Troubled economic times and suggestions for protecting ourselves

June 23, 2012

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In this show Al discusses:

  • Segment 1 – Author Bob Merry discusses his new book, Where They Stand, and gives personal insights on recent presidents and their “report cards”.
  • Segment 2 – Ellen Brown discusses Wall Street and the Government.
  • Segment 3 – Big Al and Trader Rog discuss Europe.
  • Segment 4 – Rick Ackerman discusses his concept of a decrease in the nominal price of gold.
  • Segment 5 – Jeff Pontius provides an update on International Tower Hill Mines.
  • Segment 6 – Ron Hera discusses contemporary financial issues.
  • Segment 7 – Peter Grandich and Big Al talk about the importance of values and personal actions during these tumultuous times.
  • Segment 8 – Chris Temple and Big Al continue the discussion of the prior segment.

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

Click download link to listen on this device: Download Show

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    Jun 23, 2012 23:43 AM

    Gold price is a function of the amount of money in circulation. If we play Monopoly® with $10,000 in the pot, Boardwalk and Park Place are priced accordingly. If we now play the same game with $100,000, the same entities are priced accordingly. Because of all the paper we have printed, the price of Gold has to go up. Gold price becomes a barometer of the amount of money in circulation. The only exception would be a sudden deflation. Gold price would initially go down but then skyrocket higher. The only reason you see a dip now is that speculators have to cover their short positions or people need the money to cover other losses. But on every dip, the Chinese come in and dump their increasingly worthless dollars for the yellow metal. Is Gold going down significantly? If you understand Gold’s function, I just cannot envision a scenario where this would happen.

    Jun 23, 2012 23:58 AM

    IF the facts are….Europe is in a
    INFLATIONARY SPIRAL… goes up….., then Ron’s number of $1495 is low….

    If gold is manipulated…which is proven….the numbers are manipulated,
    if the numbers are manipulated, the true value is false, and if false, then
    the number of $1495 is false…..And not true value……
    ‘”as they say, you can fool some of the people some of the time, but, you can not
    fool all the people , all the time…..” OOTB

      Jun 23, 2012 23:27 AM

      Great point In the Box!

      Big Al

        Jun 23, 2012 23:49 AM

        A big DITTO that – Big Al!
        Now….Go Azzzztecs!

    Jun 23, 2012 23:19 AM

    James Turk An accurate accounting and reporting of central bank gold reserves would go a long way to reassuring Germans and Europeans generally about the future of the euro.

    I find it interesting that to discuss this in terms of the US dollar is forbidden in our worthless media and by the brilliant financial pundits like Larry Kudlow and James Cramer.

    Everything is theatre. Eric Sprott is 10000% correct. Politicians are liars and government is the source of so many of our problems and alienation.

      Jun 23, 2012 23:28 AM

      I have to agree with you at this point James B!

      Big Al

        Jun 23, 2012 23:21 AM

        ditto for James B….GREAT COMMENTS

    Jun 23, 2012 23:41 AM

    Hi Big Al,
    Sure gold can come down to $1495.00 and then some like Rick suggests. Not to worry because buyers will step up to purchase. My understanding is 40% of US households are living from paycheck to paycheck. So the Asian markets will be making large purchases with the central banks of the world. The rich get richer and the poor get poorer. Sad but true. Thanks for your show.

      Jun 23, 2012 23:29 AM

      Morning Keep Stacking,

      Sad but true is my perception.

      Big Al

      Jun 23, 2012 23:26 AM

      Point…..Asians….in the us….outnumber the Hispanics…., just heard that this morning, and that the Asian,,better educated, with more money , better jobs,
      are going to have their say in the future… a voting block…..
      Point….the Asians like gold…..

        Jun 23, 2012 23:58 AM

        Hi In the Box,

        I learned the same thing about Asians recently.

        Having worked as a Board Member with a group of very well educated and successful Asian folks, I actually learned this from personal experience a long time ago.


        Big Al

    […] Grandich Interview – highlight segment 7 […]

    Jun 23, 2012 23:38 AM

    […] Grandich Interview – highlight segment 7 […]

    Jun 23, 2012 23:51 AM

    For lack of better terms… 😉 some thoughts below:

    Surely at one time or another you’ve had a margined account. It doesn’t matter how strong gold’s fundamental prospects are in the long term; when big investors have to pay margin calls in a market panic, they will cash in their gold. All of them. Gold is their insurance! Because gold holds its value relatively well, it’s handy to cash it in such situations. It will take the price of gold in dollars down.

    We went through this in spring 2008, autumn 2008, went through it in autumn 2011, and again this spring. It will likely happen again when the European crisis hits the fan yet one more time (yawn).

    There are many long-term drivers of the price of gold & silver — at some point banks may want more government $ and the central bankers will not be able to oblige… at some point creditors may doubt the ability of the US and others to make good on debt… on and on.

      Jun 23, 2012 23:04 AM

      Great points. I don’t factor in the margin angle of this – because of my conservative nature, but given the “gambling”, crazy nature of these guys, yeah, point well taken! I don’t even sniff working on margins, too much risk and I am not that willing to stick my neck out. Good luck with those guys – they are going to need it.

        Jun 23, 2012 23:34 AM

        Thanks Marc —
        I hope Al can get Bob Hoye at Howe Street as a guest some time. He has the most solid historical perspective on this that I’ve seen in the 7 years I’ve been watching this stuff; he’s been analyzing the markets since the 1960s and he calmly says what is going to happen with no dogma — just history. I liked his quote this week so much I transcribed it:
        “Mother Nature can’t stand a vacuum; and when you have the normal instruments of credit hugely in a bubble-mania, and you also have the innovation of new instruments of credit, and when they are contracting or collapsing, the real price of gold goes up, gold miners produce more of it, and despite what the central bankers and economists say, that gold gets into the world banking system, and improves liquidity. So on one side you have a credit contraction because there was too much speculation and on the other side you have the real price of gold going up, which is beginning to reintroduce liquidity to the system. It’s worked on previous post-bubble depressions and it seems to be working on this one. -Bob Hoye 22 June 2012”

          Jun 23, 2012 23:05 AM

          Excellent, excellent quote! Thanks you for that! Get more active on this site. 🙂
          All the VERY best,

          Jun 23, 2012 23:48 AM

          Hi Dirk,

          I will definitely contact Bob on Monday.


          Big Al

      Jun 23, 2012 23:52 AM

      I believe that you are absolutely correct Dirk.

      By the way, in all my years of investing I have never had a margin account.

      Big Al

      P.S. Thanks for all you great comments!

    Jun 23, 2012 23:55 AM

    KS and all,
    Boy, KS, you nailed it.. These so-called experts are completely and absolutely underestimating or discounting the growing economic ‘steam engine’ of demand and as Dr. Berry says – a convergence of a great BILLIONS of people (BRICS) needs, wants and desires – gold and silver, is a HUGE part of THEIR PUZZLE. NOT ours (Americans, the west, mind you), but theirs! The WEST hasn’t figured that out – yet! Too bad for us…

    Jun 23, 2012 23:58 AM

    Hi Al, I just want to say that I agree 110% with Peter G and Chris Temple, so what is next? The chief difficulty is to find a person or group of persons wise enough to know how to apply the levers of a government and who has the mandate to be allowed to keep their grip upon it until the american society is rooted once again in the true values of self reliance and moral and family values. People need this leadership at a national level even as it takes hold in a grass roots movement. Congressman Dr. Ron Paul, is the obvious and only choice for me.

      Jun 23, 2012 23:50 AM

      Hi Shawn,

      If I didn’t completely agree, I would have not recorded those two segments!

      Big Al

    Jun 23, 2012 23:15 AM

    Al and Guests: The following comment auditorium by Don Coxe is a must listen too. If anyone misses this comment, they are missing the best analysis of the Month.

    People who believe money in the bank is safe because of FDIC don’t understand what government are and can do. The worlds economic and political systems are dying from terminal Keynesian disease.

    There are no Keynesian road maps or navigators to where these systems are going, the only true and useful guides are the old long term proven systems which the world is returning to. Ayn Rand was right.

      Jun 23, 2012 23:48 AM

      Thanks Clay,

      My thoughts exactly!

      Big Al

    Jun 23, 2012 23:51 AM

    Dr Burry has a great talk on our troubled times. It was delivered at UCLA. Perhaps Al can get him to come on.

      Jun 23, 2012 23:47 AM

      Morning Tex,

      I just watched the entire speech and am asking Sarah to post it on our site.

      Holy smoke, what a great speech!

      Big Al

      Jun 23, 2012 23:26 AM

      Big Al, Tex and all
      Just finished watching that video. Excellent. ALL OF US NEED TO CONSIDER: ‘SHORT-TERM RISK VS. LONG-TERM GAIN”. Doesn’t that describe exactly our collective thought processes of investing in PM’s for protection of our assets, purchasing power and most importantly, the people we love and care about. This deflationary spiral will be short term for the long-term outlook is massive inflation – with a eventual reboot of the whole financial world and subsequent paradigm shift. Dr. Burry’s line is just a CLASSIC….we aren’t drunks or cheaters! WE WILL NOT FALL FOR THE SHORT-TERM GAIN AT THE EXPENSE OF LONG-TERM RISK, PAIN AND SUFFERING. Will we?!
      Thank you very much for that – Tex!

        Jun 23, 2012 23:40 PM

        That was an amazing speech given at an institution like UCLA!

        Big Al

    Jun 23, 2012 23:59 AM

    This country is really going right down the crapper.

    The character of the American people has drastically declined.

    Here’s just one example of what’s going on in this country every day.

    Big Al and all of you, I want you to meet some upstanding AmeroCons. These are Colliefornian (as Ahnode Swarchenegger says) citizens.

    Turns out the one who got the worst of it is no angel…

    Jun 23, 2012 23:59 AM

    This country is really going right down the crapper.

    The character of the American people has drastically declined.

    Here’s just one example of what’s going on in this country every day.

    Big Al and all of you, I want you to meet some upstanding AmeroCons. These are Colliefornian (as Ahnode Swarchenegger says) citizens.

      Jun 23, 2012 23:15 AM

      Hi Ken,

      Which of those folks would you classify as upstanding?

      Big Al who can be satirical also!

        Jun 23, 2012 23:01 PM

        Well, the citizen in the red shirt was not upstanding for long!

          Aug 24, 2012 24:11 PM

          Abnormal this post is totaly unetearld to what I used to be looking google for, but it surely was once listed on the first page. I suppose your doing one thing right if Google likes you enough to position you at the first web page of a non related search.

      Jun 23, 2012 23:08 AM

      Ken (ny) :),
      “Romulan” really makes me quiver….can’t believe he has gotten this far! Can’t believe ANY of these guys have gotten this far. What does a LEADER and a POLITICIAN have in common?…Exactly right….nothing……absolutely….NOTHING!

        Jun 23, 2012 23:12 AM

        I tell ya Marc, I guess it’s no surprise the country is in the state it’s in. Just look at the so called leaders. The fish rots from the head down…

      Jun 23, 2012 23:10 AM

      Hi again Ken,

      I began to feel quite some time ago that incidents like this would become more and more common. I currently believe that they will get much worse.

      Society is getting very pessimistic; angry; and, frustrated. This is one of the reasons that Kathy and I live out in the sticks!

      Big Al

    Jun 23, 2012 23:07 AM

    And look what goes on in the gummit youth propaganda camps (aka public schools).

    This kind of thing goes on every school day in this county.

    Is it any surprise this country is going right down the crapper?

    This should be a commercial for home schooling. The gummit schools are an absolute disgrace.

    Just look at the video below. When this happens out in Colliefornia the public unions jump up and down and scream that the gummit schools don’t have enought money. The more they fail the money they demand and receive.

    And now if you will excuse me I am going to watch that Jamie Dimon love fest our Congress Critters conducted.

      Jun 23, 2012 23:04 AM

      Hi Ken,

      I don’t disagree with much of what you say about public schools. Hence, our kids went to private schools.

      I did find it interesting that the kids did apologize. I also find it interesting that so far over $.5 million has been donated to her. My question is why?

      Big Al

    Jun 23, 2012 23:11 AM

    Dang it, I’m so angry I can’t even type…sorry for the typos.

      Jun 23, 2012 23:17 AM

      Hang in there Ken…..hang in there. Turn off Jamie Dimon…I think that is your tipping point!

      Jun 23, 2012 23:33 AM

      Morning Ken,

      I learned a long time ago that anger is more often than not a waste of time. Get even, man!

      Big Al

      Jun 23, 2012 23:31 AM

      Ken…I think it is in the water……typo….don’t worry about it ,,,,we have ty po-lice

    Jun 23, 2012 23:46 AM

    I think most men never grow up or mature no matter how old they get, when I was younger I used to refer to them as dorks and I’m sure some on this sight understand what I’m getting at you can be 80 years old and still be a male dork. My point is this sometimes I find myself sliding into dorkdom when Father’s day rolls around I had to remind myself that the important part to remember is that the family is all together no matter what has happened. Hey guys I’m sorry to say but women have us beat at maturity no matter what age we are at.

      Jun 23, 2012 23:15 PM

      I meant that last statement as something that I find humorous but true about the male persona, I wonder if George Carlin would have agreed with me.

      Jun 23, 2012 23:41 PM

      Know what Shawn,

      I learned that a long time ago, but still have trouble admitting it.

      Big Al

    Jun 23, 2012 23:10 PM

    I tell you boys, I just don’t understand what’s gotten into these people. Maybe it is the water. The behavior of these people just has me flummoxed.

    So sorry for getting so flustered.

      Jun 23, 2012 23:43 PM


      It is really difficult for me not to get frustrated many times. I really have to stop and think!

      Speeches like the recent one at UCLA and comments within this forum help me to not get frustrated because I realize that I am not crazy!

      Big Al

      Jun 23, 2012 23:46 PM

      flummoxed…never heard of that word before!….now you are beginning to sound like our very well-versed….Vortex!!

        Jun 23, 2012 23:25 PM

        watch out marc….it might be a typo

          Jun 23, 2012 23:21 PM

          Ha! Your right, OOTB….ty-po-lice…….you are funny!

    Jun 23, 2012 23:05 PM

    I try to remember the event I went to this year when Ron Paul came to a local college campus.

    It was packed with young people and a person could have easily been concerned about potential rowdiness, trouble and general hooliganism when you have that many young people crammed into one location.

    But I tell ya Big Al, it was the most well behaved group with no problems at all. It really gave me some hope and belief in these young people.

    So hopefully there is a counter balance to all the insanity going on in this society.

      Jun 23, 2012 23:08 PM

      Hi Ken,

      I can only speak for my daughters.

      I am proud to say that they do not fall into that category!

      Thanks for your positive comments by the way. Sure, there is still hope!

      Big Al

      Jun 23, 2012 23:58 PM

      Ron gives respect….and he gets respect….I also, have seen Ron , on a college campus, and the students for the most part were very respectful of Ron….and had many great questions…..

        Jun 23, 2012 23:19 PM

        In the Box,

        They give Ron respect simply because he truly deserves it.

        Big Al

    Jun 23, 2012 23:55 PM

    Ellen Brown,
    I think that Ms Brown is right on. Where do you put your money if thing go to H–l in a hand basket? The US Treas bonds could have worked 50 years ago even 20 years ago but if things collapse what than or if inflation takes off where does it leave us if we are in T-Bills?

    You can violate the laws of economics for just so long than as Adam Smith would say the invisible hand of the market takes over. The chaos that could follow opens the way for tyranny. In the meantime resource securities look pretty good.

    Thanks for having her do the interview.

      Jun 23, 2012 23:20 PM

      Yep Martin.

      She is a very insightful lady.

      Big Al

    Jun 23, 2012 23:56 PM

    I’m just listening to the show now, but Bob Merry sounds like a great guy to have a conversation with. Definitely will go have a look at his book. That’s cheaper than doing the research myself.

    Al, I appreciate Ellen Brown’s piece. She’s pretty sharp, and her views — which have seemingly differed from those on this board in the past — are interesting and quite well-informed. I actually don’t think she’s too different from anyone here.

    I was thinking this week if maybe you can get Jon Nadler on the show (for real), and perhaps some more cool on gold. I noticed the reaction to Ellis Martin was a teeny hostile. Hearing from those with varying or opposite views of mine doesn’t bother me, and I think it’s helpful for us on the board to hear what others think — not just as a polite tit-for-tat, but to understand that a lot of influential people with differing opinions do have a basis for their beliefs (even if they are completely wrong!).

      Jun 23, 2012 23:58 PM

      Hi John W,

      First of all Mr. Merry is a very interesting man. I thought is was a good interview.

      Regarding Ellen, I believe that you are correct. She appears to be perhaps a bit liberal at times but so what! We all need to listen to everyone.

      I will call Jon, but I rather doubt that he is willing to come on the show. We will see.

      Big Al

        Jun 23, 2012 23:52 PM

        Big Al, John W.,
        I would like to respond if I may. I do like to hear differing opinions and yes, I pay attention to them and, in fact, try to consider them objectively. But, after everyone of them, I ask myself the same question: “Given the situation I find myself in (as a personal investor – DIRECTlY financially responsible for eleven people) WOULD I or SHOULD I alter my allocation of investments to suit the possible future scenarios I have researched/contemplated over these many years?
        The answer is no and continues to be no.
        Can I learn from contrarian views? – of course, yes.
        I am just a participant here. I welcome them – surely, I do.
        But, for the life of me, I can’t seem to digest, or understand contrarian (including, of course, MSM, bubble stuff) views on the precious metals sector. I am not being defensive I am just analyzing the facts and giving input.
        Can gold drop to 1400 to 1100 an ounce? SURE, I guess. I wouldn’t blink because the LONG TERM is up and will continue to be for the foreseeable future. I wouldn’t use emergency funds to invest in this market currently. I would maintain a healthy cash flow. I wouldn’t jump in and out and I WOULDN’T get SCARED out of the right side of this trade.
        My continuing HUMBLE opinion and surely NOT investment advice.
        All the VERY best,

          Jun 24, 2012 24:57 AM

          Morning Marc,

          I personally agree with everything in your comment. Can’t really add to what you said.

          Interesting aside, Kathy and I went to a birthday party last night for Rob Grey (Exotrre and Exeter). Rob play football in high and then college. He knows and loves the game.

          He said that he thinks that the Dawgs can beat LSU in their house. He went on to say that he thinks the Dawgs might have turned the corner and could be a real force beginning this year.

          Interesting observation.

          By the way the Aztec game, Kathy says, is at 7:30 p.m. You may want to fly in that afternoon and we will, of course, pick you up.


          Big Al

            Jun 24, 2012 24:16 PM

            Big Al,
            Thanks for all that, yes, I will confirm for the big game there down the road. I know we joke about the teams, but the Aztecs should really be “dogs” by I would say, 7 to 10 points, no?

    Jun 23, 2012 23:02 PM

    I agree, It is very helpful to hear all sides of the story!!

    Jun 23, 2012 23:23 PM

    The reason I like some different opinions is because it helps with interpretation of timing, both for fundamental and technical analysis. There’s no question in my mind either what the end game has to be, but there is a big question on the timing. By listening to others we don’t apparently agree with, you can gauge the degree of sentiment you’re fighting against (it’s hard to swim upstream). For example, none of us probably thought the USD index would by 82.50 in June 2012, or even that gold would still be around $1,540.

    I like to hear Nadler’s take on his sources, some of which I’ve never heard of. Or, he might use a source like WGC numbers, but spin them differently. Not paying attention to these views is, at least in part, why some of us remain flustered at the prices of juniors or the price of gold themselves. They may be in the mainstream, but many of those people we don’t listen to haven’t been entirely wrong (again, short term). This is the approach of Mohammed El Erian of Pimco, and of course our wonderful host Al. Listening to everyone gives you the heartbeat of the market today, and some idea of where it might be tomorrow.

      Jun 24, 2012 24:13 AM

      Amen, John W!

      Big Al

    Jun 24, 2012 24:23 AM

    Hi Al, great show as always, I just love bad news just the miner in me I guess. If the price of gold/silver goes down so will the number of those resource miners disappear, since you guys have said that the average amt. of cost of per oz. yield is $750-$950 for operatating capital is required for a profit of any given mine to run in this day and age. After looking at how low their average yield per oz., per ton is for a given mine I think its probably much higher than that. Now this is for most mines in the junior resource sector in my opinion. I think the average geologist is a con man looking for suckers to buy his/or her stock knowning full well of not delivering hardly ever to see a profit on his end. The death valley scotty crowd are with us forever. I really like Trader Rog, he sounds so good, he`s truly your greatest guest to speak, his monday trends was a classic. Ellen Brown speaks volumes of deep thought for long thought on our long on-going nightmare called America. Obama truly sees himself as another Castro wanting to transform America into another failed power like the old soviet union. Obama must have really bought the farm with the black muslim movement of the sixties…..

      Jun 24, 2012 24:06 PM

      Hi Dennis,

      Yes, Roger is an insightful and decent human being and Ellen is certainly no slouch!

      Your comment about the president is interesting. I felt like you when I read The Audacity of Hope. I think that he truly believes that what he is attempting to do is correct. I simply disagree because that experiment has always failed in the past.


      Big Al

    Jun 24, 2012 24:39 AM

    What is going to happen?

    We know that the economy of the US is about to drop over a physical cliff. Tax rates, fees, regulations and draconian measures are being implemented by Washington politicians in “Whatever” reasons they have. Reasons neither they nor anyone else can understand. But the fact is the physical cliff is dead ahead only months away. Treasury Bonds are at record low rates, negative in most cases and prices at record highs while the largest purchases are supported by Fed monetization.

    In order to answer the above question “What is going to happen?”, we turn to history just like a technician turns to charts. One of the best books on this subject is “This Time Is Different: Eight Centuries of Financial Folly” by Carmen M. Reinhart & Kenneth S. Rogoff. In 800 years of world history the authors show that when a nation is in similar situation as the US is now, they turn to printing in order to pay off the debt. Only one case among hundreds did a nation choose austerity which was Great Britain.

    The title of this book, “This time is Different”, explains the reasoning why the leaders of a nation at the physical cliff decide to print, because like Zero Hedge reports the leaders are addicted to hopium and delusional. Does anyone in our government appear to operate on hope, change and delusion? From my perspective nearly all the politicians government are hopelessly addicted to hopium and delusional with less than a handful who are not.

    There is a greater than 99% probability the US government will follow the historical examples of money printing to pay off its debt. The only question left is which of the 99% examples outlined in the book “This time is Different” will the US follow?

    Gold, Silver, Oil and any asset not backed by hopium and delusional are the safest and smartest assets to own. Treasury bonds are the dumbest. As the cliff approaches staying in cash becomes riskier because being able time the market and switch to something safe before the fall requires greater control and knowledge.

      Jun 24, 2012 24:44 PM

      Thanks Clay, I will pick this book up.

      Have a great rest of the weekend,

      Big Al

    Jun 24, 2012 24:55 AM

    Great interview, for lack of better terms.

      Jun 25, 2012 25:40 AM


      Big Al

    […] was the gold market and where it’s headed. The transcript of the interview is shown below. The audio may be heard here. (Rick is interviewed in segment […]

    Jun 24, 2012 24:21 PM

    Geeeeeeez, NO KIDDING! Funny and gross at the same time.

    Jun 25, 2012 25:19 PM

    Finished listening to the whole weekend show today. Great stuff! Hope people are opening their minds. You certainly found people that can and will think outside the box.

    That local currency? I’d like to hear more. Can you get the county or a city manager on?

    “The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the prime cause of the revolution.” Benjamin Franklin, Founding Father.

    Aug 25, 2012 25:06 AM

    We were in The Temple Bar Sunday and saw Dave Browne together with Sharon O’Brien, Clare Peelo and Jenny Duffy pliyang. It was marveless.Back in the Netherlands I followed Dave on my laptop.Congratulations with this record of gitar play. We enjoyed it very much to be in the Temple Bar with all the music, the gitar play and especially the record by Dave.Love from Hans & Antoinette.