The Price Of Gold

(chart courtesy of www.kitco.com)

The price of gold is something in which I have taken a great interest as of late. Only recently having been educated about the link between the price of gold and the value of the dollar, the financial news makes more sense and connecting the dots is easier.

Rather than attempt to construct an economic lesson in this post, I offer the following excerpts from the April 25, 2006 speech of Republican Congressman Ron Paul before the House of Representatives, which offer great lucidity on this murky topic:

Holding gold is protection or insurance against government’s proclivity to debase its currency. The purchasing power of gold goes up not because it’s a so-called good investment; it goes up in value only because the paper currency goes down in value. In our current situation, that means the dollar.

One of the characteristics of commodity money – one that originated naturally in the marketplace – is that it must serve as a store of value. Gold and silver meet that test – paper does not. Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued. It’s more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest. The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn. The purchasing power of gold can rise even faster than increases in the cost of living.

The point is that most who buy gold do so to protect against a depreciating currency rather than as an investment in the classical sense. Americans understand this less than citizens of other countries; some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency. Though our inflation – i.e., the depreciation of the U.S. dollar – has been insidious, average Americans are unaware of how this occurs. For instance, few Americans know nor seem concerned that the 1913 pre-Federal Reserve dollar is now worth only four cents. Officially, our central bankers and our politicians express no fear that the course on which we are set is fraught with great danger to our economy and our political system. The belief that money created out of thin air can work economic miracles, if only properly “managed,” is pervasive in D.C.

***

But the fact that gold has gone from $252 per ounce to over $600 means there is concern about the future of the dollar. The higher the price for gold, the greater the concern for the dollar. Instead of dwelling on the dollar price of gold, we should be talking about the depreciation of the dollar. In 1934 a dollar was worth 1/20th of an ounce of gold; $20 bought an ounce of gold. Today a dollar is worth 1/600th of an ounce of gold, meaning it takes $600 to buy one ounce of gold.

The number of dollars created by the Federal Reserve, and through the fractional reserve banking system, is crucial in determining how the market assesses the relationship of the dollar and gold. Though there’s a strong correlation, it’s not instantaneous or perfectly predictable. There are many variables to consider, but in the long term the dollar price of gold represents past inflation of the money supply. Equally important, it represents the anticipation of how much new money will be created in the future. This introduces the factor of trust and confidence in our monetary authorities and our politicians. And these days the American people are casting a vote of “no confidence” in this regard, and for good reasons.

***

Beginning in March, though planned before Bernanke arrived at the Fed, the central bank discontinued compiling and reporting the monetary aggregate known as M3. M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation. Yet this report is no longer available to us and Congress makes no demands to receive it.

Though M3 is the most helpful statistic to track Fed activity, it by no means tells us everything we need to know about trends in monetary policy. Total bank credit, still available to us, gives us indirect information reflecting the Fed’s inflationary policies. But ultimately the markets will figure out exactly what the Fed is up to, and then individuals, financial institutions, governments, and other central bankers will act accordingly. The fact that our money supply is rising significantly cannot be hidden from the markets.

The response in time will drive the dollar down, while driving interest rates and commodity prices up. Already we see this trend developing, which surely will accelerate in the not too distant future. Part of this reaction will be from those who seek a haven to protect their wealth – not invest – by treating gold and silver as universal and historic money. This means holding fewer dollars that are decreasing in value while holding gold as it increases in value.

A soaring gold price is a vote of “no confidence” in the central bank and the dollar. This certainly was the case in 1979 and 1980. Today, gold prices reflect a growing restlessness with the increasing money supply, our budgetary and trade deficits, our unfunded liabilities, and the inability of Congress and the administration to reign in runaway spending.

***

Foreign policy plays a significant role in the economy and the value of the dollar. A foreign policy of militarism and empire building cannot be supported through direct taxation. The American people would never tolerate the taxes required to pay immediately for overseas wars, under the discipline of a gold standard. Borrowing and creating new money is much more politically palatable. It hides and delays the real costs of war, and the people are lulled into complacency – especially since the wars we fight are couched in terms of patriotism, spreading the ideas of freedom, and stamping out terrorism. Unnecessary wars and fiat currencies go hand-in-hand, while a gold standard encourages a sensible foreign policy.

***

Since keeping interest rates below market levels is synonymous with new money creation by the Fed, the resulting business cycle, higher cost of living, and job losses all can be laid at the doorstep of the Fed. This burden hits the poor the most, making Fed taxation by inflation the worst of all regressive taxes. Statistics about revenues generated by the income tax are grossly misleading; in reality much harm is done by our welfare/warfare system supposedly designed to help the poor and tax the rich. Only sound money can rectify the blatant injustice of this destructive system.

The Founders understood this great danger, and voted overwhelmingly to reject “emitting bills of credit,” the term they used for paper or fiat money. It’s too bad the knowledge and advice of our founders, and their mandate in the Constitution, are ignored today at our great peril. The current surge in gold prices – which reflects our dollar’s devaluation – is warning us to pay closer attention to our fiscal, monetary, entitlement, and foreign policy.

You can read and/or watch the entirety of Ron Paul's speech, "What The Price Of Gold Is Telling Us", at http://www.lewrockwell.com/paul/paul319.html

If Ron Paul's warnings do not trouble you and the state of your bank account, the analysts predict that the price of gold will not only reach the record high of $850 per ounce, but may possibly hit $1,000 this year. https://registration.ft.com/registration/barrier?referer=&location=http%3A//news.ft.com/cms/s/b5dca1a8-ca13-11da-852f-0000779e2340.html

While I am neither a Democrat nor a Republican, it is worth pointing out the HUGE discrepancy between the value of gold in the chart above, i.e. the value of the dollar, during Clinton's presidency and after the Chimperor took the throne.

Whether you are pro-war or against it, whether you believe in gay marriage or not, whether abortion ruffles your feathers, the value of gold does not lie. It is a neutral arbiter of the competency of our government and the current values confirm what the majority of Americans are finally starting to realize - Bush and his cronies have destroyed this country with their irresponsible ways. If you care about the dollars in your bank account, it is time to wake up.

The 1st panacea of a mismanaged nation is inflation of the currency;
the 2nd is war. Both bring a temporary prosperity; a permanent ruin.
Ernest Hemmingway

Good Is Good

Between the animated discussion going on my previous post, "Fundies Gone Wild" and a debate I provoked with some Muslims, I am inspired to talk religion.

My parents are not very religious people. They were both raised in Muslim families but my father's family is secular. Although mom's family is very religious, her marriage to my father pretty much put an end to praying five times a day and all that jazz. Never went to the mosque when I was a kid. Dad did not like "those religious people."

In hindsight, it amazes me how "liberal" my parents were. We celebrated Christmas and Easter. They let my sister and I go to church with our friends on Sundays and I even went to Christian summer camp with my best friend Tricia the summer after 8th grade. Those are my earliest memories of religion and my utter disgust for it.

I've been to Mormon church, Baptist, Lutheran, Episcopalian and have sat through hours of inane and painfully boring Catholic masses. Perhaps it is the character with which we are born; maybe we are hardwired to be pre-disposed for or against religion; because every church I attended sickened me more than the last. The dogma, the ritual, the pageantry. It all seemed so idiotic to the teenage me. There went Christianity....

Then I spent a summer in Egypt. My grandmother was doing one of her five daily prayers and I walked in front of her. Who knew that was a no-no? No one in my household ever prayed. My mom was pretty miffed and told me God would be mad at me. While other kids would probably cower in fear at such a prospect, I was indignant. Who is this jerk of a God who is going to be mad at me for doing something I didn't know was wrong? There went Islam....

Years later, I dated a Jewish guy (several, actually) who invited me to Passover seter. It was truly one of the strangest rituals I have ever seen, with eggs and chicken bones in the middle of the table. Everyone read stories from a book, all of which ended "Next Year in Jerusalem." On the way home, I explained to my then boyfriend that the last line of those prayers no longer has meaning. If Jews were really serious about those prayers, El Al has several daily non-stop flights from Los Angeles to Tel Aviv. Assuming people weren't blindly reading jibberish out of a book, they should put their money where their mouths are and book a one-way ticket. There went Judaism....

Then there was my trip to Thailand. Since Bangkok is a sickening shithole, I structured my trip to spend a day and a half there -- which was plenty of time to see the 12-year-old prostitutes with their 60-year-old Japanese johns. I took a tour of the temples around town and, at each, you're supposed to give some offering to the 101 Buddhas lined up in front. So, I put a Thai penny in some lucky number of bowls, and I filled Buddha's tummy with lamp oil, and I banged on the drum seven times, all of which is supposed to bring me good luck. Toward the end of the day, I truly had enough. I wanted to get into the last temple, take my pictures and leave and I cruised passed the incense bowls. My Thai guide looked at me with a righteous religious frown and asked me if I was going to do whatever it was I supposed to do to earn Buddha's favor. "No", was my reply. "But, it's for good luck", she responded. By then, I was tired, completely fed up in Bangkok and not having it. "If this stuff brought good luck, then I doubt you would have so many little 12-year-old girls suffering hideous indignities everyday with no one in your country doing anything to stop it." She did not speak to me the rest of the way back to my hotel. There went Buddhism....

Hinduism is a non-starter. Anything that creates a caste system is unhuman and completely off the list.

As an adult, I have made various efforts to give each of the religions a fair shot. One year during Ramadan, I endeavored to read the Quran a chapter a day. The caveat, however, was that I would not proceed to the next chapter until I was intellectually comfortable with the previous one. It worked for a short while until I got to the stuff about inheritance. I closed the Quran and ceased to consider myself a Muslim from that day on.

I did the same thing with the Bible, although I cheated and skipped past all that begatting in Genesis. What a bunch of horndogs, although I suppose they really didn't have anything else to do. The Old Testament is one of the most depraved, evil, sadistic bunch of tripe I have ever read. Besides demanding death for pretty much any mistake a person makes, the stories are so bizarre and off the wall as to offer no real spiritual guidance for this era.

The New Testament has some cool stuff in there. Assuming Jesus existed, he was an amazing man. But the NT is incomprehensible. Anyone who claims to understand what Jesus and the disciples were talking about half the time is a liar. The Parables can be interpreted a million different ways. I find it difficult to believe that a book written hundreds of years after Jesus' life could be accurate and, since the church has heavily regulated the contents of the Bible, who knows what really happened - especially when all the originals are in Greek and Latin. In short, there is a credibility problem and a book that proves itself is inherently suspect.

If there is a God, Buddhism got it right, although I don't think Buddhism was ever meant to be a religion in the mindless, ritualistic sense of the word. It is a philosophy without dogma and banging on drums. Alan Watts, one of the most brilliant theologians and philosophers to ever live, offers incredible insight into Buddhist teachings and their relation to the Big 3 religions. http://www.alanwatts.com/

I tried reading the Bhagavad Gita, but it did not hold my attention.

All the "good" books have wisdom. No doubt. They all offer some semblance of guidance for the spiritual dilemmas of this world. But the idea that God created a planet of billions of people who speak different languages and developed different philosophies, but then made only one of the belief systems correct is absurd. If there is a God, I would like to think it would not be so unjust. I would like to think that God would be good and kind and fair. I would like to think that God would care about spiritual dedication, not mindless ritual. If there is a God, and if he gave humans brains in order to make us superior to the rest of the animal kingdom, I would like to think that God would be horrified by humanity's willingness to surrender their brains in the name of religion.

It is my view of what a truly loving God should be that prevents me from ever accepting religion. And it is the refusal of so-called religious people to use God for "good" that has made religion a 2,000 year old failure. Einstein once said that it is insanity to do the same thing over and over and expect a different result. Yet humanity continues to insist that somehow this time it will be different. It is time to accept religion for what it is -- an insanity that has produced the same destructive result time and time again without fail.

I posted the following comment on another blog:

People who have good souls do not need religion. It is only for evil, depraved people who know they would slaughter and rape everyone around them if they didn't have the fear of damnation hanging over their heads. And, throughout history, the fear of damnation hasn't even been a deterrent to such behavior.

Good is good. It doesn't need an excuse to be good.

Tough Times At The Polls

Doesn't it seem like everytime Bush is having a tough time in the polls, his old family friend Bin Laden oblingingly pops his head out of obscurity to frighten Americans into supporting their Chimperor?

Where Do These People Come From?

It is not my style to publicize personal conversations, but this morning I had such a doozie that I have to share it.

Over the past few months, I have received random text messages on my cell phone asking about my mother, wishing me and my family merry x-mas, happy easter and all that jazz. Since the phone number had a 917 area code, I assumed it was a friend of mine from law school who lives and works in New York. Last night, I was at a party and was texting a friend who was on her way to the club and noticed the 917 number. I thought to myself, I haven't heard from Eric in a while, so I texted asking him how he is doing. It should have been a clue it wasn't Eric when I got an immediate reply (seeing as it would have been 1:00 a.m. in NY), but I wasn't thinking. The reply said call me, so I responded that I would call in the morning.

As I dialed the phone this morning, it occurred to me that the 917 number might not be Eric, but I had no idea who else it could be. The voice on the other end of the phone confirmed it wasn't Eric, but now I was in the midst of a conversation with a voice completely unfamiliar to me. So, as all women do, I faked it. :-) "How are you, how is work...." It was not until he asked me if I had hung out with mutual colleagues lately that I finally placed the voice with the phone number. Doh!

He was a guy I met at a professional networking function and who had taken me along as a sidekick to some networking party for a popular magazine. The party was lame, he was dull and superficial, so I told him I needed to get home to hubby and left the party after less than an hour. Haven't spoken since.

Now I have an identity, so I can play catch up. "Oh, I texted you because I realized it had been a while since I checked in and said hello." It was half-true. His response - "I just assumed that your husband intercepted one of my messages and forbid you from speaking to me."

What?

"I don't know what juvenile, insecure world you hang in", I responded, "but my husband knows very well he has absolutely nothing to worry about. Ever!"

You would think that would be the end of the topic, but it wasn't.

"We'll see. One day, I'll invite you and your husband to meet me at Venice Beach and I won't have a shirt on, and we'll see if he lets you talk to me again."

WHAT????????????????????????????????

I was speechless and it took me a second to grasp the reality of what he just said.

Then I started laughing (I am still laughing). I told him we would both think he was a foolio if he did that. "What is a foolio"?, he asked. "A foolio is one of those LA types who is so enamored with himself and so vain that he is like the bimbo chicks in the clubs who show a lot cleavage. Those types claim to be hetero, but they spend more time in the mirror then most women I know. Anyhoo, they are probably showing off their muscles to compensate for inadequacies elsewhere."

The puddle-deep intellect mustered up "well, what if I am comfortable without a shirt on when I am at the beach?" "That's fine and well, but we would still enjoy a good laugh at your expense."

With that, I politely ended the conversation.

I barely know this guy and he thinks he's so hot and studly that my husband would find him threatening. My husband would think he is as retarded as I think he is. Where the hell do these people come from? Where? On what planet do they breed such arrogant, narcissistic a-holes and then plant them here? What kind of parenting produces this?

And it's not like he's a GQ Model or anything. I have plenty of male friends who are 100x hotter than that foolio.

Fundies Gone Wild

(Fred Phelps)

From The Guardian -

Anti-gay church hounds military funerals
Julian Borger in Washington
Tuesday April 18, 2006
The Guardian

New laws have been passed in the United States to counter the activities of a bizarre church that has been disrupting military funerals with anti-gay protests on the grounds that the soldiers died fighting for a land that tolerates homosexuality.

Since last year, the Westboro Baptist church, based in Topeka, Kansas, has been picketing funerals of soldiers killed in Afghanistan and Iraq, waving signs saying, "Thank God for Dead Soldiers", "Thank God for IEDs [improvised explosive devices - roadside bombs]", and "God Hates Cripple Soldiers", while yelling that dead US troops will rot in hell.

The church - which consists almost exclusively of Fred Phelps, a 76-year-old preacher, and 75 members of his extended family - is definitely not a peace movement. Rather, it celebrates the violent deaths of soldiers and marines who died, it says, defending a licentious nation.

Today, it is planning to picket the funeral of an army sergeant, Daniel Sesker, from Ogden, Iowa, who was killed by a roadside bomb on April 6, near Tikrit. "Where in God's name did he get the idea that it was noble to fight in a fag army for a fag nation that's on the short path to eternal destruction?" asks the church's website, http://www.godhatesfags.com/. "That's right: his parents, his family, his 'friends', his state and his country; they are to blame for the fact that Sesker is now in a million pieces, the appropriate punishment for their filthy manner of life."

Horrified at the church's activities, nine states have approved laws that impose restrictions on demonstrations at funerals and burials. More than 20 other states are considering similar legislation, and the US Congress will be asked to consider possible federal laws next month. None of the new laws involves an outright ban on funeral protests, as that would clash with the constitution's first amendment, guaranteeing free speech. Instead, most stipulate that demonstrators must stay a certain distance from a funeral, and limit their protests to an hour before and an hour after the ceremony.

Some laws prohibit the display of "any visual image that conveys fighting words". Similar laws have been passed in the past to stop anti-abortion protests outside private homes or family planning clinics, and have survived supreme court challenges. The Westboro Baptist church says its constitutional rights are being
trampled by the new laws, and claims it is thinking of ways to challenge them.

It claims to have conducted 25,000 pickets since its formation in 1991, almost all of them anti-gay. Mr Phelps first drew national attention when he protested at the funeral of Matthew Shepard, a gay man beaten to death in Wyoming in 1998. The church reckons its spends $250,000 (£140,000) a year on air fares and other protest expenses. The bills are paid by the family, which includes 10 lawyers among Mr Phelps's 13 children. Three of his offspring have broken ties with the family. One, his daughter Dortha, told the Knight Ridder news agency: "I felt like I was being controlled, and I didn't have any freedom."

Before the new laws were passed, several thousand bikers, many of them Vietnam veterans, formed a group calling itself the Patriot Guard Riders, to attend military funerals and form a cordon around the protesters to shield them from view of the mourners, and to drown out their shouts by revving their engines. Mr Phelps seems to relish the fury he stirs. He likes to quote from the Gospel according to St Luke: "Blessed are ye, when men shall hate you, and when they shall separate you from their company, and shall reproach you, and cast out your name as evil, for the son of man's sake."

Yet another example of why fundamentalists have no place in civilized society.

At least this guy is an intellectually honest fundie. Most Republicans cry about America's lack of morality while, simultanously, lambasting anyone who dares critique the morally upright and always perfect America, unable to grasp the glaring contradiction of their opinions. It is, of course, because only they are allowed to critique America. Anything beyond their bigoted, hateful complaints is irresponsible debate that adds nothing to the discussion.

I can't wait to hear the whining that barring this quack from funerals constitutes "persecution" of Christians.

Assorted Ramblings

People Under The Stairs releases its new album, Stepfather, tomorrow!
http://www.putsonline.co.uk/news.htm

***

Today is the deadline to file your taxes. Dad and I have already prepared over 325 returns and there will be at least 100 more on extension. It's been quite an educational ride. You learn so much about a person by doing his taxes. You find out whose honest, a liar, a procrastinator, organized, scattered. And, I have a new found appreciation for the IRS. If we abolish all other government agencies and allow the IRS to run other public services, we might finally get some efficiency around here.

***

In a discussion about the economy, a family friend pointed out that the price of gold is skyrocketing these days. He explained that the surge in gold prices generally signals inflation; that the demand for gold has an inverse correlation to the demand for dollars. If the demand for dollars goes down, the fed will likely raise interest rates to keep investors from fleeing.

So here lies the rub - raise interest rates and keep those investors here, but what happens to the 34 percent of home mortgage holders with adjustible rate mortgages?

http://news.ft.com/cms/s/b5dca1a8-ca13-11da-852f-0000779e2340.html
http://news.ft.com/cms/s/d89efdd4-ce01-11da-a032-0000779e2340.html

Patriotism

(Photo Plagiarized from Captain Fogg)

Patriotism is the willingness to kill and be killed for trivial reasons.

Bertrand Russell (1872 - 1970)

When a whole nation is roaring patriotism at the top of its voice, I am fain to explore the cleanness of its hands and purity of its heart.

Ralph Waldo Emerson (1803 - 1882), Journals, 1824

Patriotism is the last refuge of a scoundrel.

Samuel Johnson (1709 - 1784)

"My country, right or wrong," is a thing that no patriot would think of saying except in a desperate case. It is like saying, "My mother, drunk or sober."

G. K. Chesterton (1874 - 1936)

Patriotism is your conviction that this country is superior to all other

countries because you were born in it.

George Bernard Shaw (1856 - 1950)

You'll never have a quiet world till you knock the patriotism out of the human race.

George Bernard Shaw (1856 - 1950)

Patriotism is often an arbitrary veneration of real estate above principles.

George Jean Nathan (1882 - 1958)

You're not to be so blind with patriotism that you can't face reality.

Wrong is wrong no matter who does it or says it.

Malcolm X (1925 - 1965)

Wearing The Uniform

Israeli playwright, Joshua Sobol, has written an extraordinary story of an Austrian Catholic farmer who refused to serve in the army of the Third Reich. Through 14 letters Franz Jägerstätter wrote to his wife, Sobol explores the character of a man who believed that putting on the uniform, regardless of whether he saw combat, was a compromise with evil he could not make. Jägerstätter believed that the mere act of wearing the uniform was an endorsement of everything with which he disagreed and he calmly chose death as the price for his principles.

http://www.venturacountystar.com/vcs/entertainment_columnists/article/0,1375,VCS_4436_4597965,00.html

http://www.calendarlive.com/stage/336233,0,6232885.event

Some good news from the Holy Land -

120 former Israeli, Palestinian combatants in new peace drive
By Reuters

After a year of meeting in secret, 120 former Israel Defense Forces combat soldiers and Palestinian militants unveiled a unique peace group on Monday, hopeful their union will spur dialogue and end bloodshed. Formation of the "Combatants for Peace" is a rare sign of comradeship at a time when separation increasingly characterizes relations between Israelis and Palestinians.On Sunday, Israel said it was cutting direct contacts with the new Hamas-led Palestinian government. The Islamic militant group is sworn to destroy Israel.

But in a school yard in the Palestinian town of Anata north of Jerusalem, former enemies exchanged handshakes and hugs as they inaugurated what they called the first joint group of its type. "This is the breakthrough event, to say to the world we are here," Avichay Sharon, 24, a former IDF soldier told Reuters. "We don't want to look at each other through weapon sights, we want to see each other as human."Added Palestinian Osama Abu Karsh, 35, jailed for three years by Israel for attacking troops with firebombs: "Both our sides have been fighting, but we want to sit at the same table. We hope we can achieve something."

The former combatants have been meeting for a year in different towns around Jerusalem after founders on both sides decided to do something to try to foster peace. But they kept the group's existence secret to first build trust at gatherings where emotions often spilled over as both sides told stories of what they had done in the conflict. Some of those experiences were recounted on Monday as members made speeches in the Anata school yard in front of family members and friends sitting at fold-up tables.

The group aims to put pressure on both governments to talk peace, halt violence and establish a Palestinian state. They plan to visit Israeli and Palestinian schools and universities and set up joint media teams to influence public opinion. One problem is getting together. It is illegal for Israelis to enter most of the West Bank. Palestinians find it difficult to get permits to enter Israel. Complicating matters is the separation fence, an unfinished section of which lies at the edge of the Anata school.

Yonatan Shapira, who made headlines in 2003 when he and nearly 30 other Israel Air Forces pilots refused to carry out operations on civilian Palestinian areas, said he did not expect endorsement from the governments on either side."The Israeli government is bombing Gaza and killing innocent people so I don't think they will be part of this event, nor will the Palestinians who are involved in militant attacks," said Shapira, 34. Karsh said he was a little concerned about reprisals from Palestinians who objected to his participation." Maybe tomorrow someone will say he's a spy for the Israelis. That would be very dangerous," he said.

The New Face Of Hip Hop

When I get bamboozled into fraternizing with holyrollers, I don't expect to hear hip hop at the otherwise painfully boring events. So, you can imagine what a surprise it was to see a covered chick open up the awards banquet for the Islamic Center of Southern California on Saturday night with two songs she wrote for her upcoming album. And the girl's got skills. And she's a Kurd from Northern Iraq. Very cool on many levels.

She, and many others like her, are the new face of hip hop -- Muslim Hip Hop.

http://www.muslimhiphop.com/index.php?p=Hip-Hop