Weekend Show – Sat 13 Jul, 2013

Little politics and more on hard assets

Hour 1 : 

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Hour 2 : 

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As always a little politics but much more on hard assets this week.

Hour 1:

  • Segment 1 : Al opens the Show discussing societal issues with Peter Grandich.
  • Segment 2 : John Kaiser discusses the markets with Big Al and Cory.
  • Segment 3 and Segment 4 :  A great round tables discussion featuring Rick Ackerman, Marshall Berol and Doc (aka Richard Postma).

Hour 2 :

  • Segment 5 : Sean Hyman, Editor of the Ultimate Wealth Report, discusses the markets.
  • Segment 6 : Gary Cope of Orex Minerals discusses the markets from an industry perspective.
  • Segment 7 : Well known author Nick Barisheff of $10,000 Dollar Gold discusses gold.
  • Segment 8 : Eric Coffin of HRA Advisories wraps up the Show discussing the junior resource markets.

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Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

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Featuring:
Al KorelinCory FleckPeter GrandichJohn KaiserRick AckermanMarshall Berol
Richard PostmaSean HymanGary CopeNick BarisheffEric Coffin
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Comments:
  1. On July 13, 2013 at 4:23 am,
    Bobby says:

    Puplava followers, do we take JP’s turnaround as bullish or bearish?

    • On July 13, 2013 at 2:07 pm,
      JERRY the Long..................O^OTB says:

      bobby….did you have to pay for Puplava’s advice,,,or was he giving it away,,I have not listened to him since, he changed his format…..
      But, I would not trust anything JP,had to say about anything……….

      • On July 13, 2013 at 6:59 pm,
        Big Al says:

        Why is that Jerry? I don’t know the guy.

        • On July 13, 2013 at 7:13 pm,
          JERRY the Long..................O^OTB says:

          Well, you see Al….starting in 05 06,,I use to listen to everyone ,,Including to James Puplava…and I mean every SAT MORNING…..I found some of the info. wishy washy…. Based upon what I learned in business and college, and the markets by experience…BUT, I continued to listen, just in case I was missing something, and as you say you must listen to everyone,,,except, when you know ,that the information that you are receiving is contrary to what one may have experienced first hand……
          Then he changed his format,,,with charging for info. from some so called experts,which I found no need to be charged for info. I was already getting at no charge, and quite frankly, I felt better info, from more knowledgeable people.
          But, If you read Clay’s statement below, it might add more to my summary.

        • On July 14, 2013 at 5:45 am,
          Bobby says:
    • On July 13, 2013 at 4:43 pm,
      clay says:

      Bobby: I am in complete agreement with JERRY the Long, Don’t trust anything JP says. Understand this, Puplava works for dollar money, he might not always like it but that’s what he ends up doing. Perhaps someday he will awaken and realize that working for the Man is working for the Man and his lot in life will always be what the Man give him in return, never what he decides by himself. Jim might and probably is a descent guy, but greed for money and fame will always co-opt personal fundamentals. Therefor Jim’s faith is weak and he preaches for the donation box and not what he says.

      Common flaw among most people myself included, but then I don’t give financial advice to the public and my sins are only personal infractions.

      • On July 13, 2013 at 6:06 pm,
        JERRY the Long..................O^OTB says:

        Clay……thanks for the agreement……..glad I am not alone………..

        • On July 14, 2013 at 4:45 am,
          Bobby says:

          Gents, thanks for your commentary, I am still forming my opinions. BTW Jerry his weekend and Monday shows are free, weekday interviews with authors and experts carry a fee of about .50 each with an annual subscription.

          • On July 14, 2013 at 9:11 am,
            Big Al says:

            It is a great business plan, but not for me.

            More on that later.

          • On July 14, 2013 at 1:19 pm,
            JERRY the Long..................O^OTB says:

            bobby,,,,,how is everything,,,,,thanks for the reply….,

      • On February 3, 2014 at 8:06 pm,
        Pritesh says:

        So excited I found this article as it made things much qurckei!

  2. On July 13, 2013 at 5:21 am,
    Bobby says:

    Seg 2: if we have reached peak gold as some believe the high grade deposits that john speaks of may be very difficult to find. I also believe that takeovers of juniors at current levels, are not beneficial to shareholders. Al’s call is quite bold.

    • On July 13, 2013 at 8:00 am,
      Big Al says:

      PMA! (Positive mental attitude)

      Have a great weekend, Bobby!

      Big Al

    • On July 13, 2013 at 9:20 am,
      benb says:

      Alamos gold just bought Esperanza.

      • On July 13, 2013 at 12:12 pm,
        CFS says:

        I think this stinks for long-time shareholders of Esperanza, since it is a cash buy-out that locks in a long-term loss.
        Good for AGI, since I think they got a bargain.

        Time to look at the BoD of Esperanza and NEVER touch a company they try to develop.
        Let me also look at how many shares they gave themselves…..

        • On July 13, 2013 at 12:24 pm,
          CFS says:

          Interesting. Daniel O’Flaherty of Esperanza bought over 270,000 shares in the company recently, all below AGI’s purchase price of $0.85.
          What do you say to those shareholders you had that bought shares between $0.85 and over $4.00 in the last couple of years. I hope you get charged with use of insider knowledge and do time like Martha Stewart!

          DANIEL O’FLAHERTY, a name that will go down in my Infamy Book.

          • On July 13, 2013 at 6:39 pm,
            Big Al says:

            If what you say is correct, I second that!

        • On July 13, 2013 at 6:34 pm,
          Big Al says:

          Please do cfs and let uf know.

          Please

          • On July 13, 2013 at 7:39 pm,
            CFS says:

            I trust my answer was sufficient. If not let me know

          • On July 13, 2013 at 10:03 pm,
            Big Al says:

            No, it was.

            Do you have further information on other directors?

          • On July 14, 2013 at 8:51 am,
            CFS says:

            There were minor purchases by the rest of the BoD of EPZ.V, but nothing large. (Could have been just normal purchasing.) O’Flaherty was the only one that stood out.
            Pity Bob Quartermain got so involved with Pretium, because at one time I think he was on the board or advising Esperanza.

        • On July 14, 2013 at 8:46 am,
          Bobby says:

          Reminds me of the mine finders deal, this is the near term future IMO.

      • On July 13, 2013 at 6:07 pm,
        Big Al says:

        Thanks benb. Didn’t know that.

    • On July 13, 2013 at 4:34 pm,
      benb says:

      Anytime I have had a company I owned shares in be bought or merged it cost me money.

  3. On July 13, 2013 at 6:04 am,
    jane says:

    Al, is there anything that you can do about Doc’s audio?
    His TA is most appreciative, but quite frankly he sounds like he’s
    gargling nails, very painful to listen to.

    • On July 13, 2013 at 8:00 am,
      Big Al says:

      I agree with you Jane.

      All he has is a cellphone and he is in Michigan.

      I will talk with him about it.

      Best to you,

      Big Al

    • On July 14, 2013 at 2:33 am,
      Bird Man says:

      I will second that, Jane. Doc is one of the guys I love to listen to most but lately the sound is really difficult to hear. Ricks voice on the other hand comes through beautifully. Not sure what he is doing differently. He actually sounds like he is right in your living room.

      Segent 4 Al……I could not concentrate on it with all the paper shuffling in the background.

      • On July 14, 2013 at 7:39 am,
        Jody D says:

        BirdMan,
        I agree with you on all the distracting background noise. Sounds like a lot of pen clicking (?) mixed with other sounds.
        Thanks, Jody D

        • On July 14, 2013 at 9:36 am,
          Big Al says:

          You are soundi g likfe Sarah. Your point id well taken.

          Thanks, Jody

      • On July 14, 2013 at 9:10 am,
        Big Al says:

        Sorry, I will suggest that Doc use skype.

        Thanks for the constructive comments.

        • On July 14, 2013 at 10:29 am,
          Bird Man says:

          Big fan of the Doc, Al. I hope he does not mind.

  4. On July 13, 2013 at 6:20 am,
    Bentnail says:

    Again, I must jump in and say that even though I am the most amateur trader on this board (by a mile), I do understand the world around us better than the average bear. That said, my gut is telling me that they (the powers that be) are going to dump gold and then make everyone trade it in for pennies on the dollar once they enforce their bogus bail-in (to help us pay off the debt) … After all, we are all in this together (blah blah blah) … Once they have done so … THEN they can Llow gold to hit 10,000 an ounce. That is my honest gut feeling on this one … Meanwhile they have their men waving the carrot in front of our noses … 1800 gold … 1700 gold (gonna run back up) … 1600 gold … 1500 gold (gonna run back up) … 1400 gold … 1300 gold (gonna run back up) … 1200 gold … 1100 gold (gonna run back up) … 1000 gold … 900 gold (gonna run back up) … 800 gold … 700 gold (this is a normal correction … Gonna run back up) … 600 gold … 500 gold (dirt cheap … Back the truck up … Gonna run back up) … 400 dollar gold … 300 dollar gold (too late … Junior miners are out of business or bought out for dirt cheap … American economy is out of business … Sell us your gold at these low prices or we are all doomed … Prison sentence if you refuse) … Wham!!! Hook, line, sinker!!! Got the cash (bail in) and the gold (all for virtually nothing) … Reminds me of how Eskimos coat a knife in blood and as the blood freezes, keep applying more blood (like a frozen Popsicle) … They place it in the snow and the wolf comes along to lick the blood … Before long, the wolf is slicing his own tongue on he blade but isn’t even aware of it … He tastes blood and that is all he cares about … In no time at all he has bled out and is dead. The bait was the 1900 dollar run with the promise of 10,000 bucks an ounce … And now they are just watching the masses bleed out as the price slowly drops bit by bit by bit … Very gradually … With the same men coming in with the same lines … This is a bottom … This may not be the bottom … Could see it drop another 100 for a low … It is all about confusion and gradual declines as the wolves continue to lick the bait … And before we know it they will all be dead in the water … At least their money will be.

    That is my gut feeling as I watch this gong show continue. Beware!!!

    • On July 13, 2013 at 7:58 am,
      Big Al says:

      I personally refuse to give up Bentnail.

      Your observations are certainly interesting, but as long as I am able to breath I will not give up with an attitude of resolve for the worst to happen.

      I never have and I never will as long as God keeps me here.

      Best,

      Big Al

      • On July 13, 2013 at 3:06 pm,
        Bentnail says:

        AL:

        Trust me … I am not trying to be negative (I hate negativity) but my spidey senses began tingling when I first heard charlatans like Lindsey Williams pitch his far-fetched story on the Alex jones show … He spoke about how he had insider friends who he could not name because they are revealing the PLAN to him (blah blah blah). Rather pathetic that most people don’t think things through … If Lindsey is trying to keep their alleged names from being found out by their handlers, then simple logic tells us that he should not be writing emails to them, talking on the phone with them, etc. Pathetic!!! These men can spill the beans about the powers that be … But the powers that be cannot even tap Lindsey’s phone or read his email … Heaven knows they are reading this blog as we speak but they cannot figure out who the moles are … HA HA HA … and people actually believe that nonsense … I say that because Lindsey is pushing gold like there is no tomorrow … Something does not add up and the entire BUY GOLD rant from the bogus patriot crowd stinks to high heaven in my opinion.

        • On July 13, 2013 at 7:15 pm,
          Big Al says:

          I have never ever listened to those guys!

    • On July 13, 2013 at 9:43 am,
      benb says:

      You might be right Bentnail. And everyone you hear on the net/radio/tv is being paid by the industry one way or another so their not going to tell you its a lousey investment. Altho, they could tell you to short, but they dont seem to.

      I like Mr Berrol $10,000 gold. Mike Maloney has been saying the same thing for some time now, just math as Mr Berol says. The explanation (Mike Maloney) can be found on u tube. Real easy to understand.

      I agree with Mr Berol, $50,000 gold should be somthing only whispered after dark by campfires. Attracting the undead would be the least of our worries.

      • On July 13, 2013 at 12:28 pm,
        Bird Man says:

        Just like when all the media were pumping real estate like crazy as the market imploded because the big R/E outfits were the biggest advertisers and no newsman worth his salt would go against the guys paying the salaries. But the weird part is that there is no big advertisers selling the message to NOT buy gold. I mean imagine a company like Ford making a pitch to NOT buy it’s cars. Money usually motivates the media to support a sponsors position. How do we explain anti-positions though that get widespread support though? The answer is to be found in who are the advertisers selling competing products of course. These days banks are bringing some of the biggest ad contracts. Who else has the clout to diss gold based on the power of ad revenues? And there is your answer to why the media has gone against gold. It’s all just whispers and small talk over a few beer and the signing of an advertising contract and poof…the deal is done. Bye Bye gold.

        • On July 13, 2013 at 6:52 pm,
          Big Al says:

          Look for an editorial on this maybe as early as tomorrow, Bird.

          • On July 14, 2013 at 5:23 am,
            Bird Man says:

            You are one sharp tack, Al. I can tell you have been around and know how its done.

          • On July 14, 2013 at 9:13 am,
            Big Al says:

            Trying hard Bird.

            More on why later.

      • On July 13, 2013 at 3:21 pm,
        Bentnail says:

        Mike Maloney looks extremely shady in my opinion … Not to mention, he is tied in with the Rich Dad bloke … I watched a program on television exposing his shady conferences … He became very irritated when he discovered it was a television sting. They both seem very shady to me … Which is another reason I am extremely cautious about the BUY GOLD cry.

        • On July 13, 2013 at 4:45 pm,
          benb says:

          Suspicion not so crazy maybe. I dont know all whats going on and only guess as most other people. The “guru” was saying buy buy buy (silver) then when it dropped from $50 to $30? he started saying he sold at about $50 and told his subscribers to sell too.
          Implying if you were a subscriber you would have got this “inside” info. No big deal but it does cause suspicion.
          The math thing and gold over time looks logical to me tho and the world does need silver, so unless it is all a bunch of lies about how much is used and above ground stock and how much is mined. It should be increaseing. As they say, any day now, here we go. lol.

        • On July 13, 2013 at 7:17 pm,
          Big Al says:

          You have to do what makes sense to you after you study the whole story from all sides!

      • On July 13, 2013 at 6:09 pm,
        Big Al says:

        Do you mean Marashall or do you mean Nick?

    • On July 13, 2013 at 2:01 pm,
      JERRY the Long..................O^OTB says:

      bentnail, …thanks for the post,,,always like to hear from you…..
      I am going to jump in here….and say…..GUT VS. LOGIC….
      Gut feelings , are always a good sign that something is wrong, and the inter feelings do warn one of danger….Danger is present, there is not doubt about that.,,and caution is therefore needed…..
      If you feel that your gut is correct, then I would say go with it…..Now , let us consider the time period of which you speak…..SHORT, MED. OR LONG.
      Each person, has to consider the matter, and what gold should do in their portfolio.
      Now, lets consider LOGIC,,,
      1.History…..5 thousand years…..
      2.Cycles……..usually 28 years
      3.Mania……..when 99% know about
      4.Markets…..Indian, China, etc.
      5.Currencey…..to trade,dollar,yuan,peso,etc.
      6.Inflation……fiat currency
      7.Supply and demand……..
      My thoughts are based on LONG TERM ,,,not trading……I think I am going to stay with my gut feelings and Try to use Logic and stay LONG TERM…………

      • On July 13, 2013 at 2:05 pm,
        JERRY the Long..................O^OTB says:

        typo….,,,Currencey……..currency………

        • On July 13, 2013 at 2:14 pm,
          Dennis M. O'Neil says:

          Buy the dips!!!!!!!!!!
          Dollar cost average you way to wherever it takes us.
          I look at it this way….if we are wrong on the metals then it does not matter because private property will not exist!

          • On July 13, 2013 at 2:32 pm,
            Marc says:

            Esquire….BINGO!…bingo!

          • On July 13, 2013 at 7:00 pm,
            Big Al says:

            Good point Dennis M!

      • On July 13, 2013 at 3:39 pm,
        Bentnail says:

        JERRY:

        Thanks for the kind words. I have to answer by saying that all you said is correct and would hold true if we were not in a digital world. Ban gold and you cannot trade the little you have in at the banks or coin dealer after the fact … and a black market in gold seems a tad bit off in my opinion (if that was to ever happen) … Joe blow with one pound of rice old not care if gold is one billion dollars an ounce on the black market … He could sell that one pound of rice for every ounce of gold in your pocket if you were hungry. Read up on agenda 21 (if you have yet to do so) … It speaks about the intentional collapse of the economy of first world nations (UN agenda). The logical question is … How will they tank our economy? Also, if they are trying to get rid of our wealth, then why on earth would a person like me figure out that they need to go after the real currency first so people will not be able to maintain their wealth … And THEN go after the bogus fiat currency (clean up Shop) … And yet the cannot figure this out for themselves in their think tanks. It does not make sense to go after the bogus paper currency first (allowing folks to rush into gold to preserve their wealth) when they can get the gold first … Force people into cash … And then move in for the kill. That would be my line of attack if I were a sinister globalist (and the fact that men like Lindsey Williams are frantically pushing gold has me thinking that not everything is as it seems>.

        • On July 13, 2013 at 4:03 pm,
          JERRY the Long..................O^OTB says:

          Bentnail…………How ya doing…….Think about this one………
          They will not be able to ban gold,,,,,why?…..Indians, Chineses and the AMERICAN WOMAN…she is not going to give up her GOLD JEWELS………..
          Never under estimate a woman scorned….,and if Uncle thinks he is going to get those wedding bands off ,,,he is going to have a hell of a time….

          Worldwide….good luck banning what the Chinese are accumulating gold.
          BLACKMARKET…..The Chinese will be more than glad to supply the gold in the Black Market,,,like we supplied the opium in the OPIUM WARS…..

          .The American people will give them EVIL FOR EVIL……..,,,ever seen all those Pro sports players with all the tattoos….I think they have a lot of money and Like GOLD EVERYTHING……plus, they like a good dog fight….
          Do you think you will be able to get the Gold tooth off MIKE TYSON……..

        • On July 13, 2013 at 7:30 pm,
          Big Al says:

          Interesting point Bentnail

        • On July 14, 2013 at 6:06 am,
          Bird Man says:

          Another great comment Bentnail.

          “Force people into cash” should read “encourage people into equities” for it to make more sense though. That is part of the process by which vast amounts of wealth get transferred between parties through the popular narrative of a stock market wealth effect.

          The mark (pension funds and those who contribute) have to believe they have been left behind in a market that is rising (this has now happened). They must also have faith that it will mysteriously keep rising too for the idea to be credible (Mr Bernanke’s recent confirmation of unlimited QE’s has served this purpose).

          Last, they must have financial need and be seeking both stock profit and dividend growth at a time when little is available to support their financial goals (exactly the case with the billions now sitting in cash and bonds held by pensioners and the fearful).

          As they shift money out of cash accounts, savings and bonds in search of that yield and growth they will power stocks much higher, possibly even sending prices parabolic. The narrative is complete when the public believes in the myth of recovery and finally steps out onto the ledge to indulge in the incredible surge in companies that has gone on for four years but which they missed for the most part.

          This will be all the confirmation that is necessary to draw in any laggards who have been left out of the stock market casino and then….POW….the rug gets pulled out from under them leaving most of the money in the hands of those who strategically went short.

          Sorry to have to say it is about that simple. And mean.

          We have a setup coming that will wipe out a tremendous amount of wealth held by those nearing retirement or already in it. That money represents the largest repository of savings in the country that remains untouched and it is ripe for the picking.

          I suspect the stock market swoon that will follow is going to be epic and will literally wipe-out the financial lifeblood of many folks leaving them utterly dependent on government handouts for the remainder of their lives.

          Same way it ended in 1929 and at the conclusion of other major equity busts.

          So what I am really saying is that it is my belief that markets could run substantially higher before hitting the wall. The pension funds must be roped in for it all to have the desired impact and offer the necessary payoff for the billions invested pumping up prices in the first place.

          Risk and reward. Somebody has to pay. Did you not all realize it was going to be your parents? Kiss your inheritance goodbye. The boys on Wall street are going to get it before anybody opens the will of the deceased to discover the damn thing has as much value as any other piece of worthless paper.

          • On July 14, 2013 at 9:25 am,
            Big Al says:

            Interesting commentary, thanks.

          • On July 14, 2013 at 10:33 am,
            Bird Man says:

            Could be crazy as bat-shit too but the mood hit me.

          • On July 14, 2013 at 4:01 pm,
            Big Al says:

            Regarding what, Bird?

          • On July 14, 2013 at 3:04 pm,
            Bentnail says:

            BIRD MAN:

            That makes a LOT of sense to me … thank you!!!

          • On July 15, 2013 at 2:25 am,
            Bird Man says:

            What I mean to say Al is that commentary I left is just personal opinion with no basis of evidence. Nobody has told me outright they are going to sink pensioners and pocket the gains. I merely put together an idea based on my understanding of greed and opportunism and knowledge of how simplistically some of the players operate.

            Everyone wants to believe there is a grand conspiracy involved at every turn. I don’t agree. Normal greed is operational all the time and easy pickings are never overlooked. It is the collective nature of the trading world and how they view money and opportunity that dictates their actions.

            Everyone knows that US pensions and the many funds feeding into the market are the ripest plum on the planet right now. It is just inevitable in my mind that they would be the strategic target for future profit and so efforts to pump stocks and try to attract money out of bonds plays well into the scenario when everybody and his cat knows we are at generational highs in stock markets and that this cannot ultimately be sustained.

            That is an easy conclusion for me to arrive at and if there were ever a time to be wary it is now, exactly at the moment margin is at all time highs, earnings guidance is falling and retail traders are jumping back into the market. Good grief, it is a near perfect setup for a short if you could divine when the wheels will come off the wagon.

            I cannot time the top of course but I will tell you this….I am not about to become roadkill in the market declines that I believe are inevitable as early as this very year even if it costs me 10 or 20% in lost opportunity to the upside. I see the risk as very high and do not doubt that we are now entering a credit tightening phase that will have deep implications for equity markets.

            When is the question. Few doubt we are overbought though and overdue to correct.

            I also continue to have deep reservations about sustainability of Chinese markets. Perhaps our black swan will emanate from Asian shores as is often the case. The reasons for my doubt are quite straightforward. Let me explain:

            The basic facts in China now are threefold. There is an ongoing property bubble that is at epic proportions by most global standards (although it is finally cooling). Credit conditions are at extremes to leverage after having multiplied many fold since 2008 and there are big cracks now appearing in export and trade markets which form the backbone of national income. Worries over electrical consumption which is an indicator of industrial health are legitimate despite contrary records from the authorities that all is well.

            This is happening at a time when Japanese inflation targets are robbing Chinese manufacturers as the Yen goes through a stunning devaluation and further pressures are applied as the dollar strengthens and the Yuan peg is put to the test of fire.

            Meanwhile, European imports of Chinese production have been pressured down due to outright depression conditions in some Eurozone countries and the recent IMF downgrades to global economic growth paint a disturbing picture that does not give one confidence a recovery is in the offing.

            The US itself is already overdue for a new recession simply based on longstanding patterns that are not likely to be broken simply as a result of QE and intervention. So in aggregate I cannot imagine a scenario that is beneficial to Chinese expansion anytime soon. Indeed GDP projections for that country continue to fall and most recently we have heard that the Governments next target level is an optimistic 7.5% while privately we are hearing 6.5% is a hope and a prayer.

            So housing prices and other property there are about to face their Waterloo.

            In that context the financial system itself is about to be tested. Everything comes down to the value of the underlying property assets and the collateral they represent in supporting the excessive lending we have seen to date.

            The cost of housing has of course gone far past what ordinary people can afford.

            Price to income ratios in the large cities (which represent the largest proportion of property values) have gone to nearly 30 in some cases. That is to say a home costs on average up to 30 times annual salaries versus a historical mean of 2.6 in the US.

            This represents a stunning disconnect between fundamentals and reality and it is utterly unsustainable at every level. Investors must appreciate this one single issue above all others to grasp the significance of what follows.

            In fairness though, the average ratio for the country recently stood at a much tamer 8% although it is notable that housing construction alone accounted for over 15% of the GDP print (exceptional) and it is in decline as home prices soften and a huge surplus of empty property overhangs the market. It is investment grade of course and held by speculators as a form of wealth (sarcasm in case you did not catch it).

            So why is all this a problem?

            Well it is this. A great deal of all the lending that has taken place there is based upon the collateralization of lands and properties that are themselves at nose bleed levels. Take away the asset value and there is little backing much of the financial system.

            This is especially the case with the so-called Shadow Banking sector which has over extended itself on the back of the meteoric rise in property prices and the bubble that followed.

            Lest any of the China bulls rush in to argue that the Chinese financial system is safe due to the vast holdings of foreign exchange, let me cut them off at the pass and remind them that the outright selling of all treasuries to support a property bubble collapse would in itself wreak havoc on the economy and seriously damage the currency.

            Nothing is ever so simple. Debt and credit are the same there as they are here though and lets not ever forget that. China does not operate in some special economic vacuum where it is invincible at all times due to export incomes and FX. The same rules of the game apply and what we are now seeing is that asset values as they decline are threatening the basis of the Chinese Ponzi credit nightmare that lies ahead.

            As we now know, Chinese property prices are cooling rapidly. The outcome is that this presents a genuine risk to lenders who may never recover money loaned for all the usual reasons. Non-performing loans there are already unprecedented and this is BEFORE any real trouble has materialized. The Chinese of course are just like us. When property rose, owners leveraged their assets heavily to buy even more property, to expand business’s and to convert assets to cash that they might then spirit out of the country or invest overseas.

            At the very heart of the dilemma though is the collateral supporting the system.

            The principle is painfully simple. Banks will lend on a percentage based on estimated valuations of the underlying asset. But China is in a property bubble! Has it not occurred to the China bulls there is a very big hole in the canoe over there on that basis alone and that as assets decline the banking sector, industry and employment are all at immediate risk?

            What more do we need to know other than that all bubbles eventually burst and that as an outcome the asset itself will decline in value back to fundamental valuations. This is not fundamentally different than what happened in the US after the housing bubble burst there. In the end everyone is left scratching their heads and wondering where the money went because most of them have no idea to begin with that most asset values are essentially a market fiction built on how others bid up prices. They always forget that buyers can also bid down thus wiping out gains that were in themselves artificial.

            As usual In China’s case we do not know what the fundamental values are though because their history of private property ownership has been so brief. We can infer based on global averages what it might be though. Let me assure everyone that number is not anywhere near to 30:1 income to price.

            So in short, I have little confidence that China can achieve a soft landing. This is problematic to everyone as China is not a pipsqueak nation like Greece. It is no less than the second largest economy on earth. A credit implosion there cannot possibly be contained and we will see repercussions everywhere as markets are flooded with cheap goods as Asian business’s fail and a reconciliation of past lending excess in conjunction with vast state subsidies is finally brought home to roost.

            That is just one of the reasons I have doubts about the sustainability of current equity markets in North America. I have many more but I think this is quite enough for one days writing.

          • On July 15, 2013 at 6:27 am,
            Bird Man says:

            And here is a very odd coincidence.

            No sooner had I written and posted the above comments on the problems I foresee with China than a set of similar remarks emanate from Mish Shedlock via Michael Petis who is living in China.

            I had not read his remarks prior and the thoughts I expressed are my own which I concluded through my own study of the region. I was readily impressed with how closely we see the situation developing along similar risk lines though.

            Michael, interestingly enough, goes into depth about why forced urbanization is not a valid solution to troubles over there and also by coincidence this is an area of serious interest to me. I might post commentary on exactly that topic soon with respect to my own experiences living in a developing nation. I do agree with him but for different reasons. Until later…..

            China Urbanization Growth Fallacy ~~ Michael Petis via Mish Shedlock
            http://globaleconomicanalysis.blogspot.com/2013/07/china-urbanization-growth-fallacy.html

      • On July 13, 2013 at 6:58 pm,
        Big Al says:

        I concur Jerry!

      • On February 1, 2014 at 5:04 pm,
        Jim says:

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    • On July 13, 2013 at 2:30 pm,
      Marc says:

      Very interesting comments, Bentnail. Doesnt concern me, though. gold always prevails….always..especially when 2.5 billion people have thousands of years of history with it…what does the WEST know…obviously nothing…..they havent learned…probably never will…..

      • On July 13, 2013 at 2:34 pm,
        Marc says:

        OIL IS TO TEXAS WHAT GOLD IS TO THE FAR EAST..think about it….then think about who is “rising” and who is “falling……..follow the gold and “whoever has the gold makes the rules”…….the West cant stop it and neither can you.

        • On July 13, 2013 at 2:37 pm,
          Marc says:

          Finally,
          Bentnail…..I didnt mean “you” personally……I just meant “you”(ptb) – a indicator of a large trend that is rolling down hill with a full head of steam.
          All the best,
          Marc

        • On July 13, 2013 at 3:43 pm,
          Bentnail says:

          MARC:

          They could nationalize the oil fields, gold mines, etc. in the blink of an eye … Then what? Everything will belong to the state … Or what if they simply say you are a potential enemy of the state for owning gold … Then what? Where will you trade your gold in other than the local prison? They have far more tricks up their sleeves then most people give them credit for … The precious metals cart could be tipped over in one fell swoop … Or it is possible they dismantle it one brick at a time … One thing is certain though … God is in control … Keep your eyes focused on Him.

          • On July 13, 2013 at 4:12 pm,
            JERRY the Long..................O^OTB says:

            DITTO ON THE …..”God is in control”………….but, remember it is the Devil’s playground, for awhile…..

          • On July 13, 2013 at 9:11 pm,
            Big Al says:

            Well of course.

            But also do the homework that God gave you the ability to do!

        • On July 13, 2013 at 7:02 pm,
          Big Al says:

          And look at the independanc and strength of Texas. No sarcasim intended.

      • On July 13, 2013 at 3:28 pm,
        Bentnail says:

        MARC:

        Gold may always prevail in a non-digital / media-driven economy … But when a handful of people have the clout to ban gold overnight by claiming bad guys own gold … or forcing all people to trade theirs in (or go to prison) it is another story. They could ban gold in a blink and say it is to pay off the debt and you will not be able to trade one ounce of your stash in at the bank after the fact … Where would you trade it in if the banks and coin shops won’t take it? At your local flea market? Seriously … If they ban it … Or force you to trade it in … You will not be trading it in anywhere without being met by the authorities and their nice metal cuffs.

        • On July 13, 2013 at 5:04 pm,
          Marc says:

          Points taken…Bentnail..points taken…..sure I have thought about that….they can have my gold, but NOT my family…and especially NOT my faith!

        • On July 13, 2013 at 7:19 pm,
          Big Al says:

          What about private transactions?

          • On July 14, 2013 at 6:10 am,
            Bentnail says:

            AL:

            Great question … I am merely firing out my opinion here (nothing more, nothing less), but if cash is worthless … And gold is toast (that is a big IF) … then I would assume that it will be every man for himself (I suspect there would be many private transactions … but what people would use as a gauge to determine what is worth what is beyond my IQ level … 81 on a good day.

          • On July 14, 2013 at 9:30 am,
            Big Al says:

            Beats my 75!

          • On July 14, 2013 at 3:07 pm,
            Bentnail says:

            AL:

            HA HA HA … that was funny … your great humor has started my day off on a good note!!!

  5. On July 13, 2013 at 6:26 am,
    Frank Drummer says:

    Al

    You and Peter are a great duo. Maybe you two can do a segment every week.

    • On July 13, 2013 at 7:55 am,
      Big Al says:

      Thanks Frank,

      I am way ahead of you in that I have Peter on the Show every week. I have a lot of respect for him and his intellect and I consider him to be a good friend.

      Have a great weekend,

      Big Al

      • On July 14, 2013 at 1:51 am,
        Bird Man says:

        Al that was a brilliant interview. Peter’s line “There are people who work for a living and people who vote for a living” is most memorable. I think you guys have keyed in on the social conflict of the future where an entitlement society will be divided along lines of power vested in the those who promote the continuation of handouts (pensioners vote, young people don’t) and those who are perhaps feeling punished by the taxing power of the system backed by voting blocks who care more for themselves than their own children will come to a head one day.

        • On July 14, 2013 at 2:02 am,
          Bird Man says:

          In other words, when the kids wake up and get themselves down to the polling stations the changes will come. Majority rules and politicians do listen to the trends. The apathy amongst youth is not helpful though in bringing about change as they themselves are victims and users of the entitlements. But those rights are not cast in stone. It is safe to say that the day is coming when something will get cut back on. We don’t know exactly what that will be but odds are it will be the choice that upsets the fewest people. For now, pensions are almost untouchable although I personally am in favour of changes to make the program sustainable. Higher ages before benefits kick in, no pension benefits for the wealthy whatsoever, reduced benefits for average recipients and a variety of other changes are virtually guaranteed over time no matter how displeasing it is to those affected. This current system is not going to work as predicted. Two things are therefore coming. Either the system will break down altogether or there will be serious changes to compensate for the past models that are no longer valid. There is not a middle ground.

  6. On July 13, 2013 at 6:28 am,
    bill says:

    I wholehearted agree that people should work, but even if you only accept one half of John William’s Shadow Stat’s statistics of employment, you will find that the jobs are simply not there; at least in not in Michigan.

    • On July 13, 2013 at 7:54 am,
      Big Al says:

      You know Bill, I am not really talking about “work” itself my concerns are about the attitudes.

      Have a great weekend,

      Big Al

  7. On July 13, 2013 at 7:22 am,
    Andrew de Berry (Rev) says:

    Thanks as always Al and Cory.

    Ref Segment 8 and beyond Colorado and Mexico has anyone out there got an opinion on Kyrgz’s Chaarat Gold Holdings? It’s taken some major hits from when I first bought it, but with its re-fi package still looks exciting longterm.

    http://www.chaarat.com/

  8. On July 13, 2013 at 7:53 am,
    Big Al says:

    Don’t know the company Reverend, but will look into it.

    Best and have a great weekend,

    Big Al

  9. On July 13, 2013 at 7:57 am,
    Dennis M. O'Neil says:

    BOISTEROUIS EVIL

    When I resigned myself to look in on the George Zimmerman trial I could not help but think that he was today a real life Tom Robinson. Both George Zimmerman and Tom Robinson placed themselves in situations where evil was allowed to condemn.

    In “To Kill a Mockingbird” Scout noticed how soon after Tom Robinson’s death the town forgot he ever lived except an editorial in the “The Maycomb Tribune”. As she reads the editorial, she comments that the editor Mr. Underwood referring to Tom Robinson, “…simply figured it was a sin to kill cripples, be they standing, sitting, or escaping. He likened Tom’s death to the senseless slaughter of songbirds by hunters and children…”
    When pondering the editorial Scout thinks “How could this be so, I wondered, as I read Mr. Underwood’s editorial. Senseless killing—Tom had been given due process of law to the day of his death; he had been tried openly and convicted by twelve good men and true; my father had fought for him all the way. Then Mr. Underwood’s meaning became clear: Atticus had used every tool available to free men to save Tom Robinson, but in the secret courts of men’s hearts Atticus had no case. Tom was a dead man the minute Mayella Ewell opened her mouth and screamed.”

    In “To Kill a Mockingbird” Mr. Ewell weaved a fable to condemn Tom Robinson and protect the reputation of his daughter/family. The community led by the prosecutor used the accusations to make larger more broad points than the circumstance deserved. The “issue” became a defense of society’s sins.

    When thinking about the recent IRS…NSA…..reporters’ wiretapping I also started to think of Justice Louis Brandeis’s famous dissent in the 1928 bootlegger wiretapping case Olmstead v. United States when he wrote:
    “If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. To declare that in the administration of the criminal law the end justifies the means—to declare that the government may commit crimes in order to secure the conviction of a private criminal—would bring terrible retribution. Against that pernicious doctrine this court should resolutely set its face.”

    It was as if Justice Brandeis was speaking directly to the prosecutors of both Tom Robinson and George Zimmerman. In law school one of the first things you learn is justice is not a result. Justice is the opportunity to be heard. Often people do not listen to the truth instead they listen to the loudest most obnoxious voice. When you need volume to make a point the point is often tainted. I hope the jury listened for the quiet truth. More importantly I hope those loud voices trying to churn the worst out of many are seen for what they certainly are…… boisterous evil.

    • On July 13, 2013 at 8:04 am,
      Big Al says:

      As usual, a great comment Dennis M!

      Best to you,

      Big Al

      • On July 13, 2013 at 9:54 am,
        Dennis M. O'Neil says:

        Al,
        Sometimes things turn on themselves 360 degrees.
        In the 1925 Scopes Trial…John Scopes, was accused of violating Tennessee’s Butler Act, which made it unlawful to teach human evolution in any state-funded school.
        Today even in Dayton Tennessee evolution is taught to the exclusion of teaching anything else. Apparently evolution’s case is so weak it cannot tolerate competing ideas.
        So we have gone from criminalizing the teaching the theory of evolution to teaching it to the exclusion of competing theories.

        Also in 1925 Roy Olmstead a former cop was arrested for doing an illegal act….. that a decade before was legal….that a decade later would again be legal….and which is still legal today….selling alcohol. And to think the absurdity that when Roy was arrested with prescription (and often without)you could buy cocaine & heroin at the corner 5 and dime……and 5 cents to a dime is what you paid for an ample supply…..also at the time of Mr. Olmstead’s arrest although infinitesimal Coca Cola was being served up with trace amounts of cocaine.
        It is certain that powerful and corrupt people make money when things are illegal.
        Because most laws are enacted to be strategically and selectively enforced.

        • On July 13, 2013 at 6:13 pm,
          Big Al says:

          Interesting!

      • On July 14, 2013 at 8:06 am,
        Bird Man says:

        Well except for the part where he keeps talking about killing off the birds!

        • On July 14, 2013 at 11:07 am,
          Dennis M. O'Neil says:

          What kind of bird are you….Birdman?
          Are you a mooching Jay? Do you sing?

          From TKAMB

          I remember when my daddy gave me that gun. He told me that I should never point it at anything in the house; and that he’d rather I’d shoot at tin cans in the backyard. But he said that sooner or later he supposed the temptation to go after birds would be too much, and that I could shoot all the blue jays I wanted – if I could hit ’em; but to remember it was a sin to kill a mockingbird.

          Jem: Why?

          Atticus Finch: “Well, I reckon because mockingbirds don’t do anything but make music for us to enjoy. They don’t eat people’s gardens, don’t nest in the corncrib, they don’t do one thing but just sing their hearts out for us.”

          • On July 14, 2013 at 4:02 pm,
            Big Al says:

            GREAT!

  10. On July 13, 2013 at 8:00 am,
    CFS says:

    Silver is still slightly lagging gold in turn up.
    I’m less optimistic for silver in the coming week.
    If JPMorgan has managed to fill its deficit in Gold, it would not surprise me if it turned attention to attack SLV.
    The middle East is more scary than folks realize, Syria is already in civil war, Egypt is only a missing shipment of wheat away from civil war.

    • On July 13, 2013 at 8:05 am,
      Big Al says:

      Completely agree with your comments about the Middle East.

      The trend for ag and au will certainly make for an interesting summer!

      Best,

      The Red Wine Collector

    • On July 13, 2013 at 9:47 am,
      Andrew de Berry (Rev) says:

      Not forgetting the ominous stirrings going on around Jerusalem’s al-Asqa mosque CFS.
      http://electronicintifada.net/blogs/ali-abunimah/israel-marks-international-womens-day-violent-assault-worshippers-jerusalems-al

      • On July 13, 2013 at 11:34 am,
        CFS says:

        Don’t forget Iran is undergoing a low-profile leadership change and still enriching Uranium.
        The speed with which the Emirates and Saudi Arabia recently rushed aid to Egypt tells me the Middle Eastern counties consider Egypt much more seriously than the West.
        While I consider Russia to be very pragmatic, I also think it could be opportunistic if it sees the chance to one-up the US.
        I see the situation as a potential match to light the flame of World War Three.
        But not yet.

        • On July 13, 2013 at 6:23 pm,
          Big Al says:

          And hopefully never!.

  11. On July 13, 2013 at 8:41 am,
    Paul L says:

    Gold is too low to make a profit for gold miners and top of that oil is shooting up. Dollar is on o long term rally and only lower gold prices can come in the short to mid term. Mines will have to shut down to bring down supply. High grade gold is not going to be found by juniors as mentioned as a possibility. Grades only get lower and lower over time.

    • On July 13, 2013 at 7:52 pm,
      CFS says:

      This maybe what incompetent companies might want you to believe.

      There are companies that can find and mine gold at less than $1000 per oz.
      Be very careful of the math when people say on average it costs $1200 or $1300 to mine an oz. On average 50% are below and $50% are above any average!
      Goldman Sacks is doing everything it can to talk down gold right now.

      • On July 13, 2013 at 9:56 pm,
        Big Al says:

        Pretty astute point Professor.

  12. On July 13, 2013 at 8:56 am,
    Paul L says:

    “Not much lower that juniors can go except to zero”. That sounds like a lot lower to me.

    • On July 13, 2013 at 9:12 am,
      Dennis M. O'Neil says:

      Even the last penny is 100%.

  13. On July 13, 2013 at 10:30 am,
    Irwin says:

    For the “to da moon” crowd, who consider themselves to be contrarians (as if that’s a desired condition); you might want to get used to this level of excitement. Possibly the best you could hope for is #10.

    Sleepy Animals
    http://www.youtube.com/watch?v=VRgQaOOZRo4

  14. On July 13, 2013 at 3:46 pm,
    Silverbug Dave says:

    I have never heard Jay Taylor so pessimistic and I think he is right. It is a lost cause.

    • On July 13, 2013 at 6:23 pm,
      JERRY the Long..................O^OTB says:

      I disagree with Jay……..the Problem, with rich guys , they have a lot more to loose…, and more easily swayed to give in ………….
      .As, Marc. said , IT IS EASIER FOR A RICH MAN TO PASS THUR THE EYE OF A NEEDLE,,,THAN TO ENTER HEAVEN………
      ,and this would be that one must be willing to sacrifice for his brother,, rather than, to be in BONDAGE TO A TYRANICAL KING………FREEDOM…..IS WORTH THE FIGHT.

  15. On July 13, 2013 at 6:03 pm,
    Dennis M. O'Neil says:

    Jerry Off Track Betting asked me to KISS…scale back a little on the rhetorical hierarchy and aim at an 8th grade level audience….then over at zero hedge this gem appears….classic illustration of our current economic strength simplified:
    http://www.zerohedge.com/news/2013-07-12/are-you-smarter-3rd-grade-economist

    • On July 13, 2013 at 6:15 pm,
      JERRY the Long..................O^OTB says:

      Dennis…..Now, you got it………….I love it………..
      signing off…….OOTB….out of the box….but, I am sure some will like the OFF TRACT, part…………..