Long Silver John

Saudis Drop WTI Oil Contract - But Why?

What would happen if OPEC priced oil in grams of gold?

G20 and IMF Gold: A Late April Fools'

You can almost hear them saying, in their meeting: "Hey, let's announce another huge stimulus." "But what about inflation concerns?" "Okay, let's also have the IMF dump some gold, to drive down its price and dampen any stampede to gold."

Watch for Yourself: 60 Minutes Oil Story Was Spot On

Aren't the dynamics of easy money on the oil sector about the same as the dynamics of easy money on the real estate market? Buyers sign up for future delivery at increasingly bid up prices, thinking they'll flip if for a profit. That builds up the price bubble. When they aren't able to sell at even greater prices, they hit the panic button and dump the contracts. This is straight out of the Austrian Economics theory, which focuses on money supply as causing boom and bust cycles.

Fiat Money and a Profligate Congress: A Bad Combination

That law was called Graham-Rudman, and the exceptions ate up the rule. Same thing for gold standard. When deficit spending got out of line with gold supply, the government devalued (1934) or went off the gold standard (1971).

What's lacking is the willpower of our leadership, which is focused on getting themselves re-elected, taking PAC-money from the special interests.

Volcker is the only guy (short of Graham and Rudman and maybe Bob Dole) who had the guts to take a stand. Volcker must be getting extremely nervous about this whole thing.

Obama will have his chance, but the preliminary indications are that he's going to spend like there's no tomorrow. Doesn't look good for the dollar (which is why I'm long on silver (and gold)).