The Federal Reserve

(this is taken from the Mises YouTube channel) Thomas Jefferson and Andrew Jackson understood “The Monster”. But to most Americans today (and pretty much everybody else for that matter), Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.

Dedicated to Murray N. Rothbard, steeped in American history and Austrian economics, and featuring Ron Paul, Joseph Salerno, Hans Hoppe, and Lew Rockwell, this extraordinary new film is the clearest, most compelling explanation ever offered of the Fed, and why curbing it must be our first priority.

Alan Greenspan is not, we’re told, happy about this 42-minute blockbuster. Watch it, and you’ll understand why. This is economics and history as they are meant to be: fascinating, informative, and motivating. This movie could change America.

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Precious Metals: Is Silver the Golden opportunity?

Gold prices broke the $1,000 mark again and have been hovering around that mark for some time (today’s spot price is $991.91), this is making headlines as people comment on ‘record highs’ that the metal has reached in nominal terms (no inflation factored in), if you adjust for inflation the current price would need to be c. $2,500 to match the $850 peak reached in January 1980.

The Dow/Gold ratio is currently 9.7 historically during a crash you would see gold prices surge, the peaks in the graph below are the low points of gold prices/high Dow, and you can see that in the past (c. 2000) it would have taken 40 oz of gold to buy the Dow, the historic average was around the 5 or 6 oz mark which would mean either the Dow is overpriced or gold is under priced, a ratio of c. 6 would put gold at a price of $1,605 (Dow at 9630) and at 5oz would price gold at $1,926. The hidden aspect …

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GO TO JAIL! Do not pass go, do not collect €200 million

The talk of ‘Economic Treason’ and calling for the heads of every banker are sadly starting to gain more and more traction, all of this is happening without concrete evidence thus far of exactly ‘who’ we are chasing and ‘for what’ specifically, largely the financial leaders greed is central to accusations of wrongdoing, and while greed may not be morally acceptable to right thinking individuals it is not actually a crime.

The FT recently had an article showing that executive pay misguided but that it didn’t make them criminal by nature, stupidity is an ‘equal opportuntities’ trait. It is important that every person in finance is not villified for what was something that all of society played a part in.

One question nobody is asking is ‘what part did I play in this?’, as a brokerage we are culpable, as a consumer I am personally culpable and as a citizen I will be paying for mistakes made on both …

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What is going to happen to gold prices?

For quite some time (since late 2007) we have been advising our clients to buy gold, and  not many have listened! Today gold is once again trading above $900 per ounce, the current spot price is c. $913 per troy oz. Some commentators are now taking the view that gold will surpass the $1,000 mark per once and for all and remain in a secular bull market, this is contrary to many who felt gold was a ‘bubble asset’ up until recently.

Is gold in a bubble? Strictly speaking the price has risen enough to have bubble characteristics, and despite any bull arguments given for the upward trend one truth remains, ‘trees don’t grow to the sky’. Having said that, there are events in the world economy that challenge the bearish view against gold. For a start, gold is not the only noble metal witnessing gains, silver, platinum and palladium are trading strong as well, investors are finding physical supply difficult to come by and some countries such as Vietnam …

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