Interview with Pierre Lassonde

Pierre Lassonde and Eric King discuss gold price forecasts and % of asset allocations in gold....listen here

Let Them Eat Cake

by Paul Craig Roberts:

It is not unusual for members of the diminishing upper middle class to drop $20,000 or $30,000 on a big wedding. But for celebrities this large sum wouldn’t cover the wedding dress or the flowers.

When country music star Keith Urban married actress Nicole Kidman in 2006, their wedding cost $250,000. This large sum hardly counts as a celebrity wedding. When mega-millionaire real estate mogul Donald Trump married model Melania Knauss, the wedding bill was $1,000,000.

The marriages of Madonna and film director Guy Ritchie, Tiger Woods and Elin Nordegren, and Michael Douglas and Catherine Zeta-Jones pushed up the cost of celebrity marriages to $1.5 million.

Tom Cruise and Katie Holmes upped the ante to $2,000,000.

Now comes the politicians’s daughter as celebrity. According to news reports, Chelsea Clinton’s wedding to investment banker Mark Mezvinsky on July 31 is costing papa Bill $3,000,000. According to the London Daily Mail, the total price tag will be about $5,000,000. The additional $2,000,000 apparently is being laid off on US Taxpayers as Secret Service costs for protecting former president Clinton and foreign heads of state, such as the presidents of France and Italy and former British Prime Minister Tony Blair, who are among the 500 invited guests along with Barbara Streisand, Steven Spielberg, Oprah Winfrey, Ted Turner, and Clinton friend and donor Denise Rich, wife of the Clinton-pardoned felon.

Before we attend to the poor political judgment of such an extravagant affair during times of economic distress, let us wonder aloud where a poor boy who became governor of Arkansas and president of the United States got such a fortune that he can blow $3,000,000 on a wedding.

The American people did not take up a collection to reward him for his service to them.
Where did the money come from? Who was he really serving during his eight years in office?

How did Tony Blair and his wife, Cherrie, end up with an annual income of ten million pounds (approximately $15 million dollars) as soon as he left office?
Who was Blair really serving?

These are not polite questions, and they are infrequently asked.

While Chelsea’s wedding guests eat a $11,000 wedding cake and admire $250,000 floral displays, Lisa Roberts in Ohio is struggling to raise contributions for her food pantry in order to feed 3,000 local people, whose financial independence was destroyed by investment bankers, job offshoring, and unaffordable wars. The Americans dependent on Lisa Roberts’ food pantry are living out of vans and cars. Those with a house roof still over their heads are packed in as many as 14 per household according to the Chillicothe Gazette in Ohio. The Chilicothe Gazette reports that Lisa Roberts’ food pantry has “had to cut back to half rations per person in order to have something for everyone who needed it.”

Theresa DePugh stepped up to the challenge and had the starving Ohioans write messages on their food pantry paper plates to President Obama, who has just obtained another $33 billion to squander on a pointless war in Afghanistan that serves no purpose whatsoever except the enrichment of the military/security complex and its shareholders.

The Guardian (UK) reports that according to US government reports, one million American children go to bed hungry, while the Obama regime squanders hundreds of billions of dollars killing women and children in Afghanistan and elsewhere.

The Guardian’s reporting relies on a US government report from the US Department of Agriculture, which concludes that 50 million people in the US--one in six of the population--were unable to afford to buy sufficient food to stay healthy in 2008.

US Department of Agriculture Secretary Tom Vilsack said that he expected the number of hungry Americans to worsen when the survey for 2010 is released.

Today in the American Superpower, one of every six Americans is living on food stamps.

The Great American Superpower, which is wasting trillions of dollars in pursuit of world hegemony, has 22% of its population unemployed and almost 17% of its population dependent on welfare in order to stay alive. The world has not witnessed such total failure of government since the final days of the Roman Empire. A handful of American oligarchs are becoming mega-billionaires while the rest of the country goes down the drain.

And the American sheeple remain acquiescent.

Staring into the Aybss

The latest essay by Martin Armstrong.....read here

What a Difference a Year Makes

By Jim Willie: A theme of frequent mention has been the Paradigm Shift in the financial world. It refers more specifically to the global shift away from a USDollar-centric alignment. The major industrialized nations of the world, along with major energy producers, struggle to develop a monetary and commercial system that is not based upon the seemingly crippled and certainly bloated USDollar. The challenge is daunting, since expertise on financial structures, even in an honest legitimate fashion, is somewhat lacking outside the Anglo world. Changes indeed come. Many observers, investors, and participants in the global economic and financial world who had held firm to much hope of bonafide structural improvements and of improved prices in valuable traditional assets find themselves slowly fading in that hope. Many less sophisticated people, who are involved in stalled investments and who observe the constant machinations, point to the landscape as simply not changing much. Great discouragement comes when the system seriously broke down, yet no important substantial alterations took place to the power structure or the foundational structure to the system. The high priority to maintain both the system and the power merchants is evident. The compliant financial press is a subtle weapon. Many point to price levels of their favorite or most respected assets or indexes, and conclude not much has changed. Many point to the incessant stream of deceptive economic assessments about a fictitious recovery, like Green Shoot nonsense, like Jobless Recovery contradictions, like Second Half Recovery that never arrives. Many point to the same old same old in legislation that favors those entrenched with power, like the wealthy tax cuts certain to see extension. In many respects, the appearance of sameness is prevalent....read on

Owning Gold When an Ounce Will Buy the Dow

By The Mogambo Guru: Most of us gold bugs are ready for the explosive blowout top after a long, spectacular parabolic rise in the price of gold, so that we can then move along to Phase 2 of the Terrific Mogambo Retirement Plan (TMRP).

This is the part of the TMRP where we shamelessly spend vast fortunes in the pursuit of fun and the absence of responsibility, except for the part where we sleep something off, get any new tattoos removed, nullify new contracts or marriage licenses, and pay for any damages. Otherwise, whee!

Phase 1 of the TMRP, of course, is when we spend those grueling years at our stupid jobs, smiling on the outside but secretly plotting our revenge while continuously buying gold, silver and oil with what we can salvage from our meager pay, gradually accumulating gold, silver and oil in a sheer panic because the Federal Reserve was creating too much money, which the federal government borrowed and spent to enlarge itself and its scope, and creating too much money which everyone else borrowed, too, to enlarge themselves and their scopes, which has gotten us all in debt up to here, a waistline out to here, garages full to there, and now we're freaking doomed, except for…(pause for dramatic effect)…those who were buying gold, silver and oil when they were cheap, like now.

So how much money are we talking about? Well, Joel Bowman, managing editor of The Daily Reckoning, notes, "Historically, the peak of a gold bull market/stock bear market occurs when you can pick up the 30 bluest stocks for about one, maybe two, ounces of gold. The Dow/Gold ratio, at that point in time, is said to be around 1:1 to 2:1. During the furor of tech mania in the late '90s, early '00s, when the Midas metal was scoffed at in polite company, that ratio reached 45:1."

In terms of the sheer weight of that much gold, in case you want to, for example, calculate how much gold your kids will have to carry if you are planning to sneak across the border, if needs be, "it would take you 2.8 POUNDS of Mother Nature's money to buy the Dow"! Wow!

Then, to show you how gold holds its value, he notes that "During the past decade, as stocks stagnated and gold rallied fourfold, that ratio has slipped dramatically," and now, today, gold has risen in price so much that "it takes about 8.6 ounces of gold to buy the Dow," which is less of a burden on kids ("if needs be"), and even less of a burden next year when he expects "a Dow/Gold ratio of about 6:1."

Ian Gordon of the Longwave Group verifies, in his essay "The Perpetual War: Gold vs. Paper" that the current price of the Dow Jones Industrial Average divided by the US dollar price for an ounce of gold currently stands at 8.54, which he considers quite high, considering that "the trendline joining the two lows in 1932 and 1980 is currently at 0.68 (0.68 ounces of gold to buy the Dow Jones Industrials)" which "would be equal to something like 2000 points on the Dow and a $3,350 gold price." Wow!

Phase 2, here we come!

Before I could get carried away with wild daydreams of pleasure and gluttonous debauchery paid for with piles and piles of ready cash, I am instantly on defensive alert when Mr. Gordon's warning rings out, loud and clear, "It's a possibility, but not a ratio to which we give a high probability." Darn!

Being a pathetic guy whose hopes and dreams are always crushed by a cruel, uncaring world, I naturally expect the "but," since it implies that gold is not going to soar soon, and I'm going to have to keep working at my stupid job longer than I had hoped, meaning that I will have to put up with the wife and kids and family and boss and neighbors for one more hour, one more day, one more week, one more month, or one more year than I had feared. Or more! Oh, woe is me!

On the other hand, it makes sense to keep working as long as gold, silver and oil are so cheap! Looked at it like that, what can one say except, "Whee! This investing stuff is easy!"?

Hedging Chaos With Gold

By Darryl Schoon: …what if history is not cyclical and slow-moving but arhythmic, at times almost stationary, but also capable of accelerating suddenly, like a sports car? What if collapse does not arrive over a number of centuries but comes suddenly, like a thief in the night… dramas lie ahead as the nasty fiscal arithmetic of imperial decline drives yet another great power over the edge of chaos. ~ Niall Ferguson, July 28, 2010

The nasty fiscal arithmetic of imperial decline that Harvard professor Niall Ferguson refers to is America’s unsustainable debt. Growing levels of debt according to Ferguson are now about to drive the US, like other great powers before it, over the edge of chaos; an event Ferguson believes will come sooner rather than later....read on

Is There a Shortage of Silver?

Is There a Shortage of Silver?

Some questions we are occasionally asked at ABC Bullion and increasing so of late are:

“Is there a shortage of silver bullion at the moment?”
“What is your wait list time to take delivery of silver bullion?”

Happily we can respond to our customers there is no shortage or delay for purchasing physical silver bullion. With our excellent relationships with refiners in Australia and the PAMP refinery in Switzerland we can supply all your silver bullion needs, regardless of order size.

Does this mean we have never experienced delays in the past or potentially will in the future? No it does not. ABC has experienced delays in the past for some silver bullion products, typically for the mid-range retail products such as 5 & 15kg bars. There were various reasons for such delays, a refinery closure for maintenance or simply demand for a particular bar size outstripping the refiners capacity to pour that size bar. Even though these temporary delays did exist and may well again in the future, it was always a lack of a particular silver product, not an overall shortage of silver metal.

I must admit the recent questions may have been a result of my postings on the ABC blog, in particular these posts, here & here

At ABC Bullion we have always considered silver a rare and precious metal, and have opined in the posts above silver’s dual role as a significant industrial and investment metal does distinguish it from gold.

Silver’s current price encourages consumption and discourages recycling, particularly in those applications that use small quantities, such as mobile phone circuitry. As result there may well come a day when industrial demand and investment demand will clash over the available supply, although we are not there yet, but if that does occur the market as a way to deal this situation, higher prices!

If you are interested in silver bullion, please call us or come into the showroom. We can supply silver bullion for you to take away immediately or we can arrange insured storage for your bullion at no or minimal cost depending on the storage solution you choose. Please visit our main website here: ABC Bullion

Invested in Gold and Silver?

By Peter Degraaf: Nations rise when, through inventions and technology they become economically prosperous. They grow as they enlarge their borders and increase in influence, through conquests or by trade. They fall, when the growing need to pay for promises made, and the cost of foreign wars, drains the treasury.....read on

Gold vs. A-REITs

Due to the positive feedback I received yesterday for the post showing the price performance of Gold vs. the ASX All Ords it got me thinking what else could I compare gold to? Living in Sydney the answer was obvious, Real Estate!

Click on the chart above for the 5 year performance of the S&P/ASX200 A-REIT (index of Australian A-REIT funds - blue line) vs. the price of Gold (red line, using the GLD ETF as a proxy for gold)

Oh for those who don't know what the a A-REIT is I found this description on the ASX website: "A-REIT investors gain exposure to both the value of the real estate the trust owns, and the potential for rental income generated from the properties. The fund manager selects the investment properties and is responsible for all maintenance, administration, rentals, and improvements on the property." read on

Stepping Back to Admire the View

Here at ABC Bullion we occasionally like to have a break from the daily noise of the markets, take a few steps back and contemplate a long term view. A somewhat natural action when you deal with the metals that have been desired and fought over as treasure and money by mankind for the last 6,000 years. Our long term view for today settled on the ASX All Ords index. It came as somewhat of a surprise to discover the index is exactly at the same level as 5 years ago, particularly after receiving all that advice from financial planners over the years that it was “time in the market, not timing the market that makes you money" - maybe they meant a very long time in the market.

Fortunately here at ABC Bullion we tend to listen to our own consul, and that of our clients, who have been quietly bullish on gold and silver over the last 10 years, and particularly so over the last 5 years.

Click on the chart above for the 5 year performance of the ASX All Ords (blue line) vs. the price of Gold (red line, using the GLD ETF as a proxy for gold). I must say our customers have been very wise indeed over the last 5 years.