Bernanke is creating trillions of beautiful U.S. bucks. So plentiful...and so beautiful. I'm selling all my physical silver and EXK shares so I can get my hands on more of them beautiful bucks! God luv 'em! I don't care anymore that our U.S. debts can't ever be paid off! I don't care that "fiscal cliffs" are overrated dramas. And I don't care that promises made to "Baby Boomers" via social security and medicare are underfunded by $100 trillion! If wall street manipulators cry out that gold and silver are barbarous relics of the past, then they must be right. I'm selling all my EXK shares to get my hands on some of that wonderful fiat. NOT!!!
Richard Russell, the "godfather of investment letters" blog on Fiat money:
"No fiat money has lasted for as long as a century. The US has had prior experience with fiat money -- the Civil War Greenbacks, the “Bills of Credit” of the original American colonies, the ill-fated Continentals during the Civil War. None of these have survived, and neither will the Federal Reserve notes that we now refer to as “dollars.”
I dislike falling back on the morality argument, but consider this. I may work a lifetime for five million dollars. Yet some academic working for the Federal Reserve can press some keys on a computer and create ten billion dollars instantly without working up a sweat. Is the ten billion dollars he creates moral money? Did anyone work for the money? Did anyone take a risk for the money? Did anyone drop a bead of sweat for it? No, then I claim it is immoral and actually evil money, and as such it is doomed.
The only power evil has is the power to destroy itself. I affirm that the Federal Reserve note is doomed. When the Federal Reserve note goes down the drain, all fiat money in the world will go down with it. Today information travels around the world with the speed of NOW. People around the planet will see that fiat money is a fantasy and a counterfeit fraud foisted upon them by unconscionable and unscrupulous bankers. It is then that the crowd will turn to gold, in much the way that people turned to gold back in 1978 to 1980."
It's not just the bankers, it's also the politicians who are owned by the bankers, didn't start out that way, but that's where we are. We got good ol' #$%$ Nixon to thank for that. And the Supreme Court who never weighed in on that one. Bet those judges would prefer to be paid in the barbarous relic at this point.
Speaking of evil, #$%$ Cheney used to campaign against Democrats saying, "Character counts". Then we found out about his two drunk driving convictions. And he was probably drunk when he shot his friend in the face. Why do folks think he was drunk? Hmm. Most guys with multiple DUIs have a drinking problem, or a character problem, or both.
I think Romney would have made a fine President, but it was not the right time to elect a Wall Street financial executive. Now the GOP is turning on Chuck Hagel, he has the trouble of thinking for himself, and saying things like he's a US Senator, not an Israeli senator. Wow, what was he thinking when he said that?
I saw Ted Cruz last night on the PBS news hour. His approach to all the illegals immigrants living here: Let's enforce the laws on the books. Well Texas is getting browner by the day, don't think he can survive many terms with that mentality. His dad came from Cuba, but since he's here now, guess it's time to slam the door and deport tens of millions. OK that's not gonna to happen.
The GOP is very slow to adapt. They used to lead in areas like climate change and acid rain. Not anymore. The environment is officially a dirty word. And banning assault weapons? Forget about it. The GOP would just like to issue assault weapons to every white male, crazy or not, because crazy folks got constitutional rights too, That would be a lot more money to the NRA and more $$$ for the gun rights crowd. What a windfall. What's the worst that could happen?
Sentiment: Strong Buy
I tried to post a reasoned response to your post, but it was nixed by censorship.
In it I was talking about certain proposed rule changes at a certain Currency office about a certain asset becoming a zero risk asset. I haven't seen any news about that rule change actually taking effect yet. It was supposed to happen Jan 1, 2013. Where would be a good place to look for evidence of the rule actually being changed?
As BIS notes in its progress report on Basel III implementation:
At national discretion, gold bullion held in own vaults or on an allocated basis to the extent backed by bullion liabilities can be treated as cash and therefore risk-weighted at 0%.
As Russ Norman – CEO of Sharps Pixley – wrote last month:
Banking capital adequacy ratios, once the domain of banking specialists are set to become centre stage for the gold market as well as the wider economy. In response to the global banking crisis the rules are to be tightened in terms of the assets that banks must hold and this is potentially going to very much favour gold. The Basel Committee for Bank Supervision (or BCBS) as part of the BIS are arguably the highest authority in banking supervision and it is their role to define capital requirements through the forthcoming Basel III rules.
In short, they are meeting to consider making gold a Tier 1 asset for commercial banks with 100% weighting rather than a Tier 3 asset with just a 50% risk weighting as it does today. ["Tier 1 assets" basically mean the most stable, bedrock risk-free type of assets which a bank can hold. The Basel III framework is an international framework which will require all banks to hold more Tier 1 assets, in an attempt to reduce future bank meltdowns.] At the same time they are set to increase the amount of capital banks must set aside as well. A double win potentially.
Hitherto banks have been much dis-incentivised to hold gold while being encouraged to hold arguably riskier assets such as equity capital, currencies and debt instruments, none of which have fared too well in the crisis. With this potential change in capital adequacy requirements. bank purchases of gold would drive up its value relative to other high quality qualifying assets, increasing its desirability for regulatory purposes further. This should result in gold being re-priced to bring it on a par with all other high quality assets.
Some posters on other boards had concerns earlier today. I don't often view other boards anymore, but I thought about posting on one old board to say don't sell at the open. Reason being that the CAD and AUS would place pressure on the USD, limiting movement. I also like the honest non-ego, non-competitive attitudes of longs on this board.
If EXK is bought it will have to happen by late summer or early fall as anyone buying EXK will need some financing. Short term, this makes the case of a buyout stronger. Some of the INTs that have increased shares in EXK are professionals at buying bond and interest rate investments. Interesting, but there may not be a buyer. I increased my position in PETS as that company has moved to the top of the M&A list, and they would get a nice price - (article). I don't think that MCP will be bought out.
There appears to be little/none selling of gold by the banks in London and Europe that the Rothschild family controls. Settlement rates (overnight) are showing up to a 4% move off normal variation, but that appears to be mostly bonds. I'm not sure about Koch and company. Some of the cartel had to be selling, but American banks won't release gold selling information until they issue their yearly.
I attribute the weakness in gold to rising lease rates, in which central banks loan their gold out to profit from a yield. Since December gold lease rates climbed from a negative 0.20% a year to 0.37% in the first 3 days of this year. What a timed set up to the PM investor.
Governments want a low gold price to make national currencies look good. Gold had a low borrow interest rate ( carry trade) from central banks going into 2013. The carry trade is a gift to banks (cartel) from the FED. Most of the recent selling of gold could have only been done by the cartel with orders from the US government. Gold wasn't returned to the central banks. The US cartel is GS, JPM, Chase and Deutsche who recently said gold to 2000. What #$%$. Check out who their largest private clients are. Then check out who in Washington are private clients of these banks.
For the government to keep gold low is impossible as fiat currency will continue to be debased.