Susan and I had dinner with Backwoods Jack and his wife last night. He told me that he was into gold long before I even knew how to spell it. For those of you who believe that Backwoods is just a figment of my active imagination, here is an email that he just sent to me:
Backwoods Jack`s first encounter with Gold was a private tour of the Homestake Mining Company in the Black Hills, Lead, South Dakota, back in 1948. I had a summer job at Spearfish Canyon Lodge and soon became friends with Chambers Keller whose father was Head Counsel for Homestake.
My father was an avid trout fisherman and he suggested that I work for one summer at the Lodge. On route west, we stopped at the Wall Drug where outside of town, at the edge of the parking lot, was an Indian Teepee. There, sitting on a chair, was Chief Sitting Bull’s great grandson. My father paid one dollar to have my picture taken with him. I am still looking for that picture!!
As a cabin boy I chopped wood, worked around the horse stable and corral and learned how to pan for Gold in nearby Spearfish Creek. Some 80 years before, Potato Creek Johnny, “struck it rich,” while panning for gold in Potato Creek, back up in the Hills, near Dutchman Flats. On afternoons off, we (Chambers, Frank and Billy Shane and myself) would saddle horses and ride way back up there with silting pans. Frank and Billy’s Dad owned the Lodge so it was not too difficult to “head for the hills.”
Now that Backwoods has established his “credentials”, stay tuned – more to come. He will be back!
Here is one of my favorite charts. It is the one-year gold to silver ratio. As you can see, the ratio plunged from nearly 70:1 to 32:1 before moving back up to just over 40:1 now. To what do I attribute the “rebound” in the ratio? I attribute the turnaround to the May 1st “Drive By Shooting” of silver. That’s when the Cartel (read JPMorgan and HSBC Bank) pounced all over silver, just as it touched $50 an ounce and before they let up, silver lost over 33%. Gold, on the other hand, was only hit for a loss of a little over 4 percent.
Here is the link to a Rick Santelli interview that I stole from Chris Powell at GATA:
Gold is better than money, Rick Santelli tells King World News
9:13p ET Thursday, July 21, 2011
Dear Friend of GATA and Gold:
Responding to the exchange the other day between U.S. Rep. Ron Paul and Federal Reserve Chairman Ben Bernanke as to whether gold is money, CNBC editor Rick Santelli today tells King World news that gold is better than money because it is less susceptible to what central banks are doing to their currencies. An excerpt from the interview is posted at the King World News blog here:
Here are two interesting items from reader Melanie.
After you open up the site below, read the text underneath the video before watching it. Interesting!
Author Richard Heinberg is interviewed here on The Keiser
Report about his new book: The End Of Growth.
His book makes the controversial claim that world economic
growth has hit non- negotiable limits as of 2008 and that
we’re in a new economic era. It’s not a recession that will
end at some point and we’ll get back to “normal growth”.
Rather, we have seen the end of economic growth, as we know it.
Since the Industrial Revolution we have enjoyed cheap and
abundant fossil fuel energy, a prerequisite for economic growth.
So what about the future of our economy?
Here’s the video: (12:52)
The Keiser Report produced this video
Fed passes China to become largest U.S. creditor (blogs.marketwatch.com)
June 9, 2011, 4:11 PM
The Federal Reserve has surpassed China as the single largest creditor of the U.S. government.
UniCredit’s Chief U.S. Economist Harm Bandholz is out Thursday with the details:
As a result of its asset purchase program (QE2), the Federal Reserve at the end of 1Q held about 14% of total outstanding federal debt (debt held by the public). It is, therefore, now the single-largest creditor of the US government.
According to separate data from the Treasury Department, China is ranked second. It owned in late March Treasuries worth USD 1,145bn, which is slightly less than 12% of the total amount outstanding.
After the Fed and China, the biggest holders of U.S. debt are
- the household sector
- state and local governments
- and private pension funds.
By the end of this month, the Fed will have boosted its Treasury holdings by another USD 250bn (annualized 1tr), and will own about 16% of all outstanding Treasuries (not to mention the 15% of GSE mortgage-backed securities)…
As QE2 ends in three weeks, the critical question remains, “who will buy them thereafter?” We think that private households and foreign investors, who have both been very cautious in recent months, will ramp up their Treasury purchases again. But they might ask for higher yields than the US central bank did.
Bond bulls beware!