The Rational Market Myth

One of the myths of economics is that markets are rational. Theories are based on this assumption, and the belief that markets are rational fuels the argument against regulation. The market response to the Federal Reserve’s June 19 statement that it will taper off its bond purchases if its forecast comes true is unequivocal proof that markets are irrational.

The Federal Reserve’s statement that it “currently anticipates that it would be appropriate to moderate the monthly pace of purchases [of bonds] later this year” depends on a very big if. The if is the correctness of the Fed’s forecast of moderate economic growth and employment gains.

The Fed has not stopped purchasing $85 billion of bonds each month. So nothing real has changed. Indeed, there was no new information in the Fed’s statement. It has been known for some time that, according to the Fed, its bond purchases will gradually cease.

In response to this repeat of old information, the stock and bond markets sold off in a major way on June 19-20. This market response to the Fed’s statement indicates that the Fed’s forecast is unlikely to come true. Low interest rates and a high stock market are totally dependent on the liquidity that the Fed is injecting by printing $1,000 billion per year. If this liquidity is not injected, what will sustain the markets? If the markets crash and interest rates rise, how can the Fed expect recovery?

In other words, the participants in the stock and bond markets know that the markets are bubbles created by the printing press. There is no real basis for the high stock and bond prices. The prices are an artificial reality created by the printing press. Rational markets would take into account the printing press element and would price stocks and bonds at a much lower level.

- Source, Paul Craig Roberts, read the full post here:

paulcraigroberts.org

The Failure of Laissez Faire Capitalism and Economic Dissolution of the West

The Silver Bull Market is NOT Over Yet!

SNNLive spoke with David Morgan of The Morgan Report at Cambridge House International's World Resource Investment Conference 2013 in Vancouver, CA.

- Source, Cambridge House:

http://cambridgehouse.com/

Mixed Pre-1965 US Silver Coins

France Bans Shipment of Gold and Silver

In France, a new law that sending gold, silver and cash prohibits. Companies gold coins on sale and send by post can not exercise this new law work. Sites are also traders who are prevented by the new law. Operates like eBay.

In September 2011, the French government took all measures to limit. anonymous cash purchases of gold and silver Since then, every purchase of bullion with a value of more than € 450 per bank transfer happen. With the new law since June 1 this year in force is also sending by post of banknotes and precious metals restricted.

The new legislation can be found on this website , where under Chapter I, the following Article D1 of the universal postal service and the postal service obligations is:

"L'insertion the billets de banque, the pièces et de metaux precieux est interdite dans les envois postaux, y compris dans les envois à valeur déclarée, lesson envois recommandes et les envois faisant l'objet de leur formalités attestant dépôt et leur distribution. "

Loosely translated the law says that inserting banknotes, coins and precious metals is prohibited in mail. That includes insured and registered mail shipments.

- Source, Market Update:

http://www.marketupdate.nl/nieuws/goud-en-zilvermarkt/frankrijk-verbiedt-verzending-van-goud-en-zilver-via-de-post/

1 Oz Copper Chinese Year of the Dragon

Gold Sales Prohibited by Central Bank of India

Two weeks ago, with its current account getting crushed by relentless gold imports, India's finance minister Chidambaram literally begged the people to stop buying gold. Judging by the popular response, the ongoing physical shortage, and last night's increase in Indian gold import duties from 6% to 8%, appealing to people's feeling when it comes to the choice of fiat vs physical, has failed miserably. So the FinMin Chidambaram has decided to escalate. Per Reuters: "The Reserve Bank of India has advised banks against selling gold coins to retail customers, Finance Minister P. Chidambaram said on Thursday, a day after he raised gold import duty to try to ease pressure on India's bloated current account deficit." Well, if there ever was one sure way to send demand for any product through the roof (guns, ammo, etc), it is for the government to prohibit its outright sale. What follows next, almost without fail, is a panicked, chaotic buying scramble.

Gold imports by India, the world's biggest buyer of bullion, surged to 162 tonnes in May -- more than twice the monthly average in the record year of 2011.

"I think the Reserve Bank has advised banks that they should not sell gold coins," said Chidambaram, while speaking at an event in Mumbai.

Chidambaram also urged banks to advise their customers not to invest in gold.

Why? If it is not clear by now, here is the explanation: there is simply not enough gold to satisfy demand at the current artificially downward-manipulated price, no matter what propaganda script is being spun on Verizon TV at any given moment. And with India's idiotic decree, even more gold will be purchased at these prices.

Dear India - here is a simple way to limit demand: price.

Petition the central banks to allow gold to price based on price discovery, or as it is also known supply and demand. Because if gold were to cost $2000,$5000, $10,000/oz then all problems resulting from excess demand would immediately disappear and India's current account would be back to normal.

Of course this will not happen, as the crumbling facade of the imploding fiath based regime would immediately peel away. So back to gold capital controls and other ad hoc made-up measures guaranteed to not only fail but push the price of physical gold much higher.

Good luck.

- Source, Zero Hedge:

http://www.zerohedge.com/news/2013-06-06/india-central-bank-prohibits-sales-gold-coins

Wise Company 60 Serving Entrée Only Grab and Go Survival Food Kit

The Level of Physical Gold Being Traded is Shocking!

“Just look at what’s happening in the physical gold market. The LBMA reported record gold transactions in April, of plus 25%. This is the highest level since gold peaked in September of 2011. So physical trading is at the same level where it was when gold was at its peak at $1,900. That’s extraordinary. The level of physical gold trading is incredible. We are seeing the same activity now as when gold was at its peak. And it proves that all of the selling is in the paper market.

Remember, Eric, these were April figures. We have seen, and also refiners have seen much higher activity in May. So demand is even greater right now. I believe that we have seen the gold market finally turn to the upside, despite today’s pull back  It’s possible to see some consolidation before gold takes off, but the real move, when it starts and it won’t be far away, that will be massive.”

- Egon Von Greyerz via a recent King World News interview, read the full interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/31_The_Current_Level_Of_Physical_Gold_Being_Traded_Is_Shocking.html

1944 Mercury Dime - 90% Silver

Bitcoin Vs Gold and Silver

We first celebrated Bitcoin Invading Mainstream Banking on January 11, then reported here on April 30 that Canada had tightened its grip on Bitcoin exchanges. In another article (with video from Mike), we posed the question: Could Bitcoin Eventually be the New World Currency?

The big deal over Bitcoin is our freedom of choice, because if digital options such as Bitcoin or U.S. dollars were equal in value as money to gold and silver, the owners of the systems wouldn't need laws to enforce a currency monopoly. Mike has already taken sides in this controversy, saying, "I'm for whatever the free market picks for currency."

Dr. Martenson agreed, wisely pointing out the ongoing "Cold War race between security professionals and hackers."

- Source, Gold Silver.com:

http://goldsilver.com/article/bitcoin-vs-gold-and-silver-mike-maloney-and-chris-martenson/

1942 Walking Liberty Half Dollar

Shortage Intensifies Gold Clients Being Denied Holdings

"Last week we had an investor being refused to take his physical gold out of a major Swiss bank. They told him that the regulatory authority prevented the bank from giving the client his physical gold. That is of course total nonsense, and eventually we helped the client to get his gold out of the bank.

Another of our clients was told by a major Swiss bank that he can only take out 100,000 Swiss francs of physical gold every six months. They blamed money laundering and terrorist activity for this decision. Yet another client was again told by a major Swiss bank that his storage fees would be going up substantially. When he complained he was told that he should convert to paper gold.

And finally, Eric, another big bank, which has an ETF, told a client who wanted to transfer gold out it that he would have to wait at least two weeks for the transfer. You just wonder why a major bank that is supposed to hold substantial amounts of physical gold needs two weeks of more to transfer gold to a client.

So all of this, Eric, points to the fact that there is a major shortage of physical gold in the banks. These banks obviously don’t want to lose customers, but their behaviour and the reluctance to deliver also points to a real shortage in the physical market."

- Egon Von Greyerz via a recent King World News Interview, read the full interview here:

http://www.kingworldnews.com/kingworldnews/King_World_News.html

Canary in the Coalmine Gold and Silver

"In general when equity prices are rising and credit spreads are tightening, the ratio of gold-to-silver prices falls as 'fear' ebbs away and confidence in a real economy returns as exemplified by the rise of risk assets. Twice before we have seen the anti-correlation of stocks and gold/silver flip to a highly correlated regime, and as Bloomberg's Chart of the Day notes, each time it suggested "stocks were due to snap". It seems a concerted push above and a 50x ratio (for gold-to-silver) tends to exhibit notably risk-off behaviour  Currently, the S&P 500 and Gold-to-Silver ratio have been highly correlated since this last rally began in stocks and as HSBC's Charles Morris notes, this suggests a 'snap' in risk assets within six months."

- Excerpt from a recent Zero Hedge article, read the full article here:

http://www.zerohedge.com/news/2013-05-21/goldsilver-canary-coalmine

Gold & Silver It Could Get Uglier

"The realistic general consensus is that the spot prices for gold and silver are no longer relevant. Yet, what remains the one price on which focus has intensified for each? There simply is no other alternative, at present. A distinction is made concerning the purchases by China, Russia, India, et al, paying a larger premium over spot gold, prior to the sell-off, and prices paid by those purchasing single ounce coins or even kilo bars, “the people,” as it were.

Purchases made by the tonne, from the countries mentioned, are not reported in a way that can be measured, and in fact, those purchases are not publicly reported. While the reports of unprecedented demand for both gold and silver on a world-wide basis in response to the attack on longs, last month, continues, we think the New World Order and its vast infrastructure, IMF, UN, Basel, central bankers, all governments in the West under its control, is not overly concerned about the man-on-the-street demand.

The next chapter has yet to be written. One thing is likely to be certain, it will get uglier."

- Excerpt from a recent Edge Trader Plus article, read the full article here:

http://edgetraderplus.com/market-commentaries/gold-and-silver-it-could-get-uglier-and-take-longer

One Year in Hell - Surviving a Total Collapse

Many in the precious metals world are expecting a collapse of some nature, whether it be a financial collapse or a complete "Mad Max Road Warrior" style collapse. The truth is simply owning gold and silver won't save you. It will most certainly help, but other goods are required as well. The following is a real life story from someone who HAS lived and survived a full on collapse. His story is a MUST read. It is not only interesting, but it is filled with a wealth of knowledge. Enjoy.

Selco's story of survival:

I am from Bosnia. You know, between 1992 and 1995, it was hell. For one year, I lived and survived in a city with 6,000 people without water, electricity, gasoline, medical help, civil defence  distribution service, any kind of traditional service or centralized rule.

Today, me and my family are well-prepared, I am well-armed. I have experience.

It does not matter what will happen: an earthquake, a war, a tsunami, aliens, terrorists, economic collapse, uprising. The important part is that something will happen.

The following is my experience:

Our city was blockaded by the army; and for one year, life in the city turned into total crap. We had no army, no police. We only had armed groups; those armed protected their homes and families.

When it all started, some of us were better prepared. But most of the neighbours  families had enough food only for a few days. Some had pistols; a few had AK-47s or shotguns.

After a month or two, gangs started operating, destroying everything. Hospitals, for example, turned into slaughterhouses. There was no more police. About 80 percent of the hospital staff were gone. I got lucky. My family at the time was fairly large (15 people in a large house, six pistols, three AKs), and we survived (most of us, at least).

The Americans dropped MREs every 10 days to help blockaded cities. This was never enough. Some — very few — had gardens. It took three months for the first rumours to spread of men dying from hunger and cold. We removed all the doors, the window frames from abandoned houses, ripped up the floors and burned the furniture for heat. Many died from diseases, especially from the water (two from my own family). We drank mostly rainwater, ate pigeons and even rats.

Money soon became worthless. We returned to an exchange. For a tin can of tushonka (think Soviet spam), you could have a woman. (It is hard to speak of it, but it is true.) Most of the women who sold themselves were desperate mothers.

Arms, ammunition, candles, lighters, antibiotics, gasoline, batteries and food. We fought for these things like animals. In these situations, it all changes. Men become monsters. It was disgusting.

Strength was in numbers. A man living alone getting killed and robbed would be just a matter of time, even if he was armed.

Today, me and my family are well-prepared, I am well-armed. I have experience.

It does not matter what will happen: an earthquake, a war, a tsunami, aliens, terrorists, economic collapse, uprising. The important part is that something will happen.

Here’s my experience: You can’t make it on your own. Don’t stay apart from your family; prepare together, choose reliable friends.

1. How to move safely in a city

The city was divided into communities along streets. Our street (15 to 20 homes) had patrols (five armed men every week) to watch for gangs and for our enemies.

All the exchanges occurred in the street. About 5 kilometres away was an entire street for trading, all well-organized; but going there was too dangerous because of the snipers. You could also get robbed by bandits. I only went there twice, when I needed something really rare (list of medicine, mainly antibiotics, of the French original of the texts).

Nobody used auto-mobiles in the city: The streets were blocked by wreckage and by abandoned cars. Gasoline was very expensive. If one needed to go somewhere, that was done at night. Never travel alone or in groups that were too big — always two to three men. All armed, travel swift, in the shadows, cross streets through ruins, not along open streets.

There were many gangs 10 to 15 men strong, some as large as 50 men. But there were also many normal men, like you and me, fathers and grandfathers, who killed and robbed. There were no “good” and “bad” men. Most were in the middle and ready for the worst.

2. What about wood? Your home city is surrounded by woods; why did you burn doors and furniture?

There were not that many woods around the city. It was very beautiful — restaurants, cinemas, schools, even an airport. Every tree in the city and in the city park was cut down for fuel in the first two months.

Without electricity for cooking and heat, we burned anything that burned. Furniture, doors, flooring: That wood burns swiftly. We had no suburbs or suburban farms. The enemy was in the suburbs. We were surrounded. Even in the city you never knew who was the enemy at any given point.

3. What knowledge was useful to you in that period?

To imagine the situation a bit better, you should know it was practically a return to the Stone Age.

For example, I had a container of cooking gas. But I did not use it for heat. That would be too expensive! I attached a nozzle to it I made myself and used to fill lighters. Lighters were precious.

If a man brought an empty lighter, I would fill it; and he would give me a tin of food or a candle.

I was a paramedic. In these conditions, my knowledge was my wealth. Be curious and skilled. In these conditions, the ability to fix things is more valuable than gold.

Items and supplies will inevitably run out, but your skills will keep you fed.

I wish to say this: Learn to fix things, shoes or people.

My neighbour, for example, knew how to make kerosene for lamps. He never went hungry.

4. If you had three months to prepare now, what would you do?

Three months? Run away from the country? (joking)

Today, I know everything can collapse really fast. I have a stockpile of food, hygiene items, batteries — enough to last me for six months.

I live in a very secure flat and own a home with a shelter in a village 5 kilometres away. Another six-month supply there, too. That’s a small village; most people there are well-prepared. The war had taught them.

I have four weapons and 2,000 rounds for each.

I have a garden and have learned gardening. Also, I have a good instinct. You know, when everyone around you keeps telling you it’ll all be fine, but I know it will all collapse.

I have strength to do what I need to protect my family. Because when it all collapses, you must be ready to do “bad” things to keep your children alive and protect your family.

Surviving on your own is practically impossible. (That’s what I think.) Even you’re armed and ready, if you’re alone, you’ll die. I have seen that happen many times.

Families and groups, well-prepared, with skills and knowledge in various fields: That’s much better.

5. What should you stockpile?

That depends. If you plan to live by theft, all you need is weapons and ammo. Lots of ammo.

If not, more food, hygiene items, batteries, accumulators, little trading items (knives, lighters, flints, soap). Also, alcohol of a type that keeps well. The cheapest whiskey is a good trading item.

Many people died from insufficient hygiene. You’ll need simple items in great amounts. For example, garbage bags. Lots of them. And toilet papers. Non-reusable dishes and cups: You’ll need lots of them. I know that because we didn’t have any at all.

As for me, a supply of hygiene items is perhaps more important than food. You can shoot a pigeon. You can find a plant to eat. You can’t find or shoot any disinfectant.

Disinfectant, detergents, bleach, soap, gloves, masks.

First aid skills, washing wounds and burns. Perhaps you will find a doctor and will not be able to pay him.

Learn to use antibiotics. It’s good to have a stockpile of them.

You should choose the simplest weapons. I carry a Glock .45. I like it, but it’s a rare gun here. So I have two TT pistols, too. (Everyone has them and ammo is common.)

I don’t like Kalashnikov’s, but again, same story. Everyone has them; so do I.

You must own small, unnoticeable items. For example, a generator is good, but 1,000 BIC lighters are better. A generator will attract attention if there’s any trouble, but 1,000 lighters are compact, cheap and can always be traded.

We usually collected rainwater into four large barrels and then boiled it. There was a small river, but the water in it became very dirty very fast.

It’s also important to have containers for water: barrels and buckets.

6. Were gold and silver useful?

Yes. I personally traded all the gold in the house for ammunition.

Sometimes, we got our hands on money: dollars and Deutschmarks. We bought some things for them, but this was rare and prices were astronomical. For example, a can of beans cost $30 to $40. The local money quickly became worthless. Everything we needed we traded for through barter.

7. Was salt expensive?

Yes, but coffee and cigarettes were even more expensive. I had lots of alcohol and traded it without problems. Alcohol consumption grew over 10 times as compared to peacetime. Perhaps today, it’s more useful to keep a stock of cigarettes, lighters and batteries. They take up less space.

At this time, I was not a survivalist. We had no time to prepare — several days before the shit hit the fan. The politicians kept repeating over the TV that everything was going according to plan, there’s no reason to be concerned. When the sky fell on our heads, we took what we could.

8. Was it difficult to purchase firearms? What did you trade for arms and ammunition?

After the war, we had guns in every house. The police confiscated lots of guns at the beginning of the war. But most of them we hid. Now I have one legal gun that I have a license for. Under the law, that’s called a temporary collection. If there is unrest, the government will seize all the registered guns. Never forget that.

You know, there are many people who have one legal gun, but also illegal guns if that one gets seized. If you have good trade goods, you might be able to get a gun in a tough situation. But remember, the most difficult time is the first days, and perhaps you won’t have enough time to find a weapon to protect your family. To be disarmed in a time of chaos and panic is a bad idea.

In my case, there was a man who needed a car battery for his radio. He had shotguns. I traded the accumulator for both of them. Sometimes, I traded ammunition for food, and a few weeks later traded food for ammunition. Never did the trade at home, never in great amounts.

Few people knew how much and what I keep at home.

The most important thing is to keep as many things as possible in terms of space and money. Eventually, you’ll understand what is more valuable.

Correction: I’ll always value weapons and ammunition the most. Second? Maybe gas masks and filters.

9. What about security?

Our defenses were very primitive. Again, we weren't ready, and we used what we could. The windows were shattered, and the roofs in a horrible state after the bombings. The windows were blocked — some with sandbags, others with rocks.

I blocked the fence gate with wreckage and garbage, and used a ladder to get across the wall. When I came home, I asked someone inside to pass over the ladder. We had a fellow on our street that completely barricaded himself in his house. He broke a hole in the wall, creating a passage for himself into the ruins of the neighbour's house — a sort of secret entrance.

Maybe this would seem strange, but the most protected houses were looted and destroyed first. In my area of the city, there were beautiful houses with walls, dogs, alarms and barred windows. People attacked them first. Some held out; others didn't. It all depended how many hands and guns they had inside.

I think defence is very important, but it must be carried out unobtrusively. If you are in a city and SHTF comes, you need a simple, non-flashy place, with lots of guns and ammo.

How much ammo? As much as possible.

Make your house as unattractive as you can.

Right now, I own a steel door, but that’s just against the first wave of chaos. After that passes, I will leave the city to rejoin a larger group of people, my friends and family.

There were some situations during the war. There’s no need for details, but we always had superior firepower and a brick wall on our side.

We also constantly kept someone watching the streets. Quality organization is paramount in case of gang attacks.

Shooting was constantly heard in the city.

Our perimeter was defended primitively. All the exits were barricaded and had little firing slits. Inside we had at least five family members ready for battle at any time and one man in the street, hidden in a shelter.

We stayed home through the day to avoid sniper fire.

At first, the weak perish. Then, the rest fight.

During the day, the streets were practically empty due to sniper fire. Defences were oriented toward short-range combat alone. Many died if they went out to gather information, for example. It’s important to remember we had no information, no radio, no TV — only rumours and nothing else.

There was no organized army; every man fought. We had no choice. Everybody was armed, ready to defend themselves.

You should not wear quality items in the city; someone will murder you and take them. Don’t even carry a “pretty” long arm, it will attract attention.

Let me tell you something: If SHTF starts tomorrow, I’ll be humble. I’ll look like everyone else. Desperate, fearful. Maybe I’ll even shout and cry a little bit.

Pretty clothing is excluded altogether. I will not go out in my new tactical outfit to shout: “I have come! You’re doomed, bad guys!” No, I’ll stay aside, well-armed, well-prepared, waiting and evaluating my possibilities, with my best friend or brother.

Super-defences, super-guns are meaningless. If people think they should steal your things, that you’re profitable, they will. It’s only a question of time and the amount of guns and hands.

10. How was the situation with toilets?

We used shovels and a patch of earth near the house. Does it seem dirty? It was. We washed with rainwater or in the river, but most of the time the latter was too dangerous. We had no toilet paper; and if we had any, I would have traded it away.

It was a “dirty” business.

Let me give you a piece of advice: You need guns and ammo first — and second, everything else. Literally everything! All depends on the space and money you have.

If you forget something, there will always be someone to trade with for it. But if you forget weapons and ammo, there will be no access to trading for you.

I don’t think big families are extra mouths. Big families means both more guns and strength — and from there, everyone prepares on his own.

11. How did people treat the sick and the injured?

Most injuries were from gunfire. Without a specialist and without equipment, if an injured man found a doctor somewhere, he had about a 30 percent chance of survival.

It ain’t the movie. People died. Many died from infections of superficial wounds. I had antibiotics for three to four uses — for the family, of course.

People died foolishly quite often. Simple diarrhea will kill you in a few days without medicine, with limited amounts of water.

There were many skin diseases and food poisonings… nothing to it.

Many used local plants and pure alcohol — enough for the short-term, but useless in the long term.

Hygiene is very important, as well as having as much medicine as possible — especially antibiotics.

- Sources, the Silver Doctors and the Survivalist Boards:

http://silverdoctors.com/one-year-in-hellsurviving-a-full-shtf-collapse-in-bosnia/

http://www.survivalistboards.com/showthread.php?t=189395

Fallacy - Silver is Trading Like a Base Metal

"The notion that silver has been recently trading more like a base metal is more a fallacy than fact. When the public realizes the true value of the monetary metals, it will be too late for them. Indeed this will be the greatest irony of all time – massive demand with no available supply.

Some of the top technical analysts have been stating that the reason why the price of silver has not held up as well as gold is due to the fact that silver trades more like copper than gold. Basically, if the “King” of the base metals suffers… so will silver. While this makes good press, the reality is much different..."

- Source, Silver Doctors, read the full article here:

http://silverdoctors.com/the-big-fallacy-silver-trading-more-like-a-base-metal/

The Tax Free World

As seen on ZeroHedge:

"Where do multinationals pay taxes and how much?" Gaining insight from international tax experts, this excellent documentary takes a look at tax havens, the people who live there and the routes along which tax is avoided globally. As we have previously discussed in great detail, those routes go by resounding names like 'Cayman Special', 'Double Irish', and 'Dutch Sandwich' amid a financial world operating in the shadows surrounded by a high level of secrecy where sizable capital streams travel the world at the speed of light and avoid paying tax. 'The Tax Free Tour' explains the systemic risk for governments and citizens alike. Is this the price we have to pay for globalized capitalism? At the same time, the online game "Taxodus" provides an interactive guide to hiding your company's cash. In the game, the player can select the profile of a multinational and look for the global route to pay as little tax as possible.

The Documentary:




Taxodus - The Game explained:

Taxodus - The Game: (click image for game link)

- Post source, ZeroHedge:

http://www.zerohedge.com/news/2013-05-04/taxodus-playing-global-tax-avoidance-game#comment-3530398