straight forward approach when dealing with our customers. We believe in educating, positioning and providing a strategic exit plan. Find out what gold is right for you, and whether or not it's a beneficial position in your portfolio today! Our representatives are not only courteous and friendly but are the most tenured in the entire industry.
By Wes Vernon
Recent reports, picked up by a stenographic rip-and-read media, assure us that inflation has been held in check — except for food and energy.
What? Doesn't any newsroom pause long enough to think of the disingenuous insult to one's intelligence contained in the implication that — Hey, nothing to worry about here? Just let the good times roll?
Food requires energy from farm to market. If you notice, some of the food products you buy have downsized as food marketers struggle mightily — and mostly in vain — to keep prices in check so as not to irritate an already restless public. Even little packets of fake sugar — or "sweeteners" — contain less for your morning coffee. Others subtract ingredients. They hope you 1 — won't notice, or 2 — can make do.
They are desperately hoping to hang on to their share of the market as a response to the government's messing around with the Consumer Price Index over the years with its ever-changing definitions of the very word "inflation."
Other inflationary causes
It did not help that last year Fed Chairman Ben Bernanke expanded the money supply ("quantitative easing") — the very same misstep that the Fed imposed in the twenties, and which led to the Great Depression.
Eagerly anticipating the downfall of the West, Vladimir Lenin reportedly said that the surest way to bring down any nation was to debauch its currency.
Picking your pocket
In 1919, John Maynard Keynes wrote, "By a continuing process of inflation, governments can confiscate, secretly and unobserved , an important part of the wealth of their citizens." (Ironic that Keynes would have said that, given that policies followed by his disciples in the ensuing decades have led Human Events to note in a lead editorial this week that "Inflation is the slow-acting toxic residue of Keynesian failure."
Friedrich A. Hayek — whose The Road to Serfdom, written nearly seven decades ago as if it were intended as a commentary on what's going on today — said, "History is largely a history of inflation, usually inflations engineered by governments for the gain of governments."
In his book The Inflation Deception, Craig R. Smith — founder and chairman of Swiss America Trading Corp. — writes, "Inflation is being deliberately created and used to trick us out of 1 — Our earnings, savings, investments and property, 2 — Our opportunities to pursue happiness, 3 — Our independence and self-reliance, 4 — Our security and peace of mind, 5 — Our freedom and our rights, and 6 — Our children's and grandchildren's future in what used to be a much freer America."
All of this is made to order for the administration of Barack Obama, which has shoveled more dollars into the public sector — with Bernanke's cooperation, including purchase of the government's own debt through an increase in the money supply — which in turn reduces the value of the dollar.
The coming showdown?
We have been postponing the day of reckoning for a long time. The proverbial push may come to shove in the following ways:
1 — Through an anti-business administration whose policies are to shove more dollars into stimulus programs (promoted under the lying moniker of "jobs bill") and other public sector failures; and
2 — Scaring the daylights out of investors and other job-creators with threats of higher taxes, which would be an economic drag guaranteed to affect everyone, not just the "top 1 percent."
After the election, Greece writ large?
Right now, the government hopes you won't notice the current slow-motion inflation, apparently hoping to hold back the mad rush of super-inflation until after the 2012 election. If our nation then goes into a super-inflationary spiral, we may be presented with a choice of printing ever more money or facing the possibility of a politically-unpopular austerity program a la Greece.
That is the prospect of post-election 2013. Exactly how it is handled likely depends on who is elected. Either way it won't be pretty.
The showdown has been coming for several generations, harking back to the days when President Roosevelt's trusted advisor Harry Hopkins (later shown to be a Soviet acolyte) coined the formula "Tax, tax, tax; spend, spend, spend; elect, elect, elect." And of course, all this comes with the cooperation of the Federal Reserve Board, which has been picking your and my pockets. That racket accommodates the non-stop expansion of government, the better to buy your votes for its power.
There is, or course, a word for that: stealing. But there is no cop on the beat.
Safety, Growth, plus 100% Privacy!
Today scores of analysts are forecasting gold bullion prices will double or triple again. But which type of gold offers the best long-term value; bullion, ETFs, mining stocks or historic U.S. $20 gold coins?
U.S. Mint-State $20 Gold Liberty and Saint Gaudens coins offer investors safety, liquidity and 100% privacy of ownership. Mint-State 62 grade $20 Liberty gold coin prices rose 10% in 2011. Best of all, right now prices remain 15% below their 2011 peak, offering an excellent buying opportunity.
The recent price movement in Mint-State $20 gold coins indicates this area may outperform all other areas of the gold market, as well as being one of the few remaining confidential assets. For this reason many clients prefer owning U.S. $20 gold coins as an alternative to U.S. or foreign bullion coins.
The chart illustrates classic $20 U.S. gold coins are the beneficiaries of rapidly rising gold prices in 2011 and historically offer superior long-term growth potential.
These classic U.S. gem-quality coins are among the most sought-after numismatic coins in history due to their limited mintage and growing demand in the U.S. and worldwide.
All gold is NOT created equal!
All forms of gold are NOT created equal, nor do they perform equally. Mint-State U.S. gold coins are a great form of gold to own for long-term capital preservation, appreciation and complete privacy.
Mint-State (Investment-grade) U.S. gold coins have tremendous collector appeal, which often creates more demand than the available supply will accommodate.
Discover the unique benefits of owning Mint-State $20 gold coins next time you speak with your Swiss America broker.
By Craig R. Smith
Dec. 28, 2011
Times always change and so does money. It is important for every investor to look at the past, present and future of the economy when making the decisions that will affect generations to come.
This is why I invite our readers to look not simply to today's economy for answers but also to yesterday's economy and to the future.
Throughout history a variety of commodities have been used as a means of exchange in purchasing good and services. Bricks of tea, salt, spices, beads, wampum, pine tree shillings, pieces of eight, coins, paper and even various forms of electronic money have been accepted as usable currency in the everyday purchasing requirements of consumers.
But one truth has remained throughout all of these periods in the history of money. No matter the coin of the realm of any given age; gold, and gold alone, has remained the only currency to serve as the means of exchange throughout time.
History has repeatedly shown that gold is the only universal money to maintain its purchasing power in all economic and cultural scenarios. During and after world wars, market collapses, currency crises, empire collapses and virtually all other dramatic social/monetary shifts; gold has protected the purchasing power of its owner.
Like it or not, gold will continue to be the ultimate currency of acceptability, and as such, its price in fiat currencies will continue to rise, reflecting the effects of massive money creation and market uncertainty when debt is allowed to grow ad infinitum.
Today's out-of-control government spending, continual printing of currency and the ever-expanding welfare state will continue to cripple both Europe and America. The exploding debt crisis in Europe has caused bond yields to triple overnight, effectuating the 2% interest rate on a 10-year bond to rocket over 7% in Italy.
Imagine if that same scenario was played out in America? What would a tripling of US interest rates do to a fragile recovery, anemic housing market and consumer confidence? The increased interest alone on the government debt would require massive tax increases or severe spending cuts. Such an increase in rates would be devastating.
But one cannot rule out increases occurring if we see traditional purchasers of government bonds, like the Japanese, turn instead to Chinese bonds. With this in mind, China and Japan are also working on agreements to use the Yen and the Yuan to conduct transactions versus the traditional use of the US dollar.
These seemingly insignificant moves would have a profound impact on US dollars as well as our standard of living.
Just as we have experienced a dramatic change in the way commerce is conducted in America (internet retail vs traditional brick-and-mortar stores), currencies are experiencing rapid changes of acceptability and confidence critical in making any fiat currency function.
Keeping up with changes, whether they be in commerce or currency, is the key to maintaining a constant or improved standard of living. If one does not keep up with these changes, he/she will experience a sharp decline in that standard of living.
Even though money has gone through some dramatic changes over the course of history, people today are numb to the possibility that similar changes could occur and likely will in their lifetime. The notion that "this time is different" is once again going to punish the investors who sit idly by while these changes occur.
The legitimate analysis of currency valuations are going to be the single largest challenge any investor or saver will have to overcome to protect their hard earned money in 2012.
THE BOTTOM LINE
Government-manipulated markets never allow natural market forces to correct price distortions caused by the injection of money into economies. The politically-correct decision to avoid recessions and cause growth at any cost, insures higher gold prices for years and decades to come.
The only scenario that could change the price trajectory of gold would be a complete reversal on behalf of all governments, to begin allowing natural free market forces to squeeze out all of the excesses and price bubbles. This alone would return markets to normalized levels.
With the possibility of such a shift being slim, I sincerely hope all investors who wish to maintain their current standard of living in 2012 and beyond will embrace making gold an important part of their portfolio.
Investor capital must be deployed in assets that will maintain buying power regardless of the currency of acceptability at any given time. Whether the Yen, Yuan, IMF-SDRs or any other form of currency is king, gold will translate into that currency and allow for future purchases to be completed at today's prices.
Gold allows one to exchange today's 'symbolic' money for 'substance' money which is why it is fast becoming the new 'coin of the realm' and will continue to shine as other currencies falter.