||Alan Greenspan: "Price
of Gold will rise."
Q: “Where will the price of gold be in 5 years?”
Q: “How much?”
The former head of the Federal
Reserve will not be pinned down on the question, but less than a week ago
he said he thought the dollar price of gold will be "measurably
higher" in five years. He also said that a gold money standard
is not possible in a welfare state, although he did not say the U.S.
is a welfare state.
Is Greenspan predicting a burst of inflation? The Federal Reserve
balance sheet indicates that's a strong possibility. At the moment,
however, the gold barometer is flashing the deflation sign.
That is, the dollar is a bit stronger. You can buy more
gold with it, more euros, more oil, and a great many other things.
We think the situation has the feel of skating on a frozen pond in late
winter. Stretches of ice become thinner as tendrils of spring warmth
arrive. The skater gets the ominous feeling of danger and decides to
go ashore and hang up his/her skates.
In answer to the query
"Why are central banks buying more gold?" Greenspan responded,
"That is a fascinating question."
for central bankers to hoard gold on the one hand and condemn it as a
useless monetary relic on the other. It strikes us as a good idea to
emulate what the bankers DO rather than what they SAY.
change in Part B premium in 2015
The Social Security Administration says the average Social Security
benefit will increase by $22 per month, from $1,306 in 2014 to $1,328 in
2015. The average benefit for a married couple who both receive benefits
will increase by $36 per month, from $2,140 to $2,176.
benefit increase is 1.7 percent. But the usually unreliable Internet
gossip says that the Administration is withholding news of a Medicare Part
B premium increase until after next Tuesday's election. Not
according to CBS and other media. Medicare Part B premiums will
remain the same in 2015. RETIREMENT COSTS
old is a precarious proposition, if one must depend only on Social
Security income. An extra $22.00 a month won't go far. When
the system was launched in the late1930s it was advertised as as a means
to augment one's income after 65, not to serve as a sole source of
support. Today, millions of recipients live almost entirely on their
monthly Social Security income. With thousands of Baby Boomers
coming into the system every day the SSA will be forced to dig more deeply
into its Trust Fund. The fund contains mostly government IOUs
(bonds). It will run dry at some point.
America’s most incurable
disease is spending
"Let’s look at recent history,"
Suggests Dr. Ben Carson. "In the past 10 years, projected deficits
for [federa] entitlements created long ago, such as Social Security and
Medicare, have grown dramatically. In fact, existing entitlement programs
consume about 60 percent of all federal spending. During this time much
political effort has been expended — unsuccessfully — trying to reform
these programs. I’m not saying this wasn’t an important effort. But,
if these programs are not reformed soon, they will consume 100 percent of
projected federal revenue within the next three decades." Uh-oh!
Where is the Doctor headed with this? Surely he's not saying
the federal government is spending money it doesn't have and faces a
monumental money crisis! Or is he? The Incurable
prudent steps now will improve health down the road.
Very hard to argue against
Dr. Carson and not look foolish.
Ben Garrison sees the
stock market as a bubble, albeit a tough skinned one, that has bounced
back from its recent swoon. Depending on what the Federal Reserve's
Open Market Committee says in its Wednesday public comments this week the
DOW may climb above the 17,000 level it last saw on September 30th.
(The DOW record high of 17,269.24 was reached September 18th.)
What next for stock
prices? We don't pretend to know, but we've never seen a bubble that
didn't eventually burst.
More of our nephew's 'toons
ITEM: With U.S. inflation weak, the European economy stumbling and
the dollar on the rise, the big question is to what extent Fed officials
acknowledge risks to their expectations that the U.S. recovery will
continue to strengthen and allow them to raise rates around the middle of
next year. WORRY: Low
deflation commentator Vern Myers worried about in the dreadful
inflationary days of the Nixon, Ford, Carter years waited some 40 years to
reassert itself, but to almost everyone's astonishment the fear of
DEFLATION is the Federal Reserve's worry, not the price hyperinflation so
widely expected after years of Fed money printing.
It's really beginning to look like the US is slipping into a Japanese
style malaise. With so many Harvard and Yale economists at the helm
one would think this could be avoided. <insert
Solving the problem of aging.
You can't live forever, but how about a longer, healthier life?
Finding ways for people to live even
longer might sound like the last thing needed in a world whose aging
population increasingly looks like a social and economic time-bomb. But
what if life could be extended in such a way that allowed people to remain
active and economically productive for longer? SEEKING AN
key words in the above paragraph are "active" and
"productive". The last thing society needs is discovering
methods of keeping people alive merely so they can watch television all
day and live almost entirely off the efforts of younger
(Reuters) "President Barack Obama will launch a series
of executive actions on Monday to strengthen U.S. advanced
manufacturing, including a $300 million investment in three
technologies considered crucial to the country's industrial
chief executive aims to micromanage the economy through a series of
executive actions it dramatically lessens the need of a congress of
citizen representatives. In a free market competitiveness
flows from the investment of private capital and lots of ambition.
In a government directed (socialist) scheme taxpayers are forced to foot
the bill to attempt to achieve competitive goals.
Today's action may be an attempt to bolster the chances of Democrats in
next week's election, but as FDR demonstrated eighty years ago trying to
manage economic policy from the Oval Office leads to bad results.
get to that after the election."
The White House stall is on until
after November 4th.
way of politics. A cascade of important decisions is being held up
by President Obama until after election day. Knowing what's
happening isn't helpful. There's not much the common citizen can do
"The administration has announced
that health-insurance premium rates on the ObamaCare exchange won’t be
available until Nov. 15, when the Healthcare.gov website is set to start
enrolling people for 2015.
"How politically convenient.
"Rates are expected to go up by a
whopping 14%, but voters won’t know because they won’t be revealed
until after the election. Last year, enrollment began on Oct. 1.
Clearly, the date was pushed back to hide the increases from the voting
public." Post Election Agenda
An elderly man sees
the Obama presidency as a danger.
Socialism and the Constitution don't mix.
say, I was saddened and very disheartened. I still am. I am sad because at
age 76, I’m living the last chapters of the book of my life in a
country that I no longer recognize. I am sad because the generations
who follow me will not be privileged to live in the country which I grew
up in and came to love so much. I am saddened because I believe the chance
we had to turn away from Socialism and back toward Individual Liberty and
responsibility by not returning Obama to the presidency, was lost for a
long time to come. That ship has sailed." America's Death
Being in the last chapter of life
our self we can strongly relate to John Porter's lament about the US
embrace of socialism and abandonment of the sound precepts of the
Constitution. But the socialist instinct is born in us, we
think. Isn't it perfectly natural to expend as little effort as
possible to receive as much in the way of comfort and leisure as
possible? If we become incapacitated or old don't we instinctively
feel that we have a kind of "right" to the best care possible
whether or not we have the means to pay for it?
People of Mr. Porter's age, and
older, usually have collected all the money they and their employers paid
in FICA taxes through the years (adjusted for inflation) and are living
out of the pockets of present FICA taxpayers. Most of them consider
it a benefit from "the government" that is owed them and don't
make the connection between today's workers and their own well
In our own juvenile years there
was no such thing as Social Security. The prudent lived on whatever
they had accumulated. The less fortunate elderly relied upon family
and charity. Unimaginable today, but a fact of life before federal
central planning and the idea that government owed everybody a
living. This "free lunch" can't be sustained forever but
there are plenty of eager politicians willing to try - and they will
have to continue to dip into the ideals of socialism to do it. Both
Democrats and Republicans embrace the U.S. style of socialism.
pessimist sees the difficulty in every opportunity;
optimist sees the opportunity in every difficulty."
Churchill get this bassackwards? Depends on one's interpretation, we
The pessimist, for
instance, will see problems with government seizing the opportunity to
increase tax rates whenever it chooses. Political leaders, on the
other hand, see every social problem as an excuse to expand the costly
role of government. The pessimist worries about paying back
stupendous levels of debt...the optimist says "Don't worry about
it. Let future taxpayers take care of it."
IT'S NOT YOUR IMAGINATION.
TV newsrooms are not
covering midterm elections intently.
(From the Washington
Examiner) - The nation’s Big Three TV networks
that breathlessly reported the 2006 anti-Bush election which gave
Democrats control of Capitol Hill have practically ignored this year’s
anti-Obama midterms that are expected to return full control of the Hill
to the GOP. A new and exhaustive Media Research Center analysis compared
the last seven weeks of CBS, NBC and ABC news coverage with the same
period in 2006 and found a 6-1 disparity between the Democratic election
wave and the current election. The story count: 159-25. The worst offender
is ABC’s newly-renamed “World News Tonight.”
We snitched this graphic from an essay by Gary
Christenson which maintains that the fiat currencies of the world cause
serious economic distortions that can't be fixed by merely printing more
"Loss of confidence in fiat currencies and never-ending
debt causes a major depression or financial collapse. What could create
such a loss of confidence? Insolvent governments, a global pandemic,
derivatives implosion, massive bank failures, financial melt-down, crude
oil price spike, debts that will never be repaid, and leaders who don’t
lead – are just a few." Gold or Paper?
the world's central banks are importing gold hand over fist. India,
for instance, increased its import 449% from a year ago. China has
been a big importer. And, lately, Russia is reported to have sharply
increased its gold imports.
these nations hoarding such an archaic out-of-favor commodity as
dollar price of gold is wallowing around just over $1,200.00 per troy
ounce. It's a bargain price IF price inflation increases. If deflation
breaks through and prices plunge the present gold price may be too
high. One thing for sure - according to history - an ounce of
gold conveys purchasing power into the future better than depreciating
paper money. Bottom line...it's probablyi time to add another
Krugerrand to the collection in your sock drawer.
And this. . .
..from economist Jim
Frankly, we don't
know if Rickards ever sat through a class of Econ. 101 but his books on
the weaknesses of fiat currency have made a dent on the national
psyche. He writes, "There isn’t a central bank in the
world that wants to go back to a gold standard. But that’s not the
point. The point is whether they will have to."
Your Personal Gold
He's right, all the
establishment experts are poo-poohing even the slightest mention that
there may be a role for gold after the debt=based fiat money flows down
the drain. However, as we've pointed out above China, Russia, and
central banks of other large nations have been importing vault gold by the
tons. Why would they do that if gold were really so
Remember.. paper bills are
evidence of debt. These IOUs are not wealth...they are the PROMISE
of wealth. A piece of gold, on the other hand, is the Real McCoy - a
substance that is valued around the world for its several attributes,
including its long history of holding purchasing power over time,
The deserving poor vs.
the non-deserving poor.
understand that people sometimes need help. We are in favor of feeding
the poor and housing the homeless, although we believe that is more
appropriately managed by extended families, churches and non-profits
rather than government. What we cannot support is a culture of
ever-expanding welfare that removes any incentive for families to take
responsibility for themselves, and work to improve their own
situations." 48 percent of Americans get Gov't
upon a time a distinction was made between the non-deserving poor and
the folks who are poor because of bad luck and lack of
opportunity. The so-called "deserving poor."
Taxpayers paying the bills may insist on it.
Going into debt for a
It may be one of the silliest things
new car 'buyers' are in fact debtors. They sign loan
documents and make monthly payments. Typically, for five years, the length
of the average new car loan. Some extend this to six years – and seven
years is not unheard of." ~Eric Peters.
Mr. Peters writes about automobiles for a
living. He points out that most new car buyers do not pay cash but
finance their vehicles for terms of six to seven years, a far cry from the
1960s and early '70s when a two year finance plan was common. The
consequence is many "owners" are underwater on their car debt
before the vehicle is paid for.
Our first car was a 1929 Chevrolet which we acquired for $75.00 right
after World War 2 ended. It was 16 years old and had seen some hard
use, but it was transportation and got us from one place to another
without much difficulty.
We have no car now because we can't see reliably enough to drive one, but
the Missus has a very nice luxury vehicle that is 18 years old and well
maintained. Insurance and taxes are quite low and we can't think of
any reason to swap it for something new.
To calculate the price of a new car one must add to the purchase price the
high cost of long-term financing. The tab, over time, can be
staggering. And, as Eric Peters points out, it is an appliance
that depreciates in value. ENDLESS DEBT
This does not make us feel
warm and fuzzy about Internet financial privacy.
|| About 110 million
Americans — equivalent to about 50% of U.S. adults — have had
their personal data exposed in some form in the past year, said Tim
Pawlenty, president of the Financial Services Roundtable and the
former governor of Minnesota.
About 80% of hacking victims in
the business community didn't even realize they'd been hacked until
they were told by government investigators, vendors or customers,
according to a recent study by Verizon cited by Pawlenty. Hackers
IINTERNET TAX MORATORIUM ENDS DECEMBER
It could cost consumers billions of
dollars of Congress doesn't extend it.
Congress lets the INTERNET TAX FREEDOM ACT expire on December 11th the
cost could cost consumers more than $14 billion a year tin new
It's possible to force
an extension of the act if voters hold their Congressional members' feet
to the fire before the November elections. "Congressman, what
is your view of the Internet Tax Freedom Act and how do you
propose to vote on the question in December?"
Potiphar Gride, our staff curmudgeon, got a strong whiff of
deflation in March, 2009, and wrote:
now the signals are flashing "deflation." That's
always the eventual payoff after a long economic boom fueled mainly
by debt. Consumers are forced to cut down on their demands.
Businesses cut back on their operations. Some go out of business
entirely for lack of consumer support. This shrinkage leads to
an increase in bankruptcies, and the bankruptcies trigger more
dominoes to fall as the economy spirals down into a deflationary
depression. But all this pain is necessary to clear away the
trash accumulated during the years of false prosperity created by
debt, both private and public.
federal government is trying to halt the natural correction by doing
exactly what caused it in the first place - - by borrowing massive
amounts of money. In other words, taking on stupendous debt to 'cure'
a problem that was caused by taking on stupendous debt!" COPING
economic trends is an inexact science, despite the reams of historical
charts with which economists punctuate their forecasts. The charts
are HISTORICAL and don't necessarily forecast future human
question at the moment is: Is our monetary system on track for
collapse or can official Washington policy clearly identify the problem
and fix it? History reveals that all fiat currencies wind up in the
trash can, but we of the high-tech age have mostly abandoned old concepts
of circulating currency and have come to depend on "digital
money" the creation of which requires little more than precise
computer key strokes.
So - are we
in for an inflationary outburst, or is deflation going to upset our
hopes and dreams?
know. But we get a whiff of that unsavory stink of deflation every
now and then and try to plan accordingly.