Opening the Mint to Gold and Silver
A sequel to "The Double Whammy of Geopolitical Global Gold Games"
Antal E. Fekete
Gold Standard University Live
Feb 6, 2008
In my last article I suggested that the superpowers China, Russia, and the United States may be, without they knowing it, racing towards reopening their Mints to the monetary metals. The governments of these countries are like the heroes of Greek tragedies: they are drawn to their fate by destiny. There is no way for them to avoid Kismet, regardless of what they do. Many readers have asked me to explain what the term "opening the Mint to the unlimited coinage of gold and silver free of seigniorage charges" means.
I should start by stating that the Mint is a monetary institution far more important than the Central Bank. It is an ancient and venerable institution. The Central Bank is a relatively new invention, hardly venerable. It was conceived to make ordinary people absorb the unpaid and unpayable debt of kings. The importance of the Mint is not to be found in its altogether negligible role of coining small change, the so-called subsidiary coinage which people use to make small purchases. The Mint is all-important because it is designed to produce real money. The origin of the Mint is intertwined with religion. From the point of view of political economy, the Mint is a reminder of the fact that, ultimately, real money is created (and extinguished) by the people and not by the government, or banks approved by the government. For example, the U.S. Constitution reserves the power to create money directly to the people themselves who convert gold and silver at the Mint into the coin of the realm (and extinguish money by melting it down). This is a power like habeas corpus that cannot be delegated, still less usurped. If the government grabs it, then, in the admirable phrase of Malcolm Muggeridge, it becomes the power of habeas cadaver. The Mint is the symbol of Constitutional Money, the only kind not subject to manipulation.
SIGNS OF THE TIMES - FEBRUARY 5, 2008
Feb 6, 2008
The blaming of a $7 billion hit to SoGen on one trader seems to be taking our old observation that "The bigger the trading loss - the more unauthorized the trade" to hitherto unimaginable levels.
The full story is not out yet. However, considering the enormity of widespread losses, dire exclamations would be natural, but have been subdued, or perhaps we missed some. Or maybe, the lack is indicating that the worst will be discovered over the next hill.
"Credit Woes Chip at Banks"
"Even as the big banks crank out double-digit earnings gains, weakening in credit quality is showing up."
-Wall Street Journal, January 18, 2007
"Conservative Investors Line Up For Junk Bonds"
"The junk-bond market is undergoing a sort of gentrification, appealing to more conservative investors, who like many in the current low-yield environment, are starved for higher returns."
-Wall Street Journal, January 20, 2007
The old "reaching for the extra 1/8th in yield" is always and inevitably a killer. Well, the best that can be said for the exposure is that they were onside for a few months as the yield and spreads went the consensus way until May when the yield had declined from 9.75% to 9.25%. With this the spread narrowed to a record 4.18%.
Now the yield is 14.32%, which represents a plunge from 106 to 71, or 35 points. Not nice, and there is a lot further to go as eventually many bonds will be quoted in parts per million (ppm), rather than as percentage of par. And the spread has now reached 10 percentage points over treasuries.
Stock Markets: We have had the month of January as a possible low for the initial phase of forced liquidation of suddenly insupportable positions in the stock markets. This was global and dislocated most sectors.
Using the Nasdaq, the "crash" ran for the typical 55 trading days to Wednesday, January 22. With this accomplished, the rebound could run into March and retrace some 40% to 50% of the loss. It is worth emphasizing that the break followed mounting problems in the credit markets, which change is first in the order in ending a boom and starting a cyclical contraction. The irony is that the next step on the way is the break in the stock market, which is inevitably followed by the economy rolling over.
Earnings usually turn with commodities, and those who "study" the economy to determine the course of the stock market are working with a self-imposed and costly handicap.
While there could be unsettling news items, the general market could recover to a tradable high in the next 6 to 8 weeks.
Gold Sector: Technically gold's nominal price has been acting well. The correction down to the 20-day moving average at around the third week in January, was expected to be followed by continuation to beyond 905. The correction low was 868 on January 22 and the rally made it to 942 yesterday.
Needless to say, gold has been gathering more widespread popularity - even wistfulness amongst those following orthodox theories about portfolio management. So, where do we go from here?
One aspect is that it is yet another rotation into the latest fashionable game. This may be so, but our view is that some of the move is due to increased investment demand with the onset of the credit contraction. This shows up in the real price of gold, which reached a cyclical low in May at 143. This, of course, is when the credit markets reversed and our gold/commodities index has rallied to 230 this week.
However, in the past week the senior gold indexes have not kept pace with the bullion move, suggesting that the sector could have a brief rest.
Obama Forces Scuttle Bush
Cheney Impeachment Drive
Obama Candidacy Means No Impeachment Of Bush-Cheney
By Webster Tarpley
Wondering why Congressman Kucinich has withdrawn his impeachment resolution against Cheney, and dropped out of impeachment in general? Wondering why the Los Angeles impeachment center has decided to liquidate itself and shut down? Wondering why impeachment meetups across the US are folding? Wondering why so many left-liberal spokesmen are dropping the impeachment issue like a hot potato?
All signs suggest that the demagogic needs of the Obama presidential campaign provide the answer. Impeachment is being sabotaged by left-wing Democrats now moving to support Obama so as to spare the messianic Illinois senator the political embarrassment of having to comment on a serious impeachment effort, which his craven rejection of political struggle makes a taboo. In effect, Obama's phobia against impeachment is even stronger than Hillary's.
As is well known, Obama's fatuous utopian rhetoric promises a golden age and earthly paradise of political harmony in which all real conflicts will be magically neutralized and submerged by the senator's personal charisma. Above all, partisan political clashes will be forbidden. Well, the impeachment of Bush-Cheney is a vital necessity for the future survival of representative government in this country, but carrying it out will necessarily be a rather acrimonious and partisan business. Obama cannot tolerate such a messy process, which might interfere with his ability to float like a seraph above the ignorant armies who clash by night. Struggle in any form is not part of Obama's playbook; it might upset Goldman Sachs, Soros, and his other Wall Street contributors to say nothing of the fussy independent voters upon whom Obama's future rests. It might not play well in the wealthy suburbs. It might spoil his carefully cultivated apolitical, post-partisan image.
Therefore, it is clear, the word has gone out to Obama's leftist backers: impeachment must be dumped, betrayed, sandbagged, and sabotaged without further ado. That is what is now happening. Congressman Kucinich shocked his supporters by telling them to support Obama on the second go-round in the Iowa caucuses. Now he has dropped out of the race and abandoned his own signature issue.
Drudge Report Cans Willie Nelson Story
9/11 revelations briefly flirted with popular news website's front page, quickly removed
Paul Joseph Watson
Tuesday, February 5th, 2008
Willie Nelson's explosive take on 9/11, that the collapse of the twin towers and Building 7 looked like Las Vegas-style implosions, has largely been ignored by the medis thus far, though it briefly flirted with the front page of the Drudge Report before quickly being canned.
About an hour after we released the story, members of our forum alerted us to the fact that our headline had been posted on the front page of the Drudge Report, which ranks as one of the biggest news websites in America and competes for traffic with the New York Times and the Washington Post.
Though it was not linked to our website, the headline "Willie Nelson: Twin Towers Were Imploded On 9/11... Developing..." appeared on the left hand side of the Drudge Report late yesterday afternoon.
However, within about 20 minutes or so the headline was pulled from the front page.
A similar thing happened when Charlie Sheen went public with his 9/11 doubts in March 2006 - the story briefly appeared on Drudge before being removed.
To hazard a guess at what happened, we believe that one of Drudge's assistants posted the headline before swiftly being overruled by Matt Drudge himself, resulting in the headline being memory holed.
The headline as it appeared on Drudge before it was pulled can still be viewed at the Drudge Report Archives website, which takes a screenshot of Drudge's front page every two minutes.
The story did make the front page of Breitbart.tv, which is run by Drudge's assistant Andrew Breitbart, meaning it was probably Breitbart that posted the Willie Nelson story before being overruled by Drudge himself.
So why did Drudge pull the link?
Charlie Sheen's brave embrace of 9/11 truth left the establishment media with two choices - either to ignore the story or attack Sheen. They chose to attack Sheen and that decision disasterously backfired, because it gave 9/11 truth a public platform and prompted a national debate. When his father Martin Sheen went public, the media took a different approach and completely blackballed the story. It appears that Drudge has set the standard for the second method to be employed again.
Though the story was covered last night by a Texas news channel, the rest of the media are so far silent on the issue and it remains to be seen whether or not they will keep up a united front of censorship in an attempt to diffuse the import of Willie Nelson's comments on yesterday's Alex Jones Show.