Eric Sprott on CNBC

Eric Sprott is interviewed on CNBC and gives some new perspectives on gold and silver investing for main-stream viewers.  He mentions how the central banks of the world do not like to see the price of gold go higher because that would be a sign of the true weakness in their fiat money as they continually print more to fight the contagion in their economies.  He also expects silver to out-perform gold and gives some interesting statistics for his reasoning.

Day of Deceit

The Truth About FDR and Pearl Harbor

Day of Deceit - The Truth About FDR and Pearl HarborUsing recently released documents available through the Freedom of Information Act, the author, Robert B. Stinnett provides a convincing argument that President Franklin D. Roosevelt, not only had prior knowledge of the Japanese attack on Pearl Harbor, but initiated actions which provoked Japan to do so.

Polls conducted in 1940 show that the majority of American citizens wanted no part in the war in Europe.  But FDR and his advisers agreed that US involvement was necessary because they were certain that a Nazi German victory would ultimately threaten US national security.  So the immediate strategy was to formulate a plan that would serve to induce the US public to support joining the allies in their war against Germany.

In September, 1940 the axis powers – Germany, Italy and Japan – signed a Tripartite Pact which basically tied the three nations together with a promise to assist each other in the event any of them were attacked.  Lieutenant Commander Arthur H. McCollum of the US Naval Intelligence Office (ONI) recognized this as an opportunity.  If Japan could be provoked into attacking the US, then it would be probable that the American citizens would be so angry that they would support a declaration of war against Japan.  This, in turn, would result in the axis powers supporting Japan and declaring war against the US.  The US would then be involved and join the allies.

So, in order to provoke Japan, McCollum advised a plan consisting of 8 actions to be undertaken by the US.  These were:

  1. Enter into agreement with Britain to allow the US military to utilize their Pacific bases.
  2. Agree the same with the Dutch in Indonesia.
  3. Aid the Chinese.
  4. Send US Navy cruisers to the Pacific areas, Singapore and Philippines.
  5. Sent US Navy submarines to the Pacific areas.
  6. Centralize the US Naval fleet near the Hawaiian Islands.
  7. Make agreements with the Dutch to cut off Japan’s oil supply.
  8. Together with Britain, enter into an agreement to embargo all Japanese trade.

These actions had their intended affect, especially that regarding cutting off Japan’s oil supplies.  We know what happened next.

Stinnett also makes a compelling case that US Naval Intelligence had been able to break the Japanese Navy’s radio encryption and that FDR had been advised regularly on the location of the Japanese fleet prior to the attack.  Astonishingly, FDR withheld this information from Naval commanders in Hawaii.

 

Democracy – The God That Failed

May 7, 2012

Democracy - The God That FailedThis 292 page book is basically an endorsement of Anarcho Capitalism, supporting private property as the basis for all civilization, without the need for any government of any kind.  Instead, freedom, civility and economy would prosper under a system of competing private insurance companies contracting with private property owners, who maintain their natural rights to do what they will with their own property as long as their actions don’t infringe on those same rights of their neighbors.

Hoppe provides an interesting perspective on democracy and how it compares it to other forms of government – especially that of a monarchy. After World War I, the powerful monarchies were no more and gave way to democratic forms of government. The economic comparison is drawn from the fact that under a monarchy, a king has sole ownership of all property in his domain and therefore has some motivation to maintain the property value of the kingdom. But under a democracy, there are only temporary stewards in control – they don’t own the property, they only have a temporary power to control it and therefore are motivated to extract what wealth they can for themselves and their cronies while they are in power.

There will always be less people who have things worth having than there are people who don’t have those things. And under a democracy, it is easy for someone to come to power by promising to give to those who don’t have those things.  But this is always a wealth transfer from ‘haves’ to ‘have-nots.’

Hoppe favors a decentralized form of society, where private property owners are free to do as they please as long as what they do doesn’t infringe on the rights of their neighbors. In such a society, free trade is key to economic success.  Contracts can be made with other property owners, both foreign and domestic.  Hoppe also introduces what he’s defined as restricted immigration as part of the ideal foreign policy.  Here, in order for a person to move into the geographic region, he/she must be invited by an existing property owner.  This contrasts with the current democratic foreign policy where the government forces existing property owners to be integrated, many times against their will.

Under a democracy, citizens depend on a central government to provide ‘protection’ and pay via taxes for such a service. However, the citizens have no say in how much the service costs and also have no recourse if such service fails.  This is a compulsory scheme and the government has a monopoly on the service.  Instead, under the system Hoppe suggests, private property owners would have the choice of contracting with competing insurance agencies to provide such protection.

In the last few chapters, Hoppe provides some insight on how to go about changing the existing system – via secession. He points out that it probably isn’t possible to try to secede as the south did in 1861 during America’s Civil War.  Instead, disbursed cities throughout the country should form their own bands, which would be much more difficult for the central government to prevent.

Personal note: Although Hoppe points out some very insightful truths, his suggested resolution based on complete private property ownership still doesn’t address the main problem with any society – human nature.  What is to stop insurance companies from merging, using coercion, becoming huge, and finally dominating the world as the US government does today?

Money, Power & Wall Street

Here is the PBS Frontline series on the issues behind the current global financial crisis.

Money, Power and Wall Street

Watch full-length episodes of PBS documentary series FRONTLINE for free. Money, Power and Wall Street – In a special investigation, FRONTLINE goes inside the struggles to rescue and repair a shattered economy


Ron Paul on CNBC

Which presidential candidate would you be most be confident would NOT lie to you?  Here’s Ron Paul on CNBC taking up the philosophical arguments no other candidates are discussing, including one hell of a debate on gold and the debasement of the dollar with Morgan Stanley’s Stephen Roach.

New Record for Number of Americans NOT in the Work Force

Here’s a chart from the St. Louis Federal Reserve showing Bureau of Labor Statistics (BLS) data on persons not in the work force.  Record numbers!!!  One of the reasons the statistics on unemployment have shown decreases lately is that there are fewer persons counted among the total. When one compares the total population to the number of employed, one can see that there’s a real problem here.

St. Louis Federal Reserve - BLS Not in Labor Force Statistics

Geithner Admits Gold is Not a Relic

U.S. Treasury Secretary, Timothy Geithner and Federal Reserve Chairman, Ben Bernanke testified at the House Committee Oversight and Government Reform on March 21, 2012. In discussing the European debt crisis and responding to questions regarding IMF funding, the Treasury Secretary suggested that a default by the IMF or any of its borrowers was highly unlikely because the loans are backed by “a substantial amount of IMF gold …”

More commentary from Swiss America can be found here.

 

Root Cause: The Petro Dollar

April 4, 2012

There’s a popular theory among the world population that the U.S. launched wars in the middle east in order to control its oil reserves. On the surface, this seems entirely logical, but the truth of the matter may be much more sinister, and one should look a little deeper into the situation. It’s not the oil reserves the U.S. is after, although oil does play its part in this charade. The main concern of the U.S. in these wars is more likely the maintenance of its hegemony with U.S dollar as the world’s reserve currency.

The U.S. dollar became the de facto world reserve currency after World War II, when delegates from around the world met and together agreed to what became known as the Bretton Woods System.  Under this system, the U.S. dollar would be linked to gold at $35/ounce. All other nations would tie their currencies not directly to gold, but indirectly through the U.S. dollar. This meant that those nations would hold dollars in their foreign reserves to support their local currencies.  In order to obtain dollars, those countries had to either borrow them from the U.S. Federal Reserve or earn them with a trade surplus. The U.S. got a sweet deal here – perhaps justified due to the fact that after the war the U.S. was indeed the strongest, most productive nation on the planet, along with a huge stash of physical gold.

This system worked well for the world and especially for the U.S. during the prosperous years of the 1950’s and 60’s. But with the U.S. printing its own dollars to cover its increasing debts, including the vast expeditures on the Vietnam War, the world became concerned. Suspicious that the U.S. gold reserves would not cover the existing issue of paper dollars, countries began to trade in their reserve dollars for gold at the U.S. treasury using the pegged value of $35/ounce. The U.S. gold stash was steadily declining.

In order to prevent the total depletion of U.S. gold supplies, in 1971 the Nixon administration closed the gold window – nations were no longer allowed to exchange their reserve dollars for gold.  It was the end of the Bretton Woods System, but not quite the end of the U.S. dollar hegemony in world reserve currency status.

One must then ask the obvious question: Why would a nation now hold a seemingly valueless paper dollar as a reserve currency, especially since its tie to gold has been cut?

The answer: The Petro Dollar.

After Nixon closed the gold exchange window, the dollar was a free floating fiat currency, competing with other currencies around the globe. Inflation started to escalate since there was no tie to gold anymore. In fact, in 1975 the average price of gold was $160 – more than 350% increase in just 4 years since abandoning the gold window.  Additionally, OPEC nations had been using the dominant dollar as a preferred payment method for their oil exports, but now they were starting to lose money as the dollar lost its value. In 1973, OPEC launched an oil embargo, raised prices and started internal discussions on the logistics for trading oil for other currencies including gold. Steps had to be taken by the U.S. if it was to re-secure the dollar as the strong world reserve currency.

The first step was taken in 1974 when Secretary of State Henry Kissinger launched the U.S.-Saudi Arabian Joint Commission on Economic Cooperation. Kissinger used the term “petrodollar recycling” to refer to the overall plan, which was to allow Saudi Arabia to purchase U.S. assets and services with the dollars it was receiving for its oil sales. A beneficial result for the U.S. was that the Saudi Arabian central bank (SAMA) could now use its dollar proceeds to buy U.S. debt (Treasury bills, bonds, etc.).

But the most beneficial outcome for the U.S. was that Saudi Arabia, the most dominant member of OPEC, would agree to continue to accept only U.S. dollars in exchange for its oil sales and would convince the other members of the cartel to do the same.  By 1975, all OPEC member nations restricted their oil trade to dollar transactions. To this day, as long as these key oil states play along, their leaders are showered in luxury and are quite secure in that they’re guaranteed the defense by the U.S. military and its industrial complex.

Meanwhile, countries around the globe must accumulate dollars in their own foreign reserves in order to import the most vital energy component – oil.  Nations have to aquire those dollars the hard way – by borrowing from the U.S. Federal Reserve or earning them by trading resources, goods and services to other nations for dollars.  But the U.S. enjoys the outrageous advantage of being able to print as much of the world’s reserve currency as it wants. Not only has it been able to use these dollars to purchase its own oil on the cheap, it has been able to continually out-do itself in annual deficit spending, now in the trillions of dollars, because it has had captive buyers for its debt.

One would think someone would cry “Foul!”  Well, someone did. The first nation to step away from this rigged system was Iraq.  In November of the year 2000, Saddam Hussein declared that Iraq would no longer accept the dollar for trade in the Oil for Food program.  Instead, the oil would be priced in and exchanged for Euros. Many said this would be a bad investment for Iraq at the time, but the move was actually beneficial because the dollar declined 17% against the Euro until the U.S. attacked and accomplished its mission in May of 2003.  Of course, now that the country was “stabilized” the Iraqi oil trade was repriced in the dollar market again and things went back to “normal” for a while.

The system would be challenged a second time, this time by Libya. In February of 2009, Muammar Gaddafi was elected the chairman of the African Union and would continue the effort to create the United States of Africa, which among other things, would include a unified currency, a dinar based on gold.  Gaddafi went so far as to suggest that the African nations’ oil trade would be switched from the dollar to this new gold currency. Here’s a segment from Russia Today:


Furthermore, it’s quite interesting to note that prior to the Libyan Revolution in February of 2011, Libya didn’t have a central bank linked with its western counterparts. It’s strange that before the “rebels” even had concluded battle, before they had even established a new government, they created a central bank.

And now the petro dollar has a third challenger – Iran.

The western powers are terribly concerned with Iran’s pursuit of nuclear technology. Mahmoud Ahmadinejad has publicly stated his intent to “destroy Israel” and of course this is not something to be taken lightly. Additionally, one must wonder why Iran would even need nuclear power when they’re sitting on one of the world’s largest oil and natural gas deposits.

However, attention should be given to recent events. Early in 2008, Iran launched a new commodity exchange known as the Iranian Oil Bourse. The intent was to allow for Iranian oil to be priced and traded with multiple currencies. As the system was ramped up, initially the exchange limited its trade to secondary petroleum products, with crude oil to be added “when the system was ready.” Iran recently announced it would be ready on March 20, 2012This was a declaration of war on the petro dollar!

The U.S. along with the EU then implemented a defense. Just prior to the expansion of the Iranian exchange, on March 17, the EU carried out orders to expand sanctions against Iran by removing Iranian banks from the international bank-wire transfer system known as SWIFT.  Furthermore, any banks caught doing business with Iran would be sanctioned as well.  It seems Iran’s entire international commerce engine has been halted and its oil industry crushed.

Japan, China, India and Turkey are among the countries who’ve been dependent on Iranian oil to some degree.  Various discussions have been taking place between Iran and its trading partners on the possibility to enlist trade for other commodities such as gold or grain. Unless someone caves in here, another war – perhaps a big one – seems to be on the horizon.

This article was researched and published by JonK.

Update: September 15, 2012: Must see video from CrisisHQ.

“If you want to understand what’s happening in the Mideast, particularly in Libya, Syria and Iran, you must first understand the main driving force behind U.S. foreign policy. Contrary to mainstream media propaganda, it is not our desire to spread democracy or to prevent tyrannical despots from murdering their own citizens. The real agenda is to protect the Petrodollar system, because it is the only thing that is currently preventing the total collapse of our fiat currency.”



Here’s a video from Alt Investors with a discussion on the petro dollar:

Part 1

Part 2

Source material from books (available at Amazon) on the petro dollar:

Here are links to further reading on OPEC’s petro dollar recycling:

Hunt Brothers’ Attempt to Corner Silver

In the 1970’s, the Hunt brothers tried to ‘corner’ the market in silver.  They realized that the market was extremely small and if they could start taking delivery of enough physical metal tied to futures contracts, it would cause a physical shortage and the price would shoot up.  So, with the help of financial backing from Sheik Khalid bin Mahfouz of Saudi Arabia and his discrete offshore company in Bermuda, International Metals Investment Company, they embarked on a strategy to gain control of and profit from their silver scheme.

As they continued taking delivery of their futures contracts, their silver inventory increased and silver prices began surging. The managers of the COMEX were so concerned, they enlisted the help of regulators to stop the brothers’ attempt to control the silver market. The CME and CFTC ended up changing the rules to limit the number of contracts any one individual or institution could hold, thus having the immediate result of halting silver’s price surge.  It’s interesting to note that today, regulators are not taking the same steps to halt the same kind of manipulation on the short side of the silver market.

Part 1


Part 2

Fed’s New PR Campaign – Twitter

In an effort to keep that false front of openness and transparency, someone at the Fed had the bright idea to align with technology and start a twitter account.  But with all the tweets bashing the Fed and its policies, maybe it wasn’t such a good idea?  Maybe it won’t be long before the Fed terminates this Twitter account.  Here’s some streaming tweets: