by
Adam Taggart
Libor
by
Chris Martenson
Executive Summary
- The current gold slam has *nothing* to do with the fundamentals for precious metals, which are very favorable right now
- How bad would deflation be?
- Evidence that deflation is arriving
- Why our current monetary system has become so compromised by the banks
- How to best protect your wealth from both deflation and the banks
If you have not yet read Part I: This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks, available free to all readers, please click here to read it first.
About Those Wealth Transfers
The biggest news of the recent past is the flow of gold from West to East.
(Source)
With China importing 835 tonnes of gold in 2012 – that we know about (and they may well be doing more under the table for official purposes) – and also standing as the number one producer of gold, with ~360 tonnes of domestic production, none of which is exported, China is consuming at least 44% of total yearly world gold production.
Connect that with India importing between 200 and 300 tons per quarter (2011 imports were 967 tonnes, and 2012 was 864 tonnes), and this represents another 33% of total world mine output. Add in Russia buying more official gold, and you suddenly find that a commanding proportion of the newly mined gold in the world is headed East, where it used to stay largely in the West.
To be clear, I view gold as money and therefore wealth itself. Everything else that can be manufactured out of thin air is merely a claim on wealth. In these terms, the West is slowly but steadily bleeding control of wealth to the East, something I thought our leaders were both aware of and focused on.
Knowing the lower prices will only exacerbate this West-to-East flow, I therefore thought that the bullion banks and central banks would not have dared push that dynamic any further. But apparently – no, obviously – I was wrong, which pains me on several levels.
Add to this the various things going on in the world today, and I honestly thought we were in the most gold-favorable landscape of my life.
Consider:
- Negative real interest rates (powerfully gold- and commodity-friendly throughout history)
- North Korea threatening nuclear and conventional war
- Open confiscation of wealth in Europe from bank accounts
- Japan doubling their monetary base in a brazenly desperate bid to stoke inflation by attacking Japanese trust in their own currency
- Extremely unfavorable bond yields up and down the yield ladder
- Continued European stress and discord with the possibility of a Eurozone disintegration
Taken together, this level of system, sovereign, and institutional uncertainty is about as gold-friendly a situation one could concoct…
Protecting Your Wealth from Deflation
PREVIEW by Chris MartensonExecutive Summary
- The current gold slam has *nothing* to do with the fundamentals for precious metals, which are very favorable right now
- How bad would deflation be?
- Evidence that deflation is arriving
- Why our current monetary system has become so compromised by the banks
- How to best protect your wealth from both deflation and the banks
If you have not yet read Part I: This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks, available free to all readers, please click here to read it first.
About Those Wealth Transfers
The biggest news of the recent past is the flow of gold from West to East.
(Source)
With China importing 835 tonnes of gold in 2012 – that we know about (and they may well be doing more under the table for official purposes) – and also standing as the number one producer of gold, with ~360 tonnes of domestic production, none of which is exported, China is consuming at least 44% of total yearly world gold production.
Connect that with India importing between 200 and 300 tons per quarter (2011 imports were 967 tonnes, and 2012 was 864 tonnes), and this represents another 33% of total world mine output. Add in Russia buying more official gold, and you suddenly find that a commanding proportion of the newly mined gold in the world is headed East, where it used to stay largely in the West.
To be clear, I view gold as money and therefore wealth itself. Everything else that can be manufactured out of thin air is merely a claim on wealth. In these terms, the West is slowly but steadily bleeding control of wealth to the East, something I thought our leaders were both aware of and focused on.
Knowing the lower prices will only exacerbate this West-to-East flow, I therefore thought that the bullion banks and central banks would not have dared push that dynamic any further. But apparently – no, obviously – I was wrong, which pains me on several levels.
Add to this the various things going on in the world today, and I honestly thought we were in the most gold-favorable landscape of my life.
Consider:
- Negative real interest rates (powerfully gold- and commodity-friendly throughout history)
- North Korea threatening nuclear and conventional war
- Open confiscation of wealth in Europe from bank accounts
- Japan doubling their monetary base in a brazenly desperate bid to stoke inflation by attacking Japanese trust in their own currency
- Extremely unfavorable bond yields up and down the yield ladder
- Continued European stress and discord with the possibility of a Eurozone disintegration
Taken together, this level of system, sovereign, and institutional uncertainty is about as gold-friendly a situation one could concoct…
by
David Collum
In the Big Rock Candy Mountains,
The jails are made of tin.
And you can walk right out again,
As soon as you are in.— Harry McClintock, Big Rock Candy Mountain (1928)
Fresh from releasing his exhaustive and excellent Year In Review last week, Dave Collum sits down with Chris to discuss the key developments of 2012 in detail.
David Collum: We’re Headed for a Showdown
by David CollumIn the Big Rock Candy Mountains,
The jails are made of tin.
And you can walk right out again,
As soon as you are in.— Harry McClintock, Big Rock Candy Mountain (1928)
Fresh from releasing his exhaustive and excellent Year In Review last week, Dave Collum sits down with Chris to discuss the key developments of 2012 in detail.
by
David Collum
Background
I was just trying to figure it all out.
~ Michael Burry, hedge fund manager
Every December, I write a Year in Review that has now found a home at Chris Martenson’s website PeakProsperity.com.1,2,3 What started as a simple summary intended for a couple dozen people morphed over time into a much more detailed account that accrued over 25,000 clicks last year.4 'Year in Review' is a bit of a misnomer in that it is both a collage of what happened, plus a smattering of issues that are on my radar right now. As to why people care what an organic chemist thinks about investing, economics, monetary policy, and societal moods I can only offer a few thoughts.
For starters, in 33 years of investing with a decidedly undiversified portfolio, I had only one year in which my total wealth decreased in nominal dollars. For the 13 years beginning 01/01/00—the 13 toughest investing years of the new millennium!—I have been able to compound my personal wealth at an 11% annualized rate. This holds up well against the pros. I am also fairly good at distilling complexity down to simplicity and seem to be a congenital contrarian. I also have been a devout follower of Austrian business cycle theory—i.e., free market economics—since the late 1990s.4
Each review begins with a highly personalized analysis of my efforts to get through another year of investing followed by a more holistic overview of what is now a 33-year quest for a ramen-soup-free retirement. These details may be instructive for those interested in my approach to investing. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged with enthusiasm. Everything can be found here.5
2012 Year in Review
by David CollumBackground
I was just trying to figure it all out.
~ Michael Burry, hedge fund manager
Every December, I write a Year in Review that has now found a home at Chris Martenson’s website PeakProsperity.com.1,2,3 What started as a simple summary intended for a couple dozen people morphed over time into a much more detailed account that accrued over 25,000 clicks last year.4 'Year in Review' is a bit of a misnomer in that it is both a collage of what happened, plus a smattering of issues that are on my radar right now. As to why people care what an organic chemist thinks about investing, economics, monetary policy, and societal moods I can only offer a few thoughts.
For starters, in 33 years of investing with a decidedly undiversified portfolio, I had only one year in which my total wealth decreased in nominal dollars. For the 13 years beginning 01/01/00—the 13 toughest investing years of the new millennium!—I have been able to compound my personal wealth at an 11% annualized rate. This holds up well against the pros. I am also fairly good at distilling complexity down to simplicity and seem to be a congenital contrarian. I also have been a devout follower of Austrian business cycle theory—i.e., free market economics—since the late 1990s.4
Each review begins with a highly personalized analysis of my efforts to get through another year of investing followed by a more holistic overview of what is now a 33-year quest for a ramen-soup-free retirement. These details may be instructive for those interested in my approach to investing. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged with enthusiasm. Everything can be found here.5
by
Adam Taggart
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