December 7, 2009

Unemployment Decline An Illusion, Financial System Collapse Ahead

On Friday it was announced by the Bureau of Labor Statistics that the U.S. unemployment rate in November declined from 10.2% to 10%. While the mainstream media would like you to believe we have seen a peak in unemployment and the worst of the economic crisis is behind us, we know that this dip in the unemployment number is phony and the recession is only beginning.

Although the unemployment number dipped in November, we still lost 11,000 nonfarm jobs. Unemployment fell by 0.2% only because the civilian labor force shrunk in November by 98,000 people. This means more people are becoming discouraged and giving up looking for jobs. When you combine both short and long-term discouraged workers who aren’t included in the labor force along with those who are underemployed with part-time jobs, real unemployment in the U.S. today is nearly 22%.

The most important area of employment to look at is manufacturing jobs. Increasing manufacturing is the only way for our country to truly recover and build real wealth, because it will allow us to cut down on inflation by exporting real products instead of the money we print. Unfortunately, the U.S. lost 41,000 manufacturing jobs in November and has lost 2.1 million manufacturing jobs over the last two years.

The main areas of increasing employment in November were health care and government jobs, which are non-productive jobs that are increasing global imbalances. These jobs are not being created due to a strengthening economy, they are being created due to our artificial, temporary and destructive stimulus. They are forcing our country to get deeper into debt and create massive inflation.

Those who receive a paycheck for a non-productive health care or government job, compete against all Americans for the purchasing of consumer goods, without an increase in the supply of goods. This means after excess inventories of goods are done being worked off, prices of all the goods we consume will increase at an astronomical rate that is unimaginable to most Americans today.

Many Americans with jobs are not concerned about inflation because they believe if the prices of goods go up, so will their wages and everything will balance out. They don’t understand our standard of living in America has already been declining for over a decade. Sure, we have plasma TV’s, cell phones and the Internet today, but our lives are becoming harder to live and it is becoming more difficult for the middle class to survive.

Twenty years ago, a father with an average job was able to support an entire family of four or five on one income. Today, both parents need to work, and they are still unable to support their family without getting deeply into debt with credit cards, mortgages, auto loans, and college loans. Less families today have health insurance. Wages have not kept pace with inflation, all we have seen is an increase in debt to meet some of the demand from inflation.

With the babyboomers beginning to retire, the decline in our standard of living is about to dreadfully accelerate. The average American peaks in spending at around 46 years old and the last babyboomer will turn 46 in 2010. Therefore, a major drop-off in consumer spending is coming. But more importantly, beginning this next decade, 1.5 to 2 million Americans will apply for Social Security every year until 2026, compared to only 500,000 per year during the last decade. Tax receipts are about to fall off a cliff, at the same time as government entitlement spending for Social Security, Medicare, and Medicaid go through the roof.

Many people have been asking us on NIAnswers, if we see massive inflation and gold prices go through the roof like we predict, wouldn’t that be good for the U.S. because we have the largest gold reserves at 8,133.5 tonnes? Well, at the current gold price, our gold reserves are worth approximately $300 billion. Our budget deficit this year alone was $1.6 trillion. If we had to pay back our $12 trillion national debt using only the gold in our vaults, it would require a $45,889.44 per ounce gold price. But once you factor in our $55 to $100 trillion in unfunded liabilities for Social Security, Medicare, and Medicaid, our gold reserves will not put a dent in saving our country from the financial system collapse that lies ahead.

December 11, 2009

NIA Declares Silver Best Investment for Next Decade

We are less than three weeks away from entering the next decade. The most important thing you need to know entering 2010 is that silver is the single best investment for the next decade. In our opinion, investing into silver is the only sure way to tremendously increase your purchasing power over the next ten years.

Throughout world history, only ten times more silver has been mined than gold. If you go back about 1,000 years ago between the years 1000 and 1250, gold was worth ten times more than silver worldwide. From year 1250 to 1792, the gold to silver ratio slowly increased from 10 to 15 and the Coinage Act of 1792 officially defined a gold to silver ratio of 15. The ratio remained at 15 until forty-two years later when the ratio was increased in 1834 to 16, where it remained until silver was demonetized in 1873.

The gold to silver ratio remained between 10 and 16 for 873 years! It is only over the past 100 years that the gold to silver ratio has averaged 50. History will look back at the artificially high gold to silver ratio of the past century as an anomaly, caused by the dollar bubble and the world being deceived into believing that fiat currencies are real money, when in fact they’re all an illusion. Next decade, the fiat currency experiment will end badly in a currency crisis. The wealthiest people will be those who bought silver today and were smart enough to research and pick the best silver mining stocks.

While the vast majority of the gold ever produced remains sitting in vaults, 95% of the silver produced has been consumed by industry for thousands of applications in such tiny amounts that most of it will never be recycled and seen on the market again. Nobody knows the exact above ground supply of silver today, but most likely it is somewhere in the neighborhood of 1 billion ounces. That’s a total worldwide market value of only $17.4 billion, when the world has over $7 trillion in foreign currency reserves, mostly in fiat currencies that they will need to diversify out of due to rampant inflation.

Besides the fact that the world has been ignoring the monetary value of silver, silver prices are artificially low due to a large concentrated naked short position. It’s not a coincidence that the day silver reached its multi-decade high of over $21 per ounce in March of 2008, was the same day Bear Stearns failed. Bear Stearns was a holder of a massive short position in silver. In our opinion, this was likely a naked short position because there is nobody in the world who owns such a large amount of silver for Bear Stearns to have borrowed.

The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position. Because the silver market is so small and tightly held, if Bear Stearns was forced to cover their short position, silver prices could’ve potentially rose to $50 per ounce or higher overnight. The world would’ve seen how economically unstable our country is and confidence in the U.S. dollar would’ve rapidly deteriorated.

JP Morgan still holds the silver short position they inherited from Bear Stearns. The concentrated naked short position in silver today is the largest short position in the history of all commodities, as a percentage of its market size. Eventually, JP Morgan will have to cover this short position or it could jeopardize their existence.

The best evidence that the short position in silver is naked and not backed by real silver, is the differential between what silver trades for on the Comex and what real people are willing to pay for physical silver on eBay. Every hour on eBay, there are dozens of one ounce silver coins selling for approximately $25. That’s about a 43% premium over the current spot price of silver. With so much demand for physical silver, we doubt the silver shorts in the paper market will be able to manipulate prices downward for much longer. A major short squeeze could be right around the corner and silver could take off in a way that shocks even those who are most bullish.

See video at http://www.thefinancialtube.com/video/3551/Interview-with-Adrian-Douglas-marketforceanalysiscom

From Yahoo Group “InvestorsExchange”

I bring to you the following with the specific permission of Alf Fields. I have suggested to you often in the past that once the price of gold reaches into its maximum potential it will not repeat the fall of the 1980s. I foresee gold re-entering the system in a new and unique form that does not include convertibility. It will not be tied to interest rates as it once was in its previous form. I have written to you various times about the Federal Reserve Gold Certificate ratio, modernized and revitalized, which now may well be associated with an SDR form of an International Central Bank. The tie between the ratio and gold would be a measure of international liquidity considered zero or 100 on the day of adoption.

The following is Alf’s statement yesterday, with his permission to post: “Gold cannot decline from its highs as it will be incorporated into the national and international monetary systems at that time.” –Alf Fields, May 20, 2009

Now do you have any questions why Fund Wizard Paulson just got long a few billion dollars worth of Gold ETFs and a few major gold producers? Finally a major event has taken place that is a US dollar milestone. The financing and extremely important event is the arrangement between China and Brazil displaces the dollar as China becomes the major trading partner with Brazil. Since then the Rial has been celebrating and the dollar has been depressed. This is a once in approximately a century replacement of a trading currency that has always meant a dethronement of the deposed and coronation of a new currency king. The last time this happened was when the US dollar supplanted the British Pound as the major trading currency and entity with Brazil 79 years ago. It took the Brits 300 years to supplant the Portuguese Escudo with the British Pound. Only twice has this occurred in 379 years. This is obscure to most but not to Mr. Paulson the hedge wizard. Obscure to most, but not to our gang at JSMineset. The dollar died in Rio and that means everywhere.\ The dollar is in for a very cold winter. There is one thing that is absolutely certain and that is Gold is now headed to at least $1650 and in all probability much higher. This is happening NOW! What more do you need to know?

from:  http://www.opednews.com/populum/linkframe.php?linkid=87328