Gold Buying Contributing To Criminality?

In the following video I discuss the explosion of the gold buying culture in the United States and I illustrate how gold buying is indirectly contributing to a sharp rise in jewelry theft.

The State of the States: 46 US States Could File Bankruptcy in 2009 – 2010

States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.

States are currently at the mid-point of fiscal year 2009 — which started July 1 in most states — and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps of $46 billion (over 9% of state budgets) have opened up in the budgets of at least 42 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to over 14 percent of budgets.

The states’ fiscal problems are continuing into the next two years. At least 41 states have looked ahead and anticipate deficits for fiscal year 2010 and beyond. These gaps total almost $88 billion — 16 percent of budgets — for the 34 states that have estimated the size of these gaps and are likely to grow as gaps are re-estimated in the next few months.

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Gold likely to hit new highs on dollar fear

Gold is likely to hit new record highs, spurred by serious concern about the U.S. currency and doubt about the state of the world economy, the chairman of Barrick Gold Corp. said on Thursday.

There was even a possibility, although not a probability, central banks, including China’s, might start to switch from dollar holdings to gold, which could cause the metal’s price to treble or more.

From a gold producers’ perspective, one negative is that the cost of bringing on production has remained high, even as other raw materials, including base metals and energy, have slumped.

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Monetary union has left half of Europe trapped in depression

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece’s social fabric is unravelling before the pain begins, which bodes ill.

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World Demand Collapse, Bonds Next

Anyone following the economic news in recent months has to be stunned at the declining economic activity. Japan had a 16% drop in machine orders for November. US car sales down 30 to 40%. Even world car leader Toyota has sales down 20 to 30%. Worldwide car sales are way down too, anywhere from 10 to 20% depending on which area.

US retail sales are down 2 plus percent, but depending on what stats you look at, autos -30% plus, that 2% number is far worse than it looks.

The EU region is seeing marked declines in orders and exports. Japan had a stunning 15 to 17 % drop in exports from the previous year. China had over 100,000 factories close by end of 08. The list is endless.

Of course all this collapsing demand is hitting commodities and energy. Gold has fared better overall, but is torn between central bank inflation efforts and deflation in general in every major economy. Even China is said to see possible flat growth in 09, something that they consider akin to Armageddon, as they need 15 million new jobs each year just to stay even with population growth.

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Merrill Lynch says rich turning to gold bars for safety

Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or “paper” proxies.

Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. “People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs,” he said, referring to exchange trade funds listed in London, New York, and other bourses.

“They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands,” he said.

Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.

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Gold Market Update

The way things look it will soon be impossible – or very difficult and expensive – to obtain physical gold and silver. The first major wave of physical buying has bought up all of the coins and small bar gold and silver available on the market, with the result that if you want any, you must pay a large premium. Right now, the second wave is underway, with astute investors forcing the Comex to deliver, which is having the effect of drawing down their warehouse stocks at a rapid rate.

As the Comex is massively leveraged and trades hundreds of times more gold and silver than it has in its possession, it is clear that immediately their warehouse stocks are completely depleted, there will be a mad scramble to buy physical gold and silver in order to meet contract obligations.

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Alternative Currencies Grow in Popularity

Most of us take for granted that those rectangular green slips of paper we keep in our wallets are inviolable: the physical embodiment of value. But alternative forms of money have a long history, and appear to be growing in popularity. It’s not merely barter, or primitive means of exchange like, say, seashells or beads. Beneath the financial radar, in hip U.S. towns or South African townships, in shops, markets, and even banks, throughout the world people are exchanging goods and services via thousands of currency types that look nothing like official tender.

Alternative means of trade often surface during tough economic times. “When money gets dried up and there are still needs to be met in society, people come up with creative ways to meet those needs,” says Peter North, a senior lecturer in geography at the University of Liverpool, author of two books on the subject. He refers to the “scrips” issued in the U.S. and Europe during the Great Depression that kept money flowing, and the massive barter exchanges involving millions of people that emerged amidst runaway inflation in Argentina in 2000. “People were kept from starving [this way],” he says.

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Milwaukee neighborhoods could print own money

They may be talking funny money, but it’s not funny business.

Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet Wednesday to discuss printing their own money. The idea is that the local cash could be used at neighborhood stores and businesses, thus encouraging local spending. The result, supporters hope, would be a bustling local economy, even as the rest of the nation deals with a recession.

“You have all these people who have local currency, and they’re going to spend it at local stores,” said Sura Faraj, a community organizer who is helping spearhead the plan. “They can’t spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store.”

Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.

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Making Financial Sense of the Coming Energy Crisis

Why should gold stop at $1,500?

Euphoria over bank bailouts and the temporarily buoyant stock markets is masking a sober reality.

The piper still has to be paid.

One fairly sanguine estimate of the cost of salvaging Wall Street came Tuesday morning from analysts at Merrill Lynch. They figure the inflationary effect of all the bank bailout measures now underway will push gold to $1,500 an ounce and oil back to $150 a barrel.

The analysts don’t offer a timeline, but the way markets have been jumping around lately it could be any day now.

Perhaps the real question is: why stop at $1,500?

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Bailout Plan Up in the Air After House Rejects Bill

Democratic leaders pledged to try to put together another financial rescue bill, but it was unclear whether there was enough support for even a revised plan.

Congressional staffers told CNBC that there wouldn’t be any votes on a new bailout proposal until Thursday at the earliest.

In a statement following the vote, U.S. Treasury Secretary Henry Paulson said he was “very disappointed” at the result of the vote but pledged to continue working with Congress to forge a rescue.

“I will continue to work with Congressional leaders to find a forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy,” Paulson said. “We’ve got much work to do, and this is much too important to simply let fail.”

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Other countries unlikely to buy U.S. bailout bonds, China banker says

The U.S. dollar will face short-term fluctuations and weaken in the long run, a leading Chinese banker predicted here on Sunday.

Speaking at the Summer Davos forum in this north China port city, Bank of China Vice President Zhu Min said he believed it would be less likely for the United States to sell more treasury bonds to other countries to obtain the funds needed to bail out the turmoil-beleagued financial market, which would only accelerate inflation in other countries.

Instead, the U.S. could only issue other bonds to finance the rescue plan, which Zhu said would definitely cause the dollar depreciation in the long term. The bailout fund will have topped $1 trillion U.S. dollars if the U.S. Congress passes the Fed’s $700 billion financial rescue plan.

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US Mint suspends sale of 24-karat gold coins

The U.S. Mint is temporarily halting sales of its popular American Buffalo 24-karat gold coins because it can’t keep up with soaring demand as investors seek the safety of gold in these turbulent economic times.

Mint spokesman Michael White said Friday that the sales were being suspended because demand for the coins, which were first introduced in 2006, has exceeded supply and the Mint’s inventory of the coins has been depleted.

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Precious Metal Shortage?

by John Ubele

Over the last several years I’ve been following precious metal prices almost religiously. One thing I’ve noticed is that every time or nearly every time there’s a dramatic dip in prices the retailers (brick and mortar and online) limit what they’ll sell to the public.

Yesterday I went on to Apmex’s website and found they had limited precious metal items available and I also noticed that they still have their silver eagles priced ridiculously high.

Today I read an article that stated the U.S. Mint has suspended gold eagle sales. Here’s a small snippet from that article.

A shortage of American Eagle bullion coins following a recent sharp retreat in gold prices has forced the U.S. Mint to suspend sales of the popular coins temporarily, dealers said on Thursday.

Rand LeShay, senior vice president of A-Mark Precious Metals, an authorized purchaser for the U.S. Mint, confirmed that the Mint told dealers in a memorandum it was halting all sales of American Eagles, a novel item among collectors and investors.

How exactly does a precious metal shortage effect the small investor who wants to take advantage of the low prices?

Unless the small investor is quick and well positioned he won’t be able to take advantage of the dip because big investors will beat him to the punch and clean the retailers out. So the only thing that the small investor is left with is to buy precious metal items at a higher price and hope the prices go back up.

Personally I think there are too many forces working against the dollar which dictate that silver, gold, oil and nearly all other commodities will continue to go up in price as the dollar’s buying power continues to fall. We can thank the most powerful private bank in the world, the Federal Reserve and its printing presses for destroying our dollar.


In this video Eustace Mullins does an excellent job discussing the origins of the Federal Reserve.

At this point in time the best advice I can give is to buy up as much silver and gold while you still can and hide it well.



Gold and Silver buying opportunity

Twenty-eight years brokering silver & gold have not prepared me for what I met this morning. One of my wholesalers said he was not selling anything, only buying, until further notice. Another refused to give any prices until he adjusted his spreads. Another was spreading one ounce gold coins, normally at $7 – $8, at $25. Another said he was making no sales for immediately delivery or deferred payment, only sales for 30 days delivery paid at once. Premiums were high: Austrian 100 coronas, 4.7%; Sovereigns 5.2%; Krugerrands 6.8%, American Eagles 8.2% (none for immediate delivery), & Mex 50 pesos 4.5%. 90% silver was at $9,783 a bag, a whopping 6.7% premium (1368 cents an ounce on a 1282 market!). Silver American Eagles for 6 – 8 week delivery, 1586 or 23.7% premium.

But “premium” is only one way of looking at things, dividing the item’s price by the spot silver price. Another way to view it is that physical prices have de-coupled from paper prices. The paper prices — futures, ETFs, etc. — no longer rule the market.

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Mint Suspends Gold Eagle Sales

The Gold Anti-Trust Action Committee is reporting at their website that The U.S. Mint has suspended sales of American Eagle one ounce gold coins and is refusing orders from dealers.

GATA reports that two coin and bullion dealers have confirmed the suspension by the Mint. This news was initially reported by American Precious Metals Exchange.

Chris Powell, Secretary/Treasurer of GATA, says in a website posting, “The suspension is overwhelming evidence that the futures contract price of gold on the commodities exchanges is substantially below the physical market price and that, indeed, the commodities exchanges are being used as GATA long has maintained – as part of a massive scheme of manipulation of the precious metals, currency, and bond markets.”

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8,500 U.S. banks; many will die soon

I called the death of Indymac Bancorp on Monday, July 7th. The Federal Deposit Insurance Corporation seized Indymac on Friday, July 11th.

I called the implosion of the two Government Sponsored Entities in the mortgage business, Fannie Mae and Freddie Mac on Wednesday, July 9th. Sunday, July 13th the White House announced a bailout for them.

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Defenseless

Washington Mutual is in its death throws. Reeling from the $3 billion second quarter loss WaMu staggered exhausted, from its earnings report into swirling rumors of an investigation by one of its largest lenders and charges by a bank analyst so serious that even drained and likely to implode within the week, WaMu reflexively struck out.

As Wall Street was awash in rumors that WaMu also was being audited by the government-sponsored Federal Home Loan Bank, one of its largest lenders, Gimme Credit bank analyst Kathleen Shanley wrote that the institution may be seeing funds quietly being pulled out. That spells bank run, instant death, so WaMu’s assualt on Shanley was instinctive.

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US banks likely to fail as bad loans soar

US banks set aside a record $37.1bn to cover losses on real estate loans and other credits during the first quarter in a sign of the growing economic pain being caused by the global credit crisis, regulators said on Thursday.

Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, said it was likely loan-loss provisions and bank failures would rise in coming quarters as the fallout from market turmoil hits the real economy.

“While we may be past the worst of the turmoil in financial markets, we’re still in the early stages of the traditional credit crisis you typically see during an economic downturn,” she said, adding: “What we really need to focus on is the uncertainty surrounding the economy . . . and again it is all about housing.”

Ms Bair spoke as the FDIC released its quarterly banking profile, which showed loan-loss provisions in the first quarter were more than four times higher than last year’s level. That was the main reason bank earnings fell 46 per cent to $19.3bn from the first quarter in 2007 for the commercial banks and savings institutions where the FDIC insures customer deposits.

Following restatements by banks, the FDIC revised the industry’s net income for the fourth quarter of last year from $5.8bn to $646m – the lowest since the end of 1990.

Meanwhile, the FDIC said the number of “problem” banks rose in the first quarter from 76 to 90, with combined assets of $26.3bn. Three US banks have failed this year, compared with three for the whole of last year and none in 2005 and 2006.

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