Silver Price Charts and Other Factors Say Now Is Time To Buy

by The Daily Reckoning


The Hebrew word for Silver is the same word that is used interchangeably for Money in the Torah and Old Holy Bible Testament: Silver metal = Kesef (כסף), which also means Money.

Moreover, in all Hispanic countries the word for money is the same word for silver: PLATA.

Since 1000 B.C. to today, the word SILVER is synonymous with MONEY in most countries in the world. Further testament was Stock Market genius of the 1920s, who was right on the money when he said: “SILVER and GOLD have worked down from Alexander’s time…When something holds good for two thousand years, I do not believe it can be so because of prejudice or mistaken theory.” – Bernard Baruch, a 1929 and aftermath winner

Silver’s Sterling History

Silver was first mined about 3000 B.C. in Anatolia (modern day Turkey). These early lodes were a valuable resource for the civilizations that flourished in the Near East, Crete, and Greece throughout antiquity. Later, Spain became the capital of silver production. The Spanish mines were the major supplier for the Roman Empire and an essential trading component along the Asian spice routes.

However, no single event in the history of silver rivals the importance of the discovery of the New World in 1492 by Christopher Columbus. This momentous finding and the years that followed reinvented the role of silver throughout the world.

The World Is Headed For A Major Disaster

By kingworldnews.com

I understand that there was almost a revolt at the Fed. Certain members warned Bernanke to halt the Fed's wild money creation, fearing that it would wind up in hyper-inflation. But the Fed cannot completely halt its QE. The Fed is now buying 90% of the Treasuries that are put out for sale. 

If the Fed halts its buying of Treasuries, who will buy them? Certainly not China or USA investors. Bernanke's thinking or hoping is that continued Fed stimulus will result in the US economy becoming so strong on its own that in due time it won't need any Fed stimulus.

However, matters are not working out in the way Bernanke wishes. The economy is still dragging its feet, and employment is still lagging. In the meantime, the banks, not the US populace, have prospered. The banks' reserves have been swelling. What dissenting Fed members are worried about is that bank reserves are growing and are beginning to resemble water behind a dam, pressuring to be released. When the dam finally breaks, all assets will go through the roof, and, as usual, leave the ever-suffering middle class behind.

So that's the story and the problem of the era. As I said years ago, the choice is, “inflate or die.”

Then there's another excellent reason why Bernanke can't cut back completely on the Fed's machinations. You see, the Fed has manipulated interest rates to ridiculously low levels. The US must manage or carry trillions of dollars in Federal debt. We are currently rolling over this debt at very low Fed-controlled interest rates. But if interest rates are allowed to climb to their normal uncontrolled levels, the cost of carrying the nation's debt (now $250 billion dollars annually) could rise to prohibitive levels -- even into the trillions of dollars.

So there we are -- to continue the Fed's stimulation and manipulation adventures -- or to back off and let the economy survive on its own?

So what do we do as investors and survivors? My own choice is to hold physical gold with just enough cash to carry us through each week. The amount of physical gold in the US is shrinking, and it's going to China and India. I believe the only danger to my plan is that possibly, in desperation, the US could confiscate gold from its people.

True, this was done by FDR back in 1933. But this is a different world, and it's not 1933. I believe there would be so much opposition to a “gold confiscation” today that the government could not get away with it. Besides, today many wealthy and influential people own gold, and they would constitute a powerful force against a government attempt to call in the people's gold.

At any rate, I've been doing a lot of thinking on this subject, and my conclusion is that holding physical gold in your possession is safe and the best policy for surviving the difficult years that I believe lie ahead.

Question -- what about buying and holding gold mining stocks, a category that has been denigrated and battered unmercifully? Answer -- I think they represent a good speculation, but I prefer the real deal, and that's physical gold.

There is something else I want to talk about. It's China, now the world's second biggest economy. China's debt is now 70% of its GDP, a ratio the analysts consider dangerous. If China runs into trouble it will affect all of Asia and the rest of the world.

So let's take a look at China on a chart. What I see is a huge head-and-shoulders top that has just plunged below support. The chart is telling me that the world's second largest economy is in serious trouble.

 

China's First Default Is Coming: Here's What To Expect

As we first reported one week ago, the first shadow default in Chinese history, the "Credit Equals Gold #1 Collective Trust Product" issued by China Credit Trust Co. Ltd. (CCT) due to mature Jan 31st with $492 million outstanding, appears ready to go down in the record books.


Of course, in a world awash and supported by moral hazard, where tens of trillions in financial asset values are artificial and only exist due to the benevolence of a central banker, it would be all too easy to say that China - fearing an all too likely bank run on comparable shadow products (of where there a many) as a result - would just step in and bail it out. However, at least until today, China has maintained a hard line on the issue, indicating that as part of its deleveraging program it would risk a controlled default detonation, in order to realign China's credit conduits even though such default would symbolically coincide with the first day of the Chinese New Year.


In turn, virtually every sellside desk has issued notes and papers advising what this event would mean ("don't panic, here's a towel", and "all shall be well"), and is holding conference calls with clients to put their mind at ease in the increasingly likely scenario that there is indeed a historic "first" default for a country in which such events have previously been prohibited.


So with under 10 days to go, for anyone who is still confused about the role of trusts in China's financial system, a default's significance, the underlying causes, the implications for the broad economy, and what the possible outcomes of the CCT product default are, here is Goldman's Q&A on a potential Chinese trust default.


From Goldman Sachs: A Matter of Trust

German Gold - TheBlaze

Macro Analytics - Money Bubble Part I - Why Hasn't It Burst?

How Should Prices Be Determined?

by Henry Hazlitt

"How should prices be determined?" To this question we could make a short and simple answer: prices should be determined by the market.
The answer is correct enough, but some elaboration is necessary to answer the practical problem concerning the wisdom of government price control.
Let us begin on the elementary level and say that prices are determined by the supply and demand. If the relative demand for a product increases, consumers will be willing to pay more for it. Their competitive bids will both oblige them individually to pay more for it and enable producers to get more for it. This will raise the profit margins of the producers of that product.

11 Signs That Italy Is Descending Into A Full-Blown Economic Depression

by Michael Snyder via The Economic Collapse blog

 
When you get into too much debt, really bad things start to happen.  Sadly, that is exactly what is happening to Italy right now.  Harsh austerity measures are causing the Italian economy to slow down even more than it was previously.  And yet even with all of the austerity measures, the Italian government just continues to rack up even more debt.  This is the exact same path that we watched Greece go down. 
Austerity causes government revenues to drop which causes deficit reduction targets to be missed which causes even more austerity measures to become necessary.  But if Italy collapses economically, it is going to be a far bigger deal than what happened in Greece.  Italy is the ninth largest economy on the entire planet.  Actually, Italy used to be number eight, but now Russia has passed it. 
If Italy continues to stumble, India and Canada will soon pass it as well.  It really is a tragedy to watch what is happening in Italy, because it really is a wonderful place.  When I was a child, my father was in the navy, and I got the opportunity to live there for a while.  It is a land of great weather, great food and great soccer.  The people are friendly and the culture is absolutely fascinating.  But now the nation is falling apart. 
The following are 11 signs that Italy is descending into a full-blown economic depression...

#1 The unemployment rate in Italy has risen to 12.2 percent.  That is the highest that it has been in more than 35 years.
#2 The youth unemployment rate in Italy is sitting at 38.5 percent, and in southern Italy it recently hit the 50 percent mark.
#3 An average of 134 retail outlets are shutting down in Italy every single day.  Overall, approximately 224,000 retail establishments have closed since 2008.

Financial Independence and Intellectual Influence

by  Gary North

 If you are interested in the history of ideas, at some point this question will occur to you: "How is it possible for someone to gain influence, yet at the same time retain his independence?" If you traffic in ideas, you have to be able to do both. 

A crackpot can go online today and argue for his favorite theory. He is completely independent. He is also completely ignored. His independence does him no good, because what he writes has no influence.
I suppose my two favorite recent examples of people who have maintained their independence, but whose ideas have had considerable influence, are Ludwig von Mises and Murray Rothbard. They are more influential today than they were at the time of their deaths. Mises died in 1973. Rothbard died in 1995.
Mises had the great advantage in the final phase of his intellectual career in the fact that Yale University Press published his books from 1944 to 1957. This gave him an audience.

You Can't Buy Prosperity

by Bill Bonner

Gold rose $24 per ounce Thursday. The Dow fell 12 points.
The smart money is using this dip to buy gold.
Why?
Because the world's major stock markets... currencies... and economies all depend on reckless measures by central banks. In the short run, the central banks can make things appear safe and stable.
How?
By making lending money at ultra-low rates the norm. It's hard for major players to go broke; they can just refinance.
But in the long run, those same policies can lead to instability, bubbles... and disaster.
Too bad, but you can't buy prosperity. You can't print prosperity. You can't borrow prosperity. You can't ZIRP, QE or OMF ("overt monetary financing," a phrase that is bound to become current soon) prosperity, either. Prosperity comes from hard work, saving and discipline.
That is, it comes from responsible policies, not reckless ones.

Marc Faber - Sell Equities and Buy Physical Gold Now while prices are low

video.cnbc.com




Faber said it’s a good idea to take money out of the stock market. “I don’t think there is a lot of upside potential, but I think there is considerable downside,” he said. However, he said that markets are now seeing emerging markets and their currencies go lower, and “It could be that all the money in the world flows in to U.S. stocks and avoids emerging markets.” Gold can eventually be a source of profit, according to Faber. He said it’s possible the price of gold can go somewhat lower, even though he thinks it’s now at a reasonable level. “I keep on buying gold and I have faith that gold prices will eventually be higher,” Faber said. Faber said that, in general, corporate earnings will disappoint.

The True Cause Of Chaos In Egypt Exposed

By Dan Rubock - HiddenSecretsOfMoney.com

It's no secret that the situation in Egypt is deteriorating by the day, but for some bizarre reason the ultimate cause of the recent chaos remains generally unknown. Ask any friend or colleague what they think initiated the Egyptian revolution and most will come up with something like 'The people were unhappy with the government, so they rioted', or words to that effect.

 

But that's only part of the story… nobody seems to be talking about why the people were unhappy in the first place. 

 

The truth is, it was crippling levels of inflation that sparked the rioting, looting, and mayhem that Egypt is still experiencing. Upon the breakout of civil unrest in Tahrir Square back in 2010 CNBC reported:

 

"It is food inflation that is ultimately breaking the back of the Mubarek regime - staples like meat, sugar and vegetables have been climbing out of the reach of the ordinary Egyptian for a year."

 

Is “Austerity” Responsible for the Crisis in Europe?

by Martin Masse

Most European economies have been in recession, or close to it, since the beginning of 2012. Unemployment rates are reaching record highs. Meanwhile, a debate has been raging about the deleterious effects of “austerity” measures. Various heads of government, finance ministers, and European Union officials have declared that austerity has gone too far and is preventing a recovery.
Keynesian economists like Paul Krugman are seeing this as unassailable proof that stimulus policies adopted when the financial crisis started in 2008-09 should never have been reversed and replaced by austerity measures, notwithstanding the explosion of public debt that they entailed.
In the Keynesian view, when idle resources are left unused by the private sector, governments should put them to work. They should stop worrying about budget deficits and start spending again.
Whereas Keynesians and the rest of the economics profession see downturns as unexpected and disastrous events to be prevented, Austrian School economists explain them as the inevitable result of an earlier unsustainable boom provoked by excessive credit expansion and interventionist government policies.

19 Reasons To Be Deeply Concerned About The Global Economy As We Enter The 2nd Half Of 2013

By Michael Snyder

Is the global economic downturn going to accelerate as we roll into the second half of this year?  There is turmoil in the Middle East, we are seeing things happen in the bond markets that we have not seen happen in more than 30 years, and much of Europe has already plunged into a full-blown economic depression.  Sadly, most Americans will never understand what is happening until financial disaster strikes them personally.  As long as they can go to work during the day and eat frozen pizza and watch reality television at night, most of them will consider everything to be just fine.  Unfortunately, the truth is that everything is not fine.  The world is becoming increasingly unstable, we are living in the terminal phase of the greatest debt bubble in the history of the planet and the global financial system is even more vulnerable than it was back in 2008.  Unfortunately, most people seem to only have a 48 hour attention span at best these days.

The Currency Wars Reignite

by Tyler Durden

Via Mark J. Grant, author of Out of the Box,
“Always remember, your focus determines your reality.”

                  -George Lucas

 Our reality has changed in the last twenty-four hours. The Bank of England and the European Central Bank have re-affirmed their old positions since the Fed has changed tacks. The initial reactions will be a spike in equities and a fall-off in the valuations of the Pound and the Euro to the Dollar. These, however, are first blush reactions as the color fades from the bloom.

It may well be, as Europe is in much worse financial condition than the United States, that there is a policy reason for the European positions but it may well also be a calculated move to devalue the major European currencies. Whatever the actual reasons, the European statements have certainly sounded the trumpet that the “Currency Wars” have reignited.

Keynesian Phrenology

by Richard Daughty

I am getting more and more upset about the future of the economy, especially the part where I will probably still be alive to suffer through it, instead of being safely dead and gone, laughing disdainfully from whatever circle of Dante’s hell that is reserved for us lousy fathers, worthless husbands, lackluster employees and all-around lazy bastards.

“Hahaha!” I will bellow. “Now suffer! Suffer, you morons who actually believed that the idiocy of Keynesian economics would NOT end in disaster! From the heart of hell I strike at thee!”

The Most Stunning Development In Silver

By Silver Shield

The Silver Bullet Silver Shield makes it's return with Warbird soon.
Today, I learned of one of the most stunning developments in the physical silver demand I have ever seen.
The physical Silver market is about to explode the paper silver market in a huge way. Like the price collapse in 2008 set up silver for a 500%+ return for the next few years, this recent price collapse is going to set up an epic return on silver like the world has never seen.

What TARP Boss Neil Barofsky Told Me Yesterday Should Shock You

by Bill Bonner

The financial news is getting boring. The Dow goes only one way – up. But gold fell below $1,400 per ounce yesterday.

Rather than trying to figure it out, yesterday evening we drove down to Zombietown. A friend in Washington had promised to introduce us to Neil Barofsky, inspector general of the TARP program.

You remember TARP? It was the feds' $700 billion program to rescue the US economy from a correction. Neil Barofsky was in charge of it. So we decided to go down and ask him how it turned out...

Keiser Report: Dumb Luck, Wash Trading & Gold Suppression

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the failure to understand English as saviour of the Japanese banking system. While price signals, the language of the market, are so manipulated as to be indecipherable by even those who speak the language. In the second half, Max talks to legendary investor, Jim Rogers, about gold, bonds and China.

Jim Rogers: “This Is Too Insane–And I’m Afraid We’re All Going To Suffer For The Rest Of This Decade”

by bullmarketthinking.com

I was able to reconnect with Jim Rogers this morning out of Spain, legendary co-founder of the Quantum Fund with George Soros, author of Hot Commodities, and chairman of the private Beeland Holdings.
It was an especially powerful interview, as Jim spoke towards the relentless downward pressure on gold, the upward explosion in interest rates, central bank money printing, and how to protect yourself ahead of the disastrous times he sees coming.
When asked if we’re seeing forced liquidation leading the smash down in gold this morning, Jim said, “We certainly are. There are a lot of leveraged players who are now being forced to sell. Usually when you have this kind of forced liquidation, you’re getting closer to a bottom, maybe not the final bottom, but certainly close to a bottom. I even bought a little bit [today].”

Eric Sprott: "Have We Lost Control Yet?"

by Eric Sprott

Recent comments by the Federal Reserve Chairman Ben Bernanke have shocked the world financial markets. It all started on May 22nd, 2013, at a Testimony to the US Congress Joint Economic Committee, where he first hinted at tapering the Fed’s quantitative easing (QE) program. Then, on Wednesday, June 19th, during the press conference following the FOMC meeting, the Chairman outlined the Fed’s exit strategy from QE.

Since the first allusion to tapering, volatility has been on the rise across the board (stocks, currencies and bonds) (Figure 1A). Moreover, the yield starved, hot money that had flown to emerging markets has been rushing for the exits, triggering significant declines in emerging market (EM) equity and bond markets (Figure 1B). Finally, the prospect of the end of monetary accommodation has triggered rapid and significant decreases (increases) in the price (yield) of longer dated Treasury bonds (also Figure 1B).

FIGURE 1A: VOLATILITY INCREASING
FIGURE 1B: ASSET PRICES DECLINING