Though the price of gold has seen a significant drop over the last two years from its all-time highs of about $1900 per ounce, many experts and analysts believe that Western central banks and their colleagues at major financial institutions have been manipulating the price.
The rampant manipulation is believed to stem, in part, from the formerly Rothschild-owned London Gold Fix, an organization made up of five large banks that make a daily determination of what the price of gold should be.
It is this unilateral control by Western banks that recently prompted the Chinese to create their own Shanghai Gold Exchange. What separates the two is that the Chinese will be using their currency, the Yuan, as the reserve rather than the U.S. Dollar. Moreover, unlike their European counterparts, the Chinese will be trading in actual physical dollars.
As John Williams (shadowstats.com) has observed, the payroll jobs reports no longer make any logical or statistical sense. Ask yourself, do you believe that retailers responded to the very disappointing Christmas season by rushing out in January to hire 46,000 more retail clerks?
Perhaps those 46,000 retail jobs is the BLS telling us that they have to come up with new jobs to report whether or not there are any.
As we have reported on a number of occasions, whenever the price of gold in the futures market starts to rise, massive uncovered shorts are suddenly dumped on the market. As the shorts dramatically increase the supply of future contracts all at once, the supply overwhelms demand, and the price of gold is driven down despite the fact that the demand for gold in the physical market is strong. (Remember, the price of gold is determined in the futures market in which contracts are largely settled in cash and seldom in gold. The physical market is where gold bullion is purchased, not paper claims on gold for speculation.)
All forms of money serve as a ‘medium of exchange’, and ‘unit of account’, which is convenient and flexible compared to barter. Key Point: Note that when a valuable commodity (such as gold) is used as money (‘monetization of gold’), the money is worth as much as the goods or services in the transaction. It is not just a ‘symbol’ or ‘measuring device’. This is also true of barter, but with gold’s high value per weight and volume, etc., using gold is more convenient, and thus helps improve commerce.
Two more benefits of using commodity money are to; 1. Limit excessive expansion of the money supply (inflation; loss of value) by the government, and 2. Provide a market-based, and stable, store and measure of value, with coins and paper notes produced by private mints (including banks). Mints would not require a license, and there would be no legal tender laws, since that would put the government in control. The only government function would be inspections (which could also be done by a private org) to verify that the mints indeed have the gold reserves they claim to have for redeeming paper notes. The commodity used as money could be (and has been) wheat, iron, diamonds, notched sticks, or pearls, but the market (users of money) usually chooses gold because it works best.
Did you know that the number of gold bars being purchased by ultra-wealthy individuals has increased by 243 percent so far this year? If stocks are just going to keep soaring, why are they doing this?
On Thursday, the Dow Jones industrial average and the S&P 500 both closed at record highs once again. It is a party that never seems to end, and there are a lot of really happy people on Wall Street these days. But those who are discerning realize that we witnessed the exact same kind of bubble behavior during the dotcom boom and during the run up to the last financial crash in 2007.
The irrational exuberance that we are witnessing right now cannot go on forever. And the bigger that this bubble gets, the more painful that it is going to be when it finally bursts. Those who get out at the peaks of the market are the ones that usually end up making lots of money. Those that ride stocks all the way up and all the way down are the ones that usually end up getting totally wiped out.
To get an idea of how irrational the markets have become, all one has to do is to look at Twitter.
Lew Rockwell The government and the power elite are out of control. The president rips up the constitution to start another war, and the American boobeosie sit back and watch TV. Wall Street and the big banks rip us off, and Boobus Americanus eats more junk food. But ignoring the criminals who are ruining the entire West with their monetary Ponzi scheme is hardly a cure. For one thing, we have to be prepared for retaliation by Gadaffi in New York or some other American city. But as individuals and families, we don’t have to take it. Given what lies ahead, here is what courageous Americans can do. Gerald Celente is Founder/ Director ofThe Trends Research Institute. The Trends Research Institute publishesThe Trends Journal. Listen to the interview here
Eric Blair Activist Post In recent interviews, Congressman Ron Paul has been promoting the idea oflegalizing competing currenciesin the process of diffusing the Federal Reserve's monopoly over money. As the Fed's strongest political critic, Paul will now be in a position as the new Chairman of the House Subcommittee on Domestic Monetary Policy to enforce more transparency and push for alternative currencies to compete with the dollar. Already, his unprecedented measure to audit the Fed was passed in the Dodd-FrankWall Street Reform and Consumer Protection Act. Despite being a watered down version from the original with 300-plus cosponsors in the House, it will still accomplish more transparency of the Fed. Paul has also introduced a lesser-known piece of legislation that he says is vital to reforming monetary policy and restoring economic freedom: theFree Competition in Currency Act of 2009 (HR 4248).
The premise of this bill is that private or public monopolies are naturally destructive to freedom, especially when that monopoly can legally counterfeit the nation's currency with little oversight. Paul says during his floor statement to introduce the bill that the Federal Reserve is a "dangerous organization" that "does not allow competition because they know they can't compete."
Bill HR 4248 will essentially do three things: 1) repeal legal tender laws to remove the monopoly control of the Federal Reserve, 2) legalize private mints to issue coins to be controlled by anti-fraud and anti-counterfeit laws, and, 3) remove taxes from precious metal coins to ensure fair competition among new currencies.
Paul adds that it will provide a smooth transition away from the Fed, pointing out that "if nobody wanted to use them (competing currencies), they wouldn't have to, and everybody could be happy with the Federal Reserve. But if the situation gets so chaotic that the people are looking for an alternative, they can go over to start operating in another currency."
Obviously, coins made with precious metals will maintain, or increase, in value should the world reserve currency, the U.S. dollar, continue its decline. It is this store-of-wealth component and Constitutional obligation to pay all debts in silver or gold coinage that drives Paul's monetary philosophy. And although he prefers the private production of coinage, his proposal to de-monopolize the Fed through competition does not discriminate against paper or public alternative currencies.
Some regional paper currencies have already been in circulation for years such as Ithaca HOURS and BerkShares. According to the HOURS organization, local currencies are perfectly legal "as long as it does not look like dollars, as long as denominations are at least $1.00 value, and if it is regarded as taxable income." In other words, they are essentially tied to U.S. dollars and must be taxed the same.
Ithaca HOURS, based in Ithaca, N.Y. were one of the first local currencies founded in 1991. HOURS are considered "local tender rather than legal tender, backed by real people, real labor, skills and tools" and are based on one hour of labor valued at $10. With around $100,000, or 10,000 HOURS now in circulation, they've been used for millions of dollars in trades by over 500 businesses and organizations.
The organization offers one-year, interest-free loans to local businesses. The supply of HOURS increases with these short-term loans, by issuing grants for local nonprofit organizations, a 5% annual operating/printing fee paid to a local printer, and when members sign up or renew memberships where they receive 2 - 4 HOURS for doing so. HOURS are not redeemable for dollars in banks in order to encourage local commerce.
In contrast, BerkShares, used in western Massachusetts, are directly redeemable in dollars at several participating banks. Their official website describes them as:
BerkShares are a tool for community empowerment, enabling merchants and consumers to plant the seeds for an alternative economic future for their communities. Launched in the fall of 2006, BerkShares had a robust initiation, with over one million BerkShares having been circulated in the first nine months and over 2.7 million to date. Currently, more than four hundred businesses have signed up to accept the currency. Five different banks have partnered with BerkShares, with a total of thirteen branch offices now serving as exchange stations.
Anyone can purchase 100 BerkShares for $95 at partner banks. These 100 BerkShares are equal to $100 purchasing power at participating shops and restaurants. These businesses can then either spend the 100 BerkShares back in the marketplace, or convert them into $95 at the bank. Therefore, they give a 5% discount to BerkShare customers to encourage local consumption. The program is so successful that other cities like Baltimore are modeling their BNote currency after it.
Although Ron Paul specifically mentions allowing private coinage of precious metals, these regional paper currencies provide an important alternative exchange structure should the dollar collapse. It is said that these competing currencies are backed by local relationships and labor, but it seems it was their peg to the dollar that helped early skeptics trust their value. Now that the motivation for creating currency alternatives to the Federal Reserve note is rooted in the instability of the dollar, it will be interesting to see if these communities maintain faith in their value should the dollar fail in dramatic fashion.
Western Michigan is one region that has been increasingly accepting silver or gold as a competing currency for local goods and services. A man even paid for $25 of gasoline with a half-ounce silver "barter medallion" bearing Ron Paul's likeness:
Another benefit of using gold and silver as a regional competing currency is that their value is border-less, whereas a new paper-currency may have difficulty expanding trust in times of lost faith in the fiat dollar. However, the established infrastructure for alternative paper currencies may prove to be a quicker regional solution should a dollar crisis unfold rapidly.
Ultimately, the principle of competition is of utmost importance for monetary reform. The argument is that when free market principles take hold, the most stable and trustworthy alternative currencies will likely grow in scale and coverage, yet their competition will continue to keep them honest.
Andrey Dashkov Casey's International Speculator With the gold price hitting nominal highs last month, there is a lot of “mania” and “bubble” ranting going on in the gold community. Should we start selling? A bull market typically progresses through 3 phases: the Stealth Phase, in which early adopters start buying; the Wall of Worry Phase (or Awareness Phase), when institutions begin buying and every significant fluctuation makes investors worry that the bull market is over; and the Mania Phase when the general public piles on, driving prices beyond reason or sustainability. This is followed by the Blow-off Phase, when the bear takes over from the bull and the herd gets slaughtered. Judging by the volume on the TSX Venture Exchange (TSX-V), where a lot of gold juniors are listed, we conclude that the next phase of our current gold bull market, the Mania, still lies ahead. Have a look at the chart below:
If a mania were unveiling now, we would expect to see a sharp increase in investment capital entering the TSX-V, driving its trading volume upward. Over the last few months, the TSX-Vdailyvolume has spiked upward sharply, but as the chart clearly shows, short-term volume is extremely volatile, spikes are common, and equally large drops are just as common. Stocks of junior exploration companies are leveraged to gold, meaning they rise or fall by a greater percentage than does the yellow metal itself. So a spike in volume should be expected in reaction to an ascending gold price. A more reliable barometer is volume’s 10-periodmoving averagethat removes interim market gyrations. Using this measure, the TSX-V’s volume looks like it has returned to a slope of ascent similar to before the 2008 market crash, and the longer-term trend is steadily upward –steadybeing the key word.
More investors are entering our market, but the pace is not yet accelerating greatly, as we’d expect in a true Mania Phase. In other words, an early indicator of the mania in this bull cycle will be a sustained parabolic move upwards in the TSX-V’s average volume. And that is not happening yet.
Our other volume indicator, the GLD gold ETF, behaves in an interesting manner: it frequently moves counter to the TSX-V. An explanation for this might be that GLD is considered a “blue-chip” stock; a safer haven for investors who actively trade on the TSX-V and park their cash in GLD during periods when they consider juniors overly risky.
The moving average of GLD’s volume remains on a moderate multi-year ascent but has turned down recently. However, its daily volume is up in recent trading. Given the observed correlation between trading volumes of the TSX-V and GLD, this may point to a cooling-down in TSX-V trading activity in the near term.
Finally, the ^HUI gold miners index has tracked TSX-V volume as well, also having resumed a slope of ascent similar to that of the years before the 2008 crash. We see this as another indication that we are in an accumulation phase of the bull market.
We will continue tracking these parameters and updates when we see significant changes. For now, the bottom line is that even with the gold price moving sharply higher, the mania remains an anticipated future event.
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David Redick Activist Post History shows us that when countries use a valuable commodity for money they have zero or low inflation; zero or minor cycles of economic panic or depression; and more peace, liberty, and prosperity (smaller governments). For example, the number of grams of gold needed to buy a barrel of oil has been very steady over the years. A key benefit of using gold as money is its value stability. Even better, Econ 101 tells us that a commodity such as gold in limited supply, and with increasing demand for it (growth of the economy), will APPRECIATE in value. This has huge importance because it kills the "there is not enough gold" argument, and gives a positive incentive to save and avoid debt. Thus, we would expect all countries to use sound money, except the politicians want more money than they can get by just taxing, especially for wars. They want a way to create money "out of thin air." Fiat money ("face value" decreed by the government, not redeemable for gold; we call ours Federal Reserve Notes) serves this purpose. Even when some level of redeemability (exchange for precious metal) exists, governments often suspend it before, during, and after wars, which the US did for the Revolutionary, 1812 and Civil wars, after which it must be pushed to restore it -- often with less value.
The two key reasons for using a commodity as money are to:
A. Limit excess expansion of the money supply (inflation; loss of value) by the government (you can’t trust them).
B. Provide a market-based store of value. The commodity could be wheat, iron, diamonds, or pearls, but the market (users of money) usually chooses gold because it works best.
To achieve broad use, commodity coins must be made of, or contain, a material that is:
1) Rare, with a low amount in existence now and limited new supply.
2) Malleable, so can be made into coins.
3) Stable physically and chemically; doesn't break, rust, or rot (can be stored; lasts through much handling).
4) Easy to identify (recognize), and determine purity and amount.
5) Difficult or impossible to counterfeit.
6) Homogeneous in content (a melted chunk is the same throughout).
7) Divisible into pieces (diamonds and pearls aren’t).
8) High value per ounce (not bulky to handle or store).
9) Acceptable to most sellers (familiar and recognizable).
This approach allows the use of representative paper notes ("claim checks" for gold), or base-metal tokens, so long as they are marked to show the amount of gold they can be redeemed for by any bearer, on demand.
The market of money users has decided that gold fits the above requirements best, but silver and copper can have a role in parallel, with no fixed ratios set between them as to value per gram (i.e., no bi-metallic standard). It is interesting to note that gold is not "consumed" as are other commodities, including silver and copper. Thus, except for wear, over 90% of all gold mined in history still exists (even if buried in a tomb). Silver and copper supplies and costs are more volatile than gold (more new production, are consumed for industrial use, etc.), so are less attractive, but usable. When gold is used as money, it has no "price" anymore -- weight is the unit of account. This will take some getting used to as we evolve to pricing in weight of gold.
History
From its origin until 1913, the US used a combination of foreign and domestic coins and local "bills of credit," had two failed central banks, Continental and Greenback paper dollars (both became worthless), and various runs and panics in a turbulent banking system. The unconstitutional Federal Reserve System was created in 1913 and had a monopoly on creation of "legal tender" money. It was secretly planned by bankers and politicians, for bankers and politicians. At first, anyone had the right to trade-in their Silver Certificate paper dollars for a silver dollar (this ended in 1968), and deal in gold for transactions. In March, 1933 (his first month in office) FDR took those rights from mere people, and only nations could redeem paper for gold. In 1971 Nixon ended this right for nations when he abrogated the 1944 Bretton Woods Agreement due to our serious financial problems ( a. We were running out of gold because France, England, and others were redeeming the US dollars accumulated in Europe due to our postwar spending and loans there, and b. The US was poor after spending on Vietnam and LBJ's 'Great Society', etc.). With no link to gold, the US could make dollars out of thin air as needed, and did we ever! Prices started their 'hockey stick' shaped rise a few years later as the effect of excess money creation and spending trickled to the world economy. Within in a few years, all nations worldwide ceased redeemability, even the prudent Swiss floated the Swiss franc (SF), but have been less abusive than others; hence while 1 US$ = about 4 SF in 1961, it is now about 1 US = 1 SF, so they only inflated by 2.5 while by 2008 the US inflated by 10; 4 times more!
Where We Are Today
The US has been the worst abuser among developed nations (older countries remembered their lessons from past monetary failures). The US has created so much new free, fake money since 1971 that the US dollar has lost about 80% of its purchasing power since then (this excess expansion of the money supply is called monetary inflation, like a balloon) with its consequent price increases (due to loss of the dollar's purchasing power) called price inflation. Check prices of common commodity items (that are not imported, subsidized, cheaper due to new technology, or under price control), such as a pizza, a restaurant meal, or even a car. Good examples are:
1. A room at a Motel 6 cost $6 in the 1950s, but is now in the $50 range in 2010 (same type of room and service)
2. A family car cost about $2,000 in the ’60s, but is now about $20,000 in 2010.
There is your 8 to 10X loss of USD value since the late 1940s (when the post-war big-spending started)! This ties-in with the over 95% loss of the dollars value since the Fed started! The only reason we can get away with our worldwide spending and borrowing is because the USD is the world's reserve currency (any person or bank will take and keep it as if "good as gold") and we can create new money to pay our bills. The dollar is viewed as a share in USA, Inc., the world's strongest economy, which sadly is fading (faster since 2007), as we continue the long abuse of our economy (by spending, taxing, and harmful intervention by the Fed and government) and money (by excess expansion of the supply). The era of US world dominance is ending, as it does with all empires (Rome, Spain, England, France, etc.). When (not if) the dollar loses its reserve currency status, there will be a 50% or more loss in value in a few days, and prices at Wal-Mart will triple!
Politicians and bankers love an unending supply of cheap money, but such fiat systems always fail. It is part of the pattern for all failed empires in history, and the Empire-USA is now entering the failure phase. To avoid a chaotic crash, we must reduce spending (including our role as the world’s policemen and bully), and convert to a gold-money system! The gold we own could be used to back all existing US dollars, and allow redemption of paper for gold. This would amount to about 2/10,000 ounce per dollar (or less if the Fed is lying about how much we have), and imply a price of about $50,000 per ounce. Thereafter, prices would be in weight of gold(grams, milligrams). All nations would soon convert to gold money, or sellers would not accept their trash paper. Variable foreign exchange valuations would end between countries using gold. The IMF, World Bank, BIS, G-20, and all other meddling government groups would fade and die (good). Time is short (1 to 10 years) before the big crash starts.
Write, call and visit your Senate and Congress persons to urge support of this new system. Most now prefer hyperinflation (print money to pay bills), or default (ignore debts), but that causes more damage and has no future benefit. Despite the pain and losses the conversion to gold may cause, the damage is far less than an uncontrolled crash, and there is a bright future afterward. Let’s get started.
Mac Slavo
, and 
. Mr. Redick is a "Ron Paul Style" Republican running for 