Saturday, June 25, 2011

U.S. Horrific National Debt, Are You Prepared For The Coming Economic Collapse And The Next Great Depression?

It really is hard to find the words to describe the true horror of the national debt. The U.S. government has been on the greatest debt binge in all of human history, and a day of reckoning is coming that is going to be so painful that it is going to shock America to the core. We have lived so far above our means for so long that none of us really has any concept of what "normal" is like anymore. The United States has enjoyed the greatest party in the history of the world, but now this decades-old party is ending and the bills are coming due. It was Dick Cheney who famously said that "deficits don't matter". Well, try telling that to the nation of Greece right about now. The horror that Greece is just beginning to experience is a preview of what is going to happen to us as well. Only when it happens to us it is going to be so much worse, because when we go down we are going to bring the entire global financial system down with us.

What we have done to future generations is beyond sickening. Previous generations entrusted to us the greatest economic machine in the history of the world and we destroyed it. Now we are leaving to our children and our grandchildren an economic future that has been totally wiped out and a national debt of more than 14 trillion dollars that we expect them to repay.

In Washington D.C. these days, there is a lot of talk about the debt ceiling. But whatever the politicians do, it is not going to solve our debt problems. If the debt ceiling does not get raised, we move the financial pain into the present. World financial markets would crash and that would be followed by a devastating economic nightmare.

If we do raise the debt ceiling, that will "kick the can down the road" a little bit farther. However, world financial markets will still crash eventually and our eventual economic nightmare will be even worse.

Well, can't we just "inflate our way" out of debt?

No, unfortunately things are just not that easy. If we try to inflate our way out of debt, interest rates will likely rise just as quickly as inflation does, and that would be absolutely catastrophic.

Before interest rates even reached 20% we would hit a point where it would take every single dollar taken in by the federal government just to pay the interest on the national debt.

Meanwhile, rapidly rising inflation would devastate the value of all of your bank accounts and every other single financial asset that you own.

So no, inflating our way out of debt is not going to work.

At the moment, the U.S. federal government is able to borrow gigantic quantities of money at super low interest rates.

When that changes, all hell is going to be unleashed.

The following are 41 statistics about the national debt that are almost too crazy to believe....

1 - As of June 20th, the U.S. national debt was $14,344,524,186,068.19.

2 - 30 years ago, the U.S. national debt was approximately 14 times smaller.

3 - It took from the presidency of George Washington to the presidency of Ronald Reagan for the U.S. government to accumulate one trillion dollars of debt.

4 - Since then, we have added more than 13 trillion dollars of additional debt.

5 - The United States government is responsible for more than a third of all the government debt in the entire world.

6 - If you divide up the national debt equally among all U.S. households, each one owes over $125,000.

7 - Mandatory federal spending is going to surpass total federal revenue for the first time ever in this fiscal year. That was not supposed to happen until 50 years from now.

8 - Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.

9 - The federal government has borrowed 29,660 more dollars per household since Barack Obama signed the economic stimulus law.

10 - During Barack Obama's first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

11 - The U.S. national debt is currently rising by well over 4 billion dollars every single day.

12 - The U.S. government is borrowing over 2 million more dollars every single minute.

13 - The U.S. government borrows an average of about 168 million dollarsevery single hour.

14 - The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011. Thanks to George W. Bush, Barack Obama and the U.S. Congress, U.S. taxpayers are guaranteeing that debt. This is debt that is not even included in the $14.3 trillion national debt figure.

15 - Some experts estimate that the unfunded liabilities of the U.S. government for programs such as Social Security and Medicare are in the neighborhood of60 trillion dollars. Other experts claim that the total for federal government unfunded liabilities could be well over $100 trillion. But what almost everyone agrees on is that it is going to be virtually impossible to even come close to meeting all of those obligations.

16 - The U.S. government currently has to borrow approximately 41 cents of every single dollar that it spends.

17 - The total compensation that the federal government workforce earned last year came to a grand total of approximately 447 billion dollars.

18 - The level of government waste in this country is absolutely mind blowing. For example, the Department of Health and Human Services has just announced a brand new $500 million program that will, among other things, seek to solve the problem of 5-year-old children that "can't sit still" in a kindergarten classroom.

19 - In the past, the U.S. government has spent $2.6 million dollars to study the drinking habits of Chinese prostitutes and $400,000 dollars to pay researchers to cruise bars in Buenos Aires, Argentina to find out why gay men engage in risky sexual behavior when drunk.

20 - The cost for the first week of airstrikes on Libya was 600 million dollars. Keep in mind that the leader of the opposition in Libya has admitted that his forces contain large numbers of the same "al-Qaeda fighters" that were shooting at American troops in Iraq. So we are going broke and we are helping al-Qaeda take power in Libya at the same time.

21 - Just one day of the war in Afghanistan costs more money than it took to build the entire Pentagon.

22 - In 1980, government transfer payments accounted for just 11.7% of all income. Today, government transfer payments account for 18.4% of all income.

23 - 59 percent of all Americans now receive money from the federal government in one form or another.

24 - Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid.

25 - Back in 1950, each retiree's Social Security benefit was paid for by approximately 16 workers. Today, each retiree's Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.

26 - U.S. households are now actually receiving more money from the U.S. government than they are paying to the government in taxes.

27 - Back in the 1950s, corporate taxes accounted for about 30 percent of all federal revenue. In 2009, corporate taxes accounted for just 6.6 percent.

28 - The U.S. national debt has increased in size for 54 years in a row.

29 - If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion each and every year.

30 - According to a shocking U.S. government report, interest on the national debt and mandatory spending on entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by the year 2019.

31 - A recently revised IMF policy paper entitled “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” projects that U.S. government debt will rise to about 400 percent of GDP by the year 2050.

32 - The U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010.

33 - Approximately one out of every four dollars that the U.S. government borrows goes to pay the interest on the national debt.

34 - It is now being projected that by the year 2021, interest payments on the national debt will amount to $1.1 trillion dollars a year.

35 - If interest rates move up even slightly, the interest on the national debt is going to be a whole lot worse. A recent article in the Huffington Post laid this out really well....

According to a recent note from the sage of Dallas based Hayman Capital, highly respected Kyle Bass, a move back to 5% (2006 levels) in short term interest rates will increase annual U.S. interest expense by almost $700 billion annually. This is against current U.S. government tax revenues of $2.228 trillion (CBO FY 2011 forecast).

36 - If the U.S. national debt (more than 14 trillion dollars) was reduced to a stack of 5 dollar bills, it would reach three quarters of the way to the moon.

37 - A trillion $10 bills, if they were taped end to end, would wrap around the globe more than 380 times. That amount of money would still not be enough to pay off the U.S. national debt.

38 - If Bill Gates gave every penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.

39 - If you were alive when Jesus was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now. But this year alone the U.S. government is going to add more than a trillion dollars to the national debt.

40 - If you went out today and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars.

41 - If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

You might be depressed after reading all of those statistics about the national debt, but there is some good news.

If you would like to help address this problem, the federal government is actually taking online donations that will go towards paying off the national debt.

Try not to laugh.

The national debt is a problem that should have been handled 20 or 30 years ago.

But it wasn't.

So now what we have to look forward to is a very bleak future. Even if we totally scrapped our current monetary system and repudiated the debt, the transition would be "rocky" at best and we would not enjoy anything close to the standard of living that we are enjoying today.

Unfortunately, the vast majority of our politicians in Washington D.C. would never even dream of abandoning the current system. Most of them still totally believe in it.

But this current system is headed for an inevitable collapse. There is no way of getting around it.

Even most of our top politicians are now admitting that our current state of affairs is "unsustainable". They just don't have the guts to do anything about it.

A horrific economic collapse is coming.

It is going to change the world.

You better get ready.

Lindsey Williams & Alex Jones: Earth Shattering Events to Come!!

Alex welcomes back to the show pastor Lindsey Williams. Since Lindsey appeared on the show earlier this year, his prediction about a war in the Middle East expanding into World War 3 are coming true as the U.S. prepares a ground invasion of Libya. 6 parts.

What's Really Driving House Prices In Canada? The Must-See Graph Of The Day...

What's Really Driving House Prices In Canada? The Must-See Graph Of The Day...

We've spent a great deal of time analyzing the drivers of house price appreciation in Canada. We know the usual suspects...the ones that drive house prices in normal times. And we've examined them all and found them wholly unable to account for the unprecedented rise in house prices in Canada: Rents (cities and provinces), Incomes (part 1 and part 2), GDP (part 1 and part 2),Inflation. House prices have massively outpaced them all.

We've also examined the supposed drivers of real estate appreciation: Population growth and immigration. The reality is that these two have a negligible effect on real estate values except in situations where land use regulations are highly restrictive. It's supply and demand, baby! Population growth increases demand, but don't think for a second that our construction industry in Canada isn't just as motivated by profits as any other industry. Demand will not go unmet....unless restrictive land use regulations are in play, in which case they contribute to boom-bust cycles (reference this gem by Leith Van Onselen for an excellent read).

And just for fun, we examined how demographics gave real estate a 0.5% annual tailwind for the past 40 years. That party is now over. Demographics are now estimated to exert a 1% per year drag on house prices going forward. Bummer.

My position has long been that the driver of house price appreciation in Canada over the past decade has been primarily the result of the unprecedented expansion in debt caused by theloosening of CMHC mortgage insurance requirements and the removal of the maximum insurable mortgage ceiling....facilitated by a falling interest rate environment, a new mass perception of the 'investment worthiness' of real estate as an asset class, and the emergence of housing as a form of conspicuous consumption. But if we boiled them all down into one word, it would be this: DEBT! And the pace of debt accumulation is not sustainable... ergo, the pace of house price appreciation is not sustainable. Nor are house prices at current levels relative to underlying fundamentals.

Not convinced? Behold!....presented without further commentary...

house prices canada debt gdp

The Economist - 25 June 2011

The Economist - 25 June 2011
English | PDF | 132 pages | 56.7 Mb

The Economist is a global weekly magazine written for those who share an uncommon interest in being well and broadly informed. Each issue explores domestic and international issues, business, finance, current affairs, science, technology and the arts. Your paid subscription to The Economist also includes unlimited access to and our searchable archive.

SocGen: Stay away from copper now

In its latest quarterly Commodities Review, investment bank Société Générale argues that a bumpy, but safe, landing is likely for the Chinese economy, but that we may not know until late 2013 whether a hard landing has been avoided. The bank doubts, therefore, that investors will be unwilling to run large long positions, in the second half of this year, in commodities with high exposure to the Chinese economy. Among these, of course, number the base metals, of which China accounts for almost 40% of global consumption; SocGen is averse to copper in particular, taking a long-term bearish view on prices, while being rather more neutral on the other major base metals. The exception is tin, for which SocGen is looking for a larger fall between now and 2016 than it is for copper).

This is borne out by events to date. SocGen notes that, among the metal-intensive sectors, China's May auto production was down 4.9% year-on-year - and 12% on a monthly basis while the production in the first five months of the year was up by just 4.9% year-on-year. Furthermore, railway investment plans have undergone an upheaval since the change of Railways Minister in February and the bank understands that at least $100Bn Yuan [$15Bn, or 14%] from the high-speed railway build-out this year. These and other developments, especially increased primary and secondary domestic supply, point to a further sluggishness in Chinese copper imports. These were down substantially in the first five months of the year (partly also as a result of an unfavourable Shanghai-LME spread) and the bank also notes that the amount of copper in bonded warehouses in China is reported at anywhere between 500,000 tonnes and one million tonnes. The arbitrage may also account, at least in part, for the recent increases in copper tonnage in LME warehouses. Although SocGen is looking for some month-on-month improvements in Chinese copper imports in the second half of the year, the growth figures for the full year are likely to be disappointing.

SocGen believes that copper demand elsewhere in the world, which was clearly affected in Q2 by the ripple effect of the disruption in Japan following the tragic events of March, will bounce back to a degree, but the bank remains concerned about patchy recoveries and is looking for global copper consumption growth of 4.4% this year, compared with 9% in 2010.

SocGen is looking for world copper mine production to grow by almost 5% in 2011 and over 7% in 2012, generating a likely surplus of concentrates in 2012 and the market for refined metal is expected to be in surplus in 2013, after a small deficit this year and a market more or less in balance in 2012.

The bank makes the point - indeed it says that "it must be emphasised" that constrained supply, rather than strong global demand growth, has been the key driver in the copper price dynamic over the past decade. SocGen points out, for example, that copper demand growth averaged only 2.2% per annum over the past decade, considerably below the rate for other base metals. The removal of this supply constraint is therefore expected to weaken the price-supportive matrix and SocGen avers that investors have been becoming increasingly aware of this.

There is significant growth in sight in the copper mining sector, a development that SocGen suggests may not always have been appreciated among market observers. SocGen is looking for African mine production to grow by 17% and Chinese growth to register 8% this year; further forward, there is a sharp increase scheduled for next year and, even allowing for potential disruptions, mine supply in 2012 may well exceed 18.5M tonnes. With the concentrate market easing, 2012 may well see significantly improved Treatment and Refining Charges for smelters and refiners.

This, allied to "mounting market fears of a US double dip", along with the continued increase in copper mining output, leads to a near-term aversion to copper. SocGen doubts that prices can make new highs in the current economic cycle and is now discounting the possibility of a copper ETF, and indeed does "not expect any large physical ETF in the short or medium term".

Trader alert: A huge opportunity could be setting up in energy right now

With Crude Oil getting decimated this morning, I couldn’t think of a better time to take a look at the Natural Gas to Crude Oil Ratio. This thing has been in a disastrous tailspin for as long as I can remember. This has been one of the best pairs trades out there with Natural Gas failing to find support with every chance it gets. Here is the longer term chart of $UNG vs $USO:

With the Crude Oil destruction this morning, the opposite trade is trying to finally catch a bid. The chart below shows the $UNG:$USO pairs trade battling with the 200 day moving average in a descending triangle-type formation. The Bullish divergence in RSI this Spring sparked a nice rally in this ratio and it appears to be consolidating those gains right now. RSI seems pretty positive here and the upward sloping 50 day moving average is another good thing. The trouble here lies with the declining 200 day. Typically, it is difficult to penetrate a downward sloping 200 day moving average for a sustained period of time. I would guess that a little bit more consolidation is necessary before a new uptrend can start.

I think we can watch this ratio right now for some potential entry points. I have no position yet but will be looking to put something on when the right risk/reward presents itself.

20 Tips For Surviving Economic Meltdown

Gaye Levy, Contributing Writer
Activist Post

As difficult as it may be to fathom, the current lousy economy may not be the worst case scenario. All I have to do is look around and be observant to see that there is a strong likelihood that another, more significant economic meltdown is imminent.

Why? Here are some of the reasons:
Continued lack of employment opportunities for those that are currently unemployed of underemployed
Freakish storms and other natural disasters affecting the viability of farmland resulting in increased food prices
Out of sight fuel costs affecting transportation and heating costs
Rising costs of healthcare
Devaluation of homes and real property
An increase is crimes against persons (knifings, murders, even road rage) indicate a barometer of frustration and malcontent among the populace
These are just a few indicators that an economic meltdown of horrific proportions could be on its way. (And since I am an economics knucklehead, I won’t get into the technical reasons having to do with the way monetary policies affect the economy. To me, the anecdotal and real-time experiences with real people are good enough).

Oh sure, there are pockets of economic growth here and there. But for the most part, I see and sense a feeling of helplessness and hopelessness when it comes to money and matters relating to the economy. As much as I hate to admit it, even I feel that the middle class life I have known most of my adult years will never be the same. Pretty depressing when you think about it.

What to do?

Prepping and learning to be self-sufficient are a good start. The problem, though, is that you can store water and food, stow away some cash or even gold, and insulate yourself from short-term off the grid situations. But what happens if the economic meltdown lasts longer than the six months or the year you have prepared for?

I feel that the only solution is to embrace a lifestyle where consumption is kept to a minimum. And to that end, here are some tips that I have been noodling around (in no particular order).

1. Reduce housing costs: This may mean taking in borders or sharing your home with extended family members. Are you renting a large home or large apartment? Take it down a notch.

2. Manage food costs: Stock up when you see a great sale. For example, I just purchased 10 cake mixes for 89 cents each. I saved over a buck a piece. I know, $10 may not seem like a lot but it adds up.

3. Create a mini-store in your own home and shop from your own supplies: Your pantry will become your friend when money or supplies are short. Don’t forget sundry items and personal items as well as food when it comes to stocking your home based mini-market.

4. Only purchase foods that you will eat: This is related to #3 above. Don’t purchase canned Spam if you will not eat it. That is just silly.

5. Limit eating out: For years, eating out has been a special occasion for Survival Husband and myself. That has been a preference that has now become a necessity. Eating out, to me, is one of the biggest money rat holes out there.

6. Reduce the number of vehicles you own: Do you really need a fleet with the associated costs of insurance and maintenance? Instead of an expensive vehicle, get yourself a scooter or motorcycle as a second vehicle and be smug at getting 60 mpg. Better yet, walk or bike instead of driving your car.

7. Purchase used goods: You can find some steals on Craigslist or Ebay. Or, if that is not your thing, go to garage sales and thrift shops. I am not suggesting that you purchase everything used, but think about your purchases and when practical, buy used and pocket the change.

8. Become self-entertaining: Read (use the library for heaven’s sake), watch videos (same thing, use the library as a great source of DVDs), find some puzzles you enjoy, hike, bike, dance. There are many things you can do to entertain yourself while spending very little money.

9. Reduce communications costs: Now tell me, do you really need 100 cable channels? And what about that smartphone that is costing $150 a month. Scale back as test – you can always add the extra services – and costs – back later if you simply have-to-have them.

10. Earn extra income: Sell your unused stuff on Ebay. Get a part time job if you have a skill. Flip burgers. Become a sales clerk or a barista. Anything to bring in a few extra bucks.

11. Barter your time for goods or services: Walk dogs, water plants, help out with someone’s garden. Be creative.

12. Grow food: This does not take up a lot of space (as I have recently learned). Practice Square Foot Gardening and you will be amazed at how much you can grow in a tiny area.

13. Use what you have: Become Mr. Fix-it and make repairs instead of buying new. Find new uses for old things.

14. Avoid debt: If cash is short this week, wait until next week. Live within your means even it means that you will eat beans and rice for a few days. Put a moratorium on clothing purchases for one season.

15. Secure the homestead: Firearms, weapons, pepper spray or even a baseball bat. The choice is yours. Don’t brag about what you have and do everything you can to make sure you and your supplies are safe.

16. Have an escape plan: I am a big believer in the concept of shelter in place but if you need to evacuate, be ready. Have a plan so all family members know how to communicate with each other and where to meet. Learn about escape routes in your area and practice getting out of dodge.

17. Stay healthy: Eat good food and not a lot of junk. Get physical exercise and try to maintain a decent weight. (I recently read that a good rule-of-thumb guideline is to take you height and divide it by two. Your waistline should be no larger than the resulting number.) Overweight? Try the Dukan Diet to quick start your long term weight loss plan.

19. Recognize that frugal is not a dirty word: It is a smart word. Frugal is not being cheap, it is being sensible. Being frugal now will allow you to get the most mileage out of your funds with something left over for a rainy day – or for the day when an economic meltdown occurs.

20. Prepare your mindset: If you plan for the worse and it never happens, be joyful. On the other hand, if you plan for the worse and you are prepared, you will reduce the possibility of panic in the short term and depression in the long term.

Frugal as a Lifestyle Design

So there you have it. This is the lifestyle design that I have currently embraced not so much because I am worried and afraid, but because I don’t want to be worried and afraid. I want to be able to enjoy life and plan to do so by learning to do things not buy things, learning to smell the roses, and learning to enjoy the simple pleasures provided by a walk along the water with my husband and my dog.

Our world and our society is changing. Don’t be left behind because you forgot to prepare for a time when frugality becomes the norm.

Brazilian Real Declines on Concern the European Debt Contagion May Spread

Brazil’s real fell for a third week as European leaders’ vow to stave off a Greek default failed to reduce concern the debt crisis may spread.

The real declined for a third straight week, falling 0.4 percent to 1.6048 per dollar, from 1.5978 on June 17. The real plunged 0.9 percent today. The Brazilian market was closed yesterday for a national holiday.

European Union leaders vowed to stave off a Greek default as long as Prime Minister George Papandreou pushes through a package of budget cuts next week, pledging to do whatever it takes to stabilize the euro economy. Greece’s next hurdle is to shepherd 78 billion euros ($111 billion) of austerity measures through parliament, after yesterday’s endorsement of the program by experts from the European Commission, theEuropean Central Bank and the International Monetary Fund.

“The spreads on sovereign bonds of the peripheral countries -- Italy, Spain, Greece -- are rising sharply today,” Alfredo Barbutti, an economist at Liquidez DTVM Ltda in Sao Paulo, said in a telephone interview. “The market still sees risks.”

The euro fell versus most of its 16 most-traded counterparts amid speculation the Greek austerity plan won’t resolve its sovereign-debt crisis. The euro weakened 0.5 percent versus the dollar to $1.4188.

The yield on 10-year Spanish bonds rose five basis points to 5.68 percent. Yields on Italy’s 10-year benchmark bond rose four basis points to 4.98 percent.

Futures Contracts

Yields on interest-rate futures contracts maturing after September fell as investors bet the European debt crisis will hurt global growth, helping Brazil’s central bank to tame inflation, said Zeina Latif, Latin American strategist at RBS Securities Inc.

“This Greek issue is causing a lot of concern and you still can’t see the light at the end of the tunnel,” Latif said in a telephone interview from Sao Paulo. The drop in commodities yesterday and growth concerns in the U.S. are combining with the Greek debt crisis to lower interest-rate futures yields, she said.

The yield on the interest-rate futures contract due in January fell two basis point, or 0.02 percentage point, to 12.41 percent. The contract due in January 2013 fell five basis points to 12.51 percent.

Chinese Inflation Threat a Paper Tiger?

China's Premier Wen Jiabao says fears his country cannot control inflation are unfounded.
"There is concern as to whether China can rein in inflation and sustain its rapid development," Wen writes in the Financial Times. "My answer is an emphatic yes."
China, notes Wen, has made capping price rises the priority of macroeconomic regulation and introduced a host of targeted policies.
“These have worked,” says Wen. The overall price level is within a controllable range and is expected to drop steadily."
Wen says one notable result of China’s response to the crisis is that the nation has maintained steady and fast growth.
“Between 2008 and 2010, China’s gross domestic product grew at an annual rate of 9.6, 9.2 and 10.3 percent, respectively.” Wen says. “The consumer prices index over the same period was 5.9, -0.7 and 3.3 percent; 33.8m new urban jobs were created. China has maintained sound growth this year.”
Wen also points out that China’s output of grain, of which he says there is now an abundant supply, has increased for seven years in a row, plus which China has built 10,800 km of new railways, about 186,411 miles of new roads and installed 210m kilowatts of new power capacity.
“We have boosted support for science and technology, including by encouraging companies to carry out technological upgrading and innovation,” Wen says. “There is an oversupply of main industrial products. Imports are growing fast. We are confident price rises will be firmly under control this year.”

Peter Schiff - US Set to Default, Silver Headed to $200

With gold back above $1,550 and silver firming, today King World News interviewed Peter Schiff, President of Europacific Capital. When asked about the mining shares Schiff stated, “Well I think they are throwing these stocks away. I mean gold is less than $20 from a record high, yet if you look at the HUI (Gold Bugs Index) a 16% rally is what it would need just for the index to get back to where it was when gold was less than $20 higher than its current price. You look at some of the big gold mining companies, Barrick Gold is trading at 10 times forward earnings, 10 times earnings!

I remember when that stock was 30 to 40 times earnings, yet here we have a huge bull market in the price of gold and the PE’s have compressed to 10. I think anyone who believes there is a bubble in precious metals, all you have to do is look at the PE’s of these mining stocks and realize this isn’t a bubble at all. This is a huge wall of worry and everybody is more fearful than greedy in the gold mining market.” (more)