Russell: “In the early days of the US, the dollar was trusted. The reason it was trusted was that the dollar was backed by physical gold. Those were the days when the dollar was considered “good as gold.” The obvious reason was that a person could take his dollars into any bank, and exchange his dollars for gold.
This changed in 1933 when Americans were forbidden by law to own gold. As far as Americans were concerned, they were now dealing with paper and could no longer exchange their paper for gold.
So in 1933, Americans were no longer on the gold standard. But foreigners who were creditors of the US would settle their accounts in gold. If the US had a debt with a creditor, the creditor could settle his debt by calling in a quantity of gold.
This changed in 1971 when, in the face of an outpouring of US gold, President Nixon slammed the gold window shut. This took the US, both domestically and internationally, off the gold standard. The dollar was simply a piece of paper, comparable to Monopoly money. Following the US’ example, the rest of the world abandoned the gold standard.
Mysterious forces were trying their best, but they couldn’t keep the stock market from swooning Wednesday.
They failed in the morning, despite massive purchases of stock index futures contracts. Within minutes of the market’s opening, the Dow Jones industrial average was down 350 points. Later in the day — after a lot of shocking ebb and flow — the Dow bottomed out with a decline of 460 points.
It was only in the last hour of trading that the market saviors managed to trim the Dow loss to just 173 points. And they succeeded only after Janet Yellen’s private, upbeat remarks about the economy were leaked.
Welcome to a new kind of stock market — one that the average investor should refuse to be invested in. ...
"Democracy in a free market capitalistic society today only exists in the imaginations of sleep-walkers in the American Dream. The idea of honest, hard work being suitably rewarded has become a mind-numbing slogan that is now just beginning to wear off in the minds of some Americans.
While Americans were working and playing hard, our representational democracy has evolved into a political system that has been completely and utterly bought by the moneyed interests, and is now a protection racket for their accumulation of wealth and advantageous positions of power and influence. We live in a land where untaxed off-shored wealth is ignored, and the whole tax system has been customized to suit their personal needs.
We live in a fictitious land where multi-national corporations are legally given Frankenstein-like status as a red-blooded American, and their money has become their vocal chords. Politicians, while posturing that they are working for the people, are nothing but lobbyists for the rich, which most of them are, or assured to be upon leaving office to be rewarded with speaking fees, or think tank positions by their powerful benefactors.
Net speculative longs in gold increase for the first time since August 2014. There is a growing sense that the metalÃ¢â‚¬â„¢s price has been beaten up too far. With the marginal cost of production close to US$1100/oz, miners are likely to cut back on production should the price fall any further, helping to constrain supply.
Kelly Smith writes: The U.S. Comex gold futures outperformed all the major asset classes this week, jumping 1.60% to end at $1,241.20 on Thursday. Gold prices have surged while the S&P 500 Index has dropped 2.26%, the Euro Stoxx 50 Index has plunged 3.87%, and the crude oil futures have dived 3.64% week-to-Thursday. The Dollar Index has lost 1.11% to finish at 84.955 on Thursday. The benchmark U.S. ten-year Treasury bond yield plunged to a low of 1.862% from 2.281% last Friday. The Merrill Lynch Treasury Bond options implied volatility index (MOVE Index) surged from 74.64% on Tuesday to 101.28% on Wednesday while the VIX Index jumped from 21.24% at the end of last week to 26.25% on Wednesday and 25.20% on Thursday. The Greek ten-year bond yield has surged almost 220bp this week to 8.641%.
Structural over-indebtedness argues for further upward revaluation of gold
Economists and politicians continue to attempt to lower high debt relative to economic output (debt/GDP), resp. stop its further growth. We think the ratio between the size of the public debt and gross domestic product is not very meaningful. The uselessness of this data can be seen from the fact that the calculation of GDP has recently been changed. An increase in GDP must – ceteris paribus – lower indebtedness relative to GDP. This happened in the US, where overnight GDP was reported to be 3% higher than previously believed, by suddenly including intangible values such as licensing fees and R&D spending in the calculation. As a result, $470 billion. were pulled out of the statistics hat. This is roughly equivalent to the economic output of Belgium. ...
After cutting bullish Comex gold futures and options holdings for eight straight weeks, large speculators added to their net-long holdings. Large Speculators Add To Gold Bullish Positions For First Time Since Mid-August
By Greg Hunter’s USAWatchdog.com (Early Sunday Release)
Former Treasury Secretary Dr. Paul Craig Roberts says all U.S. financial policy revolves around propping up the dollar. Dr. Roberts contends, “I’ve always said the whole system is rigged. It’s a house of cards, and the weak spot is the dollar because they cannot print foreign currencies for which to buy dollars. So, if there is a worldwide run on the dollar, they lose control then. In the meantime, they have all these things they can do to counteract the direction of the markets, and I expect them to continue doing that.”
By Michael Pento of Pento Portfolio Strategies October 17 (King World News) - Despite Rally & Propaganda, Fed To Launch Historic QE-Infinity
It wasn’t too long ago that the stock market was busy celebrating a “great” September jobs report. There were 248k net new jobs created and the unemployment rate dropped to 5.9 percent. Janet Yellen, Ben Bernanke and the rest of Washington D.C.’s central planners deemed it a great time to take a Keynesian victory lap, basking in the delusion that they have now proved you actually can print and borrow your way to prosperity.
And because of their success, the Fed would be able to raise interest rates without any damage to the economy....
Author: Lawrence Williams Posted: Friday , 17 Oct 2014 LONDON (MINEWEB) -
One of the junior gold exploration sector’s big West African success stories is facing delays, probably fairly minor, due to logistical complications arising from Liberia’s Ebola epidemic. Speaking at a Canaccord Genuity resource event on Thursday, Aureus Mining’s CEO, David Reading, noted that although there had been no Ebola cases reported at the mine site, nor at the local village at the company’s New Liberty gold project, the disease epidemic, along with the rainy season, has affected equipment deliveries which may delay the guided start-up projection of initial gold production in Q1 2015 and steady state output by the end of the first half of the year.
Reading noted that Aureus has, similar to many West African companies, implemented strict Ebola protection protocols with enhanced security and more restricted access to operations...
Most of the world’s greatest mines started as a surface outcrop before turning into a big hole in the ground. Australia’s Deep Exploration Technologies Cooperative Research Centre, backed by miners like BHP Billiton , Barrick and Newcrest, is developing new techniques to find deposits visible only deep underground.
The premise is that mineral deposits are evenly scattered across the globe and miners have only found the ones with veins at or near the surface, says Neil Williams, retired chief of government research agency Geoscience Australia. Even the world’s deepest mines, like the 2-mile-deep Mponeng gold mine in South Africa, exploit structures that prospectors originally found with conventional methods. Those methods include everything from sophisticated gravity and radiation sensors to old-fashioned panning for gold, where prospectors work upstream until the flakes disappear, then look uphill for the source of the gold. ...
The real problem is that there has been no economic recovery -- it was just an illusion. The real economy is weak and we have now started a downturn in the economy that will last for a very long time. All we have seen since 2007 is a false improvement based on money printing and a massive increase in world debt.
The U.S. debt has doubled from $9 trillion - $18 trillion since 2007 when the crisis started. Of course the Fed has also printed an additional $3 trillion. It was just announced that the budget deficit for the previous year that just ended in September was only $480 billion. Well, the U.S. debt has grown by over $1 trillion in the last 12 months. So the difference between the budget deficit of $480 billion and the $1.1 trillion increase in debt is just creative accounting. ...
For those who doubt that America is ruled by a narrow elite: three charts.
The book Why Nations Fail: The Origins of Power, Prosperity, and Poverty neatly summarizes why nations fail in a few lines:
(A nation) is poor precisely because it has been ruled by a narrow elite that has organized society for their own benefit at the expense of the vast mass of people. Political power has been narrowly concentrated, and has been used to create great wealth for those who possess it.
Sound like any countries you know?Perhaps we should flip this question around and ask: how many nations don'tfit this profile? ...
But the main problem is there is just too much debt. The developed world is choking on debt. When Western central planners intervened and took absolutely unprecedented steps in 2008 - 2009 in order to save the day, it did not allow for a cleansing of the financial system. In other words, there are zombie companies that exist today because interest rates are almost nothing. ...
Another day, another HFT firm busted for manipulating the market. Today's participant: Athena Capital, which did what every other algorithmic, HFT firm does - rig the market of course, but at least it had a sense of humor about it: Athena called the market-rigging algorithm that "manipulated the closing prices of tens of thousands of stocks during the final seconds of almost every trading day during the Relevant Period" by the very amusing name "Gravy." But remember: HFTs are really your friend - they just provide liquidity and stuff.