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Be sure and read every word of John Embry’s speech that leads off today’s daily. He is the number one man at Sprott Asset Management and his advice is as honest and correct as you will find, and completely in line with what we here at Miles Franklin have been saying for some time now. This is a CAN’T MISS ARTICLE.

I will be returning to Minneapolis on Friday and won’t be sending out my newsletter on Monday, therefore, I have made today’s daily longer than usual. I am covering two-days-worth in one. Take your time and read it over the weekend. Susan really misses the family and we are returning for a birthday party – for my son-in-law, two granddaughters and me. All of our birthdays fall within a couple of weeks of each other and we are celebrating them on Saturday in a private room at a local restaurant. Susan is picking up the tab for everyone. She is generous of heart and purse. For me it will be a BIG 70. Susan assures me that I don’t look it. I don’t feel it. It must be a mistake!   The weather in Minneapolis will be near 40 degrees, which under normal conditions would be fantastic for this time of the year, but I am leaving Aventura where the temperature has been between 75 to 85 virtually every day since we got here on November 1st. Burrrrrr.

Yesterday I listened to a long sales-oriented presentation by Agora’s Addison Wiggin. Overlooking the fact that he was trying to sell something, it was an excellent audio presentation. The report offered little new information and everything it contained has appeared on these pages countless times before, but it was all there, in one presentation and that was impressive. To sum it up in a sentence or two, the US is screwed because our spending is out of control and our creditors will soon cut off our funding and the Fed will be called to action as the buyer of last resort of our bonds. Services will be drastically cut, including police and fire departments and the standard of living will plunge in the midst of a horrendous inflationary-depression. All of this is pretty much non-negotiable and mathematically assured. It is just a matter of when it happens, not if it happens. Sinclair says the game is up by 2015. Not a cheery outlook, but who needs an “optimist,” if the “optimist” is dead wrong. Give me a miserable “realist” any day of the week. After Tuesday’s dinner party, that’s probably the way several of the guests think of me. Read on:

Susan and I were invited to a dinner party on Tuesday night and met half a dozen new couples. At the dinner table the conversation moved toward politics and the economy. I put my two cents worth into the conversation and after things got heated Susan looked at me and whispered, “They probably all hate you!” No way – just some of them, but they were idiots! I am getting too old to suffer fools! When one of them told me that the stock market had outperformed gold over the past decade, I lost it. I said that was not true. He replied his source was an expert. I told him his source was a fool! I told him the data he relies on from the BLS is not accurate and overstates the economy and understates inflation and unemployment. I suggested that he check out John Williams Shadowstats to get the honest numbers. He said he wasn’t interested and would continue to use the government’s numbers. It is amazing how fools like him end up multi-millionaires. But let’s see if he can keep it. This guy was even more brainwashed than Backwoods Jack and that’s scary. The real task, moving forward, is who amongst us will be able to keep their wealth intact. I say it won’t be those who have most of their money in stocks, bonds and currency-based portfolios touted by Cramer and the CNBC gang. But that’s just me spouting off again. I could be wrong. But at least I put MY money where MY mouth is! On second thought, I won’t be wrong, maybe a bit early – but definitely not wrong. Honestly, I am not arrogant, just certain about the few things I know well and when it comes to precious metals and the economy I have paid my dues, having logged nearly 30-years studying the markets.

2012 Price Predictions for Gold and Silver (RealMoneyTracker

I may as well add my predictions to this impressive list of “experts.”

Gold will reach at least $2,000 and possibly $2,100. Silver will hit at least $50. Predicting a “number” is easy, but getting the “timing” right is not. That said, if I miss the mark, it will only be by a couple of months at most. The numbers will be there. These numbers are just for starters and over the next 36-months, gold and silver will rise MUCH higher. If you buy now, you will be able to smile all the way to the bank (assuming it is still open for business when you get there).

And here’s some very important information from Ed Steer:

Tune Out…Buy Gold…Be Happy: Bill Bonner (caseyresearch.com

Feb 16 2012

Washington state reader S.A. sent me these two charts showing the decline in Chinese and Russian U.S. Treasury holdings…and there are no surprises.

Then a bit more than twelve hours later, the zerohedge.com story that he lifted these graphs from arrived in my in-box courtesy of West Virginia reader Elliot Simon. The headline reads “Russia Dumps Treasurys For 14 Consecutive Months; China Slashes Holdings To Lowest In Over A Year“…and if you want to run through it, the link is here.


China Reduces U.S. Debt Holdings Again (forbes.com2/16/2012

China reduced its investments in U.S. Treasury bonds in December, marking the third straight month of declines, according to Treasury International Capital data, released on Wednesday.

Data had China cutting its holdings by $31.9 billion to $1.1 trillion, the Treasury Department said. China accounts for around 9% of U.S. foreign debt holdings and is the largest foreign holder of U.S. government securities, followed by Japan with around $1.04 trillion and then the U.K. with around $414 billion as of December 2011.

Overall, foreign countries reduced their holdings of long-term U.S. bonds in December, with net sales of $21.0 billion.  Net sales by private foreign investors were $11.5 billion, and net sales by foreign official institutions were $9.5 billion.

Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were $17.9 billion.  After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, the overall net foreign acquisition of long-term securities is estimated to have been $1.6 billion in December.

Foreign holdings of all dollar-denominated short-term U.S. securities and other government bonds decreased by $18.3 billion.



Which performs better – gold or the stock market? I think the time frame that you choose dictates the answer. Now, in 2012 with the Fed fully engaged in QE to Infinity, the answer is an unqualified “GOLD.” The bull market in gold is not slowing down, it is gaining steam.

Stocks Versus Gold (Kitco.comBy Richard Zimmerman

Posted on JSMineset:

Woodrow Wilson to Obama looks almost identical to Augustus to Aurelian and took less than half as long. I wonder if they see the irony?

Emperor  Silver Content in the Denarius
Augustus (27 BC – 14 AD) about 97%
Nero (54 – 68) 90%
Trajan (98 – 117) 85%
Marcus Aurelius (161 – 180) 75%
Septimus Severus (193 – 211) and Caracalla (198 – 217) 50%
Traianus Decius (249 – 251) 40%
Gallienus (253 – 268) 20-25%
Aurelian (270 – 275) 2%