Today’s newsletter is dated 8/13/13. A unlucky double number. Do you know where the number 13 got its “unlucky” moniker?
The most commonly held view is that were usually 13 in a coven of witches. Ideally, there were 6 males and 7 females, with the High Priestess standing above and beyond the other in a spiritual sense, thus achieving gender balance. The Christian Church, in an effort to demonize all things Pagan, declared 13 to be an “unlucky” number.
Ted Butler pointed out that the silver/gold ratio is 61.74 (currently) to 1. The ratio is way on the high side, so he says there is still time to switch your gold positions into silver. Butler is still bullish on gold so therefore he is ultra bullish on silver.
Silver finally closed slightly above its 50-day moving average for the first time since last February. This is, according to Butler, the longest time ever that silver has been below the 50-day moving average. This is setting silver up for a huge move back to the upside now that this all-important moving average has been breached. It has been held down for so long that when it breaks free, the move should be dramatic.
Gold down amidst strengthening dollar index…
US Dollar outperforms gold, silver and mining shares so far in 2013…
Ed Steer had the following to say below about the relationship yesterday, between gold and the dollar:
If anyone feels that there was any correlation between the currencies and the precious metal prices yesterday, I’d like to hear their explanation for the big rallies that occurred between 2 and 3 a.m. EDT.
–Casey Research, August 14, 2013
Is the dollar up or are the euro and yen down? These two currencies account for over 72% of the USDX. It’s a fact that the yen is way down and the euro is weak too, with Spain, Greece, Italy, Portugal and Ireland holding it back. France is no bargain either. The euro and the yen are the opposite side of the same coin. Another way to put it is the dollar is the best of a bad lot.
The purpose behind the gold manipulation, going back to the late 90’s, and orchestrated by Robert Rubin and Larry Summers, was to support the dollar and low interest rates by SUPPRESSING gold. That is what Summers wrote in his well-known paper titled Gibson’s Paradox Revisited. Since then, central bank gold sales, gold leasing and swaps have been enlisted to that end. You can check out the GATA website for lots of information on this subject, if you are interested in it.
Not everyone would agree, but from my study over the past 15 years, manipulation of the dollar, interest rates, gold, silver and the stock market are real and to deny it doesn’t change the fact that it exists. It explains why the markets are acting as volatile as they are. And once you understand that, it will become obvious that this shell game is nearing the end. The losers will be the holder of dollars and the winners will be the owners of physical gold and silver.
I do not take this position because my firm sells these items. Most of my personal wealth is stored in gold, silver and platinum. I am being honest and straight forward with you, and always have. I had a pretty good track record for the first 11-years of the bull market, but it’s difficult to always be right with a long-term fundamentally sound philosophy in a short-term manipulated market. The daily moves (hourly, and by the minute) are whipsawed back and forth by large pools of money under the control of hedge funds and TBTF N.Y. banks. They have screwed up the free markets. They move in and out, from one stock to another and from one sector to another in a fight to the death with their competition (other hedge funds) for investor money and profits. They make obscene profits and the world was better off without them. Worse yet, they don’t even make the buy/sell decisions. They are made by computers, whose algorithms pollute the landscape.
Today, gold was singled out and taken down 1.17%. Silver was up, platinum was up and palladium was up. This has nothing to do with the dollar or the economy; it is all fund and Gold Cartel driven and just more of the typical “kill the messenger” monkey business.
How often do I stress that you should not succumb to the day-to-day “noise,” that has no relation to the big picture and the primary trends? The big picture and long-term trend for gold is UP and for the dollar is DOWN and if you follow the short-term moves, you will be on the wrong side of the big moves, which are not that far off now.
Forget the government GDP numbers, employment numbers and inflation numbers. They are usually “revised” after the fact anyways, and are not a true reflection of what is happening. You must know that by now. The current propaganda, using the media as a tool had an interesting beginning.
Josef Goebbels perfected this kind of government propaganda in the 1930s in Nazi Germany.
Most American’s are not familiar with Goebbels, but they may remember one of his famous quotes:
“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, economic 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.”
In the following photo, there is the unsettling image of the Third Reich’s propaganda minister, Joseph Goebbels, glaring at photographer Alfred Eisenstaedt during a League of Nations conference in 1933 remains, 80 years later, one of the signatures — and certainly one of the most unflattering — portraits ever made of any high-ranking Nazi figure. In the photo, Goebbels’s bony hands grip the arms of his chair. His tense posture transmits an almost palpable enmity. Hunched, wary, Goebbels resembles a seething homunculus.
Albert Eisenstaedt, for those of you who don’t recognize the name, is the famous American photographer who took the defining picture at the end of WW2 titled The Kiss. The two people in the picture (The Kiss) are still alive and they will appear along with my friend Gene Eisenberg and sign the back of his recently commissioned painting of The Kiss. It will take place in Providence, RI on August 22nd – Navy Day, in a museum adjacent to the U.S.S. Joe Kennedy. They expect at least 200 people to show up for this event.
I commissioned a painting of The Kiss two years ago from my friend Bill Mack, a world famous painter/relief sculpture. It hangs on the wall of our home in Miami. The Kiss captured the American spirit at the end of a very special era in American History. Mack’s “The Kiss” is painted on a collage of Eisenstaedt’s photos, taken from two copies of the original Life magazine that they appeared in, in the spring of 1945.
Things didn’t end up well for Goebbels. On May 1, 1945 with the Russians closing in on Hitler’s Berlin underground bunker, Goebbels and his wife committed suicide, after tucking their six young children into bed for the last time and giving them cyanide capsules. A suiting end for a very evil monster! He played a large role in Germany’s ascent to prominence. He knew how to manipulate the German people from his position of the Minister of Propaganda.
So what does all of this have to do with our economic newsletter? Maybe nothing and maybe a lot. My view is that our government’s propaganda has lulled most Americans to sleep. This is not new and has been going on for a long time. The average American is not aware of what is really happening and the danger we are in.
I also believe, sadly, that our country’s greatest days are behind us, and we have lost our way. Our “greatest generation” which is captured in Eisenstaedt’s photo, is unknown to most of today’s youth. Since the end of the war, we have abused our reserve currency privilege and today’s dollar, which used to be worth 1/35th of an ounce of gold, has now shrunk in value to only 1/1320th of an ounce of gold. That should tell you a great deal about where we are headed, and the quotes and pictures above are, in my humble opinion, are relevant.
I was born in 1942. I was adopted. I was told that my father was a pilot who was killed in the war and my mother was a musician in an all-girl band and could not care for me and travel, so I was put up for adoption. (I met my mother when I was in my early 30s and we had a casual relationship until she died in the 1995.)
When I was three years old, I can still remember going onto the porch on the second floor of the duplex we lived in and I stood there listening for the sound of bombs and planes. There were blackouts in those days – even in Minneapolis in the center of the country. Even as a child, I remember the war.
In college, I majored in 20th century European history and focused on WW2. In my senior year, I took three courses on WW2 from Harold Deutsch, who lectured without notes, about the war. They were the most interesting courses I took during my five years at the University of Minnesota. Deutsch was at the Nuremberg trials and was an expert on the WW2. He was also an expert on WW1.
I suppose that’s why WW2 still has a deep meaning for me and always has, since I was old enough to understand how it personally affected my life.
My father-in-law (May he rest in peace) would turn over in his grave if he peaked into our garage and saw two German cars and a Japanese car. I can only imagine what he would say if he walked into my home office and saw oil paintings featuring Luftwaffe aircraft on the walls and German Lugers in display cases. I learned how to detach today’s reality from the horrors of the war. Art is art and what I have acquired is a snapshot in time of an era gone by. I am still a WW2 history buff at heart. But like my wife says, “I can forgive but I can’t forget.”
These are “interesting times.” Our former enemies are our allies. Their once-shattered economies are now two of the four leading economies in the world. America is getting ready to pass the “torch” to China in the 21st Century. With the change I suspect also comes a new reserve currency – The King Dollar is dead, long live the King!
China is already preparing for this event. They are accumulating more gold than any other country in the world. They are thinking 5, 10, 20 years ahead. They know that gold is the financial asset of choice, not dollars. They plan to back their currency with gold. We back ours with debt.
Most Americans don’t have a clue. All they know is that gold is $1320 now and it was $1900+ two years ago. They don’t see gold as a bargain; they don’t see gold as their future. I do, and my kids and grandchildren will be the beneficiaries of my vision. I always could, as a friend once said, “See around corners.” And I clearly see the glow of gold and silver.