On the Brink of the Greatest Bubble of Our Time?

Interview with Mike Maloney

by Vedran Vuk, Casey Research:

Dear Reader,

Two types of music seem to draw the most animosity – country and rap. Rarely does anyone have a strong hatred of pure rock n’ roll, but pretty much everyone hates either rap or country music. Personally, I was once a huge fan of country, but over time, I’ve become tired and frankly disgusted with it.

At first, I really enjoyed a lot of the lyrics in country music. They’re wholesome, with good values and often a decent message. On the opposite spectrum, rap music often celebrates sloth, indecency, and criminal behavior. However, after some deep thought, there’s something much better about rap than country. It’s not the actual songs or even the lyrics – it’s the realism. Many people aren’t comfortable with the truth; hence, that’s why there’s so much hatred of the music.

Read More @ CaseyResearch.com

The Gold Price Conspiracy Uncle Sam Doesn't Want You to Know About

Peter Krauth writes: Is it really so preposterous to believe the United States and Europe would conspire to keep pole position in the global financial system?

I don't think so - and neither does China.

That much was revealed in a diplomatic cable recently uncovered by Wikileaks.

According to the 2009 cable from the U.S. embassy, China believes the United States and Europe have, as a matter of policy, suppressed the price of gold to discourage its use as a reserve currency.

And there's a pretty compelling case to be made for a gold price conspiracy.

The Gold Price Conspiracy
The cable summarized several commentaries in Chinese news media sources on April 28, 2009.

"The U.S. and Europe have always suppressed the rising price of gold," it reads. "They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency."

According to the cable, China believes that by building its gold reserves, it can not only safeguard itself against the declining value of the dollar, but encourage central banks around the world to expand their gold purchases, as well.

"China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold," the cable said. "Large gold reserves are also beneficial in promoting the internationalization of the RMB."

Now, if all we had were the Chinese claiming the U.S. and Europe were suppressing gold prices, it would be easy to disregard as superficial propaganda.

But in fact, there's evidence that supports this claim.

In the decade between 1999 and 2009, central banks - dominated by the West - were net sellers of gold in every single year. And that's despite the fact that gold in that time soared from $250 an ounce to $1,200 per ounce - a nearly 400% gain.

Then there's the infamous "Brown Bottom."

Between 1999 and 2002, Gordon Brown, then U.K. Chancellor of the Exchequer (and later Prime Minister), decided to sell nearly half of his nation's gold reserves. At the time, just the advance notice of these substantial sales drove gold's price down from $282.40 an ounce to $252.80.

Those gold sales yielded an average price of $275 an ounce, raising a total of $3.5 billion. Today, those 395 tons of gold would be valued more than $19 billion.

You have to admit, it doesn't make a whole lot of sense to sell a solid asset whose price is moving steadily higher each year - especially when the United Kingdom's debt problem then wasn't nearly as bad as it is today.

The answer: Because there's a conspiracy afoot.

Gold Dust on The Fed's Hands
Here's more damning evidence.

A U.S. District Court this year ordered the U.S. Federal Reserve to disclose to the Gold Anti-Trust Action Committee (GATA) the minutes of an April 1997 meeting of the G-10 Gold and Foreign Exchange Committee, as compiled by an official Federal Reserve Bank of New York.

And it's a bombshell. The minutes suggest that officials from the G-10 governments and their central banks were, in fact, conspired to synchronize their policies to affect the gold market.

It turns out that U.S. policymakers aren't just worried about preserving the dollar's role as the world's main currency reserve. They're also worried about the effects higher gold prices could have on the nation's debt burden.

The minutes include comments by a U.S. delegate identified only as "Fisher," which is likely Peter. R. Fisher, head of open market operations and foreign exchange trading for the New York Fed.

Fisher, the minutes say, made the case that rising gold prices would increase U.S. debt.

Fisher "explained that U.S. gold belongs to the Treasury. However, the Treasury had issued gold certificates to the Reserve Banks, and so gold also appears on the Federal Reserve balance sheet," the minutes say. "If there were to be a revaluation of gold, the certificates would also be revalued upwards; however [to prevent the Fed's balance sheet from expanding] this would lead to sales of government securities. So the net benefit to Treasury would need to be carefully calculated, since sales of government securities would expand the public portfolio of government securities and hence also expand the Treasury's debt-servicing burden."

Indeed, Fisher's remarks are an open acknowledgement that the United States has an interest in suppressing the price of gold.

So, clearly, there is a growing body of evidence that Western governments, central banks, and even some of the largest investment banks have a vested interest to subdue the price of gold. Furthermore, they've already acted on behalf of that interest.

But now the tide is turning. The dollar and the euro are on the ropes and emerging markets have been steadily increasing their gold purchases.

While authorities in developed countries are making it more difficult for investors to build gold holdings, large China and other developing markets are doing just the opposite. They're actually encouraging their populations to adopt physical gold and gold investments like futures and exchange-traded funds (ETFs).

So I think it's high time the average Westerner looked to the East for cues on wealth preservation and their attitude towards gold.

Investing 101 — How to Choose a Financial Adviser

Do you still think going it alone makes sense in this crazy market environment?

Bond yields are sinking, stocks are in full retreat and gold reversed course. The crosswinds are blowing hard, making it difficult to navigate the markets. The key to success is a disciplined plan implemented and managed by a professional financial adviser.

Once you have made the choice of working with a professional financial adviser, the next step is finding the right one for you. And there are many factors to consider.

Choosing a financial adviser is an intimately personal decision, so take care before making a final selection. Interview and meet with at least potential potential candidates, and preferably as many as five.

That might seem like a lot of work, but at the end of the day, the time will be well spent.

Hunt candidates by asking friends, family and co-workers for referrals. If those closest to you are happy with their adviser, you might be, too.

Next, use the Internet to help you find potential advisers. Look for articles about local advisers, or even better, articles written by local advisers. Sometimes the best advisers are those quite visible in the community. Seek them out during your search.

Once you have a pool of prospective advisers, the search then turns to specifics. Gather as much information as you can about the advisers. What fees do they charge? What is their investment philosophy? How accessible is the adviser to clients? What is the adviser’s performance history?

Some advisers do more than others. If you require a detailed financial plan, make sure your adviser will help you. Also find out if the adviser can help you with insurance products. Things like life insurance, annuities and long-term care products are complex. Make sure your adviser is well-versed in such things.

Finally, it is time to make a choice. If personal preference is most important to you, pick the adviser you feel most comfortable with. A better option would be to take emotion out of the choice. Go with the adviser you think will best get you from point A to point B based on the information you gathered.

Whatever you do, take your time. While it is easy to fire an adviser, making the right choice at the start will pay off for you and your portfolio over the long term.

Is a Home Still a Good Investment?

Most baby boomers have had good experiences owning homes for the last 30 years. I bought my first house in 1977. When I sold it in 1982, I joked to my friends (but it was almost true) that I'd made more money from my house than I had from my job. Despite a substantial loss in the past four years, over the last three decades I've still made a lot of money owning my own home.

For most of our lives and our parents' lives, owning a home was the American dream. Your house centered you in a stable community and provided a school for your children. In the long run, it was a good financial decision as well. The mortgage and taxes were subsidized by the tax code. And the value of your house generally increased, except for a few brief recessionary periods, and was on an upward trajectory over the long term. The rule of thumb was that is was better to own than to rent, as long as you planned to stay in the house for at least five years.

But that was then. What about now? Housing prices have been falling since 2006, and owning a home has become more of an albatross than an opportunity. People now seem more interested in mobility than stability. They want to retire to a warmer, less expensive place, but they can't sell their home. Some people also want to move to take a job, but their mortgage is under water.

Consider a single woman in her 30s making a good salary who now wonders if she should buy a townhouse. But she's worried. The prices could continue to drop and she might lose her investment. Maybe she'd be better off putting her savings in the stock market, rather than making a down payment. The upfront costs are high, including a down payment, the mortgage, the lawyer, the insurance, and the taxes.

On the other hand, she feels like she is throwing away $1,000 a month to rent an apartment. Renters are not building equity. Plus, many of the people who live in her apartment complex are transient and she'd feel more comfortable if her neighbors were more settled in. Also, while it's nice she doesn't have to worry about maintenance, the landlord often does a quick fix instead of doing the job right. She'd like to fix up the kitchen the way she'd like it, rather than the way the landlord has it.

Whether or not young people should buy homes right now is a difficult decision that doesn't have an easy answer. Above all, the choice of whether to rent or buy is a lifestyle decision. What kind of home and neighborhood does she want to live in, and how long is she going to stay there?

The New York Times offers a calculator that compares the costs of renting and buying. You plug in the price of the property, along with the taxes, your down payment, and the mortgage rate, and compare it to the rent you'd pay for the same place. But as with any calculator, you have to make certain assumptions, chiefly about how much the property will appreciate over the years, and how much the rent will rise.

But, to me, any calculation fails to answer an obvious question. In the long run, how could it possibly be cheaper to rent than buy? When you rent, somebody else owns that property. They're not going to rent it to you for less than what it costs them and they get the tax benefits.

I did the calculations for my old condo, which I sold in 2007, and which now happens to be for rent. If I assume the value of the property will go up 2 percent a year and the rent would increase at the same rate, then the line crosses at four years. If someone moves in and stays for over four years, it's cheaper to own than rent.

In other words, the new rule of thumb is the same as the old rule of thumb. Rent if you think you're going to stay less than four or five years. Buy when you're ready to settle down.

Bernanke’s Plot to Overthrow the US Dollar

09/30/11 Paris, France – Where’s the Bastille…?

The Dow got a boost yesterday — up 143 points.

Gold remained where it was — about $1,617.

Dear Readers know what we think.

The Great Correction has a lot of work to do — there are so many things that need correction. And it will take time to do it. Meanwhile, your goal as an investor is to lose less money than everyone else. He who loses least wins!

Stocks should go down. Real estate should go down. Even gold should go down…as the dollar goes up!

Cash will be king…

…until the revolution.

What kind of revolution? When?

Ah…dear reader…you’re asking a lot from a free service!

But what the heck… We’re happy to tell you what we think. We just hope it’s worth at least what you paid for it.

Here’s the way we see it. Cash is king in a de-leveraging, dis-inflationary, depressing slump. The king should reign for a long time…because it will take a long time to squeeze the excess debt out of the US economy.

But as you know, there’s a lot more going on. While the private sector reduces its debt the public sector adds debt. And the people who run the public sector are activists…determined to de-throne the king. They are plotting treacherous acts of insurrection… They are looking for the Bastille!

Here’s Ben Bernanke, stirring up the mob. Bloomberg reports:

Federal Reserve Chairman Ben S. Bernanke said the US is facing a crisis with a jobless rate at or above 9 percent since April 2009, and that fiscal discipline would help spur the economic recovery.

“This unemployment situation we have, the jobs situation, is really a national crisis,” Bernanke said in response to questions after a speech yesterday in Cleveland. “We’ve had close to 10 percent unemployment now for a number of years and, of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of.” (more)

Gerald Celente : The Crash will happen sometime this Month

Gerald Celente - TruNews - 03 October 2011 : ...and people are buying this , so to answer your question Rick , how long could they keep us from realizing what's going on ? for as long as they keep pulling the strings and they will pull the strings for as long as they can , but someday it is going to come crashing down and we believe the crash is going to happen sometimes this month

Why I'm Still Bullish on Gold and Silver

A little hysteria can go a long way, especially when it concerns financial markets. And with gold prices plunging 15% last month, it almost goes without saying all those SPDR Gold Trust (NYSE: GLD [1]) owners are now biting their nails, wondering whether the three-year rally has finally run its course. After all, the tumble from $1,900 per ounce to $1,650 is the biggest one-month dip we've seen from gold in years. Surely this is a sign the tide has turned, right?

Maybe. More realistically, it's just another blip in a much bigger uptrend.

Nobody was complaining on the way up
The pullback was nasty to be sure. What seems to have been overlooked, however, was the equally oversized run-up gold made before topping out back on Sept. 5. From July 1 to Sept. 5, gold prices soared from $1,487 per ounce to $1,905. That's a 28% rally in just two months, which is the biggest unfettered rally since 2009 (though 2009's 31% rally took four months to complete). In fact, the last time we saw anything as dramatic as this year's third-quarter rally in gold prices was the 51% rally between August of 2007 and March of 2008.

Point being, the size of the gain right in front the pullback left traders little choice but to think defensively and lock in profits at the first sign of trouble. There was just plenty of room to fall.

Gold Prices

The story isn't so different for silver, or for stakeholders in the iShares Silver Trust (NYSE: SLV [2]).

Silver prices fell 31% between Sept. 2 and the end of last week (Sept 30). The selloff was even larger than the 28% dip in April, which came after (and this isn't a typo) an 82% run-up between late January and April 25, when we hit a multidecade high slightly above $50 per ounce. Though silver prices partially rebounded in July and August, let's face it -- silver prices were still burning off the excess from that 82% move earlier in the year. In fact, last month's was the biggest plunge in silver prices since the three-month, 49% implosion in 2008, yet silver is still priced at three times what it was at that low.

Silver Prices

In the grand scheme of things, the exact numbers and dates are irrelevant. The message is far more important, particularly for those who are still hanging on to the SPDR [3] Gold Trust or the iShares Silver Trust exchange-traded funds (ETFs). And the message is this: this is nothing we haven't seen and survived before. Indeed, we've survived worse.

Oh, the meltdown both precious metals made in 2008 certainly felt insurmountable at the time, but both came roaring back within a matter of weeks to dole out three more years of higher highs. Has anything really changed between now and then?

What about the strength of the U.S. dollar?
Gold bears are quick to point out that the U.S. dollar started to rebound in late September, coinciding with and even prompting the pullback from silver, gold and most other commodities. Bluntly though, the punishment doesn't come anywhere near fitting the crime.

The U.S. Dollar Index [4] has gained just under 7% since Aug. 26 -- a very minor move relative to all its gyrations since 2008. More dramatic moves the dollar has made of late include the 19% rally in late 2008, during which gold only fell 23% (though silver got cut in half during that period). The greenback [5] rallied 17% in early 2010, and silver prices didn't budge during that rally -- meanwhile, gold prices actually moved higher. But now, all of a sudden, the sawbuck makes a very modest bullish [6] move and gold and silver are nothing but liabilities? Sorry, the relationship is too inconsistent to use as the reason for gold's demise now.

U.S. Dollar Index Compared with Gold, Silver Prices

No, the most plausible explanation for the sudden setback is the most obvious one -- gold and silver were overbought in the short run, and it was time to pay the piper. The longer-term uptrend for each has most definitely not been broken, though. Moreover, silver and gold could (and likely will) give up more ground in the near-term future without snapping their overall uptrend. Moreover, the dollar's trend still isn't exactly decidedly bullish. The charts above make that quite clear.

It's certainly not a very esoteric explanation. But that doesn't mean it's not the right one.

Risks to Consider: Unfortunately, a mob mentality within the precious metals market [7] has replaced rhyme and reason for the better part of 2011, and that herd-like effect was still in effect as of last week. Never underestimate the potential madness of a crowd to lead it to strange conclusions.

Simultaneously, neither gold nor silver are at the bottom of their bullish channels yet, so there is room to give up more ground before hitting a solid floor.

Action to take --> While the recent intense volatility may prolong a recovery in gold and silver prices, the same underlying fundamentals that pushed metal prices this far are still in place. These forces include a generally-weak U.S. dollar, brewing inflation [8], a Federal Reserve that doesn't even want a stronger dollar, and -- more recently -- fear of a globalcurrency [9] collapse. These are all bullish for gold, yet none are poised to evaporate anytime soon. This recent dip and any subsequent dip from gold -- especially if that lower support line around $1,400 is met -- is an attractive entry opportunity as the metal continues its erratic march toward multiple price targets in the $2,200/$2,300 per ounce range. That's at least 33% higher than where it's priced now.

As for silver, it doesn't benefit from inflation worries and currency wars the way gold does, and is the more speculative of the two at this point. It's still in a broad uptrend, though, so it's suitable if you have a higher risk tolerance.