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Eric Sprott Interview By King World News: Must Hear
King World News presents another great interview, this time with innovative hedge fund manager, and financial skeptic, Eric Sprott, best known recently for bringing an alternative to the GLD and SLV paper domination, with his innovative gold and silver physical ETFs. In the below interview, Sprott shares a wealth of insight into Keynesianism, on the staggering and rising debt load, on the collapse in every single economic metric and the imminent arrival of the double dip (sorry Apple fans, iPad sales are not a leading indicator; at best they serve as a delinquent mortgage tracker), on QE1 and the upcoming QE2. Sprott's view that "nobody has a solution here, nor should they have a solution here: I think we need to rid ourselves of the theory we need to keep adding debt all the time to keep growing." Sprott agrees with the Zero Hedge principle, that when dealing with broken Keynesian economics, you need to shock the system - "you need to hit bottom." As Sprott says: "You need to really shake the system in order for the system to change, and so far there has been absolutely no change in the system." And, of course, Sprott discusses gold, gold manipulation, and paper gold. 30 minutes of must hear observations.
Full interview can be found here.
Highlights from the King World News interview:
On the failure of Keynesian principles:
"One of the studies concluded that whereas we used to get something like 60 cents back on the dollar of government expenditures, today it’s negative 40 cents. So it’s pretty dismal when you think that everyone’s expectation is that this government’s going to bail us out, and as they are trying to bail us out, we’re actually losing ground because at the end of the year you still have the debt.”
On the inevitability of QE2 and on the $10 billion a week debt issuance clip:
“I’m debating whether QE2 is happening while we speak, because the Fed’s balance sheet continues to grow, even though they said they are going to stop buying most instruments at the end of March. But every week it keeps growing by $10 billion. I mean $10 billion a week is half a trillion dollars a year.”
On the economic double dip:
“You know we’ve had to go from obviously greenshoots, to what we’re looking at today is almost like cliff diving. And some of the data points are just so shockingly bad...Consumer confidence numbers...The rate of decline was just awful, the rate of decline was incredible...We have obviously hit the wall.”
On the ongoing collapse in the jobs market:
“Here we haven’t had any net employment increases and now we’re starting a waterfall down. So if we keep losing jobs and their are no policy tools left, how could anyone imagine that you turn it back up again.”
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Heyyyyy. I stopped paying my mortgage for 18 months but I didn't buy any Ishit and never will. I'm offended.
Juicy, how long can one go without paying their mortgage before they are foreclosed upon? 18 months seems like a long time but if you're under water on your mortgage and can save 18 months of payments, it sounds like a sweet deal.
He can go indefinitely if the bank can not find the original copy of the loan.
Take the BLUE PILL?
http://www.freeandclearin90.com/
I bought my house from a bank 13 years ago. The owner hadn't made his 1st or 2nd mortgage payment in over 24 months at that time and neither lender had started foreclosure proceedings. His big mistake was not paying the property taxes for 1.5 yrs. Those government fuckers want their money and they want it now! The bank had to buy the house back for what they were owed as there were no bidders.
...and, since the majority of these folks have their property taxes escrowed, they won't be paying them either. The banks have to pay the taxes if they want to postpone the bankruptcy pain and take the loss onto their books.
Well, watch out, under any circumstances. In 1993, I bought a new house in NJ originally listed at 900k; it had languished for two years before I bought it for around 650k. It was theoretically supposed to have the same guarantees from the builder that the house would have had originally--punch list, etc. I was never able to enforce the punchlist, which was not massive, yet was under a builder guarantee, and was part of the contract. The asshole builder said, effectively, So sue me! And he had nimbly managed to rid himself of all assets, including the sailboat, the sails of which he'd stored in the house for years, and were still there when we moved in.
That was it...18 months.
18 months?
Juicy, you're an animal.
In some hard-hit areas here in california, the banks have no interest in foreclosing. There are several reasons.
In the worst areas, maybe one in three or every other house is behind in payments or has stopped paying altogether. If the bank evicts, the house will be looted and vandalized. I mean, people will take the copper wire out of the walls. This doesn't benefit the bank.
Also, due to the high concentration of non-performing loans in these areas, if the banks were to forclose en masse, prices would tank.
So they are stuck. Can't sell the houses, and can't let them sit vacant, so you might as well let the deadbeats stay there and at least mow the lawn and water the garden and whatnot.
This is mostly based on stories told to me by co-workers. I can't point you at data, but it seems very plausible to me.
You might think they could foreclose and rent the house out, but the problem with that is that banks are not set up to be in the property management business.
Take the Blue Pill?
http://www.freeandclearin90.com/
You mean you didn't turn in the keys and vacate?
Are you then considering adverse possession of the premises?
Or are you just rolling with 'something for nothing', or shelter without pay?
The mortgagor should write (or have written) to the bank asking for ADEQUATE ASSURANCE OF DUE PERFORMANCE. It is likely that the bank claimed to have lent money to the mortgagor when in fact all they did was create a bookkeeping entry. This was proven in the Credit River case (look it up). You have no obligation to honour a contract and may very well be in a position to terminate the contract if the other party has not performed their part in the contract.
Banks are engaging in wholescale, systematic and systemic fraud in most (if not all) mortgage contracts.
The mortgagor is not getting something for nothing, the bank is! The mortgagor provides value via their deposit and signature, all the bank does is create a bookkeeping entry. It is the bank that is getting something for nothing.
I don't understand this reasoning. If the bank gives the loan to the buyer then the agreed upon price is paid to the seller by the bank. After which the bank charges interest for the money it paid for the house to the seller. Right? So how is it just an entry on the books?
The banks are also forging documents. They are now showing up in court with the ink still wet.
One of the studies concluded that whereas we used to get something like 60 cents back on the dollar of government expenditures, today it’s negative 40 cents.
All Ponzi schemes collapse in the end. The bagholder will be 99% of America who will be left poor, cold and destitute. GS execs will have their cake and eat it too.
"The bagholder will be 99% of America who will be left poor, cold and destitute. GS execs will have their cake and eat it too."
Until the hungry start to eat the GS execs.........
mmm, calamari
Leo,
1.I dont think a brilliant mind as ES needs your advice
2. Irronically your stupid solar stocks get mostly and worlwide governement subsidies (or taxpayer money), precisely what ES is criticizing. On the other hand, you belong to these people who dont question taxpayer money as long it is at your advantage.
3. ZH is not the right forum for a mainstream guy like you.
4. Continue to watch CNBC and the lies they tell day by day.
In my country the payback time of solar panels is barely five years due to all government subsidies and regulations in favor of green energy. Without all this money the payback time would be about 20 years, if energy prices don't go totally bonkers.
xamax,
Unlike you, I've met Eric Sprott. He's smart, gutsy, but brilliant is not a term I use lightly, and I have never met a "brilliant" hedge fund manager (and I've allocated to the best of the best). Only one man in my life struck me as brilliant, Charles Taylor, a political philosopher at McGill University. I used to audit his classes for fun, just sit there and have intellectual orgasms. That man is brilliant, a true Canadian treasure.
Leo,
Dont know Mr.Taylor, as well as I never met ES. What is irritating me is your belief in the solar industry coz until today, it has not been proven that it's economically viable. While the greens want 20% less CO2 in the next years, the related costs in Europe alone will top 1 Trillion (Euro). Who is supposed to pay that ? Correct..... the Taxpayer. And here we are again at the source of the problem, that debt level will balloon. But nobody cares and certainly not the not-so-brilliant politicians we have in Europe. The solar industry will be the next bubble and add worlwide a few trillions more of debt. But who cares, today's mentality being: Others will pay for it !
Don't hate the player, hate the game. Seriously, I think ZH can use as many contrarian views as possible. If Leo represents the longs, that's great. Intellectual diversity is good.
Traderjoe,
Agree on the diversity. What really bothers me about the longs is that they only survive thanks to money printing by governments and then trumpet with their profits as the result of their analytical skills.
Your diversity brain washing and dumbing down is now complete. Moron.
We don't need "diversity" of opinion. We need intellectual and accurate information. Not a rainbow of crap.
Oh, your information is so solid that you resort to calling people "moron".
I'm rubber and you're glue...
first interesting comment I've seen you post here Leo
Your cconsideration of a Canadian University professor, over a self made Canadian Billionaire, as briliant, ironically eliminates you from achieving that same elusive accolade.
+100
Hendry / Sachs anyone?
I won't talk about Leo, he's busy eating the second part of the strawberry orb of his chocolate and strawberry ice cream cone, and should be left in peace.
Dude, that's funny!
Albert Einstein was a professor who never became wealthy. He devoted his life to other ambitions.
By your standard of comparison, those who pursue anything but wealth can never be called brilliant.
Please show me where I said that?!?
I and many others know of Eric Sprott but not of the unknown professor.
So If I had to award one of the two with the title of brilliant, I'd give it to Mr. Sprott.
Charles Taylor is a world renown political philosopher who deservedly won the Order of Canada. He has taught all around the world, including at Oxford, Harvard and Princeton. To compare this man to Eric Sprott or any other hedge fund manager is a pure insult to him. Taylor is rich, coming from a wealthy family, but his political leanings were always left of center. He is an intellectual tour de force, taught by another giant in the field, Isaiah Berlin.
All of you who equate wealth with 'brilliance" are totally off. Soros is a billionaire, arguably the smartest hedge fund manager of our time, but even he knows not to compare himself to geniuses like Isaiah Berlin. Bill Gates is the richest man alive, but even he knows there are brilliant people out there, much smarter than him, who are a lot poorer than him.
There are many examples of this : Thomas Edison and Nikola Tesla. Edison was a much better business man, but Tesla was a better inventor, but poor business man.
Hunh, by that standard 'being a better businessman' means being a ruthless, self promoting swindler. Just ask Elisha Gray. Kinda sounds like the classic 'Neoclassical' economic theory that everyone acts in their own best self-interest, as long as any negative consequences to others can't be traced back to them. IE The closer you are to a clever sociopath the further you'll go.
Time to 'etch a sketch' this bitch.
Regards
Just saying Tesla was head and shoulders above Edison in brilliance, but this doesn't equal notariety or wealth neccesarily. Who do we remember Edison or Tesla yet we use Tesla's AC system still today not Edison's DC system. Tesla only recently was awarded being the first to invent the radio which was formerly attributed to Marconi. I could go on and on about Tesla, but I will cut it short.
An with all that I wholeheartedly agree. Tesla probably had the answer to all of our energy problems, but unless oil runs out, or those who now hoard Tesla's secrets find a way to profit from them, we'll never know what they were.
So you can see that what I took issue with was your not your respect for genius, but your definition of a 'better' businessman.
Regards
Much smarter than "he" (is)....
Agreed. I highly recommend Charles Taylor's book "The Sources of the Self." Absolutely revelatory. Note: Charles Taylor the Canadian philosopher is not to be confused with Charles Taylor the genocidal Liberian rebel.
Taylor's another philosophical/intellectual jerk off.
A tall midget amongst mental midgets.
(Oops, I hope i didn't offend any little people, like philosophers or taxpayers)
Leo, you strike me as a guy that listens to Cher alone on a Friday drinking a bottle of $11 Pinot. You do, don't you.
I knew it.
Stop spanking your monkey silly, it simply will not grow an extra inch.
Nice trend, unfortunately the options have no liquidity...
This is the unspoken tragedy. Without government subsidies solar companies would be forced to improve the technology so that the rest of us wouldn't need subsidies in the first place.
The return on natural gas and oil is over 250 horsepower per acre. Solar is a paltry 35hp per acre. And what guarantee do you get that the panels will provide output a decade from now?
The solar industry is like the country Greece. They got fat at the public trough and failed to do the hard work now that provides everyone a better life in the future. That doesn't mean that FatPhuck Solar, Inc., LazyDickhead Solar Corp & ProgressiveLiar Solar Inc. stock prices won't go up.
The clean energy mafia around Al gore know the trick and there are enough stupid people on earth to buy it. For the politics, it's smart to be a bit "green", so they vote for subsidies. But I agree with you that a few years will pass until also this bubble will burst.
The reality is that fossil fuel energy is subsidized in a myriad of ways that make it MORE expensive than green energy like solar. Consider how we subzidize the large automobile lifestyle, the stand alone ranch/home/suburban lifestyle and the cost of foreign wars that don't show up in lower prices at the pump. Fossil fuel energy is in fact more costly than solar etc. If all the indirect subsidies are added up. What should be obvious to even the dullest of the oil self interest naysayers is that fossil fuel dependance and the related urban sprawl lifestyle is unsustainable. The Gulf disaster and the browning of another piece of the planet is only the most recent unquantifiable but real cost of this dependance.
"Consider how we subzidize the....the stand alone ranch"
Please explain this to me. I have never taken a subsidy for my ranching operation. Tried to get government help once from the NRCS. They are a squirrely bunch, ended up sending them packing!
I think that if you are looking for subsidies - look to the lagre corporate ranch operations. They get millions.
truly stupid makes a great point. people DISS alternative energy all the time..yet conveniently LIE about the current SUBSIDIES and TAX breaks big oil and gas already get such as depletion/depreciation and a slew of others
than they use unfair post subsidy #s to compare to solar/wind/getc
Leo, love your market timing stuff. If you calssified this as a ST trade, I'd go for it, but since (as Eric says) all fiat currencies eventually go to zero, I don't think this is the time to be getting long anything. Now, if we get QEII and there is not a revolt amonst the sheeple (each class - those with jobs, those in foreclosed homes and those falling off the dole) you may have a shot. Of course they could get put on the GS conviction buy list and become one of the top 5 that dominate market liquidity, but those odds are small as well. I'll keep an eye on it as a ST play though. Thanks.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=1129702,2&cmd=...[s204555545],iday[false]&disp=G
We need to print our way out of this while we still have the trust of those suckers buying our currency! :)
they seem to have been following your advice for about 20 months
Question:
we used to get something like 60 cents back on the dollar of government expenditures, today it’s negative 40 cents.
I've heard this elsewhere and I have wondered, does this mean that previously when government spent a dollar it generated an additional 60 cents in GDP or does it mean that there was a loss (to someone) of 40 cents? Does a dollar currently spent by government subtract 40 cents or $1.40 cents?
I guess the question is, what happens with that original dollar spent by the government? Where does it go and what does it do?
Just trying to understand the metric, although it is obvious to me that numbers are heading in an undesirable direction.
Thanks.
I am not a government statistician/economist, but...
You can look at the idea of "generating 60 cents in GDP per dollar spent" (read: borrowed) as a cost of 40 cents per dollar wasted upon the overhead of bureaucracy (and interest), meaning that only 60 cents of every dollar spent was on some good or service contributing the GDP.
Today though, spending (borrowing) the same dollar carries an overhead of 140 cents, meaning that the marginal utility of government spending (debt) is now negative, going only to overhead, and to service existing debt. They can still get away with it for now though because of the time element which allows them to kick the can just a little farther down the road, hopefully, until they are long gone. In the meantime, just look at who it is that consumes this overhead (political class) and you'll instantly see why they fancy this form of destruction.
To answer your question, GDP is lowered by 40 cents for each dollar spent, but since that dollar was likely borrowed in the first place, it too will have to be "repaid," thus creating the downward spiral that over time has led GDP growth per dollar spent from +60 cents to -40 cents.
Of course, it is all much, much, worse than it appears if you believe, like I do, that government expenditures should be subtracted from GDP, rather than added to it, since they represent wealth that has either been removed from the productive economy in the form of taxes, or from the debasing of the currency thanks to the free-money machine known as the US Treasury/Federal Reserve.
That's a lot to chew on, thank you for the analysis.
I agree with you "that government expenditures should be subtracted from GDP, rather than added to it." I recall reading something recently which said that the increasing amount of interest payable on the ballooning debt is actually counted as being a increase in GDP.
"I agree with you "that government expenditures should be subtracted from GDP, rather than added to it.""
Ummm, if we did that - wouldn't be still be in a <depression> recession? I like hearing that all is well, we are in the recovery phase now, just look at our positive GDP!
If Eric Sprott wasn't Canadian, I'd want him to run for president.
Dream 2012 ticket: Sprott/Hendry
You're just begging for an obligatory Birther rejoinder.
Favored unconstitutional ticket featuring dead people: Mises/Rand 2012
You caught me. Didn't take long. See below.
If we're going to feature dead people then I'll go with:
Washington/Jefferson 2012
Aaron Burr and Andrew Jackson.
The zombie solution to FEDREZ.
Holy shit that's brilliant. And I don't use that term loosely.
Joe Montana and Patrick Willis. Could happen , both still alive.
but an Indonesian is ok?
"If Eric Sprott wasn't Canadian"
Wasn't he "born" in Hawaii too?
Solar panels will be the new currency
My pants need bigger pockets. Go long cargo pants.
Ben Davies on Max Keiser Report.
Max Keiser interviews Ben Davies on gold, silver suppression, BIS swapshttp://maxkeiser.com/2010/07/20/kr61-keiser-report-markets-finance-gold/...
Wish I could here a serious take on the benefits & drawbacks of Sprott's PHYS. I've been dabbling a little - but would like to find out more about exactly how "physical" the fund really is.
with eric sprott's reputation. his fund will be as 'physical' as naked mud wrestling i would imagine.( the fund that is, not the wrestling, nevermind).
What some may consider downside, is the minimum redemption is around $250K.
Well, if you think gold is going to double & had the $125K downstroke ... you could expect to take possession, right?
Wish I could here a serious take on the benefits & drawbacks of Sprott's PHYS. I've been dabbling a little - but would like to find out more about exactly how "physical" the fund really is.
PHYS represents real assets (gold) but sells in the open market for a premium of 5% to 20% over its intrinsic value.
This is OK if you buy on dull days when the premium is low.
All this is laid out on his web site. The intrinsic value, market value and premium.
Google it. There's a ton of bad 'reviews' out there that point out the fallacies of it. You can't really exchange for physical unless you are a big investor. Essentially it's a closed-end fund that trades at a premium to NAV. It could easily go to a discount, which would mean you would lose all of the premium and then some. He's done one dilutive follow-on offering already that took out some premium. I don't think the fund is as shareholder-friendly as people think. Also, you can actually by 1 oz coins for less premium and store them yourself.
It seems like it might be an interesting trading vehicle though. At one point the premium to GLD was over 20%. Now closer to 8%.
Its good for qualified assets - i.e., IRA's.
I've read a lot of the literature & reviews, and still don't have a good feel for it. I know it WAS selling at a big premium... but look at the price now.
I can't imagine it going to a discount for long... can you?
Thanks all for the answers.
Anywho - I bought a bunch of shares at 11.50 about two weeks ago, and doubled down at around 10.85 today. I guess we'll see what happens.
thanks TD. well worth the time.
This is the unspoken tragedy. Without government subsidies solar companies would be forced to improve the technology so that the rest of us wouldn't need subsidies in the first place.
The return on natural gas and oil is over 250 horsepower per acre. Solar is a paltry 35hp per acre. And what guarantee do you get that the panels will provide output a decade from now?
The solar industry is like the country Greece. They got fat at the public trough and failed to do the hard work now that provides everyone a better life in the future. That doesn't mean that FatPhuck Solar, Inc., LazyDickhead Solar Corp & ProgressiveLiar Solar Inc. stock prices won't go up.
That's the second time you've posted the same thing, son. It sucked the first time. It still sucks. The problem with your logic, son, is that the return on natural gas and oil is ZERO everywhere where there is no oil and gas. The sun pretty much shines everywhere, at least in my part of the world. End subsidies, for sure, but don't deny the future. At some point oil and gas are going to be prohibitively expensive. I hope to have an option before then.
"The sun pretty much shines everywhere"
Except at night, or when you are standing under a solar panel, then you are standing where the sund doesn't shine. There are other "green" sources of renewable power that return far more KW/ft2 when you are looking at foorprint size.
I like wind power, and those new Hydrogen power cells look pretty interesting too.
+1 ,Yeah hydrogen is the fuel of the future. we just need the banks that keep financing these gas guzzlers to go belly up then we'll see some progress, because as I look around I don't see anyone boycotting the car companies... but, it will probably happen when gas hits 5$ a gallon.
I pretty much agree with you, except that I don't see solar as a viable replacement for liquid fuels.
Liquid fuels like gasoline and diesel are convenient for a lot of reasons. Storage transport, etc. Airplanes and boats can't really run from battery power alone, and will probably continue to use liquid fuels.
So I think we will have to find ways to synthesize or produce them no matter what else we do. I don't see solar as scaling well enough to do this, just because it would require such large solar farms. I am envisioning energy from nuclear or coal being used to synthesize liquid fuels.
A greener option is to use algae (possibly genetically modified) to fix carbon out of the air into some kind of oil that can be refined to high quality fuels. If done in intensive fashion, maybe this could scale. You know, have half of nevada and arizona dedicated to algal fuel production.
Solar will continue to be a good choice for remote areas where there is no grid, and where fuel transportation is difficult. Storage batteries will be required unless the power is only needed when the sun is shining.
For a good time sync "Highroller" to when King says "Lets talk about gold", and eat mushrooms or take a rip of Iowaska :D
http://www.youtube.com/watch?v=KQ9Wj8GyrDU
"Our condolences to his wife and unborn child."
Seconded.
I want to hear Geopol's take on this.
37 Year Old Greek Investigative Journalist And Blogger Murdered
"One of the studies concluded that whereas we used to get something like 60 cents back on the dollar of government expenditures, today it’s negative 40 cents. So it’s pretty dismal when you think that everyone’s expectation is that this government’s going to bail us out, and as they are trying to bail us out, we’re actually losing ground because at the end of the year you still have the debt.”
I would like to see some proof that this statement has any veracity.
Have a gander at what the Z1 revealed when applied to the marginal utility of debt (should have included a nod to Professor Antal Fekete):
http://economicedge.blogspot.com/2010/03/most-important-chart-of-century...
That analysis is faulty because it assumes that existing debt has not been defaulted. The fact is that huge piles of debt are no longer collectible and merely exist as book entries. That chart is pure fiction that does not reflect the real world. When change in GDP turns negative, debt also falls as defaults rise. There is no such a thing as negative correlation between GDP and Debt.
Nice working theory you got there. Since book entries are fiction and thus don't really exist, what makes you think your correlation holds up to real vice nominal GDP?
http://market-ticker.denninger.net/archives/2515-Crack-Smoking-Is-Getting-More-Popular.html
You want to also call that chart bogus, I am sure you will get a lively debate on that blog's forum.
"and the upcoming QE2. "
Everyone is so sure of this, it's probably wrong.
PROOF OF GOLD PRICE SUPPRESSION
Gold & the US Dollar
By Adrian Douglas
http://www.gata.org/files/AdrianDouglasProofOfGoldPriceSuppression-07-20...
Great stuff but too many formulas for a dipshit like me. These last 4 paragraphs are all you need to know:
The Trade of the Century
The sick joke of the Gold cartel is that whether you hold dollars or unallocated
gold you only have 2.3% of gold backing! However, the trade of the century is to
buy actual physical metal with your dollars, or if you have unallocated gold to
demand physical delivery. In this way you can trade something with 2.3% gold
backing for an investment that is 100% gold.
More and more large investors and funds are waking up to the fraud of fractional
reserve bullion banking and how it suppresses the price of the very asset they
have invested in. As a result there is a growing trend away from unallocated
bullion toward allocated bullion and storing it with entities who are not affiliated
with the bullion banks. This is creating a short squeeze of the physical market.
Such things are hushed up by the bullion banks but there are the tell tale signs.
The IMF has been surreptitiously selling large tonnages of gold each month since
February to undisclosed recipients. The recent massive gold swap of 380 tonnes
of gold between the BIS and commercial banks is without a doubt an attempt to
address a lack of physical gold liquidity (see “Mysterious BIS gold swaps are
likely a bullion bank bailout” ). This gold swap involves more gold than the Bank
of England sold, it involves more gold than the IMF has so far sold out of its
earmarked 400 tonnes. The fact that it was “discovered” in a footnote of the BIS
quarterly report is evidence that this news is being hushed up.
Goldman Sachs is recommending that gold mining companies hedge their gold
production! This would be the worst trade of the century. Why would anyone bet
that the US dollar that only has 2.3% gold backing could be more valuable than
mine output that is 100% gold? Hedging would be betting that the Gold Cartel
can ramp up their selling of paper gold even more so that the market price is
suppressed even more. All indications are that the opposite is true. Look at figure
1. Clearly FRR has been in an increasing trend since 2001; this means that there
is a trend that less paper gold is being sold or that physical gold sales are
increasing, or both. The increasing fractional reserve ratio suggests the price
suppression game is coming to an end. The last thing a mining company should
do is to hedge production. But when has Goldman Sachs made
recommendations in their clients’ best interests?
The writing is on the wall that physical demand is so strong it is straining the
system. If you own unallocated bullion you likely only own about 2.3% of what
you think you own. The window of opportunity to get your investment to be 100%
bullion is closing rapidly.
Goldman are blithering duches! Barricks Gold Miners sold their Hedge Book last year (this at the height of the price, December 1-why did the price of gold go down then? Yes, the Largest Hedge Book in the world was sold)! That and their Hedge Book was larger than all the other mining companies combined! It was 3/4 of the market. This is like asking me if I will loan a bum an OZ of gold while he goes around the corner to piss! 'Oh sure Mr. Bum, here is an OZ of gold for you to have while you go where I can't see you.' Wait a minute..........
Jimi: take it to its logical conclusion...GS is out there pimping cash-strapped mining companies to sell their gold forward. Hmmmm, I wonder who is buying that gold forward??? GS, perhaps???
If you ever needed confirmation that gold is headed much higher, there you have it. GS is desperately trying to protect itself AND profit at the same time. Sound familiar? Does the recently settled DoJ case ring a bell??
Nice link. The fractional reserve wine merchant analogy will be a nice additional piece to wave in the face of the whole 'but if the price is manipulated when Au goes down, then why isn't Au manipulated when it goes up?' non sequitur.
Regards
Has anybody thought that the Forbes 400 will completely change in the next 10 years as people like Sprott, Einhorn and John Paulson see their net worth explode upward?
Are there other resources I should be buying other than gold and silver?
please tell me you're kidding
arable land with potable water. Good luck.
PHYS Colt, Winchester, Remington, Glock, Federal, Kalishnikov, Weatherby, S&W, Ruger, et al.
JPM and Ginne Mae buybacks, very interesting:
http://www.housingwire.com/2010/07/20/ginnie-mae-buybacks-cause-jpmorgan-reo-assets-to-nearly-triple
I apologize for my lack of knowledge on this, but is this as if our govt is in a sense acting like an AIG? The banks buy insurance against MBS they purchase and then when the assets fail within these MBS they just collect "insurance money" from the govt (ginnie mae)?
More like the Gov (GNMA) told JPM to take their flaming bag of dog dirt back if they know what is good for them. Humorous, considering that Morgan is reducing their loan loss provision to get a good print at the same time that their potential losses are about to mushroom. No - the bagholder has "returned to sender" in this instance, just like the stamp pictured above the article.
all these 'Must Reads' on ZH are all the same and from the same side of the fence.. I think the only 'Must Read' would be someone like Ben or Timmy saying these same things...
do you play poker? why don't you 'read' ben or timmy's facial expressions or gestures while they tell everyone "what they're really thinking." HA! KEEP WATCHING CNBC BUDDY!
ever hear the term 'preaching to the choir' ??
after a few years, it is time for action.. local or otherwise but just watching the same people say the same things and have no effect is just pandering
azw, i watched a congressional hearing on c-span where they questioned first hank paulson and then geither.
paulson was stuttering every single word, sweating profusley and really looked like he was pissing himself.
geither however was cool as a cucumber. my guess he is a complete sociopath unable to feel fear or any other human emotion.
but thats just a guess thou. he could also be an honest public servant with nothing to hide.
Uhm, Leo may be right. So long as solar has government support it might make it. Eventually it should become self sufficient. The real question is whether the artificial support remains.
One could argue all day long if the supports are good or bad. But remember we in the USA have access to cheap oil because of our strong military. What would a barrel of oil cost if we charged a protection tax to maintain a military presence in the middle east?
Same goes for the Nuclear industry. How much government support helped get that industry off the ground? You know it was a lot. Not saying it was wrong but I bet it was a lot more than solar subsidies.
Tax motor fuel at $10 Federal and similarly tax other fossil fuel derivatives to reflect opportunity cost and reduce dependance on foreign sources.
And the thing is.....Solar (includes Wind) still wouldn't pencil without government subsidy. Because you can't manufacture, transport, maintain equipment and deliver electricity without substantial fossil fuel imput.
Point of order. Sprott was a billionaire when his stock listed at 10.00. Today it is 3.33. References to the billionaire Sprott are erroneous.
[T]he US funded its World War II effort largely by raising taxes and tapping into Americans' personal savings. Both of those avenues are nowhere near as promising today as they were in 1941.
Current tax burdens are now much higher than they were before the War, so raising taxes today would be much more difficult. The "Victory Tax" of 1942 sharply raised income tax rates and allowed, for the first time in our nation's history, taxes to be withheld directly from paychecks. The hikes were originally intended to be temporary but have, of course, far outlasted their purpose. It would be unlikely that Americans would accept higher taxes today to fund a real war, let alone a pretend one. That leaves savings, which was the War's primary source of funding. During the War, Americans purchased approximately $186 billion worth of war bonds, accounting for nearly three quarters of total federal spending from 1941–1945. Today, we don't have the savings to pay for our current spending, let alone any significant expansions. Even if we could convince the Chinese to loan us a large chunk of the $20 trillion (on top of the $1 trillion we already owe them), how could we ever pay them back?
If all of this seems absurd, that's because it is. War is a great way to destroy things, but it's a terrible way to grow an economy.
What is often overlooked is that war creates hardship, and not just for those who endure the violence. Yes, US production increased during the Second World War, but very little of that was of use to anyone but soldiers. Consumers can't use a bomber to take a family vacation.
The goal of an economy is to raise living standards. During the War, as productive output was diverted to the front, consumer goods were rationed back home and living standards fell. While it's easy to see the numerical results of wartime spending, it is much harder to see the civilian cutbacks that enabled it.
The truth is that we cannot spend our way out of our current crisis, no matter how great a spectacle we create. Even if we spent on infrastructure rather than war, we would still have no means to fund it, and there would still be no guarantee that the economy would grow as a result.
What we need is more savings, more free enterprise, more production, and a return of American competitiveness in the global economy. Yes, we need Rosie the Riveter – but this time she has to work in the private sector making things that don't explode. To do this, we need less government spending, not more.
Peter Schiff is president of Euro Pacific Capital.
http://www.lewrockwell.com/schiff/schiff102.html
Isn't this the same guy you all think is a joke? Basically everyone here alleges he runs a gold ETF with imaginary gold backing. WTF, now you're on all fours sucking him off. PICK ONE!
I think you have mistaken Sprott for Paulson.
PHYS.
PHYS(Sprott) is considered valid and GLD (Paulson) is diluting the gold value.
Yadda, yadda, yadda. ZH members in full discussion of "wealth". I´ll define wealth according to the comedian Chris Rock : Shaq ( Shaqille O´Neal - basketball player ) is rich. The white man who signs his check … is wealthy. "Ah, here you go, Shaq. Go buy yourself a bouncing car. Bling, bling!"
So while we you are discussing the implications of John Maynard Keynes, I am long EUR/JPY, long ES, short T Notes, long German Bunds, long Gilts, short copper, short Gold, short USD/JPY, long GS, long BAC, long AAPl...and make some serious $$$$ ...hum Euro.....hum JPY....
Good luck trading !
Long FDAX, SMI, FTSE, CAC 40...
Also the german finance minister Schaeuble said the german economy should confine growth.
You can read it here in german:
http://www.cash.ch/news/boerse_ausland/economicsdefinanzminister_schaeub...
Did you hear about shark loans in China. Chech out this.http://israelfinancialexpert.blogspot.com/2010/06/special-report-secret-...