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Could a Brenton Woods II save the world economy from imploding? Martin Armstrong explains a two sided world as we approach financial armageddon:
Everyone knows something is wrong. Not everyone can put their finger on it, but they just instinctively know something ain’t right. One participant of the Occupy Wall Street movement across the street from me in Philadelphia holds up a sign saying “too many grievances to list”. Others just assume we have a White Knight in shining armor ready to charge in and save the day. There is certainly no shortage of optimists that just want to believe everything will be alright. They argue we will “grow” our way out of trouble like we always have done. This group stands in contrast with those calling for the end of the world turning gold into a religion and get angry if you say there will be even just a brief pause in the price advance.
Gold is the perfect hedge against a Sovereign Debt Crisis. However, it is a matter of TIME and the majority does not see it that way. Nonetheless, this is what makes the Business Cycle function. It requires two opposite extremes that refuse to consider any other alternative. In this sense, these two extremes are like the optimist who falls off of the top of the Empire State Building and as he passes the 4th floor says: “Well so far so good.”
Both are entrenched in their ideas beyond discussion. On the one side, some refuse to think that civilization can ever collapse as it has done many times in the past. At the other extreme the Gold advocates who argue only gold is money and all fiat is evil without any realization that to create a world with absolutely no fiat is to return to the Dark Ages when there were no banks, no financial markets, no leveraging, no credit, and no jobs – just serfdom.
If M3 shows a money supply of $6 trillion and the total market cap of NYSE stocks is $15 trillion, guess stocks by law should not be allowed to trade above the total money supply since this too would be fiat! According to Wilshire Associates, the total U.S. market cap of US stocks was about $15.35 trillion at the peak in 2007 compared to the world at $51.23 trillion.
The only time that existed without some sort of fiat system in 6000 years was the Dark Ages when money itself was rare and you were most likely a serf. Then there is the academic crowd who only focus on the domestic economy and ignore the global economy. While everyone screams at each other, the real economic nuclear bomb keeps ticking away on a global scale with a countdown to an international Financial Armageddon – debt.
Chances seem to be moving towards another big US bank fiasco with their growing involvement in selling billions more worth of CDS insurance contracts thinking the Greek tradegy is fixable. Remedying weekly Eureopean debt problems with more extended debt to its weakest countries only works in their dreams.
The following appeared Saturday in Bob Chapman’s International Forecaster:
While Europe tries to sort out its problems US banks have bet heavily on a solution. The money center banks have increased sales of insurance against credit losses to holders of Greek, Irish, Portugal, Spanish and Italian debt in the event of default. These are figures from the BIS, the Bank for International Settlements. The numbers leaped from $80.7 billion to $518 billion almost all of which are CDS, credit default swaps. New York banks, which in great part own the Federal Reserve, obviously are going for broke. That means in the last three months they added $350 billion in exposure. All we can say is that they must have a death wish.
As events change from moment to moment regarding Europe’s problems, predictions are difficult due to the machinations and irrationality of the elitists and the governments they control. How conceivably can governments’ bent on world government and the bankers who control them come up with solutions for the Greek euro and other EU problems? They cannot, of course, because they have an ax to grind. These are the same incompetents that created unregulated derivates, CDO’s, CDS, ABS and MBS, plus were the driving forces behind QE 1 and 2 and stimulus 1 and 2, all of which did not work.
Greek Prime Minister George Papandreou barely survived a confidence vote with a slim margin of 153-145. This pretty much guarantees needed funds for Greece in continuing to make interest payments on its growing debt burden. Their potential financial powder-keg explosion just got moved back in time some with the pushing back of some burning brush, that’s all.
It seems bankers who have sold CDS’s insuring against debt failures just got a big reprive until the expected general election in February.
The problem with CDS’s is that experts believe the banks who wrote the CDS’s, for buyers insuring their long positions on the Greek debt, won’t be able to pay-up if the country defaults thus causing a major world financial crisis in addition to the expected damage to the Euro that would result.A credit default swap (CDS) is similar to a traditional insurance policy, in as much as it obliges the seller of the CDS to compensate the buyer in the event of loan default. Generally, the agreement is that in the event of default the buyer of the CDS receives money (usually the face value of the loan), and the seller of the CDS receives the defaulted loan (and with it the right to recover the loan at some later time).(Wikipedia)
The repeal by the Clinton Administration of the Glass-Steagal Act is the genesis, along with the JReno Justice Deptartment (ahem) in collusion with Dem-led Congress (ahem BFrank) all is the direct cause of the huge mess.
The poor miss-informed Occupy crowd, as we know, has been duped…
Apparently Major Blooom finally admitted it today.
Let’s see, here you go:
“You can buy a house for nothing down, and all you have to di is sign here….ahem, yes, on the line that says Democrat Party.”
“What do I have to do? I can’t pay the rate in four years! I can pay it now, but what then??”
“No worry….just sign where it says ‘you get a new house!’ and be sure to vote Dem, or else your new house will be, well, maybe in jeopardy of being repossess by the evil Wall-Street crowd, and the evil Repubs.”
“Gosh, thanks, Mr. Barny! We couldn’t do it without you!!”
Never mind that the poor people who could never afford them in the first place had to be the pawns.
WHAT A SCAM!!!!
All the $$ ending up back in the Dem piggybank. VOTES purchased.
Welcome To The Age Of Bank Failures
The Age of Bank Failures
19 October 2011
By Greg Hunter’s USAWatchdog.com
The U.S. stock market surged yesterday on news the European Union (EU) would deploy a two trillion euro rescue fund to help get its sovereign debt crisis under control. This news was so good even battered Bank of America stock jumped more than 10%. Crisis averted? Hold on, not so fast. Some big French banks are in trouble because they are up to their necks with sovereign debt. Naturally, President Nicolas Sarkozy wants action now. Yesterday, the Financial Times (FT.com) reported the French leader said, “. . . an unprecedented financial crisis will lead us to take important, very important decisions in the coming days.” Raising the sense of urgency, the French president added: “Allowing the destruction of the euro is to take the risk of the destruction of Europe. Those who destroy Europe and the euro will bear responsibility for resurgence of conflict and division on our continent.” (Click here to read the complete FT.com story.)
Jim Rickards of Tangent Capital says you have to distinguish between the bonds, banks and the euro. He said recently in an interview on King World News, “The bonds are definitely going to crash and burn. The bonds are toast. . . . The banks own the bonds, and if the bonds are toast, the banks are toast. . . . But that doesn’t mean the currency is toast.” (Click here for the complete King World News interview with Mr. Rickards.) Rickards expects the euro currency will survive, but many banks will not.
Reggie Middleton of Boombustblog.com says the reason for the coming bank failures is simple—high debt loads. Middleton says many European banks have 40 to 1 leverage. He recently explained how dangerous this was by saying, “I take a dollar and I borrow $39, and I go out and buy something with it. All you need is a 2% move to totally wipe you out—100%. And we all know a lot of sovereign bonds have moved a whole lot more than 2%.” (Click here to see more of Middleton on the Boombustblog.com.) Middleton is expecting more European bank runs as the crisis picks up speed.
Dr. Martin Weiss of MoneyandMarkets.com is also predicting “European megabanks will collapse.” In a recent post, Dr. Weiss said, “Sovereign debt defaults will trigger more bank failures. More bank failures, in turn, will precipitate more sovereign debt defaults. This vicious cycle will cut off the flow of credit to businesses and households, sink the global economy into a depression, and perpetuate the vicious cycle. Ultimately, we will see an extended period of great economic hardship for billions of people on every continent.” (Click here for the complete Moneyandmarkets.com report.)
The risks associated with the European sovereign debt crisis are not overblown. Some of the top government financial officials know all too well the real world consequences of a daisy chain of out-of-control debt defaults. Just last month, Bloomberg reported Treasury Secretary Tim Geithner’s warning to the EU. The report said, “. . . Geithner pressed European policy makers to intensify their efforts to end the 18-month sovereign debt crisis and avoid the “threat of cascading default, bank runs and catastrophic risk.” In his strongest public push yet for Europe to step up its crisis-fighting, Geithner said strains in the euro-area’s budgets and banks are the “most serious risk now confronting the world economy.” (Click here for the complete Bloomberg report.)
The EU can’t save all the banks, but that is not going to stop them from printing money to pick and prop up winners. As we all know, every bank cannot be a winner. The problem is so big that European banks are allowed to lie about the value of their assets to project the image of solvency. The same is true for American banks. When European banks start failing, there is no way U.S. banks will be able to avoid being sucked into a vortex of default. For anyone who thinks this crisis can be resolved with a pain free plan—forget it. Welcome to the age of bank failures.
From the Mountain Messenger under “The Sixteen To One Mine In The Crosshairs from 9/30/11:
“No matter, declared the AG. The case, the prosecutor argued, is not about the deficiencies or crimes of the government: it is solely about the missing documentation. The justice of the situation doesn’t matter. Only the $2 million is at issue, which must be imposed immediately.”
“The justice of the situation doesn’t matter? Only the $2 million is at issue, which must be imposed immediately.”
Give me a break, Mr. AG. One wrong doesn’t make a right! If a judge can’t see where you are coming from then we’re all destined to be robbed by the State. If a $2 million assessment is ordered against the Mine it will just be the beginning of an extreme tyrannical power play to fix the out-of-balance incompetent management of the State’s financial affairs.
“The $2 million must be imposed immediately?” Immediately, yes I would suppose it would have been better to submit the reports and then later protest but just look at all the expense in the past just to get the attention of the Water Board to understand that the mill was closed. The money that was to be used for the in question water tests was used up in time and expenses just to get the Board’s attention that the mill wasn’t open any longer which they refused to recognize over and over again.
What were we suppose to do, sell body parts to pay for the tests that proved that a closed mill wasn’t operating anymore?
It’s fairly obvious what’s going on here: The Water Board has a personal agenda against the Mine’s president and his staff along with a AG that has been probably ordered by the Legislsture to go find some money with the added benefit to him that a conviction and big settlement would be great for his overall batting average.
The conviction rate of Federal prosecutors is near to 99%. At whose expense? It’s a fact that part of those convictions put folks in jail who were innocent people, who were not criminals. Martin Armstrong reports that it was these innocents who were the great majority of suicides while in captivity.
I hope the judge has some compassion for the potentially many shareholders that will be financially affected over a trivial matter that began with the Sixteen To One officers and staff showing the Water Board how incompetent they really were following many face to face hearings.
No one likes to be wronged, not even the Sixteen To One Mine, but when the Water Board gets personal and vindictive its time for higher authorities to reassess what truly their responsibilities are and determine if there are grounds for disciplinary action that have brought the office of the AG into an unjust action in which could turn out to be an embarrassing incident for the State.
Is the root of evil for us at the Water Board resulting because we never passed stuffed envelopes under the table to them but instead, just asked them to do their job?
“What truly exist(s) are corrupt corporations paying bribes to government for favorable treatment. End lobbying, pay for all elections and then you will eliminate the influence that has corrupted society. Those who run for office (1) cannot use their own funds to retain that office or run for election, and (2) install one term only rule. Make politics once again an honorable position, not a profession.
Do that and gut the regulators and courts and you will see the light of FREEDOM shine once again and return government to the people.”
Martin Armstrong
/More from Bob Chapman/
Most of these corporate miscreants are technology and pharmaceutical giants, who need a tax break like they need a hole in the head. This is 2004 all over again, but this time the number is $2.2 trillion not $350 billion. Back then they were supposed to create jobs. They created very few and took the funds to buy their stock to push up the price, so officers of these corporations could cash in their options and make hundreds of billions of dollar(s). This time they’ll do the same thing and make trillions, as Americans suffer in the worst depression since the 1930s.
fact these corporate titans laid off thousands of workers the last time around.
The revenues being lost by government would have accrued to the people over the next ten years, but the elitists cannot wait. They want their money now.They are Apple with $12 billion, Microsoft with $29 billion and Goggle with $17 billion for starters. These are not corporate derelicts. Politicians cannot agree on a debt extension, but they have no trouble agreeing on a redistribution of the people’s taxes upward to the very rich. This is really what Occupy Wall Street is all about.
Last time around we saw the same lobbying and the return on their investment 22,000%. There was no domestic investment, no more jobs, just less and no R&D. Shareholders of the stocks of these companies made out like bandits. It is a fact these companies laid off some 21,000 workers after they received their largess. Pfizer, which repatriated $35.5 billion, then laid off almost 12,000 employees.
Compensation for the officers of these firms jumped almost 30%. Are you getting the message?
If nothing else this is totally unpatriotic. The average American suffers, as the rich get richer. They want to laugh all the way to the bank again. It is no wonder people are enraged.
What will happen again is no one will be hired, corporate share buybacks and dividend payments will increase and our deficit will widen, as tax revenue spikes downward.
This can only happen in America, the most corrupt country in the world.In today’s International Forecaster, written by Bob Chapman:
America’s corporate criminals are not satisfied with depriving 11.7 million Americans of their good paying jobs, but now they are pushing for a repatriation tax holiday for $2.2 trillion they hold in tax havens offshore and pay little or no tax in the process.
The momentum is underway by transnational conglomerates that have hired hundreds of lobbyists and others to cajole and pay off politicians to get their legislation passed, which will screw American taxpayers out of $787 billion in tax revenue. This cannot be called anything else but a tax giveaway to multinationals who along with Wall Street, banking, insurance and Parma companies that control our country by buying off these same politicians. It is just like another travesty, the Import Export Bank that guarantees US investments in foreign lands at taxpayer expense.
A bill has been introduced by Senator John McCain and Senator Kay Hagan to lower the repatriation tax to 9%. Eight years ago they pulled this and had a 5-1/4% rate. There is a similar bill in the House, as Senator Charles Schumer brings Democrats in line for their payoffs for expediting the corporate payoffs. Only in America!
This is a redistribution of wealth to the rich. A corporate subsidy – corporate welfare as American unemployment hangs at 22.6 and inflation hovers at 11.4%. This is the total corruption of the political system, and the apex of corporate greed and Congress could care less, as long as they are paid off.
California AG Kamala Harris should prioritize:
How about waking up and prosecuting the CDAA, the Regional Water Boards and do some actual meaningful prosecuting.
I’d love to see the robo-signatures that rubber-stamp the rogue behavior of these crooks.
California pulls out of 50-state foreclosure talks
By DON THOMPSON
SACRAMENTO, Calif.
California Attorney General Kamala Harris says she will not agree to a settlement over foreclosure abuses that other state attorneys general are negotiating with major U.S. banks.
Harris’ announcement Friday is the latest to undermine a settlement that had been in the works between the banks and attorneys general in all 50 states. Other states including New York also have expressed reservations.
The agreement was supposed to settle claims of poor mortgage and foreclosure practices, including document fraud known as “robo-signing.”
Harris says in a letter to state and federal negotiators that the pending settlement is “inadequate” and gives bank officials too much immunity.
She says California will go it alone in negotiating a settlement.
Iowa Assistant Attorney General Patrick Madigan says the multistate effort will continue.
The Bank of New York Mellon is going down according to the man who brought Bernie Madoff’s Ponzi scheme to the attention of the SEC. Madaoff’s Ponzi’s scheme amounted to $65 billion.
Mr. Harry M. Markopolos alleges that the New York Bank Mellon cost tens of millions of Americans between $6 to $8 billion from their retirement savings accounts by cheating them on fraudulent foreign currency mark-up and mark-down charges during past decades.
Check out more of what the whistleblower Markopolos has to report against the bank during an October 8, 2011 interview by Eric King of King World News.
The Bank of New York Mellon is the largest custodial bank in the country.
[audio src="http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/10/8_Harry_M._Markopolos_files/Harry%20Markopolos%2010%3A8%3A2011.mp3" /]
On a regular basis, folks should continue their education. There is no better place to allot some of your precious time than to tune into http://www.martinarmstrong.com.
Yesterday’s commentary entitled, “Occupy Wall Street, Gold & Did Operation Twist Send The 30 Year Rates To Record Lows?” is another piece of brilliant writing by Mr. Armstrong, always with an historical twist of its own.http://www.inflateordie.com/files/OWS%20Gold%20and%2030%20Yr%20Rates%2010-08-2011.pdf
From Martin Armstrong:
There is NO constant in money because money is simply another variable in the entire economic-mix. Gold is a COMMODITY that is rare enough to provide a STORE-OF-WEALTH that is recognized universally on a global scale. REAL ESTATE has no international value because it cannot be transported outside the domestic economy. LABOR has no true international value because it fluctuates among nations dependent upon a host of other factors. Gold is a commodity that is the same in all nations, yet its value varies internationally because it is a hedge against the fiscal mismanagement of government. There is ABSOLUTELY no government that has not defaulted upon its debt except Romania during the 1980s.
Thanks for the update !!!
More Market Rigging.
Kitco News reports today that the CME Group raised copper margins by 15%.
Check out the link below depicting a chart of copper, absolutely, showing no price reasoning for increased margins at this time. It must be clearly apparent to trained observers that the metal was heavily shorted some weeks back and now, the insider big shorts are hoping to flush copper from weak hands with this move.
Will authorities investigate? I don’t think so.
The following gold production numbers for the U.S. were provided by Stan Sudol in his recent article, “North Ontario -A Golden Klondike – 192 Million Ounces and Counting:”
Top Gold Producing American States in 2010 (State Geological Surveys)
In 2010, the United States produced 228,000 kilograms (8,042,463 ounces) of gold, the third largest amount globally. Nevada produced 163,000 kilograms (5,749,656 ounces) and the remaining other states mined 65,000 kilograms (2,292,808 ounces). (United States Geological Survey)
Please note that the statistics from individual State Geology branches are not always in sinc with the United States Geological Survey. (1 kilogram equals 35.2739619 ounces)
Nevada – 5,338,559 ounces
Alaska – 845,144 ounces
Utah – 283,220 ounces
Colorado – 231,000 ounces
Washington – 198,810 (gold equivalent production: Kinross)
Arizona – not available
California – 174,446 ounces (2009) – In 2010 150,000 ounces were produced at the Mesquite Mine in Imperial County operated by New Gold(NGD).
South Dakota – not available
Greg Hunter spells out the OTC derivatives risk today by some major US banks:
The Bank of International Settlements pegs the total world over-the-counter (OTC) derivative exposure at around $600 trillion, but many experts say the real figure is more than twice that amount. No matter which figure you use, it is a gargantuan sum. OTC derivatives are an unregulated dark pool of money with no public market. These are basically debt bets between two entities on things such as credit risk, currencies, interest rates and commodities. According to the latest report from the Comptroller of the Currency, just four U.S. banks have an eye popping $235 trillion of OTC derivative leverage. (Click here for the complete Comptroller of the Currency report.) As a nation, U.S. banks have a total OTC derivative exposure of $250 trillion. So, the fact that just four U.S. banks have this much leverage and risk is astounding! The banks are listed below in order of size and approximate OTC exposure:
1.) JP MORGAN CHASE BANK NA OH
$78.1 trillion OTC derivatives
2.) CITIBANK NATIONAL ASSN
$56.1 trillion OTC derivatives
3.) BANK OF AMERICA NA NC
$53.15 trillion OTC derivatives
4.) GOLDMAN SACHS BANK USA NY
$47.7 trillion OTC derivatives
Considering that the total assets of these four banks are a little more than $5 trillion, I see a frightening amount of risk with a total derivative exposure of $235 trillion! This is nearly 50 to 1 leverage. On top of that, assets such as real estate or mortgage-backed securities can be held on the books at whatever value the banks think they can sell them for in the future. I call this government sanctioned accounting fraud, or mark to fantasy accounting. Who knows what the true value of the banks “assets” really are.
The public celebration of the 100th anniversary of Original Sixteen to One Mine, Inc. will be scheduled on a future date to coincide with the State Legislature’s resolution in recognition of the event. Thank you for asking. As soon as a date is decided it will be posted here. Please pass the word to any other Shareholders you may know.
What is being planned for 100 year aniversary an of the Original Sixteen to One Mine’s Incorporation? I for one would love to attend and plan to be there.
More Bank Subsidies On The Way?
Candice Choi, AP Personal Finance Writer, On Thursday September 29, 2011, 5:16 pm
NEW YORK (AP) — Will a monthly debit card fee soon be the norm? Bank of America said Thursday that it plans to start charging a $5 monthly fee when customers make debit card purchases. The fee will be rolled out starting early next year.
—The fact of the matter is that when Bank of America took over Countrywide Reality they under-estimated all the toxic waste that went with it. Bob Chapman says that if major US banks realisticlly priced their toxic waste it would become known that they are, actually, insolvent.
So one way or the other, the consumer continues to bail out the banks.
There are 520 million issued debit cards. $5X12mosX520million= $31.2 billion in new yearly proposed bank charges coming if BOA gets their way and all the other banks join into taking for themselves $5 each a month from our checking accounts.
The reason the economy stinks is all the money being sucked from us via loans and high interest credit cards payments to banks is NOT BEING RECIRCULATED back into our local economies. Think about it: we don’t need fancy worded stimulus plans, we need lower interest payments to lenders so our local economies can be well greased with the fruits from our labor.
In the early 80’s the lid on the general usuary law was lifted by Paul Volker. Who has the guts in Washington to get the big bankers back in line???? Or, just let the parasitic block suckers fold and let the chips fall where they may.
Director of Agnico Eagle(NYSE) with strong Wall Street connections becomes president of Sutter Gold. Sutter Gold’s main asset is their Lincoln Project located between Amador City and Jackson which is preparing for gold production.
http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aSGM-1882052&symbol=SGM®ion=C
Check out this Max Keiser video, “Flaming Banks, Burned-Out Economy.” This video in particular is a blockbuster. It clearly shows, along with an outstanding presentation by Aaron Krowne, how Americans are getting ripped-off over and over again by financial institutions while the government watchdogs with all their regulatory agencies do little to nothing in preventing this ongoing fraud.
Please see my message in the ‘Technology’ topic. The mining men that I am affiliated with in Reno are good people. My partner would be glad to introduce an experienced negotiator/attorney to you guys if you are willing to share some of your correspondence about your legal prolblems. I fear you are facing a stacked deck. But then again I am new to this mining idea and what do I know?
Bigsbkahuna, if someone offers you the Brooklyn Bridge to buy, refuse. Since most of the regulars know how to respond to your silver nuggets purchase but out of respect remain silent, Scoop must reply.
No silver nuggets have ever been found in the Sixteen to One mine. An educated guess is that no mine in the Alleghany district sports silver nuggets. Write eBay and report a fraud. Are you sure your nuggets are steel balls?
Scoop knows that the Webmaster will move your interesting purchase to the miscellaneous topic. Write again. You have had a most unusual experience.
Kissinger, the Bush’s and Bill Clinton all should take the dubious honor of destroying the working class in this country. The only person standing up for the U.S. worker’s security was Ross Perot, a proven businessman, during the 1992 presidential debates and, overall, the minority in Congress.
Mr. Perot said all NAFTA would do was create a “Giant Sucking Sound” (of U.S. jobs) and NAFTA was only “A One-Way Street.” Bush and Clinton said this was not true. This is just more proof that politicians have no idea how their decisions effect their constituents, or do they?
Bob Chapman recently stated that 8,000,000 U.S. jobs have been lost to free trade globalization. To whose benefit? Big U.S. corporations increased their profits by employing cheaper labor abroad which led to off-shore accounts and tax evasion. There maybe 2 to 3 trillion dollars of U.S. corporate money on deposit abroad in an attempt to circumvent IRS tax codes. And the U.S. is seeking to locate individual foreign tax payer’s holdings with a requested 35% hold on them to the benefit of the IRS? How about U.S. corporate foreign deposits?
With the shrinking U.S. job market, people have been forced to cut-back on their living expenses. Many folks have been lured to Walmart type stores because of their competitive pricing just to survive. Who is Walmart’s big supplier? Why China, of course.
Cheap products flowing into this country from China have given the Chinese a huge trade surplus with us, thanks Kissinger. As a result of the government’s failed attempts with massive debt expansion to jump start a faltering economy because of production loss and failed gambling endeavors by the big banks, the integrity of the U.S. dollar has greatly dimished.
Now, China is looking to buy into U.S. assets with their questionable Treasury holdings. Thanks, Kissinger and all your supportive cronies who lick the boots of big U.S. corporations at the huge expense to American families.
Ambrose Evans-Pritchard has an excellent article linked below depicting the China situation with their U.S. Treasury holdings. China seems interested in an acquiring an equity position in Apple and Boeing. China has already purchased farm land in the U.S.
What’s next, Kissinger. What other long term deals did you make in your 1974 meeting with them?
Just bought some natural silver nuggets on eBay that were said to come from the 16-1 ?
Silver and platinum would be in some formations, right?Love to buy some stock.
Matthew Kramer
Santa Barbara, caSound familiar?
The following are some recent thoughts from Martin Armstrong:
During the Bonus Army march upon Washington in 1932, the government sent in troops and tanks against veterans and their families using the label “criminals” to justify the government strong-arm tactics. History repeats for today the same labels are appearing rolled out once again for England and Greece.
Government blames society for breaking down into single parents and then there is the school discipline issue to blame. Of course what also emerges is the Marxist view that instantly attacks the rich, bankers, Wall Street, and the overall materialism/capitalism.
This justifies higher taxes, more regulation (as if the sea of agencies actually have prevented anything), and the general witch-hunt to imprison
those on the periphery and never any real culprits who are part of the oligarchy feeding the elections of some of the corrupt politicians. Prosecuting anyone produces the impression it is NOT those in government that have screwed anything up.Dear Mike,
I hope you had a great Labor Day weekend! Thank you for your reply to my posting. I very much appreciate the thought you put into it. Clearly you are a well-spring of knowledge and experience in both mining and the Kinky idiosyncrasies of California government. I know that you have most of the answers I’m looking for, and I will also search this site studiously. Naive as I am, I really did expect to hear the hills alive with the sound of music from air compressors and happy miners singing “Hi Ho! Hi Ho! It’s off to work we go!” REALLY I DID! But I learned that this isn’t the case, so I felt a need to explore the Topic which heads this blog. Let me explain why I did this.(Beware! This is a long post)
My business experience has been Management Consulting in Strategy, primarily Competitive and Marketing, in “production based” industries. However, now my focus has shifted almost totally onto gold mining. This is because I recently became the owner of a gold mine with patented claim which has been an important producer in Sierra County gold mining. The mine has had excellent historic production, and I hope great future potential. And so my Task One is, as you recommend, to conduct my “Due Diligence”, learn about the industry and the specifics of my property.
My research is still preliminary, but if gold mining was like Hi-tech, at the current prices, companies and mines would get snatched up like corn cobs in a tornado! Clearly this is not the case, so I am trying to understand why. The structures of “normal production based” industries are determined by relative cost position and the nature and strength of the internal competition. In mature industries, those with very strong competition and low friction, such as semiconductors, the top 3 competitors own 80% of the market. The top competitor sets standards and controls the product/market definition. Production cost is proportional to cumulative volume. The industry price is generally set by the cost structure of the #3 competitor. This produces stability and lets all 3 make acceptable returns on investment.
My current understanding is that resource based industries follow a different pattern. Some of the difference is that resource assets differ in quantity and quality from company to company. Cost is based more on the character of these assets rather than on total cumulative volume. Buying resource assets is easier but much more risky than buying manufacturing facilities. And seemingly, Government Regulation may be the most important variable in determining profitable production. Until now, my only direct experience with a resource based industry was aluminum production with Kaiser Aluminum & Chemical. But in this global industry the controlling resource was not the ore, but rather the availability and cost of the energy needed to refine it. To get into the aluminum business all you needed was a hydroelectric dam, or lots of cheap coal.
Government Regulation seems like a Great Black Pall which hangs over the whole resource industry in California. It sounds like this is currently the dominant force, an inconsistent and inescapable force, and one that I need to understand. On the international stage mergers, acquisitions, and joint ventures are becoming more common as gold price increases. Large companies are using this as a quick way to obtain ready assets to compensate for the depletion from operations. I don’t know if this is or will become important in California.
One thing that I do know well…..I know how to do research. There is a wealth of information on the Sixteen to One website that I am working through. I am also taking mining and geology courses through the University of British Columbia, studying USGS surveys, and hunting on Google. I would greatly appreciate any direction you other experienced members of the Forum might give me. And especially THANK you for reading through this long post.
Ron Pacholec
Retired in silence the glorious past producers continue to await the magical unknown gold price that will rejuvenate the District which is needed to surpass the heavy negative factor of regulation.
For the moment, mindless career politicians continue to rape and squeeze the companies and people of California. In order to start mining, near curent gold prices, these immoral vampires will have to be purged.
From the Casey Daily Dispatch
A sub-species of particularly stupid and destructive capuchins in the California legislature appear poised to pass a bill that will effectively put an end to hiring an adult babysitter or anyone seeking casual employment doing odd jobs.
Historically, the producers of the real wealth and the revenues for the State have been the hard working farmers and the hard working miners. Now we have a herd of buffoons in Sacramento unable to learn from simple high school history doing what they do best, suffocate and restrain the folks who want to work.
This following below is an outstanding description of the big problem faced by miners in California. Although intended for the malfuction-junction group in Washington, it can equally be applied to the political gang in Sacramento.
Comments by Martin Armstrong:
Politicians just don’t get what is going on. They are living in a dream world where they are so wrapped up in themselves that they fail to realize (1) they are the problem, and (2) the emperor truly has no clothes. They said Nero fiddled while Rome burned. They are jousting for position only to be able to blame the other party for the next election and to HELL with our future.
The majority of politicians are so wrapped up in themselves they are completely disconnected from the people. They rant and rave over pointless dogma but are clueless to how the real world actually functions. They must be living under a rock because they are completely void of any common sense whatsoever and are oblivious to the future.
They assume that government is exempt from EVERY law and economic principle and can actually manipulate their way out of anything. Some are just lining their pockets and getting theirs before it is too late.”
Back in the days when Bernard
Baruch was a stockholder things
were a lot easier going with capital a lot easier to come by. Mr. Baruch was always a “dead serious” investor and gold was rather cheap. Now with the price very high in the sky we have to wade thru some unbelievable opposition. But
with the assurance that we have
an unbelievable “lode” under our feet there is only one choice: “Go for it Boys”.Gold is rising like a Saturn 5 rocket on its way to the moon! The rocket fuel: the global economy, debt, financial and currency problems will be with us for the long term. In addition, buying by central banks, frightened investors, and flight from fiat currencies is predicted to increase, or at least remain stable in the near time. This will keep demand strong, at least for now. In this kind of an environment, which could change quickly by political will or investor preference, traditional Competitive Strategy says “Get as much product to market as fast as possible”. What has been the response to this situation by gold mining companies in Sierra County, or California in general? Are there significant new investments being made or planned for exploration, development, maintenance, and Especially for bringing dormant mines with significant, potential, back online? Consolidation through acquisition, merger, and joint venture is often the favorite Corporate Strategy in an industry in which current asset prices are low and potential is high, but which might change quickly. Do we expect there to be consolidation in mines and mining companies in the County? Are there any indications for M&A, or that major investments are being considered by larger financially stable companies in smaller pocket and dormant mines? In brief, what might be the future structure of mining in the County? Anybody have an opinion or a “Crystal Ball”?
Dear REAP (see below),
A modest mining man has the answers to your questions, many of which are scattered throughout this FORUM in almost every topic on the FORUM and headings listed to your left. Let’s begin with the first question, “What has been the response to this situation in Sierra County?” Growing interest based on phone calls, traffic in the mining areas and correspondences.
In California the response seems to be wonderment as to why the hills aren’t alive with the sounds of music from air compressors and happy workers; however everyone is scared away by the threat of lawsuits or time delay in beginning production.
No signs of new investment can be found. Every now and then people with an interest materialize. None have conducted a thorough inquiry.
Varied and detailed development plans based on history, geology and the present are published on this web site, well thought out and designed to “Get as much product to market as fast as possible”. Others may have plans also.
Significant consolidations of mines in the Alleghany Mining District occurred. Large companies fail to recognize the benefits from investment in small vein, underground, high-grade gold mines. Frankly, these operations are not suited for their corporate style.
Ah, the culture of “Crystal Ball” exercises about gold, a favorite or up-and-coming pastime of those who mine, those who wish and those who dream; sometime (rarely) someone does all three. You ask about the future structure of mining in the county. The structure will be similar to those that have taken place for 150 years: one company dominates (that company has changed over time); partnerships will form (General and Limited); associations may give it a try (most will fail); stock promotion companies will sneak into the county (most will fail); some really smart businessmen with the spirit and understanding risk/reward ventures may make an important contact and conduct his or her “due diligence”. (This would be refreshing.)
However, California has festering inside its governmental bowels some misinformed career employees that continue on a path of destruction for gold mining and other natural resource extraction industries. They are succeeding, which frightens away one of three ingredients for success in mining gold. The Central Valley water board staff currently leads a list that has hurt Californians much more than people realize. Tied for second are the “Attorney General” staff and the staff of the department of conservation.. They have swarmed like flies on shit. Instead they should be embracing all serious programs to utilize California’s splendid natural resources. They could be swarming like bees on honey. All Californians would reap the benefits of Sierra County’s gold.
I do not have a crystal ball to gaze into and see the future. I do run a gold mining company. I know that the future of Sierra County, California and the United States is understanding the past in tandem with predicting the future. Gold’s historical truth in social and cultural evolutions is undeniable. Like gold, truth lies at the bottom. One company may overcome the obstacles in Sierra County and California. It has an unusual name, Original Sixteen to One Mine, Inc. I have a personal stake in its welfare and treatment. A litigious government, working to selectively enforce and selectively prosecute any person or entity is at work in Sierra County to destroy this company. The drivers work in Sacramento. Their actions hurt every person in America except those who financially benefit from the present prosecutions.
“Many reasons may be assigned for the amazing economic development of the United States. The abundance of our national resources, the freedom of our political institutions, and the character of our population have all undoubtedly contributed. But in my judgment the greatest factor has been the fact that by the happenstance of good fortune there was created here in America the largest area in the world in which there were no barriers to the exchange of goods and ideas.” Gold helped bring about this happenstance of good fortune.
Right on, Bluejay. By the way
A.P. Gianini was not born in Italy
He was born in San Jose, Calif.
MY wife’s grandma knew the wife
as a customer in the store her
family had in San Francisco.Hi Martin
This is what I know, according to a man, Bob Chapman, that claims he’s 98% right with his projections and facts:
“The Bank of America has become a dumping ground for toxic debt the past three years. The Bank of America is upside-down to the tune of $500 billion.”
The sad thought is, I’m sure, that this mess wouldn’t have happened under Mr. Giannini.
In 1927 there was a “run” on the
Santa Rosa CA. Bank of America.
The branch listed 3mil in de-
posits but only had 300,000 to
pay out. Cash had to be brought in
from San Francisco and Healdsburg
to cover the demand.
every body that requested their funds got paid. A.P Gianinni was
the President of the Bank then,
what would he do now and any
different?My grandfather retired from Wall Street as a partner in a brokerage house and moved his family to West Hollywood, California in 1923. He later bought into the local Sherman Bank and became its vice president.
On the day of the famous run on the banks in 1929, employees put aside cash that the owners had on deposit. When my grandfather arrived at the bank, wading through lines of people seeking their money, he was told his deposited funds were safe. It was at that time he ordered employees to unsegregate his share and make it available.
Knowing the man my grandfather was and knowing how bankers operate these days leaves little to be desired of them. In addition, it is beyond my imagination why anyone would rent their money to the banksters for the going rate of 1% when the current inflation rate is 11.2% according to John Williams of Shaddowstats.com of Oakland, California.
Below are some of today’s related comments from Martin Armstrong:
“I wrote in the Rise & Fall of the Euro an example of DIRECT intervention rather than INDIRECT that would mitigate the decline and would have helped to actually stabilize the economy and real estate markets.
As always, we benefit only the lobbyists and the expense of the economy as a whole. “In the US Mortgage Crisis, government ONLY concerned itself with the bankers, and not the borrowers. Lending money to the bankers FAILED to restart the economy because it was one-sided. The solution would have been easy.
Revalue all property, shave 25% off the mortgage price, use the funds to accomplish that end, which would have left the majority of people in their homes reducing the supply of real estate coming to market, and thus stabilize the two ends and the economy.
The political solution was motivated ONLY by the bankers and this created the propaganda of “too big to fail” implying that they somehow were more important than the economy.”
Martin Atrmstrong laments:
Our once great societies constructed out of wilderness dominated by nature, sprung to life and were crowned with the golden roofs of a temple of Liberty. That temple is now overthrown, the gold and noble morals have been pillaged, the wheel of fortune has indeed accomplished her revolution, and the sacred ground upon which so many statesmen had espoused such noble goals of Liberty and Justice for All, is but once again disfigured with decay of politics and corruption as tyranny rises from the ashes.
Capitol Hill, formerly the envy of nations, the citadel of Freedom on earth, the defender of human rights; illustrated by the stupendous footsteps of so many great minds encapsulated in Jefferson’s words “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” This breathtaking achievement of man’s struggle to be free, the pinnacle of accomplishment, how is it fallen!
This spectacular triumph of hope over experience, how is it possible to now crouch in the shadow of such greatness, gobbling over the spoils of the people like casting lots for what remains after death. How changed are the inspirations that moved a people to stand tall and assert Liberty and Justice for All? How disfigured the structural design of a nation obliterated by the theories of Karl Marx concealed by a mountain of rules and procedures incapable of improving upon the simple Ten Commandments.
Look upon what remains. A shapeless fragment or moral virtue colossal in size consuming the resources of the people until all property is controlled by the state by regulation leaving title only in name to reside in the meager hands of the people. The great halls within which true representatives of the people once assembled to enact their laws and elect their magistrates, is now hopelessly insolvent, incapable of defending the people or the nation against the change in fortune and circumstance, leaving only monuments and edifices, that were founded with such great hope for eternity, awaiting their fate to lie prostrate, naked, and broken, like those of every civilization that has raised itself from the ground grasping at the chance for culture and progress only to (be) found buried by the sands of time in ruin waiting only in silence to reveal to future generations what a stupendous relic of human folly lays here a victim of its self-inflicted injuries over the course of time and fortune.
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