Last weekend I was one of the speakers at the FATCA Fact Finding Forum held in Toronto. The event was sponsored by the Progressive Canadian Party. The proceedings of the forum are now available on Youtube. The Canadian government has said that it is close to signing a IGA (intergovernmental agreement) on FATCA with the United States. FATCA will result in the ratting out so-called “US persons” with Canadian bank accounts. This has been devastating for thousands of the approximately one million affected people in Canada. If Canada signs an IGA it will destroy the lives of hundreds of thousands of Americans in Canada. Canada must say “JUST SAY NO to FATCA”.
Month: December 2012
Paper-Gold Fraud Now Out In The Open by Jeff Nielson
In Paper-Gold Fraud Now Out In The Open, Jeff Nielson makes the point, that I made in an earlier post, that the market price of gold is manipulated, offering the supply crunch of physical gold as the proof. Here are some interesting tidbits:
The virtues of (actual) “free markets” are well-known to anyone familiar with basic market dynamics: they self-correct. If supply exceeds demand, the price falls to a sufficient level to discourage more supply and encourage more demand – until those simultaneous dynamics achieve equilibrium: supply and demand
matching, with prices stable.
Conversely, where demand exceeds supply; prices must rise sufficiently so that more supply is encouraged and more demand is discouraged, until once again equilibrium is achieved. Thus a permanent supply-deficit is ipso facto proof of price-suppression.
The problem with the price-suppression of any kind of physical “good” is always the same, one inevitably runs out of inventory as the repressed supply and excessive demand caused by artificially low prices means that buyers will always outnumber sellers.
Now this should help explain why investor grade bars and coins are not available at bullion stores–the price is manipulated too low. Buyers are readily available but sellers are scarce, and so physical metal is not available.
Disclosure: I own Sprott Physical Gold Trust and Sprott Physical Silver Trust
Waist inflation
Most of us have heard of economic inflation, grade inflation, and other such bubbles. Here is one that is perhaps new to folks: waist inflation. This is the phenomenon where the a size, such as 38 inches men’s waist size, will actually fit someone much larger, say 41-42 inches. As I am now in slimming mode, I’ve found that my 40″ Hanes stretchy trousers are too lose at 40.5 inches, yet they still fit when my waist was 44″. Thus, I could easily deceive myself that I was only a size 40 when I was really 44. Deception is the name of the game when it comes to phoney markets and economies.
A couple times now, men have told me: “I’m a 38″, when in fact they were manifestly fatter than me when I was at 42″+. In their cases, they were wearing Levis. Denim is a fabric that shrinks upon washing and drying and stretches to size in the first few minutes of wearing. Thus, these men convinced themselves that they had 38″ waists. Levis, size 38″, fit nicely when one is 41”.
The manufacturers of these products, particularly Hanes, know what they are doing. They know that if someone thinks he’s a 36, and tries on a 36 and it’s too snug, he will reject that particular label for a one with a size 36 that fits him better. So they make trousers about one size too big, just to appeal to the vanity and lack of realism on the part of the consumer. And they also created trousers with stretchy waistbands just so that a man may maintain his pants size while allowing his belly to go to pot.
The result of this waist inflation is too often adverse health related to obesity. A man who can claim to be a waist that is as much as four inches smaller than his real size deceives himself and may delay necessary lifestyle adjustments. In my case, the lifestyle adjustments came as result not of acknowledging realistically my girth but of finally understanding that many of my adverse symptoms were related to high blood sugar: peripheral neuropathy, arthritis, and chronic levels of fatigue after eating.
Many of our serious problems in Western culture require a denial of reality. Our debt-based money system makes us think, for example, that we can continue to borrow and never pay back. But illnesses will set in, killing the organism, if lifestyle changes don’t occur. The pathologies related to waist inflation, thus, are analogous to the sickness of the debt-based economy in which we live. We deny the disease which is ultimately killing us.
The physical gold market vs. phoney gold markets
The phoney silver and gold markets, e.g., the London and New York exchanges, trade in multiples of paper in relationship the actual available physical metal. Today, a call to my local coin dealer shows that the market price is far too low. The Canadian PMX expects to have one ounce physical coins including silver American Eagles, Silver Rounds, Maple Leafs, Philharmonics, and bars; and 1 oz gold Maple Leafs, bars, and Philharmonics only by the middle of January. This means: (1) the mints can’t keep up with the investor demand because the current market price is too low; (2) no one who actually already owns physical species of precious metals in the Toronto area are bringing their coins to Canadian PMX to redeem them at these pathetically low market prices. Thus, those with physical metal know that they are holding value, while the current paper market in which traders pass back and forth many multiples of paper metal with little physical backing is an absolute farce.
I remember those who came from manipulated markets in the Soviet bloc countries during the cold war had severe supply demands. I heard a testimony once that people would stand in line at markets for a long time, not even knowing what was for sale. When you final came to the front of the line, they might be selling left shoes size ten, and you would buy them, as many as you could, because you never knew when you might have another chance to buy something.
Currently, the physical market is very tight. If buyers have a chance to put their hands on physical metal, they should. You never know the next time you’ll have a chance.
Disclosure: I currently have positions in Sprott Physical Gold Trust and Sprott Physical Silver Trust.
The Righteous Investor 