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"[A] wise and frugal
government ... shall restrain men from injuring one another, but shall leave
them otherwise free to regulate their own pursuits of industry and improvement,
and shall not take from the mouth of labor the bread it has earned. This is
the sum of good government." -- Thomas Jefferson
"It has been said
that all Government is an evil. It would be more proper to say that the
necessity of any Government is a misfortune. This necessity however exists;
and the problem to be solved is, not what form of Government is perfect, but
which of the forms is least imperfect." -- James Madison, 1833
LIARS & THIEVES
There's a strong
connection between Wall Street's moneymaking policies and Washington's
law-making policies. They both cost and steal money, while giving no
guarantees for performance. It takes a healthy dose of skepticism and
independent thought as well as a whole lot of courage of your convictions to
both make and protect your own wealth.
BLOOD IN THE SAND AND ON
THE MOON
The "Arab
Spring" is as I have warned you not a welcomed groundswell of Democracy, Instead it has unleashed a 1,300-year-old wave
of destruction that is poised to reach around the globe unleashing death and
destruction into the middle of your life. Unfortunately, millions of
unprepared and unthinking Pollyanna's will experience unprecedented financial
pain and loss while others like my readers will reap great gains due to their
thinking and preparedness.. The Price of GOLD and
OIL Will explode as the worst DEPRESSION HISTORY hit the world.
Burying the Truth
Over 100 years ago,
novelist Emil Zola of Richard Dreyfus fame stated "If you silence the
truth and it be hidden and buried, it will grow and gather such explosive
power that the day it bursts through it will blow up everything in its
way." This is a key reason why economies crumble, World Wars begin and
entire empires wind up in the junkyard of history". It is also why investors
lose fortunes and lives are destroyed.
It's become my mission to
give you a direct, immediate pathway to the truth no matter how lonely that
endeavor may be and no matter how much opposition and risk I face.
So now, finally, others
are beginning to see what I saw many years ago. Socialism doesn't work and
only Capitalism can save us and the world.
Aubie Baltin
SELF DELUSION IS NO WAY
TO MAKE PRUDENT INVESTMENT DECISIONS.
Fitch has warned that a
comprehensive euro-zone deal is now "beyond reach," placing six
euro zone countries on short-term downgrade watch. Fitch has also downgraded
Goldman Sachs, Bank of America, and Morgan Stanley among others.
Moody's has downgraded
Belgium by two notches, warning that their soaring borrowing costs are
straining their Financial Foundations.
Standard & Poor's
reported planning potentially traumatic and devastating ratings changes of
the heavily indebted countries like Belgium and France and possibly even
Germany.
The IMF has in its
strongest warning yet, that the global economy could soon see another Great
Depression.
Why a 2008-Type Scenario
and much worse Is Now Unavoidable!
We are one headline away
from a massive spike in gold prices as well as a bursting of the Treasury
BUBBLE. And $300 to $400 OIL. We are ignorant to believe a 1600 year-old war
and simmering hatred between the Sunnis and the Shia will fade away simply
because we lowered our flag and basically pulled out of the Middle East.
Instead we left a vacuum and everybody knows that the world abhors a vacuum. It
will soon be filled, but by whom?
The sad truth is we are
in worse shape now than we were four years ago: And in Graver Danger the ever
in our history. If what we think is about to happen becomes reality, GOLD and
OIL will skyrocket as world stock markets and Financial Systems crash.
Just like Hitler who told
the world exactly what he was going to do and the World disregarded him until
it was too late: We are ignoring today's Megalomaniacs and Psychopaths as well.Will it be too late once
again.
Will America Survive
Humanism?
Waves of pessimism have
overwhelmed the European Union; its economy has stalled, good will between
its members has dissolved, and its leaders watch helplessly as
ever-increasing populations of Muslim immigrants establish hostile, independent
communities within European borders. Europe is going the way of the Roman
Empire, but how did it get here? Europe as a Mirror for America,
outlined the advance of enlightenment FREEDOM and Free Thinking in the West,
and then explains how humanist philosophy has already destroyed
Europe and is in the process of destroying America. Applying little-known
historical examples establishes that America's restoration and the salvation
of Europe can be achieved but only by a wholesale return to the
foundation that originally made the West great:
Free Market Capitalism
Embodied In Optimistic Judaic Christianity
WHERE TO NOW?
Most every other day, we
get another "out-of-the-blue rally", thanks to another new European
bailout plan - a "three-year long-term refinancing operation
(LTRO)" which is just another acronym for "kick the can down the
road." In a nutshell, the European Central Bank (ECB) offered European
banks an opportunity to re-finance their assets at 1%, over a three-year term
instead of just a few weeks or months. So now, 523 over-leveraged banks just
borrowed another $650 billion in order to buy the sovereign debt of
down-graded troubled countries. But the euphoria after each piece of so
called good news does not last the day. Then the actual auction results
created another spike in euphoria that lasted the morning- but then the Euro
faded. And so did stock futures, gold futures, copper futures, and just about
every asset out there. Why?
Because the markets know
adding cheap liquidity to shaky banks is like giving whiskey to alcoholics.
Plain and simple - it's dangerous, maybe even deadly! We saw what this did in
Japan in the 1990s to 2010 and we will soon be seeing it in Europe in the
2010s. and yet we in America cannot see the writing
on the Wall, as Obama just asked for another $1,5 trillion debt increase.
This Latest Bailout
Effort Only Puts Us CLOSER
too the Ultimate Day of Financial ARMAGEDON.
No amount of
"liquidity" (easy money) is going to magically solve the fact that
too many people (and nations) borrowed too heavily and spent too freely
during the boom years. Easy money for European banks doesn't solve the global
economic slowdown that we're witnessing either and that I started predicting
1 1'2 years ago. Nor will it prevent corporate
earnings growth from tanking along with both the Stock and Bond markets.
AMERICA'S FINANCIAL
DOOMSDAY
JIM RODGERS over a year after my 1st
warnings, STATED THAT THE NEXT BUBBLE TO BURST Is the BOND BUBBLE. This is
going to end very badly and you need to make sure you're prepared.
"Buying U.S. government bonds at this stage is a terrible mistake; it is
one of the few bubbles left in the world."
Instead, Rogers believes
that owning hard assets is the best plan. He opines that the Federal Reserve
will be continuing their massive quantitative easing efforts. "I
am not short bonds yet, but I plan to be short bonds," he said. "If
the world economy gets better, you are going to make money in commodities
because that's where the shortages are. If the economy doesn't get better,
they are going to print money." (And we will make money in GOLD.)
Finally, Rogers said that the Federal Reserve is already engaging in another
round of quantitative easing, they just haven't told the public about it yet.
I am a nobody so he gets all the Press.
If all of that is not
enough: Our Government is talking about "Sustainable Development".
Translated into plain English, that means more regulatory power for the
EPA. GOD will we ever learn or is it already too
late.
Gold's glitter will soon SHINE
BRIGHTLY
The Santa Claus Rally has
come and gone without too much fanfare this year. Even gold, a traditional
seasonal favorite and safe haven has been caught up in the Euro/USA turmoil.
Indeed, the precious metal has dropped some $400 or 23% from the all-time
high registered in early-September. It dipped below its 200-day moving
average for the first time since January 2009, which brought to an end the
longest ever streak - 732 days. Not surprisingly, the breakdown has prompted
the Bears to come out of their lairs to declare that the 11 year bull market
in gold is finally over. The many "barbarous relic" proponents, who
have been dead wrong for 11 solid years and have completely missed out on the
world's top performing asset, insist that gold's price action is nothing more
than a dangerous asset bubble. This kind of misguided thinking fails to
explain why gold has been ascribed value by humankind for at least the last
5,000 years and has never become worthless. Could the long sweep of history
truly be wrong?
It's more than a decade
later and the non-believers' message remains the same. Investors who heeded
such advice have missed the opportunity to reap a near sevenfold increase in
capital investment in the precious metal over the last decade. Of course,
past returns are no guarantee of future performance and although it may be
fair to say that the bull market in gold time wise is closer to its end than
it is to its beginning: Price wise we still have another 400% to look forward
too. Meanwhile the underlying fundamentals suggest that there is still
another 4 to 6 years left for the metal to shine. And I would rather stick
with an unblemished 10 year track record than any Johnny-Come-Lately trying
to vindicate their last 10 years of folly.
It is important to note
that its stubborn critics are not the only ones to demonstrate a complete
lack of understanding of gold's attributes. So have a great many of the so
called Gold Bugs who recommended taking profits on your gold holdings that
they wished they had. They did so in 2006 and 2008 much to the chagrin of
their followers.
Such thinking is
dangerously misguided, but technically welcomed as quantitative easing and
the associated increase in banking sector deposits held at the central bank
will soon lead to a concomitant increase in the money supply. The traditional
multiplier model taught in Economics 101 is wrong since banks no longer make
loans according to the level of reserves in excess of statutory requirements
but on the basis of adequate levels of capital (which are now suspect) and
the availability of profitable loan opportunities. The evidence from both
Japan and more recently, the US demonstrates that quantitative easing does
not work through the lending channel when the banking sector is
capital-constrained and the private sector which cannot print its own money
is reluctant to borrow. Simply put, the large increase in consumer prices
anticipated by bulls, who only view gold as nothing
more than an effective inflation hedge, will only materialize when it's least
expected: But it will materialize as the Natural Laws of Economics dictate.
For the time being,
deflation remains the clear and present danger, particularly so in the Euro
zone following the latest summit, which hopes to enshrine pro-cyclical monetary
policy while proclaiming austerity. Good Luck to that.Perhaps
I should offer the all a course in Economics 101.
Fortunately for us, the
historical record demonstrates that gold performs equally well, if not
better, in the presence of a destructive debt deflation.
The logic is easy to
understand. Individuals scramble for liquidity and flee financial assets
during deflations. The deteriorating credit quality of currency issuers, as well
as currency's lost function as a STORE of Value and the resulting loss of
confidence in the Banking system, means gold by default becomes preferred to
paper currency as a hoarding vehicle (Store of Value) simply because the
precious metal is no-one's liability and always pays off. In essence, gold is
an effective insurance policy against a black swan event such as debt
deflation or Hyper Inflation. Or may I dare say Currency Default?
It is important to
appreciate that gold does not require a black swan event to perform well. Its
market thrives on uncertainty, something that the equity markets abhor and
that typically attracts investors during periods of increased risk aversion.
It is said that the only
thing that rises during bouts of market turbulence is correlations, but the
historical record demonstrates that gold's correlation with stock prices
turns decidedly positive when equity markets are turbulent. In other words,
the precious metal acts as an effective portfolio diversifier and helps to
mitigate losses during uncertain times.
GOLD also serves as a
viable currency alternative, competing directly with the world's major
currencies.
Since gold is a
non-interest bearing asset, its relative attractiveness is enhanced as the
interest rates fall. The opportunity cost of holding gold decreases and
consequently its relative appeal rises. Near-zero interest rates across the
developed world combined with quantitative easing programs that place
downward pressure on the associated currencies means the hurdle for gold has
seldom been this low and its attractiveness this high.
The gold price has come
under pressure during the last 4 months, which has seen bulls declare an end
to the spectacular run of the precious metal for all the wrong reasons. A
closer examination of the facts, however, reveals that gold is most likely to
glitter even brighter in 2012 and beyond. Does anyone really believe that the
printing of trillions of US Dollars, Euros, Yen, Yuan, Rupees, etc. have no
negative consequences and the printing and QEing
have really only just begun?
ARE YOU TEMPTED TO SELL
OR EAGER TO BUY?
My advice is to spend a
little more time watching the drivers for gold and a lot less time worrying
about the price. Until those things change, look for an entrance, not an exit.
Interestingly enough,
financial market stress has indirectly dragged gold prices down and weakened
the euro. That's rather shocking to many analysts, I among them, who thought
gold could surpass the $2,000 mark by the end of 2011.
On the contrary prices
have fallen to a point where investors with longstanding positions are
liquidating some of their holdings to secure profits and momentum-driven
traders are selling heavily mostly to raise cash needed for redemptions. But
these are temporary factors that are about to change and provide the best
opportunity to buy Gold cheaply of the Decade.
Negative factors
contributing to the recent price slump
They include year-end
book squaring, sales to secure profits and more importantly margin calls as
well a liquidation to pay unrelated Mutual Funds liquidations. A temporary
pause in emerging market demand, (primarily in INDIA because a weak Rupee)
has lifted the gold price in India to record highs prices in Rupees; reduced
positions due to successive increased margin costs as the prices rose.
Protective stops as well as sales triggered by the manipulative breakdown of
support levels. The Taking of profits while retaining of loosing
positions.
Please note the
difference - On the bullish side, there are solid long-term reasons why the
gold price should rise. On the bear side, the reasons are short-term and they
are engineered and manipulated reasons to sell gold.
Why else would the prices
be falling after London is closed and before Asia opens? It is this kind of
selling that is forcing the price down, but not for much longer.
Additionally, some
experts are suggesting that there is a link between the gold price and the
price of the Euro. While a common denominator is difficult to determine
there, many investors are worried where gold will go from here and how much
further it could fall. If you are one of these investors interested in
selling, you still want to get the best price for whatever gold you currently
possess. According to Mineweb, your greatest chance
of successfully doing so would be to sell in the market where you can
"sell the most gold at a price that is achieved on (your) entire sale at
one time."
In these volatile times,
you really need a good understanding of the worst and best ways to sell large
quantities of gold. This is why the two daily Fixing sessions were set up in
London. The AM Fix usually achieves the highest price, incorporating as it
does the emerging -particularly the Indian and Chinese markets- world. In the
afternoon, the Fix is usually set lower because the gold price usually falls
in the U.S. After the afternoon Fix, the gold price is usually at its daily
weakest in a relatively 'thin' market. So sales after the afternoon Fix are
almost guaranteed to achieve the lowest price and have the most detrimental
impact on the gold price. And this is particularly so if the sales are heavy
in a "thin market". Certainly, unless immediate demand responds to
this in Asia's day or in London's morning to the extent that they chase
prices, the gold price will remain at the lower levels.
But the sales of gold -
both on the fall from $1,900 and from $1,700 -- took place after both Fixes
were done. Why on earth would a seller want to sell when he would achieve
only the worst price? Why sell persistently to make the gold price fall
further? Unless that is precisely what is wanted to achieve. With lease rates
in negative territory, it appears that heavy lending has taken place
encouraging just such falls. Is the motive the same as it was when Central
Banks sold gold in the later fifteen years of the last century? It could be
so! Their motive then was to ensure the dollar's dominance.
If you've got a lot of
gold to sell, you might consider selling to Central Banks especially and the
emerging markets.. They want quantity, so you may be
better able to negotiate a higher price if you've got the type of volume
they're looking for. Keep in mind that Central Banks' demand for large
volumes of gold may well turn things around in the gold market. Despite
gold's slacking prices lately, there are still a lot of bullish fundamental
characteristics to gold. Such as: Central bank demand, limited mine
supply growth, a surge in jewelry demand, and gold's position as a safe-haven
and potential to become a currency standard in the ever-evolving world of
finance will soon stimulate a recovery in the gold market. The most
compelling reason is the ever increasing interest in increasing the money
supply by China, the USA and Europe.
GOLD IS ALWAYS A SUPERIOR
GOOD
I have explained what a
superior good means in economic terms more than once: That is when prices
increase and demand increases instead of shrinking as prices rise, which is
exactly what has happened for the last 10 years. Gold has not dropped, but
has continued to rise both as to volumes traded and price for 11 consecutive
years. The recent decline in price in US Dollar terms makes it only look that
way, since it is actually up in terms of other currencies like the Rupee
(India is still the world's largest buyer of gold) and the Euro has been
dropping in terms of gold.
GOLD STOCKS
Gold prices are set to
break upwards to $2,500 in the next 6 to 10 months. That's more than 35% in
gains for those who have the courage of their convictions and are not afraid
to stand alone. Besides, you are not alone, most of my readers and I will be
right there beside you. If you do, those 35% 40% gains will look like child's
play compared to the 100% to 150% you could earn investing in the group of
"stretched rubber band" gold stocks that could start rebounding as
early as this month. In fact, these gold stocks are stretched to the limit
right now and the slightest trigger could send them soaring.
There's an important
ratio between gold bullion and gold stocks that has been stretched out of
proportion by gold's rapid rise and the gold stocks out of proportion fall.
This ratio - between the gold indexes and the spot price of gold - has been
maintained for decades. Traditionally, these investments, which average a 2:1
ratio with gold - meaning if gold goes up 10%, these stocks double that,
going up 20%. If gold goes up more than 60% - like it did from mid-2010 to
mid-2011, these stocks should go up 120%. But the recent run up in gold
prices has gone too high, too fast for these investments to keep up. And that
2:1 ratio has been thrown completely out of whack, with these stocks trading
nearly sideways, despite much higher returns as gold prices surged. That's
about to change... After more than 6 months of fluctuating gold prices, these
"rubber band" stocks have been stretched thin. And as they snap
back, they could easily bring 100% gains or higher - just to come up even
with the current price of gold. HOWEVER, the normal is that just as they sold
off to below their normal ratio, they will in turn over shoot on the up side.
IN SPITE OF GOLD'S RECENT SELLOFF, GOLD HAS DEVELOPED AN ALLURE LIKE NOTHING
ELSE HAS, SO THAT BOTH 2011 and 2012 will end their 11th and 12th consecutive
years making new HIGHS. If any of you know of a better investment, please let
me know about it.
GOOD LUCK, GOD BLESS and
HAPPY NEW YEAR
The Power of Now
happens the moment you decide to take control of your own life. Take the next
fifteen minutes and decide to take control for 2012.
This is the moment that you change your life.
Create a New Year's Resolution that includes two goals for your personal life and
for your career. Last year, one of mine was to remove the negativity of the
media by simply tuning them out and finding more rational, NON-POLITICAL
information sources. By understanding what is really happening, you become
better able to remain positive and move forward with both your personal life
and business goals.
YOUR FIRST STEP: Is to subscribe to UNCOMMON COMMON
SENSE, right now. Don't procrastinate - DO IT NOW: It can be this moment
that you choose to make 2012 an amazing year, only you can do it.
All of my long term readers were not surprised by
the shenanigans of the last few months. There are rarely any major surprises
once you learn how to analyze political speech with an open mind and without
pre-conceived ideological positions. My most frequent mistakes are usually
only ones of timing. I seem to continually underestimate the stupidity and
ignorance of our Media, Keynesian Economists and Politicians who don't seem to
know how to tell the truth. In most cases, "The Obvious Is Obviously
Wrong" and is the one thought that will keep you on the right side:
That and COMMON SENSE.
We are into the most trying times in our nation's
history. We can either succumb to our Government's folly and go down with the
ship or personally prosper. As always, the choice is yours.
EXPIRING MEMBERS:
Existing and expiring subscribers can extend their subscription for one year
for only $199 or $349 for 2 years. A new Gold and Silver Timely Buy List will
be sent to you tomorrow.
NEW SUBSCRIBERS: Give
yourself the investing advantage by getting a five month TRIAL Subscription
for only $99. A one year subscription is only $249 and a two year
subscription is only $349. SPECIAL: Month to MONTH is also available at $30/mth.
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Please call (561) 840-9767 to subscribe by credit card or mail a check for
the required amount to: Don't forget to include your email address as well as
your phone number.
UNCOMMON COMMON SENSE
Aubie Baltin CFA, CTA,
CFP, PhD.
2078 Bonisle Circle
Palm Beach Gardens FL. 33418
aubiebat@yahoo.com
561-840-9767
Please Note: This
article is for education purposes only and is designed to help you make up your
own mind, not for me to make it up for you. Only you know your own personal
circumstances so only you can decide the best places to invest your money and
the degree of risk that you are prepared to take. All Information and data
included here has been gleaned from sources deemed to be reliable, but is not
guaranteed by me. Nothing stated in here should be taken as a recommendation
for you to buy or sell securities. I am
not a registered investment
advisor.
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