Stephanie

Natural Gas Transportation Is a Win-Win Technology

Michael,

There is a reason why we haven't gone completely alternative or NG - the American government is trying to run the hostile countries out of their oil so that they cannot militarily defend themselves against a conventional invasion, nor could the hostiles invade us. The government wants us to be the last country with any oil reserves (at least the allied countries). As soon as we shift over to NG, I'll bet you within a few years, the same American Peak Production story will float again, and we'll be importing NG just like we did in the late 80's, so that we can run the hostiles out of theirs. I know, because my dad worked in the field in south Texas, and he said that one day, in 1985, they went to him and said that the fields were to be shut down. Period. Never mind that they were still producing full force with no decline in evidence in the fields he worked in.

FDIC Insurance Fund - It Doesn't Actually Exist

The banking system needs to be taken down, period.

Mexico: Running Out of Oil and Options

It looks more like Mexico will reach a point to where the crime will flow over our southern border like a tsunami. At that point, we might have to take over Mexico and destroy the drug cartels, because the damned Spaniards running the country won't loosen up and let people have more freedom and economic opportunities. Or we could simply legalize drugs and yank the black rug out from under the cartels.

Gold Train: All Aboard

Tvb, son, you missed a point, which is that the interest rate you think of is actually negative, in which the rate of return is far less than the rate of inflation (which had been running around 12-15%, if you read between the lines). As I've said elsewhere on seekingalpha, there is NOTHING out there for the wage earner who earns less than $3,000/year (after all bills are paid each month) that would have made the returns silver did back in March if you had sold out and waited for the downdraft that happened recently to buy back in (because I only make $23,000 a year, although I'm trying to change this and find something else in the smoking, gutted ruins of this economy).

But for bearfund's reasons, I hold for the long term, because it is a store of value, nothing more. In fact, fiat has created a way of life which is to "invest the money so that it not only preserves capital, but outpaces inflation as far as possible - get rich while other people work for you when you have not worked to deserve that position of earning capacity." Which is what the stock market is, a ponzi scheme, son. I work for a privately-held retail company, which is 70 years old now. We paid off long-term debt about two years ago, and we have no short-term debt. There should not be any substitutes for working hard.

What we used to have centuries ago was the idea that since you had a relatively stable currency as long as it was based on gold or silver, you could work hard and accumulate savings, and expect that the purchasing power would be around more or less in 10-20 years in case you had to use it.

That is what traditional Indian gold consumers do. They are unbanked for the most part, and when they harvest their crops in mid-August, they will take the paper profits and buy gold with it for savings and for the holiday and wedding season (has already started with Raksha Bandhan a few weekends ago, and Ganesha Chaturthi is coming up next week). They do this because they do not trust corrupt government and thieving central bankers. Compared to us in the US, their experience is far more intimate with corrupt bankers creating massive inflation.

Why Should I Own Gold?

Jacob, there is a reason those of us own gold/silver. Unlike paper money, which can be printed up/entered into the computer on a whim, gold has a much more stable value. I say this because you cannot print up or enter into a computer account physical gold in that same manner. Expanding the gold supply is hard, dirty, dangerous work. People have gotten hurt, even died creating the money supply in mines, shipping channels, and refining plants. It takes time to make an ounce of gold or silver. On top of that, since nearly all the gold ever mined in the last 7,000 years remains aboveground, the annual addition to the gold supply only increases it by a small fraction, helping to keep the gold supply stable in terms of value, and that stable feature grows into the future as the gold supply grows larger.

You need to understand that the piece of paper that is a $100 bill cost only a few cents to make, no more than the $1 bill. That is what fiat means. Backed by nothing other than the faith of the US government and unconstitutional tender laws that say you can redeem a tattered dollar bill with another one. There is nothing in fiat currency to keep us honest, to keep the people close to the vest from taking advantage of inflation and working it to the common people's disadvantage. We cannot resist the temptation. It is part of human nature. History is littered with stories like this. The Ancient Roman empire? Archaeologists in the last few years finally confirmed that the ancient government did indeed debase the currency by increasing the amount of base metals in what were originally gold and silver coins, and finally going to all-base-metal coins, even clipping the gold coins. The Chinese experiment in paper money? They played with it for several centuries, having to reform it several times because of inflation. The US Continental Dollar? "Not worth a continental" came out of the Revolutionary period. The Union greenbacks? Used to fund the Civil War because gold couldn't be made fast enough to fund the war. I just checked the Bureau of Labor Statistics' web site that has an inflation calculator that shows that the dollar in 1913 had the same buying power as $22.22 today does. www.bls.gov/data/infla... - that is over 95%!

You have to understand that inflation is a form of stealth theft. The people that get first dibs on money to start and run businesses, or even do nothing by virtue of connections get to buy stuff at lower prices than the rest of us do. Our wages now do not keep up with inflation.

Being on a gold/silver standard taught us how to live within our means. If we wanted our store of value to increase, we had to get out there and work for it. There was little in the way of investing the money in stocks or artificial financial instruments and getting rich off them. These financial instruments are a lazy person's perfect dream of not having to work. We can't have this. Someone has to pick up the garbage, fix electrical faults, fix blown engines, fix collapsed bridges, do complicated bone surgeries, keep records of customers in order to formulate SOME kind of financial budgeting for the following fiscal year, etc. You can't have everyone rich and not doing anything or at the least, playing money master.

All these reasons and more is exactly why we had a silver standard to start with (read the coinage Act of 1792 - according to this thing, a lot of people today are eligible for the death penalty). The founding fathers had experience with exactly what we are dealing with today.

Hard Money Inflation: Oil and Gold Continue to Plunge Downward

Yes, sir, Captain Bob! He is funny!

Thanks 30121.

About the deflation thing. I just realized that probably the reason we have inflation right now is so that the Feds can slow down the rate of deflation so it doesn't destroy as much as it would if it were not impeded, but it will get to a point in a few months when deflation finally bottoms out, and watch out! At that point, the Feds might ramp up inflation because then, the money supply will be able to expand at a faster percentage rate than it can today, even without deflation (as it would be much smaller then than it is today). Hyperinflation, maybe?

Still No Inventory Reduction at GLD

Okay, David! You're on! I have this page bookmarked so I can go back here from time to time.

Still No Inventory Reduction at GLD

goldmoney.com/en/comme... - go here and look for the article at the top, "A Fabrication Bottleneck or Something More" You may have to scroll down to archives and find it there if you read this message a few months from now.

I want to add here that you are not to trust what I say, but do the research yourself. You'll be glad you did.

Still No Inventory Reduction at GLD

Wchanofalberta's comment - See? $250 versus $786 today. You STILL made 3 times your money in return if you sold out today. How about March? 4 times! Base metals and some commodities gave and still give you MULTIPLES of that.

Here's the evidence - www.kitco.com/charts/l... - the ten-year chart tells it all. And compare the dow numbers with gold in the same time frame, and you'll see that the dow/gold ratio had dropped to as low as something like 12-14 this past year. Even now, with the current dow of 11,660 and gold price of $786, the ratio is only as high as 14.8.

The key is that you have to know where are you in the bull/bear market cycle. You want to buy in when it's bottomed out and starting to go up, hold through the intermediate period, and sell out near the top and move your money into something else that is currently undervalued or unappreciated. Everything made and sold under the sun by humans have a bear/bull market cycle. You can't just go by numbers. You have to look at everything around you.

Hard Money Inflation: Oil and Gold Continue to Plunge Downward

Sidj, don't forget two years ago when silver spiked up over $15/oz, and then finally broke through the last high in very late 2007. It took well over a year to do that, in spite of the seasonality of gold. You have to remember that gold/silver prices are set by paper transactions and not physical transactions, so you times like in March/April when prices dropped $4 or so and yet shops were running out of silver. Hopefully, it will happen again, so that I can stock up, especially when tax time rolls around!

Still No Inventory Reduction at GLD

There is also the seasonality of the gold markets. The Indian holidays started with Rakhi, or Raksha Bandhan on Saturday. JUST prior to that, after gold hit way down (under 12.000 rupees per 10 grams), demand for gold went way up, causing the shops to run out and say that they would have to wait 'til August 20th to get more in from overseas sources.

This is what I'm saying. Gold has its ups and downs during the year. India is the world's largest market for gold because of its population size AND its gold culture that is part and parcel of an Indian's personal life, whether it's holidays, religion, savings, or gifting in general. Don't forget weddings! The father will have been saving for his daughter's dowry, or stridhan, which can be added to by the mother, brother, or in-laws (at the time of the wedding), from the time she was born. Same thing happens when a boy is born, only for his future wife. The holidays there start right about the time the farmers harvest their crops (mid-August thereabouts), and because these are agriculture profits, they are not taxed. Farmers, living as they have for thousands of years with experience with corruption and failed currencies, will get rid of their rupees for gold. Most of these people are "unbanked" and don't have access to different ways of saving. Even if they did, they couldn't trust the banks to not lose their savings for them.

Their connection with gold goes so far as to have women with gold comment that when they lose a mate of a pair of earrings, they stash away the remaining mate as part of their holdings.

Because Indian women have been relatively uneducated and more or less run things in India on the social level and not on the economic level, they are given gold, and only they can decide what happens with the gold (that is protected by law). They have the gold in the event they lose their husband or family and have to survive on their own.

With that, Indians are very price-sensitive, and when they see price drops like this, especially around holidays, they inhale it big time! And you can also see that if their gold were to be confiscated, you would be dealing with a billion angry Indians!

Still No Inventory Reduction at GLD

Oh darn it! I forgot. Go to Kitco's web site and see this for yourself.

IMPORTANT NEW NOTICE: Due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products. Please note that you can continue to place orders and prices will be guaranteed; however, cancellation fees will still be applicable regardless of the length of the delay. Consequently once inventory is received there may also be delays in processing and shipping by our vaults.

kitco.com

Still No Inventory Reduction at GLD

Digger,

I do not have an MBA. I work in a camping store. Part-time. About all the skills I have aside from spending 30+ a week reading financial stuff at home.

The practical part of what I'm saying is that it IS better to put $30-50 a month into gold/silver in this stage rather than in the bank because of inflation and the bull/bear market cycle mark. Even with the price slide this week, I still have a 48% return on my silver if I were to sell out tomorrow. Having less than $5,000 a year to spend after all bills and needs are done, I don't have the money to do stock markets, thusly there is just about nothing out there that can earn me the kind of return I would have gotten had I decided to sell out several months ago when silver hit $20+. That would have been a 100% return. But I didn't because I have a long-term plan in place. I don't time tops and bottoms, except to go in and buy on the dips and hold. Take a page from savers in India.

Hard Money Inflation: Oil and Gold Continue to Plunge Downward

Wow...

Amberger has no clue, does he?

I'm going to say it again here. Just love copy and paste, don't you?

Notice that the media makes little mention of gold prices on upswings, forget silver, and yet mentions gold when it takes a hard hit. Also note that bull markets always NEVER go straight up. There are ups and downs as markets overheat and back off a bit to blow the steam off, and then recover again and keep going. It happens to shake off the weak, speculative hands to restore the foundation to a more sensible level. Blowing the froth off, as it were. And bear markets NEVER go straight down, either. The US stock market has been experiencing bear traps, especially when you take in consideration inflation.

Now, I will add that the deflation argument has some weight. I was just thinking about it the other day last week. "Deflation... Deflation... How would that happen?" Well, I realized that it's taken decades for the total markets to build up to well over $500 trillion (including the derivatives markets). You have hundreds of thousands, okay, maybe millions of people (or parties) involved in these transactions. How many employees do the Feds, FDIC, Freddie Mac, Fannie Mae, Ginnie Mae, HUD, etc. have altogether? Maybe a few thousand. How many of those people are the actual decision makers that will get the wheels moving to bail out all these defaulted parties? One person can't move fast enough to cover the activities of 1,000 other people. Heck, I can't keep with anything more than 5-8 people in the clothing department's fitting rooms! It's a matter of velocity. Which number is moving faster? The rate of money creation to bail out people, or the rate of debt collapse? I'd bet on the debt collapse at this point.

If you have money (credit) supply collapsing like this, then prices on most services and goods at some point will drop, I mean drop way down. HOWEVER, this is what you have to watch out for. People will at some point scramble for gold and silver because it will be the only thing they can trust (after seeing their bank accounts wiped out, their retirement accounts gutted, ad nauseum). If you have, say $900 gold and $0.94 gallons of water, and things deflate to say, $250 gold and $0.20 gallons of water, then gold still has more purchasing power at $250 than it did at $900, only assuming that it will indeed happen like this and prices drop uniformly across the price index. It's not done once the price collapse occurs. The demand for gold and silver would take off, and prices would have to adjust to account for this.

Know this - no single fiat currency has survived intact in human history. Not the Ancient Roman debased currency, not China's first fiat experiment, not the French Assignat, the US Continental Dollar, the Union Greenbacks, etc. Read up on how the public responded with a flight back into gold/silver or something tangible each time it happened. Gold/silver has a history of being money for several THOUSANDS of years.

And I'm going to throw in that at a coin shop last week, I saw $12,000 worth of silver being bought by TWO people, and that's in Houston, an area not strong in gold/silver ownership. I have one former coworker who has silver, ONLY because he was given silver as an anniversary gift by his father-in-law. NOBODY else talks about it there. Only two or three out of 120 people in my life talk about it or are even curious about it. On the other hand, I had about 3-4 people at work alone with any money talk about real estate, how great it was, and that it always goes up, and that was in 2005-2006. I had already seen the writing on the wall by mid-2005 when I noticed that dogs and cats became homeowners as well. This is not happening among the general public in the US, and this used to be a market where everyone had at least some silver change in his pocket or her purse!

Good luck!

Painful Surprises and Big Lessons with Precious Metals & Energy

Marc,

That same Thursday night, I couldn't sleep. Not because I was worried about prices. I was excited! And a little worried that there would be no silver to be had on Friday morning. I was prepared to not only show up an hour before the coin shop opened, but to call two other coin shops in my area if the first one didn't have any with the hope of securing some more silver. It almost happened on Tuesday, when all they had left was junk silver coins. They were out of the one-ounce rounds (all I can afford or the junk silver coins). Anyhow, I was the first and only one in line so far. The first lady who showed up was surprised to find me sitting there 45 minutes before they opened. I picked up some fresh Amarks that arrived the day before.

You would not be picking up Ambien CR if you knew how these markets work. I do not trade, I hold for the long term.