Monday, September 24, 2012

Have a Computer and Phone? Easily Buy Gold Plated Tungsten Products

You'll have to cough up a little extra for the call to China, but going to the tungsten-alloy.com website is essentially free of charge (aside from your monthly internet bill).

Here's the site: http://tungsten-alloy.com/gold-plated-tungsten-alloy-coin.html.

Surely, none of my readers would go to that site and purchase gold plated materials and pass them off as real, gold items. Perish the thought!

Again, this brings to mind some serious doubts about what is really out there in terms of physical supply, especially the bars held by ETFs like GLD, Give it some time, the GLD ETF will be a reminder to all that they never held any gold to begin with through GLD. This may not happen tomorrow - to wit, I am no advising people dump GLD tomorrow, but it clearly behooves the GLD holder to think about the ramifications of putting too many GLD eggs into one basket.

While I realize many hold GLD because they cannot hold physical gold in their retirement accounts, the recent attention this topic has received should make GLD holders consider the merits of buying physical gold and silver and to stay away from the paper GLD product which may be backed by a lot more Tungsten than gold.


Sunday, September 23, 2012

Developing: More Gold Bars Found w/Tungsten

CNN video here is an eye opener.  Easy solution for the average person is to acquire rare gold coins with about an ounce of gold (too little for counterfeiters to deal with). From Fort Knox to the Treasury to Comex Warehouses, or whomever -- all needs to be audited and confirmed as real gold bars. Imagine the thought of the GLD ETF not having nearly the gold it is supposed to have because of tungsten bars.

I would be on guard for a gold take down attempt. So far the press has latched on the coverage of gold bars known an PAMP gold bars.

This is another big weekend development in news surrounding gold.



Last week the NY Post broke the story about a single fake bar. Now more are popping up. This is nothing new... Tungsten Genesis

Consider this as well...

How to use Ultrasound test - http://youtu.be/rh0Mcagio5Q

From a commentator on Zero Hedge:
"
The only cost effective material for creating an insert would be tungsten (W) as it has close to the same density as gold (Au). However, the speed of sound in W is~5000 m/s whereas in Au it is ~3000 m/s (a significant difference). I'd be quite confident that ultrasound would detect this.

Materials other than W would be easy to detect by measuring & weighing the bar (density would be wrong). Uranium is detectably less? dense by speed of sound like W. Plutonium is denser but more expensive than Au."

Argentina Seeks to Reduce Gold Hoarding

It is in this article, in Spanish, from a newspaper in Argentina. http://www.cronista.com/finanzasmercados/Bancos-y-casas-de-cambio-exportaran-el-oro-que-ya-no-pueden-vender-en-el-pais-20120911-0050.html.

The Mainstream media will eventually catch on.

The gist of the article leads me to believe that while it is not illegal to own gold in Argentina, its government has taken to regulating the purchase and sale of gold for FOREX purposes.

As economic conditions deteriorate in that country, people are naturally flocking to gold. This means competition for the government, which if it has any sense, is also hoarding gold!

Gosh, were has this script played out before?? Gold hoarding because people are shunning a broken fiat currency which then causes liquidity problems for said country to operate within the world banking system? Hmmm, it sounds like this has happened before in some other BIG country - back in the 1930s which led to gold confiscation. Oh, right, here in the U.S.  New times, same old tricks. Next, we'll be hearing about the taxation of gold transactions and/or confiscation.

Saturday, September 22, 2012

A Quick Summary: DEUTSCHE BANK: Western Economies Are Screwed, And Investors Face A 'Disturbing Paradox'

The authors of this DB report believe a gold standard is possible. I would disagree so long as there is a Shadow Banking system with its derivatives and notional value of over a quadrillion dollars and the ever traditional fractional reserve banking system that tolerates leverage at the excruciating levels of 40x or more which is ultimately a by product of Central Banking and accounting mumbo jumbo. The system  of finances today are to corrupted to be inter mingled with a gold standard. The Gold standard is a lovely idea, but structural problems stand in the way. But I digress.

The problems DB also addresses with the colossally extreme levels of debt are in my opinion beyond ever settling (paying off) and can only be perpetuated by continuous restructurings which only lead to higher levels of debt. Is that really a cycle that go on to infinity? The bankers may be clever, but they are not eternal.

The unworkable solution would be a jubilee, or a reset of the system back to zero with a complete structural reform to prevent a new cycle of extreme leveraging. Banks, or the lending class hold an unprecedented level of control over society today. One upon a time, the leaders of eons ago, were smart enough to know that the lending class would from time to time (every 75 years or so) have to be neutered, or that debtors would owe forever. Jubilee was the answer and it worked.

That certainly was no fun for the lending class who ultimately have become the banksters as we know them today. They have never wanted jubilee as it starved them of fees and the ability to enslave people to permanent debt serfdom. They have since made sure to eliminate the concept of jubilee by becoming interwoven with government. Jubilee will never happen voluntarily again. As a result, at some future point we are doomed to a banking system implosion under its own weight and as it overwhelms the ability for society to share in the supply of available money. Yes, one day your ATM cards will not work. Then, the bankers will find a way to take over and control bartering. Humanity seems destined to lose out to the banking cabal no matter what. Now there's a cheery thought! Now go hug a loved one and go about your 'normal' business. lol.

DEUTSCHE BANK: Western Economies Are Screwed, And Investors Face A 'Disturbing Paradox' http://www.businessinsider.com/deutsche-bank-issues-a-terrible-warning-on-the-health-of-the-global-financial-system-2012-9?

DJIA considering structural changes: report

Remember, stock benchmarks like the Dow and the S&P are MANAGED indexes, meaning that over time changes are made to the indexes when companies change hands, die, or become irrelevant. This means that stock indexes are skewed to a positive bias to reflect changing trends (positive trends). They are thus not a completely honest portrayal of what is really going on. But so be it. Certainly adding Apple, or Google could put additional shine on the Dow. As one example, how useful is it to have a single digit stock like Alcoa as part of the Dow? The best days of AA have passed and its moves as part of the price weighted Dow Jones average have a tiny impact on the overall Dow.

It would be a barrel of monkey fun to have Apple, or Google in the 30 component Dow on days when those two stocks alone could make the Dow go ape-you-know-what! lol.

I would hasten to add that gold is not "managed". It stands amidst the financial noise as itself whether the times are bad or good for gold. There is no substitute for it.

"SAN FRANCISCO (MarketWatch) — The owner of the Dow Jones Industrial Average is considering changes to make it more relevant and will discuss possibilities at its next meeting with major index users, according to a media report Saturday. The changes are being considered by Dow owner Stndard & Poor’s because the index is supposed to be a measure of U.S. industrial titans but doesn’t include Apple Inc [s:aapl], Google Inc. [s:goog] or Berkshire Hathaway Inc. [s:brk.a], the Financial Times reported, noting they are three of the largest U.S. companies. There would be problems adding them to the Dow bedause they would dominate the 30-stock index that’s weighted by price, the FT said. David Blitzer, chairman of the index committee for S&P DJ Indices, said the issue is being discussed, the FT reported."

Dave is among my Linkedin contacts. We interviewed him regularly at Bloomberg. Should I contact him about this? No, I'm sure he has better things to do, like figure out how to m ake the Dow more relevant.

Forget About GDP, Look at Sagging Household Income

We are regularly bombarded with economic data and other information that attempts to protray the economy as bumbling along at a sub part GROWTH pace.  The rebound in pockets of the real estate market from desperation lows to an improvement in the unemployment rate thanks to millions dropping out of the workforce are dishonestly heralded as signs of economic recovery. Yet, people know that something is just not quite right - that the reality of every day life and the optimism of a smattering of favored statistics (favored by those who benefit from the positive spin as opposed to the stark reality) are out of sync.

Here is a very simplistic, but real answer to why things just don't seem quite right.

Consider the chart below from John Williams and his Shadow Stats service. It shows REAL income, or income adjusted to account for inflation, or the sagging buying power of the dollar. Inflation eats away at buying power as it is like a tax that takes money away from you. Most don't realized just how fleeced they are over time by inflation and how they become poorer as a result.

As illustrated, real income is in the tank, where it was back in the 1960's. True, we take home more dollars (though real wage deflation is taking a toll as our economy becomes more services oriented) than in the 60's, those dollars don't go as far today.

The text book definition of recession is two consecutive quarters of GDP contraction. But since the GDP figure can be goosed by using unrealistically low inflation assumptions, I see GDP portraying the sub par economic growth it portrays as being useless and almost propaganda in its nature. On the other hand, when something like real wages is considered - it is no wonder why the present economic times feel tough. They are. This is a far more practical example of why it feels recession like in the great "out there".

If this chart were to have shown a rise in real income, then we could have a serious conversation about a return of prosperity. But there is no evidence to be found for that in this data series.

The Fiscal Gap is Really Over $222 Trillion Meaning the U.S. has NEGATIVE Net Worth

This is bad news here. In light of this week's release of Household Net Worth data at $62.7 trillion as of the 2nd quarter of this year - DOWN a tad from Q1 - the picture is gloomy. It's not so much that net worth slipped, but that compared to what is known as the "fiscal gap", or Alternative Fiscal Scenario (AFS) from unfunded liabilities at a staggering $222 Trillion that we see just how piled high and deep the country is.. By this measure, the U.S. has a negative net worth of in excess of $100 trillion when you consider that along with the $222 trl AFS...

-There is $16 trl in treasury debt;
-A Fed balance sheet of over $2 trl worth of junk paper to say nothing of the mystery $16 trln given to banks during the height of the financial crisis.

More on the AFS: Blink! U.S. Debt Just Grew by $11 Trillion http://bloom.bg/OMHrbd via @BloombergView

Oh, and the latest household net worth data dump from the Fed merrily assumes that all of that net worth can be  liquidated. Paper worth vs real, future obligations do not portend happy financial times ahead.

And by the way, 68% of the so called net worth is financial assets, or over $51 trl. It doesn't take a rocket scientist to figure out that QE3 is aimed lock stock and barrel at inflating this realm. Good luck to them in keep the inflation bogey man in the closet.

Coordinated Toilet Flushing - A Hyperinflation Story


I have a trillion dollar Zimbabwe note in my desk for kicks and giggles. It is worth less than 1 American dollar. Zimbabwe is the land of hyper inflation and this coordinated toilet flushing is an unintended consequence of out of control monetary policy which exacerbates shortages of anything. 
It sounds silly at first, but there is nothing funny about what has happened in that country. America is at that loss of control-point with QE3. I am not saying that Zimbabwe like hyperinflation is on the way for the U.S., but faster inflation (higher prices) certainly are along with eventual product shortages and all the fun stuff that comes with morphing into a third world financial basket case. Thus far, monetary hyperinflation here has been confined to the banking system. Let's hope it stays that way, or we'll all be flushing too.

Sunday, September 16, 2012

Will High Gasoline Prices Spoil Things for Obama? Will SPR be Used??


9/16/12

There are numerous commentators who are saying last week’s ‘open ended” QE initiative announced by Fed Chairman Ben Bernanke is a deliberate move on the part of the Fed to save the Presidency of Barrack Obama. I won’t jump into that political speculation directly, but I would like to point out that the Fed’s work may be all for naught in the coming months if the price of gasoline hammers consumers to the point of taking their frustrations out on the D.C. incumbents, including the President, on election day.

On September 13th, I commented on the ill timed rise in gasoline for the President:

 “Sorry to my Obama fan readers. But this needs to be said. The high price of gasoline is just the oil industry's way at settling some scores with Obama. How convenient that prices go UP before the election this time? Just bad timing, or planned? The higher prices shall be worth some near term pain, if it can get that guy out of the White House. No one forced the big O to waste so much money on green, or to act as he did with the XL pipeline, or to put the Middle East region in a state of greater tension because he favors the "brotherhood". I could go on and on. Sure, Brent has remained persistently high, but that's just one factor. The recent fizzled storm that shut in some Gulf production is a tiny factor and is over emphasized by the financial press. Sorry to politicize gasoline, but I see this move as more than just a coincidence in an election year. If these prices don't miraculously soon come down, this high profile pocketbook issue might very well tip the scales to Romney who needs all the help he can get.”

I made that comment on my http://www.financialbalderdash.com blog. One subscriber even cancelled after I made the post! Lol. Yes it was on the partisan side – how dare I point out a few failures of our present leader.  

As it is turning out, perhaps it is not a conspiracy by ‘Big Oil’ against Mr. Obama, but one of the first unintended fruits of the world’s central banking policy of unlimited printing. Gasoline is up over a half dollar a gallon in the last two months, or since the European Central Bank moved to a stance of blind creation of reserves (printing).

Did someone forget that as the U.S. and Europe race to fiat currency oblivion that maybe commodities prices, such as gasoline, might just rise?? It makes me chuckle in a disparaging sort of way as these Central Bankers are such fools.

It may very well be that they forgot that in the daily grind for the average person (a majority of whom do not own houses), that the price to fill up a tank to enable the grind to continue might draw more negative scrutiny than the thought of mortgage rates coming down another ½ a point in the coming weeks? Are these policy makers a bunch of schlubs, or what?  One must always consider Unintended consequences and think outside of one’s reality. In the case of the Fed head, I would wonder the last time he actually filled his own car with gas? Or, if he recently has done such an average thing (which I am doubtful of unless he puts on a toupee, sunglasses and skinny jeans to go out incognito), pump price might not resonate in his mind since he could pay any price for gasoline as part of being of the elite class. 

In other words, they either never thought about what could be a brick wall to the QE tricks, or they forgot about the masses who would be hurt by high gasoline and what that could mean for the election outcome if there was pressure put on the Fed to act in September to help the president.  

Obama could very well lose the election come November if gasoline prices continue to trend higher.

The SPR Solution Non Solution

BUT, and this is a big BUT: The president has already talked about using the Strategic Petroleum Reserve (SPR) to attempt to force pump prices lower. This little saga could bring some further surprises, though an SPR gambit to lower gas prices might fail.  Here's why: 

The SPR is intended for real emergencies like a sudden cutoff of overseas of supplies, or to supply crude oil for national defense purposes. The SPR was not intended to be a solution to lower the price of fuel before an election. 

Given the state of the oil industry, a release from the SPR would bump into constrained refinery ability. The solution is not more oil to lower pump prices. Another four years has passed with little progress on the issue of national energy. While I am thinking that Romney would not necessarily make a greater difference over the next four years on the matter, I highly object in the short term for the potential that the SPR may be misused. 

I can already see it now. What was supposed to be an energy savings account (SPR) gets used to try to lower pump prices for the convenience of holding on to political power, setting a new precedent that would fritter the energy savings account away. 

The solution to getting whacked at the gas station would actually be to have a sane Fed, better foreign policy for a more peaceful world and a long term energy plan to reduce the need for oil from most countries that hate us to begin with! But that would be hard to do as the real solution lie in the real of serious structural reform and in today’s society it’s all about taking the easy way out with band aid repair that fail to cure the core problems. 

And when push comes to shove, the situation will boil down to an Administration's power grab and not something aimed directly help people reduce to cost to drive. They will sell it as help to us, but you should know better that it is really help for them. 

Nothing would surprise me anymore – even a vain attempt by the present Administration to use the SPR for political gain. If they do, they should be wary of unintended consequences. Stay tuned.

Thursday, September 13, 2012

My Brief Take on the High Post Labor Day Gasoline Price

Sorry to my Obama fan readers. But this needs to be said. The high price of gasoline is just the oil industry's way at settling some scores with Obama. How convenient that prices go UP before the election this time? Just bad timing, or planned? The higher prices shall be worth some near term pain, if it can get that guy out of the White House. No one forced the big O to waste so much money on green, or to act as he did with the XL pipeline, or to put the Middle East region in a state of greater tension because he favors the "brotherhood". I could go on and on. Sure, Brent has remained persistently high, but that's just one factor. The recent fizzled storm that shut in some Gulf production is a tiny factor and is over emphasized by the financial press. Sorry to politicize gasoline, but I see this move as more than just a coincidence in an election year. If these prices don't miraculously soon come down, this high profile pocketbook issue might very well tip the scales to Romney who needs all the help he can get.

We Live in a Twisted Financial Reality - CAMI - Museum Quality US Coins for the Advanced Collector

We Live in a Twisted Financial Reality - CAMI - Museum Quality US Coins for the Advanced Collector

Tuesday, September 11, 2012