February Podcast Archives 2013

2.28.13 - Faith-Based Economics on Trial - Listen

Gold prices consolidated recent gains Thursday amid profit taking, a firmer dollar and a slight GDP rise in Q4. Stocks teeter. Gold last traded at $1,580 an ounce. Silver last traded at $28.50 an ounce.

MARKET NEWS HEADLINES
-Danger in the air as stock ‘Greedometer’ flashes red - Marketwatch
-Foreclosure-Related Homes Still Driving Home Sales - CNBC
-US Consumer Debt Rises for First Time in 4 Years - Reuters
-Natural Gas Boom Projected To Grow for Decades -WSJ
-Spending cuts start Friday after both Senate bills fail -Marketwatch

Stocks closed lower Thursday despite news that the government revised Q4 GDP upward to a 0.1% growth, up from -0.1% as reported last month. $85 billion in automatic federal budget cuts now look certain to begin on Friday, after the Senate fails to pass alternative bills.

Meanwhile, gold prices fell for a second day as technical sell-signals triggered following a 5% monthly decline in February. Could gold go lower? Yes. Could the government stop spending and printing? Yes. Either way, smart money is hedged with gold.

BERNANKE'S FAITH-BASED ECONOMICS - Forbes
During his testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke had a heated exchange with Tennessee Senator Bob Corker.

Senator Corker leveled a valid (although poorly articulated) charge that the Fed was subsidizing the big banks at taxpayers’ expense. Bernanke countered with a claim that what the Fed was doing was necessary to support economic recovery. Unfortunately, the Fed Chairman’s defense of his “QE3” program was based on belief, rather than evidence. It was also disingenuous.

We seem to be living in an era of faith-based economics. Proponents of “fiscal stimulus” and “quantitative easing” don’t even seem to notice when their policies fail in the real world.

Clearly, the Fed’s “quantitative easing” is based upon a flawed model of how the economy operates. Both QE2 and QE3 have been harmful to the real economy. To continue QE3 is to ignore the evidence, in favor of faith-based economics.

A TEST OF STRENGTH FOR GOLD - Frank Holmes, Kitco
To help investors analyze whether gold continues to be a wise investment, I like to refer to the book "The Wisdom of Crowds" by James Surowiecki.

There are four factors to consider whether a crowd is suffering from groupthink or is making wise decisions:
1) Is there a diversity of opinion?
2) Are investors independently acting on their best interests?
3) Is there a decentralization of gold believers?
4) Is there aggregation?

I believe you’ll find these factors continue to be valid for gold. Ultimately, the key to gold is moderation... gold is a volatile asset class and the daily price can be more dramatic than blue-chip stocks. We have always advocated that investors hold a modest 5 to 10 percent weighting in gold and gold stocks. In other words, we feel strongly that an investor should not try to get rich from the metal.

WITCHES, WARLOCKS AND FEDERAL RESERVE CHAIRMEN - DailyReckoning
A few months ago, the insightful and engaging financial market observer, James Grant, drew a comparison between “witchcraft, on the one hand, and modern central banking, on the other.”

Grant presented this novel comparison in an address to the “Investment Decisions and Behavioral Finance” meeting at the Harvard Kennedy School.

“I won’t spend much time defining terms,” Grant began. “Witches, as you know, cast spells, make storms and fly on goats or broomsticks to diabolical nighttime rendezvouses called sabbats. Modern central bankers override the price mechanism, conjure money from thin air and undertake to boost economic growth by raising up stock prices.”

In other words, both activities rely greatly on a kind of mysticism – beginning with the notion that combining bizarre ingredients in a cauldron can work magic…and ending with the notion that mere mortals can wield supernatural powers.

More: Swiss America Gold Market News

2.27.13 - The Bucking Bull Market of 2013 - Listen

Gold prices dipped below $1,600/oz. Wednesday on profit taking despite Fed's planned accommodative strategy. Stocks cheer upbeat data. Gold last traded at $1,596 an ounce. Silver last traded at $28.98 an ounce.

MARKET NEWS HEADLINES
-Bernanke Warns Congress, Again, on Budget Cuts - CNBC
-Dow's up 200 points as U.S. stocks extend gains - Marketwatch
-Senate GOP ponders ceding power to President Obama - Politico
-Do Walmart's Sales Herald Yet Another Recession? - WSJ
-$4/Gallon Gas Pain Is Spreading - MSNMoney

Saddle up for the ride of your life in 2013 as the financial markets very well might whipsaw on a daily basis. Stocks down 200 points one day, then up 200 the next. Gold up $25 an ounce on one day, then down $18 the next. Why all the volatility? Simple. Big speculators are driving prices up and down in a desperate effort to find short-term profits.

What should the long-term investor do? Nothing much, except to enjoy the side show until market fundamentals actually signal a true change in direction. Regarding gold prices, we recommend buying any and all dips as a means of cost-dollar averaging down metal prices.

DEBT REPRESENTS A ‘CANCER’ FOR US - MoneyNews
Bill Fleckenstein, president of Fleckenstein Capital, portrays the $16 trillion U.S. government debt burden and the Federal Reserve's money printing in bleak terms.

“The United States has cancer, because we refuse to address our problems,” he tells CNBC “From time to time we go into remission. The Fed has created bubbles now [with its easing].”

“We are in a sweet spot of the bubble, where money printing gets people to believe the economy is getting better. But it won’t,” he notes.

3 RISING FEARS THAT COULD SPARK A STOCK SELL-OFF - FiscalTimes
There are plenty of reasons to be anxious about the long-term outlook for stocks.

First, Consumers Running Low on Fuel: Gas price increases have soared 45 cents since the beginning of 2013. Second, The Italian Job: The European crisis raises its head again. Third, Earnings Growth: Any gain in stock prices hinges on the expectation of higher profits, so bearish earnings forecasts are a major sign of worry.

As things stand, what we have is a toxic brew of factors, short and long term in nature, that collectively have investors in a tizzy and are sending volatility levels sharply higher. (The CBOE Volatility Index fell 11 percent Tuesday after spiking 34 percent on Monday.) You may want to brace yourself for a bumpy ride.

WHAT HAPPENS WHEN THE FED REALLY DOES RUN OUT OF AMMUNITION? - TIME
Fed Chairman Ben Bernanke remains undaunted. In his testimony before Congress on Tuesday he defended his easy-money policy, noting that it has “supported real growth in employment and kept inflation close to our target.” With consumer prices up only 1.6% over the past year, Bernanke declared: “My inflation record is the best of any Federal Reserve chairman in the postwar period – or at least one of the best.”

In addition he argued that worries about potential losses on the Fed’s ballooning bond holdings were overstated. Careful portfolio management, he said, would allow the central bank to absorb the losses over time by trying to hold bonds to maturity rather than selling at a loss. “We could exit without ever selling,” Bernanke said.

Bringing the stimulus to a halt at a time when the economy is weak only increase the chances of a double-dip recession. But continuing with quantitative easing raises the likelihood of inflation at some point in the future and also increases the vulnerability of the banking system to a rise in interest rates. Trying to split the difference may avoid a double-dip recession, but only at the possible cost of stagnation and some inflation – or as it was called 40 years ago, “stagflation.”

More: Swiss America Gold Market News

2.26.13 - Money Talks, Politicians Walk - Listen

Gold prices rocketed over $1,600/oz. Tuesday on safe haven buying and bargain hunting after accommodative Fedspeak. Stocks rise on upbeat data, Bernanke QE. Gold last traded at $1,614 an ounce. Silver last traded at $29.42 an ounce.

MARKET NEWS HEADLINES
-Gold posts biggest gain of year - Marketwatch
-New Home Sales, Consumer Confidence Soar - CNBC
-Fed Faces Explaining Billion-Dollar Losses - Bloomberg
-Bernanke Defends Easy-Money Policies - WSJ
-Annual home-price gain best in seven years -Marketwatch
-Italian election rattles world markets - CNNMoney

"Fed Chairman Ben S. Bernanke’s efforts to rescue the economy could result in more than a half trillion dollars of paper losses if interest rates rise abruptly from recent levels," reports Bloomberg.

CAVUTO: PRESIDENT 'CRYING WOLF' OVER CUTS? - FoxNews
Neil Cavuto wonders why the sudden fury. Author and Swiss America Chairman Craig R. Smith was a guest on the program today to discuss the sequester, Ben Bernanke's testimony and emerging currency wars.

Mr. Smith told Neil, "Today's market reaction proved that Ben Bernanke is the most powerful man on earth, while promising ongoing support to foreign banks. Meanwhile, the president is telling Americans the sequester spending cuts will have devastating effects, as if planes will fall from the sky. The truth is the U.S has a spending problem and we need the sequester cuts." (WATCH VIDEO)

STIMULUS ISN'T LEADING TO HIGHER INFLATION: BERNANKE - CNBC
Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank's bond-buying stimulus before Congress on Tuesday, saying that the bank sees little risk of higher inflation in the near term.

Minutes of the Fed's Jan. 29-30 policy meeting, released last week, showed that a number of officials felt the potential risks posed by buying bonds could warrant tapering or ending the program before hiring picks up. However, several others argued there was a danger in halting it prematurely.

Bernanke appeared to be in the latter camp, citing improvements in the housing and auto sectors and tracing them in part to the Fed's stimulus. He also noted that inflation remains projected to stay at or below the Fed's 2 percent target for the foreseeable future.

SEQUESTER THE FED - Alhambra Partners
Shaving 1.2% off the federal budget or the equivalent of 0.3% of GDP is not going to usher in an era of austerity. Our borders will not be over run by terrorists or Mexicans looking to take American jobs. Public safety will not be compromised. Buildings will not be left to burn. So calm down and back away from the heated rhetoric.

Cutting spending by that amount won’t cause a recession either. Of greater concern in the short term is the effect of the payroll tax hike and the policies of the Federal Reserve. The payroll tax hike is equivalent to roughly $125 billion per year in higher taxes on virtually every American.

The hike in payroll taxes also neatly explains the Fed’s expansion of quantitative easing in December. It appears to me that the Fed upped the outright purchases to $85 billion per month in anticipation of this additional drag on the economy. The problem is that quantitative easing isn’t having – and in my opinion can’t have – a large enough effect to offset the tax hike. The two most obvious effects of QE are the rise in stock prices and the rise in oil prices which tend to offset each other. The wealth effect from higher stock prices cannot offset the income effect of higher gas prices and the payroll tax hikes.

The wealth effect from changes in stock prices are minor compared to the effect from changes in disposable income. Of course, real estate prices have been rising too and that has an effect but again not as much as changes in disposable income. Furthermore, I question whether the recent gains in real estate wealth can be sustained with incomes falling. Rising house prices and falling incomes would not seem to be compatible unless banks are about to start just giving away money.

More: Swiss America Gold Market News

2.25.13 - U.S. "Crisisocracy" Lifts Gold - Listen

Gold prices shot up near $1,600/oz. Monday on safe haven buying despite a firmer dollar. Stocks/Euro fall on Italian debt worry. Gold last traded at $1,595 an ounce. Silver last traded at $29.07 an ounce

MARKET NEWS HEADLINES
-One Quarter of US Has More Card Debt Than Savings - CNBC
-White House Warns on $85B Sequestration - USAToday
-Noonan: Government by Freakout - WSJ
-The real deadline for government shutdown is March 27 - Slate
-Low-income consumers hit hardest by tax increases - CSMonitor
-U.S. stocks slide with divided Italy in view - Marketwatch

GOLD’S DEATH CROSS IS A BUY SIGNAL FOR CHINA - Telegraph
The reality is that we have been moving for several years to an informal Gold Standard in which gold takes its place once again as a central store of value – a currency of sorts – in the mix of sovereign reserves.

The reason is obvious. The West is crippled by debt, and so is Japan. Governments are likely to seek an easy way out in the end. The rising reserve powers of Asia know this perfectly well.

Technical patterns can be very powerful but this is not one of them. The Dark Cross trigger offered no meaningful signal on the S&P Composite. Why should gold be any different? Trust your analytical judgement, not some Voodoo gobbledy gook.

SEQUESTER SECRETS AND SURPRISES - NewsRelease
We are being told that the coming Sequester on March 1 could shut down large parts of the Federal Government and plunge America into economic chaos. Is this true?

“If nothing is done to erase, modify or delay it, the Sequester supposedly cuts the Federal Government's budget by $85 Billion,” says Smith. “The real cut, however, will be closer to $44 Billion, which is a relatively tiny amount – less than 2.4 percent of the government's annual budget, and only one-quarter of one percent of America's Gross Domestic Product or GDP.”

“The government's nearly $3.7 Trillion annual budget is so huge, and the Sequester is so small,” says Smith, “that the Sequester cuts, as several economists have noted, are little more than a rounding error for Federal bookkeepers.In fact, the Sequester does not shrink government at all because even if Sequester cuts kick in, Federal spending in 2013 will increase by at least $15 Billion.”

“Today's Crisisocracy is a government by the pressure of deliberately created crises and emergencies,” says Ponte. “This is a wasteful, reckless and foolish way to run a government, an economy and a culture. No wonder people are reluctant to invest in America anymore.”

KILLING THE DOLLAR: G20 & IMF PUSH FOR GLOBAL FED, GLOBAL CURRENCY - NewAmerican
The real unreported story is that the global gathering of central bankers and finance ministers is pushing forward with their plan for "supersizing" the International Monetary Fund. Their end goal is to transform the IMF into a global Federal Reserve.

Federal Reserve Chairman Ben Bernanke (shown above) told the Moscow G20 conference that the Fed would continue its inflationary policy of creating colossal sums of new digital dollars out of thin air, otherwise known as "quantitative easing."

“We believe that by strengthening the U.S. economy we are helping to strengthen the global economy as well,” Bernanke told the G20 ministers, according to Bloomberg. “The Federal Reserve continues to provide accommodative monetary policy in our effort to foster maximum employment and price stability,” Bernanke said.

WHY THE BIGGEST US BANKS ARE EVEN BIGGER AND RISKIER THAN YOU THINK - AEI
Just how big are the biggest US banks, and how safe are they? When trying to figure all that out, it makes a big difference if you are analyzing them according to US accounting standards or international ones. The latter makes lenders account for a greater portion of risky derivatives on their balance sheets.

Take JPMorgan, for instance. Under US accounting rules, the bank is just the fourth largest in the world with total assets of $2.3 trillion and capital equal to roughly 7% of total assets. But under international rules, where lots of off-balance sheets assets like derivatives are accounted for, according to Bloomberg, JPMorgan would be the largest in the world with assets of $4.5 trillion and capital equal to less than 4% of assets.

More: Swiss America Gold Market News

2.22.13 - THE GREAT AMERICAN RACE (TO DEBASE) - Listen

Gold prices rebounded above $1,575/oz. Friday on bargain hunting despite a firmer dollar following a 6% technical sell-off this month. Stocks rebound. Gold last traded at $1,579 an ounce. Silver last traded at $28.72 an ounce.

MARKET NEWS HEADLINES
-More Inflation Is the Cure for the Fed’s Impotence - Bloomberg
-Gas Prices: Up 15% in 36 Days -CNNMoney
-When Interest Rates Rise, Watch Out - WSJ
-Economists Warn Fed Risks Losing Control Amid Deficits - Bloomberg
-Stock Market Correction May Have Begun - USNews

FOR SILVER, BEING CHEAP IS A GOOD THING - Marketwatch
After a nearly 9% dive in silver prices this month, investors should be able to breathe a sigh of relief as growth in industrial and investment demand gains pace, and calls of “oversold” conditions and “bargain” prices for the precious metal intensify.

“Silver is grossly oversold at current levels, more so than any time in the past five years,” said James Carrillo, senior portfolio adviser for precious-metals investment firm Swiss America Trading Corp.

“Fundamentally, silver should be rising,” as physical demand remains strong, said Carrillo. “However, the technical side of the market is dictating direction currently.”

THE GREAT AMERICAN RACE (TO DEBASE) - Editor
The DAYTONA 500 is known as "The Great American Race" but in reality the whole world is watching. For the first time in the history of NASCAR the race will start with a woman at the front of the pack. Danica Patrick completed the fastest qualifying solo lap at 196 mph, prompting Sports Illustrated to nickname Danica as "the fresh face of NASCAR".

Swiss America will also present a fresh face at the race, as our new "Simple Truth" TV commercials will be shown on the Daytona Speedway's 60' x 120' Jumbotron screen 24 times daily on Friday, Saturday and Sunday. The TV spots feature Braida Zoe (a smart 9-year old) who offers NASCAR fans a free copy of "The Great Debasement" book, a $25 value.

Braida explains the simple truth about how to protect yourself from spendthrift politicians - also driving in an international "race to debase" the U.S. dollar. Go Danica! Go Braida!

George Washington's 281st Birthday Warning
“Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.” -George Washington Perhaps that is why America's first president also said, “It is not the custom with me to keep money to look at.”

WHEN IT COMES TO GOLD, STICK TO THE FACTS - Kitco
Gold dipped below $1,600 last week, falling to a six-month low, much to the chagrin of gold investors. During short-term gold corrections, it’s much more important to focus on the facts, including the fact that gold is increasingly viewed as a currency. Rather than buying real estate, lumber or diamonds, central banks around the world are buying gold. According to the World Gold Council (WGC), over 2012, central bank demand totaled 534 tons, a level we have not seen in nearly 50 years.

Gold’s correction is reaching an extreme, indicating a potential buying opportunity. You can see on our oscillator model how gold has dropped nearly 2 standard deviations on a year-over-year basis. An event like this has happened only about 2 percent of the time over the last 10 years. Following these extreme lows, gold has historically increased as much as 15 percent over the next year.

TOP STORIES OF THE WEEK

-GOLD'S BIG PICTURE MADE SIMPLE - SATCAlert
The stage is now set. Gold prices, which have been at the mercy of technical selling since 2012, are now ready to resume the 21st century march upward as the world's monetary standard.

-SCHILLER: A HISTORY OF THE NATIONAL DEBT - WashTimes
George Washington warned about the dangers of debt in his Farewell Address (1796), admonishing “the people of the United States to avoid the accumulation of debt.” Forty years later (1835) was the only debt-free year in America’s history. By the time President Clinton gave his final State of the Union address on Jan. 27, 2000, America’s national debt was $5.5 trillion.

-WHAT WOULD BEN FRANKLIN SAY ABOUT AN AMERICA IN DECLINE? - RCM
In his masterful 1998 book, A History of the American People, historian Paul Johnson opined that the British weren’t incompetent as much as the Founders were brilliant. Washington, Adams, Jefferson, Madison, Hamilton, Monroe, and Franklin were in the eyes of Johnson the greatest collection of minds in one place in the history of mankind.

-THE COOLIDGE LESSON ON TAXES AND SPENDING - WSJ
Only Reagan could fix this. That's the intuitive reaction to the surge of spending and budgetary challenges in Washington today. But if you look back, around the curve of history, you can find a Republican who cut taxes, reduced the deficit and the budget: Calvin Coolidge.

-US DOLLAR WILL BE ‘OVERTHROWN’ AS WORLD’S RESERVE CURRENCY - MoneyNews
“Generally speaking, it is not believed by the vast majority that the American dollar will be overthrown,” Dick Bove, vice president of equity research at Rafferty Capital Markets, said in a note obtained by CNBC. “But it will be, and this defrocking may occur in as short a period as five to 10 years.”

-GOLD, SILVER COINS ACCEPTABLE FORMS OF PAYMENT? - AZDailySun
PHOENIX -- Arizonans who fear the federal government will make their folding money worthless may soon be able to substitute privately minted gold and silver coins.

-ICELAND FORESHADOWS DEATH OF CURRENCIES LOST IN CRISIS - Bloomberg
Iceland is hinting its currency may be too small to survive in the volatile world left behind by the global financial crisis. Less than five months after Finance Minister Katrin Juliusdottir said the krona probably will never be restored to a free floating regime, the central bank Governor is signaling the same.

More: Swiss America Gold Market News

2.21.13 - Seeing Gold's Big Picture Clearly - Listen

Gold prices rebounded to $1,575/oz. Thursday despite a firmer dollar and bearish Fed report. Stocks slip on uncertainty. Gold last traded at $1,575 an ounce. Silver last traded at $28.66 an ounce.

MARKET NEWS HEADLINES
-Government Report: U.S. consumer prices unchanged in January - Marketwatch
-Jobless Claims Move Up; Inflation Pressure Builds - CNBC
-U.S. Stocks Fall on Fed Minutes Amid Corporate Earnings - Bloomberg
-John Boehner: The President Is Raging Against a Budget Crisis He Created - WSJ

Hats off to Arizona conservative politicians considering restoring gold and silver as a hard money alternative to declining dollars for payment. We have sent Sen. Steve Farley, D-Tucson a copy of The Great Debasement as he is a little confused, thinking that gold has "failed" and paper succeeded.

GOLD'S BIG PICTURE MADE SIMPLE - SATCAlert
The stage is now set. Gold prices, which have been at the mercy of technical selling since 2012, are now ready to resume the 21st century march upward as the world's monetary standard.

"Gold's healthy price correction back near $1,550/oz. in Feb. 2013 should be viewed as the best buying opportunity in the last year. Market fundamentals remain solid," said author and Swiss America Chairman Craig R. Smith.

Mr. Smith remains confident the 21st century rush toward a new gold standard and away from a debt-driven culture is far from over, "The strong fundamentals driving this flight to safety could continue to propel gold prices above $2,000/oz."

The recent price dip offered the 9th major gold buying opportunity since 2003. The average price rebound following price dips is 36%! Better yet, this was only the third time in a decade that gold prices have dipped near 20%. more...

GOLD, SILVER COINS ACCEPTABLE FORMS OF PAYMENT? - AZDailySun
PHOENIX -- Arizonans who fear the federal government will make their folding money worthless may soon be able to substitute privately minted gold and silver coins.

The Senate Finance Committee on Wednesday took the first steps to making such coins legal tender in Arizona. SB1439 would give them the same legal status as bills and coins authorized by Congress.

Nothing in the proposal by Sen. Chester Crandell, R-Heber, would force anyone to actually accept these coins as payment for any debt. Their use would be voluntary. But proponents said it's only a matter of time before the country suffers hyperinflation, making the greenback worthless.

SCHILLER: A HISTORY OF THE NATIONAL DEBT - WashTimes
George Washington warned about the dangers of debt in his Farewell Address (1796), admonishing “the people of the United States to avoid the accumulation of debt.” Forty years later (1835) was the only debt-free year in America’s history. By the time President Clinton gave his final State of the Union address on Jan. 27, 2000, America’s national debt was $5.5 trillion.

So began the long, steep ascent to today’s $16.5 trillion national debt. The national debt now exceeds 100 percent of GDP and is growing by roughly $3 billion a day. The Congressional Budget Office (CBO) projects a $20 trillion debt 10 years from now.

Uncle Sam spends more money every year than he takes in. The resulting budget deficits are financed by issuing more Treasury bonds (IOUs), adding to the pile of debt. Annual deficits balloon when wars or recessions cause spending to surge and/or tax revenues to decline. Deficit spending makes debt reduction impossible.

More: Swiss America Gold Market News

2.20.13 - Presidential Lessons in Economic Truth - Listen

Gold prices ended sharply down Wednesday after a bearish FOMC minutes report. Stocks fall after Fed minutes. Gold last traded at $1,560 an ounce. Silver last traded at $28.40 an ounce.

MARKET NEWS HEADLINES
-U.S. stocks slump after Fed minutes- Market Watch
-Fed Officials Divided on Future of QE- CNBC
-John Boehner: The President Is Raging Against a Budget Crisis He Created - WSJ
-S&P 500 Falls Most Since November as Minutes Show Debate- Bloomberg

WHAT WOULD BEN FRANKLIN SAY ABOUT AN AMERICA IN DECLINE? - RCM
In his masterful 1998 book, A History of the American People, historian Paul Johnson opined that the British weren’t incompetent as much as the Founders were brilliant. Washington, Adams, Jefferson, Madison, Hamilton, Monroe, and Franklin were in the eyes of Johnson the greatest collection of minds in one place in the history of mankind.

At present the creation of our Founding Fathers limps along with high unemployment, gargantuan budget deficits, and a lack of confidence that is, well, un-American. Wildly successful entrepreneur Tom Blair has done just that with his highly insightful and enjoyable "Poorer Richard’s America – What Would Ben Say?"

The Founders were as skeptical of democracy as they were of monarchy; the former taking on the trappings of monarchy if not checked. Franklin himself famously responded about the creation of the United States that they’d given us “A Republic, if you can keep it,” and as opposed to a democracy marked by the passions of the voters, the Founders gave us a constitutional Republic in which the powers of the federal government were once again very limited.

NOTE: “When the people find that they can vote themselves money, that will be the end of the republic,” warned Benjamin Franklin at America's birth. "Today 49.1 percent of households have at least one person living there who gets a government benefit. More than 47 percent of adult Americans pay no income tax. Dependents see government as a free goody-dispensing machine," writes Craig R. Smith in The Great Debasement.

THE COOLIDGE LESSON ON TAXES AND SPENDING - WSJ
Only Reagan could fix this. That's the intuitive reaction to the surge of spending and budgetary challenges in Washington today. But if you look back, around the curve of history, you can find a Republican who cut taxes, reduced the deficit and the budget: Calvin Coolidge.

Coolidge came to Washington as vice president and moved into the White House only in 1923 after the sudden death of President Warren Harding. He later won the office himself and served until 1929. The 30th president cut the top income-tax rate to 25% (lower than the 28% of the historic Reagan cut of 1986). Coolidge reduced the national debt and balanced the budget. When he departed the White House he left a federal budget smaller than the one he found.

Three factors gave Silent Cal the ability to cut as he did, each suggesting a governing approach that would be useful today. 1) Under the Accounting Act of 1921, the executive branch gained the authority to present a unified budget and the authority to impound money already appropriated... 2) Coolidge came in like a lion, determined to make austerity permanent... 3) Coolidge's third advantage was what might be called fiscal trust... in 1926, Coolidge won his 25% tax rate.

ICELAND FORESHADOWS DEATH OF CURRENCIES LOST IN CRISIS - Bloomberg
Iceland is hinting its currency may be too small to survive in the volatile world left behind by the global financial crisis. Less than five months after Finance Minister Katrin Juliusdottir said the krona probably will never be restored to a free floating regime, the central bank Governor is signaling the same.

After its biggest banks defaulted on $85 billion in 2008, Iceland imposed currency controls to cauterize the outflow of capital. Offshore investors have about $8 billion in kronur locked behind the controls.

Even with the controls, the krona has lost almost 6 percent against the euro in the past 12 months. Versus the dollar, it’s declined almost 5 percent in the period.

“The restrictions have long-term costs for the economy and its international links,” he said. “Also, it might lead to asset bubbles and other such things, which we still haven’t seen much of yet.

GOLD FACES 'GLOBAL SUPPLY CRUNCH' - Telegraph
Gold miners have responded to recent falls in the price by concentrating on the highest quality deposits, scrapping extraction of more marginal material. This will cause a "significant decline" in global production of gold, according to Angelos Damaskos, who runs the Junior Gold fund.

"A shift in gold market dynamics in the near future could result in a supply crunch," he said.

It is likely that macroeconomic events will disappoint and impact the market negatively, dragging the European or US economies back into recession and forcing central banks to intervene in new, radical ways. Such developments would spook the market, encouraging investors to turn to gold as the ultimate safe haven. This scenario is a recipe for the gold price to reach highs, potentially of as much as $2,000.

More: Swiss America Gold Market News

2.19.13 - Prepared for the Rule of Gold? - Listen

Gold prices held near $1,600/oz. Monday amid technical selling despite a firmer dollar. Stocks rise on mergers. Gold last traded at $1,604 an ounce. Silver last traded at $29.47 an ounce.

MARKET NEWS HEADLINES
-Home Builders Get Jitters for First Time in a Year - CNBC
-Simpson and Bowles To Offer Up Deficit Fix - WSJ
-Obama Warns Sequester Will Cause Job Losses - CNBC
-Wall Street on the rise with M&A seen as catalyst - Marketwatch
-Iceland Foreshadows Death of Currencies Lost in Crisis - Bloomberg

THE RULE OF GOLD - RealMoneyPerspectives
Back in 2006, Craig R. Smith wrote, "A dollar is not money. A dollar is a unit of measurement, like an inch or a quart or a mile. Congress, in the Coinage Act of 1792, fixed the 'dollar' as a specific weight of gold or silver coin. Logically, if there are no gold and silver coins in circulation today, then there are no dollars of anything to be found."

"People have been led to believe that a dollar is both money and a measure of it. It is only when we understand what a 'dollar' really is that we can out-think the world of manipulated markets. Gold and silver are the only assets historically worthy of being a 'standard' in the financial markets - yesterday, today and tomorrow. Few U.S. investors can see it yet, but they will!"

PREPARE TODAY FOR RULE OF GOLD TOMORROW - Editor
It seems everyone from Fortune Magazine's Sr. Editor to a major Wall Street money manager to a Berkley Economic Professor all agree with Mr. Smith's conclusions in The Great Debasement; that the U.S. Dollar will be toast within 5-10 years - unless we radically change its course.

Imagine this new world where the U.S. must actually pay our debts vs. printing money. That is the world in which true wealth will be measured accurately in tangible assets. A world in which Gold money once again overthrows political money, as covered in The Great Debasement! Get prepared today for the rule of Gold tomorrow!

US DOLLAR WILL BE ‘OVERTHROWN’ AS WORLD’S RESERVE CURRENCY - MoneyNews
“Generally speaking, it is not believed by the vast majority that the American dollar will be overthrown,” Dick Bove, vice president of equity research at Rafferty Capital Markets, said in a note obtained by CNBC. “But it will be, and this defrocking may occur in as short a period as five to 10 years.”

“If the dollar loses status as the world’s most reliable currency, the United States will lose the right to print money to pay its debt,” Bove wrote. “It will be forced to pay this debt. The ratings agencies are already arguing that the government’s debt may be too highly rated. The United States Congress, in both its houses, as well as the president, are demonstrating a total lack of fiscal credibility.”

FEARS AT FED OF RATE PAYOUTS TO BANKS - FTimes
US Federal Reserve officials fear a backlash from paying billions of dollars to commercial banks when the time comes to raise interest rates.

The growth of the Fed’s balance sheet means it could pay $50bn-$75bn a year in interest on bank reserves at the same time as it makes losses and has to stop sending money to the Treasury.

Officials at the US central bank fear it could create a public-relations nightmare after the Fed was lambasted for rescuing banks during the financial crisis. It is one factor prompting some inside the Fed to reconsider the eventual “exit strategy” from easy monetary policy.

If you think of the profitability of the biggest banks, if you’re going to talk about paying them something of the order of $50B – that’s more than the entire profits of the largest banks.

OBAMA DEBT SOLUTIONS ‘GENERATIONAL THEFT:’ LANGONE - CNBC
President Barack Obama's roadmap to reduce the deficit and invest in the future is "generational theft of an enormous magnitude," Home Depot Founder Kenneth Langone said in a "Squawk Box" interview.

He used an analogy to make his point. "If you had one meal left, and you had your grandchild with you, would you eat if or give it to your grandchild?" He said all people would say "give it to my grandchild."

But pursuing the president's vision, he argued, "[Is] eating the grandchildren's breakfast, lunch and dinner right now. And the [grandchildren] haven't been born yet."

More: Swiss America Gold Market News

2.15.13 - Gold: Fundamentally a Smart Buy! - Listen

Precious metal prices fell over 1% Friday amid technical selling, upbeat economic data and a firmer dollar. Stocks mixed. Gold last traded at $1,606 an ounce. Silver last traded at $29.84 an ounce.

MARKET NEWS HEADLINES
-US Consumer Sentiment Improves Job Outlook - CNBC
-With 2 Weeks Until Deadline, $85B Sequester Looks Inevitable - TheHill
-Obama's No-Growth State Of the Union - RealClearMarkets
-Gold Dips To $1,600 First Time Since Summer As Sell Stops Triggered - Kitco

Gold prices touched 6-month lows near $1,600 an ounce on Friday on technical selling, based on charts and moving averages. However, none of the fundamentals for owning gold in your portfolio have changed. This dip represents another smart buying opportunity for long-term investors.

GOLD: BOTH SIDES OF THE COIN - SpecialReport
This Swiss America Special Report will examine both the "Bull Case" and the "Bear Case" for owning gold today by the world's top analysts.

The gold bears make a few good points, which should be considered before jumping aboard the gold bandwagon. It is possible, under new leadership, the U.S. could begin to rein in the debt and deficits. And it is true that the U.S. Dollar might brake its multi-decade decline as a result.

So, if you are 100% confident that; 1) the U.S. Dollar will strengthen, 2) the debt crisis will be solved and 3) owning physical gold is not a prudent and safe haven, due to recent volatility – these are valid reasons for remaining bearish on gold.

Are you willing to entrust your financial future in the hands of politicians with a vested interest in a perpetually weak U.S. dollar and continually snowballing debt? If not, then ignore the bears (who have been wrong for a decade) and consider the logic of owning gold right now. Discover 4 Reasons to be BEARISH on Gold and 24 Fundamental BULLISH Reasons to Own Gold

HOW GOLD WILL BENEFIT FROM A CURRENCY WAR - Marketwatch
Talk of a so-called currency war has been heating up, and it might finally light a fire under gold, too. Efforts by countries such as Japan to boost growth with massive stimulus programs -- which in turn have devalued their currencies, an aid to exports -- can benefit prices for gold. These have started to alter the precious metal’s relationship with the foreign-exchange market and expand its role as a safe-haven asset.

“We are now moving irrevocably to a time when gold will measure currencies, not currencies measure gold,” said Julian Phillips, a South Africa-based contributor and founder at GoldForecaster.com.

G20 TO DILUTE BIG POWERS' DEMANDS ON CURRENCIES - Reuters
The currency market was thrown into turmoil this week after the G7 - the United States, Japan, Germany, Britain, France, Canada and Italy - issued a joint statement stating that domestic economic policies must not be used to target currencies.

G20 officials will disregard key parts of a currency statement issued this week by the Group of Seven powers, according to a communique drafted for finance leaders meeting in Moscow, and will not single out Japan.

CURRENCY WARS ARE EVIL - Merk
Real people may die when countries engage in “currency wars.” Countries debasing their currencies risk, amongst others: Loss of competitiveness, Social unrest, War.

The illusory benefit of a weaker currency is to boost corporate earnings as companies increase their exports. That may well be true for the next quarterly earnings report, but ignores that their competitive position may be weakening.

Currency debasement is not just bad for the corporate world: it’s particularly painful for citizens. Just ask citizens of Venezuela where the government just announced a 32 percent devaluation in the bolivar’s official exchange rate to the dollar.

For those that believe currency debasement is the appropriate way to escape a depression, keep in mind that the Great Depression provided a transition to World War II. Currency wars have a disproportionate impact on the poor, as they don’t hold assets whose value is inflated in nominal terms and that could buffer some of the fallout.

GENERATIONAL THEFT NEEDS TO BE ARRESTED -WSJ
Higher taxes, however advisable or not, fail to come close to solving the problem. Discretionary spending must be reduced but without harming the safety net for our most vulnerable, or sacrificing future growth (e.g., research and education). Defense and homeland security spending should not be immune to reductions. Most consequentially, the growth in spending on entitlement programs—Social Security, Medicaid and Medicare — must be curbed.

These truths are not born of some zeal for austerity or unkindness, but of arithmetic. The growing debt burden threatens to crush the next generation of Americans.

The country must find the courage, conviction and compassion to fix what ails it. The opportunity to advance real reform is still possible. But failure to reform the entitlement culture, reaffirm long-run objectives, and re-establish a common purpose will mean a dimming of opportunities for American children today and for future generations. And a great nation will have ceded more than its greatness, but its goodness.

TOP STORIES OF THE WEEK

-CENTRAL BANKS BOUGHT MOST GOLD IN NEARLY 50 YEARS - CNBC
-WHY ARE RUSSIA AND CHINA HOARDING SO MUCH GOLD? - ETFDaily
-VENEZUELA DEVALUES BOLIVAR 32% - Bloomberg
-STAGE SET FOR BIPARTISAN MONETARY REFORM - Forbes
-PUTIN TURNS BLACK GOLD TO BULLION AS RUSSIA OUTBUYS WORLD - Bloomberg
-CHINA'S NEW “YEAR OF SNAKE” RISKY FOR U.S. ECONOMY, WARN EXPERTS -NewsRelease

More: Swiss America Gold Market News

2.14.13 - Valentine's Day Economic Lessons - Listen

Precious metal prices drifted lower Thursday amid short-term profit taking and a stronger dollar. Stocks end flat. Gold last traded at $1,637 an ounce. Silver last traded at $30.52 an ounce.

MARKET NEWS HEADLINES
-U.S. Carriers Merge to Form Air Giant - WSJ
-Cashin: Dow Has 'Given Up Rallying for Lent' - CNBC
-Millionaires' Flight from Taxes Accelerates - Barrons
-Obama's Economic Confusion Rivals Roosevelt's - Forbes
-Why The Dollar’s Reign As World Reserve Currency Is Ending -ETFDaily
-Obama Fires 20,000 Marines, But Sends $700 Million to Palestinian Terrorists - FrontPageMag

SAINT VALENTINES DAY ECONOMICS - Editor
1 + 1 = 4 ?! - CNBC reports, "Couples who get and stay married can have as much as four times the wealth of their single or divorced peers." So it looks like old Mark Twain was right; "To get the full value of joy you must have someone to divide it with."

A LESSON FROM THE ROMANS - DailyReckoning
Once the Romans started creating coins out of thin air, it took 200 years for the denarius to lose 95% of its purchasing power. But look at this.

It has taken the United States about 80 years to do to the dollar what the Romans did to their own money in 200 years. Now, compared to gold, the dollar’s lost 95% of its value. The "devaluation" of currency happens again... and again... throughout history. [NOTE: This is the subject of our latest book, "The Great Debasement" Learn from history rather than becoming a victim of it.]

CENTRAL BANKS BOUGHT MOST GOLD IN NEARLY 50 YEARS - CNBC
Central banks scooped up more gold in 2012 than they have annually in nearly half a century as they sought to diversify reserves, the World Gold Council (WGC) said on Thursday.

Central banks bought 534.6 metric tons of the precious metal last year – the most since 1964 – led by Russia, Brazil and Iraq. Net purchases by central banks accounted for 12 percent of overall demand in 2012, compared with a 10 percent share in 2011.

Ric Spooner, chief market analyst at CMC Markets expects this trend to continue, noting that there is a, "broad tendency for the U.S. dollar to decline in value with the Federal Reserve's QE (quantitative easing) policies. Assets like gold are a hedge against debasement against foreign exchange reserves."

[NOTE: This topic is one of dozens covered in Swiss America's 2013 Real Money Perspectives, The Simple Truth. Call 800-289-2646 or register here for a FREE copy!]

WHY ARE RUSSIA AND CHINA HOARDING SO MUCH GOLD? - ETFDaily
Most Americans simply don’t understand that Russia and China have the power to collapse the U.S. economy by going to a gold for oil system. All they have to do is pull the trigger.

Are Russia and China hoarding massive amounts of gold because they plan to kill the petrodollar? Since the 1970s, the U.S. dollar has been the currency that the international community has used to trade oil around the globe. This has created an overwhelming demand for U.S. dollars and U.S. debt.

And all of this has worked out very nicely for the United States. It has created a massive demand for U.S. dollars and U.S. debt. But what would happen if the rest of the world rejected the petrodollar system and adopted a “petrogold” system instead?

HENNINGER: THE STATE OF OBAMA - WSJ
A State of the Union speech normally is about relating a president's public policies to conditions in the country. An Obama State of the Union speech is about one thing: the Obama project.

That we are all just riding in Barack Obama's sidecar should have been obvious from day one. His 2008 Denver acceptance speech enveloped nearly everything. The vast, sweeping goals he then laid out in January 2009 are virtually the same ones he described Tuesday night—the climate cleansed, education for all, social justice achieved and the drowning middle-class saved.

As to the American population, beset with anxieties over low growth and persistent unemployment, they're expected to gut it out with their inspirational president. In year five, he's proposing 15 "manufacturing hubs" that he says will be "global centers of high-tech jobs." Anyone who has seen "Annie" on Broadway knows the translation: "The sun will come out—tomorrow."

More: Swiss America Gold Market News

2.13.13 - Survey Reveals 8% Real World Inflation - Listen

Gold prices dipped below $1,650/oz. Wednesday amid technical profit taking and a flat dollar, stocks mixed up. Gold last traded at $1,642 an ounce. Silver last traded at $30.80 an ounce

MARKET NEWS HEADLINES
-State of the Union: 11,629 go on food stamps each day -DrudgeReport
-Obama appeals for an end to manufactured crises - Marketwatch
-Minimum Wage Raise Has Risks for Obama, Economy - CNBC
-Rubio: More government breeds more problems - CBSNews
-Pay rises 'outstripped by inflation' - Telegraph
-Why the Dollar Rebound Won't Last - CNBC
-Stocks Reach a Stalemate - WSJ

Gold prices slipped on short-term dollar strength ahead of this weekend's Group of 20 meeting. Meanwhile, CNN reports, "India spent $56 billion for their gold. Buying gold is a cultural habit in India - one that's also driven by economics. The easiest way to make an investment is to buy a piece of gold - a hard asset that can be stored at home."

THE PRICE OF DOWN IS UP - MillersMoney
Well, our inflation survey results are in. The weighted average for our reader-reported inflation rate is 8.07% and we are calling it the Money Forever Reader Poll Inflation Rate.

I know our rate is unscientific, but I trust our readers more than I trust the Bureau of Labor and Statistics. Also, please note that Vedran Vuk will share some additional analysis in the Casey Daily Dispatch. Its readers also participated in the survey.

In addition, Vedran prepared the graph showing the distribution of responses. We were hoping for a bell-shaped curve, but you will notice it stops with 23.6% of the respondents reporting that they believe inflation is 11% or higher. In light of this, we will add higher rate choices the next time we run our survey.

VENEZUELA DEVALUES BOLIVAR 32% - Bloomberg
Venezuela devalued its currency for the fifth time in nine years, a move that may undermine support for ailing President Hugo Chavez and his allies ahead of possible elections later this year.

South America’s biggest oil producer may have to call elections if Chavez, who hasn’t been seen for two months after undergoing cancer surgery in Cuba, dies or steps down. He ordered his government to weaken the exchange rate by 32 percent to 6.3 bolivars per dollar starting Feb. 13, Finance Minister Jorge Giordani told reporters yesterday in Caracas.

Annual inflation accelerated to 22.2 percent in January, the fastest pace in eight months, led by a jump in food prices. The move prompted Venezuelan consumers to rush to buy appliances including flat-screen televisions before prices were adjusted.

ATTACK ON THE FREE - WashingtonTimes
For at least the last 2,500 years, from the time of the Athenian republic, fragile islands of freedom have been under attack. The more economically free jurisdictions have, in general, higher growth rates and standards of living for their citizens than those less free.

Under the Obama administration, the United States has become the biggest single financial imperialist and oppressor of global economic freedom. Its biggest “gun” has been the new Foreign Account Tax Compliance Act (FATCA).

How would most Americans react if the Swiss government told all American financial institutions they had to report their customers to the Swiss tax authorities so the Swiss could determine if any Swiss citizens or residents had U.S. accounts? The outrage and resentment would be justifiable.

Now, President Obama has again called for even higher taxes. His ideal seems to be the French, big-government model. If the Republicans are smart, they should support and advocate for the smaller-government, Swiss model — France’s freer and more prosperous next door neighbor.

AMAZON MINTING CURRENCY, FED AT RISK - Marketwatch
This month, Amazon launched its own coins — a virtual currency that can be used to buy stuff for your Kindle tablet ... regrettably virtual currencies are just as prone to booms and busts as the real sort.

It is not hard to see why central bankers are worried. Right now, virtual currencies are tiny. Hardly anyone is taking them seriously. And yet people are increasingly losing faith with traditional currencies. They are losing value steadily to inflation. And quantitative easing and currency wars mean they are constantly being debased. They are open to alternatives.

Of course, governments and central banks will try to stop it. They won’t give up their monopoly over money without a struggle. Plenty of investors have been turning to gold. Russia and China are building up their reserves, and so are many private individuals.

More: Swiss America Gold Market News

2.12.13 - The True State of the Obamaconomy - Listen

Gold prices steadied near $1,650/oz. Tuesday amid profit taking and bargain hunting, stocks seek direction. Gold last traded at $1,651 an ounce. Silver last traded at $31.12 an ounce

MARKET NEWS HEADLINES
-Bailout success story of TARP is a work of fiction - Marketwatch
-Central Banks Gone Wild: What Can Investors Do? - CNBC
-Fed's Yellen: Fixing America's Job Market Could Take Years - CNNMoney
-Economy, Deficit Top Voter Issues - Reuters
-Goldman Sachs Downgrades Stocks - CNBC
-G7 fires warning shot over currency wars - Reuters

Tonight the President will deliver his fourth State of the Union address which will undoubtedly accentuate the positive and eliminate the negative. But most Americans are well aware that our nation is not headed in the right direction by a ratio of 2 to 1.

As the chart below clearly shows the last four years have not produced much positive growth; unemployment is up, food stamps up, misery index up, mortgage delinquencies up, debt way up.

Republicans will have a chance to respond, via Florida Senator Mark Rubio. We shall see who can best inspire America to move closer toward a bigger or a smaller federal government.

KRAUTHAMMER: STATE OF THE UNION "EXTREMELY AGGRESSIVE AND PARTISAN" - RCP
Obama is still campaigning, he hasn't stopped. Part one was to re-win the presidency, which he did. But now he is continuing his idea, his political objective now to is reduce, to fracture, to marginalize the Republicans in the House, who were the ones that stopped the agenda in years three and four of his presidency, and who he has to marginalize if he wants to enact his agenda in the second term.

He is really going to hammer Republicans on the sequester, that is the automatic spending cuts which Republicans in the House have announced they are going to allow it to be enacted unless Obama offers ultimate cuts. Obama wants a hike in taxes.

OBAMA TO REWARD COALITION IN STATE OF UNION SPEECH - Marketwatch
President Barack Obama is expected to show some new-found swagger at his State of the Union speech on Tuesday to press for issues favored by the coalition of women, youth and minorities that swept him to victory in November.

“This is the year of regulation, not legislation,” said Ethan Siegal, founder of the Washington Exchange, a firm that monitors Washington for Wall Street ... bank regulation is expected to plod along ... Health-care reform will continue to take shape ...Headlines will come soon from energy regulation.

In most cases, there is little, if any, “middle ground” for compromise between House Republicans, Obama and congressional Democrats, Siegel said.

STAGE SET FOR BIPARTISAN MONETARY REFORM - Forbes
The elevation of reform of our broken monetary system to a bi-partisan economic issue may be the biggest positive development of the next two years. Just last week, two-thirds of the Delegates in the Virginia House voted to “establish a joint subcommittee to study the feasibility of a metallic-based monetary unit.”

It is past time for the Federal Reserve and the advocates of the paper dollar to be held to account for the complete and utter failure of their grand experiment in monetary manipulation made possible by severing the final link between the dollar and gold by President Richard Nixon in 1971.

Since abandoning gold for a paper dollar, the American people have suffered through a dozen financial crises, culminating in the financial crisis of 2008 and 2009, the housing collapse and now the European sovereign debt crisis.

More: Swiss America Gold Market News

2.11.13 - Currency Wars Launch Lunar New Year - Listen

Gold prices dipped to $1,650/oz. Monday on profit taking and a firmer dollar, stocks slip on oil. Gold last traded at $1,650 an ounce. Silver last traded at $31.03 an ounce.

Kitco reports, "Most Asian markets were closed Monday for the Lunar New Year celebration. China is on holiday all week for the Lunar New Year, which could limit physical buying this week."

MARKET NEWS HEADLINES
-Chinese world worries that Year of Snake may bite - SFgate
-Cashin's Reasons to Be Cautious About Stocks - CNBC
-Companies Fret Over Uncertain Outlook - WSJ
-G20 should give clear signal there is no currency war - Reuters
-The 8 most common tax blunders - Marketwatch

CURRENCY WAR? HERE'S HOW TO HEDGE IT WITH GOLD - CNBC
As leaders from around the world meet this week to discuss fears of competitive currency devaluations, analysts told CNBC the currency war could lead to a sharp rise in gold prices in the second half of this year, after a falloff in the first half.

"We think a currency war will be the biggest story of 2013 when we look back on the year," Patrick Armstrong, managing partner at Armstrong Investment told CNBC on Monday.

The potential upside for gold in the second half of 2013 will be $250-$300, said Michael Widmer, metals strategist at BofA Merrill Lynch Global Research, as markets have yet to price in that countries will continue to devalue their currencies.

PUTIN TURNS BLACK GOLD TO BULLION AS RUSSIA OUTBUYS WORLD - Bloomberg
When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.

Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.

CHINA'S NEW “YEAR OF SNAKE” RISKY FOR U.S. ECONOMY, WARN EXPERTS -NewsRelease
On February 10, the ancient Chinese Lunar calendar, based on a 12-year cycle of different animal years, exited the Year of the Dragon and entered the new Year of the Snake.

Snake years have been unlucky for humankind, and many Chinese astrologers predict that 2013 could be a year of disasters of many ominous kinds.

“The 1929 stock market crash and plunge into the Great Depression happened in a Snake year,” says monetary expert Craig R. Smith.

“Many in Asia fear that this new Snake year is a bad omen that could lead to war or another economic disaster. Such thinking could become a self-fulfilling prophecy.”

Smith in his latest book, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America's Money Back, includes many amazing facts about China – the birthplace of paper money where events such as Chinese New Year are celebrated with gifts of gold and offerings to the deceased of “ghost money.”

More: Swiss America Gold Market News

2.8.13 - The Simple Truth: Stories of the Week - Listen

Gold prices dropped below $1,675/oz. Friday amid profit taking and bargain hunting, stocks lifted by data. Gold last traded at $1,668 an ounce. Silver last traded at $31.48 an ounce.

MARKET NEWS HEADLINES
-Why gasoline prices are headed even higher - Marketwatch
-Americans Are Using Their Houses as ATMs Again - CNBC
-Blizzard Brings Travel Nightmare for New England -AccuWeather
-Could Obamanomics Cause New Ice Age? -NewsMax
-Survey: Young Adults More Stressed Than Other Generations - CBS
-Obama Approval Sinks After Re-election -Quinnipiac University

FED HAS BOUGHT MORE U.S. GOV’T DEBT THIS YEAR THAN TREASURY HAS ISSUED - CNS
CNS reports, "So far this calendar year, the Federal Reserve has bought up more U.S. government debt than the U.S. Treasury has issued by about $3.9 billion.

If the Fed continues to purchase $45 billion in additional federal debt each month in 2013 it will buy up another $540 billion in federal debt this year alone.

The CBO currently estimates that the federal deficit for fiscal 2013 will be $845 billion. If the Fed were to buy debt at a pace of $540 billion a year, and the Treasury were to issue it at $845 billion per year, the Fed would be buying the equivalent of about 64 percent of all debt the government issued.

WORK & MONEY TOP CAUSES OF MILLENNIAL STRESS
CBS reports, "A new survey found that the stress level for Millennials, adults aged 18-33, was 5.4 with 39 percent saying their stress increased during the past year and 52 percent saying that it has kept them up at night. The top two causes of their stress are work and money."

TOP STORIES OF THE WEEK

OBAMANOMICS MIGHT CAUSE NEW ICE AGE, SAY EXPERTS - NewsRelease
Cite Liberal Study Claiming Less Work Could Cool Planet ~ Is Eurosocialism the Way to Reverse “Global Warming”?

2.8.13 - A new study by the Center for Economic Policy and Research, a liberal think tank in Washington, D.C., predicts that if the world became “more European” – working fewer hours and taking more vacations – this could reduce future global warming by as much as 2.34 degrees Fahrenheit.

“If this is true, then President Barack Obama's economy-chilling new taxes and choking regulations could push us into a new Ice Age,” laughs Lowell Ponte, a former think tank futurist and author of one of the most widely praised books about global climate change.

“Because of President Obama's policies, 8.5 million fewer jobs exist in America today than when he took office four years ago, even though the U.S. population has increased by 9 million people,” says Ponte, author of the bestselling book The Cooling.

“America's economic growth has cooled to an almost-frozen halt, and plummeted to Minus 0.5 percent GDP growth, an icy dip to Recession level low grow, in the 4th Quarter of 2012.

“If fewer work hours will cool Earth's climate by expending less energy, then 23 million Americans now unemployed, or able to find only part-time work, are chilling our economy and society to the bone,” says Ponte, who for 15 years was the Roving Science Editor at Reader's Digest Magazine.

“No wonder so many Americans are shivering with fear that our economy may not survive the next four years, and that our children have no future in the economic Ice Age that President Obama's policies are bringing on,” he says.

Ponte and co-author Craig R. Smith, a famed monetary expert, explore forces that could bring down America's economy in their latest book, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America's Money Back.

LEARNING TO OVERCOME ECONOMIC ILLUSIONS - Real Money Perspectives
"An economy built on an illusion is hardly a sound structure," reports Wall Street Journal. But "the truth can be stranger than fiction," opined Mark Twain.

Swiss America's 31st Anniversary Edition of Real Money Perspectives, "The Simple Truth," exposes economic illusions by telling the truth. This helps our readers create a more solid foundation that can withstand the storms of life.

The many topics covered in "The Simple Truth" include:
1) The dubious 100-year anniversary of the Federal Reserve and IRS
2) How to stop Progressives from stealing our children's future
3) Where you can put your assets for protection and growth. Listen: 2-min. Summary

ECONOMY CAN’T DEFY LAWS OF NATURE FOREVER - Marketwatch
“I don’t think we ever actually got out of the last recession,” said Chris Martenson of PeakProsperity.com in a telephone interview with Marketwatch. “When the government is borrowing 8% to 10% of GDP, and GDP is growing at 2% to 3%, it tells me the real economy is shrinking by 5%-7%.”

The Federal Reserve will print another $1.14 trillion in new money in 2013 through its so-called quantitative-easing activities, Martenson notes. “This is an unprecedented experiment, which might end well, or it might end badly.” He believes the odds of an unforeseen shock to our fragile, debt-laden systems are a lot higher over time than the odds of the Fed’s plan actually succeeding in spawning significant growth.

VIRGINIA TAKES GOLDEN LEAD ON MONETARY REFORM - NYSun
It’s starting to look like Virginia could yet emerge in a leading role among the states in respect of monetary reform. The lower chamber of its general assembly has passed a bill to underwrite a study of the feasibility of a monetary unit based on a metallic standard. It is one of a number of states that are reaching deep into the Constitution of the United States to protect themselves in an era when the value of the dollars issued by the federal government is collapsing.

George Washington, James Madison, and Thomas Jefferson, were, after all, all Virginians. They were also of the view that gold and silver are the true money. Washington warned that paper money always has the effect “to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."

Virginia has an opportunity to begin an important study of the powers of the states at a time when the value of the dollar has plunged to below a 1,670th of an ounce of gold, little more than half of what it was valued at when Barack Obama acceded to the presidency.

THIS WEEK'S 100th ANNIVERSARY OF THE INCOME TAX - NewsRelease
SHOULD BE MARKED BY “MOURNING IN AMERICA” SAY EXPERTS

Sunday, February 3, was the 100th Anniversary of the ratification of the 16th Amendment – which instantly opened the door for today's Income Tax.

“America's Framers wrote a Constitution that prohibited an income tax, but the Progressives who won the 1912 election were eager to impose unequal taxes – and they got their way,” says monetary expert and economic historian Craig R. Smith.

“Just like today, the politicians in 1913 promised their new tax would fall almost entirely on the rich. They used class warfare and envy to trick people into accepting a tax that enriches government, a heavy and intrusive tax that more than half of all working Americans – not just the rich – now pay,” says Smith.

TEN MILLION DOLLARS FOR DOLLAR COIN BREAKS RECORD - Examiner
Stack Bowers Galleries auctioned the 1794 Flowing Hair silver dollar for $10,016,875 on January 24, 2013. The previous record was $7,590,020 for a 1933 Double Eagle by Stack Bowers Galleries in partnership with Sotheby’s in 2002.

The 1794 silver dollar graded by PCGS Professional Coin Grading Service known as the finest graded first silver dollar with a grade of MS-66; mint state 66 a high graded condition for any coin.

Numismatists believe that this 1794 Flowing Hair silver dollar might possibly be the very first dollar minted in the United States of America.

More: Swiss America Gold Market News

2.7.13 - Learning to Overcome Economic Illusions - Listen

Gold prices eased below $1,675/oz. Thursday on profit taking and a firmer dollar, stocks fall on data. Gold last traded at $1,671 an ounce. Silver last traded at $31.46 an ounce.

MARKET NEWS HEADLINES
-U.S. stocks fall after economic data - Marketwatch
-Jim Rogers Joins Bill Gross Warning on Treasuries Rout - Bloomberg
-Europe's Economy Still Weak: ECB's Draghi - CNBC
-The Fed's Asset-Inflation Machine - WSJ
-Bernanke confesses to economic doping! - DailyReckoning

LEARNING TO OVERCOME ECONOMIC ILLUSIONS - Real Money Perspectives
"An economy built on an illusion is hardly a sound structure," reports Wall Street Journal. But "the truth can be stranger than fiction," opined Mark Twain.

Swiss America's 31st Anniversary Edition of Real Money Perspectives, "The Simple Truth," exposes economic illusions by telling the truth. This helps our readers create a more solid foundation that can withstand the storms of life.

The many topics covered in "The Simple Truth" include:
1) The dubious 100-year anniversary of the Federal Reserve and IRS
2) How to stop Progressives from stealing our children's future
3) Where you can put your assets for protection and growth. Listen: 2-min. Summary

CHINA: SOON TO BE WORLD’S BIGGEST GOLD IMPORTER, IF IT ISN’T ALREADY - Barrons
Private and public-sector gold buying in China may have just pushed the country past India as the world’s biggest buyer.

Commerzbank’s strategists point this morning to fresh statistics out of Hong Kong showing that year-on-year gold imports almost tripled in December, to 114 tons. Do the math and China is ready to move into the top spot globally if it isn’t there already.

Gold bulls expect this to be a minor factor compared to the presumably destructive aftereffects of the Fed’s quantitative easing on the dollar. But every buyer counts. Especially when they’re approaching 1,000 tons annually.

PLACE GEITHNER'S BOOK IN FICTION SECTION - NY Post
When I first reported last month that ex-Treasury Secretary Tim Geithner wants to write a book about his long years as one of Washington’s chief economic bureaucrats, I was only half joking when I said it should be in the fiction section. And now I mean it.

Geithner yesterday confirmed that he’s shopping a book. As a free-markets fan, I hope he gets a nice payday. The irony is that Geithner has done much to damage the country’s free markets.

As a fellow author, I want to help Tim find a title that best explains his contributions.
A few options:
* An Idiot’s Guide To Screwing Up the Economy
* What I Saw at the (Socialist) Revolution
* How To Screw Up a Perfectly Good Bailout
* Loving the Guy in the White House (Who Couldn’t Care Less About Me)

CURRENCY WARS RETURN, 1930S STYLE: WHO WILL LOSE OUT? - CNBC
As countries try to weaken their currencies to boost exports, the risk of a currency war similar to events seen in the 1930s has heightened and policymakers are making sure they are on the winning side, according to Morgan Stanley.

The balance of power now rests with Japan, according to the bank, as Japan's policy-makers' more dovish approach looks set to bring the world a step closer to a currency war.

The U.K. was the first to leave the gold standard on September 19, 1931 due to painfully high unemployment. Sterling depreciated, setting off a volatile chain of events with the U.S., Norway, Sweden, France and Germany all following suit.

Those countries that moved early benefited at the expense of others on the gold bloc, a "beggar-thy-neighbor" outcome, according to Pradhan.

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2.6.13 - 2013 Economic Wild Cards Abound - Listen

Gold prices rose above $1,675/oz. Wednesday on bargain hunting despite a firmer dollar, stocks mixed up. Gold last traded at $1,677 an ounce. Silver last traded at $31.84 an ounce.

MARKET NEWS HEADLINES
-Insiders now aggressively bearish - Marketwatch
-CBO: Spending Cuts and Tax Increases Are Slowing Growth - CNNMoney
-U.S. Postal Service to Cut Saturday Mail - WSJ
-US Economy One Quarter From Recession - Minyanville
-Gross: 'Cult of Equities' Still Dying, Despite Dow 14K -CNBC
-Federal Reserve hacked, 4,000 bankers' details stolen - Guardian

2013 ECONOMIC WILD CARDS ABOUND - Real Money Perspectives

"Some superstitious people have called the '13' in this year unlucky, along with its ushering in of the new 113th Congress, whose lawmakers were elected months earlier in a year of 13 full moons. The year opened with Congress passing the 'American Taxpayer Relief Act,' which raises annual Social Security taxes on 77.1% of U.S. families by an average of $1,000 to $1,300," writes Swiss America Chairman Craig R. Smith in "The Simple Truth," Swiss America's 31st Anniversary Edition of Real Money Perspectives.

"This loss of private spending by America's families will slow economic growth in 2013's First Quarter to around 1 percent. This added tax and growth burden could also increase the unemployment rate by at least three-tenths of a percent and further stall economic recovery. With real inflation running close to 7% and devouring our economic growth, this and the deal's other tax increases could put America's economy underwater – shrinking its growth to negative 5% or worse. This could become the start of another Recession," says Smith.

ECONOMY CAN’T DEFY LAWS OF NATURE FOREVER - Marketwatch
“I don’t think we ever actually got out of the last recession,” said Chris Martenson of PeakProsperity.com in a telephone interview with Marketwatch. “When the government is borrowing 8% to 10% of GDP, and GDP is growing at 2% to 3%, it tells me the real economy is shrinking by 5%-7%.”

The Federal Reserve will print another $1.14 trillion in new money in 2013 through its so-called quantitative-easing activities, Martenson notes. “This is an unprecedented experiment, which might end well, or it might end badly.” He believes the odds of an unforeseen shock to our fragile, debt-laden systems are a lot higher over time than the odds of the Fed’s plan actually succeeding in spawning significant growth.

VIRGINIA TAKES GOLDEN LEAD ON MONETARY REFORM - NYSun
It’s starting to look like Virginia could yet emerge in a leading role among the states in respect of monetary reform. The lower chamber of its general assembly has passed a bill to underwrite a study of the feasibility of a monetary unit based on a metallic standard. It is one of a number of states that are reaching deep into the Constitution of the United States to protect themselves in an era when the value of the dollars issued by the federal government is collapsing.

George Washington, James Madison, and Thomas Jefferson, were, after all, all Virginians. They were also of the view that gold and silver are the true money. Washington warned that paper money always has the effect “to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."

Virginia has an opportunity to begin an important study of the powers of the states at a time when the value of the dollar has plunged to below a 1,670th of an ounce of gold, little more than half of what it was valued at when Barack Obama acceded to the presidency.

401KS ARE A DISASTER - USAToday
Recent and near-retirees, the first major cohort of the 401(k) era, do not have nearly enough in retirement savings to even come close to maintaining their current lifestyles. We need an across the board increase in Social Security retirement benefits of 20% or more.

According to the Center for Retirement Research at Boston College, the median household retirement account balance in 2010 for workers between the ages of 55-64 was just $120,000. For people expecting to retire at around age 65, and to live for another 15 years or more, this will provide for only a trivial supplement to Social Security benefits.

And that's for people who actually have a retirement account of some kind. A third of households do not. For these people, their sole retirement income, aside from potential aid from friends and family, comes from Social Security, for which the current average monthly benefit is $1,230.

More: Swiss America Gold Market News

2.5.13 - Progressivism Celebrates 100th Anniversary - Listen

Gold prices held near $1,675/oz. Tuesday on bargain hunting despite a firmer dollar, stocks rebound. Gold last traded at $1,672 an ounce. Silver last traded at $31.80 an ounce.

MARKET NEWS DIGEST
-Housing Already Shows Signs of a New Bubble - CNBC
-Obama Calls on Congress to Delay Spending Cuts - WSJ
-Bernanke Voiced Alarm Over Credibility of Credit Ratings Firms - Bloomberg
-U.S. stocks stage rebound as Dow flirts with 14,000 level - Marketwatch
-CBO: Obamacare will cost 7 million workers healthcare coverage - WashTimes

ARGENTINA FREEZES PRICES TO BREAK INFLATION SPIRAL - FOXNY
Argentina announced a two-month price freeze on supermarket products Monday in an effort to break spiraling inflation. The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it's trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.

THIS WEEK'S 100th ANNIVERSARY OF THE INCOME TAX - NewsRelease
SHOULD BE MARKED BY “MOURNING IN AMERICA” SAY EXPERTS

Sunday, February 3, was the 100th Anniversary of the ratification of the 16th Amendment – which instantly opened the door for today's Income Tax.

“America's Framers wrote a Constitution that prohibited an income tax, but the Progressives who won the 1912 election were eager to impose unequal taxes – and they got their way,” says monetary expert and economic historian Craig R. Smith.

“Just like today, the politicians in 1913 promised that their new tax would fall almost entirely on the rich. They used class warfare and envy to trick people into accepting a tax that enriches government, a heavy and intrusive tax that more than half of all working Americans – not just the rich – now pay,” says Smith.

“In their 1848 Communist Manifesto, Karl Marx and Friedrich Engels proposed a 'heavy graduated income tax' as one of the most powerful ways government could bankrupt capitalists and destroy capitalism,” says Smith's co-author Lowell Ponte, a former think tank futurist and investigative reporter for Reader's Digest.

“Politicians have many reasons to love the Progressive income tax,” says Ponte. “It allows them to selectively impose very heavy taxes on a minority of high achievers, then redistribute their loot to a majority of voters.”

THE UNHAPPY, BIG-GOVERNMENT FEEDING 100TH BIRTHDAY OF AMERICA'S INCOME TAX - Forbes
Yesteryear’s income tax advocates would not recognize their handiwork today. The tax code is mind-numbingly complex, as dedicated to manipulating individual behavior as to raising government funds. By raising nearly a trillion dollars annually it has become the chief fiscal engine of government growth.

Governments need revenue. But the income tax makes it far too easy for politicians to spend more. Moreover, the levy creates a direct disincentive to work and investment. Perhaps even worse, the system invites legislators to manipulate people’s behavior by creating a bizarrely complex system of special interest deductions and credits, which act as the equivalent of cash subsidies, only carefully disguised as obscure provisions in the impenetrable tax code.

A century of the income tax has undermined individual liberty and promoted unlimited government. Americans should insist on lower and simpler taxes. That will require curbing politicians’ lust to spend and engage in social engineering. And, more important, that will require the rest of us to stop asking government to tax others for our benefit.

HOW WALL STREET AMPUTATED ADAM SMITH’S ‘INVISIBLE HAND’ - Marketwatch
Adam Smith’s “invisible hand” is no longer driving “capitalism in a healthy, positive direction.” A “happy conspiracy” of Wall Street, Washington and Corporate America is spreading a “pathological mutation of capitalism,” driven by the many profit-addicted “invisible hands” of this new “mutant capitalism,” replacing Adam Smith’s ideal from 1776, the original soul of democracy and capitalism.

Take a moment to diagnose our bank culture through these 10 symptoms of moral pathology, focused on Goldman Sachs in 2009 because of its conflicts of interest with the Treasury secretary.

More: Swiss America Gold Market News

2.4.13 - Swiss America's 2013 Newsletter Released! - Listen

Gold prices rose above $1,675/oz. Monday on bargain hunting despite a firmer dollar, stocks fall. Gold last traded at $1,675 an ounce. Silver last traded at $31.74 an ounce.

MARKET NEW HEADLINES
-U.S. markets suffer worst day so far in 2013 - Marketwatch
-Factory Orders Rise 1.8 Percent but Miss Forecasts - CNBC
-Senate to Move on Guns - WSJ
-U.S. to sue S&P over ratings ahead of financial crisis - Reuters
-$10 million for dollar coin breaks record - Examiner

THE SIMPLE TRUTH - 31st Anniversary Real Money Perspectives Newsletter
As we enter the next stage of this historic 21st century gold rush it is vital to understand "the simple truth" about the fundamental forces driving precious metals.

Swiss America Chairman Craig R. Smith offers his sobering expert analysis about what we should expect over the coming year as political currencies continue to crumble.

A frequent guest on Fox News' "Your World With Neil Cavuto", Craig offers common sense strategies to help readers prepare wisely for the future with a golden legacy. Here is a quick overview of the contents of "The Simple Truth" ... more ...

DOW 14K 2ND TIME AROUND - NYPost
Wall Street put on the party hats as the Dow Jones industrial average closed over the 14,000 mark for the first time since October 2007.

Testifying on Capitol Hill the first time the Dow hit 14K in July 2007, Bernanke needlessly fretted about inflation and assured Congress that subprime losses were in a manageable and now laughable range of $100 billion.

Since that ill-advised testimony, there have been five and a half years and trillions of dollars in money- printing in an attempt to correct Ol’ Ben’s shocking myopia.

And print he will continue to do. As a result, the price of gold is $1,000 higher than where it was in July of 2007, while interest rates as measured by the 10-year Treasury note are three points lower than when the Dow first crossed 14K.

THE PERSONAL INCOME TAX AT 100 -TheAmerican
Few areas of American public life are more in need of thorough reform — and, alas, more difficult to change — than the tax system. Politics can have a very long reach.

Today the federal tax system is a national disgrace: 4 million words, tens of thousands of special favors to rent-seeking individuals and companies, hopeless complexity. It is contradictory, arbitrary, duplicative, and deeply injurious to the federal fisc, American democracy, and our place in the world.

Unfortunately, the personal income tax did not replace the corporate income tax that had originally been intended only as a stopgap. Nor did Congress integrate the two taxes so that income, whether corporate or personal, was only taxed once. The two taxes simply ignore each other as if corporations are owned by Martians, not people...The two income taxes have been the main reason that the tax code has exploded to a 4-million-word incomprehensible mess.

TEN MILLION DOLLARS FOR DOLLAR COIN BREAKS RECORD - Examiner
Stack Bowers Galleries auctioned the 1794 Flowing Hair silver dollar for $10,016,875 on January 24, 2013. The previous record was $7,590,020 for a 1933 Double Eagle by Stack Bowers Galleries in partnership with Sotheby’s in 2002.

The 1794 silver dollar graded by PCGS Professional Coin Grading Service known as the finest graded first silver dollar with a grade of MS-66; mint state 66 a high graded condition for any coin.

Numismatists believe that this 1794 Flowing Hair silver dollar might possibly be the very first dollar minted in the United States of America.

More: Swiss America Gold Market News

2.1.13 - The Simple Truth: Stories of the Week - Listen

Gold prices rose again on Friday amid safe haven buying on rising U.S. joblessness. Dow touches 14k. Gold last traded at $1,668 an ounce. Silver last traded at $31.86 an ounce.

MARKET NEWS HEADLINES
-UNEMPLOYMENT RATE BACK UP TO 7.9% - CNBC
-Dow tops 14,000 for first time since 2007 - Marketwatch
-Gas prices to top $4 again - CBSNews
-Davos Takeaways: Why Elites Are Losing Sleep - TIME
-When Will U.S. Hit 6.5% Unemployment? - The Big Picture

Today the government reported the unemployment rate rising to 7.9 percent. Employment grew by 157,000 in January, but that pace will not improve the jobless rate.

$15,000 GOLD IN ONE YEAR?! -KingWorldNews
Paul Brodsky, co-founder of QB Asset Management, had this to say in a stunning interview: “Clearly this week was just confirmation that the Fed cannot withdraw, and if anything they are probably going to increase their quantitative easing. I don’t think people should be expecting any surprises, the trend is your friend here.”

“They (central banks) want to present confidence to the markets. Where we as a firm come down is that the economy is shrinking in real terms. The amount of leverage that is in the system and the amount of money creation that still has to come is incredible."

Brodsky also added: “At $2.7 trillion in base money, our call was for $10,000 gold. As base money is now rising, from additional QE, the shadow gold price should rise to about $15,000 in roughly one year’s time."

This week's U.S jobs data confirmed the fact our economy is in fact NOT in recovery, as we've all been told so often by mainstream financial pundits and government leaders. Meanwhile, gold and silver prices inched higher and stocks look set for a price correction. For the simple truth about money, Pat Boone interviews Braida Zoe, a smart nine-year old.

TOP STORIES OF THE WEEK

LATEST DATA POINTS TO RECESSION, NOT RECOVERY - NewsRelease
“We are still in a recession, not a recovery. I believe Barack Obama will go down as the worst economic President in history. We need leadership that will restore economic stability and confidence in our currency,” said Swiss America Chairman Craig R. Smith on Your World with Neil Cavuto today.

Prior to last year's election, the Department of Commerce's Bureau of Economic Analysis (BEA) reported that the economy (3rd Quarter 2012) was recovering and growing by 3.1 percent.

Now, new data, released January 30, show that economic growth as measured by America's Gross Domestic Product (GDP) in the 4th Quarter of 2012 plummeted to an anemic -0.1 percent growth.

“The politicians made this even worse in January by piling an additional $1,000 a year in payroll taxes on the average working family – which will slow economic growth to 1% during the 1st Quarter of 2013,” says Smith.

HUMBLE NICKEL FROM 1913 LIKELY TO FETCH MILLIONS - AP
A humble 5-cent coin with a storied past is headed to auction and bidding is expected to top $2 million a century after it was mysteriously minted.

The 1913 Liberty Head nickel is one of only five known to exist, but it's the coin's back story that adds to its cachet: It was surreptitiously and illegally cast, discovered in a car wreck that killed its owner, declared a fake, forgotten in a closet for decades and then found to be the real deal.

The nickel made its debut in a most unusual way. It was struck at the Philadelphia mint in late 1912, the final year of its issue, but with the year 1913 cast on its face - the same year the beloved Buffalo Head nickel was introduced.

VALUE DESTROYERS LIKE BERNANKE FANCY THEMSELVES MAGICIAN ECONOMISTS - Forbes
Economics is not magic. Yet today, many prominent economists insist on pulling off an economic rabbit hat trick when they propose getting something for nothing. Economists who advocate solving the world’s economic woes with an inflationary central bank, or even a trillion dollar coin, have lost sight of the basics of their profession.

Worse are the central bankers who implement these policies. In a futile attempt to juice labor markets, U.S. Federal Reserve Chairman Ben Bernanke expands on the third round of quantitative easing this month by adding in $45 billion monthly purchases of U.S. sovereign debt.

GDP SHOWS SURPRISE DROP FOR US IN FOURTH QUARTER - AP
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts.

THE FIAT DOW - NYSun
As the Dow Jones Industrial Average edges close to 14,000 let us just remark on the value of the famous index in ounces of gold. It may be that 14,000 is nearly twice the 7,949 at which the industrial average stood on the day President Obama was sworn. But what are we to make of the fact that the value of the Dow is actually lower today, having slumped to 8.38 ounces of gold from the 8.7 ounces at which it was valued on January 20, 2009?

We are by no means the first to ponder this point. There is a whole Web site that charts the Dow in gold. The value of the Dow was actually 44 ounces of gold as recently as 2000. So the drop is not small. Congressman Ron Paul marked this point in March 2011, when he was chairman of the House monetary affairs subcommittee and was questioning the Chairman Bernanke. We’d but add that one could call the index that is nearing 14,000 the “Fiat Dow.”

The fiat nature of the current Dow Jones Average, in any event, would underscore the points made in an op-ed piece in this morning’s Wall Street Journal. In it the economist John Taylor argues that the Fed’s quantitative easing has not only failed to fix the economic problem but that it has been an actual drag on the recovery.

WHEN GOLD BREAKS FROM THIS BASE, IT WILL TRIGGER A STAMPEDE OF MOMENTUM BUYERS - BullMarketThinking
According to Peter Grandich, publisher of “The Grandich Letter, “It’s a stealth bull-market… never in 30 years in this business could I say a market could have risen as much as they have, and still see so few net participants in it. Go to any financial institution in any part of the country and look at any 100 accounts, and you won’t find 1 out of 100 that own physical metal — the bulk of the buying net-net, has been outside of the United States.”

When asked about this excruciating consolidation period for many investors, Peter explained that, “They [the metals] have digested a decade’s worth of large gains, they’ve built a very strong base…as tough as it is for somebody to struggle with it, the longer the base is built, when the inevitable breakout to the upside comes, the bigger that move can be. I believe that move is coming this year.”

MARC FABER: STOCK MARKET OVERBOUGHT - Benzinga - CNBC video
Marc Faber, editor of the Gloom, Boom and Doom Report told CNBC's Maria Bartiromo on Tuesday that he was reducing his exposure to equities. Faber said that the market was "overbought."

Still, he admitted that the market might continue to rally this year, but even if it did, he foresaw a "'87 moment" wherein the market could plunge by as much as 40 percent in the second half of the year.

Faber said he was reducing his US equity exposure because he thought market "euphoria" was building up. "Markets move up and down," Faber said. Faber continues to like gold, saying that he owns the yellow metal because he is "fearful of systemic crises, wars and so forth."

More: Swiss America Gold Market News