Monday, April 30, 2012

Obama to Grandstand Over Boogie Man Osama's Demise

Probably the most powerful video from Alex for the year so far, a must watch.

The Juice Media's take on the Osama killing

Too Stupid to Think, too Paralyzed to Act

By Peter Souleles B. Com. LLB.

26 April 2012
Many years ago when I was a teenager, my late father had a friend who was in his sixties. His name was Johnny and he was overweight. He was in conversation with my father one day when he started complaining how his fluctuating and ballooning weight required him to buy bigger pants every few months which in turn then required him to look through his wardrobe to find the pants that would fit him as his weight went up and down.

My dad admonished him and told him to lose weight and keep it off. Johnny said it was not possible. It was then that I threw in my two cents worth into the conversation:

"Have you ever thought of buying pants with an elastic waist and possibly one with an elastic waist and a cord that you could tighten when your weight drops a little?"

Well that was it. I had solved old Johnny's problem once and for all. I was feeling quite proud of myself. Needless to say my solution eventually killed Johnny because he kept growing until a fatal heart attack put him into a not so elastic coffin a couple of years later. Since then I have often wondered if he was buried wearing one of those elasticized pants as well.

It seems to me that the central banks of the world have adopted my elasticized waist solution and have continued to print not only money but also solutions that have simply not reined in continually expanding budgets and debt. In fact most of society is walking around with elasticized pants of some sort due to personal or business debt. Now this will all end badly when the world's financial system has a fatal heart attack or when the elastic breaks and we lose our collective pants. Let us be honest, all the QE's, LTRO's, ESM's etc are elastics that will one day snap because they are not solutions.

There are limits of course to how long this can go on for although I must say I have been fascinated by the current alchemy's ability to stave off the day of reckoning to date. But reckoning will come and the bill have to be paid with write-offs, bankruptcy, change of lifestyle, change of attitudes and perhaps even war.

Most of the world's balance sheets are now in the red. And those that are seemingly in the black carry financial assets of dubious quality given that they consist of loans to others that are either unserviceable or unrepayable. As I have said in a previous piece, if a farmer included a dead horse on his balance sheet his bank manager would laugh. In the banking world of today however, this is not only allowed but also encouraged by the regulators.

So what is to be done?

The answer is difficult because the existence of a fractional reserve system complicates matters quite significantly. Let me explain why this is so with an example. If you hold a piece of gold and look at yourself in the mirror you can still see one piece of gold. That to me is a gold standard because the image is the fiat dollar we all hold and the piece of gold is the image's backing. This is quite convenient because the fiat dollar (the image) is much lighter and easier to deal with.

What fractional reserve banking does though is quite wickedly clever. The person holding the gold holds another mirror behind the piece of gold and when you look into the mirror you can see an almost endless number pieces of gold. Everyone feels happy and the banker is even happier than everyone else because he lends out those images to all the cretins of this world and collects real interest on illusory images. Just remember - only the first image is real.

This is going to be an image that is going to be difficult to destroy because the process of removing fake images is called deleveraging and it can easily destroy the system if done incorrectly. At best we should only hope to rein in its growth.

Well the solutions to our debt soaked world are of two kinds. Those that you can proactively adopt and those that are imposed upon you. With the former you continue to be master of your fate and with the latter you become a slave. Iceland is an example of the former and Greece is a fine example of the latter.

It was therefore with interest that I read today that a certain John Butler has put out a new book titled 'The Golden Revolution: How to Prepare for the Coming Gold Standard'. In a nutshell he foresees a return to the gold standard possibly within a year and gold going to $10,000 per oz.

These price predictions always have me shaking my head in disbelief but today I gave the prediction a little more thought. Why? Because governments and central banks ARE the biggest holders of gold bullion. Members of the EU for example have over 10,000 tonnes which if re-valued by a factor of 6 would be the equivalent of 60,000 tonnes which at today's price of gold would equate to over 3 trillion dollars. Now that is a real fire wall, a real bazooka and a real means of re-capitalising banks whilst allowing them to finally recognize and write-off a lot of the toxic mutton they are currently dressing up as lamb as well as giving some much needed respite to debtors.

They can either do this pro-actively and be masters of their fate or they can wait for the elastic to break and then watch as a panicked public first tries to withdraw its funds from the bank and then heads for the bullion shops.

This idea is not new but I am forced to repeat it in the hope that they will overcome their stupidity and paralysis before we see a chaotic resolution to the present impasse.

A revaluation of course is not a magic solution, a silver bullet or manna from heaven. It is simply a reset button that will go along way to restoring some semblance of balance and solvency to enable debtors to breathe and the system to re-ignite. It will in some ways aid the removal of many of those fake images we see in the mirror without breaking the mirror.

Even us plebeians with the odd gold coin, gold ring or gold chain could be allowed to cash in on the big price rise as long as it was handed over to the bank to extinguish debt and thus deleverage the system without breaking it. In fact our sales of gold back to the system would further recapitalise it.

The masters as well as the slaves of this world will still have to understand that this is a one off solution because if they fell into the trap of subsequently and constantly revaluing gold at an official level it would still lead to the same current mess.

In addition to a revaluation, the world therefore has to accept that unfunded liabilities are just images of images, that unbridled consumerism is not sustainable, that trade imbalances do not work out well for the creditor or debtor nations, that growing inequalities in income and assets between the have's and have not's are like pushing all the poor passengers on a bus to the last two rows or to one side which in turn causes a blow out or an accident, that trickle down economics is just a euphemism for the top 1% pissing down on the bottom 80%, that ZIRP and poor lending standards are anathema to economic stability, that unemployment is corrosive to society and so on and so forth.

The little man on the street may or may not understand the complexities of the world's finances but he does understand a repossessed house, a loss of his job and a hungry child. It is not within his power to recalibrate the system but it is within his power to rise up when he comes to his wits end. The top 1% and the leaders of this world have both the income, the assets as well as control of the banking, legislative, judicial and policing apparatus to avoid such an outcome with a just and peaceful solution. In fact it is their moral and financial imperative to do so unless a complete meltdown and war are part of their master plan.

In addition, the world is going to have to pay-off the arms manufacturers to close most of their facilities or else give them a monopoly over some other peaceful and profitable activity, because these guys will not accept redundancy lying down. Let us not forget that had the slave owners of the south been compensated for releasing their slaves rather than starting a civil war, the final cost would have been much much smaller in both human and financial terms. But as one blogger recently said, "men are attracted to war just like moths are attracted to electric light globes."

Failing that, the masters of the system are going to have to figure out how to eliminate all of us baby boomers as we turn 65 so that unfunded liabilities and pensions can also be eliminated so as to allow the younger generation to have the chances that we had at their age and to avoid the world imploding in on itself. I call this the Final Solution - Part II.

Until the participants of this world decide whether to be proactive solution solvers on the one hand or cannibals and combatants on the other, the relative safety of gold and silver is perhaps the best material protection in an imperfect and material world.

What more can I say?

Jim Rogers On Markets, China and Gold


McEwen, Crofton Debate Gold Standard Feasibility

April 27 (Bloomberg) -- Rob McEwen, chief executive officer of McEwen Mining Inc., and Michael Crofton, CEO of Philadelphia Trust, talk about the potential benefits and challenges of returning to the gold standard in the U.S. They speak with Trish Regan on Bloomberg Television's "Street Smart."

John Butler - Gold Standard Inevitable

Gold for Lobster

Kudos to the cafe owner, yet again small business shows it's flexibility when compared to monolithic brain dead chain stores. Thanks to the Doc from for the video link.

Apr 26, 2012 by ReutersTV

Game On! - CFR representative wants to ban cash

Another episode of this blog's Game On! series. Today we see Council on Foreign Relations mouthpiece, and former Goldman Sachs analyst Erin Burnett bash cash: “We wonder, what if we got rid of cash? After all, cash is what keeps terrorists, drug dealers and gun dealers in business.” Gee and here I was thinking it was their customers and causes, silly me, you are right Erin all of them are just in it for American made cotton waste fiat trash, as even a terrorist knows that America makes the best fiat trash there is.

Hmm let me see, the world's largest drug dealer in history, the East India company shipped up to 1,400 tons of opium per year to China via Hong Kong in exchange for cash? US cash? you sure Erin it wasn't something else, anything else, not silk, not tea, not salt, surely not silver? Makes you wonder why they bothered if they couldn't get their hit of cash, I can't imagine why they were so stupid back then as to exchange one commodity for another and pocket the spread. Although Erin is no doubt right they surely couldn't have stayed in business for very long without cash.

Need I say more:

Quote of the Week

"I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave, and I believe it is better to know than to be ignorant" ~ H.L. Mencken

Eric Sprott on Currency Debasement and Gold

Legendary Canadian Billionaire Eric Sprott discusses ongoing currency debasement, the Euro and Gold/Silver with Eric King. Listen to the KWN interview here

Eric Sprott follows this blog on Twitter, join him by following at:

Sunday, April 29, 2012

I Love the Smell of Data in the Morning

The topic of this video reminds me when I worked for a Asian based airline in the 90's and my network college was dispatched to Sri Lanka to help assist with repairs to the company's network in the Colombo Airport that had been damaged in a bomb blast (yeah he got all the top gigs). He wanted to take his network "sniffer" with him but wasn't allowed to until he got a re-export license from the US State Dept., so potentially dangerous is this type equipment if used for spying on data traffic. How they work is they sniff TCP/IP packets as they pass by, in our case on an ethernet cable, but no doubt more specialized devices can sniff T1 and fibre optical cables. What makes such devices so insidious is that neither the sender nor the receiver of the data can detect that the data has been "sniffed" as the data does not get diverted, modified, removed or delayed.


UK's rich increase stake in economic pie

The wealth of the richest people in the UK has increased compared to last year, according to British newspaper the Sunday Times.

YOUR Representatives DON'T Read The Bills They Pass

SBSS 24. The Big Silver Picture

Apr 28, 2012 by

Bilderberg 2012 Location Confirmed: Jim Tucker Reports

On the Wednesday, April 25 edition of the Alex Jones Show, Alex talks with ace reporter and Bilderberger sleuth Jim Tucker about speculation that the location of the Bilderberg Group's annual meeting will be chosen to coincide with this year's U.S. presidential election. It now appears Bilderberg will hold their confab in Chantilly, Virginia from May 31st to June 3rd.

Ron Paul's UT Austin Town Hall Speech on Restoring America

LAKE JACKSON, Texas -- 2012 Republican Presidential candidate Ron Paul attracted an impressive 6,000-plus supporters and undecided voters tonight at his University of Texas at Austin town hall meeting.

Counting the Cost - The Murdochs: Money, power, influence

Apr 28, 2012 by
Did British politicians get too close to Rupert Murdoch's family and News Corp? Plus, as the far-right grabs headlines in France and the Netherlands, is Europe witnessing a push back against Angela Merkel's austerity drive? And, Beijing's Motor show.

European sovereign debt crisis: Where is it headed?

Apr 28, 2012 by

Are we in midst of 2nd Great Depression?

Apr 28, 2012 by

Gerald Celente : The Great Depression All Over Again

Apr 28, 2012 by

The Day Justice Died

Apr 28, 2012 by

Egon von Greyerz on Europe and Gold

Egon von Greyerz discusses the recent fund raising by the IMF, the indebted bailing out other debtors. He also discusses the US economy and gold. Listen to the KWN interview here

Silver Doctors- Gold To Silver Ratio Could Hit 5 to 1

My friend, The Doc at is interviewed on QE and the current and potential futures moves in gold and silver.

Apr 28, 2012 by

Keiser Report: Oh My Gun!

Apr 28, 2012 by   Follow Max Keiser on Twitter:

In this episode, Max Keiser and co-host, Stacy Herbert discuss how shouting 'fire!' in a crowded economy may be the only thing left to save us from our unpayable debts and, failing that, Barack Obama's 'revolving door' could be another GDP booster. In the second half of the show Max talks to David Graeber, author of Debt: The First 5000 Years, about weaponized debt and the origins of May Day.

Saturday, April 28, 2012

Taxing Carbon Based Life Forms

Dreaming Big, Living Small: Tiny House Movement Gaining Real Estate

At this rate the American Dream will end up being a chuck wagon encircled by Indian offshore workers.

Apr 26, 2012 by

Clarke and Dawe - General Knowledge

Apr 26, 2012 by

Weekend Chillout - Still Waiting

This weekend's chillout is inspired by the seemingly never ending wait for gold and silver to hit new highs, I am a patient man, but even my patience, particularly with silver, is starting to wear me down.

Capital Account - Jeffrey Tucker on why Government Hates your Lawn!

Apr 27, 2012 by   Follow at:

Money, Power and Wall Street: Part Two

Friday, April 27, 2012

Money, Power, and Wall Street Part 1: A Brave New World of Banking

Capital Account with Jim Grant

Lauren interviews Jim Grant, one of the few great US economic analysts. Actually if Ron Paul were to become President Jim is the at the top of the list for Treasury Secretary, yet another reason to support Ron Paul.

Apr 26, 2012 by

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BofA - Gold to $7000

NEW YORK (Commodity Online): 

In one of the highest predictions yet made by an investment bank analyst, Bank of America's MacNeil Curry sees gold prices hitting $7000/oz before ending the uptrend.

According to MacNeil, commodity bull markets end with a massive speculative blow off and they don't end quietly. If gold was topping out, the daily ranges would have span around $200/oz and we have not seen anything like it.

"Until we see price action take some kind of massive speculative blow-off, where prices effectively double in a year or less, I have to maintain a long-term bullish bias. That says to me, we'll probably see a move in gold, before all is said and done, to between $3,000 to $5,000 (per ounce) and potentially $7,000 per ounce”.

S&P cuts Spain's credit rating by two notches to BBB+

From the Telegraph:

Original source

S&P cut the country's rating to BBB-plus and added a negative outlook, saying it expected the Spanish economy to shrink both this year and next, raising more challenges for the government.

Esther Barranco, a spokeswoman for the Economy Ministry, told Reuters: "They haven't taken into consideration the reforms put forward by the Spanish government, which will have a strong impact on Spain's economic situation."

S&P also said that eurozone-wide polices were failing to boost confidence and stabilize capital flows, and that the region needed to find ways to directly support banks so that governments were not forced to take on those burdens themselves.

"We believe that the Kingdom of Spain's budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections," it said in a statement.

"At the same time, we see an increasing likelihood that Spain's government will need to provide further fiscal support to the banking sector."

Keiser Report: Tainted Sinkholes Of Fraud

Apr 26, 2012 by RussiaToday

Follow Max Keiser on Twitter:

In this episode, Max Keiser and co-host, Stacy Herbert discuss the fact that the economy is naked with tainted sinkholes of fraud and ex-Citigroup board member, Richard Parsons, is blaming Glass Steagall. In the second half of the show Max talks to activist Reverend Billy about living in public, taking action and casting out Blythe's demons.

Thursday, April 26, 2012

People & Power - Building the Perfect Bug

Apr 25, 2012 by
A mutated bird virus that could kill millions has been built by scientists to advance medical knowledge, but should their research be published?

I watched this doco in total after posting it, just before the end it cuts back to Laurie Garrett for a conclusion and I noticed something that caught my eye in the background behind her right shoulder. I used to work many decades ago as a video cameraman for a small freelance documentary & news company, ever since I have been left with a morbid fascination with items in the background of photos and videos. Try it for yourself, look at the extreme edges of videos, particularly outdoor news conferences. People at the outer edge of a camera's field of view invariably believe they are out of shot and hence often betray their feelings through facial expressions that they would have held in check if they knew they were being filmed. Maybe it is how our brain processes images, most of us have a very narrow effective field of view. Whilst our eyes can capture a 180 deg view most choose to process only the part of the image in their most direct line of sight, and therefore project that bias back towards a camera lens not directly pointed at them.

Look at the pic below from the 02:08 mark (it is repeated at the 23:39 mark where I first picked it up)

Now look over her right shoulder at the book or brochure on the ornate side table:

As best as I can make out after cropping and enhancing the image's lighting and colour is the title "Council on Foreign Relations". Whilst I do not have the time and space to discuss the evil nature of the CFR I do find it fascinating that she would "hide" such a subliminal reference in plain view whilst being interviewed for a doco, lets face it, that is discussing the potential for 80%+ of the world's population to be killed by a modified form of bird flu.

Laurie Garrett's bio can be read here, where she proudly lists her association with the CFR.

Bank of America Targets US Firearms and 2nd Amendment

I strongly urge my US readers to close their Bank of America bank accounts and move their business to a small FDIC insured solvent bank. Even then caution is required, use banks for transactions, precious metals for savings.

3 Coming False Flags

 I highly recommend taking out 15mins from mindless TV viewing and watching this important video. It explains how the world really works and the best reason for holding precious metals.

Mar 29, 2012 by

Are you punching above your weight?

The World Tomorrow - Slavoj Zizek & David Horowitz

Apr 24, 2012 by

Slavoj Zizek and David Horowitz are the guests for the second episode of Julian Assange's interview show, "The World Tomorrow". "Intellectual superstar" Slavoj Zizek is a philosopher, psychoanalyst and cultural commentator. David Horowitz is a renowned stalwart of hardline conservative American political thought and an unrepentant Zionist.

Double Standards - The truth about Sudan

Apr 22, 2012 by

Young Turks - CISPA Explained

Apr 24, 2012 by

Going Dutch: 'Game over for euro if Netherlands quits'

Apr 25, 2012 by

The caretaker Dutch Prime Minister is still desperate to push through budget cuts and has called on lawmakers to help him. The government collapsed on Monday when Mark Rutter resigned, as it failed to agree on painful measures demanded by Brussels. The political crisis has already been described as a revolt against enforced EU austerity. UK-based journalist and blogger Neil Clark says there's every chance now the Netherlands will abandon the Euro, which he believes would be disastrous for the single currency.

Pakistan tests new ballistic missile

Apr 25, 2012 by

Britain back in recession

Apr 25, 2012 by

Britain's economy has contracted again taking the UK into its second recession since the financial crisis.

Escobar: Al-Qaeda bogeyman gone, US bent on bugging China

Apr 25, 2012 by

Capital Account - James Turk gives his timeline on the Dollar's Collapse and Gold's role as the messenger

Apr 24, 2012 by

Wednesday, April 25, 2012

Marc Faber the Great Depression all over again

Gold rush to mine precious metals in outer space

Original source

(CBS News) It's not science fiction. Some well-known investors want to send robots into space, land on asteroids and dig for precious metals.

Space tourism pioneers Eric Anderson and Peter Diamandis live by the idea that the future is now. "This company is not about thinking and dreaming about asteroid mining," Anderson said. "This company is about creating a space economy beyond the earth."

As far as they're concerned, mining asteroids in space is soon to be fact. The two men, backed by wealthy investors like Google CEO Larry Page and filmmaker James Cameron, say asteroids offer rich sources of metals like platinum - which go for $1,500 an ounce.

"This is smart money investing in one of the largest commercial opportunities ever," Diamandis said, "going to space to gain resources for the benefit humanity."

Within two years, the men want their company Planetary Resources to launch up to five telescopes for close looks at the 9,000 asteroids orbiting near Earth. Asteroids also contain chemicals like hydrogen and oxygen needed as man moves deeper into space.

Read more 

Apr 24, 2012 by

Central Banks continue to add to Gold reserves

By Rhiannon Hoyle

Original source

LONDON (Dow Jones)--Mexico and Russia lifted their official gold holdings sharply last month, each adding more than half a million troy ounces to their reserves as a host of central banks around the world continued to beef up their stockpiles of the precious metal.

According to the latest figures from the International Monetary Fund Tuesday, central bank officials returned to the international gold market as keen buyers last month--a move that should be positive for gold prices, particularly after much softer demand from the sector in February, say industry participants.

"With [speculative] positioning light, participants could certainly use this as an excuse to become a little friendlier towards the yellow metal," UBS precious metals strategist Edel Tully.

Emerging markets' central banks have been buying gold in reaction to the sovereign debt crises affecting traditional reserve currencies, like the dollar and the euro. This has become a key support for gold prices, as it not only absorbs supply but boosts investor sentiment toward the metal, market participants say.

According to the IMF, Mexico's central bank purchased a net 541,000 ounces of gold in March, increasing the country's official reserves of the precious metal to 3.941 million ounces. Russia meanwhile returned to the market as a buyer after reporting net sales in February for the first time since early 2007. It purchased 532,000 ounces of gold, taking its official reserves to 28.799 million ounces.

Elsewhere, Turkey's central bank--which last year began to accept gold as collateral from commercial banks--reported a 369,000-ounce lift in its reserves in March, to 6.739 million ounces.

Kazakhstan's central bank lifted its reserves 138,000 ounces, to 3.092 million ounces, while Ukraine raised its official reserves by 38,000 ounces to 939,000 ounces and Tajikistan increased its holdings 13,000 ounces to 158,000 ounces. Belarus, Greece and Mongolia were also buyers.

"There is an increasing realisation amongst central bankers that gold is a less risky alternative to most paper currencies and a recent survey showed that the majority of central bank reserves managers were favorable towards gold," bullion dealer GoldCore said in a market report.

UBS's Tully said the data help to explain why the $1,600/oz price floor managed to hold last month, despite indicators at the time suggesting gold should fall below that level.

Lest we Forget

Today Australia and New Zealand commemorates ANAZC Day. We recognize the ultimate sacrifices that Aussies and Kiwis paid fighting shoulder to shoulder in thousands of pointless campaigns, where "our" 99% fought "their" 99% for the enrichment and carnal pleasure of The 1%. The wars may have been pointless but their sacrifices for each other were not. Lest we forget.

Lew Rockwell: The Government is A Gang of Thieves writ Large

Apr 24, 2012 by
On the Tuesday, April 24 edition of the Alex Jones Show, Alex talks with Lew Rockwell. Mr. Rockwell served as Ron Paul's congressional chief of staff from 1978 to 1982. He was a contributing editor to The Ron Paul Investment Letter and worked as a consultant to Paul's 1988 Libertarian Party campaign for president. Lew founded the Ludwig von Mises Institute where the Journal of Libertarian Studies is published. He is the author of Speaking of Liberty and The Left, The Right, and The State.

Keiser Report: Beggars Without Borders

Apr 24, 2012 by

In this episode, Max Keiser and co-host, Stacy Herbert discuss debt piles and thin dimes. They also discuss Christine Lagarde begging for money outside Penn Station while insider trading bankers 'charitably' talk to beggars at Grand Central. In the second half of the show Max talks to economist Michael Hudson about the austerity, debt and fraudulent conveyance.

Dr. Stephen Leeb can treat Paper Addictions

If you have people that are close to you that think you are odd for buying gold and silver, or if you have friends and relatives that you wish were saving in real money of gold and silver instead of paper promises then please sit them down in a darkened room and have them read, listen and watch all of the posts on this blog from Dr. Stephen Leeb. The good doctor will help treat them of their paper addictions. All of Dr. Leebs posts can be accessed by clicking on this search link here

To ease your patient into the treatment best start with the following video from Feb 2010 when silver was priced at US$15/oz:

Dr. Stephen Leeb on Gold, Oil and China

Dr. Leeb discusses the Holy Trinity of current economics, Gold, Oil and China. Listen to the KWN interview here

John Hathaway on Gold the Fed

John Hathaway discusses Gold, mining shares and possible actions of the Fed. Listen to the KWN interview here

Monday, April 23, 2012

Silver: The harsh realities behind diminshing supplies

By Gaia Vince

At over 4,000 metres above sea level, Potosí in Bolivia is the world’s highest city. But it is overshadowed by the rainbow-coloured Cerro Rico, or Rich Hill, which looms above the citizens – an imposing reminder of the cause of the city’s splendour and horror. The city was founded in 1545 following the discovery of silver in the Cerro Rico, the veins of which proved to be the world’s most lucrative, bankrolling the Spanish Empire for more than two centuries.

Many roads lead to hell, and I follow a miner to the Candelaria Bajo mine, one of the oldest of the 700 mines in Cerro Rico, which dates back at least 350 years. Like the millions who have gone before me, I take a last look at the sun and then enter the underworld through a low, dark entrance, stained black with llama blood, the remnants of a sacrifice to the devil. Miners are extremely superstitious.

It is no wonder. Cerro Rico held extraordinary quantities of the precious metal – it is said that at one time you could have built a silver bridge from Potosí to Spain and still have enough silver to carry across it – but this came at a terrible cost. Eight million workers died during the 350 years of Spanish occupation. And by the 1800s, the silver was depleted and its global price diminished, sending the city into a decline that it is only recently recovering from, thanks to the demand for tin, lead and zinc.

Short supply

Cerro Rico is emblematic of a wider malaise. Global reserves of silver are diminishing rapidly, and supplies could run out as soon as 2029. That is, if we consume silver at the rate we are today and no new deposits are found, according to Mansoor Barati, a metals production and refinery expert at the University of Toronto. The reality is that rising silver prices will make exploration become more cost-effective and new deposits are likely to be found, but even then Barati’s prognosis is grim. "Silver will last longer,” he says, “but not beyond this century."

As it becomes scarcer, the price of silver has rocketed up, from less than $5 an ounce in 2000 to $48 in April 2011 (currently, it is fetching around $32 an ounce). So Cerro Rico still draws silver miners into its black heart, killing them on average before the age of 35 – from silicosis, mesothelioma, accidents, and poisonings from the various noxious chemicals they are exposed to, including cyanide, mercury and carbon monoxide.

The air I breathe when I enter the dark and dusty mine is infused with a peculiar smell – a caustic combination of the many chemicals here. I stumble along, crouching under the low rocks, trying to forget that 10 years ago geologists predicted that the mountain, riddled with tunnels and crevices, would collapse within 8-10 years. I bash my head frequently, alternatively grateful for my hard hat and cursing it for falling down over my eyes and obscuring my view of obstacles. I struggle to mount a rock just in time as a series of steel trollies come speeding down the tracks towards us, pushed and pulled by ghostly men, wide-eyed from coca.

The air becomes impossible to breathe through my scarf as I continue deeper and further into the mine, and it becomes harder to see with every step. Soon I am reduced to crawling on hands and knees through tunnels tight enough to panic in, and still we descend.

Sliding down a hole we reach a lower level, where workers with mad staring eyes push and pull trolleys laden with tonnes of rock past us, seemingly not noticing our presence. I am a couple of kilometres inside the mountain now and it is stiflingly hot, lung-searingly difficult to breathe and incredibly exhausting – and I am not even working.

Precious metal

For their efforts, those toiling in these sought-after cooperatives can earn an average of 1,500 Bolivianos a week (£150/$225); those working alone usually earn a great deal less. It all depends on the quantity and quality of the minerals they produce.

Where precious silver was used mainly in coins and jewellery (and later in photography), its industrial uses now outstrip the decorative market. Silver has the highest electrical (and thermal) conductivity of any metal, so it is used in a range of electronics – including sensitive radio frequency antennae, particularly at VHF (very high frequency), such as found in televisions and mobile phones, and in radio frequency identification (RFID) devices. Silver is also found in many printed circuit boards, in hearing aids and in batteries.

The medicinal properties of silver bullets have been known since at least the times of Hippocrates, the Ancient Greek “father of medicine”, and rely on its toxic effects on pathogens, including bacteria and fungi. Silver ions kill pathogens by binding to proteins in their cells, making silver compounds ideal for use in antiseptics and wound dressings. Nanoparticles of silver are even woven into socks and other clothing to reduce bacterial and fungal growth – and the odours that arise. Silver is also used in heart valves and catheters, and researchers are now investigating silver's potential in killing cancer cells.

Seeking alternatives

One solution to dwindling reserves is to recycle the silver already in circulation. A tonne of ore usually contains less than 3 grams (0.1 ounces) of silver; whereas a tonne of discarded mobile phones (6,000 handsets) can contain 3.5 kilograms (7.7 pounds) of silver, according to United Nations University experts.

Clearly, replacement materials are also needed. "As a surface coating, silver could be replaced by aluminium or rhodium, which is itself expensive, or by complex metal oxides, which are good conductors," suggests Peter Edwards, professor of inorganic chemistry at Oxford University. Other applications could use copper or silver-plated copper, or palladium alloys.

Finding replacements for medical applications might be more tricky. For instance copper also has an antiseptic quality – it is being used in hospital door handles to replace aluminium and reduce the spread of germs, and in water filters to prevent Legionnaires’ disease. But copper can be neurotoxic, so it is not used in implants or wound dressings, says Alan Lansdown, an expert in medicinal uses for silver at Imperial College London. "There aren't really any effective and safe replacements for silver, except synthetic antibiotics," he says.

So, with potential alternatives in short supply, and while the price is high and there is still some silver left in the ground, desperate people like those at Cerro Rico will continue to burrow for it.

After what feels like an entire day, but is in fact just an hour and a half, I emerge from Cerro Rico, blinking into the sunlight. Gasping the cold fresh air, I am grateful to be alive, but the dusty mine has taken my voice, I have to shower for 20 minutes to clean off the grime and my clothes stink of the underworld.

For me, it was a brief foray. I simply cannot imagine having to work in those conditions for 12-14 hours, sometimes doing a double night-shift, and for years. Children work in these mines from the age of 9 or 10. There are no middle-aged men, only widows shovelling rocks outside.

Gaia is a science writer and broadcaster who is particularly interested in how humans are transforming planet Earth and the impacts our changes are having on societies and on other species. She has visited people and places around the world in a quest to understand how we are adapting to environmental change. You can follow her adventures at and on Twitter at @WanderingGaia.

Sunday, April 22, 2012

Quote of the week

All great truths begin as blasphemies

David Morgan - Myths In The Silver Market

From a presentation made in February 16, 2011.

The current Gold to Silver ratio is 51:1 (ie Silver is 51 times cheaper than Gold)

David Morgan Interviewed at California Resource Investment Conference 2012

Apr 21, 2012 by

$10 Million Loans for Everyone!

Apr 21, 2012 by
Former FDIC head Sheila Bair wrote an op-ed in the Washington Post about fixing income inequality with huge interest free loans for all Americans to illustrate the absurdity of what was done with the big Wall Street banks after the financial collapse. The Young Turks host Cenk Uygur breaks it down.

Read the article here:

The Little Red Apple Book


On the Edge - French economy & Presidential elections

Apr 21, 2012 by In this edition of the show Max interviews Gonzalo Lira from He talks about the primary economic issues for France on the eve of the presidential elections both nationally and in EU.

Keiser Report: Corpse of Economy

Apr 21, 2012 by    Follow Max Keiser on Twitter:

In this episode, Max Keiser and co-host, Stacy Herbert discuss Dr Bernanke's hologram and his real tsunami of money. In the second half of the show Max talks to Alec Empire of Atari Teenage Riot about copyright, Anonymous and free speech and the armed government goons sent to shakedown grannies.

James Rickards on Why Central Banks are Obsessed with Gold & Why QE3 is Imminent

Well the Reserve Bank of Australia (RBA) is certainly a case in point, a quick search of their website for the word "Gold" results in 2,930 hits, but amazingly none of those hits detail whether Australia's Gold reserves are held in Australia or offshore (see previous posts on this topic here & here).

Apr 20, 2012 by

Saturday, April 21, 2012

Inside Story - India: Flexing its military muscle

Apr 20, 2012 by

As India fires an intercontinental ballistic missile capable of carrying a nuclear warhead and with a range that could reach China, we ask if an arms race is brewing between the two.

Louis Farrakhan on the US Dollar and Gold

Not sure of the date of this sermon, but as always when Louis Farrakhan talks about debt, fiat currencies and gold it is timeless.

A Simple Question - Is an oil shock looming?

Apr 19, 2012 by

BS Bernanke's rounds of QE floods the world with Fiat currency that raises the cost of life's essentials

Apr 20, 2012 by

CIA Wants To Expand Drone Strikes In Yemen

Apr 20, 2012 by

Marc Faber pessimistic about the Australian Economy

Apr 20, 2012 by

TSA pushing to have body scanners nationwide?

Apr 20, 2012 by

Life goes better with Butter

This video is sooo anti-establishment I couldn't resist posting it.

Apr 20, 2012 by

Dr. Paul Craig Roberts: U.S. Police State Masquerades as A Democracy

Apr 20, 2012 by

The Alyona Show - Financial Checkup

Apr 20, 2012 by

Capital Account - Jon "Teflon Don" Corzine and his Posse Roam Free ahead of new MF Global Hearing

Apr 20, 2012 by

TrimTabs: Talking Gold with Eric Sprott

Apr 19, 2012 by

Friday, April 20, 2012

Brother JohnF - Silver Bubble?

Apr 19, 2012 by

Cryptocat puts privacy back on the Web

Apr 19, 2012 by RTAmerica

The Cyber Intelligence Sharing Protection Act (CISPA) could change the way we use the Internet. Congress is attempting to pass legislation the legislation, which in turn would infringe on online users' freedoms. CISPA is being pushed as a necessity to help protect national security and would allow companies and the government to spy on whoever they wish, but should the masses lose their privacy for the potential wrong-doings of a few? Fear not, one individual has developed CryptoCat, a service which denies third-party access to private conversations online. Nadim Kobeissi, computer security researcher and the creator of the software, joins us to discuss why he developed CryptoCat

Weekend Chillout - Tomorrow

This weekend's chillout is inspired by Julian Assange's TV show The World Tomorrow and the media pigs in their money troughs sniping at him for doing a real interview with someone of importance.

Capital Account with Paul Craig Roberts

Paul Craig Roberts makes an excellent point at the 06:40 mark onwards that lowing interest rates in the US has not caused a recovery in jobs as so many high paying jobs have been offshored, jobs that wont ever come back.

Apr 19, 2012 by CapitalAccount

Double Standards - The rise and fall of Al-Jazeera Arabic

Apr 15, 2012 by PressTVGlobalNews

Mongolia's "ninja" miners help sate China lust for gold

By David Stanway

BORNUUR, Mongolia | Thu Apr 19, 2012 3:28am EDT

Orignal source

(Reuters) - In a hot, concrete hut filled with acetylene fumes, an elderly Mongolian miner struggles to contain her excitement as she plucks a sizzling inch-long nugget of gold from a grubby cooling pot and raises it to the light.

Khorloo, 65, and her sons spent the day scrutinizing half a dozen CCTV screens as workers at the Bornuur gold processing plant whittled 1.2 metric metric tonnes of ore down to 123 grams of pure gold that could earn the family as much as $6,000.

Near the plant, separated from Mongolia's capital, Ulan Bator, by 100 km of rocky pasture and mostly unpaved road, life has remained largely unchanged since Genghis Khan's "golden horde" rampaged across Asia nine centuries ago.

But Khorloo is a member of a new horde of at least 60,000 herders, farmers and urban unemployed trying to extract the riches buried in the vast steppe with metal detectors, shovels and home-made smelters.

In the last five years, dwindling legal gold supplies and a spike in black market demand from China have made work much more lucrative for Mongolia's "ninja miners" - so named because of the large green pans carried on their backs that look like turtle shells. For thousands of dirt-poor herders, the soaring prices alone are enough to justify years of harassment, abuse and hard labor.

"It took us a week to dig this out," Khorloo said, holding the nugget. "But we dug for three years to reach the vein."

China's annual gold output reached a record 361 metric tonnes last year, but demand continues to outstrip supply. While Beijing doesn't publish full import figures, deliveries from Hong Kong hit 428 metric tonnes in 2011, three times more than a year earlier.

Spot international gold prices hit a record high of $1,920.30 an ounce in September as investors bought the metal as a safe haven amid uncertainties surrounding the euro zone and its debt. The price has fallen back to around $1,636 but gold remains at historically high levels after a decade-long rally.

China has certainly driven the gold rush in Mongolia - from the giant $6 billion Oyu Tolgoi copper-gold project currently being developed by Ivanhoe Mines and Rio Tinto to the makeshift holes that honeycomb the hills and valleys of Bornuur.

While the government in Ulan Bator hopes to use growing mineral output to drag its largely pastoral economy into the 21st century, many lawmakers are wary about turning Mongolia into "Minegolia" - a choking, resource-dependent blackspot tearing itself apart to deliver raw materials to China.

However, policies aimed at cutting output to more sustainable levels have played into the hands of the ninjas and a shadowy network of black market traders.

Read more

Sanction hit Syria tries to sell its Gold Reserves

From Arab News

Original source

PARIS/DUBAI: Syria is trying to sell gold reserves to raise revenue as Western and Arab sanctions targeting its central bank and oil exports begin to bite, diplomats and traders said.

Another diplomatic source said Turkey intercepted a vessel in the Mediterranean suspected of carrying weapons and ammunition to Syria yesterday.

"We received information that the vessel has a cargo of arms and ammunition headed for Syria," the source said.

Western sanctions have halved Syria’s foreign exchange reserves from about $17 billion, French Foreign Minister Alain Juppe said on Tuesday after a meeting with about 60 nations aimed at coordinating measures against President Bashar Assad’s government.

“Syria is selling its gold at rock bottom prices,” said a Western diplomatic source, declining to say where it was being sold.

A second diplomatic source confirmed the information, adding that Damascus was looking to offload everything it could to raise cash, including currency reserves. On Feb. 27, the European Union agreed more sanctions including prohibiting trade in gold and other precious metals with Syrian state institutions, including the central bank.

Two gold traders in the United Arab Emirates said the Syrian government had been offering gold at a discount, with one saying it was making offers at about 15 percent below the market price.The trader said Damascus was selling small volumes of around 20-30 kg which were easier to offload, with offers being made through private accounts set up with free e-mail providers.

Another trader said deals as of yet had not gone through in Dubai because the Emirati authorities were blocking unauthorized trades and few potential buyers were willing to take the risk of these deals.

“We have been getting offers for gold purchases from Syria and North African countries at 15 percent discount, but there are tough restrictions in Dubai that don’t allow any unauthorized trades,” said the trader.

The meeting on Tuesday was aimed in part at tightening up existing sanctions and trying to pinpoint countries that were offering Damascus ways to sidestep them.

The World Gold Council estimates Syria had about 25.8 metric tons of gold as of February 2012, representing about 7.1 percent of its total reserves.

Read more

Where is Australia's Gold? - Update

19th Century Gold scales on display at the RBA museum
I have been doing more research on this topic discussed earlier this week here on where Australia's Official Gold Reserves are physically stored and whether they are leased out.

On the leasing question I found the following two articles on the Reserve Bank of Australia's (RBA) website. It seems that in the year 2000 all of Australia's 80 tonnes of gold was on "loan" but by end 2011 only 1 tonne was on "loan".

For those who are not familiar with the concept of precious metal "loans" let me explain. When most people loan something they do so on in the basis they will actually get back what they loaned. If you lent your blue ford falcon to someone for a year (for a fee) you would expect to get your blue ford falcon back.

This is not the case with Central Bank loans. Central Banks "loan" gold into the market for which they receive a fee (interest), but what happens to the gold is that it is sold by those who borrow it. Borrowers are usually large mining companies forward selling gold they have in the ground but have yet to mine it, or bullion banks who act as an agent for refiners and other end users. 

At the end of the term of the loan either the loan is rolled over, at the prevailing interest rate (the most common practice) or the borrower has to go into the market and buy the same amount of gold to repay the loan. Basically it is the equivalent of your mate borrowing your blue ford falcon then selling it and when you want your car back going out and buying a "blue ford falcon" to repay loan.

I know gold is fungible, i.e. one bar of the same purity and weight is interchangeable for any other bar but the principle still stands Central Bank "loans" would be by normal people called sales or at best swaps for a paper promise.

Operations in Financial Markets

Year 2000:

In addition to investments in foreign currencies, the RBA also holds about 80 tonnes of gold, currently valued at $1.2 billion. No outright transactions in gold were undertaken during the year, but an active gold loan program, involving virtually all gold holdings, was maintained. The average maturity of loans out- standing is six months, with the longest maturity at a little over one year. Total returns for gold- lending operations for the year were $21 million, a little higher than in the previous year.

Year 2011:

In addition to foreign currency assets, the Reserve Bank holds 80 tonnes of gold on its balance sheet. Over 2010/11, the price of gold rose by 21 per cent in US dollar terms but declined by 4 per cent in Australian dollar terms. As a result, the value of the Bank's holdings of gold declined slightly to $3.6 billion at the end of June. The lack of activity in the gold lending market, noted in recent annual reports, continued in 2010/11. Reflecting this, income from gold lending fell to just $0.1 million for the year and, at the end of June 2011, there was only 1 tonneof gold on loan.

-------- / -------

On the where the 80 Tonnes of gold is stored, Australia or offshore, I received this response from the RBA's Media & Public Relations Office today:

"Thank you for your email.

The Bank does not publish the location of its gold reserves."

Make of that what you will. Personally I didn't think it would have killed them to say "Australia", after all it is a big place, plenty of space to hide 80 tonnes of gold with giving anything away.

Lastly on the topic of the sale of most of the RBA's gold in 1997 I found a confidential white paper from Dec 1996 outlining the RBA's view on its gold reserves and the actions they should take to convince the then newly elected Howard/Costello federal government to let them sell the gold and to keep the proceeds to "re-invest" in interest bearing foreign government bonds. Interesting to read that the RBA thought the following:

"This would require (meaning the gold sale) the approval of the Treasurer to allow the realised gains to be retained for the Reserve Bank Reserve Fund. The current budgetary climate suggests that the chances of gaining the Treasurer's agreement to this are better now than they have been for some years." 

I have just gained more respect for Paul Keating that the RBA didn't dare take this ludicrous suggestion to him when he was Treasurer or Prime Minister.

And the subsequent press release issued after the sale in 1997

Clarke and Dawe - Important new research reveals enterprise doomed from the start

One of their funniest for a long time.

Apr 19, 2012 by ClarkeAndDawe

Are Australian companies offshoring jobs ignoring this extraneous risk?

When Australian and US companies offshore critical business functions to India and Communist China do they even know that most of India's and China's nuclear weapons are designed with the sole object of obliterating each other?

Most probably don't even know that they fought a war against each other or that culturally both sides have long held "attitudes" to each other stretching back into the distant past when both fought for the title of world's largest economy (until the West discovered fractional reserve banking).

"Never mind the quality Sir, feel the price" ~ Tears of the Moon, 2005.

Maybe I need to update my quote to add risk as well.

Original source

BHUBANESWAR, India, April 19 (Reuters) - India successfully test-fired on Thursday a nuclear-capable missile that can reach Beijing and Eastern Europe, thrusting the emerging Asian power into a small club of nations that can deploy nuclear weapons at such a great distance.
Footage showed the rocket, with a range of more than 5,000 km (3,100 miles), blasting through clouds from an island off India's east coast. It was not immediately clear how far the rocket flew before reaching its target in the Indian Ocean.
The defence minister said the test was "immaculate."
"Today's successful Agni-V test launch is another milestone in our quest to add to the credibility of our security and preparedness," Prime Minister Manmohan Singh said in a message to the scientists who developed the rocket.
Almost entirely Indian-made, the Agni-V is the crowning achievement of a programme developed primarily with a threat from neighbouring China in mind.