The Pursuit of the Tao

In the world of knowledge,

Every day something new is added.

In pursuit of Tao,

Every day something is let go.

— Lao Tzu

Gold Moves into Uncharted Territory

The price of gold has cleared the former all-time high, reaching into the $1040 (USD) range for the first time in the history of the yellow metal.  The chart below illustrates how gold formed and broke through a bullish inverted head & shoulders formation, broke through the top of a consolidation wedge, and broke through a wedge in the MACD indicator.

With an RSI reading of 70, gold is one hot commodity.  This should start ringing some alarm bells at major money centers around the world.  It is becoming ever-more apparent, that we are experiencing a serious rout of inflation which could very well turn into a devastating wave of hyper-inflation in due time.

Gold Breakout Chart: October 7, 2009

The Tao Te Ching on True Mastery

The Master doesn’t try to be powerful;
thus he is truly powerful.
The ordinary man keeps reaching for power;
thus he never has enough.

The Master does nothing,
yet he leaves nothing undone.
The ordinary man is always doing things,
yet many more are left to be done.

The kind man does something,
yet something remains undone.
The just man does something,
and leaves many things to be done.
The moral man does something,
and when no one responds
he rolls up his sleeves and uses force.

When the Tao is lost, there is goodness.
When goodness is lost, there is morality.
When morality is lost, there is ritual.
Ritual is the husk of true faith,
the beginning of chaos.

Therefore the Master concerns himself
with the depths and not the surface,
with the fruit and not the flower.
He has no will of his own.
He dwells in reality,
and lets all illusions go.

–Tao Te Ching (ch. 38 — S. Mitchell Translation)

Thoughts on the Gold Chart and Economics

As of September 25, gold has broken through two long-term formations and sits at the neckline of an inverse head & shoulders formation.

Given that gold closed the week at the neckline of such a long-term Head & Shoulders formation, after having shown such resilience over the past few weeks, it is time we prepare ourselves for a significant move, further into unknown territory. The chart above indicates that gold is acting like a coiled spring, ready for the slightest trigger, to send it into launch mode; bringing the price into the $1200-1300 USD range.

When I look at this chart, I am reminded of the 2002-2003 period, when gold was hovering around the $375 range in a large wedge formation. At the time everyone was thinking, “this must be it for gold, it’s already had such a run from $250, the bull run surely must be over by now.”

I remember seeing the wedges, similar to the current chart, though less volatile than the current price fluctuations. I remember seeing a good-sized wedge in the MACD which had broken to the upside. In fact, it was at this time that Jim Sinclair, the CEO of Tanzanian Royalty Exploration and the author of Jim Sinclair’s Mine Set had a contest for gold community members to draw the relevant trend lines on an Investors Business Daily gold chart that he provided. The prize for this contest was a one ounce gold coin.

Well, I took Jim up on his offer and drew formations similar to those on the attached chart. Including a MACD breakout precisely like the one on the current chart. I made the chart simple yet elegant and intuitive and fortunately for me; out of all of the hundreds of charts sent in to his fax, he chose mine as the winner. What a great feeling that was and what an appreciation I gained for the power that each of us has to understand what is going on in the economic world with elegant simplicity not endless complexity.

It was even more rewarding to see gold advance to $450 by late 2004 and then $700 by 2006. What you have to realize, when you are studying these charts, is the fact that the underlying forces which propel gold skyward have not changed. The governments and central banks of the world continue to employ their disastrously flawed Keynesian economic models which create welfare, warfare and ultimately massive inflation.

Politicians love having all of the “free” money, hot off the printing press, to buy votes, line the pockets of their associates and bail out their friends. That is why these leftist notions of a nanny state taking care of us from cradle to grave, often embraced by Republicans and Democrats alike, is not going to solve the problems it was intended to solve.

This is because everything has a cost, yes even the nanny state, corporate welfare and the like. As the price of the yellow metal rises the buying power of the savings of billions of individuals decreases; so they are in effect robbed in broad daylight by the Keynesian inflationary policies. Is it any wonder that the standard of living continues to decline all over the western world.

“We can’t solve problems by using the same kind of thinking we used when we created them.” –Einstein

One of these days, it may dawn upon people, en mass; that in general the government doesn’t solve problems, it only creates problems. So the only way to truly solve problems is by strictly limiting the role of government to that of a referee and letting the free market bring about the solutions we need.

Had the free market been allowed to act upon zombie banks years ago, when the problems first arose; these banks would have never become “too big to fail.” Had the free markets been allowed to act, unhindered, in the health care field, we would have more choices and less people unable to get the help they need.

Unfortunately, with the public school educated populace; the first place they turn whenever their is a problem is the government. So we have the Hegelian dialectic, “(problem) oh goodness, what a dreadful problem! — (reaction) what are they going to do about it? — (solution) the policies that were originally sought, but did not find the political support are now widely supported and then implemented without much opposition.”

It really saddens me to see my countrymen repeating this cycle over and over again, unaware and uncaring of the fact that it makes their lives much more difficult and constrained. I often wonder when it will become apparent to them that all of this nonsense isn’t working. Will it be when gold is at 3,000? 5,000? 10,000?

I can’t say for sure when decisive action will be taken; but if history is any indicator, inevitably there will come a point at which the pull of the massively centralized state on people’s lives distorts the culture of these people to such an extent that they decide they’ve had enough of it. This would be the point where they realize that it costs so much more to live in a massive welfare state than the benefits that are derived from it and the productive individuals either demand real change, or they pull up anchor and head for some place which will suit their needs.

Ghost Economy: The World Sits Idle

During the boom years of globalization and credit expansion, a tremendous amount of over-capacity was created. Now that consumers are tapped out and the bills are coming due, we see economic phenomena such as: idle shipping vessels, idle dock cranes and shipyards running out of orders for new ships to build.

These are the kinds of outcomes you see when people become driven by the irrational forces of the current international fiat money system. Supply and demand are not as effective when you have government and monetary authorities toying with foreign exchange rates and creating vast sums of fiat; this wreaks havoc on markets and causes the severe imbalances we have been seeing as of late.

One of the most telling signs, of how crippled world economy has become lately, is a vast fleet of idle cargo ships off the coast of Singapore. With trade dropping off around the world, the price to charter these ships is now a tiny fraction of what it was in better times; many ships cost 1/10 of what they once did.

Unless we replace our monetary system with sound hard-asset-based money, it is likely that we will continue to see these kinds of severe imbalances for many generations to come.

Revealed: The ghost fleet of the recession

Simon Parry | UK Daily Mail

The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination – and is why your Christmas stocking may be on the light side this year.

The tropical waters that lap the jungle shores of southern Malaysia could not be described as a paradisical shimmering turquoise. They are more of a dark, soupy green. They also carry a suspicious smell. Not that this is of any concern to the lone Indian face that has just peeped anxiously down at me from the rusting deck of a towering container ship; he is more disturbed by the fact that I may be a pirate, which, right now, on top of everything else, is the last thing he needs.

His appearance, in a peaked cap and uniform, seems rather odd; an officer without a crew. But there is something slightly odder about the vast distance between my jolly boat and his lofty position, which I can’t immediately put my finger on.
Then I have it – his 750ft-long merchant vessel is standing absurdly high in the water. The low waves don’t even bother the lowest mark on its Plimsoll line. It’s the same with all the ships parked here, and there are a lot of them. Close to 500. An armada of freighters with no cargo, no crew, and without a destination between them.

My ramshackle wooden fishing boat has floated perilously close to this giant sheet of steel. But the face is clearly more scared of me than I am of him. He shoos me away and scurries back into the vastness of his ship. His footsteps leave an echo behind them.

Navigating a precarious course around the hull of this Panama-registered hulk, I reach its bow and notice something else extraordinary. It is tied side by side to a container ship of almost the same size. The mighty sister ship sits empty, high in the water again, with apparently only the sailor and a few lengths of rope for company.

Nearby, as we meander in searing midday heat and dripping humidity between the hulls of the silent armada, a young European officer peers at us from the bridge of an oil tanker owned by the world’s biggest container shipping line, Maersk. We circle and ask to go on board, but are waved away by two Indian crewmen who appear to be the only other people on the ship.
‘They are telling us to go away,’ the boat driver explains. ‘No one is supposed to be here. They are very frightened of pirates.’

Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers – all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.

They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia’s rural Johor state, 50 miles east of Singapore harbour.

It is so far off the beaten track that nobody ever really comes close, which is why these ships are here. The world’s ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world’s economies.

So they have been quietly retired to this equatorial backwater, to be maintained only by a handful of bored sailors. The skeleton crews are left alone to fend off the ever-present threats of piracy and collisions in the congested waters as the hulls gather rust and seaweed at what should be their busiest time of year.

Local fisherman Ah Wat, 42, who for more than 20 years has made a living fishing for prawns from his home in Sungai Rengit, says: ‘Before, there was nothing out there – just sea. Then the big ships just suddenly came one day, and every day there are more of them.

‘Some of them stay for a few weeks and then go away. But most of them just stay. You used to look Christmas from here straight over to Indonesia and see nothing but a few passing boats. Now you can no longer see the horizon.’

The size of the idle fleet becomes more palpable when the ships’ lights are switched on after sunset. From the small fishing villages that dot the coastline, a seemingly endless blaze of light stretches from one end of the horizon to another. Standing in the darkness among the palm trees and bamboo huts, as calls to prayer ring out from mosques further inland, is a surreal and strangely disorientating experience. It makes you feel as if you are adrift on a dark sea, staring at a city of light.

Ah Wat says: ‘We don’t understand why they are here. There are so many ships but no one seems to be on board. When we sail past them in our fishing boats we never see anyone. They are like real ghost ships and some people are scared of them. They believe they may bring a curse with them and that there may be bad spirits on the ships.’

read full article…

Why the Federal Income-Tax is Unnecessary and Immoral

One of the firmest rooted myths in today’s American society, is this notion of an income tax. It is one of those consensus reality illusions which has wormed its way into our culture in the 20th century.  A thorough investigation into this matter, shows that there is much controversy as to whether or not this tax is even valid, when applied to most Americans.

It is often thought that the 16th amendment gives congress this power to tax labor.  However, in 1916, the Supreme Court of the United States ruled “the Sixteenth Amendment does not purport to confer power to levy income taxes” in Brushaber vs. Union Pacific Railroad.

It is unfortunate that the majority of the population still does not understand the law, or the reason why the Constitution forbids direct un-apportioned taxes.  If this understanding of the law were more wide-spread, we would see the end of many of these organizations which take of the fruits of our labors.

The graduated income tax and the institutions it supports are deeply immoral; it undermines the inalienable rights of the individual and gives the Federal Government virtually unlimited power to take our property and control our lives.

Unnecessary and Immoral

By Jake Towne | Campaign For Liberty

“In a Time of Universal Deceit, Telling the Truth is a Revolutionary Act.”
– George Orwell, author of 1984

Summary: The federal income tax is an unnecessary and immoral tax. I am in favor of abolishing the federal income tax and eventually the entire IRS. YOUR income from YOUR labor belongs to you and no one else, especially the government, has the right to steal it from you. Most Americans are unaware that while the government collects $1,200 billion in federal income taxes and collects roughly $3,000 billion in total taxes, the fact is that “only” $67 billion is necessary to run the executive, legislative, and judicial branches, which includes the FBI and federal court system. (1) (2) (3) When one compares this amount to the Banker Bailout of October 2008 for $800 billion and the Obama Stimulus Plan for $1,100 billion with interest, one wonders why not bailout the taxpayer in a plunging economy instead? read full article »

Gold is Poised for Liftoff

It looks the yellow metal is preparing for another increase. Tonight it is moving above the key $1000 level to $1008 USD. Based upon the inverted Head & Shoulders formation on the medium-term chart, the target on this move is approximately $1379. If this indeed occurs, it means a tremendous selloff in the US Dollar; because gold almost always acts in inverse of the US dollar.

The extent to which the dollar falls relative to the other currencies depends on how much gold increases relative to those currencies. As has been predicted for years, we are moving from a confidence based economy into a hard asset based economy.

Over then coming weeks, I expect we will see some shocking dollar corrections in the currency markets; which will begin to wreak havoc over the daily lives of billions of people. We are likely to see civil unrest, rapid increases in prices for everyday items and shortages.

Elliott Wave Formation in Gold as it Reacts off of its all-time high at $1037.

Gold broke out of the recent consolidation wedge, confirming some recent bullish activity.

Always Look on the Bright Side of Life

Coordinator: Crucifixion?
Prisoner: Yes.
Coordinator: Good. Out of the door, line on the left, one cross each.
[Next prisoner]
Coordinator: Crucifixion?
Mr. Cheeky: Er, no, freedom actually.
Coordinator: What?
Mr. Cheeky: Yeah, they said I hadn’t done anything and I could go and live on an island somewhere.
Coordinator: Oh I say, that’s very nice. Well, off you go then.
Mr. Cheeky: No, I’m just pulling your leg, it’s crucifixion really.
Coordinator: [laughing] Oh yes, very good. Well…
Mr. Cheeky: Yes I know, out of the door, one cross each, line on the left.

Video Link: Life of Brian ending

The ending of Life of Brian

Some things in life are bad,
They can really make you mad,
Other things just make you swear and curse,
When you’re chewing life’s gristle,
Don’t grumble,
Give a whistle
And this’ll help things turn out for the best.
And…

Always look on the bright side of life.
[whistle]
Always look on the light side of life.
[whistle]

If life seems jolly rotten,
There’s something you’ve forgotten,
And that’s to laugh and smile and dance and sing.
When you’re feeling in the dumps,
Don’t be silly chumps.
Just purse your lips and whistle.
That’s the thing.
And… read full article »

The Importance of the Jeffersonian Model

At the dawn of America’s independence, her newly formed government was populated with reluctant leaders; statesmen in the truest sense of the word.  Whereas in today’s world, such statesmanship is practically an anathema; for those who do exhibit statesmen-like principle are often ridiculed, for their strict opposition to the unprincipled, morally bankrupt, tactics of today’s political movements.

The Hypocrisy of the Ruling Party

“I never submitted the whole system of my opinions to the creed of any party of men whatever, in religion, in philosophy, in politics, or in anything else, where I was capable of thinking for myself. If I could not go to heaven but with a party, I would not go there at all.”

– Thomas Jefferson

In contemporary American society, there is a considerable hubris and hypocrisy, exhibited by the ruling party and supporters of this party; whether it be Republican or Democrat.  Both parties claim to be adherents of the Constitution and the Bill of Rights, yet both parties unapologetically denigrate these foundational principles at virtually every opportunity.

It is as if the principles of equal protection under the law, upon which our republic was founded, have been discarded in favor of a democracy in which favored groups are rewarded using protection rackets and money powers to govern.

American society is ever becoming like many ancient societies, where the national government becomes the centerpiece of everyone’s lives.  They use bread and circuses to keep the people occupied, such that they do not object to the gradual takeover and subjugation of an individual’s right to self-determination.

Some-day in the near future, it may be virtually impossible to make a decent living in America, without working directly for the government or as a contractor of the government.  This merging of the corporations with the government is the very definition of Industrial Fascism.

The Immorality of Unconstitutional Spending

“This I hope will be the age of experiments in government, and that their basis will be founded in principles of honesty, not of mere force.” — Thomas Jefferson

If you consider the extent to which we are taxed and scrutinized, as well as the legal definition of Citizen of the United States, then we are already employees of United States; because in legalese the term Citizen is held to mean Employee. This is how the government gets away with the so-called Income Tax, despite the fact that direct un-apportioned taxes are expressly forbidden in the Constitution. In fact many Americans are already working 3+ months out of the year to pay for the taxes they are compelled to pay by the government. read full article »

On the Misguided Agenda of the Leftists

One of the biggest problems in America today derives from the fact that most of the people, from the boomer generation on, haven’t a clue of the purpose of the Constitution of the United States of America. They tremble in fear at the thought of law abiding citizens possessing guns; while they have no objection at the 100,000+ federal government officials who have guns and use them to compel people to conform to questionable laws, which often undermine the Constitution and the protections afforded to the individual under law.

The original purpose of the second amendment was to protect the individual from possible tyranny of the Congress. If you need any confirmation of what happens when the people are disarmed; just look at Iran, China and the U.K. In all of these situations the people are severely limited in their ability to exercise free speech; their liberties are also curtailed to such an extent that life has become quite difficult to live without government intrusion.

Indeed, we are headed in the same direction as the countries mentioned in the United States of America; but I firmly believe the pace is slowed and the lines are drawn, by the fact that the citizenry are well armed and there is a facet of the population, however small, who understands the need to safeguard liberty from all enemies foreign and domestic.

The fact is, these leftists (and there are leftists on both sides of the aisle), while they may be well meaning in many cases; they are undoing what took centuries of struggle and bloodshed to achieve. If only they would read and understand the Constitution, the Federalist Papers and the other writings of the founding fathers; they wouldn’t dare attempt to curtail liberty and build a larger and more invasive government.

Alas, they do not understand the protections afforded to an individual, or the reason for them; they are content in their self-righteous crusade to abolish the protection of the individual by undermining the original intent of the founders of the republic. I find it truly disheartening to see intelligent people supporting universal health care, gun controls, cap and trade energy taxes and the like; I know from these policies that they have not a shred of understanding of why the Constitution and the Bill of Rights were authored; or why the founding members of our society sought to fight off the influence of the red coats.

My suggestion to leftists who don’t care for the original intend of the Bill of Rights, is to spend some time in countries where there are no protections for individuals; in fact, move there if you like tyranny so much.  Instead of trashing the liberties and the economy of the last great stronghold of liberty, just move to a place that has already been sacked like England, where you can be watched from dawn ’till dusk on CCTV cameras and you can wait months to get treatments using the “free” health care.

The Liberal Fear of Guns

By Jacob Hornberger | Campaign For Liberty

Liberal columnist David Sirota is scared, and he believes that the First Amendment is intended to eliminate his fear. In a column entitled “Freedom from Fear — and the Second Amendment,” Sirota argues that because some people get scared when they see guns and think that the gun owner is going to shoot them if they say the wrong thing, the Second Amendment is a threat to the First Amendment. read full article »