Aurelian Resources Was Stolen By Kinross and Management But Will Not Be Forgotten
The company whose shareholders were better than its management
Message: WHAT A MESS
The Fed just cut rates again – now, they’ve
only got about 2% to play with.
If the current trend persists, by July we’ll be
seeing the words “0% rate” all over the place..
.but for once it won’t be in a used car commercial.
Yes, a Japan-like slump does not look far off; and as
the Fed continues to blow hot air into the U.S. economy,
For centuries, gold has been used as a hedge
against inflation.
Well, right now you can get this safety net for
about what ? A penny per ounce?
Considering the fact that gold is right around $900.00
an ounce, this is an opportunity
Agoracom readers can’t afford to pass up. ARU’s recessionary chant could be:“Let it sink. We’ve got over 13 million and counting in gold ounces.”
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In today's dollars, 1975 gold at $196 is . 1980 gold, the peak year at the historical price of $850, would now clock in closer to $2,176. And remember, this is only what you get using the most conservative market calculation of gold's worth. There are other, even more telling ways to value gold.
Remember, for a good part of America's history, every dollar in your pocket was a dollar backed by gold.So it's not so crazy to ask yourself... if America has 8,180 tons - or nearly 261.7 million ounces - of gold in reserve...How many dollars does that buy?When dollars became unhinged from gold, the printing presses at the Fed cranked up. By 1980, for every ounce of gold in America, the financial system carried $6,966 in cash. That's $1.8 trillion total. But get this, by the end of 2005, the total real money supply shot to over $10 trillion. That's $38,349 in circulation for every ounce of gold in reserve!Of course, it's even higher now. The printing presses are still cranking, well into 2007. Only now, it's much harder for you to know how fat the actual money supply has gotten. See, by March 23, 2006... The number had gotten so embarrassing... the Fed actually "retired" a number called "M3," which was the most broad-reaching measure of how much cash floats around in the system.Because this is the starkest vision you see the absolute carnage that's piling up in a "secret war" Washington's fighting right now... and has fought, unsuccessfully, for the last 20 plus years. No, not the war in Iraq. Or Afghanistan. Or even some possible future conflict with Iran. This is another kind of war... right here at home.The enemy is the dark nemesis of a dead and stagnant economy. And the Fed secretly fights to hold it off desperately every single day. This is a worse enemy than recession. It's the enemy called deflation, an economy where nothing moves and nobody buys a thing.The weapon of choice in this ongoing secret war is to flood the market with cash and easy credit. Because regular cash and credit injections make everyone feel rich. The theory goes, when you've got cash and low-priced credit, companies borrow and expand. Consumers borrow and spend. Families borrow and buy homes.Which is why, since 1950, the total amount of money in circulation has soared well over 3,000%!And it's all good... or seems good... until it goes all wrong.See, the trouble is, even money can't escape the natural law of supply and demand. When there's too much of it floating around, each dollar is worth that much less relative to the whole. Suddenly, you've got price inflation. Suddenly, every dollar you have in the bank is worth less. Hemingway called it the "first panacea of a mismanaged nation."And in the USA's case, it's helped plummet the purchasing power of their dollars by a mind-blowing 96%.The US dollar's worth today is just pennies compared with what it bought a century ago.In fact, its worth is just a fraction now -- compared to the last time gold prices boomed, in the 1970s and early 1980s.Only now, unlike then, the "wiggle room" we have left now between us and a complete dollar implosion is so thin it's practically transparent. Could total implosion actually happen? Absolutely.Take what relatively new Fed Chairman professor Ben Bernake famously said in a speech at the National Economists Club in Washington, in November 2002...Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost... You can conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.In other words, if you want to juice an economy... turn on the printing presses and make it as easy as all get-out to borrow money at a low, low rate of interest. Bernanke and others in the Fed think that's no problem. They think they can handle it, just so long as short-term interest rates don't go to zero. Flooding the market with easy money is more like burning your furniture to keep warm. It cannot last as a stopgap measure. It's courting disaster. Ludwig Von Mises, got it right instead, when he said...There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.See, thanks to all that Fed-driven loose credit, consumer debt has soared. It's never been higher. In 1987, when Alan Greenspan first took his job in Washington, consumers where in the hole by about $10 trillion. Where are they now? An unbelievable $37.3 trillion in the red - or nearly 350% of GDP! Think about that.As a whole, Americans owe three and a half times more than the entire U.S. economy -- the largest in history -- produces in a year. If you or Antoninus owed that much on a personal level, you'd be suicidal.Meanwhile, the government doesn't seem to worry. They spend money even faster. They borrow even deeper. Even this administration now, with full knowledge of the implications of a credit disaster, has already borrowed more money since 2000 than every White House since the time of Washington!By 2017 - says the Heritage Foundation - USA federal deficits should be soaring by at least $1 trillion per year. After that, it will jump to $2 trillion. That's not how much they'll owe. It's how much you add to what they owe... every 12 months, for as far as the eye can see. Doesn't that sound, to you, like they're at a turning point? Bernanke has done some cutting already. But he's trapped between a rock and a hard place.Slashing the rates means an even bigger dollar collapse. And even higher credit debt, at a time when few Americans can afford it. It would also mean less overseas confidence in the U.S. economy. And that alone could spark a whole new wave of disaster.See, when all those overseas bondholders out there see the United States disintegrating its economic base, that's all she wrote! They'll start dumping the dollar and they're debt investments with abandon. I'm sure we're smart enough to see where this is headed... That kind of unraveling is the perfect recipe for $2,000 gold plus.You're reading this correctly and, as BUCKSHOT would say. “Do your own DD!” |
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