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Live Blogging the Casey Summit 2013 Conference (Day 1)

Here's what Chris and Adam are hearing
Friday, October 4, 2013, 10:49 AM

Chris and I have just taken our seats at the Casey Research Summit in Tucson. There are a lot of interesting minds here (Doug Casey, Jim Rickards, Mike Maloney, Rick Rule, to name just a few).

We thought we'd try live blogging the event today, to give our readers access to the insights being shared by today's speakers. If the feedback in the Comments suggests that this process is appreciated, we'll repeat it tomorrow and Sunday.

I'll be updating this page throughout the day, so come back to it from time to time, or hit the 'refresh' button on your browser to get the latest.

Up first is Doug Casey, founder of Casey Research and our host for the weekend.

Doug Casey Will the U.S. Go the Way of Rome?

Much of the founding structure (politically, architecturally, militarily, etc.) of the U.S. was based on the Roman Empire.

Rome's expansion was defined by an increasing centralization of resource management. The U.S. began its path down this road in earnest post-WWII.

Casey sees the U.S. being in a full-blown crisis by 2016. Expects the military to have more influence in politics by that time, as an anxious populace looks for a strong hand.

U.S. Constitution only mentions three crimes by name: piracy, terrorism, and counterfeiting. Shows where their priorities lay.

In Rome, the "dole" (the bread & circus days) lasted for ~ 500 years. With over 50% of the U.S. populace dependent in some way on Federal support, he sees this trend increasing for many more years.

Wars destroyed Rome by making it less agrarian and more dependent on a stream of resources plundered by newly conquered peoples. Once it began running out of resource-rich countries to invade, it was unable to sustain its standard of living.

Similarly, wars in the U.S. are becoming exponentially more costly. Much more expensive to wage and the economic returns are much lower, increasingly quite negative. Our 20-year lead-time Defense industry is increasingly irrelevant against open-source warriors from non-sovereign entities. Lots of analogies here to Rome's challenges dealing with the unstructured barbarian hoards.

Deforestation, soil exhaustion and other forms of poor resource stewardship also contributed in no small way to Rome's inability to sustain itself.

As the Roman Empire began failing, the government made increasingly rapacious demands on the Roman citizenry. This coincided with the debasement of the currency (rapid declines in purchasing power). It got to the point where Romans began fleeing to live with the barbarians.

In Rome's ascendancy, it had a common culture. As it became more hybridized and religion became less of a uniting 'glue', its social cohesion weakened. The same is happening in U.S. and is more advanced in Europe today.

Big picture: Second Law of Thermodynamics the more complex systems become, the more energy they need to maintain themselves, and the more prone they are to catastrophic breakdown. The Romans reached their limits resource-wise and their founding values were washed away. They reached their breaking point.

There are growing indicators that the developed world is hitting similar limits to expansion. 

What the solution to declining empire? Less command ad control. Less legalization. Free markets. More entrepreneurship

But these aren't going to happen. There are immense institutions that will fight any serious challenge to the status quo. Self-preservation will drive them to fight this.

Civilizations grow according to the Peter Principle: They expand to the point at which they no longer can handle their own complexity.

Does it really matter if the U.S. declines? "No," because the America we long for is already gone. This is the course of history. It will get replaced, hopefully with something better.

What's the takeaway? Several possibilities:

1) Stay put and watch the barbarians take over (may be best option for most folks just be wary. Local mileage will vary)

2) Expatriate

3) Be resilient invest in things that will limit your exposure, find the opportunities. (This is the best, in Casey's opinion.)

Bud Conrad The Investment Bubble and How the Next Big One Will Affect Us All

We are vastly more militarized than the original American leaders intended. The military industrial complex has created the "sorrows of empire": forever wars, loss of freedoms, and dishonesty.

Bud just inflated a balloon onstage with "BONDS" written on it. He blew it until it popped. "I hope I'm making a point..." (applause)

We live in a time of bubbles. First, 2000s dot-com bubble. Second, housing, caused by Fed's low interest rates. Third, bonds.

We're hurdling towards the bursting of that third bubble.

Central banks will continue expanding money supplies. There is no limit on this.

Federal debt is expanding at dizzying rate.

Exponentially-growing U.S. demands: interest servicing, social programs, and military. All at a time when the U.S. population is aging (becoming less productive).

Rising interest rates will sucker-punch economic growth prospects.

So the Fed is buying HUGE amounts of debt to keep rates low. Its balance sheet has ballooned since 2008, and no end to the expansion is in sight.

For much of the time since 2008, the more debt the Fed purchased, the lower interest rates went. But something has changed. Since the beginning of 2013, rates are beginning to move up. The key question: Is the Fed losing control?

Ponzi scheme: U.S. Treasury prints bonds. Fed prints money to buy those bonds. Fed earns interest on those bonds. Fed returns the interest payments to the Treasury.

Warning sign: The Fed is having to buy the lion's share of U.S. debt, as foreigners are no longer buying.

Trouble in the bond market is most destructive than trouble in the stock market, as the bond market is MUCH bigger.

If our credit rating is damaged again by another debt-ceiling debacle, that will raise interest rates and accelerate the collapse of the bond bubble.

Meanwhile, the employment rate has barely improved since 2009, showing that national productivity is not increasing the way it needs to grow the economy to keep up with the growth in interest payments.

History shows that currency crisis tend to happen once a generation in most countries (about 100 times worldwide in the past 100 years). The U.S. is overdue and very vulnerable.

Consider bond ETFs (but be aware that they follow different paths in response to the same data): e.g.,TLT. More aggressive investors can play directly in Treasury futures.

James Rickards Where Are We Now? Inflation, Deflation & Debt in the International Monetary System

Today's markets are confusing to a lot of experienced minds. It's not a normal business cycle has more in common with times during the 1970s, or, better, the 1930s.

We're in a tug of war between deflation from debt and de-leveraging and inflation from monetary policy. At first in tug of war, not much happens. But then one side begins winning out and the action speeds up from there.

Deflation *should* be the order of the day today. We are in a Depression. Which the Fed is fighting with inflationary monetary policy. Right now, they are offsetting each other.

Be warned, you can have recessions within a depression. In fact, we likely will see more recessions before this depression is over. Expect the next one in 2014.

Depressions are structural. If you don't have structural solutions and we don't right now they will persist. Rickards expects us to be in this painful economic territory for a long time.

But, with the government fighting deflation, it's hard to call exactly when it will break and in which way. In fact, you can get both: inflation followed by deflation.

The Fed has no exit here. It must increase the money supply and continue to do so. It can't taper.

But the money printing isn't having the intended effect of stimulating economic growth A big factor of this is that there's no money velocity right now. The Fed has essentially given up on sparking real growth, and they're now driving nominal growth in attempt to stay ahead of interest costs (debt rates are nominal).

As a result, real rates are negative (drives folks to borrow) and inflation expectations are high (drives people to spend money before their purchasing power erodes). These are helpful to the Fed's goals in the short term, but are destructive in the longer term.

Governments actually need inflation. Deflation is a big bogeyman. You can't tax deflation. Banks fail. Debt-to-nominal GDP increases.

For these reasons, you can always count on governments to pursue inflationary policies over time.

These days, Fed is hell-bent on pursuing 3% inflation (via QE, Operation Twist, nominal GDP targets, etc.). It's not working, but that doesn't mean it will stop. In fact, expect them to get more extreme in their tactics (cue helicopters...)

Rickards sees this coming as soon as 2014. Via tax cuts bypassing the banks directly.

Why hasn't this happened already? Because political support isn't there yet. But if we sink into recession, that will likely change.

Of course, Rickards doubts this will help the Fed with its goals. Many of those funds will be used to de-leverage or save vs. drive growth-friendly consumption.

Rickards believes the Fed's models are wrong. Wrong for the problems they're trying to solve. And if you have bad models, you get bad results. Recent history shows this: The Feds forecasts have been chronically wrong, and wrong by a long shot.

Big concern: Fed is going to melt things down (crash markets, kill currency, etc.) through its misguided policies.

Rickards is showing lots of slides illustrating the immense complexity and interconnectedness of capital markets. You can see that the complexity has increased dramatically each year since 2003. But the record shows that the Fed is ignoring this hyper-complexity.

So what to expect? A burning of existing fiat currencies. Multiple reserve currencies and the push for SDRs to replace them (favored by the elites). The rise of gold as the true monetary backing standard.

Expect SDRs to happen. They may not work well, but expect them to be tried. (The only clean balance sheet left in the world is the IMF.)

In the end, gold may likely be the only practical way to restore confidence in a reserve currency. Rickards is predicting $7,000/oz gold (in certain circumstances, he sees potential for gold prices as high as $44,000/oz!)

Sadly, sees collapse of markets and social order as quite possible as this unfolds. "We return to a gold standard by a messy process vs. a calm one".

Lacy Hunt How Debt Induced Monetary and Fiscal Policies are Undermining the U.S. Economic Prosperity

The ratio of employment to population is the single best indicator of the health of the employment market and the well-being of the U.S. economy. It has dropped precipitously since 2008 and is now flat-lined.

Of what employment we have, the quality is dropping. The percent of part-time work with low pay/no benefits/no career path is quickly rising.

And the much-touted decline in the unemployment rate is almost entirely due to the drop in the participation rate (those who are looking for work). We are amassing unproductive, dispirited, dependent citizens, but acting as if this is a good development.

On the productivity side, nominal U.S. GDP sluggish, at best. In Hunt's opinion, it is now decelerating and will decelerate further from here.

Compounding this will be the implementation of the Affordable Care Act. It essentially is a huge incremental tax on the American citizenry. And it is accelerating the rise of part-time work as small employers attempt to avoid its constraints.

Meanwhile, the Fed reflationary efforts are not working. GDP is mired, the job market is not expanding and while asset prices are higher, all that is doing is further expanding the dangerous wealth gap between the affluent and everyone else.

But the big problem here is our level of over-indebtedness.

If you look at private+public debt for the world's largest countries, it has been growing fast it's now about 30% higher since 2008. This number doesn't include emerging market debt, which has doubled since 2008.

The key takeaway here? The problem of debt constraining economic growth is worldwide. And moving fast in the wrong direction.

The private sector looks grim, too. Corporate profits, which have been elevated for several years due to stimulus policy, are now decelerating. Investment in capital expenditures is down (nearly negative now). Combined with the employment trends mentioned earlier, it's clear we are not investing for expansion of future production.

Imports are coming down because consumers are buying less. Exports are decelerating as the economic situation worsens in the rest of the world.

Real median household income is now back down to levels last seen in 1995. The personal savings rate is no lower than when we entered any economic contraction since 1929.

Regarding the Fed, Hunt is citing research that shows when it comes to policy: If you go "all-in", if you're wrong, there are tremendous exit costs. He also discussed the "imperious immediacy of interest" bias that affects policymakers. Essentially, this is the condition where policymakers are unable/unwilling to see that their plans are not working as intended. Hunt says this applies to the Fed in spades.

Dominick Graziano Prepare to Be Wrong: Especially When You KNOW You Are Right

The threats our brains are wired to address are mostly from our species' days on the African savanna thousands of years ago. They're not arranged for dealing with the much more amorphous risks we face today.

When you make an investment decision, you should plan your exit strategy at the same time. Because as soon as you make it, your wiring is going to kick in and oftentimes influence you to make bad choices.

It's extremely important to set a limit on how much you're willing to lose. As losses mount, the probability of recouping them declines exponentially. So putting yourself in a position to minimize large losses has great value.

There was a lot of data that indicated back in 2012 that the price of gold was topping. Many were unwilling to see the data and held tighter as losses mounted. Was it better to hold (he's mostly talking about paper investments here: ETFs, miners)? Or sell, planning to buy back in at a later date at lower prices?

Graziano sees a lot of data that suggests the commodity bull market cycle may be over. And that we may be poised for a new bull market in stocks, powering them much higher. He realizes this contradicts much of what the previous speakers have said. He's just looking at the data, as a trader does. He will revise this opinion if the S&P falls back into the 1500s.

He thinks money is now flowing out of bonds and into stocks. But he concludes with a quote of Socrates: "The only thing we know is that we know nothing."

Andy Miller Real Estate

You can historically expect a 3% free and clear yield on single-family homes. A huge number of single-family homes are now being purchased by private investors like hedge funds.

Miller agrees that the scale of inventory being purchased is unmanageable by investors, which will eat into this expected 3% yield. Add to that the recent rise in rates, and he sees we could be in for a dangerous period where rates keep rising (making mortgages less affordable) and investors start trying to unload inventory. This will place a lot of downward pressure on prices.

Also, as Treasury rates rise, investors begin to find they can get more attractive and "safer" returns by owning Treasurys vs. owning homes with all their associated risks.

Multi-family homes are also growing as a percentage of new housing development. This will cannibalize single-family home prices.

Miller is pessimistic about home sales across the country. The Fed has been able to stabilize things, but its returns are diminishing and its failure risk is growing. He expects prices to largely head downward over the next few years.

Miller is buying multi-family homes in small cities with agriculture and colleges. He's found about 250 of these markets.

Rick Rule - Bear Market Lessons for Bull Market Profits

We're seeing a cyclical decline in commodities within a bull market. This is a good time for investors, as all things are on sale.

Natural resources have grown 100-fold over the past 21 [when?].

In natural resources, you are either a contrarian or a victim.

Bear markets allow you to buy reality. In a bull market, there's a lot of hype and optimism that adds premiums to price. In a bear market, what matters are management competence, balance sheets, and cash flows.

In resources, you have to seek huge returns to justify the risks because you will lose money on most of your bets. Your returns must be "scalable" to cover your losses.

In the resources space, the best companies in this bear market have bottomed, for all practical purposes. The rest of the companies are going to go down further (and likely die). It's going to take about another two years to clear out the jetsam. But once the market clears, it's going to be a positive time for investors as the survivors thrive.

Mike Maloney Hidden Secrets of Money

Mike is about to show us a new chapter from his 'Hidden Secrets of Money' video. It will debut to the public online on Oct 15.

He just started the video...

Video over. It's a pretty excellent visualization of the money creation process and how it benefits the government, banks, and Federal Reserve at the expense of the rest of us. And why the "debt ceiling" will always get raised until the currency system collapses. (It simply must be, given the way our money system is structured.) I highly recommend watching it when it gets released. It will definitely make you mad. (And will make you understand why it's good to be a bank.)

Day 2

Click here to follow the live blog for Day 2 of this conference.

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49 Comments

Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348
Thanks and please

If the feedback in the Comments suggests this process is appreciated, we'll repeat it tomorrow and Sunday.

Please, great to get a summery view of the current thinking of these minds.

pcm's picture
pcm
Status: Member (Offline)
Joined: Jul 19 2012
Posts: 7
Please

Chris, Adam, I appreciated your efforts for doing this live blogging.  Please continue and have a great time at the Summit.

digging's picture
digging
Status: Member (Offline)
Joined: Sep 13 2010
Posts: 20
Yes great read, thanks!

Yes great read, thanks!

drbost's picture
drbost
Status: Bronze Member (Offline)
Joined: Aug 18 2010
Posts: 58
Thanks for blogging

This is helpful.  Please continue.

LesPhelps's picture
LesPhelps
Status: Platinum Member (Offline)
Joined: Apr 30 2009
Posts: 728
Keep it up!

44,000 an oz?  Wow, that would make enduring the paper losses some have experienced this year more palatable.

Les

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Keep on

Thanks for this! Wish I could be there, but this is a close second!

JRB's picture
JRB
Status: Silver Member (Offline)
Joined: May 17 2009
Posts: 149
Keep it up!

Great running summary.

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
DaveF please read this line over and over and over

Bud Conrad - The Investment bubble and How the Next Big One Will Affect Us All

We are vastly more militarized than the original American leaders intended. The military industrial complex has created the "sorrows of empire": forever wars, loss of freedoms, and dishonesty.

Bud just inflated a balloon onstage, with "BONDS" written on it. He blew it until it popped. "I hope I'm making a point...." (applause)

We live in a time of bubbles. First, 2000 Dot Com bubble. Second, housing - caused by Fed's low interest rates. Third, bonds.

We're hurdling towards the bursting of that third bubble.

Central banks will continue expanding money supplies. There is no limit on this.

earthwise's picture
earthwise
Status: Platinum Member (Offline)
Joined: Aug 10 2009
Posts: 846
Definitely Greatly Appreciated

Please! Keep it up!

Thanks Adam.

HughK's picture
HughK
Status: Platinum Member (Offline)
Joined: Mar 6 2012
Posts: 760
Very helpful

Dear Adam and Chris,

Thanks for passing along the perspectives and ideas of the speakers at the summit.  I find that very valuable and helpful.

Have a good weekend!

Hugh

Nervous Nelly's picture
Nervous Nelly
Status: Silver Member (Offline)
Joined: Nov 23 2011
Posts: 209
$44,000 an ounce !

I'll would gladly settle for $10,000 an ounce. 

Thx Chris, Adam for sharing this.

NN

RoseHip's picture
RoseHip
Status: Silver Member (Offline)
Joined: Feb 5 2013
Posts: 147
Much appreciation

Thanks for providing this service I greatly appreciate it.

Rose

lynnke's picture
lynnke
Status: Member (Offline)
Joined: Jan 10 2012
Posts: 7
Right on!

Thanks for the updates!

Lnorris's picture
Lnorris
Status: Silver Member (Offline)
Joined: Mar 28 2011
Posts: 105
Excellent

Please keep blogging. Excellent information to read and digest.

ScottT's picture
ScottT
Status: Bronze Member (Offline)
Joined: Nov 2 2009
Posts: 48
Interesting stuff

Gold at $44,000/oz!!

ridiculous....

 

 

 

sand_puppy's picture
sand_puppy
Status: Diamond Member (Online)
Joined: Apr 13 2011
Posts: 1758
High priced physical gold..

will demand an army to defend it.  A crowd with "bigger guns" will want it and with the breakdown of property rights, (no police force to ensure gangs don't plunder neighborhoods) a big stash won't do anyone much good.  Buy solar panels and compost for the yard....

IMHO

craigo_dds's picture
craigo_dds
Status: Member (Offline)
Joined: Jan 24 2010
Posts: 2
$44000 oz gold

The numbers presented were for Global M1 at 40% is close to $7000/oz and Global M2 at 100% being the $44,000/oz number.  Just 8th grade math dividing the m1 & m2 by amount of gold.  Hope that helps.  

gbcm's picture
gbcm
Status: Bronze Member (Offline)
Joined: Sep 3 2009
Posts: 36
Same ol' ssmr ol story

I would be wiling to bet that the majority of the audience would have been having many a Yogi Berra moment " deja vu all over again "  I wish I had $10 for everytime I've heard Doug Casey give his potted version of history and the fall of the Roman Empire ---- god give me strength. And the $44,000/oz comment --- LOL ---- is that US$ or Argentinean$ ??? Hope springs eternal in a gold bugs heart.

 All droughts (eventually) end with rain and all markets are cyclical but as Mark Twain says history does not repeat but  it rhymes ---- meaning the past will not be repeated, and the doomsters and gold bugs seem to not understand or believe in evolution, which is by the way an incontestable fact, and the future as the great Yogi also said is impossible to predict unless you are witnessing a Thelma & Louise moment. Gold bug prophets --- are like Ron L Hubbard's --- they grow rich from the creation and maintenance of the religion , not from the practice of it . 

Rick Rule correctly said " In natural resources, you are either a contrarian or a victim." Which means that if you follow the advice of the gold bugs like the Casey Report, CM & Mish to name a few, you would have been pole axed by the decapitation of the gold market in April, ( while they started singing a different tune like gold should only be part of a balanced portfolio, oil, technology uranium ---- ) which was only the final push of a reversal that had begun in 2011 ---- a fact completely missed by the gold camp, which lead by the ravers like the Golden Jackass and other subscription bloggers who make a living fanning their conspiracy stories, along with the bullion dealers like Eric Sprott, Andrew Maguire and Eric von Gretz who are regular entertainers on the King World News blog ------ believe it if you will, listen if you must but these guys didnt see it coming, and they don't know where its headed. Former gold bugs like Jim Puplava have seen the light, mainly because his sons have come into the business and convinced him fighting the Fed ( the financial arm of the US military) is futile, and that one has to be a trend follower and owner of real and productive assets.

One day gold may increase in nominal value , but as Jim Puplava now warns, that is when the US government will increase taxation or stage a repeat of FDR's 1933 raid which was a massive QE where they exchanged most peoples gold  for ' thin air money ' and revalued the US$ all at the same time - wow!

Until that day arrives, what's the point in sitting in a bunker full of guns , ammo, beans , booze and gold coins ---- and cable TV --- so one can keep in touch with your chosen fantasy universe ! Equally a world made by hand will be a very tough ask, and one which most are completely unprepared for, and even the Amish will struggle in that dystopian world !

The stunning ease that the gold price can be taken down by the paper shorters, backed by the US Fed market agents and approval of market regulators , and the likes of the CNBC Marie Bartoli's defense of JP Morgans CEO Jamie , where she refused to accept that there was any proof of malfeasance, and any way ," they are making great profits and what can be wrong with that" ----- it sounded like a defense that the mafia would feel applied equally to them.

 But what can you expect in a nation that glorifies violence, crime and corruption --- "Sons of Anarchy" "Breaking Bad" "Criminal Minds" "Dexter" "Godafther 1,2,3,---100" "The Sopranos" "Wall St " -------- etc etc etc etc etc etc etc etc etc etc etc etc ----- what ever happened to " Leave it to Beaver " ( that I believe is now a well known porn show ) and the " Untouchables " ( that is now a story about Detroit City bonds )

I for one wont need to read any more of Chris & Adams blog of others at the Casey conference, and I'm sure that CM's presentation will induce more deja vu . This is a crazy world where perhaps the best one can do is sit on the sidelines in cash, but remember that when the SHTF, your money in the bank makes you a shareholder, not a gauranteed depositor who will have full and instant access to your savings - we are all 'Cypriots' now.

Cheers, GB

 

ferralhen's picture
ferralhen
Status: Silver Member (Offline)
Joined: Oct 14 2009
Posts: 151
nice review nothing new yet,

nice review nothing new yet, , keep blogging. good to recap today,...i'd like to see what is next. so a vote to continue.so far seems like a tainter review.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
The Model Maketh the Man.

Rickards believes the Fed's models are wrong

There we go with the Models thing again. The trouble is that the Left Brain which creates maps of Reality also houses the Ego and the speech centers. And it is totally unaware of the existence of the Right.

So to the Left the models Are reality and any challenge to the model is perceived as a threat to the very existence of the Ego. Then the full force of the Lefts language abilities and its not inconsiderable powers of Rationalization to defend the models is unleashed.

How apropos! Yesterday I found this piece. The difference between Einstein's brain and everyone elses was in the size of the Corpus Callosum. There was a better balance between his model making and his gestalt. This is why he often described an Idea as "Beautiful", a very Right brained take on things.

So what to do? Grow a bigger corpus callosum? A colossal callosum, as it were? That is a good long term aim, but in the short term we could weaken the Ego with powerful medication. An over-inflated ego would sit nicely in the DSM alongside Attention Deficit Disorder.

I would prescribe slow release DMT. The only down-side is that it would cure the patient and that violates all the rules of the pharmaceutical industries' business models.

To conclude: This is also a psychiatric problem.

gillbilly's picture
gillbilly
Status: Gold Member (Offline)
Joined: Oct 22 2012
Posts: 423
Go Arthur!

The "Master and His Emissary" should be required reading for all in addition to the CC.

treebeard's picture
treebeard
Status: Platinum Member (Offline)
Joined: Apr 18 2010
Posts: 590
And he does not share power...

Former gold bugs like Jim Puplava have seen the light, mainly because his sons have come into the business and convinced him fighting the Fed ( the financial arm of the US military) is futile, and that one has to be a trend follower and owner of real and productive assets.

The stunning ease that the gold price can be taken down by the paper shorters, backed by the US Fed market agents and approval of market regulators , and the likes of the CNBC Marie Bartoli's defense of JP Morgans CEO Jamie , where she refused to accept that there was any proof of malfeasance, and any way ," they are making great profits and what can be wrong with that" ----- it sounded like a defense that the mafia would feel applied equally to them.

Nicely summed up, this is the stuff that we are afraid to face, we don't want to tussle with ugliness and brutality of it all.  This is a war with all its obscene cruelty.  We still project our own decency and sense of fair play onto the situation, thinking that markets will assert themselves.  In our helplessness we have treated markets with the same certitude usually reserved for the laws of physics even though we can not even define what those rules or are.

Lets drop the "financial speak", the language of parasitical bureaucracy. Let's do something productive with ourselves and our time and create something of meaning and value for ourselves and others.  Give to Caesar what belongs to Caesar................

The reporting is interesting even though I'm not a big fan of owning gold, the more view points and context the better.

mememonkey's picture
mememonkey
Status: Silver Member (Offline)
Joined: Nov 1 2009
Posts: 223
Knockin Down the strawmen
gbcm wrote:

I would be wiling to bet that the majority of the audience would have been having many a Yogi Berra moment " deja vu all over again "  I wish I had $10 for everytime I've heard Doug Casey give his potted version of history and the fall of the Roman Empire ---- god give me strength. And the $44,000/oz comment --- LOL ---- is that US$ or Argentinean$ ??? Hope springs eternal in a gold bugs heart.

 All droughts (eventually) end with rain and all markets are cyclical but as Mark Twain says history does not repeat but  it rhymes ---- meaning the past will not be repeated, and the doomsters and gold bugs seem to not understand or believe in evolution, which is by the way an incontestable fact, and the future as the great Yogi also said is impossible to predict unless you are witnessing a Thelma & Louise moment. Gold bug prophets --- are like Ron L Hubbard's --- they grow rich from the creation and maintenance of the religion , not from the practice of it . 

Rick Rule correctly said " In natural resources, you are either a contrarian or a victim." Which means that if you follow the advice of the gold bugs like the Casey Report, CM & Mish to name a few, you would have been pole axed by the decapitation of the gold market in April, ( while they started singing a different tune like gold should only be part of a balanced portfolio, oil, technology uranium ---- ) which was only the final push of a reversal that had begun in 2011 ---- a fact completely missed by the gold camp, which lead by the ravers like the Golden Jackass and other subscription bloggers who make a living fanning their conspiracy stories, along with the bullion dealers like Eric Sprott, Andrew Maguire and Eric von Gretz who are regular entertainers on the King World News blog ------ believe it if you will, listen if you must but these guys didnt see it coming, and they don't know where its headed. Former gold bugs like Jim Puplava have seen the light, mainly because his sons have come into the business and convinced him fighting the Fed ( the financial arm of the US military) is futile, and that one has to be a trend follower and owner of real and productive assets.

One day gold may increase in nominal value , but as Jim Puplava now warns, that is when the US government will increase taxation or stage a repeat of FDR's 1933 raid which was a massive QE where they exchanged most peoples gold  for ' thin air money ' and revalued the US$ all at the same time - wow!

Until that day arrives, what's the point in sitting in a bunker full of guns , ammo, beans , booze and gold coins ---- and cable TV --- so one can keep in touch with your chosen fantasy universe ! Equally a world made by hand will be a very tough ask, and one which most are completely unprepared for, and even the Amish will struggle in that dystopian world !

The stunning ease that the gold price can be taken down by the paper shorters, backed by the US Fed market agents and approval of market regulators , and the likes of the CNBC Marie Bartoli's defense of JP Morgans CEO Jamie , where she refused to accept that there was any proof of malfeasance, and any way ," they are making great profits and what can be wrong with that" ----- it sounded like a defense that the mafia would feel applied equally to them.

 But what can you expect in a nation that glorifies violence, crime and corruption --- "Sons of Anarchy" "Breaking Bad" "Criminal Minds" "Dexter" "Godafther 1,2,3,---100" "The Sopranos" "Wall St " -------- etc etc etc etc etc etc etc etc etc etc etc etc ----- what ever happened to " Leave it to Beaver " ( that I believe is now a well known porn show ) and the " Untouchables " ( that is now a story about Detroit City bonds )

I for one wont need to read any more of Chris & Adams blog of others at the Casey conference, and I'm sure that CM's presentation will induce more deja vu . This is a crazy world where perhaps the best one can do is sit on the sidelines in cash, but remember that when the SHTF, your money in the bank makes you a shareholder, not a gauranteed depositor who will have full and instant access to your savings - we are all 'Cypriots' now.

Cheers, GB

 

I make it a point to listen and analyze  multiple points of view, even those I disagree with and benefit from extracting information, theories etc weighted by appropriately filtering the source.  In the case of Doug Casey and company,  I find much useful even if I reject his slavish ideological devotion to Libertarianism,  I even embrace many of the tenants of libertarianism,  realizing, though that there are many critical public commons and they are not uniformly best served by unfettered free market competition.    

That said,  I cant help but wonder how you are able to reject, the notion of holding gold, a historically consistent store of value uniquely without counter party risk  considering you acknowledge that we are 'all Cypriots now' 

You seem to have set up several straw man arguments and flush with victory of knocking them down you cast a pretty wide net of  aspersions

No one here or at the Casey conference is advocating hunkering down in a bunker with bullet beans and gold.  Instead, I see a consistent message of striving for resilience in skills, life systems and values. as well as a discussion of Gold as a store of value. 

I would add that your time frame is awfully compressed, If you listened to the 'gold bugs' when gold was $300 /oz  you would still be way ahead of the game. regardless of Aprils action.   Nothing has been fixed.  the scale of the problems is greater, this system is mathematically certain to crash, the Dollar is on a path to lose its reserve currency status.  When that happens Gold as insurance will likely pay off.  Yes there are risks of holding gold including punitive taxation or attempts at confiscation, though it is possible to mitigate those risks  still it is wise not to put all eggs in one basket.

The paper shorts can take down the price of gold until they can't. the fed can keep interest rates in check until they can't.  When these things happen than I sure want to be holding gold,  not bonds or hyper devalued cash. will the dollar strengthen and gold soften before that end game,  likely yes,  its not a binary world.

Finally I find it interesting that your ideal world would be reflected in a fantasy construct such as the sanitized leave it to beaver faux world of the sixties.   Media tends to reflect the current zeitgeist and while I am too am a critic of of our current  social values,  current art is if anything, more realistic as it accurately reflects the inherent human condition the often violent and corrupt nature of humans something as old a man.  The history of which is not just rhyming but repeating.

mememonkey

 

jcat3022's picture
jcat3022
Status: Bronze Member (Offline)
Joined: May 9 2012
Posts: 78
I find your analysis

I find your analysis interesting, but you 1) aren't telling me anything I don't already know and 2) aren't giving any facts as to why gold should continue to go down from here.  Your citing a bunch of folks who are the so called experts.  Like Chris has always said, trust your own instincts.

As I look at the landscape today, I see a country (USA) where its citizens have zero interest in owning gold.  Literally, zero.  Our deficits are $1 trillion plus per year, our debt is $17 trillion and the Feds balance sheet will be at $4 trillion before we know it.  The stock market & S&P are at all time highs & you have to be a little crazy to jump into bonds as I see it.  Growth is stagnant at best, and I'm not seeing it jump to 5-7% anytime soon.

where does all this leave us?  I say in a terribly precarious situation.  Enter physical gold.  I think most on here don't trade it.  We buy it as insurance.  It's insurance against from the craziness in Washington & the Fed.  They may lead markets now, but I am 100% certain that will change.  When it does change, I am very comfortable being long gold.  

In the meantime, I'm studying up on solar panels and and going to meet with a local farmer today and get a tour of his farm and how he tends to his pasture raised cattle.  I can't wait.

gillbilly's picture
gillbilly
Status: Gold Member (Offline)
Joined: Oct 22 2012
Posts: 423
We know nothing

Grazioni - But he concludes with a quote of Socrates "The only thing we know is that we know nothing"

That sums up the entire thing. All these viewpoints are interesting perspectives and are valuable in some respects, but none of us have the foggiest idea what will happen. Maybe all these things happen but it takes 50 years to unfold, and we're all dead. Maybe one or two will happen, and soon. Who knows? Many having been predicting that the debt will crush the US for over twenty years, but here we still are. Many have been predicting gold to go to $10k for some time, but here we are. Same goes for the markets...up/down/whatever. We don't have control over them, but we do have the power to change them by our actions.

Rickards - Today's markets are confusing to a lot of experienced minds. It's not a normal business cycle - has more in common with times during the 1970s, or better, the 1930s.

The first part of this statement is correct, the second part is trying to fit into some type of past model. Arthur's point on models is right on. The markets are confusing for those steeped in left brain modeling. They seem to have forgotten that the models have always been our limited way of trying to make sense of the world, not the world fitting into the models. If the left brain would give up its ego collectively we might reach a more holistic view.

I agree with Treebeard, it's time to get active. Be the change you want to be. I'm spending less time on-line and more time focusing my attention on my immediate surroundings and relationships, and I have to say I'm happier for it.

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phildenn
Status: Bronze Member (Offline)
Joined: Sep 2 2009
Posts: 38
Casey & Gold

GB: As a subscriber to the Casey Report, I can tell you they spotted the alarming technicals in the intermediate gold topping and recommended a couple of nice shorts (through buying put options on GLD) that each yielded several hundred percent if memory serves. These were low cost and easy ways to hedge a core position in gold (or simply speculate). They were well timed/executed. The whole collapse of the money system is and will take much longer than I and many expect. It's funny that once you realize it's doomed to fail, you expect it suddenly, but at that moment the only confidence lost was your own. The masses will be the last to know, and it will hold together relatively well until then, and then not at all.

Phil

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 5 2009
Posts: 573
gold is money
gbcm wrote:

One day gold may increase in nominal value , but as Jim Puplava now warns, that is when the US government will increase taxation or stage a repeat of FDR's 1933 raid which was a massive QE where they exchanged most peoples gold  for ' thin air money ' and revalued the US$ all at the same time - wow!

Cheers, GB

Plan A

When I visit my local PM dealer I always ask several questions.  Who is buying?  Who is selling?  What is the ratio of gold to silver sales?  What are the current legal exit strategies that bypass the taxman?  

I have attended the San Jose coin show.  Over 200 dealers in one location.  Cash only business.  Do you really think all 200 will abide by a law that increases taxes on PM's?

When silver crossed $45 some time ago, a friend at work sold a monster box of eagles on Ebay.  The transaction was at a very public location and the FRN's were carefully examined for authenticity.  Do you think he reported this to the IRS?

The taxation issue does not concern me. 

Plan B

Several years ago a friend offered to sell his Iowa farmland to me.  He was willing to accept junk silver, silver eagles, gold bullion, US dollars or a mix of the above.  During my recent root canal, I asked my dentist if he would accept gold as payment.  His answer - "No problem".  The individual that farms our property will accept gold or silver for the sale of his alfalfa. 

Gold always has been, is, and will be money.  Someday even the masses will connect the dots.

ferralhen's picture
ferralhen
Status: Silver Member (Offline)
Joined: Oct 14 2009
Posts: 151
i got most stuff in place so

i got most stuff in place so now i'm online.!

i keep reading opinions that make the assumption that this system will continue and not be replaced, just change which is on top, gold, bonds, stocks....

i feel gold is manipulated, it should be much higher, in lieu of that, i see the whole financial system moving rapidly toward a system not attached to a country...so like imf becoming the reseve currency whatever they call it..and then they can print whatever. they can still manipulate gold however they want. i see all the current printing as leading to a crisis so the imf looks welcoming and it will be mosty digital by then it's taking the status quo one more step further. but still the status quo and the status quo while currently comfortable is killing us..

the time to buy something is when it's low and the time to sell is when it's high. gold is in the middle  right now not a time to sell or buy. it's just there.

thinking of anything as insurance in these times is just foolishness. the whole idea of insurance is to remove or reduce risk. money, stocks, bonds ,gold, paper of all kinds, even food with all the cesium spewing out of fukushima is not insurance of survival.

the whole mentality to have a talisman or hoard of something i believe is missing the point.

in order to live in the future ,we have to shift our energies to stop our habits and lifestyles that pollute the earth and water and air we need

.all financial talk is just that talk.and  i feel a distraction to doing the actual work we need to be doing. and talk is fine as long as we can maintain that perspective that that is all it is.

this whole mindset of setting up a false sense of security on financial intstruments has to give way to actually doing somethng about our life styles. gasoline has got to go. toxic nuke waste dumps have to be constructed now and used. if we need a "modest proposal" then we do...it's getting tight and already not   healthy here on earth. the very things we need to sustain life are becoming more and more poisonous to ourselves. we are crapping on our own air ,water, land, food supply.. 

mylittle garden doesn't cut it.ascribing to lofty ideals are nice, pleasant to have, but you can find that in any church. we have a group of intelligent people here who are wringing their hands over gold of all things when we have the capability to figure out how to get out of our death spiral of pollution.we are making.

somebody talk to me please.

treebeard's picture
treebeard
Status: Platinum Member (Offline)
Joined: Apr 18 2010
Posts: 590
Doubts?

Does anyone here doubt that centralized political, economic and military powers will do "whatever it takes" to maintain their view of the American "lifestyle".  Lloyd Blankfein has already said he is doing "gods work".  The relationship between US economic interests and military actions is very well established.  There is a tangled web of relationships between economic regulators, the Fed, multinational corps, military contractors, security agencies and the like.  Enforcing their view of the "American" economic system is seen as their patriotic duty.  They have wrapped their personal economic interests into their world view, this is not a group that is prone to self reflection.

Betting on the price of gold is betting on what this group will do.  I am not a betting man, in the end the gold bugs may be right, and perhaps owning gold is the prudent thing to do.  For me, it just feels wrong, buying a safe and doing the security necessary to protect it. We carry all of that within us, wherever we go, whatever we do.  I don't want that weight on me.

As hard as I have worked, the world still owes me nothing.  Each day is a gift, and that is enough.  What I do must pass a practical, emotional, intellectual and spiritual test, purchasing gold just doesn't do that for me.  There is so much work to be done rebuilding our culture, creating community, rationalizing and re-localizing our economic system, protecting our failing ecological systems by changing our lifestyles.  When all that work is done, then maybe if there is something left over to buy gold, perhaps I will.  But I'm hoping by then I won't need to.

 

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Ignore at your peril

Hey GBCM,

Before I get started, let me just say I truly do appreciate having my beliefs challenged, and you make some good points.

I would just reply that although the warnings from Cassey and others you cite have been echoing through the investment world for years, that does not make them wrong or "religiously" inclined as you suggest.

Some economic cycles take a very long time. They do not look long when looked at in hindsight, but when you are in them, they seem to take forever. This is especially true if you have positioned yourself for a turn of events you know will happen, but cannot possibly predict exactly when, and in the meantime you see the stock market partying.

In judging whether all these very smart people who articulate their ideas so well are wrong, the only thing  can stack against them is they have not been completely right just yet. But they have been pretty darn right in many things - like the stock market bubble of 2000, the housing bubble crash of 2008 (predicted by a few including CM many months beforehand), and they were right about the runnup in gold starting in 2000. If you had bought gol then, the recent correction would mean nothing to you.

When I look at your argument, the only thing it has going for it is that these folks haven't been 100% right yet. That's like criticizing a sports analyst at mid season with a lot more to go.

Ask yourself the following: Do you really believe QE can go on forever? Do you really believe the world can run off fiat money forever, given that it benefits one country (the money printer) disproportionately over the rest? We are playing monopoly, and we have been dealt the "bank" card. That is the only reason we have been able to kick the can for so long. Do you really believe the size of government can keep growing at current rates, or even stay the same size? Do you really believe we can run up 1 trillion in debt every year? Can we just keep expanding our debt/GDP ratio by leaps and bounds to infinity? Of course I believe the answers to all these questions are a resounding "NO"!

If you believe the answers are also no, then you can plan for what comes afterward, or you can choose not to. Many of us who are planning for what comes next are planning for resiliency, productive assets, and of course real money - gold. I am also in the camp of keeping lots and lots of cash (percentage-wise) because I believe we could have a liquidity crisis before we get to a currency crisis. If that happens, cash will buy far more than what it will be able to buy once the currency crisis (which is my predicted government's solution to the liquidity crisis) kicks in.That will be the time to really load up on gold and silver, at least in my humble view.

To summarize, I think you are ignoring these folks at your peril. You may think others follow them at their peril. I only know one thing: things that cannot go on forever, won't. Our current system is such a thing, and history is replete with examples of fiat currencies, bloated empires, and corrupt governments, all of which end in disaster for those who do not prepare. While gold is not a contingency for every or even most of the difficulties economic collapse may bring to your door, it does cover one, which is to provide a safe and trade-able store of value for your current wealth.

I respect your views, but think you will be proven wrong. This is not the kind of wrong you get a do-over in, so choose wisely. Respectfully,

FB

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5570
The Value of Casey (and my presentation)

The value of Casey conference for me is the same as the value of one of the seminars we hold at Peak Prosperity, and that revolves around gathering like-minded people who can speak freely about how they see the world.

Of course, the views here depart significantly from the center mass of our current cultural narrative that asserts we are on a path to recovery and the government and Fed have a workable plan.

In taking the recent Meyers-Briggs personality test, I scored as an introvert because many of the questions merely asked if I found parties and gatherings of people to be filling or depleting. But here at Casey, it occurred to me that I answered the test questions after mentally inserting myself into a typical U.S. social scene.

If, instead, I am around people like those here at Casey, the truth is that I am quite energized by meeting and being around people, so the right way for me to answer the personality test question in the future is “it depends.” To be around people who are curious, engaged, and interested in figuring out the world really is exciting and energizing to me; the opposite is draining.

In some social scenes, I am an introvert, and in other situations I am an extrovert. I suspect others share this trait, and I know that a lot of the people I’ve met here come first for the experience and second for the information.

I will be talking today and do my best to illuminate and educate. My topic is explaining the mechanisms of quantitative easing (QE), something that we’ve heard a lot about here so far, but something I think few people really understand.

My approach is that if you want to know what’s going to happen next, you need to understand what’s happening right now. The punch line is that QE is easily done in one direction, but almost impossible to do in reverse.

Money pushed out to the world is well received, especially when it’s given for assets being bought at a profit for the seller...and that is QE in ‘forward gear.’

Money taken from institutions in exchange for an asset that is, by definition, falling in price, is an impossible task. Well, maybe not literally impossible, but it will break all of the things the Fed has accomplished so far, such as providing markets with liquidity, causing interest rates to spike, and causing institutions to become cautious and skittery.

Knowing that QE is a permanent feature provides a guide of sorts…it simply means the Fed will keep doing what they do until things break for some reason. As always, I do not know what that reason will be, or when it will come along, I can only note that the stresses are building, not falling, and that means the chances of something happening are rising as are the odds of the next financial crisis being much larger than the prior ones.

I talk in a few hours…will let you know how it goes.

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
What the matrix wants you to believe about Gold...

I have often contended that there are agents among us whose job it is to create doubt in the mind of folks considering Gold... and to be clear, I speak of nobody who has commented above on this thread.  There are lots of reasons why one may not care for Gold, and I understand all of them.  In my mind though, anyone who comes here and purports to profess and defend the following ideals is suspect;

1)  Gold is not scarce - the signals that we see suggesting scarcity (relative to the infinitely printable dollars) have other explanations

2)  The dramatic drop in Gold price since the 2011 peak is normal market behavior and must be telling the truth about supply vs. demand. 

3)  Price movements in the paper futures market is a representation of supply vs. demand, i.e. when the price drops in the futures market, somebody is selling, "Gold".

I am posting here because I stumbled across something.. or I should say somebody, who I find extraordinary.  I followed a link earlier today to a Marketwatch.com article that talks about the fact that the US Treasury has made it clear it would not sell any of its Gold, even to ward off defaulting in the event of an extended debt ceiling impasse.  The article is here;

http://www.marketwatch.com/story/why-uncle-sam-is-hoarding-gold-2013-10-04

But what really struck me was the vigor, and blanket coverage, of one particular commenter.  My contention is that TPTB have their agents out there on these websites attempting to stifle the next viral wave of Gold advocates... the next doubling of awakenings to the Ponzi that Fiat currencies are.  I can't tell you for certain that we have such agents here... an agent as brash and willing to use lies as the one I point out to you in the comments section of this article would not survive the onslaught of truth and logic that would rain down on him/her from the PP.com crowd... I would hazard a guess that the average IQ and awareness level here is much, much higher than the marketwatch.com crowd. 

Take a look down the comments... go down just the first page of them and tell me if you can see an agent at work?  Ask yourself, why would somebody put so much energy into the support of a virulently anti-Gold view?  Why would someone so seemingly well educated in the ways of finance use what are, to many of us here, obvious lies in support of the anti-Gold view?  Just to help you along, let me point out two really blaring, obvious lies that said agent uses in their defense of paper money and their attacks on Gold (realizing that these are one in the same);

Agent;

As to your last paragraph, that is BEYOND ABSURD and is proof of nothing as really very little has changed with China over the past year other than that it moved to the largest gold market after DEMAND FOR GOLD TOTALLY COLLAPSED IN INDIA this year which was previously the largest market for gold;  Supplies of gold are now around 4250 metric tonnes a year and there is very significant overhang (over supply) in the gold markets which is a key reason why the price of gold is continuing to fall and is down more than 32% over the past 2+ years.

Jim H response:   That demand for Gold in India has collapsed is true on one level... but most of us here know that the truth is that there has been a collapse in legal imports due to the enforcement of Draconian capital controls/taxes on the import of Gold into India, for the stated reason of improving India's balance of trade.  The Indian populace has in no way lost their taste for Gold.. and the real lesson in this collapse of imports is that there might very well come a time when you decide you want Gold, but will not be able to get it.

Agent;

The Federal Reserve rarely prints any currency, George, as there is plenty of its in circulation.  In fact, they have printed practically none of it since the run they did in 2009.

Jim H response:  This is factually incorrect.  There has been some discussion on this topic of late centered at John Rubino's website;

http://dollarcollapse.com/inflation/where-have-all-the-new-dollars-gone/

The discussions centered about some anecdotal observations about the "series" date on the bills folks were getting at banks.  The simple truth is that most of the paper money printed right now says 2009 on it because the plates have not been changed since then.. it is not at all a reflection of the date of printing.. only the date of the plate/design.

So, is this entity a real person who just wants to save these poor, dull marketwatch.com readers from the perils of Gold and Silver... or is this something different.. something more dark?  Even in this extreme example, I can't know for sure... but I ask myself, if I were the money cartel behind the world's big banks.. why wouldn't I use some of my infinitely printable produce to buy the services of propaganda agents?  Might this not be one reasonable explanation of the paradoxical behavior of this Marketwatch.com comments participant?  

CleanEnergyFan's picture
CleanEnergyFan
Status: Silver Member (Offline)
Joined: Jan 29 2012
Posts: 103
Thanks for keeping us updated

Chris and Adam...I appreciate your taking the time to chronicle your experiences at this conference.  I know its alot more fun to simply be at a conference and NOT have to take all the notes but for those of us who couldnt attend its very useful (even though most of the info pretty much correlates with what we already knew/thought).  One of the conference comments that Doug Casey made struck a nerve with me:

"Does it really matter if the US declines? "No" because the America we long for is already gone. This is the course of history. It will get replaced, hopefully with something better."  

This is something I have never heard said in public and dont even want to think about but often do subconciously, especially the part about  "the America we long for is already gone".   I don't see how our centralized government takeover of power, resources, and decision (er indecision)-making gets reversed short of an all-out economic collapse or possibly through some type of grass-roots revolt (ie a Tea party movement on steroids or State push-back against Fed intervention).   As for the foregoing discussion of Gold...its enough for me to want to have my "money" in a monetary unit that is NOT controlled by any government or Central Bank...that alone is reason enough for me to prefer Gold/Silver to a FRN or a bond tied to a FRN.  Good luck on your talk Chris...wish I was there...I too would love the networking aspect of conversing with a freeminded crowd and share your views on extrovert/introvert being dependent on the type of crowd.

Thetallestmanonearth's picture
Thetallestmanonearth
Status: Gold Member (Offline)
Joined: Feb 28 2013
Posts: 320
Casey

Casey said (as summerized by Chris):

"What's the takeaway? Several possibilities:

1) Stay put and watch the barbarians take over (may be best option for most folks - just be wary. Local mileage will vary)"

Who are the barbarians in our case?  I don't know that there is a proper analogy in modern day america.  Thoughts?

jdye51's picture
jdye51
Status: Silver Member (Offline)
Joined: Feb 16 2011
Posts: 157
"The End of the World is Near"

Those of us born into a developed First World country like the U.S. have benefited from the rise in living standards from cheap oil. This kind of life, an aberration in human history,  is all we know. I certainly remember growing up at a time when the future looked bright (remember the Jetsons?). Things would only get better and better in an upward trajectory. Of course it was a fantasy but we held onto it. Most still are. Some, like those of us here at PP, have awakened to the discontinuity between the dream and the reality. But even that clarity of vision has stages or levels. Those who have benefited the most have the most to lose and are the most dependent on the status quo. The people presenting at and attending this conference (I wonder how many are nonwhite and/or female - I'm just sayin) to me reflect the compromised state of mind of those who are facing the demise of their world but aren't quite ready to let go and make the radical changes necessary. Sort of like the bargaining stage in the grief process. Holding on and letting go simultaneously. Of course, I'm generalizing, but you get my drift. If something works well for us, humans tend to want that to continue. Life is hard and we welcome those things that make it a bit easier. But we've gotten carried away and convinced ourselves that we could have every material thing we want despite the consequences to ourselves and the planet. Consequences that may result in our demise along with the world as we've known it. There are limits it turns out.

But how we each deal with these limits will vary. While we may acknowledge change is necessary, each of us has a different capacity for letting that knowing sink in past our heads and down into our hearts. The thing is not to judge where someone is on the scale of letting go. Someone may have all their physical preps but hasn't begun to do the psychological work. Or vice versa. The process is going to be different for each of us. I am frustrated not to be farther along in my physical preps but am doing quite a bit of psychological/spiritual work. Probably because that's where I'm most comfortable. So we have to be willing to go out of our comfort zones because life requires it now. For some of us that may mean being willing to access feelings and not look at them as a sign of weakness. To allow ourselves to admit to being really angry that things are so horrible and, most of all, to let ourselves grieve the loss of "normality" . There is going to be so much loss ahead of us. Many are already experiencing the loss of homes and jobs and expectations for the future.

Have compassion for yourself and for those around you. We'll all be facing enormous changes and will need each other more than ever. There is no "right" way to prepare for the unknown. So buy gold if it makes you feel better - heck I have some, but know that the true gold is within.

The point is to keep going, not to be perfect. Let's stop comparing ourselves like in some kind of contest and instead ask what we can do to support each other's efforts - whatever they are. The old paradigm is one of separation; the new paradigm must be one of unity if we are to have a chance. Part of living the new paradigm is not making someone else wrong in order to feel like I'm right. Living my authentic truth and standing in inner strength and wisdom, is a goal I strive for. Imperfectly as that may be in practice! So I ask myself, "what can I do today that will take me one step further along the never-ending path of personal awakening?". Some days that looks like me buying more toilet paper to store (what is it with women and t.p.?). Other days, I'm dealing with my resistance to doing what I know I need to do.

Personally, I'd welcome more discussion here about our emotional preparation efforts because they are at least as important as the rest but are easier to ignore, at least for now. But when TSHTF, whatever form that takes, we will all be thrust into a confusing and alarming bag of feelings we don't know what to do with. How we respond to change and challenge may make the difference between giving up in despair and living for another day. Have you ever hit bottom emotionally and fought your way back to the light? Ever had a dark night of the soul? Ever thought your grief at the loss of a loved one would never end? How do you deal with your anxiety in regular life? How do you deal with interpersonal issues? What character flaw do you need to work on most? How do you handle your money? And on and on and on. Self-knowledge is one more strength to develop for trying times. Whether you choose this forum as a place to share or in another area of your life, the work needs to be done. Because the world we are living in is ending.

If going to conferences, while they are still viable, helps you prepare emotionally, so much the better. Remember that such gatherings aren't just about the topics at hand, but provide a place to share concerns with others over the rumbling edifice of finance that's ready to topple at any moment - and the fear that brings up for survival. Some solace may be gained by meeting with others who share that fear. However if someone is only comfortable talking about things intellectually, I would invite them to drop down into their feelings and feel the fear that is lying just beneath the surface. Get to know the fear/anxiety like a friend. Find out how that fear drives you and what you choose to do with your time/money (energy). Are you in your comfort zone and what can you do differently to move out of it? We learn to put on public personas that conceal our true feelings but now is the time to become more in alignment with our truth by integrating our thoughts with our feelings. We need to start telling the truth to each other, not what we think will get us approval. As I write these words, I am speaking to myself as much as to you. I had a reminder recently of my pattern of seeking the approval of others over my own needs by attending a social function when I was recovering from shingles. I should have said no and taken care of myself but I didn't want to disappoint. For others, it will be different issues.

How are you doing? Depressed, anxious, numb or none of the above?

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johnrtaylor474
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Joined: Aug 9 2009
Posts: 1
A Response to Jdye51 Oct. 5, 2013

 

Hello Jdye51:

Loved so many things about your Oct. 5, 2013 post, that I felt compelled to write and say "thank you".  Your reference to growing up in the time of the "Jetsons" where everything could only get better and better in an upward trajectory is so very appropriate and fitting,  and ultimately untrue when viewed materialistically.  I  recently viewed for the first time, the film 'Invictus' starring Morgan Freeman as Nelson Mandela, and Matt Dameon as the captain of the South African rugby team.  In it, Nelson shares a copy of a poem that he says helped him during his 28 years of imprisonment in a tiny cell.

Where so much in today's world events seems to loom out of control and ready to collapse  rapidly  into chaos and crisis, the attitude contained in this peom offers another perspective.  Here's the poem, with a link to the story and the man behind it following.

In answer to your question "How are you doing?"  I am anticipating great opportunity for personal growth and development of perspective in all that lies ahead.

 

Thanks again,

John Taylor

Sebastopol, CA

 

Invictus

Out of the night that covers me,
Black as the Pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds, and shall find, me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul. 

William Ernest Henley
http://en.wikipedia.org/wiki/William_Ernest_Henley

 

davefairtex's picture
davefairtex
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Posts: 5067
crazy man Rickards - just a math guy

I was initially suprised by Jim Rickards numbers, and then I did some simple math.

So let's imagine we take the total value of all the dollar bills floating around out there - the FRED timeseries for this is CURRENCY, or the sum total of all money in circulation.  Then we assume that the US government wanted to have 100% gold backing for every dollar, so you would divide CURRENCY by the number of ounces the US government owns - 8133 tons x 29k troy ounces per ton.  Given the 1.1 trillion in CURRENCY, the resulting chart is what you would see.  (Yes, that's $4650/ounce)

 

Now how does Rickards get his other, higher number?  Well, its simple, he just uses a different FRED timeseries.  This one, that FRED calls M2, is the sum total of CURRENCY + checking accounts + savings accounts + money market funds + small account bank CDs.  In other words, the "mostly liquid" cash holdings in the US, which is currently around 11 trillion.  Now let's back all of that 100% by the 8133 tons of gold, and see what we get.

And there's our magic $44k/oz number. 

The one interesting number that gives this at least some credibility with me is the first CURRENCY chart going back to 1980.  Notice that gold there is about $500/ounce given the currency in circulation back then.  So given historical valuations, the $4.5k/oz number isn't quite so crazy after all.

So could such a thing come to pass?  I believe the answer is yes, it could.  However, there are several things to consider:

1) politicians would be dragged back into a gold standard kicking & screaming.  They couldn't do their no-tax-yet-spend deficit giveaway programs anymore.

2) the US could no longer run a continual trade deficit.  We'd have to actually trade oil for gold.  Given that could last for only months, it would mean a drastic drop in the US standard of living, and likely the end of US hegemonic power in the world.  (oil = liquid hegemonic power, h/t Stoneleigh)

3) everyone holding gold (a very small minority) would get a massive windfall.  This would be seen as unfair and as we know, our current society is very much against unfair things like this, and its dangerous to be in a very small minority that is suddenly quite wealthy in a society with everyone else having drastically reduced living standards.  No doubt the jealousy (and propaganda) against gold-hoarders would be very intense.  gold might become dangerous to unload - like selling cocaine, heroin, etc.

4) most likely warehouse gold would be nationalized.  Most likely mines would be either nationalized or heavily taxed.

This may be where we end up after a massive currency crisis.  I believe it would likely come after trying literally everything else, because the immediate negative consequences in terms of national power as well as living standards and economic dislocation would be so dramatic.  Anyone in power at the time this happened would have zero future in politics, unless they managed to shift the blame onto some handy scapegoat-group.  But I'm sure our politicians would never do such a thing.

So that's the math, and some things to think about.  Even the lower end Return of the Gold Standard $4,560 gold will likely come with an "unintended consequences" price tag attached.

Last point: I don't think this is the only scenario, but I believe its one that might happen.  How likely?  We'll have to watch how things develop.  As Jim himself has said, its not correct at some level to give odds, since one scenario has 100% chance of happening, and all the rest have a 0% chance.  Even so, I'd give this one somewhere between 15% and 40%.

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davefairtex
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and two more currency/gold charts

I had so much fun with the last set of charts, I had to do two more.  I found a very long-lived timeseries named CURRCIR, which goes all the way to 1917.  It is a slightly broader version of "currency in in circulation" since it includes money stored at bank vaults, but it is roughly equivalent to CURRENCY; for instance, CURRCIR right now is 1.206 trillion, while CURRENCY is 1.147 trillion, a difference of only 5%.

So the equation "CURRCIR / us-gold-ounces" gives us a "fair value price" for gold of $523 in 1980 and about $50 in the 1950s, and a range of $14-$60 in the 1940s.  So in some sense the $800 price for gold in 1980 wasn't crazy, but it might have been a bit high.

 

And we get one more chart, this time comparing the previous values to the size of the US gold reserves over time in tons.  Check out how the tons of gold in the US gold reserve (red line) started at 20k tons in 1960, and steadily dropped until Nixon closed the gold window.  We were printing too much currency from Kennedy on, our monetary policy was just too loose, and we were unwilling to raise rates and cause a recession in order to remain on the gold standard.

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ferralhen
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another response to jdye51

in response to the question "how do i feel?"

i feel like a candybar wrapper; discarded after my sweets have been devoured.

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davefairtex
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Posts: 5067
wow, Jim H is right on this one

I think Jim really has located a live one here.  This guy spouts so many half-truths and non-truths its not even funny.  If you want to see what attempts at "anti-gold propaganda" look like, this is the real deal.

You should read through them if you are up for some good entertainment.  Jim had his favorite comments, and I have mine:

 

 

@Chas Caldwell  I've travelled in 32 countries and most will accept gold as payment, especially in the Middle East and Asia.

Chas Caldwell
 

That is a totally false assertion, markus.  And nobody in their right mind would even consider accepting any gold  for any financial transaction at current preposterously inflated commodities prices for gold.  What would they do with it>  It is worthless unless sold back to a dealer at a 10% cost and then converted into actual money which could be deposited in a bank account.  do you really think anyone would be stupid enough to accept gold as payment for anything, particularly when there would be no way to even account for such a bizarre transaction and huge costs associated with it?  Really?

Being quite familiar with southeast asia, while its unlikely someone would actually accept gold straight across unless they knew you - the issue is really one of authenticity more than anything else, since there are so many fakes in asia - its a simple matter to go to the gold shop together, do a quick exchange of gold-for-currency (at an 0.5% haircut, NOT 10%) essentially paying the shop to authenticate the gold, and then execute your transaction.  Sheesh, even jewelry doesn't have a 10% haircut if its made in-country using the standard alloy, it is more like 5%.

The authenticity problem should not be underestimated.  One standard-sized gold bar is about $3200, about six months salary for a person just out of university, so the incentive to counterfeit is quite high.  And they are so very good at counterfeiting - currency included.

Here's another example:

Brett, the actual reality is that THERE IS NO MARKET FOR THE US TO SELL OFF ITS 8250 METRIC TONNES OF GOLD even if they tried to sell it for their book value of $42.22 per ounce.

Simply Amazing.

debu's picture
debu
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Posts: 222
Conspiracy Facts?

We know that Cass Sunstein, an Obama confidant, has advocated infiltrating online groups and websites to counter "conspiracy theories".   We also know that the Israeli government hires "university students to post pro-Israel messages on social-media Web sites".

Is it therefore that far-fetched that the Fed/BIS/banking cartel, etc. might employ similar tactics to undermine confidence in gold?

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jgritter
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Posts: 273
Scared Shitless

In response to jdye51, how am I feeling?  I'm scared shitless!  It really begins to look like the dumb bastards are going to drive the bus off the cliff.  After all the intellectual machinations and mental masturbation I can't help but think of what Berlin looked like in 1935 and what it looked like in 1945.  I think of what the United States looked like in 2007 and what it might look like in 2017 and I want to vomit. The time may some be upon us when we have to, no shit, hunker down and ride out the storm.  God help us all.

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davefairtex
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on conspiracy theories

debu-

Nice paper on conspiracy theories.  The writer had some interesting things to say apart from the bits you quoted about infiltrating online groups (which I think is short sighted, bad strategy, and hits the symptoms without addressing the root cause).  His observations include:

* conspiracy theories increase as governments and media sources become more untrustworthy.

* in most cases, humans tend to think most consequences were intended rather than unintended; an underlying intentional order is preferred psychologically over a universe that acts either out of random chance or resulting from the unintended consequences of the sum total of our decisions.  As a species/society we prefer the sinister subtle intentional force to an unpredictable universe.

* conspiracy theories are extremely resistant to correction; believers attribute unusual powers, reach, persuasiveness, and understanding to agents of the conspiracy, and so any apparently contrary evidence is just further proof the conspiracy exists.  the better the evidence, the more super-human the agents become.  this structure is quite problematic; if we imagine a case of a false conspiracy theory, we can easily see that it would be impossible to prove to a true believer the falsity of the theory.  contrary evidence has a negative impact on a conspiracy theorist.

* intensity and belief increases because of group polarization effects - a well-established phenomenon whereby members of a discussion group end up in a more extreme position in line with their tendencies than they were before the discussion began.  (The group polarization phenomenon has been found in hundreds of studies involving over a dozen countries).  If a group of radicals sit down and talk, they are more radical by the end of the meeting than they were before it started.

* self-selection increases intensity and eliminates countervailing voices.  Once polarization occurs, doubters and halfway believers will tend to leave while intense believers remain. It is likely only intense believers will join going forward.  The group becomes increasingly more fanatical.

* group leaders may enforce a form of segregation, eliminating information or arguments that will undermine the leaders' hold on the group.

To me, the paper's solution section avoids addressing the root cause of the whole mess - the more secretive, dishonest, and corrupt the government and media is, the more conspiracy theories will blossom.  A rise in conspiracy theories are simply the logical end product of a long history of dishonesty.  If you really want to eliminate conspiracy theories, perhaps its better to work at restoring honesty to the system.

All that said, even though a dishonest government and captured media leads to an increase in conspiracy theories, that doesn't mean each conspiracy theories are correct just because the government and/or media isn't telling the truth.  It is possible to understand and even be sympathetic for why they come to be, but it isn't necessary to then take the next step of following each one down its own rabbit hole.   Likewise, there's no need to adopt the behaviors of suppressing dissent, eliminating non-believers, attributing super-human powers to conspiracy agents, and so on.

Well that's my philosophy anyway.

troof's picture
troof
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Well Doctor, it all started when ...

images?q=tbn:ANd9GcQ80StPl0l4tyHZbPJtiatwBxAjOD5oizYygruf6zt5D9d6YAb9Rw

Now tell me sir, how long have you had this delusion that government could ever be honest and how long have you had this compulsion to debunk conspiracy facts?

 

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treebeard
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Posts: 590
Petrodollars

US military is by far the most powerful in the world by far.  It been used for a century to support the US financial system.  We can print money, send it overseas and get real goods in return, who wants to give up a racket like that.  I have a feeling that the price of gold will not rise until the US military is defeated.  The only thing that will turn this around is if we get our financial [email protected]#'s kicked.  I'm not holding my breath.

That's not a conspiracy theory, that's the global financial system.

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Jim H
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The military

is not doing a very good job of suppressing the price of oil.  Oil is a limited resource that almost everyone needs.  Gold is a limited resource that only some across the world realize they need.... for now.  I predict you will be very, very wrong Treebeard. 

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treebeard
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Posts: 590
I hope I'm wrong

Jim,

I certainly hope that I'm wrong and that you're right.  That would be better for all of us.  We know that gold should be around $4,000/oz right now but the price is consistently hammered on a regular basis.  We're back down below $1,300 again.  We know the price is manipulated.  How do you think that the current gold suppressing mechanism will break and allow the price to take it's market value?  What event, or series of events do you visualize happening to facilitate transition from a command and control to a free market economy?  I'm not certain that I'm right, but I can't visualize how that is going to occur.

If it does start to unravel, why wouldn't the banks do whatever it takes to stop the rise, even if they needed to make possession of gold illegal?  I think that there is just to much a stake to let it rise.

I don't see what interest the military/indutrial/banking/political/system has in suppressing the price of oil.  I think that their only interest is in seeing it traded in dollars to keep the value of the currency up, oil is what is giving the dollar it's value.  Drawing the battle lines between paper and gold I think it playing in a game that is to heavily stacked against us.

The real and effective positive change I think will come about from re-scaling our world, from large centralized centers of political and economic power to the diverse and local.  This is a way forward that works on spiritual, emotional, ecological, economic and political levels.  It is way forward that works for everybody regardless of economic means.  It is something that everybody can do right now, no amazing technological advances are required, no political transformations needed.

Many of the PP community have already made lists of this sort, consciously changing how you spend your money and eventually transforming your life style. You can do this whether you live a large city, suburban lot, country homestead.  Those are things that are transformative that are in our hands.  Who want's to wake up constantly wondering what somebody else has done to the price of gold?  That seems very dis-empowering to me.

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mgreenx
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Posts: 5
Spot on!

"It's funny that once you realize it's doomed to fail, you expect it suddenly, but at that moment the only confidence lost was your own"

That is absolutely right!  But after one loses confidence, what are they to do? 

I'm betting my future on Beer, Butter and Cheese...

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mgreenx
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Posts: 5
get out of our death spiral...

There are movements and communities springing up all over, especially Europe!

http://www.sustainable.org/living

http://www.dancingrabbit.org/

http://sustainablecitiescollective.com/luis-rodriguez/131416/road-map-ma...

...

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