Privacy, Taxes and Insurance

As discussed before, when governments begin to dilute the value of their paper money, tangible assets become the best way to protect one's wealth.  However, one tangible asset you might want to pass on, as you can see above, is real estate.

In addition to being in a downturn, real estate also costs insurance and property taxes that further dilute returns.  Gold has none of these and also keeps your wealth hidden from prying gov't eyes.  The days of making easy-money by flipping houses are long gone.

Bank Run?
(Source) Citi Bank has just issued statements to their clients nationwide that read: "Effective April 1st 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change."

Here is the exact wording on the Citibank Client manual from their website:

Withdrawal Notice: We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past.

If the economy and the stock market are in such good shape, why are they so worried that they issued the above notice? It seems that Citi is very worried about the possibility of a run on the bank. What do they know that we don't?

Detroit
In 1994, the median sales price of a house in Detroit was about $41,000. The housing bubble pushed it up to about $98,000 in 2003. In March 2009, the price was $13,600.

Today, the price is $7,000. This is the median price. Some houses can be bought for a lot less than that! Detroit is the first major US city to face extinction. From 1.8 million people at its zenith to the current 900,000 citizens, the decline continues. City hall is considering a plan to turn large sections of the city into farmland.

The "Wall Street Journal" recently ran the following account. The journalist told the story of the history of a 5-bedroom home in Detroit, from the land purchase to its recent sale.

It was built by one of the most influential men you have never heard of, Clarence Avery. Avery was on the Ford Motor Company team that conceived of implementing an assembly line for Ford's factory. He copied the idea from a hog-slaughtering operation.

His home was a very nice home for the time. The journalist located his daughter, now age 91. She said that she always thought the home was the best home she ever lived in.

As recently as 2005, the home sold for $250,000. It was subsequently purchased by a woman who was lent $200,000 to buy it. It was financed by a sub-prime loan. The asking price was $189,000. Where the other $61,000 went, the woman has no idea. She defaulted.

The deteriorating house was bought by a Christian organization that is renovating it. The house sold for $10,000.

“When a city simply shuts down from the effects of government mismanagement, the media says nothing. Detroit has become the poster child of government regulation, welfare systems, and a population that has given up hope”…… Dr. Gary North.

Source

Stimulus Failure
It costs US taxpayers $160,000.00 for every job the Obama administration claims to have created with the Stimulus Package. Peter Shiff, CEO Euro-Pacific Capital.

Silver Coinage Disappears

Here's an interesting chart that Nick Laird over at sharelynx.com. It shows how the precious metals slowly disappeared out of the coinage of the Roman Empire as it crumbled into ruin. If this sounds familiar... it has happened many times over the last several thousand years... and is happening again right now.

Why You Buy Gold: Reason #548

This chart courtesy Martin Weiss. US money supply has gone exponential. The result can only be price inflation. There has never been a different outcome to monetary inflation. When paper money becomes worth less, tangible assets like gold preserve purchasing power and protect the holder against potential financial meltdowns.

Unemployment Soars

This chart courtesy Federal Reserve Bank of St. Louis shows the duration of the average unemployed worker in the US continues to lengthen. This puts a strain on the budget, as benefits paid by the Federal Government keep growing while revenue derived from workers declines.

75% of modified home loans will redefault

NEW YORK (CNNMoney.com) -- Most borrowers who have had their mortgages modified through a government-sponsored program will redefault within 12 months, according to a report released Wednesday.

Between 65% and 75% of loans that are modified through the Home Affordable Modification Program but not backed by the federal government are likely to go bad, according to the report released by Fitch Ratings, a N.Y.-based credit-rating agency.

The main reason these borrowers continue to struggle is that HAMP does nothing to solve the rest of their debt problems, the report added.

"Many of these borrowers still have very heavy levels of other debt," said Diane Pendley, a Fitch managing director, "auto loans, credit cards and other expenses. The HAMP modifications reduce housing expenses down to 31% of income but do not touch these other obligations."

On average, HAMP-modified borrowers, according to Pendley, have 64% of their monthly pretax income spent before they even buy a quart of milk. If even a small emergency arises -- an unexpected car repair, a medical bill or a loss of overtime income -- they're in trouble.

"We're talking borrowers who don't have cash reserves," said Pendley. "If they did, they wouldn't be in this position in the first place. It doesn't take much for them to get in the same situation again"

Jay Brinkmann, the chief economist for the Mortgage Bankers Association, finds nothing at all surprising about the Fitch finding. "Over the course of studying this over several years," he said, "we find re-default rates from 40% to 60% on modified mortgages. You have borrower behavior that keeps coming back."

Investment Guru Marc Faber: "I buy gold..."

Another fantastic interview and some typically outspoken observations from everyone's favorite Doom and Gloomer:"I think that governments have become like a cancer, they have expanded in the financial system...The biggest problem is too much intervention. Whatever the government touches is usually done worse than in the private sector. I think any government intervention has unintended consequences and is negative. Eventually the market will break the intervention and things will blow out...People who tell me about the big deflation in Japan, why don't they spend a day in Tokyo? It's still the most expensive city in the world. At this level I'm not particularly interested in buying anything. I buy gold, I don't know what else to buy." Faber expects another worse crisis to happen in five to ten years, "when the whole financial system collapses" - the reason: the debt problem has been kicked down the road without actually being sold. "I think US Fed, ECB and other central banks have no other option, they will continue to monetize and buy bad paper, period. The central bankers are precisely the ones that don't know that excessive money creation and excessive debt creation leads to a crisis down the road. The ECB will talk hawkishly, but act dovish, like the Fed in the US." Must watch 20 minutes.

Russia Pushes For New Reserve Currency
June 19 (Bloomberg) -- Russia wants the ruble to be one of the world’s reserve currencies as President Dmitry Medvedev renews his push to reduce the dollar’s dominance and make Moscow a global financial hub.

“Only three, five years ago it seemed like a fantasy” to create a new reserve currency, Medvedev said yesterday in a speech in St. Petersburg, Russia. “Now we are seriously discussing it.”

Medvedev, who has repeatedly called for a supranational currency to match the dollar, said discussions with China are continuing on broadening the global options. Russia sold U.S. Treasuries for a fifth consecutive month in April, the U.S. Treasury Department said June 15. The world may need as many as six reserve currencies, Medvedev said.

The 1980 Gold Bubble

Here's another graph... this one courtesy of Nick Laird over at sharelynx.com. It shows the 1979/80 gold 'bubble' compared to how our current 'gold bubble' is doing. You can see from this graph that our current 'bubble' is laughable by comparison... it's hardly even started.

Russian Gold Reserves

According to Casey Research, "there are no stories about it on the international wire services yet... but I have the gold reserves page of The Central Bank of the Russian Federation bookmarked. On Friday they updated their gold reserves for the month of May, and they show an increase from 21.5 million to 22.6 million ounces in one month. I mentioned in May, when they updated for April, that I was expecting a far bigger number than the 200,000 ounces they reported back then. Well, it finally showed up in May. The 1.1 million ounce purchase is their biggest one month increase, ever. Year-to-date, the Russian Central Bank has added 2.1 million ounces of gold to their reserves. Here's the updated graph".

Short Term Gold Target: $1,272

From Rick Ackerman at Rick's Picks

Hidden Pivot forces appear to be properly aligned for a promised push to 1272.60. For starters, a minor ABC rally that took the futures somewhat above the magically resistant 1250.30 slightly overshot its target, 1258.10. Adding to the bullish picture is the fact that the retracement so far is shallow, having created no bearish impulse legs so far even on the 5-minute chart.

Chart of the Day

Today's chart provides some long-term perspective in regards to the gold market. As today's chart illustrates, gold has been in a strong bull market since 2001. The pace of that upward trend increased beginning in mid-2005. Following the financial crisis of late 2008, gold surged once again. While gold made another record high today, it still trades significantly below resistance (red line) of its upward sloping trend channel. In the end, with gold currently trading near $1,250 per ounce, gold has more than quadrupled in price during its nine-year bull market.

Why Gold Has Nowhere To Go But Up
The fiscal situation in the state of California is insane. Truly, truly insane. I heard somewhere that if you added state budgets to the federal budget, debt-to-GDP of the U.S. is something like 160% – worse than Greece.

And I don't think that these circumstances are restricted to Europe or the United States; I think that we have a crisis of expectation around the world, really, in terms of the collective ability to address various concerns. I think that democracies tend to live well beyond their means; and I suspect that will mean that the currencies they use will continue to be debased. So I suspect we're going to see a revolving series of crises that will play into gold's hands.

There's something else very important for people to understand: gold is a store of wealth and a medium of exchange that has no constituency for devaluation.

Consider the United States dollar: it'll go lower, but the United States is still the largest consumer of goods and services in the world. The Chinese have made it very clear that tying their currency to our currency is a development strategy – they're trying to provide employment for their people by selling stuff to us. If the yuan doesn't appreciate, then the other four principle Asian currencies can't appreciate relative to the dollar. If none of those currencies appreciate, neither can the euro; because Europe would become a dumping ground for goods that were diverted from America, and the Europeans would lose their access to U.S. markets.

Most of the developing nations' currencies are caught in the same sort of vortex.

What's interesting then is that every national government has some incentive to devalue – to protect their own domestic economy and employment.

Gold has no similar constituency for devaluation. That's an important reason why I'm attracted to gold, going forward.

Source: Casey Research interview with Rick Rule.

It's Not Too Late!

This has to be one of the best charts I have seen in a long time. If you think gold is in a bubble, take a look at this.

CLICK ON CHART TO ENLARGE

Mutual Fund Outflows

As the stock market begins its next descent, how much of the money leaving stock mutual funds will find its way into gold? What will this increased demand for gold do to the price of gold?

Wormwood?
I reprint the following commentary from Rick Ackerman in its entirety. He asks many thought-provoking questions that can certainly have implications on our investment decisions.


Has BP Summoned the Fires of Hell?
We’ve railed at traders and speculators recently for their arrogant and sometimes breathtaking stupidity in failing to discount an onslaught of world-shattering news. If the dolts, rubes, bozos and mountebanks who have kept stocks afloat even remotely understood what has been going on in this world, we wrote here recently, the Dow Industrials would plummet 6000 points in mere days. And the news has been grave, indeed. America’s wholly imagined economic recovery died for good on Friday with the release of shocking retail figures for May. Household incomes have been falling, consumer credit imploding, M3 plummeting, and now it turns out that corporations have allowed $1.8 trillion to sit idle in low-yielding bank accounts, hastening the economy’s deflationary collapse and the onset of a Second Great Depression. We face the impossible task of getting out from beneath $130 Trillion of debt and liabilities amassed by government at all levels. The nation is adrift under a weak president whose radical politics have sharply divided the voters. Iran and Turkey (a NATO member!) have declared war on Israel, sending warships to run the Gaza blockade. Europe’s financial house of cards is within months, or even weeks, of total collapse. The jihadists may be turning the tide against U.S. and British forces in Afghanistan.

Unfortunately the list does not end there. For in fact, there is one crisis that greatly overshadows all of them: the seabed irruption in the Gulf of Mexico. We won’t even pretend any longer that there is a market “angle” to this story. In fact, the markets are a side show, and politics a droll burlesque, in comparison to the geophysical dreadnought taking shape in the Gulf. Because it could eventually threaten all life on this planet, there may be no “investable issues” here.

Seabed Fissures

The problem is no longer a leak or a spill, you see, but a volcanic gusher – one that appears to be defeating the efforts of the most capable petroleum engineers in the world. More and more, it is looking like a sci-fi disaster film with no hero and an unhappy ending. Even our supposed best hope for containing the gusher – a second well that would intersect and plug the leak by sometime in August – may be doomed to failure, since the well casing itself may be too damaged to seal off. But the scariest story currently making the rounds is that there are fissures springing up all over the seabed, and that if the weak bedrock that holds the oil gives way, it will release a quantity of hydrocarbons greater in volume than the Gulf itself.

Whenever we’ve tried to predict the “black swan” event that might eventually send the U.S. and global economies into deepest coma, we believed in our heart that, no matter what happened, everything would turn out all right. The real estate market might collapse, taking our standard of living with it, but Americans would somehow get through hard times together and emerge better and stronger for it. Even the prospect of a nuclear conflagration in the Middle East implied a beginning and an end — a radioactive half-life, as it were.

Human Error

Who could have imagined that there was an even bigger disaster lurking — or that mere human error could trigger a cataclysm of seismological proportions? Or will it be of Biblical proportions, with rivers and seas turned into wormwood? Has BP tapped, not an oil well, but a hole into volcanic Hell? While these questions are almost too frightening to contemplate, the answers may be staring us in the face within months or even weeks. For the moment, though, it has become difficult to sort out fact from fiction. Are clean-up workers getting sick from toxic hydrogen sulfide fumes? Is the Obama administration covering up the true magnitude of the crisis to avoid a panic? Why are nearly all of the satellite photos of the spill on the Web a month old? Can BP really handle a crisis whose costs may soon mount into the trillions? Is the problem even solvable?

Morgage Delinquencies Continue To Rise
This chart courtesy Calculatedriskblog.com

As the economy continues to contract, jobs are lost and mortgage delinquencies rise. This chain reaction will continue to deflate the real estate, stock and bond markets. Also, lower incomes result in lower tax revenues at the precise time the government is requiring higher tax revenues to fund their socialist programs.

Because of this, look for higher taxes accross the board. Smart investors should be looking to private investments like gold to avoid the coming tax blitz from Uncle Sam.

Gold: The Only Asset Worth Owning - The Street.com

Deficits Continue To Drive Gold Higher

This chart based on CBO research shows no end in sight to expected budget deficits. These deficits are the main driver behind the current bull market in gold.

Gold Demand Remains Strong

Uncertainty Restores Glitter to an Old Refuge, Gold - NY Times

Gold Still Not Mainstream
The June 12th edition of the NY Times has an article about gold on its front page. Normally we would see this as a contrarian red flag. By the time an investment is touted by a national newspaper or magazine, the ride is usually near its end.

In the case of gold we look around see if the trade is crowded and we find it is not. The majority of main stream analysts are still not recommending it and your brother-in-law still has never bought a gold coin. Your next-door-neighbor thinks it is a risky investment.
Peter Degraff

Ten Benefits of Expatriation
The following is an excerpt from the free 29-page American Expatriation Guide, written by a former U.S. citizen who wants to remain anonymous. Read what he has to say - from a "been there, done that" perspective - and maybe take your own first steps to move to greener pastures.

Everybody has their own personal reasons for expatriating, but here are some of the benefits:

1) Freedom from the global U.S. tax net. Taxing you no matter where you breathe on this earth is wanton American exceptionalism. What other nations don't dare do to their citizens, the U.S. government doesn't think twice about. Once you renounce, it's your choice either to live the rest of your life free of any tax net, or to pick a place you want to be year-round and opt into the tax system (assuming it's not a tax-free jurisdiction). If you do, you'll at least know you have the freedom to walk away from it by simply moving elsewhere.

Taxes in the U.S. are already high, and rates are set to increase across the board. To gain some perspective, it's clarifying to calculate the number of months per year you work for the government. How many months did it take to pay all the federal, state, and local income taxes, capital gains taxes, FICA taxes, property taxes, and AMT - plus the raft of permitting, licensing and accounting costs you incur over the course of a year? Add corporate taxes if you're a business owner. And don't forget the new 3.8% health care surcharge tax on all investment income, including dividends. Be honest and add it all up. You'll then have a decent idea of how much it costs you in time and money to be a U.S. citizen every year. That cost will rise dramatically going forward.

more

Taxes Going Up!
Why are you still adding to retirement plans? Don't you know that taxes MUST go up on the "have's" to pay for the benefits that our socialist government has bestowed upon the "have-nots?"

Why do you want to defer taxes today only to pay MORE taxes tomorrow? Why do you want to invest in plans and accounts that require your name and social security number? Do you LIKE giving your money away?

The following is just ONE example of what is on the horizon:


Starting in 2011 (next year folks) your W-2 tax form sent by your employer will be increased to show the value of what ever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort, or if you're retired.

So what?

Your gross will go up by the amount of insurance you get.

You will be required to pay taxes on a large sum of money that you have never seen.

Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year. For many it also puts you into a new higher bracket so it's even worse.

This is how the government is going to buy insurance for 15 % that don't have insurance and it's only part of the tax increases.

Iran ready to protect Gaza-bound ships
TEHRAN, June 7 (UPI) -- Iran is prepared to deploy the Islamic Revolutionary Guard Corp naval forces to escort aid ships pressing an Israeli blockade on Gaza, authorities said.


Israel enacted a blockade on Gaza in 2007 to keep weapons out of the hands of the ruling Hamas, which has vowed to destroy Israel.


A flotilla May 31 refused Israeli orders to divert to the port of Ashdod for inspections. Israeli forces then raided a Turkish-flagged vessel in the convoy in international waters, killing nine in what the Israeli military said was an act of self-defense. (Read full story here)

Just in case you have only been getting your news from mainstream sources, you may be unaware that the world sits on the edge of WW3 at any moment as the radical muslims continue to try to smuggle weapons into the Gaza and then "cry foul" when they are caught.

One wrong move by either side and global powers backing both parties would be pulled into an immediate and possibly global-scale conflict.

Should that scenario happen, gold would most likely at least double in price in a matter of days as it is the ultimate safe haven during times of political and military uncertainty.

Gold is a great safety net if things go wrong
(Telegraph.Co.UK) In these uncertain times, strong cases can be made for and against most investments. Against this backdrop, my thoughts keep coming back to the one investment that has always acted as a safe haven at moments of crisis. It is hard to argue against anyone holding at least some gold in their portfolio as an insurance policy against things going badly wrong. (Click HERE for the rest of the article)

Gold's 'Real Move' to $7,000 Coming: Asset Manager
CNBC.com
The "real move" in gold is to come, predicted Egon von Gruyerz, founder of precious metals investment and storage company GoldSwitzerland.com, on Monday.

He told CNBC he sees the inflation-adjusted price of gold  "easily" rising to six times its current price ($1,210) to around $7,000 an ounce in the future on "normal" inflation.

"Adjusted for real inflation (as per shadowstats.com) the 1980 gold peak in today’s prices corresponds to around $7,200 today. So gold could easily go up 6 times from the current price of $1,220 and still be within normal parameters," von Gruyerz's latest report for GoldSwitzerland.com said.

But von Gruyerz told CNBC gold could go higher if the world encounters hyperinflation.

The fears stemming from the European debt crisis will enhance gold's safe haven appeal, according to von Gruyerz.

"Gold is at this point not a bubble," he added. "It is not overbought."

An important barrier for gold is $1,220 an ounce and that barrier will be broken and it's "going to shoot up by probably $100 very quickly," von Gruyerz told CNBC.

"There will be nowhere near sufficient gold to satisfy demand at current prices. We had been expecting gold to start its acceleration in March 2010 and this is exactly what is happening. We expect the move to be relentless during most of this year with very few major corrections but with high volatility. Moves of $100 in one day could easily happen. So gold is likely to make a top in the next few years between $5,000 and $10,000," his report stated.

"Gold reflects governments' deceitful actions in destroying paper money," he said. "At certain points gold is a commodity. Right now it's money."

Zebras Hate The Sunlight
Read this article from Rolling Stone and notice that Democrats and Republicans alike feed from the trough of Wall Street money. (Barney Frank - D, Trent Lott - R)

Also notice how they like to keep their little deals hidden from the public they are supposed to serve.

The Republican stripes of the zebra may appear to be opposite colors on the surface from the Democratic stripes, but they are both part of the same zebra, and neither of them give a *%&# about you or America.

It's early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act – the massive, year-in-the-making effort to clean up the Wall Street crime swamp – word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.


The real shocker is a thing known among Senate insiders as "716." This section of an amendment would force America's banking giants to either forgo their access to the public teat they receive through the Federal Reserve's discount window, or give up the insanely risky, casino-style bets they've been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street's most lucrative profit centers: Five of America's biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan's trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.


The companies with the most at stake are particularly well-connected. The lobbying campaign for Goldman Sachs, for instance, is being headed up by a former top staffer for Rep. Barney Frank, Michael Paese, who is coordinating some 14 different lobbying firms to fight on Goldman's behalf. The bank is also represented by Capitol Hill heavyweights like former House majority leader Dick Gephardt and former Reagan chief of staff Ken Duberstein. All told, there are at least 40 ex-staffers of the Senate Banking Committee – and even one former senator, Trent Lott – lobbying on behalf of Wall Street. Until the final weeks of the reform debate, however, it seemed that all these insiders were facing the prospect of a rare defeat – and they weren't pleased. One lobbyist even complained to The Washington Post that the bill was being debated out in the open, on the Senate floor, instead of in a smoky backroom. "They've got to get this thing off the floor and into a reasonable, behind-the-scenes" discussion, he groused. "Let's have a few wise fathers sit around the table in some quiet room" to work it out. (Source)

Wall Street Fearless As Iran Declares War

40l(k)/IRA Nationalization Quietly Moves Forward
from Lew Rockwell
“The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.”

They want to "get” people to invest their 401k’s and IRA’s into annuities, or likely into U.S. T-Bonds, which are in the biggest overvalued bubble the world has ever seen.

They are doing this because they will have $2 Trillion Dollars in bonds to sell this year, and foreign buying is drying up. China doesn't want them.... Do you?

Who's behind it?

The White House and a powerful network of Congressional activists, and The highly-influential Ford and Rockefeller Foundations. They are engineering a new regulatory and tax-incentive. The purpose is to herd and ultimately force Americans to convert their 40l(k)s and IRAs into government-directed retirement accounts.

The 40l(k)/IRA de-privatization plan is the brain-child of Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis – SCEPA), who is funded by the Rockefeller Foundation.

The extreme tactics used to ram nationalized health care down the country's throat are a blueprint for what could be the biggest asset grab in history.

This is exactly what took place in Argentina. Yes, Argentina was once a powerful nation; the 3rd wealthiest nation until the 20th Century.

Another reason as to why our government needs to nationalize retirement accounts...

Is reported by the New York Times, "This year, the system will pay out more in benefits than it receives in payroll taxes, this important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office." The trickle of red ink will soon become a flood under the pressure of 78 million retiring Baby Boomers.... Less money going into the system!

Who will you need to Trust in the Handling of your money?

The March 9 edition of Business Week notes that new federal regulations designed to "promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams" would help drive cash into government-controlled entities such as American International Group (AIG), which was bailed out to the tune of $182.3 billion.

You DO trust AIG.. right?

The Real Question Is...

Why are you still contributing to something that will soon be worthless?  Why are you still contributing to something that Big Brother knows about?

Why aren't you privately buying gold?

If Everybody's Borrowing, Who Are They Borrowing From?

When individuals borrow, they promise to repay their loan from future earnings.  Well, governments are no different.  When they borrow, they intend to pay back with funds derived from future tax revenues.  In other words, when our government borrows and spends, they are confiscating YOUR future earnings.  YOU are the co-signer on the note!

This is why you want your investments to be private.  If they don't know you have it, they can't come get it.

Eerie Similarities
When I began to read the following quote, I immediately thought about the United States government. Kind of gave me the chills when I read who originally made it.

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political and/or military consequences of the lie. It thus becomes vitally important for the state to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie... and thus, by extension, the truth is the greatest enemy of the State. - Joseph Goebbels, Reich Minister of Propaganda in Nazi Germany from 1933-1945

NY Nearly Goes Broke Again, Delays Paying Bills
(Reuters) New York state delayed paying $2.5 billion of bills as a short-term way of staying solvent but its cash crunch could get even worse in August and September, Budget Director Robert Megna said on Tuesday.

Rest of article here.

A Lesson From Ted

Ted Turner attributes a lot of his success to "going to where the action is and then letting the law of large numbers work" for him.

So, let's translate that over into the investing world.  Where's the action right now?  Based on the last 10 years of performance you'd have to say "gold."

And yet 99 out of 100 people you talk to still own NONE!

The people who made millions on Microsoft invested when 99 out of 100 of their neighbors had never heard of Microsoft.

The people who made millions on Walmart invested at the same time.... BEFORE it became mainstream.

And Ted?  He invested in a little cable news company called CNN BEFORE everyone else realized the potential of such and idea.

Of course he was laughed at and called crazy, but, he just hung on and waited for everyone else to figure it out, pile in, and make him rich (The Law of Large Numbers).

Are you will to be laughed at and called crazy?  Are you willing to think outside the box?  Are you a leader? If not, then you can forget about every becoming rich.

But if you are, then here's your chance.......    The action in gold is hot and the crowds will be coming soon.

The Gold Bull Has Another 15 - 20 Years

According to this Bloomberg article China plans to continue to emphasise gold as an investment for another 15 to 20 years.

China’s trade in yuan-denominated gold investment products moves the currency closer toward global acceptance and the country should develop more of them, a central bank official said.

Pricing commodities in the currency “helps China’s goal to internationalize the yuan,” Wang Zhenying, deputy director- general of the Department of Financial Management at the Shanghai office of the People’s Bank of China, said today. “Gold is a good choice to have yuan trading.”

Full internationalization of the yuan will take 15 to 20 years, Dai Xianglong, chairman of China’s National Council for Social Security Fund, said last month. This doesn’t mean the currency will displace the dollar, which will remain dominant in the global currency system, he said.

“We have more than 30 trillion yuan worth of savings in deposits and the lack of investment products have contributed to Chinese investors going into mungbeans and garlic lately,” the central bank’s Wang said. “We can develop more gold products to attract investor demand.”

Human Freedom Rests on Gold Redeemable Money
By HON. HOWARD BUFFETT
U. S. Congressman from Nebraska
Reprinted from The Commercial and Financial Chronicle
5/6/48

Is there a connection between Human Freedom and A Gold Redeemable Money?

At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere. But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold,and the rare prize known as human liberty.

Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom.

Click HERE to read the rest of the article.

Unemployment Graph

Click Graph to Enlarge

Taxes on Gold
Proper planning with your finances is incomplete until you consider the endgame consequences of your investment decisions today. So, what are the tax consequences of selling gold, gold ETFs, and gold stocks?

There’s lots of conflicting and inaccurate tax information on the Internet about this. We know of one site that claims the sale of silver Eagles is exempt from capital gains tax due to some obscure law (not true). So, let’s nail down the current tax rules for selling gold in the U.S.

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Don't Feed The Animals

I am going to keep this short and no-so-sweet. "Politics" is not the answer for what ails our nation.

In team sports, a team is no better than its weakest player. The same holds true in nations. Most Americans think that the weak link in our nation is our elected officials. They are wrong in this belief.

The weak link in America is Americans themselves!

Because we have been "dumbed down," we have no idea that WE, not politicians, hold the key to our economic freedom.

Forget about the ballot box, its a rigged game. WE have the ability to vote with our pocketbooks EVERY DAY! And believe me, when we begin to do this, the politicians WILL listen.

Gold stands in direct opposition to runaway spending by politicians. Here's the mechanics of how it works.

When you and I begin to buy gold with our savings, instead of stocks, bonds, mutual funds, bank accounts, etc. we starve these systems of much needed funds. And it is these systems, the financial sector, the world of paper/fake money that ENABLE the politicians to deficit spend and print money out of thin air. I think the following cartoon is appropriate at this juncture.

Why do you think Congress has been so gracious to Americans to allow them to save tax-deferred in retirment plans such as 401ks? Because they care about your retirement? Hahahahahah! NO! It is because by putting money into a GOVERNMENT sponsored retirement plan, they can CONTROL what you invest in. Try buying gold in your 401k... you can't. Every dime you put in your plan helps feed the pig.

Right now you are saying to yourself, "well I am going to keep adding to my 401k because I get a match... that is free money I would be giving up if I didn't participate."

Guess what, you just proved yourself worthy to run for political office because that is the EXACT logic the politicians use to justify doing what they are doing. They say "I am going to keep voting like these special interest groups want me to vote because they give me money, and that is free money I would be giving up if I didn't play the game."

How do you feel about yourself now?

By holding gold and REFUSING to fund their paper money system we starve them out. I am sure you have heard the old saying "it takes money to make money." That's true, and it is YOUR money they are using to make themselves rich. When you begin to withhold your wealth from their paper money system THEN, and only then, will the politicians do the bidding of the people.

Now I know not too many people are going to read this, and whatever we as individuals decide to do really isn't going to make too much difference, so why bother, right?

That is the EXACT mentality that the establishment counts on to keep us enslaved. Maybe we can't make a difference, but you better believe I am going to go down swinging, and at the end of the day when I look in the mirror I am going to know I did MY part. And those of you who are too lazy, or scared, or whatever to do your part, well then, you are no better than the politicians you are complaining about, and it is YOU that is the weakest link!

I am going to close this rant with a reprint of a speech given by Rep. Howard Buffett in 1948 that illustrates the same thing I have been saying here, but in a much less offensive way. I hope you will read this, consider it, and pass it on to everyone you know, for it is only from the individual level that we can take back our nation, one American at a time.

Human Freedom Rests on Gold
Redeemable Money
By HON. HOWARD BUFFETT
U. S. Congressman from Nebraska
Reprinted from The Commercial and
Financial Chronicle
5/6/48

Each of you is in business to make profits. If your firm
does not make profits, it goes out of business. If I were
to bring a product to you and say, this item is splendid
for your customers, but you would have to sell it
without profit, or even at a loss that would put you out
of business. -- well, I would get thrown out of your
office, perhaps politely, but certainly quickly. Your
business must have profits.

In politics VOTES have a similar vital importance to an
elected official. That situation is not ideal, but it exists,
probably because generally no one gives up power
willingly.

Perhaps you are right now saying to yourself: "That's
just What I have always thought. The politicians are
thinking of votes when they ought to think about the
future of the country. What we need is a Congress with
some 'guts.' If we elected a Congress with intestinal
fortitude, it would stop the spending all right!"

I went to Washington with exactly that hope and belief.
But I have had to discard it as unrealistic. Why?
Because an economy Congressman under our printingpress
money system is in the position of a fireman
running into a burning building with a hose that is not
connected with the water plug. His courage may be
commendable, but he is not hooked up right at the other
end of the line. So it is now with a Congressman working for
economy. There is no sustained hookup with the taxpayers
to give him strength.

When the people's right to restrain public spending by
demanding gold coin was taken from them, the
automatic flow of strength from the grass-roots to
enforce economy in Washington was disconnected.

Old Howard was right, and unlike 1948, we can now legally own gold and have no excuse whatsoever if our politicians are failing us.

Quit feeding the pig watch what happens!

Current Pace Unsubstainable

This chart courtesy Andy Sutton of Sutton-associates.net shows the interest of the US debt rising exponentially, while revenue is slowly declining. The US government cannot do anything about the rising interest component of the budget, and can do very little about increasing the revenue part.

Biblical Capitalism
By Gary North

The essence of democratic socialism is this re-written version of God's commandment: "Thou shalt not steal, except by majority vote."

"Economic democracy" is the system whereby two wolves and a sheep vote on what to have for dinner.

Christian socialists and defenders of economic planning by state bureaucrats deeply resent this interpretation of their ethical position. They resent it because it's accurate.

When Christianity adheres to the judicial specifics of the Bible, it produces free market capitalism.

On the other hand, when Christianity rejects the judicial specifics of the Bible, it produces socialism or some politically run hybrid "middle way" between capitalism and socialism, where politicians and bureaucrats make the big decisions about how people's wealth will be allocated. Economic growth then slows or is reversed. Always.

Free market capitalism produces long-term economic growth. Socialism and middle-way economic interventionism by the state produce poverty and bureaucracy. If your goal is to keep poor people poor, generation after generation, you should promote socialism. But be sure to call it economic democracy in order to fool the voters.

Gold Versus S&P 500

Click on chart to enlarge

One of the biggest helps to an investor is to realize at ALL markets go through cycles.  With that in mind, what do YOU think is about to happen to gold relative to the stock market?

Now, let me ask you the same question another way.  What do you think is the most risky investment to be in right now..... gold, or stocks?

China, The Big Consumer

This chart courtesy Energy Information Administration and Elliott H. Gue of KCI Investing 56% of oil loaded in the Persian Gulf is destined for the Far East. Only 8% is headed for the USA. Chinese demand continues to grow.

Since China has become the new economic superpower and have expressed their desire to diversify their reserves away from dollars and into gold, would that not signal that the price of gold has a long way to go? Remember, higher demaned equals higher prices.

Click chart to enlarge.

War
The problem that governments face today is that they cannot depreciate their money fast enough to keep their debt loads “affordable” without running an ever increasing risk of wiping it out as a viable media of exchange. Their choices are quickly narrowing down to only two. Either start cutting spending drastically in REAL terms or face the collapse of the “legal tender” which is the source of their power. There is a third choice -- habitually resorted to by governments at the end of their financial tether -- war. - Bill Buckler, The Privateer, May 30, 2010

Geopolitical Risk
The Israeli attack on the Gaza aid ship with the deaths of more than 15 protesters on board will likely contribute to an escalation of geopolitical tension in the region. Moderate Turkey has warned Israel of 'irreparable consequences' to bilateral ties, and the United Nations said Monday it was shocked at the loss of lives and urged Israel to refrain from further steps that could endanger civilian lives.

Gold's outperformance of other asset classes in May could continue given the continuing sovereign debt and currency concerns, geopolitical risks and the growing concerns of a double dip recession. These concerns look set to continue for the foreseeable future making having an allocation to gold a prudent strategy. The benchmark MSCI benchmark had its biggest monthly decline since October 2008. Stocks tumbled in the US on Friday, capping the worst May for the Dow Jones Industrial Average since 1940.

Too Pig To Fail

Gold-dispensing ATMs: Coming to a city near you

NEW YORK (CNNMoney.com) -- As economic fears drive gold prices to new highs, the creator of a gold-dispensing ATM is attracting attention around the globe.

Germany-based GOLD to go, which is currently churning out 50 gold machines a month to meet a recent jump in demand, launched its first ATM in Abu Dhabi's Emirates Palace Hotel earlier this month and opened its second in Germany last week.

The golden ATM's next destinations are the Bergamo Airport in Milan, Italy, all major airports in Malaysia, one of Russia's biggest banks and an undetermined location in Turkey.

By making gold investing as easy as buying a candy bar from a vending machine, GOLD to go hopes to attract average buyers to the gold market.

"We are going to make gold public with these machines," said Thomas Geissler, CEO of Ex Oriente Lux AG, which owns GOLD to go. "The prices are so easy to control that we're going to de-mystify gold and make it easier for anyone to buy it."

GOLD to go's ATM looks like a vending machine and dispenses gold coins and bars weighing up to one ounce at prices updated every 10 minutes based on the real-time spot price of gold.

ATM-owners can choose from a variety of other gold items, such as gold Canadian maple leaf coins, South African Krugerrands, and even some custom designs. For example, the special edition gold medallion it engraved with the Palace Hotel's logo was created for the United Arab Emirate debut.

How To Pay Off The National Debt
Gold has reached record highs in recent weeks, but it will continue to rise, Ben Davies, CEO of Hinde Capital, told CNBC Wednesday. Gold should be viewed not as a commodity, but as a cash supplement, stating:  "There's been such proliferation of currency. As a consequence, gold is very undervalued. I could be really obtuse and say $36, 000. But actually it's not as ridiculous as it might sound."

If all the reported Fort Knox gold was re-valued at $36,000 per ounce, it would pay off all the debt in the US, he said (CNBC).

• Gold may climb to $1,500 an ounce this year should investors continue to be concerned that Greece's debt crisis may spread through Europe, Citigroup Inc. commodity analyst Alan Heap said. He told Bloomberg television:

Certainly $1,500 an ounce is possible. Gold's rallying despite dollar strength and it's rallying because investors are once again concerned about sovereign risk. Gold is at the moment fulfilling its traditional role as a safe haven.

(Bloomberg)