Auf Euro lautende Banknoten sind das einzige unbeschränkte gesetzliche Zahlungsmittel.

Auf Euro lautende Banknoten sind das einzige unbeschränkte gesetzliche Zahlungsmittel.

Auf Euro lautende Banknoten sind das einzige unbeschränkte gesetzliche Zahlungsmittel.

ECA Marcellus Trust I Announces Quarterly Distribution

ECA Marcellus Trust INYSE:ECT     Energy : Oil, Gas & Consumable FuelsSmall Cap Value	Change company  Symbol lookup

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As of May 29, 2013 4:01pm ET

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ECA Marcellus Trust I Announces Quarterly Distribution 4:15p ET May 6, 2013 (Business Wire) ECA MARCELLUS TRUST I (NYSE: ECT) announced today that the Trust's distribution for the quarter ended March 31, 2013 will be $0.443 per unit, which is expected to be distributed on or before May 31, 2013 to holders of record as of the close of business on May 17, 2013. The Trust was formed by Energy Corporation of America ("ECA") to own royalty interests in natural gas properties owned by ECA in the Marcellus Shale formation in Greene County, Pennsylvania, and is entitled to receive certain amounts of the proceeds attributable to ECA's interest in the sale of production from the properties. As described in the Trust's filings, the amount of the quarterly distributions is expected to fluctuate from quarter to quarter, depending on the proceeds received by the Trust as a result of production and natural gas prices and the amount of the Trust's administrative expenses, among other factors. Pursuant to IRC Section 1446, withholding tax on income effectively connected to a United States trade or business allocated to foreign partners should be made at the highest marginal rate. Under Section 1441, withholding tax on fixed, determinable, annual, periodic income from United States sources allocated to foreign partners should be made at 30% of gross income unless the rate is reduced by treaty. This release is intended to be a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b) by ECA Marcellus Trust I, and while specific relief is not specified for Section 1441 income, this disclosure is intended to suffice. For distributions made to foreign partners, nominees and brokers should withhold at the highest effective tax rate. This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical facts, are "forward-looking statements" for purposes of these provisions. These forward-looking statements include the amount and date of any anticipated distribution to unit holders. The anticipated distribution is based, in part, on the amount of cash received or expected to be received by the Trust from ECA with respect to the relevant quarterly period. Any differences in actual cash receipts by the Trust could affect this distributable amount. Other important factors that could cause actual results to differ materially include expenses of the Trust and reserves for anticipated future expenses. Statements made in this press release are qualified by the cautionary statements made in this press release. Neither ECA nor the Trustee intends, and neither assumes any obligation, to update any of the statements included in this press release. An investment in Common Units issued by ECA Marcellus Trust I is subject to the risks described in the Trust's Annual Report on Form 10-K for the year ended December 31, 2012, and all of its other filings with the Securities and Exchange Commission. The Trust's annual, quarterly and other filed reports are or will be available over the Internet at the SEC's web site at http://www.sec.gov. http://cts.businesswire.com/ct/CT?id=bwnews&sty=20130506006345r1&sid=cmtx4&distro=nx SOURCE: ECA Marcellus Trust I ECA Marcellus Trust I The Bank of New York Mellon Trust Company, N.A., as Trustee Sarah Newell, 1-800-852-1422 http://research.tdameritrade.com/grid/public/stocks/news/story.asp?docKey=100-126b8383-1

Giganten der ÖlindustrieTanken mit Putin und Chávez

29.10.2012 ·  Der Aufstieg des russischen Ölkonzerns Rosneft zeigt: Staatsunternehmen erobern die Ölindustrie. Weltweit besinnen sich die Länder auf ihre Energiequellen.

Von MARCUS THEURER UND WINAND VON PETERSDORFF, LONDON/FRANKFURT

http://www.faz.net/aktuell/wirtschaft/unternehmen/giganten-der-oelindustrie-tanken-mit-putin-und-chavez-11941092.html

Wenn die Umsetzung nicht beschlossen werden sollte, muss die Bundesrepublik der EU eine Strafe von 100.000 Euro pro Tag der verspäteten Einführung zahlen

Sehr geehrte Kundin, sehr geehrter Kunde,

immer mehr Kunden fragen uns nach der Mehrwertsteuererhöhung für Silbermünzen von 7 auf 19 Prozent. Nach unseren Informationen vom Bundesfinanzministerium existiert eine EU Richtlinie zur einheitlichen Besteuerung. Darunter fallen auch Silbermünzen, die in Deutschland mit 7 %, aber in anderen EU Ländern mit dem vollen Steuersatz von 19 bzw. 20 % besteuert sind. Diese EU Richtlinie muss auch die Bundesrepublik umsetzen. Noch hat der Bundestag nicht entschieden, wann die Umsetzung stattfinden soll. Der nächste Termin wäre der 1.1.2013. Hier könnte der Bundestag noch am letzten Sitzungstag, am 22.12. die Einführung beschließen. Wenn die Umsetzung nicht beschlossen werden sollte, muss die Bundesrepublik der EU eine Strafe von 100.000 Euro pro Tag der verspäteten Einführung zahlen. Wir gehen deshalb davon aus, dass die Mehrwertsteuererhöhung von 7 auf 19 % im Januar kommen wird. Die Silberunzen werden sich deshalb drastisch verteuern.

Darüber hinaus gehen wir davon aus, dass die Edelmetallkurse weiter steigen werden und sich der Euro nicht bei knapp 1,30 zum Dollar halten wird, sondern Richtung 1,25 senken wird. Deswegen werden sich Silberunzen im nächsten Jahr in dreifacher Hinsicht verteuern.

Wir raten deshalb jetzt das Depot mit Gold und Silber weiter aufzustocken. Wir haben heute für Sie eine neue Sonderaktion mit prägefrischen Gold- und Silber Maple Leaf 2012 und den neuen 1oz Silber-Antilopen 2012 aus der Wildlife Serie zum Sonderpreis zusammengestellt.

Ich wünsche Ihnen ein schönes Wochenende.

Herzliche Grüße

Ihr

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Why A Gold Standard, Alone, Is Not Enough

Guest Post: Why A Gold Standard, Alone, Is Not Enough

Submitted by Tyler Durden on 10/09/2012 10:25 -0400

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• Guest Post
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Submitted by Martin Sibileau of 'A View From The Trenches',

...The Argentine case and the Dutch Golden Age suggest that the elimination of the credit multiplier (i.e. extinction of shadow banking) is more important than the asset backing a currency...

As we pointed in our last letter, we have lately noticed that there is an ongoing debate on whether (or not) the world can again embrace the gold standard. We join the debate today, with an historical as well as technical perspective. Today’s letter will deal with the historic part of the discussion. In the process, you will see that we side with some popular ideas, while we challenge others.

The gold standard will be the last option: If adopted, it will be out of necessity and in desperation

We are not historians. In our limited knowledge, we note however that historically, the experiment of adopting a gold standard –or a currency board system- was usually preceded by extremely trying moments, including the loss by a government of its legal tender amidst hyperinflation.

The change to a commodity standard has often been then out of necessity. We witnessed one of these episodes first-hand, in Argentina, back in 1991. The local currency was decreed convertible into US dollars (i.e. a currency board) at a rate of 10,000 to 1, and assigned a new name: peso argentino. The method with which this was carried out challenges the current speculation regarding gold, according to which gold bullion would be confiscated, in order to provide reserves to a central bank daring to return to the gold standard. In Argentina, US dollars were not confiscated to back the peso. There was no need do that. On the same grounds, we don’t think gold would need to be confiscated, although one must never, ever underestimate stupidity.

How did Argentina implement its convertible system? The central bank adopted two relevant measures: The first was to change its charter to prohibit holding government debt. The second measure was to commit to sell unlimited dollars at the established peg of 10,000  to 1. Of course, the first measure was later violated. But that’s a discussion for another day. What it matters is that they committed to sell the asset backing their liability (i.e. the peso), but not to buy it. From then on, nobody dared to challenge the central bank until 1994-5, when the Mexican peso was devalued. And even then, the system passed the test.

The 10,000:1 peg was based simply on the fact that that was back then, the amount of local currency per each US dollar in reserves. It is very conceivable that, under an inflationary spiral, the US government may proceed similarly. If at that time there are x thousand US dollars per ounce of gold at the US Treasury, a peg may be established to reflect that ratio. And just like it occurred in Argentina, we would not expect the Fed to be challenged.

From those years, we also remember this: When the peg was set at 10,000:1, there were many who thought that the US dollar was still underpriced. However, think about this: Why would the market have paid for your US dollars more than 10,000 (Australes), when the market knew that, in the absence of a bid, all you could get from the central bank was going to be 10,000? We can very much foresee a similar situation where, the market price of gold collapses from its peak to the established peg, leaving painful losses.

A gold standard with reserve requirements below 100% will not work

There were many flaws with the currency board rehearsed by Argentina. But remember: It was established out of necessity, without time to plan. Just like the European Union is handling its problems today and just like the US will handle theirs tomorrow...

The most important flaw, in our opinion, was that it left the central bank in its role as lender of last resort, while at the same time it allowed banks to have reserve requirements below 100% (about 30%). Therefore, the credit multiplier was after all still very much in place. The fact that the central bank would later invest some of its US dollars in USD denominated (Argentine) government debt was not critical. Nor was it relevant that banks were coerced to buy government bonds with deposits (like they are in the Euro zone today). The crux of the matter was that as both of these things happened, the central bank was….well, the central bank! The lender of last resort! Had the central bank been only a note bank for legal tender, without any other responsibilities, the Argentine default of 2001 would have not triggered a systemic crisis. But it was not a note bank, it was the lender of last resort and the crisis became systemic….just like we fear will happen, if the US implements a gold standard in a rush. Why do we fear this? Because if all plays out that way, the world will lose faith in the gold standard for the wrong reasons.

The Bank of Amsterdam and the Industrial Revolution of the XIX century

Popular wisdom has the birth of the industrial revolution in XIX century England. Some, with a technological emphasis, are willing to concede that already by the time of the French Revolution, the years of the Enlightenment, the seeds had been planted for the technical developments that would come later. The Napoleonic Wars are thus regarded by these people as an interruption, a hurdle, in the race by the West to conquer the world. Only a few point out and even admit that, as a coincidence, during that industrial revolution and particularly at the end of the XIX century, gold was money. But this is treated as a mere coincidence. There are others too, who are convinced that if gold had not been money, if Great Britain had not adopted the gold standard, the speed of the industrial revolution would have been even more impressive.

None of this, in our opinion, could be farther from the truth. We are not historians and we expect many to challenge our comments today, but we offer this view: The industrial revolution did not begin in England, but in what was then known as the Low countries, and was enabled in a decisive way by a gold standard with 100% reserve requirement established by the city of Amsterdam. There are two parts in this conjecture: The first one is that the industrialization began in the Low Countries. We side here with Henri Pirenne and suggest that this birth was brewed by the system of Hansastädte, and in particular, in Brugge, where very early, for instance, the Medici opened a branch.

If our view is correct, the counterfactual argument therefore lies in proving that the development from that stage into the XIX century would have been possible, had the city of Amsterdam not established the Bank of Amsterdam (Amsterdamsche Wisselbank). We leave to our readers to do their own research on this speculation.

The Bank of Amsterdam took upon itself to accept bullion in deposit, issue notes in exchange for circulation and charge (yes, you read well, charge!) depositors for their bullion as well as a “liquidity” fee for making such deposits liquid, thanks to the issuance of their (i.e. the bank’s) notes.

In his book, “The Ascent of Money”, Neil Ferguson makes a few interesting observations about this period:

Inflation (don’t ask us how Mr. Ferguson measured it, but this is what we read) fell from 2% p.a. between 1550 and 1608 to 90bps pa between 1609 and 1658 and 10bps p.a. between 1659 to 1779! This represents no less than 229 years of price stability! With the low life expectancy of those years, this period would have easily encompassed 9 generations. Can you even begin to picture that? In today’s terms, this would mean that the currency held by an American living back at the time George Washington was president would have kept its purchasing power to this day, had a similar financial stability taken place!

In 1602, the Vereenigde Nederlansche Geoctroyeerde Oostindische Compagnie (East India Co.) had its IPO. Between 1602 and 1733 its share price rose from par (100) to 786, in spite of the fact that between 1652 and 1688 they had to face, with violence, the attacks of Britain at their trading posts. By 1650, with the dividend payments the company made, buy-and-hold IPO holders would have earned an annual compounded rate of return of 27%. Given how popular this IPO was,  this context of financial stability brought about perhaps the most widespread capitalization ever witnessed by a nation.

This stability was based on a 100% reserve requirement. With it, when the East India Co. began to fall, its decadence was gradual: It took 60 years and by 1794, it was still worth 120 or 20% above par, in terms of a currency that had preserved its value all along! In other words, it was still 20% up in real terms. In real terms also, by 1690, the company was bringing back to the harbours of the Netherlands about 156 ships per year, all loaded up with consumption goods for the enjoyment of the Dutch people. In other words, on average, one ship every two days was being loaded up in a trading post in Asia. There were no cranes, no trains, no telecommunications.

In summary, the Argentine case and the Dutch Golden Age suggest that the elimination of the credit multiplier (i.e. extinction of shadow banking) is more important than the asset backing a currency. The Argentine case shows what can go wrong, when a currency is asset backed, but reserve requirements are allowed below 100%. The Dutch case shows what can go well, when a currency is commodity-backed and reserve requirements are held at 100%. Bear in mind that the notes of the Bank of Amsterdam were not enforced upon the people, they were not legal tender.

Unlike today’s policy makers, the Dutch of the XVII century had the luxury of planning their system, based on the collective wisdom of their merchant class. Does anybody think that the Dutch Golden Age would have taken place had the Bank of Amsterdam not existed? Does anybody think that England would have been able to accumulate capital from its natural resources (wool, meat), without the demand of the early industries of Brugge,  Liege,Amsterdam or Antwerp? We don’t!

Therefore, the question that lies before us is: How can we replicate the success of the Bank of Amsterdam, in today’s context? How can we not fall prey to necessity, just like Argentina fell back in 1991? That remains the subject for our next article.

Hinweis: Gehen Sie zur Trefferliste "US37950E8536" , wenn Sie einen anderen Wert suchen!

Global X Silver Miners ETF Registered Shares o.N.

03.10.12  22:00 Uhr

24,72 USD

-1,24%  [-0,31]

Morningstar
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Typ: Fonds  WKN: A1CXR6
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5 Jahre

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Sogar ein kurzer Blick auf den SIL kann Bände sprechen.

Dies hat natürlich mein Interesse geweckt und mich dazu veranlasst, mich intensiver mit diesem Thema zu befassen. Es ist immer von Vorteil, sich rechtzeitig mit einem ETF vertraut zu machen, um herauszufinden, ob er wirklich die beste Investitionsmöglichkeit eines bestimmten Sektors ist. Sogar ein kurzer Blick auf den SIL kann Bände sprechen.

Die Tabelle bietet einen Überblick über die SIL-Holdings, die absteigend nach ihrem prozentualen Anteil am Gesamtvermögen erfasst sind. Die Börsenkürzel sind in Blau angegeben, gefolgt von der in USD angegebenen Marktkapitalisierung und des/der Orte(s) des Vorzeigeprojektes des jeweiligen Unternehmens.

Der SIL besteht aus insgesamt 32 Aktien, die einen erheblichen Teil aller Silberaktien weltweit ausmachen. Unserer Zählung zufolge gibt es weniger als 125 Silberminengesellschaften, die primär Silber fördern (Explorations-, Entwicklungs- und Produktionsunternehmen) und an US-amerikanischen und kanadischen Börsen notiert sind. Es ist weithin bekannt, dass der Großteil aller Rohstoffaktien an diesen Börsen notiert ist.

Wenn wir uns die Notierungen genauer ansehen, fällt auf, dass alle der 32 SIL-Holdings bis auf fünf Ausnahmen Erstnotierungen in den USA und/oder Kanada haben. Nur ein paar Silberminengesellschaften sind ausschließlich in London, Mexiko, Australien oder woanders notiert. Meiner Ansicht nach wird die Gesamtverteilung der Silberminenunternehmen weltweit anhand der SIL-Unternehmen, die zu 85 % in den USA und Kanada notiert sind, gut widergespiegelt.

Auch wenn wir in unseren Betrachtungen optimistisch sind und davon ausgehen, dass es weltweit 150 Silberaktien gibt, ist dies trotzdem noch eine geringe Anzahl. Man würde meinen, dass mehr Unternehmen auf diesem Planeten auf der Suche nach dem Edelmetall sind, insbesondere wenn man seine Gewinne im vergangenen Jahrzehnt berücksichtigt. Es gibt dennoch logische Gründe für dieses Phänomen, wobei wohl der wichtigste in der geologischen Beschaffenheit Silbers liegt.

Interessant ist, dass Silber gemessen an seinen Einnahmen für gewöhnlich ein Nebenprodukt einer polymetallischen Lagerstätte darstellt, die entweder eine hohe Konzentration an Basismetallen (meist Blei oder Zink) oder Gold aufweist. Aus diesem Grund kommt weniger als ein Drittel des gesamten in Minen produzierten Silberangebots aus Silberminen, in denen primär Silber gefördert wird. Daher gibt es nicht sehr viele Minengesellschaften, die in der Exploration und Entwicklung primärer Silberlagerstätten erfolgreich tätig sind.

http://goldseiten.de/artikel/150547--Der-Silver-Miners-ETF.html?seite=2

Global X Silver Miners ETF

Global X Silver Miners ETF
				Fund Holdings Data as of 9/14/2012
% of Net Assets	Name	Identifier	Market Price($)	Shares Held	Market Value($)
13,33	SILVER WHEATON CORP	828336107	39,33	1.232.327,00	48.467.420,91
12,28	FRESNILLO PLC	B2QPKJ1	30,34	1.471.519,00	44.652.265,76
11,05	INDUSTRIAS PENOLES CP	2448200	48,66	826.299,00	40.206.036,34
8,47	PAN AMERICAN SILVER	697900108	20,56	1.497.958,00	30.798.016,48
5,83	HECLA MINING COMPANY	422704106	6,36	3.331.892,00	21.190.833,12
5,82	FIRST MAJESTIC SILVER	2833583	22,58	938.178,00	21.185.443,59
5,20	COEUR D'ALENE MINES CORP	192108504	28,52	663.517,00	18.923.504,84
4,45	POLYMETAL INTL. W/I	B6T5S47	17,54	922.490,00	16.181.671,53
4,30	TAHOE RES INC	B5B9KV1	21,04	743.375,00	15.638.316,69
4,17	SILVER STANDARD RESOURCES	82823L106	16,08	944.089,00	15.180.951,12
3,99	HOCHSCHILD MINING PLC	B1FW502	7,96	1.820.280,00	14.494.067,37
3,59	SILVERCORP METAL USD	82835P103	6,75	1.934.934,00	13.060.804,50
2,84	ENDEAVOUR SILVER CORP	29258Y103	10,21	1.010.283,00	10.314.989,43
2,28	FORTUNA SILVER MINES INC	2383033	5,64	1.468.857,00	8.288.458,38
2,01	MCEWEN MINING INC	58039P107	4,68	1.558.881,00	7.295.563,08
1,72	MAG SILVER CORP	55903Q104	12,10	517.796,00	6.265.331,60
1,60	AURCANA CORP	2771542	1,12	5.183.196,00	5.817.519,07
1,04	GREAT PANTHER SILVER LTD	2926472	2,38	1.583.277,00	3.766.019,53
0,81	BEAR CREEK MINING	2578668	3,30	888.870,00	2.928.882,25
0,78	ORKO SILVER CORP	2872605	1,86	1.516.241,00	2.825.924,12
0,72	ALEXCO RESOURCE CORP	01535P106	4,56	570.405,00	2.601.046,80
0,61	SCORPIO MINING	2503381	0,96	2.305.781,00	2.208.079,42
0,40	GOLDEN MINERALS CO	381119106	5,86	248.128,00	1.454.030,08
0,38	EXCELLON RES	2311249	0,44	3.164.539,00	1.384.882,95
0,37	WILDCAT SILVER CORP	2775232	1,24	1.086.539,00	1.342.580,24
0,37	ARIAN SILVER CORP	B15MSM5	0,38	3.470.712,00	1.330.816,94
0,33	US SILVER & GOLD INC	B8HPS09	2,48	486.852,00	1.208.169,00
0,30	IMPACT SILVER CORP	2480592	1,60	685.481,00	1.094.059,16
0,26	REVETT MINERALS INC	B0683K8	3,69	258.507,00	952.947,60
0,24	MINCO SILVER CORP	B0SL8P5	2,43	361.622,00	878.780,74
0,20	ALCYONE RESOURCES LTD	6552099	0,06	12.238.302,00	710.395,26
0,17	CASH	CASH	0,82	749.152,61	613.171,70
0,12	MINES MANAGEMENT INC	603432105	1,59	284.899,00	452.989,41

First Platinum, Now Gold: As South African Miners Strike Spreads, Thousands Of Ounces Remain In The Ground

Submitted by Tyler Durden on 09/02/2012 16:44 -0400

• Central Banks
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Two weeks ago we showed dramatic footage as striking miners at Lonmin's Marikana South Africa platinum mine were fired upon by local the local cops, killing dozens of protesters in the process. Aside from the implications of what happens when the establishment loses control and desperate  workers revolt with complete disregard for their own safety, the strike has crippled the world's third largest platinum maker, and has cut daily production of the precious metal by 2,500 ounces. Since then the Lonmin situation has remained critical, with just 6% of the South African company's workers turning up for work last week. In the meantime, the strike bug has gone airborne, and has now impacted Gold Fields, the world's fourth largest gold mine. From the FT: "Some 12,000 workers at a gold mine operated by Gold Fields have gone on strike, in the latest industrial strife to hit South Africa’s mining industry. Sven Lunsche, a spokesman for Gold Fields, said the wild-cat strike was not directly related to the crisis at the Marikana platinum complex, where 44 people have been killed in violence after rock drill operators downed their tools to demand higher wages on August 10. But he acknowledged that “the atmosphere in the mining industry is very volatile at the moment and this may have had an indirect impact on the situation". The bottom line: "The strike was costing the company 1,660 gold ounces of production a day, Mr Lunsche said." In other words in addition to the fear of a resumption in money printing by central bankers, the gold price will now have to deal with the added fear that supply disruptions just may hamper China's stealthy hording attempts to become the world's biggest holder of physical gold, or at least at sub $2000/oz prices.
Furthermore, it appears that where the striking miners of Lonmin and Gold Fields have boldly gone, many more local unionized workers are set to go as well, in the process shuttering the biggest industry in the Southern African nation:

The unrest at Marikana mines operated by Lonmin, the London-listed company, has been complicated by a dispute between the NUM and a rival union, the Association of Mineworkers and Construction Union, a newer body that has been making inroads into the platinum sector.

Amcu has no representation at the Gold Fields mine, although it has previously attempted to recruit members there. Industry officials have said the fact that gold producers use collective bargaining to negotiate with unions should reduce the risk of the kind of dispute afflicting Lonmin spreading to that sector.

But the Marikana crisis has triggered nervousness throughout the industry, while also putting focus on what appears to be growing dissatisfaction among workers with the NUM, which has been the dominant union in mining for three decades.

Lesiba Seshoka, a spokesman for the NUM, said the union had sent a team to the KDC mine to see what the workers’ concerns were. But he said suggestions that it was related to an internal union dispute at the mine were “not true”.

As a reminder, South Africa is the world's third largest producer of gold in the world (although the output has been steadily declining year after year), and the broader mining accounts for just under 20% of the country's GDP.

Should the local workers grasp that they have the bulk of the leverage in this critical industry, it is unknown how far the metal production shutdown will extend, and how far the price of gold will rise as fears of a persistent supply contraction, coupled with once again increasing demand by both retail and central banks, spread.
Average:

Paul Krugman’s Mis-Characterization Of The Gold Standard

Guest Post: Paul Krugman’s Mis-Characterization Of The Gold Standard

Submitted by Tyler Durden on 08/30/2012 20:42 -0400

• Bank of England
• Consumer Prices
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• Fractional Reserve Banking
• George Soros
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• Jim Cramer
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• Paul Krugman
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• Unemployment Insurance

Submitted by James E. Miller of the Ludwig von Mises Institute of Canada,
With a price hovering around $1,600 an ounce and the prospect of “additional monetary accommodation” hinted to in the latest meeting of the Federal Reserve’s Federal Open Market Committee, gold is once again becoming a hot topic of discussion.
George Soros made news recently when a filing with the Securities and Exchange Commission revealed that he had liquidated his position with major financial firms and had loaded up on gold; approximately 884,000 shares worth.  Jim Cramer, the CNBC personality in constant search of growing business trends, recommends putting at least 20% of one’s assets in gold.  Following the Republican National Convention, the party platform now proposes the establishment of a commission to study “the feasibility of a metallic basis for U.S. currency.”
Like the gold commission before it, this new interest in gold has brought out the critics who regard the precious metal as nothing short of, to borrow the infamous term coined by John M. Keynes, a “barbarous relic.”  Wesleyan University economist Richard Grossman writes in the Los Angeles Times that the idea of a gold commission is a “waste of time and money” because the standard hasn’t “worked for 100 years.”  In The Atlantic, fiat currency enthusiast Matthew O’Brien calls the gold standard a “terrible idea” and presents a few charts demonstrating that linking the dollar to gold failed to keep prices stable.  Economist and New York Times columnist Paul Krugman has praised O’Brien’s article on his blog and makes sure to point out that the price of gold has been highly volatile since 1968 by showing the following chart:

There is a remarkably widespread view that at least gold has had stable purchasing power. But nothing could be further from the truth.

Krugman points out that when interest rates are low the price of gold typically rises.  He claims that as interest rates tend to fall during recessions, gold’s rise in price would lead to “a fall in the general price level.”  Lastly, Krugman ridicules the notion that a true gold standard would prevent asset bubbles and subsequent busts from occurring by calling attention to the fact that America suffered from financial panics “in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933.”
These criticisms, while containing empirical data, are grossly deceptive.  The information provided doesn’t support Krugman’s assertions whatsoever.  Instead of utilizing sound economic theory as an interpreter of the data, Krugman and his Keynesian colleagues use it to prove their claims.  Their methodological positivism has lead them to fallacious conclusions which just so happen to support their favored policies of state domination over money.  The reality is that not only has gold held its value over time, those panics which Krugman refers to occurred because of government intervention; not the gold standard.
Right off the bat, the Nobel Laureate makes the amateur mistake of conflating two different gold standards.  There was not one set standard throughout the 19th century up to the Great Depression.  Until the first World War, the United States and much of the West was under the classical gold standard.  This meant that the dollar was just a name for a set amount of gold; generally 1/20 of an ounce.  Following the massive inflation used to pay for World War I and the Genoa Conference of 1922, the gold exchange standard was adopted by many Western countries including Britain.  Though the United States remained under an imperfect classical gold standard, other Western countries stopped redeeming gold coins for national currencies.  Instead, they redeemed their currencies for dollars or pounds which allowed for expanded fiscal policies because the constraint of gold was not so prominent.  At the same time, President of the New York Federal Reserve, Benjamin Strong, conspired with the head of the Bank of England, Montague Norman, to keep gold from flowing out of Britain by having the Fed adopt “easy money conditions in the United States” and “increase bank liquidity a great deal” according to economic historian Robert Higgs.  This backroom deal was carried out as England readopted the gold standard in 1926 at the pre-World War 1 parity despite the pound being devalued during the war.  Because trade unions and unemployment insurance made wage rates less flexible downwards, the ensuing deflation was detrimental and combated through further inflation aided and abetted by the Fed.
This new international agreement between central bankers may have appeared to be a maintaining of the classical gold standard but it was nothing of the sort.  The inflationary boom in the later half of the 1920s was a product of the monetary scheming of the Fed and Bank of England.  The final result was the stock market crash of 1929 which ushered in the Great Depression.  Contrary to popular belief, the Depression was not caused by the classical gold standard but because of its rejection.
As for the other panics Krugman mentions, neither were caused by the gold standard but by government intervention in the money market.  As economist Joseph Salerno explains, the pervasiveness of fractional reserve banking, or the expansion of credit unbacked by gold reserves, played a key role in creating financial instability.  The panics were caused primarily by

..the establishment of a quasi-central banking cartel among seven privileged New York banks resulting in the almost complete centralization of U.S. gold reserves in their vaults by the National Bank acts of 1863-1864.  This New York City banking cartel was able to expand willy nilly the monetary base and the overall money supply by expanding their own notes and deposits on top of gold reserves.   Their notes and deposits were then used as reserves by lower tier banks (Reserve City Banks and Country Banks) on which to  pyramid their own notes and deposits.

Moreover, banks, especially the larger ones, were encouraged in their inflationary credit creation by the firmly entrenched expectation that they would be freed from fulfilling their contractual obligations in times of difficulty by the legal suspensions of cash payments to their depositors and note-holders that recurred during panics throughout the 19th century.

In sum, an adherence to a real gold standard was not the main cause of all the financial panics Paul Krugman lists.  It was his favorite institution, the state, and the incessant fiddling around with the economy by the political class that created an unstable monetary system.  It is also worth pointing out that the late 19th century was a period of incredible economic growth for both the United States and the rest of the world in spite of the flawed gold standard.  Though it is often alluded to as a time of robber barons, worker starvation, and terrible deflation, the U.S. economy experienced its highest rate of growth ever recorded as the 1800s drew to a close.  As Murray Rothbard documents in The History of Money and Banking in the United States: The Colonial Era to World War II:

The record of 1879–1896 was very similar to the first stage of the alleged great depression from 1873 to 1879. Once again, we had a phenomenal expansion of American industry, production, and real output per head. Real reproducible, tangible wealth per capita rose at the decadal peak in American history in the 1880s, at 3.8 percent per annum. Real net national product rose at the rate of 3.7 percent per year from 1879 to 1897, while per-capita net national product increased by 1.5 percent per year…

Both consumer prices and nominal wages fell by about 30 percent during the last decade of greenbacks. But from 1879–1889, while prices kept falling, wages rose 23 percent.  So real wages, after taking inflation—or the lack of it—into effect, soared.

No decade before or since produced such a sustainable rise in real wages.

From 1869 to 1879 the total number of business establishments barely rose, but the next decade saw a 39.4-percent increase. Nor surprisingly, a decade of falling prices, rising real income, and lucrative interest returns made for tremendous capital investment, ensuring future gains in productivity.

When the United States maintained a gold standard to a fairly significant degree, the economy blossomed.  The relative absence of inflation ensured that the dollar acted as a store of value in addition to facilitating transactions.  Without the threat of looming price increases, the public was more willing to put off consumption and add to the supply of capital availability by saving.  The prudent technique of producing more than you consume allowed for a greater number of entrepreneurs to put capital to work.  This set the foundation for mass production and giving consumers access to an abundance of goods never thought possible just a century before.
To the Keynesians’ befuddlement, the economic renaissance of the late 19th century occurred at a time where prices weren’t rising or stable but actually falling.  The fall in the general price level occurred as the production capacity expanded at a faster rate than the money supply.  Today, economists of the Keynesian and monetarist school remain convinced that a stable price level is good thing when common sense dictates otherwise.  Falling prices are a godsend for consumers; not a catastrophe.  As long as entrepreneurs are able to utilize the inherent feedback mechanism of an undistorted pricing system to forecast input costs, falling prices are only a minor problem.  The focus on price stability is why many economists missed the Depression and the Fed-engineered boom of the 1920s.  In a free market, the tendency is for prices to fall as production increases.
Krugman denies not only that sound money leads to economic stability and growth, he does so while attempting to show that gold has been incredibly volatile since Richard Nixon cuts the dollar’s tie to the precious metal in 1971.  But Krugman puts the proverbial cart before the horse with his example as it hasn’t been the price of gold that has fluctuated to a high degree but rather the dollar’s value.  As Forbes editor John Tamny pointed out in August of 2011

as Brookes calculated in his essential book The Economy In Mind, “In 1970 an ounce of gold ($35) would buy 15 barrels of OPEC oil ($2.30/bbl). In May 1981 an ounce of gold ($480) still bought 15 barrels of Saudi oil ($32/bbl).” Fast forward to the present, and an ounce of gold ($1750) buys roughly 20 barrels of oil ($85)

Krugman also asserts that when interest rates fall, the price of gold increases [ZH - we discussed the various regime changes between interest rates and gold here in great detail].  But again he makes the same mistake of not recognizing the role dollar manipulation plays in both measures.  Interest rates haven’t been formed by market forces since the Federal Reserve was established.  In a free market, interest rates are determined by the public’s collective time preference or the discounting of future goods against present goods.  When more people are saving, and therefore putting off consumption, there is a higher supply of loanable funds.  This higher supply translates to lower interest rates as the price of present capital lowers.  Under a fiat regime like the Fed which oversees a system of fractional reserve banking, interests rates are manipulated by a few central bankers instead of the market.  These central planners increase the supply of money in an effort to push down interest rates and induce consumers into borrowing. This also has the effect of pushing up the price of gold as investors lose confidence in the dollar’s value.
In his crusade to keep Keynesianism as a legitimate school of thought, Krugman has yet again attempted to mischaracterize gold and blame it for crises caused solely by government intervention.  What Keynesianism amounts to is a theory of state worship and the virtue of hedonism.  Its leading proponents declare there is such thing as a free lunch and that it is served directly by the printing of money.  In other words, it is based on backwards logic and remains distant from reality.
The Keynesians admit there was a housing bubble then fret over an “output gap.”  They blame market exuberance for recessions but then prescribe the exact same policies that lead to exuberance to begin with.  This irrationality was best displayed with a remarkable quote by former Treasury Secretary and former director of President Obama’s National Economic Council Lawrence Summers who wrote in an editorial for the Washington Post:

The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending, it can be resolved only with more confidence, borrowing and lending, and spending.

Keynesians have no pure economic theory; they are totally ad hoc in their approach.  Any data point which fits their view is trumpeted.  Any theory that presents a challenge to the idea that the economy can be finely tuned like a child’s trinket is dismissed as right-wing propaganda.  Keynesians ultimately reject the golden rule of economics: savings represents deferred consumption and producing more than is consumed.  Real savings in the form of capital goods (factories, equipment, machinery, etc.) are the backbone of any economy.  Government only squanders these scarce resources through its constant pillaging of wealth.
Keynes himself was contemptuous of the middle class throughout his professional career.  This is perhaps why he held such disdain for gold.  Gold is the market’s choice for money; not the statist ruling class dependent on spending virtually unlimited sums of tax dollars.  Because a true gold standard prevents runaway inflation and budget deficits from occurring in perpetuity, Keynesians will do all they can to discredit gold as a workable form of currency.  Their allegiance lies with the state and paper money; not the natural choices of the common man.

The Top 3 Rules to Understand About Gold & Silver Price Behavior

Submitted by smartknowledgeu on 08/28/2012 05:22 -0400

• Central Banks
• Great Depression
• KIM
• None
• Precious Metals
• SmartKnowledgeU
• Volatility

Over the past 10+ years of this gold and silver bull, I’ve seen gold and silver "newbies" repeatedly make the same mistakes. So I’ve decided to write this short article to help people more clearly understand gold and silver price behavior. There are 3 solid rules to follow and understand when buying gold and silver bullion and or mining stocks. Because of the lack of understanding of these rules, many investors unfortunately unload gold and silver assets at the exact wrong time, at the bottom of long corrections and right at the beginning of huge new legs higher. Back in mid-May, when I wrote that it was a very low-risk, high-reward point to buy gold and silver assets, virtually no one outside of the very small circle of seasoned gold and silver investors were interested. Now that gold and silver have risen considerably since that point and time, there is more interest than just a few weeks ago, but again, some newbies will make the mistake of buying into gold and silver now, and on any slight pull back, listen to the doubts disseminated by the mainstream media, and panic sell again.

I previously stated on August 16, 2012, the following: “The one thing I can guarantee, however, is that when gold and silver finally make new highs, and they will, some of the ferocious moves higher are absolutely going to stun a lot of people.” And I still stand by this statement. In retrospect, I don’t consider the recent moves in gold and silver to be part of the “ferocious moves higher”. That hasn’t happened yet and we're still a bit away from the manifestation of the scenario that will trigger these moves. Still, some of the moves higher in gold and silver that will happen over the next 1-2 years will be so rapid and shocking that to most people, they will seem impossible given the psychological damage done by the past 18-month gold & silver correction and consolidation period. And to those that pay too much attention to the mainstream financial press and not enough to the realities of the physical, not paper, gold and silver markets, these violent moves higher will be likewise shocking.

Because gold and silver have been so suppressed for an extended period of time the consequent defensive actions of exiting PM mining stocks and re-purchasing them at solid re-entry points has left many gold and silver investors weary and with a negative outlook ahead. Though patience is a virtue when holding and stacking gold and silver assets, this virtue is much more easily vowed than practiced, especially during volatile periods of price behavior upward and downward during an extended consolidation phase. However, those that are able to see through the volatility games of banksters will see something entirely different – a solid base for gold and silver’s next move higher to escape the banking cartel’s price suppression schemes. Thus, even though it is likely for gold and silver assets to take a breather this week and for a pull back in prices to happen before the upward trek continues, whether gold and silver are rising or falling, every gold and silver investor needs to understand the top 3 rules when holding gold and silver assets. So here they are:

(1) Volatility Does Not Equal Risk.
Far from it. In fact most volatility in gold and silver is deliberately manufactured by the banking cartel, and is manufactured in fake paper derivative markets in which prices are set with absolutely zero regard for the actual physical supply and physical demand determinants of these two precious metals. Furthermore, since banker cartel manipulation of paper gold and silver derivatives plays such a big role in price volatility, moves in gold and silver are often just as violent to the upside as they are to the downside after long periods of consolidation, as violent moves higher are often caused by short-covering of panicked hedge funds and banking cartel members that are forced to unwind shorts when the momentum to the upside becomes too great for them to suppress. Furthermore, after brief periods of very quick rises, another short-term correction triggered by day traders taking profits and/or desperate banking cartel members actions in paper markets does not mean the uptrend has reversed back downward again…which bring us to Rule #2.

(2) Lack of Patience is the Greatest Enemy to Buyers of Gold, Silver and PM Mining Shares.
With physical gold and physical silver, bankers deliberately create massive volatility in paper prices at times to discourage the uninitiated from buying physical and to try to goad those already in to mistakenly sell. With PM mining shares, the greatest mistake investors make with this asset class is to let the bankster created artificial volatility in mining shares discourage them into selling out of all of their shares right before the next great leg higher. While it is true that the vast majority of gold and silver mining shares in the junior resource sector are junk and inflated pipe dreams, even cashed-up, solid junior mining companies will be taken down in price during bankster raids on paper gold and paper silver and thus, patience with junior mining companies is essential to coming out on top.
One of the top performing gold stocks lost more than 50% of its value a few years before the onset of the Great Depression before going on a spectacular +1,258% run higher that ended in1939. Those that were impatient because they were unable to see the big picture of the importance of gold during periods of severe economic instability sold out when this stock corrected sharply, locked in losses, and received none of the spectacular gains. Many today will repeat this same exact mistake.

(3) Ignore the White Noise and Disinformation Anti-Gold/Anti-Silver Campaigns of the Commercial Banking Industry.
Clients that allocate money to physical gold and physical silver purchases or PM mining share purchases translates into lost revenues for fee-based managed money commercial banking and brokerage firms because this normally translates into money that leaves these firms and never comes back. Thus, the vast majority of commercial banking/brokerage firm employees have great incentive to prevent their clients from purchasing any gold and silver assets of any nature, including even robust PM mining stocks.
Thus, when the most robust PM mining shares are at super undervalued valuations and represent a low-risk, high-reward set-up, commercial banking/brokerage firm employees are likely to tell you there is ZERO opportunity in PM mining shares. However, when great runs higher in gold and silver assets occur, uninformed commercial banking employees are likely to inform you of this situation and goad you into purchases right before the next steep correction, as was the case when silver hit $50 an ounce last year. A sharp, rapid and significant correction in the first month of buying gold and silver is a lesson likely to keep many "newbies" from ever returning to the gold and silver markets in the future.

For those interested in a further discussion of the above 3 rules, please refer to the articles below:

With Gold & Silver, Why Does the General Population Consistently Get the “Buy Low, Sell High” Mantra Backwards?
In Gold, Silver, Diamonds, & Stock Markets, Controlling Perception is the Banker Weapon Du Jour
The One Personality Trait that All Gold & Silver Investors Need to be Profitable
Fear & Panic are the Banking Cartel’s Weapons V. the Gold & Silver Bull. Patience and Logic are the Best Defense.

We have the banking cartel on the ropes now and gold and silver will eventually break out to new highs. To prevent the banking cartel from executing the rope-a-dope on us as they have so many times in the past, now is the time for every citizen to stand up for his or her beliefs, to buy an ounce of physical silver and an ounce of physical gold, and to begin to impose our collective will upon the banking cartel for a return to sound money and free markets.

About the author: JS Kim is the Managing Director of SmartKnowledgeU, a fiercely independent investment research & consulting firm that focuses on gold and silver asset accumulation as a wealth protection strategy against the currency devaluation campaigns of all Central Banks around the world.