What is Gold?

Gold key to success

What is Gold is your key to unlocking a huge wealth creating opportunity. Gold prices have been rising steadily since 2001, when one could buy an ounce of Gold for $256, and those of us who bought Gold at that time have since enjoyed gains of over 550% in 10 years! So far, Gold is the best investment of the Century, second only to Silver which has risen a jaw dropping 775% in price.


Here's the good news: In classic, Gold Bull Markets, like this one, 90% of the price move up comes in the last 10% of the time. Let me put it this way; if Gold follows the historical patterns, and there are many reasons it will, in the near future the Gold price could rise much higher and much faster. Some say at least as high as $5000 per ounce. Some say $10,000 in the near future!


Will Gold rise to such incredibly high prices? Maybe. Gold has already doubled, tripled, and quadrupled some people's money, so it's hard to know for sure. But, do you want to miss out on a Potentially Golden Opportunity?


The Purpose of What Is Gold: to inform you about Gold and to provide an introduction to How to Invest in Gold and why you should.


Unleash Gold's Potential For You!



"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgitt are mere memories."

~ Richard Russell



What is Gold Doing Now?

Doug Casey on Taxes and Freedom


The always-outspoken Doug Casey addresses a broader view of taxation and its costs to both individuals and society in general in this interview with Louis James.


L: Doug, the Taxman cometh, at least for most US citizens who file their annual tax papers on April 15. We get a lot of letters from readers who know about your international lifestyle and wonder about the tax advantages they assume it confers. Is this something you care to talk about?


Doug: Yes; something wicked this way comes, indeed. But first, I have to say that as much as I can understand the guy who flew his airplane into an IRS building, as we once discussed, I do not encourage anyone to break the law. That's not for ethical reasons-far from it-but strictly on practical grounds. The Taxman can and will come for you, no matter how great or small the amount of tax he expects to extract from you. The IRS can impound your assets, take your computers, freeze your accounts, and make life just about impossible for you, while you struggle to defend yourself against their claims and keep the rest of your life going. The number of IRS horror stories is beyond counting. As the state goes deeper into insolvency, its enforcement of tax laws will necessarily become more draconian. So you absolutely don't want to become a target.


L: So… just bow down and lick the boots of our masters?


Doug: Of course not. People can and should do everything they can to pay as little in taxes as possible. This is an ethical imperative; we must starve the beast. It could even be seen as a patriotic duty-if one believes in such things-to deny revenue to the state any way possible, short of endangering yourself. Starving the beast may be the only way to force it back into its cage-we certainly can't count on politicians to make the right choices-they're minions of the state. They inevitably act to make it bigger and more powerful. It's sad to see well-intentioned people supporting someone like Mitt Romney because they na´vely think he'll reduce the size of the state and its taxes. The man has absolutely no ethical center; he'll just try to change the government to suit his whims.


L: Can you expand on the ethical imperative aspect?


Doug: Yes. The first thing is to get a grip on who owns the moral high ground. The state, the media, teachers, pundits, corporations-the entire establishment, really-all emphasize the moral correctness of paying taxes. They call someone who doesn't do so a "tax cheat." As usual, they have things upside down.


Let's start with a definition of "theft," something I hold is immoral and destructive. Theft is to take someone's property against his will, i.e., by force or fraud. There isn't a clause in the definition that says, "unless the king or the state takes the property; then it's no longer theft." You have a right to defend yourself from theft, regardless of who the thief is or why he is stealing.


It's much as if a mugger grabs you on the street. You have no moral obligation to give him your money. On the contrary, you have a moral obligation to deny him that money. Does it matter if the thief says he's going to use it to feed himself? No. Does it matter if he says he's going to feed a starving person he knows? No. Does it matter if he's talked to other people in the neighborhood, and 51% of them think he should rob you to feed the starving guy? No. Does it matter if the thief sets himself up as the government? No. Now of course, this gets us into a discussion of the nature of government as an institution, which we've talked about before.


But my point here is that you can't give the tax authorities the moral high ground. That's important because decent people want to do the morally right thing. This is why sociopaths try to convince people that the wrong thing is the right thing.


If an armed mugger or a gang of muggers wanted my wallet on the street, would I give it to them? Yes, most likely, because I can't stop them from taking it, and I don't want them to kill me. But do they have a right to it? No. And every taxpayer should keep that analogy at the top of his mind.


L: I also believe that the initiation of the use of force (or fraud, which is a sort of indirect, disguised, form of force) is unethical. It doesn't matter what the reason for it might be nor how many people might approve of the action. But some people claim that taxation is really voluntary-the price one pays for living in society… and if I'm not mistaken, the US government says the federal income tax is voluntary.


Read the rest, here.

The Pesky Details of Prospectus Disclosure


By Vedran Vuk, Casey Research


In the infamous case of the Goldman Sachs Abacus 2007 AC-1 fund, it doesn't take a whole lot to figure out the wrongdoing. Paulson & Co., a multibillion-dollar hedge fund, helped select the mortgage-backed securities held by Abacus while at the same time, Paulson was planning on shorting it. This was all unbeknownst to Abacus buyers, since Goldman Sachs conveniently left out the details of Abacus' creators and their bet against the fund in the investment marketing materials. Ultimately, the case was settled for $550 million.


Goldman Sachs made a huge mistake here. By not telling its clients about the conflict of interest, the whole thing seemed like the coverup of a malicious act in order to defraud investors. What it really should have done is put the fund's flaws in difficult-to-understand language on page 82 of the hundred-page prospectus. After all, that's what everyone else in the industry does, and they're certainly not settling for half a billion dollars with anyone.


The exchange-traded fund (ETF) industry has made millions-if not billions-of dollars on products sold with a similar approach. If the problems are laid out somewhere, it's not the ETF company's fault when the fund fails. Better yet for them, ETFs never promise results… they are marketed only as an investment tool. In the majority of cases, this works just fine. It's wonderful that investors can purchase a whole index such as the S&P 500 with a single ETF.


Unfortunately, these incentives can create a serious problem in the ETF industry, as popularity drives much of its profits, rather than results. When commodities became all the rage in the past decade, retail investors flooded billions into futures commodity ETFs promising to provide an easy way to invest in the asset class. It didn't matter that the underlying investments were doomed for failure. The funds lay out the risks in the prospectus and then wash their hands clean should the ETF head for the worst. Sometimes the failure of those funds is hardly an accident or the result of bad luck.


In regard to ETFs, Wall Street needs to answer the following question: Is there a moral difference between constructing a package of worthless securities while hiding the creation process, and packaging the same sort of garbage while informing the investors about the problems on page 82 of a hundred-page prospectus? In both cases, you're aggressively marketing a product which is known to be harmful, if not disastrous, to the investor.


Sure, one can pretend to not know what's in the product. After all, ETFs aren't promising returns… they are just an investment tool. It's always "buyer beware," but if the tool is broken, someone should be held responsible for the damage. In the securities industry, ETF companies are encouraged to play stupid. If one pretends not to know about the likely performance of the fund, then everything is fine, as long as the fund's faults are somewhere in the prospectus. But if one packages a garbage fund and doesn't write down the details, then one's likely to face a billion-dollar lawsuit.


In reality, the two are close to the same thing. Of course, one man's garbage could be another man's treasure, but there are cases where one could objectively call the product pure trash. When a company shorts a product it created or an ETF fails to follow its intended index, then these are truly garbage investment products. It's hard to say that anyone would want to invest in such financial instruments, if one properly understands them.


Read the rest, here.

Doug Casey: "It's a Dead-Man-Walking Economy"


By Doug Casey, Casey Research


In an interview with Louis James, the inimitable Doug Casey throws cold water on those celebrating the economic recovery.


[Skype rings: It's Doug Casey, calling from Cafayate, Argentina. He sounds tired, but pleased with himself.]


Doug: Lobo, get out your mower; it's time to cut down some green shoots again, and debunk a bit of the so-called recovery.


Louis: Ah. I have to say, Doug, the so-called recovery is looking more than "so-called" to a lot of smart folks. Even our own Terry Coxon says the recovery is real, albeit weak.


Doug: Terry's probably looking at it by the numbers, some of which are reported to be improving. But let's come back to the numbers later and start with fundamentals. The first order of business, as usual, is a definition: a depression is a period of time in which the average standard of living declines significantly. I believe that's what we're seeing now, whatever the numbers produced by the politicians may seem to tell us.


L: I was just shopping for food and noticed that the bargain bread was on sale at two for $5. My gas costs almost as much per gallon. That's got to hurt a lot of people, especially on the lower income rungs. I don't need to ask; a member of my family just got a job that pays $12 per hour-about three times what I made working for the university food service back when I was in college-and it's not enough to cover his rent and basic bills. If his wife gets similar work, they'll make ends meet, but woe unto them if anyone in their family crashes a car or requires serious medical treatment.


Doug: That's just what I mean. Actually, the trend towards both partners in a marriage having to work really started in the early '70s-after Nixon cut all links between the dollar and gold in August of 1971. Before then, in the "Leave It to Beaver" era, the average family got by quite well with only the husband working. If he got sick or lost his job, the wife was a financial backup system. Now, if something happens to either one, the family is screwed.


I think, from a very long-term perspective, historians will one day see the '60s as the peak of American prosperity-certainly relative to the rest of the world… but perhaps even in absolute terms, even taking continued advances in technology into account. Maybe the '59 Cadillac was the bell ringing at the top of that civilizational market.


My friend Frank Trotter, president of EverBank, was just telling me that the net worth of the median US citizen is only $6,000. That's the median, meaning that half of the people have less than that. Most people don't even have enough stashed away to buy the cheapest new car without going into debt. It used to be that people bought cars out of savings, with cash. Now they have to finance them over at least five years… or lease them-which means they never ever have even that trivial asset, but a liability in the form of a lease.

The bulk of the 49 percent below this guy don't even have that-with the concentration of wealth among the top one percent, most of those below average have seriously negative net worth, at least compared to their earning capacity. In other words, the US, Europe, and other so-called First-World countries are in a wealth-liquidation cycle that will be as profound as it will be protracted.


By that I mean that people are on average consuming more than they produce. That can only be done by living out of capital-consuming savings-or accumulating debt. For a time, this may drive corporate earnings up, and give this dead-man-walking economy the appearance of returning health, but it's essentially, necessarily, and absolutely unsustainable. This is an illusion of recovery we're seeing-the result of our Wrong-Way Corrigan politicians continuing to encourage people to do the exact opposite of what they should do.


Read the rest, here.

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