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Gold Heading Back Towards A Monetary System, Not Away

February 14, 2012, at 8:57 am
by Jim Sinclair

Dear Extended Family,

The Gold Aficionado’s greatest fear is totally without basis. The price of gold will not fall significantly from its points of true standard valuation and the introduction of a new currency system.
Gold is heading back towards a monetary system and not away from it. The producing gold company of the future is the new utility as it dividends a majority of its profits to its shareholders.
The fact that gold is money and not a commodity is the safety latch that opens on its own when all other forms of money close. Gresham’s Law is human nature seeking a standard when all other forms of exchange have mutated to casino chips with national flags on them. Increasing world liquidity multiplies itself in increasing volatility of all things traded until an epic moment when over the top volatility convinces even the most economically ignorant that only a standard that cannot be multiplied by an instant Bernanke helicopter unlimited electronic monetary liquidity system is honest money. It is the flight from the burning values in terms of purchasing power of the casino chips called fiat currency towards a standard that proves Professor Gresham’s Law. It is a study of history that repeatedly shows his thesis that good money, honest money, forces out bad money.
Between now and 2015 gold will meet and, like all markets, exceed its value as a standard of measure. However there will be no repeat of the 1980 to 2001 price adjustment. Of course gold will meet and exceed a number, but its return to that full valuation will be a modest percentage of the total value. Gold is headed to a pendulum point at the introduction of the new virtual Western World Reserve unit for trade settlement.
I see the new system utilizing a Western World M3, which all member governments will agree to as 100 on the Index of Standard Currency Equilibrium. As this measure rises and falls, governments will agree that the value of their Treasury gold will move in the same direction and percentage according to their GDP ranking.
What will of course happen is the Squids of the Western world, the investment banks, will invent derivatives to speculate on member’s gold value requirements, which will change the price of gold in the marketplace and therefore remove the necessity of doing anything from the central banks. Once again the airwaves of the financial world will hang on the weekly announcement of the M figures, but this time it will be for a Global Western M3 tallied by the historical lender of last resort, The US Federal Reserve Bank.
There will be many variations and tweaks to this concept, but once again a new Rentenmark will be invented as a virtual reserve currency unit tied to a standard (gold) with a shadow of control on Western global money supply. A function of control will be by exposure (M3), but not convertibility. Like the Rentenmark it will be a bit of a farce, but it will work due to the demand for a fix that sits in the shadow of gold but is not convertible. This new Rentenmark will not be tradable by general business but rather be the virtual Standard Reserve Currency Unit (SRCU) available only to the central banks of the Global Western Monetary Association. All the present fiat currencies, the casino chips with national flags on them called things like the dollar and euro, will still be around and serving a purpose valued against the virtual Standard Reserve Currency.
The survivor will be gold. Its volatility will subside as it trades around a pendulum point that will be the price of gold on the day of agreement to the setting of the Index of Standard Currency Equilibrium (ISCE).
Assuming Alf Fields has called the number at $4500, then gold would trade in a range around $4500, say by $500, as the derivatives created to speculate on the Global Western world M3 changes via gold’s value.
What would not remain is the purchasing power of each casino chip with a flag on it, fiat currency. That would have fallen victim to currency induced cost push inflation, which now permeates the Western world’s financial system yet to be properly defined.
In conclusion, gold will not fall significantly in value after finding its full valuation as a standard. It will mutate into a currency form the same way German real estate gave the Rentenmark its value when Germany did not own all that much real estate.
The producing gold companies will now return to what they were in the 1940s and 1950s, the utility sector of the equity market as the best and certain yielders.
This is why I do what I do every day. Rather than in the 70s when I carried 22,000 long Comex gold contracts, I am building an entity to carry as many ounces of mineable gold as I possibly can assemble to become a utility equity of the future via outright ownership and royalty. That is done through TRX on the NYSE and TNX on the senior Toronto Stock Exchange.

Regards,
Jim

The Final Tipping Point: We The Sheeplez Meet Cliff

by D Sherman Okst, PsychopathicEconomics.com:
“The world is a dangerous place to live; not because of the people who are evil, but because of the people who don’t do anything about it.” ~Einstein
 
Pareto’s Principle
When I began seriously researching for the book I’m working on, “Psychopathic Economics,” two principles really surprised me.
The first was a much deeper review of the ’80/20 Rule’, which states that 80 percent of the profits come from just 20 percent of the product line. Most often, 80 percent of the business generated is created by 20 percent of the work force (usually the sales team). In many cases 80 percent of the product line is purchased by 20 percent of the customer base. When businesses wind up on the ropes, 80 percent of the time they cut into that 20 percent muscle.
But what really floored me was the second principle. Social scientists revealed that with herds it only takes 5 percent of the herd to create a “social tipping point”. This 5 percent is actually large enough to nudge the herd in a different direction. Which brings focus to Einstein’s quote:
“The world is a dangerous place to live; not because of the people who are evil, but because of the people who don’t do anything about it.”
Read More @ PsychopathicEconomics.com

An Economy That's Gone Off The Cliff

Dave in Denver at The Golden Truth - 5 minutes ago

But first, I wanted to unload on AAPL. AAPL has run up $74 billion in market cap since releasing its earnings a couple weeks ago. That's a 20% move. The stock has gone parabolic (and the media morons call gold an investment "bubble?"). The market cap of AAPL is now close to $470 billion. At first glance the earnings and cash flow are quite impressive. It has amassed a cash hoard of almost $100 billion. It's trading at 35x trailing earnings and a hefty 10x cash flow. Those are pricey multiples for a company that has "sustainability of franchise" issues now that the founder... more » 





 

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know-it_02112012

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This story illustrates something so eggregious that I felt compelled to post it so as to let the readers know what the fallout from this meddling Administration's policies is across this country. We apparently now have Kathleen Sebelius's Department of Health and Human Services feeling that they have the right to POLICE your childrens' lunch boxes. Take a look at the following story and tell me that we are not losing our freedoms in this nation. This is what Obamacare has wrought and what we can expect to see more of should Americans be foolish enough to empower this group of cont... more »

 

 

Gold moving higher in Yen terms; strong in Euro terms

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Order a copy for me while your at it...  :-)

The Oracle – Martin Armstrong the Movie Trailer HD

 

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Triple Lutz Report – Totalitarianism Stealing Your Rights Away One Cellphone at a Time – Episode 160

from The Financial Survival Network:
 
We all know that every level of government is broke and that in a vicious effort at self-preservation, they will stop at nothing to keep the game going. New York State and New York City have been masters of this game for decades. Visit New York City and you’ll be hit with the full force of the law, regardless how trivial your offense. Yesterday, one of Mayor Michael “Nanny” Bloomberg’s boys in blue hit me with a ticket for egregious offense of holding a cellphone in my hand while driving.
When he approached the car and asked what I was doing with the cellphone, I informed him that, “I was talking to Siri.” Alas this was no excuse, since merely holding any electronic device in one’s hand is now grounds to receive a $150 ticket and 3 points on your driving record. Intent to violate the law is no longer required. And of course there’s never been any finding that someone who merely holds a cellphone or other electronic device in their hand is any more likely to have an auto accident as someone who’s holding a cup of coffee of a lipstick. Increased risk and threat to public safety is merely a justification for ever more intrusive and burdensome laws. And of course there’s there revenue side of the ledger. Millions of dollars will flow to Albany and New York City’s coffers as a result.
So it’s the citizen be damned. Your purpose is merely that of a milk cow, being constantly squeezed to produce ever more revenue and sustenance for a government that knows no bounds. New York, in its glory days was once known as the Empire State. Now it has simply become an empire of corrupt, inefficient, exploitative, rapacious government. For some reason I don’t think that’s what the Founding Fathers had in mind when they created a constitution that gave the government limited powers and sought to insure individual rights.
Click Here to Listen to the Podcast

 

 

Silver Still Strong Above $33

from TFMetalsReport.com:
The Turd is very impressed with the continuing action in silver. It continues to find strong support every time it moves down toward $33 and it beginning to de-couple from the POSX.
So let’s start this lovely Tuesday right there. The POSX has been rallying of late, primarily due to Euro weakness. We’re now also seeing weakness in the Yen but more on that later. For now, here’s the same old Pig chart that we’ve been watching. 79.60 is obviously a level to watch very closely.
Read More @ TFMetalsReport.com

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According to Ramesh Ramani, CEO of BRR Jewellery, it’s important for businesses such as his to cater to rising tourist demand. Those customers are mostly tourists from countries like India who hope to find hot deals in Dubai. Due to on-going high demand for the yellow metal, so-called Express Outlets are springing up like mushrooms. The much lower rents for the small kiosks are also playing a role and after receiving a licence they can be opened virtually anywhere making it easy for merchants to approach well-visited tourist centres. Another plus for the gold kiosks are the low personnel costs as it only takes two to three well educated employees to assure a smoothly operating business. The large showrooms on the other hand require a lot more personnel and the presentations of gold products take more time compared with gold kiosks. The large Indian jewellery firm Sky Jewelley recently opening its first gold kiosk in Dubai.
Read More @ GoldMoney.com

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[Ed. Note: Listen, once again, for the improper use of the word "anarchists" to describe people who clearly want MORE government, and not less. War is Peace. Freedom is Slavery. Ignorance is Strength. Communists are Anarchists.]
The debt-ridden EU has suffered another blow from ratings agencies. Moody’s has downgraded the debt ratings of six EU states – including vulnerable Portugal, Italy and Spain. It comes as the bloc struggles to prevent Greece from default by offering bailouts in return for more austerity. But as RT’s Jacob Greaves reports, more and more Greeks feel the measures will only make things worse.

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