The Generational Bull Market in Gold: Why $1600 Is Just The Beginning

Gold benefits from: out of control sovereign debt, nanny states, media mind control, war, over-the-counter derivatives, unfunded liabilities, trillion dollar deficits, accounting fraud, artificially low interest rates, quantitative easing, loss of confidence in governments and paper assets. Gold benefits from these things because it allows imbalances to get out of control in a major way.

In just 5 years the gold market has bid up the price by $1000. It is likely that, in the next 10 years, the gold price will rise to at least $15,000.

Oh, and did I mention that nothing meaningful or effective has been done to address those issues listed above, which help to create a bull market for gold. That’s why these kinds of great movements of civilizations can last for a decade or more; because of the unwillingness of societies to solve their problems until its too late.

Gold is Not in a Bubble

Gold is mistakenly thought of as being in a “bubble”; however, gold has a history of being a currency of last resort when confidence-based systems fail. So when you have vast sums of “wealth” worldwide tied up in confidence systems, such as the US-Dollar and the US reputation is subsequently crushed, what you see in gold is actually a deflation of a world-wide bubble of confidence in paper assets.

If you consider the trillions and trillions of dollars, still tied up in questionable confidence-based paper assets, why should $1600 be the ceiling for gold? The US and other major debtor nations never stop raising their debt ceilings and never address the underlying problems, so why would gold stop reflecting these problems anytime soon?

What I believe you will see, over the long-run, is that the next 10 years will look like the last 10 years; but sharper to the up-side and more violent in its volatility as things become increasingly more unstable.

Gold went from around $250 – $1600 during this 10 year period (a 560% increase); it will likely go from $1650 – $15000 during the next 10 year period (an 800% increase).

Why Gold May Eventually Reach $15,000

Jim Sinclair is well known for his prediction of the rise in gold to nearly $900 in the 1980’s. The formula Mr. Sinclair used was roughly: the price gold would have to reach, in order to make the gold held by the United States equal to the amount owed to foreign creditors, on the international balance sheet of the US.

In the 1980’s that “balanced” value was $900. Today the “balanced” value would be $15,000+.

Jim Sinclair | Jim Sinclair’s Mine Set

Assumption:

Because gold is held by many central banks, once as a reserve currency but now as an inventory currency, it functions as a swing asset to balance the International Balance sheet of the US.

Central banks are sellers of dollars but still hold, by default, large dollar inventories.

China has hedged its dollar position 50% through commitments to long term dollar commercial agreements, pay in, mineral, and energy deals internationally. That is an act of pure genius.

We can assume other central banks still hold 90% of their reported dollar positions, on average unhedged by commercial obligation positions.

In crisis times, the US dollar price of gold ALWAYS seeks to balance the International Balance Sheet of the USA.

Therefore:

Take 90% of international US dollar debt less China and then add 50% of the US debt owned by China. Then divide that number by the ounces supposed to be owned by the US Treasury. The result is where gold wants to go.

In 1974 this gave me $900 gold. Now you do your homework, and submit your analysis to me. Do this, and I will give you Angels going to that price by a little known technique of Jesse Livermore that only works on gold after it has broken to a new high above all resistance.

Little by little I am passing on all that I have learned from Jesse through Bert to those that read every day in thanks for your support of me and mine.

Jim

When you evaluate recent data, with the above formula, you get the following:

source: Jim Sinclair’s Mine Set

Using the methodology you specified in your article today, I get a target price for gold of: $15,600.

Most current TIC report: http://www.ustreas.gov/tic/mfh.txt

Total Foreign Holdings of Treasury Securities: $4,479.2 Billion
-Less : China – Mainland (1,144.9)
-Plus: 50% of China – Mainland 572.5

Adjusted Foreign Holdings of Treasury Securities $3,906.8 Billion

Number of Fine Troy Ounces held in Custody by the US Mint for the US Treasury: http://www.usmint.gov/downloads/about/annual_report/2010AnnualReport.pdf

Note to Financial Statements 6, “Custodial Gold and Silver Bullion Reserves”, page 59
Statutory value @ $42.2222 per FTO $10,574,053,000
Number of FTO 250,438,229

Valuation of Gold required to equal Adjusted Foreign Holdings of Treasury Securities
Adj Fgn Holdings $3,906,800,000,000
Number of FTO Gold at US Mint 250,438,229

Gold price Valuation $15,600

The Option to Protect Yourself is Still Available

So all of those people who complain about having missed their chance to protect themselves from what is to come are full of shit. Even if you can only spare a hundred or so dollars at a time to get a 1/10 ounce gold coin, or buy a few shares of a gold mine each month, you can benefit greatly by protecting yourself from the coming rout of inflation.

One interesting fact, is historically quality shares in gold mines have held a 3x leverage to the price of gold. This means that if gold goes to $15,000, the likely return on the share price would be at least 2400%. Junior gold miners can have an even higher level of leverage, given that their share prices tend to stay suppressed and then eventually explode when the fundamentals take over as gold rises.

Gold will be there for you to use when the value of everything else is called into question. It does not require anyone to perform on their obligations, as all paper assets do. Given that we are living in a vast sea of empty promises, is it any wonder that people are choosing gold and other precious metals to protect themselves?

George Washington, Political Parties and Lack of Principle

Today’s parties, the Republicans and Democrats, or as I like to call them Republicrats and Demipublicans, are not here to fix our problems. As George Washington recognized over 200 years ago, political parties are tools “by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people.”

Whenever I hear partisan talk, I am reminded of how easily people become tangled in the dialectic and effectively neutralized. Neither party is going to save us, no matter how it plays out, the only saving grace will come when people again become principled.

These people that put all of their energy into making sure their “party” gets in are incredibly naive and unwilling to face the fact that either party will do anything to get in power and stay there; neither has much in the way of principle. You can’t have good public policy without sound principles, there simply is no way to compromise; either you have sound principles, or you don’t.

“All obstructions to the execution of the Laws, all combinations and associations, under whatever plausible character, with the real design to direct, control, counteract, or awe the regular deliberation and action of the constituted authorities, are destructive of this fundamental principle, and of fatal tendency. They [political parties] serve to organize faction, to give it an artificial and extraordinary force; to put, in the place of the delegated will of the nation, the will of a party, often a small but artful and enterprising minority of the community; and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill-concerted and incongruous projects of faction, rather than the organ of consistent and wholesome plans digested by common counsels, and modified by mutual interests.

“However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people, and to usurp for themselves the reins of government; destroying afterwards the very engines, which have lifted them to unjust dominion.”

–George Washtington

We’re In This Together Now

So often our ego gets in the way of really being there for our fellow man when it counts; truly being our brother’s keeper. We’re often so concerned with being the one who’s right or being superior, that these concerns often lead to hiding information to get the upper hand or turning a blind eye, when we could use our skills to help someone in a meaningful way.

Now there’s nothing wrong with being your best, per se; but it’s when we intentionally do things to aggrandize our selves at the expense of others, that we should really take pause. If we really are so great, then we shouldn’t need to hide things and screw over others to let the world know this. Simply acting with great awareness and equanimity, drawing on our abilities and our intellect; this will be all that needs to be done.

Its easy to forget, in a competitive civilization such as ours, that ultimately we are in this together. If we all become better, then everyone enjoys the benefits!

Even though we compete with each other in so many ways, the goal of this competition is to encourage each of us to become better; well, at it’s best, that is what competition does. At its worst, competition encourages us to push our fellow man down to get the upper hand, to hide information, to plot and scheme for unfair advantages.

Sometimes, you’ve just got to take a break from your own idea of personal advancement, to express care and compassion. Ultimately, your true advancement is bolstered by being able to help others along the same lines, because it teaches you, makes you better and makes you more fulfilled.

What it Means to Really Be a Friend to Someone

“Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising which tempt you to believe that your critics are right. To map out a course of action and follow it to an end requires courage.” –Ralph Waldo Emerson

It has always baffled me, how certain people are periodically nudging me to “hang out with them” or “see them more often”; but when I actually do make it out, they don’t really want to talk about anything other than what they are into. In fact, I have some friends, who I’ve known over the years, who ridicule me when I talk about my interests and only support talking about their own interests. This is not a very balanced equation, nor is it very pleasing to take part in.

Indeed, this is not what real friendship is about. A friend is not there just to be seen and not heard or to only speak when spoken to. A real friend should accept and appreciate your uniqueness, even if they don’t agree with all you say. They should feel free to discuss and debate matters of importance instead of trying to change the subject and bury the matter altogether.

Unfortunately, I do not know many of these real friends; but the ones I do know are always there to enjoy a nice in-depth conversation. I could go for months without seeing one of my real friends and still feel the warmth and acceptance as if we had been together only yesterday.

This notion of popularity, so often sought, has never been important to me; primarily because of the shallow nature of such friendships. I’d rather have fewer friends and maybe even considered an outcast by some, than to suppress who I really am to gain acceptance by the many. I don’t care if I rock the boat from time to time; it’s healthy to stir up some shit and unhealthy to simply suppress things and let them fester.

Never suppress who you are to please others. If they can’t handle you being exactly who you are, then who needs ’em.

“To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment.” –Ralph Waldo Emerson

Paul LaViolette Interviewed on Radiorbit

This is an interview with maverick scientist Dr. Paul LaViolette on Radiorbit.com; the interview was originally recorded on January 30, 2006.  In the interview they discuss Dr. LaViolette’s theories about galactic core explosions, Sub-Quantum Kinetics, pulsars, exo-politics and alternative views to the prevailing views of mainstream physics and cosmology.

I have long appreciated Paul LaViolette’s unique perspective on science, history and metaphysics.  He has an extremely well integrated set of theories, where he is able to combine hard observable science, clues from mythology and metaphysics; to synthesize his groundbreaking theories.  Paul’s theories make sense, both to my intellect and to my intuition, where their counterparts in conventional science often leave me scratching my head, wondering how the universe could really be as they describe.

Dr. Paul LaViolette Interview on Radiorbit: Listen to the Full Show/Interview 2:46 (mp3)

Here is an abbreviated version of the interview, strung together as a YouTube playlist.

I have compiled a semantic body of information on Paul LaViolette via PearlTrees, which you can access here.  In this resource I have compiled all of the interviews, videos and other information I have been able to locate.

Tai Chi Practice by Candlelight

Practiced the Tai Chi long form by candlelight tonight, with Egyptian Musk incense burning and relaxing music in the background. I know of few activities more beneficial or engaging than this. It exercises the body, circulates the chi and sharpens the awareness like none other.

Now that I’ve been doing Yoga and Tai Chi classes regularly again, I’m really starting to feel the Chi as it flows through my sinews. Its like a sort of quasi-biological field, that the mind can control and manifest consciously in various parts of the body.

This better understanding of chi, in combination with the incremental increases in core strength from practice, also make Yoga poses that were nearly impossible a few months ago quite easy; as the understanding of the chi and allowing it to flow freely provides much of the strength and balance that the body needs to achieve difficult poses.

Dr James Fetzer and Anthony J Hilder: Conspiracy Con 2011: Miracles Of 9/11, Bin Laden

Here is a video of Anthony J Hilder and James Fetzer discussing their research at Conspiracy Con 2011. They have a light hearted and humorous way of discussing these topics, yet it is still informative as hell!

Description: Jim Fetzer and Anthony Hilder meet at Conspiracy Con and talk over the improbabilities that we are told are true about 9/11, Bin Laden, and Chemtrails…the only way they could be true is that, indeed, a MIRACLE happened. Dr Fetzer explains the contradictions and Mr Hilder is truly amazed…as we ought to be. So many people now are waking up to the impossibility the mainstream explanations are about what happened.

ZERO An Investigation Into 9/11

There’s nothing wrong with questioning events and proposing alternate theories; yet you wouldn’t know this, from the way many who do this are treated. An intelligent, logical, critical-thinking person can see that, many things which happened on 9/11, were highly abnormal and inconsistent with the explanations we were given, by those in the government and media.

How is it that many supposedly educated, critical-thinking individuals, have been so well trained to protect government claims and government propaganda, instead of thinking for themselves and arriving at their own conclusions? Why do we allow these government propagandists, or people who have been duped by this propaganda, to keep us from having a substantial public inquiry?

It has now been nearly 10 years since 9/11 and while a substantial portion of the population now questions the official stories; it is still considered taboo, under most circumstances, to pose questions which indicate a non-belief in the official version of events.

Discussing these theories has lead to many firings and quite often ostracism from friends, co-workers and family; but these questions are perfectly logical questions. Why do people resort to such immature measures in response to simply questioning an event? Why not just answer the questions and come to the conclusions reached using logic?

Is there, perhaps, a fear of using logic to question these events? Might the conclusions reached possibly put people in a position of conflict with long-held views? Read the rest of this entry »

Increasing credit risk will push up interest rates

Gijsbert Groenewegen | Groenewegen Report
Posted Jul 1, 2011

Increasing credit risk will cause much higher interest rates across the borders

The Belgian/French bank Dexia, with a ¤4.3bn or $6bn+ exposure (according to S&P’s Corp) to government debts in Greece, has back stopped (guaranteed) $17bn in municipal bonds in the US according to an article in the WSJ. As a result of the problems in Greece interest rates of municipality bonds in small towns in the United States used to finance municipal facilities like schools, bridges, ice rinks etc are being pushed up. S&P warned last month of a possible downgrade of Dexia’s investment- grade credit ratings. It looks indeed like Lehman revisited when one of the victims of the CDO crisis in the US was a small town in Norway which had bought “triple A” CDO s. And don’t forget the exposure of AIG to the housing market through the Credit Default Swaps (CDSs) that were never going to be called because of the triple A status of the CDOs, and how it almost bankrupted Goldman and others.

While other investors are stepping in to buy those bonds, they are demanding sharply higher yields as compensation for the increased risk following a possible downgrade of Dexia’s credit rating. As a result, borrowing costs for some municipalities are now the steepest since the financial crisis. Some cost of borrowing are tripling and quadrupling in a matter of weeks.

Dexia is obliged to buy as much as $17 billion in municipal bonds if investors withdraw during the remarketing or rollover process. Some $400 million has already been taken back though in those cases, allowing Dexia to increase the interest rate paid by the municipalities whilst at the same time it can demand an accelerated pay back schedule. Some municipalities are trying to replace Dexia with other banks though the refinancing is likely to lead to much higher interest rates in some cases from 3% to 12% which increase borrowing costs by tenth of thousands of dollars which in turn leads to very high fees for the related facilities.

With the QE2 ending on June 30 (the Fed has bought 85% of all treasury issuances this year!!) and higher credit risks higher interest rates could bring down the markets. If we break above the 4.80% level on the 30-y Treasury bond we will break out of the downtrend since 1981 and could see much higher interest rates with all its obvious consequences for the financial markets and economies.
Read the rest of this entry »