KB Gold Affiliates ~ Modern Gold Rush

Government Financial Report 2010 - John Williams

My Blog- KWN: "...The GAO went so far as to run an 'Illustrative Alternative Scenario' (page 130) to the government’s happy Medicare adjustments, with the net effect of showing a net present value of unfunded Medicare liabilities (open group) $12.4 trillion higher than that used in the formal accounting. The alternative assumptions appear more realistic than the politicized data used in getting ACA enacted.

...Broader GAAP-based federal deficits, including the Social Security and Medicare unfunded liabilities, have been in the $4 trillion to $5 trillion range in 2008 and 2009, and 2010’s deficit again likely was near $5 trillion, remaining both uncontainable and unsustainable. The federal government cannot cover such an annual shortfall by raising taxes, as there are not enough untaxed wages and salaries or corporate profits to do so. On the spending side, all government spending, except Social Security and Medicare could be cut, but the broad GAAP results still would be in deficit..

..The GAO went so far as to run an "Illustrative Alternative Scenario" (page 130) to the government’s happy Medicare adjustments, with the net effect of showing a net present value of unfunded Medicare liabilities (open group) $12.4 trillion higher than that used in the formal accounting. The alternative assumptions appear more realistic than the politicized data used in getting ACA enacted.."

Norton's comment: So, that is a long way of saying the US Government is BROKE! So, I you ready to fend for yourself?  Independent power supply. Heat. Telecommunications. Water supply. food inventory.

Telling Trend Reversals: The Dollar and Bonds

Telling Trend Reversals: The Dollar and Bonds: "In last week’s Money and Markets column, I wrote about Bernanke’s quantitative easing policy. The goal of the policy is to create higher stock and housing prices by pushing the dollar and interest rates down.

So how is the Fed’s plan going? Let’s start with the …"

Norton's comment: This is a very telling article with a number of charts to illustrate what is really happening.  QE2 is NOT doing what the FED stated goal is to be.  Supply and demand as it related to the supply of money is operating as one would expect. Too many dollars are chasing investors when China, India, Brazil and other countries that buy us Treasury bonds are suspecting that our FED is driving down the value of our dollar so as to payoff US Govt debt with less valuable dollars.  Countries holding our debt do NOT want their investment devalued; that is, the future purchasing power of their investments in the US Treasuries diminished..

Big Mac index: Bun fight

Big Mac index: Bun fight | The Economist: "Big Mac index Oct 15th 2010

A WEAK currency, despite its appeal to exporters and politicians, is no free lunch. But it can provide a cheap one. In China a McDonald’s Big Mac costs just 14.5 yuan on average in Beijing and Shenzhen, the equivalent of $2.18 at market exchange rates. In America the same burger averages $3.71. That makes China’s yuan one of the most undervalued currencies in our Big Mac index, which is based on the idea of purchasing-power parity. This says that a currency’s price should reflect the amount of goods and services it can buy. Since 14.5 yuan can buy as much burger as $3.71, a yuan should be worth $0.26 on the foreign-exchange market...."

Norton's comment:
Understanding the difference in your investment goal between preserving principal and preserving buying power
Recently I asked several investment brokers and investment fund managers about my concerns with the safety of the principal of my mothers portfolio.  She has some major corp. stocks, mutual funds and various municipal, state and federal tax exempt bonds.  I noticed that she had over 50% of the total in stocks or stock mutual funds.  this seems a bit high to me where she is 99 years old.  Their response was unexpected: "..oh, she will be fine.  When the dollar tanks, the stock market will go up.."


I said, " No, you don't understand. Today, let's say I buy a hamburger for $ 1.00.  If we get hyper-inflation, and I go back to buy the same hamburger in five years, I will be paying a lot more like $ 3.00. So the point is, my goal goes beyond preserving her PRINCIPAL!"  


The bonds will do that.  My goal is to preserve her PURCHASING POWER!!!  This is where precious metals, gold , silver and agricultural products come in.  They are expected to rises even as the dollar and the economy tanks.  Supply and demand takes effect. So if she / we have some portion of our investments (5 to 20% guess-timate) in gold / silver and agricultural resources, then our purchasing power of our hard-earned income and retirement will be protected.

Gold Stocks in a Failing Fiat Currency | FINANCIAL SENSE

Gold Stocks in a Failing Fiat Currency | FINANCIAL SENSE:

by David Galland Fri Dec. 17, 2010

"I have been agonizing about getting metal after dumping paper metal I held and was reading the Daily Dispatch looking for investment clues. I was pondering the ratios of thirds that you mentioned in a recent Dispatch and the pursuing of metal stocks when an issue occurred to me that was not mentioned.

On the one hand, you discuss the dollar trap of investors running from one currency to another, away from the dollar and back to it. I fear that the dollar is doomed as are other fiat currencies, and time is getting short. So the question that came to mind is, what happens if one is invested in metal stocks or any vehicle that is denominated in a fiat currency, and that currency goes bust, blotto?...more"

Jesse's Café Américain: Gold Daily and Silver Weekly Charts

Jesse's Café Américain: Gold Daily and Silver Weekly Charts

by Norton

We are expecting a temporary correction; that is, drop in these prices and then it is expected to break through the $ 1400 per oz. for Gold

PMXO - Gold - to-Go ATM Machine

Bullion Vending Machine introduced in America

PMXO - Penny PayDay:   "Mining company, PMX Communities, Inc. (PMXO.OB), through its wholly-owned subsidiary, PMX Gold LLC, has opened the first “GOLD to go™ ATM” in America with the launch of the vending machine in Boca Raton, FL at the prestigious Town Center Mall. The machines are currently operational in twelve locations throughout the world including German, Spain, Italy and Dubai. The famous Emirates Palace Hotel in Abu Dhabi Hotel in Dubai installed one of the machines in the summer of 2010."

Norton's comment: Sign-up for FREE for a gold-backed Savings Account. Now signup is available. No initial deposit is necessary. Also, we are looking for business partners  ... more information HERE>>>

John Williams - Massive Selling of US Currency Lies Ahead

My Blog: "John Williams - Massive Selling of US Currency Lies Ahead

John Williams today was dispatching information regarding gold, silver, M3, nearby massive selling of dollars and inflation. Here is a portion from his commentary, “Despite November 9th’s historic high gold price of $1,421.00 per troy ounce (London afternoon fix) and the multi-decade high silver price of $30.50 per troy ounce (London fix) on December 7th, gold and silver prices have yet to approach their historic high levels, adjusted for inflation.”"

BOMBSHELL – Whistle Blower Comes Forward With Solid Proof The Price Of Gold And Silver Is Being Manipulated By Major Financial Institutions

BOMBSHELL – Whistle Blower Comes Forward With Solid Proof The Price Of Gold And Silver Is Being Manipulated By Major Financial Institutions: "Once the American people learn how incredibly corrupt the world financial system is, it is going to change everything. The government that we are all trusting to guard the integrity of the financial system is failing to do that job. It turns out that the Commodities Futures Trading Commission has been sitting on solid evidence that the elite banking powers have been openly and blatantly manipulating the price of gold and silver. Even though they were basically handed a 'smoking gun', they have done absolutely nothing with it. But now the information has gone public and the CFTC is red-faced.


Back in November 2009, Andrew Maguire, a former Goldman Sachs silver trader in Goldman's London office, contacted the CFTC's Enforcement Division and reported the illegal manipulation of the silver market by traders at JPMorgan Chase..


Because of Maguire’s warning, the CFTC was able to watch a crime unfold, right in front of their eyes, in real time.

So what did the CFTC do about it?

Nothing.

Absolutely nothing.

Which is extremely alarming, because the size of this fraud absolutely dwarfs the Madoff or Enron scandals.  In fact, this fraud is so gigantic that it is not even worth comparing to any of the other major financial scandals of recent times.

But Maguire did not give up.  He sent several more emails to the CFTC detailing the open manipulation of the gold and silver markets.

The CFTC did not reply....."

The Biggest Election Scandal Since Watergate : Veterans Today

The Biggest Election Scandal Since Watergate : Veterans Today: "The Military Industrial Comples Spends Massively on Elections using Non-Profit Scams
One reason why the U.S. sees ongoing wars, massive military budgets and record arms sales is because the military industrial complex spends massively on elections. This year, corporate spending on elections is worse than ever thanks to the Citizens United decision and political operatives like Karl Rove who have created front groups [non-profit scams] to hide the source of campaign donations. These front groups [non-profit scams]are designed to evade federal election laws and federal tax laws. The violations of law are quite evident...."

As a result of this, our allied organization Prosperity Agenda, took a major step on Thursday.  Voters for Peace via Prosperity Agenda asked the Department of Justice to begin a criminal investigation of [non-profit scams] being used to take unlimited, anonymous donations in an attempt to influence the vote.

New IMF Strategy Document Charts Launch Of “Bancor” Global Currency: Economy / Currency; Highlights “potential resistance” on road from “voluntary multilateral framework” to full blown global currency Steve ...

New IMF Strategy Document Charts Launch Of “Bancor” Global Currency: Economy / Currency; Highlights “potential resistance” on road from “voluntary multilateral framework” to full blown global currency Steve ...: "Steve Watson Prisonplanet.com Wednesday, Aug 4th, 2010


A chart within the document, innocuously titled
"Reserve Accumulation and International Monetary Stability "(PDF link), presents a stepping stone system toward a fully fledged global currency:



A newly published IMF strategy document calls for the implementation of a global currency, called the “bancor”, to stabilise the international monetary system, while acknowledging that only a monumental shift toward acceptance of globalism will make it possible in the short term..."

A golden opportunity for monetary reform! Golden for whom?

FT.com / Comment / Opinion - A golden opportunity for monetary reform: "A golden opportunity for monetary reform
By Robert Skidelsky November 9 2010 22:20 | Last updated: November 9 2010 22:20


Three cheers for Robert Zoellick. Writing in the FT this week, the World Bank president set out an ambitious agenda for the Group of 20 leading economies to “rebalance demand” and “spur growth”. He recognises that the reduction of current account imbalances is a necessary condition for a non-protectionist trading system...

This was addressed by Keynes’s proposal for capital controls (to guard against capital flight) and, more imaginatively, to create a new international reserve asset that he called “bancor” (short for “bank money”), which would replace gold as the ultimate reserve asset of the system. Gold would remain as a reference point for the value of bancor, thus limiting the capacity of the ICB to create credit – which seems similar to Mr Zoellick’s idea. Keynes’s famous description of the gold standard as a “barbarous relic” does not quite capture his opinion of the metal, which he thought would be useful as a constitutional monarch but disastrous as a despot..."


Norton's comment: It is a golden opportunity for the power brokers, bankers and families associated with the IMF.............not for the 98 plus percent of people in the World that are working for these folks!

How is this Income distribution working for YOU? by Occupation

from visualizingeconomics.com

Economist/Banker: Prepare for the next bank's crisis---By Shan Saeed

Economist/Banker: Prepare for the next bank's crisis---By Shan Saeed: "Investors who bought this mostly AAA rated junk as mortgage-backed securities are not simply going to swallow the losses quietly. These investors –including Fannie Mae, Freddie Mac, Pacific Investment Management (PIMCO) and BlackRock (BLK) are seeking redress. Under certain circumstances, the terms of their purchase agreements allow them to put back the mortgages to the banks..."

Graphs below also show that idea that no inflation is in play is more BS:

Increases in every day consumer costs by category.

Claim that no inflation is in play courtesy of dshort.com

Move your money now! Weiss independent list of banks in trouble! Notice no one else shows Bank of america.

Bank of America, with its still awful Countrywide and Merrill acquisitions, has the greatest exposure, at over $35 billion. Citigroup somehow has a mere $8B in potential putback losses."

| OpenSecrets- Bank of America lobbying influence, tactics

OpenSecrets Blog | OpenSecrets: "But while being targeted by the government for consumer and corporate power abuses, Bank of America has spent millions of dollars attempting to woo state and federal officials through professional lobbying efforts and campaign contributions, an analysis by the Center for Responsive Politics finds. The company even has two corporate political action committees that target the levels of government differently.

What's more, the banking giant has spent $6.52 million to lobby the federal government -- including the Securities and Exchange Commission, which led the fraud investigation -- on a range of financial issues during 2009 and 2010. This year alone, Bank of America has employed 21 professional lobbyists (most of whom previously worked for the government) who lobbied on nearly 70 specific bills and dozens of other federal government issues, federal lobbying documents show.

A number of topics listed in the documents are standard for financial institutions -- and in many ways, Bank of America is out-lobbied by some of its banking competitors........."

Bond Massacre Hits Treasuries

Bond Massacre Hits Treasuries, TIPs, Munis, Mortgages; PIMCO Among Biggest Losers; Is the Bond Bull Finally Over?

by (Michael Shedlock)

The treasury market has slapped Bernanke silly. Yields have soared ever since QE II was finalized in November. Mortgage rates are up a half-percent in a month and Bankrate shows they are about at the same level as a year ago. Treasuries, TIPS, and municipal bond funds have all been hit hard in the past few weeks. Matters took a turn for the worse when President Obama agreed to a tax compromise that will cost close to $900 billion.


With that backdrop, please consider Pimco Total Return Among Biggest Losers as Bond Rally Fizzles

Bill Gross’s Pimco Total Return Fund, the world’s largest mutual fund, was the second-biggest decliner among the largest U.S. bond managers in the past month as clients pulled money for the first time in two years amid a selloff in Treasuries.....

 Yield Curve As of 2010-12-10

Important Bull/Bear Chart Watch Out! - "Investors Intelligence

 King World News - Dec. 09, 2010 Friday

This is an extremely important chart from Investors Intelligence showing 10 years of up to date Bull/Bear surveys.  From their report, “The Investors Intelligence Advisors Sentiment Survey bull-bear spread is once again moving towards the +40% danger zone. When the spread last broke above 40%, in October 2007, the market collapsed spectacularly.”  The entire write-up is below...."

Gold/Silver Ratio: Silver Going Higher? | zero hedge

Gold/Silver Ratio: Silver Going Higher? | zero hedge: "Gold/Silver Ratio: Silver Going Higher?
Submitted by Tyler Durden on 11/19/2010 11:58 -0500

Recession Roman Empire

A topic we covered extensively in the past makes a second appearance, this time courtesy of Abigail Doolittle and The Weekly Peak, whose weekly musings focus on the much fabled ratio between the price of gold and silver. Some observations:

• 323 B.C. – The ratio stood at 12.5 upon the death of Alexander the Great.
• Roman Empire – The ratio was set at 12.
• 12th to 17th Century – The ratio was around 12.
• End of 19th Century – The nearly universal, fixed ratio of 15 came to a close with the end of the bi-metallism era and England’s attempt to demonetize silver and conceivably because the country had little of the precious metal.
• 1980 – At the time of the last great surge in gold and silver, the ratio stood at 17.
• 1991 – When silver hit its lows, the ratio peaked at 100.
• 2003 - 2007 – This part of the bull market in silver caused the ratio to drop to 45 from 80.
• 2008 – The ratio rose back to 80 on the Great Recession.

Much more in the full report below. Gold/Silver Ratio: Silver Going Higher? (pdf)"

Euro collapse ‘possible’

Euro collapse ‘possible’ amid deepening divisions over bail-out ; Ireland Finance  Philip Aldrick,12:03, Tuesday 7 December 2010

"Euro collapse ‘possible’ amid deepening divisions over bail-out
It is feasible that the euro will not survive the current sovereign debt crisis sweeping Europe, one of the Treasury s leading independent forecasters has said. Under questioning from MPs on the Treasury Select Committee, Stephen Nickell, a member of the Office for Budget Responsibility (OBR) and a former Bank of England rate-setter, said a collapse of the single currency was "a possibility".

Asked more broadly about the sustainability of currency unions, he added: "The general consensus is that sooner or later they fail for one reason or another — but that doesn't mean to say it always happens. His comments came as deep divisions in the eurozone threatened to drive Spain, Portugal and Ireland into more difficulty. Attempting to defy Germany, the euro-zone's powerhouse and the nation that will provide the bulk of any rescue fund, Belgian Finance Minister Didier Reynders called for the €440bn bail-out fund to be expanded, while Luxembourg Finance Minister Jean-Claude Juncker and Italian counterpart Giulio Tremonti outlined proposals for a joint European government bond...

UFirst Videos-take control and payoff loans EARLY

UFirst Videos - Commentary Brad Ferris Mortgage Hour Show

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• Better and easier to use than Quicken, Quickbooks, Mint........

Norton's comment:

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Click Here to get more info at my website ............more FREE analysis available.

Is the Political Class Economically Incompetent or are they Simply Bought and Paid For?

Mish's Global Economic Trend Analysis: Is the Political Class Economically Incompetent or are they Simply Bought and Paid For?: "Inquiring minds are reading an interesting article in Forbes by writer Charles Kadlec regarding the Economic Incompetence of the Political Class.


The sovereign debt crisis now threatening Europe, as well as major American states and cities, discloses the sheer incompetence of a political class that has over-promised, under-delivered and squandered vast amounts of their citizens' wealth


Greece, Ireland, Spain, Portugal, California, Illinois, Los Angeles and Chicago are simply the poster children for what happens when elected officials engage in reckless and irresponsible management of their economies, their banking system or their respective government's public finances.

California's budget deficit has soared to $25 billion, or more than 25% of total spending. And, according to a recent study, the City of Chicago's unfunded pension liabilities total $45 billion, or more than $40,000 per household.
Politicians may not be solely ....."


Norton's comment: This sums up my observation and bodes ill for the next one hundred years including why there could be the second American Revolution.

Is there a peak-gold like there is a peak-oil?

Is there a peak-gold like there is a peak-oil?: "Why does gold rise?
Gold is a 'blue-chip', stable investment. Even more so than real-estate since one can move gold to a different location. Its price goes up when those willing to buy it outnumber those willing to sell it. The main three reasons why buyers seek gold are:

• Uncertainty due to war
•  Risk of high inflation
•  Lack of confidence in the economy and its leadership.

Today, all three conditions are present in the US market. The Federal Reserve has been artificially deflating the US inflation rate but today's real, high inflation, is the leading cause for high gold prices. More dollars buy less gold because the dollar is weak against all major currencies, consequently inflation is high. In addition, liquidity flooding BRIC countries allow investors to invest in gold which they traditionally value.As inflation increases and the dollar depreciates, count on the price of gold to increase again in the coming months."

Is Silver the Next Gold? - Seeking Alpha

Is Silver the Next Gold? - Seeking Alpha: "With gold hitting another historic high Monday, I thought it might be worth taking a closer look at another precious metal on the move and one that's at a fresh thirty-year trading high: silver....Second, and somewhere between the technical and the fundamental is the gold/silver ratio or the number of silver ounces it takes to buy a single ounce of gold. Specifically, it is very close to hitting a decade-long area of support found around 45/1 and this suggests that silver will trend higher yet.

Currency Wars: China's Gold Imports Soar 500% As the International Banks Pressure Their Markets

The rhyme of history being what it is, the hard money versus soft money wars have not gone away and seem to be heating up.
From Goldcore:

"China's growing importance to the precious metal markets was underlined by the news that Chinese imports have surged by more than 500% due to increased investment demand. Incredibly, China's gold imports were five times higher in the first ten months than in the whole of last year. Imports hit 209 tonnes compared to 45 tonnes for all of 2009, according to the Shanghai Gold Exchange. Trading volume of gold on the exchange in the first 10 months rose 43 percent from a year earlier to 5,014.5 tonnes.

Inflation and Deflation: US Money Supply Figures - We're Not In Kansas Anymore Toto

Jesse's Café Américain: Inflation and Deflation: US Money Supply Figures - We're Not In Kansas Anymore Toto: "04 DECEMBER 2010 Jessies Americain Cafe

Inflation and Deflation: US Money Supply Figures - We're Not In Kansas Anymore Toto

Here are the latest Money Supply Figures from the St. Louis Fed.

I start with the narrowest measure, the Monetary Base and widen out to M2 which is the broadest measure of US money supply currently available, with MZM serving a similar function for the short term."

What to look for before you buy an ETN

What to look for before you buy an ETN: "Why ETNs are Riskier Than They Look
Ron Rowland | Friday, February 6, 2009 at 7:30 am


Co-editor of Weiss Research’s International ETF Trader
Mike Larson is off today, so he asked me to fill in for him. And one thing that I think Mike and I both agree on is that ETFs, or exchange traded funds, are one of the best things that ever happened for small investors.

You may already know about the advantages they have over conventional mutual funds … liquidity, low costs, transparency, diversification, and more.

What you may not know is that there is a new investment that looks a lot like an ETF but is actually a whole different species. I’m talking about ETNs: exchange traded notes.

On the surface, ETNs share many of the characteristics of ETFs. You can buy and sell them on the stock exchange throughout the day, their performance closely mirrors an index, and they give you access to specialized market niches like commodities and currencies.

However,

There is One Gigantic Difference …
An ETN Is Really a Bond!

That’s why they’re called “notes” rather than “funds.” Yet it usually doesn’t pay interest at a fixed rate, like say a Treasury bond would. Instead your “interest” is the return on a designated index...."

Real Estate and Home Loan Information: Libor Rates Make New Historic Low

Real Estate and Home Loan Information: Libor Rates Make New Historic Low:

"This is This table shows all LIBOR rates are down significantly from a year ago.
Updated 7/25/2009 This week Month ago Year ago
1 Month LIBOR Rate 0.29        0.31            2.46
3 Month LIBOR Rate 0.50        0.61            2.80
6 Month LIBOR Rate 0.96        1.15            3.14
1 Year LIBOR Rate   1.49        1.74            3.26

New historical lows shown in RED


###### LIBOR ###### Prime Fed

1 Mo 3 Mo 6 Mo 1 Yr Rate Funds
Rate
Current % 0.29 0.50 0.96 1.49 3.25 0.25
Min % 0.29 0.50 0.96 1.46 3.25 0.25
Max % 6.94 6.85 7.07 5.43 9.5 7.063

See Libor Rates at a Glance for current rates and graphs.

Definition: LIBOR is the London Interbank Offered Rate. It is a daily reference rate based on the interest rates banks in the London wholesale money market (or interbank market) offer to lend unsecured funds to each other. LIBOR is usually slightly higher than the London Interbank Bid Rate (LIBID). LIBID is the rate the same banks are prepared to accept deposits."

New phase of debt crisis! Striking NOW! Despite rescues!

New phase of debt crisis! Striking NOW! Despite rescues!The Real Trauma of
The Irish Debt Crisis


Default insurance is the telltale indicator.

And right now, the cost of insuring €10 million of 5-year Irish government bonds against default has skyrocketed — to an extremely high €600,000.

That’s 55 percent more than it cost for the same insurance in the aftermath of the Lehman Brothers failure — a time when it seemed the entire world was on the brink of collapse.

It’s 50 percent ..."

This is an urgent read! You must be prepared for what is coming! Do not be caught up in the dust of the next phase of financial calamity!

I have financial, cash flow, investment and savings tools to help you. See my bio at http://www.linkedin.com/in/creativenortonwest

An I.M.F. Announcement on the Completion of Gold Sales due Soon by Julian D. W. Phillips

An I.M.F. Announcement on the Completion of Gold Sales due Soon by Julian D. W. Phillips: "All from the head of the World Bank down are also aware of the useful role that gold can play in acting as a ‘value reference point’.   Should this happen gold will have returned to the world of money in real terms, albeit  in a slightly different role to the one it had in the past.   We termed this in earlier issues of the Gold Forecaster as gold no longer being a ‘means of exchange’, but as a ‘measure of value’....

What happens to demand with a 400 tonne drop in supply?

A 400 tonne drop in supply in a balanced market will pressure the demand side to find more gold.

· With mine supply pretty inelastic there will be only a small additional flow from that source.
· With jewelry demand in the developed world back to former levels, only much higher prices will deter them.
· With industrial demand [particularly electronics] now a necessity, demand is unlikely to be deterred by higher prices.
· With demand in India after an excellent monsoon and good harvests and GDP growth at 8.9% Indians are keen to buy at these prices and will not be deterred except by sharply higher prices.
· With the Chinese middle classes expanding rapidly as that country continues to develop, demand from there will continue to grow and most likely irrespective of the rising gold price.
· Central Bank demand is unlikely to abate no matter what the price, because their interest is solely in acquiring tonnages of gold. We note that as part of their ongoing program of gold buying Russia also bought 18.66 tonnes in October [against the I.M.F. sale of 19.5 tonnes]. Not only are they buying local production but are present in the open market.

Consequently, the only additional source of supply will have to be scrap supply or supply from current holders. So we ask, “At what price will current holders sell?"

The Day the Dollar Died by Inflationus (Youtube)

YouTube - The Day the Dollar Died: "

Are you ready for this?

Advice from Norton:
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Gold separating from the US Dollar

King World News: "With gold and silver consolidating recent gains, King World News interviewed James Turk out of London.  When asked about the action in both gold and silver Turk stated, “I think the important point today is that gold has moved back above its short-term moving averages.  This should bring a great deal more buying into the market.  I was very impressed today that gold was strong in spite of the fact that the US dollar was up a full point.  Jim Sinclair has been bringing up this point, and it looks like he nailed gold separating from the dollar in terms of the action.”

Turk continues:

“The big shock here in London is the Irish bailout. Many were not expecting it, and when it was announced, the size of the bailout was the second shock. The implications are now that everyone is starting to look at Portugal and Spain. Portugal is a small player, so therefore its impact will be limited. Spain on the other hand is a big economy, it is larger than Ireland, Portugal and Greece put together.

So the interesting thing is once the Irish bailout is finished and a bailout is put together for Portugal, more than 50% of the 750 billion Euro stabilization fund will be used on these periphery countries. The question therefore becomes will there will be enough left in the fund for Spain? And don’t forget about Italy, who’s economy is as big as Spain’s.
..."

The Euro Zone’s Timeout is Expiring! (Money & Marketing)

The Euro Zone’s Timeout is Expiring!

: by Bryan Rich | Saturday, November 27, 2010 at 7:30 am
"Now, the euro-member countries are in trouble for all of the reasons Milton Friedman, one of the most influential economists of the 20th century, cited prior to that currency’s inception a decade ago.

He said:

A “one size fits all” monetary policy doesn’t give the member countries the flexibility needed to stimulate their economies.

A fractured fiscal policy forced to adhere to rigid EU rules doesn’t enable member governments to navigate their country-specific problems, such as deficit spending and public works projects.
Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors.

A common currency can act as handcuffs in perilous times. Exchange rates can be used as a tool to revalue debt and improve competitiveness of one’s economy.

Friedman predicted the euro would succumb to these flaws and fail within 10 years. If Ireland represents the catalyst for round two of the European sovereign debt contagion, his timing may not have been too far off..."

Preparing for The Big One, Coming Soon by Deepcaster

Preparing for The Big One, Coming Soon by Deepcaster: "Preparing for The Big One, Coming Soon ....
November 24th, 2010 
 
“Attempts to bail out the Irish banking sector via multinational loans will only increase debt burdens in Europe and lead to a nightmarish scenario there, says New York University economist Nouriel Roubini....

In any event, in the Middle and Long Term, Gold and Silver are the World’s Best Bets to rise dramatically in terms of all Fiat Currencies.

Thus they are the best Assets to Acquire on Dips and the best way to prepare for The Big One, Coming Soon...

Muni Bond Market Imploding: How to Play It?

Muni Bond Market Imploding: How to Play It?

-- Seeking Alpha: "While it was readily apparent years ago, and we were reminded again during the 2008-2009 financial crash, markets had temporarily forgotten that municipalities across the nation are virtually insolvent and should already have declared bankruptcy. If they have not yet “restructured” their debt, they should and they will. After decades of politicians writing checks the future generation couldn’t pay by way of lavish public spending sprees, unsustainable defined benefit programs for public workers and lousy investment schemes (Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire), current investors are rightly questioning the ability to meet these debt obligations in the future.

Who Will Blink First?
This has traditionally been a calculus..."

The Key to Understanding "Recession" and "Recovery": The Wealth Pyramid

charles hugh smith-The Key to Understanding "Recession" and "Recovery": The Wealth Pyramid: "This goes a long way to explaining how 'consumer spending' can be 'recovering' even as the incomes of the bottom 80% stagnate or fall. The top 5% of Americans by income are responsible for 37% of all consumer spending-- about the same as the entire bottom 80% by income (39.5%).

David Stockman, director of the Office of Management and Budget under President Reagan, recently noted in an editorial that the top 1% of Americans received two-thirds of the gain in national income from 2002 to 2006."

There Was a Fed Chairman Who Swallowed a Fly by Peter Schiff

There Was a Fed Chairman Who Swallowed a Fly by Peter Schiff:

"On July 24, 2009, just as the Federal Reserve unleashed its first quantitative easing campaign (now called 'QE1' - an echo of the reclassification of the Great War after still more destructive subsequent developments), Fed Chairman Ben Bernanke wrote an opinion piece in the Wall Street Journal to soothe growing concerns about excess liquidity. He assured the public that the Fed had an 'exit strategy.'

In a response entitled 'No Exit for Ben', I called the Chairman's bluff. I argued that the Fed had no exit strategy, and that Bernanke was trying to fool the market into believing that quantitative easing was not debt monetization. 

Just 16 months later, Bernanke is at it again, penning another op-ed to defend his second round of QE. Except this time, instead of feigning an exit strategy, he just outlines a path to expand the program in perpetuity.

In recent months, Fed economists have taken great pains to tell us how much better off the economy is now than it was in the first half of 2009. Given this supposed good news, what prompted the current turnaround in policy? Could it be, perhaps, that perpetual easing was the policy all along?...."

US$ about to Lose Reserve Currency Status ? by Mish

US$ about to Lose Reserve Currency Status ? by Mish: "US$ about to Lose Reserve Currency Status ?
November 21st, 2010 by Mish's Global Economic Trend analysis.  
 
G-20 is over but the acrimony is not. Bloomberg reports China Assails Monetary Easing, Citing Inflation, Bubble Risks.
 
China renewed an attack on quantitative easing, citing the risk of increased prices in emerging economies, a day after the Group of 20 nations said the markets can adopt regulatory steps to cope...."

Gold Will Rise Violently - Jim Sinclair

This is Late 1979, Gold Will Rise Violently

Jim Sinclair Nov. 18, 2010
"With gold heading higher today, King World News interviewed legendary trader Jim Sinclair. When asked about the action in gold Sinclair stated, “We have to be right in front of a major move in gold. Today the gold market had all of the indications of what would be considered by the old-time traders (Bert Seligman & Jesse Livermore) as a major turn. This would be a sign to them that the bulls are gaining strength in the market, and given any excuse it will rise violently..."

How to Prepare for the Next Banking Crisis - Whalen -- Seeking Alpha

How to Prepare for the Next Banking Crisis - Whalen -- Seeking Alpha: "Fees charged by Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), and a mortgage origination cartel led by the big four banks (Bank of America (BAC), Wells Fargo (WFC), JP Morgan Chase (JPM), Citigroup (C)), are now 4-5 points on new origination loans versus less than 1 point during housing boom. Huge subsidy for largest zombie banks effectively blocks refinancing by millions of households.
These fees, which can add up to 7 to 10% of the face value of the loan, raise mortgage rates to borrowers by hundreds of basis points. Banks and the housing GSEs, however, saw significant benefits in declines in funding costs thanks to low fed funds rates."

Norton's comment: HOPE! I am a client and representative for a company that offers cash-flow management software to facilitate paying down your mortgage and debt fast so you do NOT need to refinance to free up cash and cut your interest charges. Check it out here www.moneymergeaccount.com/nortonwest

Impact of Modernizing the American Poverty Measure on the Poverty Status of Older Persons

Impact of Modernizing the American Poverty Measure on the Poverty Status of Older Persons

"..The current official poverty rate does not provide adequate information about who is poor or whether key programs are helping to make progress against poverty.

According to a new PPI Fact Sheet by Ke Bin Wu of the AARP Public Policy Institute, The current official poverty measure understates persons age 65 or older in poverty, largely because it is based on outdated food consumption patterns and ignores the cost of health care. In 2008, the experimental poverty rate for persons age 65 older was 18.7 percent, which was almost double their current official poverty rate.

A new U.S. poverty measure is sorely needed. The Supplemental Poverty Measure (SPM) that will be produced by the Bureau of the Census in 2011 and the Measuring American Poverty (MAP) Act of 2009 provide significant opportunities to generate a new official poverty measure...."

Norton: Another example of how govt. and corporations are NOT our friends! They play tricks with statistics to make them look good even though they are not meeting their responsibilities to the public!

(PART 2!) $10 Oil? Mike Maloney Schools Bankers on Deflation, Gold and S...

Gold and silver prices explode!| BDS-online.info

Gold and silver prices explode!| BDS-online.info

German consumer rating organization that recommends KB Gold.

Radical Difference Between Monetization 1 and QE2 by Daniel R. Amerman

Radical Difference Between Monetization 1 and QE2 by Daniel R. Amerman

By Daniel R. Amerman, CFA

Overview It's official: the Federal Reserve announced on November 3rd that it will create approximately $600 billion of new money to fund US Treasury bond purchases, and will also utilize another $250-$300 billion of money that had been previously created (also out of the nothingness). The usual term in the media for these planned purchases is "QE2", as in the second round of quantitative easing.

The "2" in "QE2" implies that this is something that has been done before. This implication is dead wrong....."

World Gold Index Interactive

Good long term view of world Gold Index and how it can be projected into the future.
http://www.freestockcharts.com?emailChartID=641b2cbe-c278-4b70-b4f9-7e4e259baf96

Meltup - it's time for you to take charge of your financial future!

Norton's comment: You can now buy gold bullion in small amounts. Start a gold backed savings account for FREE. Go to my website http://nortonwest.goldfromkb.com

Mike Maloney: Gold should reach $15,000/oz!

REAL GOLD by Michael Maloney

Comments by Norton:
check out my real Gold website at http://goldfromkb.com/nortonwest/index.php?lang=en

Headed Down to "Uncharted Territory - Gold / Dollar

10/25/2010
video by Peter Schiff
Expert's Gold/Dollar Outlook: Dollar Headed Down to "Uncharted Territory"
In the CNBC segment below, which aired earlier today, Peter Schiff of Euro Pacific Capital (who I've interviewed before) sounds off on where gold and the dollar are headed...

He says in the clip that the dollar is headed into "uncharted territory." Not good. Unless you own a ton of gold and silver, as Schiff presumably does. His company, Euro Pacific, also advises many of its clients to hold precious metals in case currency devaluation continues.

Gold: Further to Run

by Mary Anne & Pamela Aden,
October 25, 2010
Courtesy of www.adenforecast.com

"...But now 10 years later, we’ve seen the gold price produce consecutive annual gains. And with gold up more than 20% this year, 2010 will mark 10 full years of gains. This is the longest winning streak since the 1920s!

Times have changed. But it took the financial crisis and the ongoing aftermath to change the way people view gold. Confidence is growing and the change in the central banks’ actions and attitude toward gold was key in giving a green light to investors.

Central banks stopped selling gold and they’ve become net buyers this year for the first time in two decades. They’re expected to buy 15 metric tones of gold this year, which is a major turnaround. Gold is becoming an important reservable asset and again, this bull market has further to run. So use weakness in the weeks ahead as an opportunity to buy at a better price… and then plan to hold on for the long haul..."

Norton's comment: I have expressed my concern about the US Dollar collapsing to a number of professionals in the investment industry. Most will not comment on it. One said not to worry since it will only cause the stock market to rise! That is NOT my point! I can buy a hamburger today for one dollar! So, let's say I put all my investments in fixed securities like bonds. In five years it might be said that my PRINCIPAL was protected; however, the purchasing power was NOT protected. After five years, I will need alot more than one us dollar to buy that hamburger!

Financiers Offer Terms to the Rest of World in the Currency Wars

comments by Jesse's Cross Roads Cafe
Anglo-American financiers to the Rest of World: We've a Gun to Our Heads, Better Surrender.
"To put it crudely, the US wants to inflate the rest of the world, while the latter is trying to deflate the US. The US must win, since it has infinite ammunition: there is no limit to the dollars the Federal Reserve can create. What needs to be discussed is the terms of the world’s surrender: the needed changes in nominal exchange rates and domestic policies around the world."
Destroy the world economy by trashing the global reserve currency? Yes we can.

I hate to make light of this because it does offer a useful vignette of the deployment of opposing lines and basic strategies in the currency war, at least from one perspective. Several years ago I forecast that the Bankers would make the world an 'offer they cannot refuse,' or at least that the Bankers think that they cannot refuse. Hank Paulson made such an offer to the US Congress, and now it appears that the financiers are extending a similar type of offer to the rest of the world.

And quiet flows the Don.

***
Financial Times

Why America is going to win the global currency battle

By Martin Wolf
October 12 2010 22:30
"Naturally, one could imagine an opposite course. Indeed, China objects to the huge US fiscal deficits and unconventional monetary policies. China is also determined to keep inflation down at home and limit the appreciation of its currency. The implication of this policy is clear: adjustments in real exchange rates should occur via falling US domestic prices. China wants to impose a deflationary adjustment on the US, just as Germany is doing to Greece. This is not going to happen. Nor would it be in China’s interest if it did. As a creditor, it would enjoy an increase in the real value of its claims on the US. But US deflation would threaten a world slump.

Prof Blanchard is clearly right: the adjustments ahead are going to be very difficult; and they have also hardly begun. Instead of co-operation on adjustment of exchange rates and the external account, the US is seeking to impose its will, via the printing press. The US is going to win this war, one way or the other: it will either inflate the rest of the world or force their nominal exchange rates up against the dollar. Unfortunately, the impact will also be higgledy piggledy, with the less protected economies (such as Brazil or South Africa) forced to adjust and others, protected by exchange controls (such as China), able to manage the adjustment better...

It would be far better for everybody to seek a co-operative outcome. (Co-operative outomce is code for 'obey our will and give obesiance to the financiers' - Jesse). Maybe the leaders of the group of 20 will even be able to use their “mutual assessment process” to achieve just that. Their November summit in Seoul is the opportunity. Of the need there can be no doubt. Of the will, the doubts are many. In the worst of the crisis, leaders hung together. Now, the Fed is about to hang them all separately....
The theme for the next ten years is self-sufficiency."

Gold & Silver Represent Freedom From The Matrix - Mike Maloney in Red Sq...

No Joke. Be ready for another crash in 2010-2011 Gerald Clemente

Fall 2010. Gerald Clemente economic forecasts; You need to be prepared!

Economic Policy Threatens The Dollar

by Paul Craig Roberts at Trend Research Institute

KINGSTON, NY, 2010 October 10 — The illusion of a "weak recovery” – language the government prefers to “double dip recession” – continues being perpetuated by monthly “reporting errors” of economic data.

Just as the Census Bureau’s August report of a small gain in July residential housing starts was due to a downward revision of the prior month’s report, the Federal Reserve Board’s September 15 report of a slight increase in industrial production was achieved by revising downward July’s initial reporting. The optimistic July report made July look good, and the downward revision of the optimistic July number made August look good. It is by such means that the public is being fooled into believing a recovery is underway.

Many forecasters and policymakers continue to expect a recovery, because postwar Keynesian macroeconomics (demand management) is operating at full blast. According to Keynesian gospel, the two main components of expansionary economic policy are low interest rates and government deficit spending. Keynesians view supply as essentially passive, merely a response to government policy, which can be adjusted as needed to produce the desired expansionary result.

According to John Williams’s "Shadowstats" measurements of the Consumer Price Index – a gauge of inflation as experienced by consumers in their day-to-day living expenses – current interest rates on Treasury and corporate bonds are negative. That is, the rate of inflation exceeds the interest on the bonds. Williams reports that the CPI measured by the official government methodology in 1990 was approximately 4.5% in August. According to the official methodology used in 1980, the current CPI measures 8.5%.

(Note: John Williams is a statistician/economist who analyzes the manner in which statistics are manipulated in order to produce or conform to predetermined conclusions. In a nutshell, the figures may not lie, but they can be presented in such a way that they deceive. For more, see Shadowstats.com)

So we have an extremely low – a negative – interest rate and an official deficit that is one-third of the government’s budget. In fact, the deficit is even greater than that, as the official calculations of the deficit are based on a recovery scenario that is not in place.

What explains the failure of both barrels of Keynesian macroeconomics to lift the economy?

The answer is to be found in the offshoring of production of goods and services for US markets (see “The US Economy Is On Death Row" ). Offshoring has disassociated Americans from the incomes associated with the production of the goods and services that they consume. Americans are now in the same position as people in third world countries whose consumption is based on goods and services from abroad. The difference is that third world countries receive World Bank loans to pay for their consumption, while the US pays by turning over its assets and the income streams associated with the assets to foreign creditors.

The phenomenon of offshoring has negated the stimulative measures of demand management. The postwar economic slumps, which the Federal Reserve engineered in order to cool an over-heating economy, left the productive base intact. The jobs were still there waiting on the Fed to reverse course and renew the growth in consumer demand. Offshoring, however, removes the jobs to China and India, and, thus, there are no jobs to which stimulative monetary and fiscal policies can call workers back.

In the current national and global economy, the only effects of demand management policies are to deprive retirees of interest income and to build up the national debt and, thereby, to make the debt a threat to the US dollar’s role as reserve currency.

Misplaced confidence in postwar economic policy and institutionalized optimistic forecasting have masked a dangerous social crisis. The real income of American households is less than it was a decade ago. Lawrence Katz, professor of economics at Harvard University, and a recognized authority on income studies, reports that median family income in 2009 is 5 percent lower than in 1999.

Moreover, the distribution of income in the United States has become polarized beyond anything politicians and economists had anticipated. Dollars have been shifted from the middle class to CEOs, shareholders, and Wall Street. The high value-added, high productivity jobs always associated with the US middle class have been offshored and the ladders of upward mobility that made America an opportunity society have been pulled down.

This development gives the United States another familiar third world characteristic – the disparity of income between a massive poor class and a small, concentrated rich class. On September 16, the US Census Bureau reported that 43.6 million Americans – including 20% of its children – citizens of the “world’s only superpower” – were living in poverty in 2009, the largest number since the Census Bureau began recording poverty a half century ago. The number of poor is higher this year, and it will be higher next year. Yet, bought-and-paid-for-economists still preach that offshoring is “good for America.”

The facts demonstrate that “globalism” is good for corporate CEOs’ bonuses and shareholders at the expense of the US economy and American workers. No amount of statistical maneuvering can get around this conclusion.

The massive loss of US jobs has increased the total of Americans without health insurance to 51 million, thus adding them on to the burden of remaining taxpayers. The “Obama health plan,” written by the private insurance companies, uses taxpayer funds to create 30 million new customers for private health insurance. Bought-and-paid-for-economists praised this sellout as a victory for “private medicine.”

Poverty is even worse than the statistics indicate. The real extent of the crisis is partly masked by children moving in with parents and grandchildren moving in with grandparents. On September 16, the Wall Street Journal quoted David Johnson, chief of the Housing and Household Economic Statistics Division of the US Census Bureau, saying: “If the poverty status of related subfamilies were determined by only their own income their poverty rate would be 44.2%.” Families sticking together and sharing one house has held down the poverty rate.

And still, Obama, Congress, the media, and the neocons think the US is a country that can afford multi-trillion dollar wars in places that most Americans cannot find on maps. While Washington continues its battle for world hegemony, the economy collapses at home. It is a policy with ominous precedents.

In his magisterial A History of Europe, Henri Pirenne describes the emergence of medieval Germany from the ruins of the Carolingian Empire of Charlemagne to become the leading power in Europe, only to throw away its prospects by neglecting its citizens in pursuit of foreign adventures. Such has been the mistake of the American state since the days of President George Herbert Walker Bush, if not before.

Twenty years of mistakes have reduced the American economy to ruin. But worse is almost certainly on its way, though the foreseeable last straw does not play much of a role in the simplified bread-and-butter economic news on which most Americans rely. America’s economic fate depends upon the fate of the dollar. With the dollar as the world’s reserve currency, America has been able to borrow at will to finance its large deficits. But that status is currently under threat.

America’s window of opportunity to save the dollar as reserve currency is closing down fast and the signs are not auspicious that the drastic moves needed to keep the window open will be taken. Deficit-building stimulus programs and low interest rates are a threat to the dollar’s reserve currency role and systematically reduce the dollar’s value. If these destructive policies are not reversed, the dollar will be irretrievably undermined.

When the dollar ceases to be the reserve currency, the United States will be relegated to the status of a second-rate power in need of international subsidies to pay for its imports.
by Paul Craig Roberts


Publisher’s Note: We are pleased to present this Trend Alert® from our contributing editor, Dr. Paul Craig Roberts. A former associate editor of the Wall Street Journal, columnist for Business Week, and professor of economics, Dr. Roberts served on personal and committee staffs in the House and Senate and as Assistant Secretary of the Treasury for Economic Policy during the Reagan Administration. He speaks with an authority bred of experience. As a former “insider” now on the outside, we welcome his bold, clear and informed analyses.