"I think gold will survive as a store of value far longer than any government, fiat currency, or debt-based paper investment." ~Gary Christenson
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October 23rd, 2014
IT'S NOT YOUR IMAGINATION.
(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 of them.
"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?
Some of 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.
Why are these nations hoarding such an archaic out-of-favor commodity as GOLD?
The 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. . .
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."
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 useless?
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.
Going into debt for a
"Most 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.
IINTERNET TAX MORATORIUM ENDS DECEMBER
Bottom line...if Congress lets the INTERNET TAX FREEDOM ACT expire on December 11th the cost could cost consumers more than $14 billion a year tin new taxes.
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:
Predicting 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 behavior.
The big 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?
We don't know. But we get a whiff of that unsavory stink of deflation every now and then and try to plan accordingly.
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