To my chagrin I have neglected a subject, I just discovered last night. Oh, I knew it was going on, & always suspected that your wonderful government would pull it on y'all's pension funds and IRAs, etc., but today it has drawn one step fearfully closer. I'm talking about government confiscating pension funds -- y'all's pension funds -- to dig out of their debt swamp. Argentina did it a few years ago, Hungary last year, and Ireland is eyeing 24 bn euros in their National Pension Reserve fund right now. US government debt = $15 trillion. US pension fund assets = $16 trillion. Y'all see any similarity there? Anything click in your mind? Add to other precedents Portugal today, which transferred 5.6 bn euros of private pension funds to itself to meet its budget deficit. And somebody explain to me, in the face of all this precedents, how the US government (ever trustworthy) would not do the same? All that time folks have wasted worrying about gold being seized as it was in 1934 have been watching the front door of the house while the burglars were unloading the furniture thru the back door. Y'all know I am no alarmist, and I reserve my most lip-curling contempt for all those Internet Chicken Littles who every day see the sky falling. This warning is nothing new with me. The government seized gold in 1934 for the same reason that Willie Sutton robbed banks: that's where the money was. In 2011 the money isn't there, it's in pension assets, IRAs, 401(k)s, pensions, all the rest. For years when people have asked me what they should do with their IRAs, my threshold remark has been, "First, you have to decide if you want to continue in a partnership with the US government. Ownership has two parts, title and control. With your IRA or 401(k), you have title, but they have control. Yes, you will pay a penalty & tax to withdraw it, but how much is control, in your own hands, worth to you?" From long experience I know that not 1 out of 80 will choose to cash out his IRA, so powerful is the APPEARANCE that all the money is yours. ME, I don't want any part of any partnership with the yankee government. I'll take my licks AND my money, thank you very much. But I am nothing but a paranoid natural born fool from Tennessee. I will not, however, stand in the middle of the railroad tracks when an express train is barrelling down on me, driven by a maniac. Now y'all can put that IRA into silver & gold, but it is still in an IRA, and a trustee holds it, not you. If you simply MUST keep your IRA, then put it into physical silver or gold. But you ought to consider most earnestly, together with your spouse, which is more important, mere title to the IRA, or control. Sarcophagus of France and Ferkel of Germany met today and after lunch announced a list of recommendations for changes to the euro treaty, namely, automatic sanctions against deficit violating countries, debt limits written into member constitutions, and no more haircuts for creditors (save those holding Greek paper). Look deeply into it: this will established centralized budget oversight in Brussels. This is the nightmare turn, and most of all IT CONTAINS NO SOLUTION TO THE ALREADY UNPAYABLE DEBT. No solution, that is, except inflating it away, but thru the ECB rather than individual nations. Don't let all those German protestations about not making the ECB lender of last resort. If they are going to pay all that unpayable Himalaya of debt, they can only inflate it away. All other explanations are mere carpeting for the barnyard. The European announcement shaved 79 basis points off the spread between Italian and German debt almost immediately. That indicates that a lot of investors took the bait. I remind you that even if all power is centralized in Brussels, the debt remains still too large to be paid. Investors have been suckered. Dow today gained 78.14 points (0.65%) to close at 12,097.83. Maybe that's a case of buy the rumor, sell the news. S&P 500 closed up 12.8 (1.03%) at 1,257.08. My upper limit on the Dow is about 12,200. It's at that wall now. I doubt it will climb it, but if y'all can't accept that, then keep on trying to draw to that inside strait and keep holding those stocks. US Dollar index today went sideways, up 3.8 basis points, but important thing is that it remained above 78.50. Currency traders weren't buying good news out of Europe. Euro gained 0.4% to 1.399, while the Yen closed up 0.19% at 128.54c/Y100 (Y77.8/$1). SILVER & GOLD took the biggest hit on the European news. Gold dropped $16.30 (0.9%) to $1,730.70 on Comex, while silver dropped 31.5c (1%) to close 3230.6c. All right, I'm going to crawl out on that limb. I think today's drop in silver & gold was a mere reaction to the last few days' highs, & that the bottom boundary of the triangle for silver (3150c) and of the trading channel for gold ($1,690 - $1,700) will hold. Plainly, if they break those supports, they will tank, but I think they will hold. At least, they did today, with silver posting a low at 3185c & gold at 1,717.67 (protecting that $1,720 support). But up or down, I have run my nose slam up against that wall again: what else can I trust but silver & gold? Government promises? The stock market, locked in a bear trend? Banks??! Banks, who'd as soon throw you out of the lifeboat into a swarm of chummed sharks as I would step on a bug? Mercy! I reckon I'll take my chances with the silver & gold, and even if they drop 20 or 40%, I'll still have 'em where I can rub on 'em to console myself. Y'all do what seemeth good to you, but I smell a trap, and I'm not going to wait around to make sure I've identified the right stench. On 5 December 1913 Great Britain outlawed sending arms to Ireland. Now why do you reckon the nice Imperial government would do that? On 5 December 1861 the Gatling gun, prototype machine gun, was patented. It brought a new era of bloodletting in warfare never before imaginable. On 5 December 1876 Daniel Stillson patented the Stillson Wrench, the first practical pipe wrench. We build monuments and statues to generals & presidents, but why not to really USEFUL people like Stillson?
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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