Nice Article About Gold Part II : It's foolish to ignore 5,000 years of monetary history...

And for people who trot out the canard that you can't buy a Big Mac with Gold Coins, what do you think goldsmith's notes – the original bank notes – were? They were receipts that indicated gold ownership and your ability to pay a debt. You could exchange goldsmith's notes as payment for goods and services because the paper claim was backed by a real asset. Goldsmith's notes were the precursor to bank notes. Same type of system as today, only with real money.

Is this all just some nostalgia for a financial system that no longer exists? Does gold have a real role to play in the future financial system? Well, Gold is a threat to the fiat money peddlers from the warfare/welfare State because it exacts a heavy price for deficit spending and money creation. The expansion of credit or deficit spending is always possible in a fiat money system, and it thus placates voters with false prosperity borrowed from the future.

The rise in the Gold Price, therefore, is telling us that markets are increasingly suspicious of government-backed money and its ultimate affect on the real economy. Or, as Greg Canavan of Sound Money, Sound Investments says:

"Gold is saying that the crisis is not over, that it is in fact getting worse. We are seeing Gresham's Law in action, as bad money pushes out the good. Gold is being swept off the market by millions of individuals who know that without fail governments always ruin the value of their paper money."

Nice Article About Gold Part 1: It's foolish to ignore 5,000 years of monetary history...

It's nice to see the media actually discussing Gold. But what's a little disturbing is how poorly understood gold's historic role in the financial system is. What's more, doesn't anyone know what sound money is any longer?

Our burden today, then, is to remind these nattering nabobs of negativism that gold is not anyone else's debt. It is not anyone else's liability. It cannot be created with a few keystrokes. And for thousands of years, millions of people from all walks of life have been happy to use it as money because of its unique features (divisibility, durability, scarcity, difficulty in counterfeiting).

Gold is a commodity. But its price is not driven exclusively by the Indian jewelry market or investment demand. As a tangible commodity, gold has some of the aforementioned qualities that make it a fantastic medium of exchange.

Emas turun: Adakah kerana IMF sudah menjual stok emas??

Gold Declines in N.Y. as Dollar’s Gain Pares Investment Demand
By Nicholas Larkin and Pham-Duy Nguyen

Sept. 29 (Bloomberg) -- Gold fell in New York as a stronger dollar cut investment demand for the precious metal. Silver sank.

The dollar climbed as much as 0.6 percent against the euro, touching a two-week high, as evidence economies have yet to shake off the worst effects of the global recession spurred demand for the safety of the U.S. currency. Gains in U.S. equities helped limit gold’s losses.

“Gold is looking at the dollar and the stock market for direction,” said Frank McGhee, Integrated Brokerage Services LLC’s head dealer in Chicago. “At this point, it could drop $25 or rally $25.”

Gold futures for December delivery fell $2.30, or 0.2 percent, to $991.80 an ounce at 11:04 a.m. on the New York Mercantile Exchange’s Comex division. Earlier, the price rose as much 0.1 percent and dropped as much as 0.8 percent.

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IMF Board Approves Sale of 403.3 Metric Tons of Gold (Update1)

By Sandrine Rastello

Sept. 18 (Bloomberg) -- The International Monetary Fund’s executive board approved gold sales of 403.3 metric tons valued at about $13 billion and pledged to avoid disrupting the market with the transactions.

The IMF said it would “stand ready to sell gold directly to central banks.” The sales could also be conducted in the open market in a “phased manner” over time, the Washington- based lender said in an e-mailed statement today.

“These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market,” IMF Managing Director Dominique Strauss-Kahn said in the statement.

China pushes silver and gold investment to the masses

The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."

Gold Falls Most in Two Months as Dollar’s Rebound Erodes Demand

Sept. 24 (Bloomberg) -- Gold fell the most in more than two months, closing below $1,000 an ounce, as the dollar’s rebound reduced demand for the precious metal as an alternative asset.

The dollar climbed from a one-year low against a basket of six major currencies. Before today, gold advanced 15 percent this year, while the greenback dropped 6.5 percent.

“You’re seeing significant selling in gold because the dollar is beginning to rise,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.

CHART ANAlYSIS

Gold’s decline may accelerate after prices failed to rally closer to the record, UBS AG said in a report yesterday. Technical analysis shows the bullish trend can only be maintained should prices surpass $1,032.50, UBS said.

The metal reached $1,025.80 on Sept. 17. Gold jumped to a record $1,033.90 on March 17, 2008.

The Fed’s statement is “theoretically negative for gold, because they took away the wording on inflation, but there wasn’t any talk of rate hikes,” said Tom Pawlicki, an MF Global Inc. metals analyst in Chicago. Gold may climb to $1,100 early next year, he said.

A rate increase would boost demand for the U.S. currency, analysts say

Harga Emas semakin turun?

Pagi-pagi Jumaat ni... anda semua boleh lihat harga emas dunia semakin turun... Ia telah turun ke bawah paras 1000 usd/oz. Apakah sentimen yg menyebabkan ia turun? Berapa banyak lagi akan turun? Berapa lama masa diambil utk naik semula?

3 persoalan ini hanya dapat dikupaskan oleh penganalisa2 yg handal. Jadi, mari kita sama-sama mencari jawapannya. Namun begitu, inilah masanya utk kita membeli secara berperingkat selagi harganya masih murah.

INGIN DAPATKAN PERAK MENTAH (SILVER RAW MATERIAL)

Bagi peminat emas yg ingin menyimpan Perak sebagai satu alternatif adalah digalakkan. Anda boleh menghubungi saya utk mendapatkan harga. Stok adalah berdasarkan kepada harga harian pasaran.

Sebagai pengenalan, harga semasa Perak adalah dalam lingkungan Rm 1900- 2000/ 1000 gm. Sesiapa yg berminat boleh hubungi utk keterangan lanjut.

PERINGATAN: (Produk yg dijual adalah dalam bentuk mentah (raw material) )
Sila lihat gambar untuk lebih jelas.

Once Upon a Time

ONCE UPON A TIME, debtors went to prison, cocaine was an ingredient in soft drinks and women could not be trusted to cast an intelligent vote, writes Eric Fry in the Rude Awakening.

But today, debtors go to "loan modification specialists", cocaine vendors go to prison, and NO ONE can be trusted to cast an intelligent vote.

From generation to generation, social conventions change...mostly because the conditions that shape conventions change.

One generation faces adversity; the next generation reads about it. One generation labors; the next generation plays. One generation struggles to accumulate wealth; the next generation squanders it.

Last night, my eldest son tried to exterminate an invasion of ants by spraying them with Axe aftershave. As the potent scent spread through the house like desperate males through a nightclub, his father nearly suffocated.

"Hey Noah!" I yelled downstairs. "What the heck are you doing?! Did you try to kill those ants with Axe?"

"Yeah, but it didn't really work," he replied.

"Duh!" his annoyed father replied. "What were you thinking? Did you think that ANYTHING in an aerosol can would simply work like ant spray?"

"I dunno. I just thought it might work," Noah explained.

For some reason, this little incident reminded me of my grandfather, "Bramp"...and how little Noah resembled the man.

Bramp would never have sprayed ants with cologne. DDT, yes. Cologne, never. He didn't mess around with half-measures. Bramp kept a loaded Colt 45 under his mattress and would not hesitate to draw it at the slightest inexplicable nighttime sound. He was not mean-spirited or paranoid, just hyper-vigilant.

My grandfather guarded his savings as passionately as he guarded his home. Bramp spent 20 years in the Army, and 85 years saving pennies. He cared about saving, protecting, guarding and, in every possible way, hanging on to what was his. He was a cheapskate, yes...but also so much more than that.

Bramp carried more keys on his belt than a locksmith. He locked everything...every door, cabinet, case or hinged item of any kind. He also used to stockpile enormous quantities of canned goods in his garage.

As one of the many millions of Americans who lived through two World Wars and a Great Depression, Bramp had learned to fear deprivation and sub-optimal outcomes. He had learned to shun risk. By contrast, Bramp's great, great grandson, Noah, never gives a thought to deprivation. Why would he? The refrigerator is always full and his dad still draws a paycheck. Noah never worries that his circumstances might change for the worst. Why would he? It hasn't happened yet...to him. But circumstances have changed for the worst for millions of Americans.

Nearly one year ago, the financial markets crumbled, government officials warned of a potential economic meltdown, and for the very first time in their lives, an entire generation of Americans began to imagine that things might get worse, not better. An entire generation began to consider the possibility of adverse outcomes. It considered the possibility of job losses, mortgage foreclosures, and yes, even the possibility that the stock market might fall a lot.

For many, many Americans, these horrifying fears actually came to fruition. Millions have lost their houses; millions more have lost their jobs; and tens of millions more have lost large percentages of their savings. These are realities. These are facts.

And yet, many of the geniuses on Wall Street - who would be unemployed geniuses if the federal government had not intervened - say to one another, "Hey, this recession isn't so bad. Looks to me like this whole thing is just about over."

And maybe they're right. Or maybe they just don't realize that failing businesses usually fail. Maybe the Wall Street seers fail to understand that most Americans work for enterprises that the government will NOT rescue.

Thus, Americans are still losing their jobs - day after day, week after week. Americans are still refusing to borrow and spend or invest. They're still incapable of borrowing and investing. They're still saving what they can and spending as little as possible.

These traits, dear investor, are not the traits that typify and nurture an economic recovery. Rather, these are the characteristics of an economy in distress - the kind of economy that tempts ham- fisted Washington bureaucrats to "solve" the problem but pouring newly minted Dollars into the economy.

CHINA Dumping Dollars for Gold?

Dumping Dollars for Gold?
This one is still at the rumor stage, but highly-respected website Mineweb.com reports that the Chinese sovereign wealth fund is selling US Dollars at a rapid clip. Might it be looking to Buy Gold too?

What we know for sure is that the country founded its primary sovereign wealth fund, China Investment Corporation (CIC), two years ago. Its stated aim is rapidly deploying some of its $1.5 trillion forex surpluses – $200 billion initially, with another $100 billion recently added to the kitty – into investment in non-Chinese enterprises. Thus it's been acquiring businesses around the globe, mining companies among them, including Teck Corp., the diversified Canadian mining giant.

We don't know for sure that CIC is Buying Gold, but it seems likely to us here at Casey Research. And, in addition, rumors sneaking off the mainland indicate that within the CIC, a lot of effort is being poured into prospective investment deals in the oil and precious metals sectors. The more it produces, the more it can keep.

The Chinese have made no secret of their disdain for current American economic policy and what they see as the inevitable destruction of the Dollar. That they would be moving to diversify out of the greenback shocks precisely no one, and gold is one logical landing place for all those bucks. We suspect that's exactly what is happening, behind the scenes

The UN suggests replacing unbacked US Dollars with notional SDRs. Why...?

WE READ WITH interest earlier this week a call from the United Nations Conference on Trade & Development for a new global reserve currency, writes Kris Sayce for Dan Denning's Australian Daily Reckoning.

Apparently the current set-up of having the US Dollar as a reserve currency isn't working very well. They're quick learners at the UN obviously!

"The Dollar-based reserve system is increasingly challenged," the UNCTD opines with slight understatement. If "increasingly challenged" were a euphemism for "dead" then we'd agree.

But what do they plan replacing the Dollar with? Special Drawing Rights, or SDRs. If you've got no idea what that means, it's simple.

An SDR is something made up by the boffins at the International Monetary Fund (IMF) to act as an "international reserve asset". The rationale for the creation of the SDR was that "the international supply of two key reserve assets – Gold and the US Dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place."

Look, I won't pretend to be a grade 'A' student of monetary theory, but to me the creation of the SDR is part of the reason the global economy is in this current mess. That gold was deemed to be inadequate for "supporting the expansion of world trade and financial development" tells you that's when the Western world begun its massive spending spree.

Back in 1969 with the creation of the SDR, we got a spending spree that couldn't be achieved just through stealing money from citizens through the tax system, but one which could only be kept going by the creation of more money. It was, you could argue, the beginning of the "Consume, don't produce" Western economic model.

The problem that SDRs "solved" was the ability to crank up the printing press. Of course that didn't happen straight away. There's always a transition with these things.

First, as it happens, and like the US Dollar, the SDR was backed by Gold. But if you're creating a new reserve that you want to be more flexible than gold – because you want to print more money and spend it. So backing it with gold isn't going to work.

Because backing a currency with gold helps to maintain the value of the paper currency. If you know that your $1 note is redeemable for a set quantity of gold then it will maintain value. Which means the banks can't – or shouldn't – create more paper money than the reserves they have in gold to back it up.

Simply put, Gold creates and requires discipline. Something that bankers and governments in the 1960s weren't happy with. The 'inflexibility' of gold made it harder to for governments to spend and made it harder for banks to lend.

Therefore the creation of the SDR was a stepping stone to abandoning the reserve status of gold. And sure enough, two years after the SDR was invented, US President Richard Nixon closed the gold window at the Federal Reserve and there was no longer any obligation for US Dollars to be exchanged for a fixed weight of gold.

Instead the US Dollar was backed by nothing, and so the SDR was backed by the US Dollar and other currencies which were also backed by nothing.

Yet it is this worthless SDR which is being touted as the new reserve currency. Why should it make any difference? It won't. An SDR is just a weighted basket of other currencies. Unless it is backed by something tangible, such as gold, then it will prove to be equally as worthless as the US Dollar it is replacing.

Perhaps bankers and governments will see the error of their ways and make a call for these new SDRs to be back by gold...?

Not a chance.

There are several reasons. One, as mentioned above, is that gold forces a government and its central bank to be disciplined. It cannot circulate more money without having a corresponding increase in its gold reserves.

If it were to do so then the paper money – or certificates – would not be fully backed by gold. This would cause the value of the paper to decrease – the greater supply of one thing relative to another devalues it.

If people got wind that the central bank was printing more money without increasing its reserve of gold, there would be an increased demand for physical gold. There would be a run on the banks.

The other problem gold has is an image problem. Take this comment from a recent article by Alan Kohler over at Business Spectator:

"But while there's no doubt the gold will continue to be underpinned by the demise of the dollar, it is not a currency. I can't go into JB Hi-Fi with a lump of it and buy a TV.

"Central banks around the world own about 26,000 tonnes of it, which represents 8.5% of total reserves, but it's not legal tender. It's just a commodity they got stuck with because it used to be a currency a long time ago and will never be again."

This represents the common attitude of the mainstream press to gold. They don't understand that it is a store of value. Kohler claims you can't go into JB Hi-Fi and buy a TV with a lump of gold. He's quite correct on that score. But it wasn't so long ago that is effectively what consumers did. Maybe not for TVs but for other items.

Under a gold standard where your Dollar (whether US or Aussie) was backed by Gold, consumers were exchanging a gold backed dollar for goods. It was an exchange of gold for goods, only that a paper note was used as a proxy.

What's so crazy about that? Nothing.

But if you look at Kohler's other comment about 26,000 tonnes of gold being only 8.5% of total reserves, it gives the game away for the real reason bankers and governments don't want a gold backed currency.

Limits on inflation.

It's no coincidence that since the early 1970s, global paper currencies have lost about 90% of their purchasing value. Virtually every currency you name is worth significantly less today than it was forty-odd years ago.

That's not because prices have risen, it's because currencies have become devalued. And as Kohler, perhaps unwittingly admits, central banks and governments have embarked on a massive money-printing exercise.

If paper money still had the backing of gold, then global economies would not have one-tenth of the current problems we are currently facing. The fact that the UN and other government organizations are proposing to replace one currency backed by nothing with another currency backed by nothing signals they are either ignorant or are intentionally pursuing policies guaranteed to deliver economic destruction.

And more importantly to you, to guarantee the continued devaluation of your money and wealth.

Gold Jumps to $1021, Gains in All Currencies as Bonds, Stocks & Commodities Rise Together on Central-Bank Liquidity

Gold leapt to a fresh 18-month high versus the Dollar in Asian trade on Wednesday, adding 7.2% from the start of Sept. as world stock markets reached 12-month highs and commodity prices rose together with government bonds.

Pushing up to $1,021 an ounce in London trade, gold also touched its best level for UK investors since late April at £616 an ounce.

Eurozone investors now Ready to Buy Gold saw the price add 1.6% from Tuesday's low, but it held shy of last week's 5-month high near €700 an ounce as the single currency jumped on the forex market, breaking a fresh 2009-high vs. the Dollar.

"Although the declining Dollar has been one of the catalysts for gold's rise, it is also important to note that gold bull markets are usually characterized by the metal making headway in all currencies," writes South African fund manager Prieur du Plessis in his Investment Postcards today.

"This is now happening with bullion rising in terms of most major (and minor) fiat (paper) currencies."

"Gold Prices tend to show a high correlation with increases in liquidity," noted Merrill Lynch analyst Michael Widmer in a report on Monday, "and central banks around the world have pointed out that they are unlikely to remove monetary stimulus any time soon."

On Tuesday, both US chief central banker Ben Bernanke and his UK counterpart Mervyn King said their economies were "technically" out of recession.

Neither the Fed nor Bank of England is expected to raise interest rates from their current near-zero record lows, however. In parliamentary testimony in London, King said yesterday he may cut the interest rate paid by the Bank of England on commercial-bank deposits below zero, forcing them to seek positive returns by lending more freely to households and business. (Read about Sweden's Sub-Zero Rates here...)

Dinar Halal Hub

Petang tadi saya telah terima satu lagi koleksi 1 dinar. Ya, Dinar Emas kohalal-Hub. mmmm.. memang cantik.. Bukan sahaja cantik, tetapi berasa bangga kerana ada usaha daripada bumiputera untuk memajukan industri emas ini. Syabas kepada Ustaz Rafidi dan rakan2...!!!

Selain daripada penjualan emas dinar ini,banyak lagi perkhidmatan yg disediakan oleh Syarikat Kohalal-HubDinar Emas ini. Antara lain ialah menjual dan beli jongkong emas, khidmat simpanan dinar, membeli barangan kemas dan lain-lain lagi.

Apa yg menarik perhatian saya ialah program menabung emas untuk Umrah dan Haji. Memang secara teori ramai mengetahui dengan menabung (meyimpan) emas untuk menunaikan haji adalah perkara realistik. Cuma secara praktikal masih belum ramai yg cuba utk mengusahakannya. tetapi dengan inisiatif mereka, kita dapat memudahkan urusan penyimpanan tersebut.

Walau bagaimanapun, saya masih dalam peringkat kajian dan memahaminya... Jika telah faham sepenuhnya saya akan cuba menerangkan kepada anda semua. Atau, bagi yang sudah memahami atau sudah menyertai program ini, bolehlah berkongsi idea bersama2 di sini.

Akhir kata, amat mudah utk membeli dinar emas ini drp syarikat Kohalal-Hub Dinar Emas. Anda akan dilayan dan diterangkan secara terperinci drp website mereka... Jika tidak faham terus telefon Ustaz atau wakil mereka..

Wassalam

A Floor Beneath the Gold Price...?

CHENG SIWEI, former vice chairman of the Standing Committee of the Chinese Communist Party was recently quoted as saying Beijing is dismayed by the "credit easing" coming out of the US Federal Reserve, writes Byron King for Whiskey & Gunpowder.

"If they [the Fed] keep printing money to buy bonds," said Mr. Cheng, "it will lead to inflation, and after a year or two, the Dollar will fall hard.

"Most of our [Chinese] foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into Euros, Yen and other currencies."

He was referring to over $2 trillion of Chinese foreign reserves, the world's largest holding – and "Gold is definitely an alternative," said Cheng.

"But when we Buy Gold, the price goes up. We have to do it carefully so as not to stimulate the market."

From Mr. Cheng's lips to God's ears...and now to ours. We have direct testimony from a high-level cadre that China, while cautious, is a key driving force in the gold market. China is buying.

We already knew that the Chinese are Buying Gold and hoarding it. For example, China is the world's largest gold-mining nation. China mines more gold each year than the US or South Africa. Yet what are the net gold exports from China? Umm...zero. That is, China doesn't export gold (unless you buy a Panda coin). Overall, in fact, China is a net importer of gold.

Sure, the Chinese use gold in industry, such as for electronics, jewelry and fast-rising private investment. But much of the rest of Chinese gold purchases go into state coffers, or into "off-books" storage. I'll bet that there's a lot of gold in "industrial stockpiles" in China, which are really just strategic monetary reserves for China's Central Bank.

The implication from Mr. Cheng is that the Chinese will not overbuy gold, which may be why the yellow metal has hovered just below the $1,000 mark per ounce in recent weeks. At the same time, it's more than likely that China will Buy Gold whenever there's a price dip.

The significance is that the Chinese seem to be prepared to establish a floor under any correction in Gold Prices. This limits the downside, I believe, as well as potentially putting a floor beneath well-positioned Gold Mining stock, such as my subscribers hold in the Energy & Scarcity Investor portfolio.

Is there an upper limit to Gold Prices? Well, I expect to see the Gold Price rise, but slowly and in a long series of plateaus. I also expect to see pullbacks, usually based on world monetary and political events.

So we'll surely have some roller-coaster rides with the prices for the mining shares. How it all unfolds for us as investors will depend on when, and to what degree, monetary-driven inflation begins to bite into the economy. When it becomes totally obvious, it'll probably be too late to protect and preserve your wealth and purchasing power.

The problem for us in the West is that most of the politicians and major media just DO NOT GET IT. Or at least, the ones that do "get it" generally don't report things honestly to the citizens. They're probably afraid of what might happen when the citizens really figure out how much the political classes have screwed up the world.

So you see these rosy-sounding headlines about how the economy is "improving" and things are "getting better." Huh? What planet are these guys on?

The tide of inflation is rolling in. It'll lift the boats of Gold and the gold miners.

Gold, other commodities rise amid weaker dollar

Wednesday September 16, 2009 MYT 8:01:00 AM

NEW YORK (AP): Gold prices bounded higher Tuesday, supported by a weaker dollar and a report showing a bigger-than-expected jump in inflation

Report: Firms gave out RM140bil in bribes

PETALING JAYA: Companies in developing countries have been giving bribes to corrupt politicians and government officials amounting to US$40bil (RM140bil) every year, says a report on global corruption.

The Global Corruption Report 2009: Corruption and the Private Sector (GCR) conducted by Transparency International (TI), also revealed that half of international business executives polled estimated that corruption raised project costs by at least 10%.

Consumers around the world were overcharged about US$300bil (RM1.5tril) through almost 300 private international groups discovered from 1990 to 2005, the report added.

TI Chair Huguette Labelle said there was a need to foster a culture of corporate integrity to protect investment, increase commercial success and ensure the stability sought by poor and rich countries, especially during the economic crisis.

“Basing a company or fund’s future on personal relationships and unpredictable systems or simply operating in a dark space without oversight and accountability is a path to guaranteed failure,” he said in a statement yesterday.

“Winning on anti-corruption means adding to the bottom line.

“It is time that corporations face up to the risk of paying millions in fines and the long-term loss of trust from their customers and shareholders,” said Labelle.

The GCR is a yearly publication from TI that compiles expert research and analysis from around the world with a focus on corruption.

It consists of more than 75 experts examining the scale, scope and devastating consequences of corporate corruption.

The report is complemented by 45 in-depth country reports along with the best practices and recommendations to combat graft.