Various Investment Alternatives to Protect Ourselves

July 21, 2012

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In this show Al discusses:

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    Jul 21, 2012 21:45 AM

    Below are some notes I took, following up to what Al and I talked about earlier this week. They reflect both cooments made by Ron Herra in segment 4 and touch on what Ron Paul was firing away for effect to Bernanke at this week.

    Notes- follow up Al Korelin:

    We were talking about how people supposedly well studied in economics not being able to understand how we arrived where we are at today.
    It takes an assumption to assume they have made a mistake.
    It takes an assumption to believe circumstances turned against them and their otherwise wise would have been right only if…
    Al…the Paul Krugmans arrived us to where we are today on purpose. There motive was control.
    The Bank of England was established in 1694 –
    The Stamp Act was passed by parliament in 1765 to address the fact that the Colonies were not widely using the British currency as the preferred medium of exchange.
    The Stamp Act besides being a tax was required to be paid in the British currency creating basics of a tender law.
    This Gave rise to the Sons of Liberty the fore fathers of today’s Tea Party.
    The First Bank of the United States using the Bank of England as his model in most respects from 1991 to 1811 – the first private Bank controlling the allowed to control government set up shop
    in Philadelphia. Washington signed the First Bank of the United State Bank into existence April 25, 1791. (Between the ratification of the Constitution and the Bill of Rights.) Our great hero is said to have negotiated having that new Capital built in a filled in swamp such that it benefitted his select properties nearby one of which is now known as Arlington Cemetery. This was a very small price to pay by the bankers to cause their corrupt private interests to gain control of currency issuance.
    Al when the first Bank’s charter ended in 1811, this was contemporaneous with raised British Antagonism leading to the War of 1812. With the Bank the relations between the Great Britain and the young
    government was turbulent marked by skirmish mainly in the disputed frontiers but tolerable. Without the Bank the path to War was marked.
    The beginning of the War and the end of the War are book ended by the end of the First Bank and the Beginning of the Second. A coincidence that leads me to believe it these were coincidences at all.
    1) The War started soon after the First Bank Charter expired un-renewed. Hostilities leading up to the war accelerated when the charter expired.
    – Andrew Jackson was left unsupported by Washington DC….leaving him to his own devices to win the final battle in early Jan 1815…it did not matter if Jackson won or lost the deal was done!
    2) The War concluded soon the workings of the The Second Bank were set in motion once again taking over the country’s finances in January 7, 1817.
    Andrew Jackson who took bullets in duels fought in the frontier, Florida, famously in New Orleans, was an old hickory hayseed winning elections from the elite of the day but always said his biggest victory was defeating the bank.
    Today we somehow look at the bank as a given. Our Country was founded because of the BOE. Our country had two relatively short lived Central Bank experiments in the first 3 Generation of the young county.
    The Civil War gave rise to the Greenback – Coinage Act of 1873 – William Jennings Bryant and the Silverites – leading to The Federal Reserve Bank.
    Fluidity with the monetary system and more specifically Central Banking is a given in our countries history. Admittedly we have economic downturns, inflation like the Continental and panics like the one in 1907 when we were without a Central Bank, but we have had some of our greatest economic successes during periods when there was no Central Bank. The last hundred years shows us that Central Banking is the answer only to a misleading question.
    Our current Federal Reserve has a dual mandate neither of which is being met. Monetary policy is in a shambles…interest rates are not moderated. It has been a joke. What is The Federal Reserve Bank saving us from? Answer nothing – except maybe the challenges presented by true monetary liberty?
    We are experiencing the same economic turmoil’s event times may be lengthened or delayed but when they are that are more severe and long lasting when they inevitably arrive.
    The only thing The Federal Reserve Bank has assured us is that its shareholders have first use of new money and profit form the continued expansion of the money supply.
    Ron Paul was firing for effect over the target in Congressional hearings this week.
    Al, the issue is not lack of knowledge of what is the correct thing to do…It is the corrupt preference to do things knowing they are wrong but also knowing they allow power and control to be maintained by the Central Bankers, the mysterious shareholders of the controlling bank and the elite bankers and others who gain first use and license to literally make money out of nothing.

      Jul 22, 2012 22:42 AM

      So what you’re hypothesizing is, every time the USA tries to work without a central bank, without money based upon a loan at interest, the money masters, The Powers That Be, primarily based in England, use a war to exhaust us back to being shackled with their central bank.

      Lincoln-Andrews-Wilson-Hitler-FDR: how do we break the shackles?

        Jul 22, 2012 22:00 PM

        Struggles for power are a fact of life.
        An instructional read in the direction you question is a great book by H.W. Brands titled “Andrew Jackson his fe and Times”.
        The major point I wish to make is the Central Banks have failed at their announced objectives. We are no better off having them compared to not having them. What we concede to them is our very liberty for non performance.
        Another point I wish to make is The Federal Reserve can only be seen as successful if this determination is based on uannounced goals of controlling a population.
        When you flow chart it, debt based currency can only provide the illusion of prosperity through monetary inflation and/or cause causing defaltion.
        Would it not be better to base currency issuance on a standard that required production, consumer good trade surplus to aquire backing to support monetary expansion which would provide confidence for meduim of excahnge.
        Or we can just keep on what we are doing: running tradzing e deficits, racking up debt, monetizing debt, promising lush pensions to workers who put in their time producing little or nothing, promising bulletin board watchers their double dips, promising entitlements that cannot be paid without a loaf of bread costing $30.
        jhpace- what is your solution….

          Jul 22, 2012 22:01 PM

          H.W. Brands titled “Andrew Jackson his Life and Times”.

          Jul 22, 2012 22:49 PM

          Afternoon Dennis M

          I particularly enjoyed your final paragraph. That really sums it all up, doesn’t it!

          Big Al

            Jul 22, 2012 22:40 PM

            Since our currency is debt based. Would it not be nice to know who we the taxpayers are obligated to pay (or defaul) the interest to?
            Another way to put it is who are the shareholders of The Federal Reserve to whom per Bernanke the Congress has delgated monetary policy. For all we know the Queen of England herself is majority stakeholder. Happy 60th BTW.

          Jul 22, 2012 22:55 PM

          My solution? What JFK attempted before his death – issue US Treasury notes without interest as the new “money” and not let Congress “borrow” another FRN. No interest, no debt, pay off the Federal Reserve (or refute it a la Iceland), and force Congress to balance the budget by refusing to hire or expand budgets for as long as I was in office. Which wouldn’t be long, given Lincoln’s and JFK’s example!

            Jul 22, 2012 22:53 PM

            jh- and that is the Austrian Point
            Central banks and debt based fiat solve nothing.
            They do make cliff higher for the fall
            they make the tree more brittle for the next strong wind
            Did central bankers know that when Kennedy attempted a silver note?
            I think YES!

            Jul 23, 2012 23:32 AM

            Unfortunately Dennis M,

            I agree with you about Kennedy.

            Big Al

            Jul 23, 2012 23:39 AM

            Morning Jhpace1,

            Something does certainly need to happen!

            Big Al

    Jul 21, 2012 21:57 AM

    There are certainly wars and rummors of wars coming to the end of a 100 year charter for the Federal Reserve. 1913 to 2013. Will peace and prosperity arrive when the Fed charter is re-newed? We shall see. Best to all.

    Jul 21, 2012 21:30 AM

    Morning Dennis M,

    First of all, many thanks for taking the time to write this great comment.

    Secondly, and by far the most important is an apology from me.

    I completely forgot that I scheduled you for the Weekend Show. I had it in my calendar and completely overlooked it.

    When we are in Chicago in Sept for the IIC Conference, I would like you to have dinner with Kathy and I.

    You are a very insightful person and I value your contributions to this site.

    Can we reschedule the interview for next Friday at the same time?

    Have a great weekend,

    Big Al

      Jul 21, 2012 21:19 PM

      Maybe I should have proof read the above notes.
      I hope the ideas and concepts surrived the typos.

        Jul 21, 2012 21:36 PM

        Trust me they did.

        Big Al

    Jul 21, 2012 21:33 PM

    Hi Big Al,
    I liked your weekend show and your idea of four legs you use to diversify. Why own farm land when you can buy MOO. I have some farm land and it is a hassle. If I don’t work it, it turns back to grass, weeds and brush. I also like Trader Rog’s idea of junior miners, in good locations, next to a producing mine for buy out. Simple concept and correct. Thanks a million

      Jul 21, 2012 21:31 PM

      Keep stacking you may prefer the hassles presented from being the custodian of your land compared to owning too much MOO. Especially, when the catch phrase of the day on CNBC returns counter party risk.
      MOO sounds great for what it is but it is still a paper promise. Plus 50% of sales exposure to the index begs the question what is the other 50%.
      Their are so may haircuts ready out there I am thinking about training for a Barber’s license.

        Jul 21, 2012 21:52 PM

        Mr. O’Neil,
        Thank you for writing me. Yes, counter party risks should always be considered in investing. Sometimes I wander from this reality, forgetting the times we live in.
        Best to you.

    Jul 21, 2012 21:45 PM

    Actually, I can believe it. My grandfather, who cleared a farm out of low-lying land literally on the east side of the Mighty Mississippi in western Illinois, told me at a very young age that no one “needs” to acquire stocks , bonds, buildings, silver, or gold, but everyone must have food.
    Keep up the good work, GO HAWKS !!!
    Bob in Iowa

      Jul 21, 2012 21:39 PM

      Everyone must have food. That says it all.
      Thanks Bob!

      Big Al

        Jul 21, 2012 21:46 PM

        You are right Al!.
        I should have told Keep Stacking about the dangers of collectivism and farmland.
        Do you remember Roscoe Filburn?
        Do not grow too much wheat keep stacking!
        Al could you ask Rog where MOO currently has the other 50% situated.
        1/2 AG and 1/2 Greek bonds will not help anyone.
        ETF tend to take the edge off of supply pinch points as paper is easier to deliver than the stuff!

    Jul 21, 2012 21:08 PM

    Big Al, and all
    Standard Chartered bank segment is what we have been harping about constantly on this blog. OK, OK now we can happily throw in Africa on the supply and demand “BULLETT TRAIN” headed toward massive consumption levels unprecedented in human history….billions of people and growing……. means more food, water, energy, and more of everything including, of course, gold and silver. Beats putting cash in a long term CD and hoping and praying its safe! That is absurd and down right dangerous. The rates more than stink and the dollar is being destroyed with greater ferocity! The world will need more and more of “things”……and last time I checked the world governments and central banks can’t print those “things”! Boy, pretty easy, Huh?
    All the best,

      Jul 22, 2012 22:24 PM

      Yep, Marc, pretty easy!

      Big Al

    Jul 21, 2012 21:39 PM

    Silver is forming a tight volatility coil, and roughly 70% of the time, the initial move out of a coil ends up being a false move soon followed by a more powerful and more durable move in the opposite direction. Considering how late it is in the daily cycle, the coil should break to the downside soon. But if Bernanke delivers at the next Fed meeting, the pattern should reverse and follow through to the upside.

      Jul 22, 2012 22:43 AM

      Exactly my concerns, Bart. But I don’t think the Bernanke is going to deliver because it would be the wrong thing to do at the worst possible time.

    Jul 21, 2012 21:12 PM

    Gold will be down to $650 in a year or two. I REALLY think it will, it’s in a huge bubble phase right now. Fundamentals don’t really count this time around…

      Jul 21, 2012 21:16 PM

      OK, I will take you for your word. Now if you are so bold and confident in this assertion -please outline a detailed analysis how this could possibly play out – not in one word – deflation. Not good enough to support this bold proclamation.

      Jul 21, 2012 21:08 PM

      SilverFox, perhaps of FoxEntertainment Channel – Entertainment = takes no thought. And it sounds like you love what Obama has done & and what if elected to a second term will do for you – my what a happy trooper you are. Sounds like you`ve been in a coma for the last decade or so…

      Jul 22, 2012 22:26 PM

      Hi Silverfox,

      “Fundamentals don’t really count this time around”?

      To me that’s kind of like saying, “the fundamental concept that human beings don’t need air to breathe really don’t count this time around”.

      Big Al

        Jul 22, 2012 22:14 PM

        Yep, Big Al, spot on!

        Feb 04, 2014 04:46 AM

        the pay channel is shoiwng a couple making love. In the fist stanza, there was a war and millions of people died; yet everyone was mentioned as innocent? And apparently the president did not care much since he spoke of it as a magic love potion. And for the narrator to have eyes opened in astonishment and have a face like a twice-canceled postage stamp shows that he or she was in complete shock to that, that they could not believe it.In the second stanza, right off the bat the narrator says he or she lived well, but life was awful. That’s a very contradicting statement, and a very powerful one at that. This give the poem a time period though, that time had passed since the war. The narrator recalls the war, that there were so many soldiers that day and So many refugees crowding the roads. and then Naturally, they all vanished With a touch of the hand. I think the ending line of this stanza was such a great metaphor: History licked the corners of its bloody mouth. This conveys history to be an evil, a monster even, and all of the bloodshed was its beautiful doing.The last stanza shows current time, and the narrator seems to be stuck in the past. He or she is watch a TV channel where there is a couple about to have sex. The TV is muted, and the room is dark, and the narrator can only see the red and pink colors on the screen. Except for the screen where the color Had too much red in it, too much pink. I am contemplating whether or not the narrator had been a solider themselves possibly unable to get over the horrid memories the war left with him or her and how apathetic the world was to the entirety of it

    Jul 21, 2012 21:10 PM

    What is dollar backed by? It is backed by 80 percent of the world’s financial transactions. It is backed by the great USA, its vast resources, people and powerful military ever existed on earth. It is in world’s interest to keep the dollar strong.

    What is gold backed by? No use other than silly indians buying it. It is backed by few fear mongerer constantly beating the drum of world’s financial collapse. It is backed by nothing by fear. That’s all it is used for.

    Forget the inflation and deflation – its all silly talk.

      Jul 21, 2012 21:02 PM

      SilverFox, about, what is the dollar backed by, the late great USA, ?? Its vast resources you said, that`s kept in check by the environmental lobby as off limits for all people, for all time, in memorial. And the powerful military machine that`s killing itself out at a record speed in suicide in record numbers according to Time magazine, because of endless wars with no end in sight. The carnage, for no good reason for being there in the 1st place. Why record numbers of people in the military support Ron Paul for President because war for war`s sake makes no sense at all to them in uniform. And finally to keep the dollar strong – blood for dollars that makes sense for you and all the nice little bankers out there in TV land. The US Banking Industry is about, what does exists out there, as an Industry right now here in America. Its(the banking industry) going stong with fresh money being pumped into it by the Fed and the taxpayers its raping every day in new taxes levied by the Fed with no oversight at all by the so-called leaders in Congress…..

    Jul 21, 2012 21:51 PM

    China, India and Russia buying/hoarding all the gold they can get their hands on.

    I don’t know what’s coming but it won’t be pretty for anyone holding pretty polymer notes that melt in the sun.

    Jul 22, 2012 22:04 AM

    Silver fox,not sure if you just arrived on earth or you missed what Nixon did to the US dollar in 1971.A dollar is a Federal Reserve note.
    Your Fed note has no backing ,whatsoever.It is a note that bankers promise to redeem it’s debts it has assisted in creating.
    US debt is 101.5% of US GDP.The Federal Reserve is now funding the majority of your US debt.
    The US is 16 Trillion dollars in debt and that is just the good news spin.
    With all the unfunded liabillites of the US attached to the US Federal Reserve note the US U.L. has risen to between $51T and $84T-depending on what you read.
    Every American household is $513k in debt -without accounting for the unfunded liabilities.With them we are talking up to $1.3 million per US household.

    The US is in so much trouble fiscally,this is amply evident in the amount of counties going under or facing imminent bankruptcy.
    Gold has now been declared an FDIC tier one asset.
    That means when the SHTF gold is now not sold off as it is not a liability against debt but an asset.It is now labelled as holding zero risk as a financial asset.
    Fort Knox has not been audited since the 50’s but fear not,Silver Fox as nobody on this board believes in the Fed,their reserve notes or your silly thesis.

    Central banks are hoarding gold the world over.

    The Federal Reserve is a control mechanism and your failure to recognise what it is means you have done zero research on this matter.
    Sad,really,as you have had 100 years and your Federal Reserve note has long lost it’s link to honest money and the founders of your Constitution’s desire to keep the US away from Banksters to retain independence and strength.
    The Federal Reserve Note is a fractional reserve banking mechanism that controls the US from ever achieving (financial) independence.
    Gold is a world wide asset that has given a 25% return since 2001.
    The Federal Reserve Note is the symbol of US slavery and nothing more.

      Jul 22, 2012 22:15 AM

      Enough said. Thank you. I will, though, make a comment on your last line. The FRN is not a symbol of US slavery. It is the Americans use (abuse) thereof that allows the FRN to become an “instrument” of slavery. You can’t abuse gold OR silver. It WON”T let you – by its very nature.
      All the best,

      Jul 22, 2012 22:45 AM

      So very true, Matt! So very true. great points!
      I think Silverfox suffers from “normalcy bias”. 😉

      Jul 22, 2012 22:23 PM

      Perhaps as pertinent a question is: Why does anyone bother with the dollar? If all those points you make are against the dollar, and make it seem like dog poop is more valuable, then what are the points that make the dollar valuable and important?

    Jul 22, 2012 22:47 AM

    Silver Fox,
    It is in American citizens best interests to ditch the Fed Reserve Note in it’s present form.
    Every one else in the world is doing it so it is about time for all Americans to see what it has done to your country and whose interests it has represented,
    Ron Paul is trying.One American hero stands to be counted.

    Jul 22, 2012 22:23 AM

    Rep. Louis T. McFadden (R. Pa.) rose from office boy to become cashier and then President of the First National Bank in Canton Ohio. For 12 years he served as Chairman of the Committee on Banking and Currency, making him one of the foremost financial authorities in America. He fought continuously for fiscal integrity and a return to constitutional government (Reference 1). The following are portions of Rep. McFadden’s speech, quoted from the Congressional Record, pages 12595-12603:


    The depredations and the iniquities of the Federal Reserve Board and the Federal Reserve banks acting together have cost this country ENOUGH MONEY TO PAY THE NATIONAL DEBT SEVERAL TIMES OVER.”

    About the Federal Reserve banks, Rep. McFadden said, “They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; the rich and predatory money lenders. This is an era of economic misery and for the reasons that caused that misery, the Federal Reserve Board and the Federal Reserve banks are fully liable.”

    Rep. McFadden continued, “Every effort has been made by the Federal Reserve Board to conceal its power but the truth is the Federal Reserve Board has USURPED THE GOVERNMENT OF THE UNITED STATES. IT CONTROLS EVERYTHING HERE AND IT CONTROLS ALL OUR FOREIGN RELATIONS. IT MAKES AND BREAKS GOVERNMENTS AT WILL.

    No man and no body of men is more entrenched in power than the arrogant credit monopoly which operates the Federal Reserve Board and the Federal Reserve banks. These evil-doers have robbed this country of more than enough money to pay the national debt. What the Government has permitted the Federal Reserve Board to steal from the people should now be restored to the people.”

      Jul 22, 2012 22:35 PM

      Thanks for bringing this to our attention, Matt!

      Big Al

    Jul 22, 2012 22:39 PM

    Big Al and all:
    Must watch VIDEO! For your EDIFICATION:

      Jul 22, 2012 22:33 PM

      Marc after watching that clip I thought:
      What would our GDP be if we had a balanced budget?
      BTW- It was a great presentation however I would have stayed with charts instead of piling on with the 991 clips. Stick with the finance and win that argument before illustrating where our path has and will bring us.

    Jul 22, 2012 22:57 PM

    The power of persuasion….if all the traders investors call for gold to break out…it will

    Jul 22, 2012 22:49 PM

    There has been quite the debate on the internet as to whether Bernanke will or won’t initiate QE3. If the dollar were to spike up to the 87/86 level over the next two weeks it would enter the zone that has triggered currency interventions over the last 4 years. A move into the danger zone would probably force Bernanke to fire the next shot in the ongoing currency war regardless of what level the S&P is at.

    Jul 22, 2012 22:16 PM

    One has to think that the Fed will do their best to stay quiet until after the elections are done?
    I listened to Ross Clark over at today and this is what he stated:

    Dollar headed for low 90’s level after this drop in the dollar-next year/year and a half time frame.

    Oil and commodities bottomed with this interim top in the dollar.

    I thought the metals would have more bouyancy out of May but it is a flat trading range.

    Support low 1500.Cash market is firm.It is the paper market causing panics.

    Pop to the upside is possible if we close above 1605-1610.

    Run to 1695-1735 -probably won’t run much higher than that.Not enough strength right now.

    If we are capable of rallying we can stay healthy in the gold market.If not there is a large possibility of a bigger break.

    That is the 1300 level on gold.50 month.

    We have to rally here now to support the chart.There is no break outs as of yet.

    July 12th is the low of the year cyclically for gold and the mining stocks.

    July has short lived rallies historically and then a retest.

    So,a rally and then a retest of 1605-1610.

    We need a seasonal rally.Then we can rally into the fall.

    If we break the 1600-1605 level look out.

    If we rally take money off the table.If we break 1600- 1605 protect yourself further.

      Jul 23, 2012 23:30 AM

      Thanks Matt,

      As I have said time and time again, we need all the information we can get!

      Big Al

    Jul 23, 2012 23:30 AM

    Al here is a link showing another chart show population growth from 1950-2050.

    What we do not know is the change of the average of the population each year.

    Jul 23, 2012 23:40 AM

    Forgot to put in age in the sentence What do not know in the change of the average age of the population, going up or down or remains the same. Sorry.