The ‘gold bugs’ assert that at all times and in all circumstances gold remains money. For some irrational reason the ‘paper bugs’ cling to their increasingly worthless colored coupons asserting their importance as currency.

On 26 November 2009 the State Bank of Vietnam devalued the dong by about 5%. This is the third instance of currency devaluation in two years. The FRN$ is likewise being devalued against gold.

A few weeks ago I observed that those buying gold in Vietnam are paying a premium and that:

Back in June of 2008 after the Cambridge House Investment Conference I wrote about how Vietnam had limited gold imports but with all the updates to RunToGold it appears the article was lost to the Internet ether. The last time I was in Vietnam to visit a few factories, including one of Nike’s (NKE), I found the people so nice and gracious, learned about the mangosteen for the first time and had the best ice cream in the whole world. And the chocolate pancakes were amazing. The extremely low prices would amaze you.

Bloomberg reported on 12 November 2009 that

TRACE MAYER: Welcome back to episode #55 of the RunToGold.com Podcast. I’ve got with us today a special guest, Ian Gordon from the Long Wave Group. Welcome Ian.

IAN GORDON: Thank You very much for having me.

Edgar Allen Poe’s most widely circulated story was ‘The Gold Bug‘ where William Legrand appears to go insane after being bitten by a bug he thinks is pure gold and embarks on a search for mythical treasure. Paul T. Jones II of Tudor Investment Corporation has approximately $11.57B under management and has earned $1.22B year-to-date in 2009.

Mr. Jones is a serious money manager who makes serious money. In the 2009 Q3 report (.pdf) he wrote, ‘I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time.’

The recent gold bull upleg is in the midst of a predictable slight correction and consolidation. When that finishes it is highly probable, based on seasonality and technicals, that the next part of the upleg will commence. The Federal Reserve and Washington are only making matters worse through their extremely damaging policies.

On 22 October 2009 Reuters reported that Korea National Energy Corporation will purchase Harvest (HTE) for C$1.8B or C$10 per unit. On 12 December 2008 I wrote, “For these reasons Harvest appears to be fairly cheap and a good opportunity.” This article will examine the anatomy of the trade and opportunities for redeployment of capital.

PEAK OIL

On 9 October 2009 I was interviewed (MP3) by Business News Network, Canada’s premier financial channel, live from the NASDAQ in Times Square New York about the rise of gold.

BNN HOST: A note that caught our eye from RunToGold.com saying “Gold price rise pretends another round of the Credit Crisis. … Gold in Q2 2010 $1,300.”. Joining us to talk about that prediction, Trace Mayer, financial blogger and author of The Great Credit Contraction. He is in the city so nice the name that twice New York, New York. Very happy to be with us, Trace.

Note: The rare earth metals are extremely important to the developed Western economies. The two part interview with Jim Dines along with Casey's overview will provide a great foundation about these vital elements.]

Part One – Jim Dines – Paper For Wealth In The Ground – 30 minutes

Friday 25 September 2009 had two significant events. First, there was a full committee hearing on Ron Paul’s bill H.R. 1207 to audit the Federal Reserve. Second, Chief Judge Edith Jones of the United States Court of Appeals for the Fifth Circuit, directly under the United States Supreme Court and covers Florida, Georgia, Alabama, Mississippi, Lousiana and Texas, issued an order for a three judge panel (.pdf) to hear an issue brought about apportionment regarding the House of Representatives. Both of these actions, should they be brought to fruition, would seek to restore essential checks and balances found in the United States Constitution and reduce the centralization of power.

END THE FED

[Note: Due to unnecessary risk for inadequate reward on Wednesday 16 September 2009 I closed my PayPal money market fund which was yielding a whopping 0.05% APY. Mr. Galland of Casey Research elucidates the reasoning behind this decision very well. In addition to just holding the FRN$ balances over the last few months I have also been moving into gold, silver and platinum and I am sure most of you know how to buy silver, etc. but this is especially important with silver trending towards backwardation. As the liquidity in money market funds evaporates this could put further pressure and perhaps hasten the coming market crash. Make sure your capital is safe and liquid.]

By Casey Research

The silver backwardation has been on-again off-again throughout 2009 and this portends gigantic problems for the worldwide monetary system. Backwardation is a situation where the fiat currency price of a commodity is pregnant with a premium the buyer is willing to pay for immediate delivery. The price of a commodity for future deliver is lower than the spot price. This is contrasted with contango where the spot price is lower than the futures price. Backwardation seldom arises in the monetary commodity gold or the quasi-monetary commodity silver.

QUESTIONS

The FRN$, the world’s reserve currency, has no definition and the quantitative easing will fail. After all, what is a dollar? Because there is no definition it is impossible to perform accurate, or even semi-acccurate, calculations of value using this tool. Consequently, other key ratios ought to be used to hone in and focus on value.

MAY 2009 RECAP

On 12 August 2009 I interviewed (mp3) John Rubino of DollarCollapse.com for the 48th episode of the RunToGold Podcast about economics versus political dogma, the two paths for the FRN$ currency crisis, the Fear Index and potential solutions individuals can take to protect and preserve their wealth during the transition and increase of political risk.

INTERVIEW

There is a massive change in the institutional gold market. The CME Group (CME) has announced,

In response to market needs, CME Group will offer a clearing service for the OTC London gold forward market beginning September 20, 2009 for trade date September 21, 2009.

In America, a land of plenty, the economy is in the gutter, incontinent government spending is coupled with out of control budget deficits resulting in ballooning debt, and bankrupt States. Skyrocketing unemployment with benefits ending is compounded with manic-depressive politics while commercial real estate is imploding. Earnings of publicly traded companies are cratering, the remaining liquidity in the financial markets is illusory from the likes of program trading via Goldman Sachs (GS) and there is a new weekly event called ‘bank failure Friday’ with the FDIC now bankrupt and would be insolvent but for its line of credit with the Treasury.

The solution from Wall Street and Washington appears to be quantitative easing which is doomed to failure as they intentionally exacerbate the greater depression. Consequently, for good reason the general sentiment for the Federal Reserve Note Dollar (FRN$) appears to be particularly bearish.

On 12 August 2009 I interviewed (mp3) John Rubino of DollarCollapse.com for the 48th episode of the RunToGold Podcast about economics versus political dogma, the two paths for the FRN$ currency crisis, the Fear Index and potential solutions individuals can take to protect and preserve their wealth during the transition and increase of political risk.

INTERVIEW

Market liquidity is a business, economics or investment term that refers to an asset’s ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value. As market liquidity dries up then the bid and ask widen. The depth and breadth of United States financial markets has provided significant liquidity which has resulted in tremendously inflated illusory asset prices.

This will be an introduction to The Depository Trust and Clearing Corporation along with a brief analysis about how by its very nature market liquidity can evaporate extremely quickly which would destroy your value and purchasing power and what you can do to protect yourself.

One of the most recognized, innovative and valuable brands in the world, Apple (AAPL), is under assault. Apple has long been known for its fanatical followers, innovative solutions like a graphical user interface or the mouse and stylish products that meld hardware and software to create the best user experience possible.

“By the pricking of my thumbs, / Something wicked this way comes” is from Act 4, scene 1, lines 40-41 of the Bard’s Macbeth.

A year ago at Cambridge House when asked whether the economy was going to rebound I responded, “That light at the end of the tunnel is just the next train. Get out of the way!” Another commentator on stage, who helped manage about $10B at the time, responded that things would get better and not to worry. What happened?