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Gold and Silver • WILL GOLD SOON BE REGULATED?
WILL GOLD SOON BE REGULATED?
Written February 27th, 2013 by Egon von Greyerz
Categories: Commentary (English), Egon von Greyerz’ Newsletters
Lector Salutem
Will gold soon be regulated?
You may have read that Via Mat International AG, the Swiss Logistics and precious metals storage company, has decided to close all accounts with US citizens.
They do not explain the cause for this, but mention taxation and tax structures in their letter as one reason.
The decision by Via Mat has no effect on Matterhorn’s US clients.
Matterhorn Asset Management / GoldSwitzerland has never accepted undeclared accounts. We go through very stringent compliance procedures to make sure that all accounts are declared in the country where the client is tax resident. Furthermore all clients are annually sent a Compliance Review Form in which they must confirm that all account details are correct including compliance with the fiscal regulations in the country where the beneficial owner of the account is tax resident.
Precious Metals are not regulated in most countries currently. However, this might change in the next few years in some countries. If gold and silver become regulated, the reporting requirements might become much more stringent. We believe it is important for clients to be prepared for that eventuality both mentally and practically.
As regards in which country gold should be stored, we are constantly reviewing this issue. There are storage companies in many countries. Outside of Switzerland the most popular locations are in Hong Kong and Singapore. We have investigated both these locations in-depth. In our view it is not right to diversify a holding just for the sake of diversification.
As Mark Twain said:
“Put all your eggs in one basket and watch the basket”.
Both these jurisdictions have attractions but there are also some drawbacks. Hong Kong is not a democracy and if there was ever a problem between China and the USA, China could easily close off Hong Kong. Singapore has an authoritarian political system, although a benevolent one. There is also a major US influence in Singapore including an US naval base. However, since some investors have asked us to store their gold/silver in Singapore, we are considering opening a precious metals purchase and storage facility there.
Swiss bank secrecy is virtually dead. Thus Switzerland is not the same as it was before US authorities attacked UBS with their undeclared US accounts. However, undeclared accounts are of course illegal to hold in Switzerland for US citizens so it is not surprising that the US authorities could not accept this. Subsequently many European countries have also reached agreements with Switzerland regarding undeclared accounts in order to exchange information and tax these accounts often with punitive rates. Due to major fiscal deficits in most countries, authorities worldwide will continue to pursue tax evasion with vigour.
So although Switzerland (CH) is no longer a haven for hiding undeclared accounts, it is still one of the oldest and truest democracies in the world. Politics is not personalised in CH and the role of the President rotates every year. Few people care who the President is. Decision making is decentralised into the regions (the cantons). Whenever someone feels strongly about any issue, be it the price of sugar or immigration, it is sufficient to obtain 100,000 signatures on a list in favour of the motion and the particular issue will have a national referendum. Thus CH is one of the last remaining nations with real People Power. Also, the Swiss are great believers in independence and non-involvement by the government in their affairs. Having personally lived in many countries for extended periods, I am of the opinion that Switzerland is probably the only remaining true democracy which also offers a quality of life and non-interference by government that is not found in most other countries.
As regards Gold and Switzerland, there has for very long been a tradition for the Swiss to save part of their wages in gold by every month buying a Vreneli (small gold coin). Also for wedding presents many Swiss receive gold. Currently there are two gold initiatives in Switzerland. One is to introduce gold as a parallel currency (which MAM is backing) The other initiative has reached 90,000 signatures with only 10,000 to go for a referendum.
The referendum would be to decide:
To keep Swiss gold physically in Switzerland (ie repatriate Switzerland’s gold)
Preventing/forbidding the SNB (the Swiss National Bank) from selling any more of its gold reserves
Requiring the SNB to massively increase their gold holdings to a minimum of 20% of its reserves within 5 years, held within Switzerland.
The point I am making here is that the Swiss probably feel more strongly about gold than any other Western nation and is therefore unlikely to confiscate gold or tax it punitively. It must also be remembered that Switzerland refines 70% of all gold in the world which makes it an important industry for the country. Switzerland would be foolish and unlikely to kill the goose that lays many golden eggs.
What is absolutely critical for investors is to store their precious metals in physical form outside the banking system and outside their country of residency. The investor must have personal access to his gold/silver which must be stored in a politically stable and democratic country.
Egon von Greyerz
Founder & Managing Partner
Matterhorn Asset Management
http://goldswitzerland.com/general-commentary/
Statistics: Posted by yoda — Thu Feb 28, 2013 7:10 am
View full post on opinions.caduceusx.com
Gold and Silver • Coming Soon: $10 Trillion Of Yearly QE & Fantastic Gold Char
Continue reading the Egon von Greyerz interview below…
To hear which company investors and institutions around the globe are flocking to
that has one of the best gold & silver purchase & storage platforms
in the world click on the logo:
“The cash deficit every year is currently running at $1.5 trillion, but if you include unfunded liabilities, the accounting deficit totals $6 trillion each year. How can they ever stop QE? You look at the banking system, they can only survive by valuing their toxic assets at phony values.
Even student loans now total above $1 trillion, and the default rate currently amounts to 23%. Some colleges have a default rate as high as 60%. As youth unemployment increases, default rates will average 50% in my view. If you look at Social Security, there are over 125 million on benefits, including food stamps.
I wouldn’t be surprised to see at least 150 million people in need of government assistance or standing in front of soup kitchens in the next few years. All the while the Fed will be signaling the end of QE. So there is nothing in the US that’s pointing to any improvement or anything that would allow for QE programs to cease.
One thing that’s worried me and it continues to worry me is the divide between the rich and the poor. It’s increasing continuously in the US and in the rest of the world. The poor in the US and Europe are having trouble making ends meet, and this is a very, very dangerous trend for the world.
Interestingly enough I was at a family office conference recently and this confirmed that the rich are still very rich, and they are buying all of the conventional assets, stocks, property, private equity, wines, art, etc. But very few of them had any significant exposure to gold. There will be a massive wealth destruction because many of the assets which have been financed by credit bubbles around the world, they will plummet massively in real terms.
If we move to the eurozone things are just getting worse. The European Commission admitted that what they expected to be growth in 2013 is not going to be happening. But optimists as they always are, they now say it will happen in 2014. Well, Eric, there is absolutely no chance there will be growth in Europe in 2014.
The problems in Europe are still massive. When you look at Spain as an example, the financial system is crumbling. Bankia, which is the bank that was created by all of the mergers in 2010, and subsequently saved by the government, is about to announce its biggest loss ever. They are not even valuing their assets at real market value. There are 3 million empty houses in Spain as an example.
We also just had the second biggest bankruptcy ever announced in Spain. So with unemployment at 27% overall, and roughly 60% for the youth, Spain is in an absolute mess and is not going to improve. The government’s borrowing rate should be 50% or more, and yet they are still able to borrow at 5%. In fact, they couldn’t borrow any money without the ECB’s help.
You have a very similar situation in Italy, Greece, France, and the UK will be next. The ECB had been upbeat about the expected repayment of the LTRO, but the repayment was only half of what they expected because the reality is the banking system is still under tremendous pressure.”
Greyerz had this to say regarding gold: “The gold market will very soon begin to reflect the money printing that is guaranteed to happen in 2013. I could easily see the Fed moving from $85 billion each month to a number ten times that amount in coming years. This number could well grow to $850 billion each month from the Fed over the next few years, and that’s just on the US side.
When we discuss gold going up dramatically in a short period of time, most people think it can’t happen. We’ve talked about the next targets of $4,000 to $5,000, and people in the mainstream media would say that’s crazy. But below I am showing a chart of the 1979 to 1980 gold price action.
In 1979, in April, gold was $240, and in January of 1980 the price extended above $850. Gold went up roughly 3.6 times in price in a matter of months. So it is very possible that once this market starts moving that we will see a very fast move. I could see this type of move being repeated in the next twelve months in terms having a very explosive move to the upside.
After gold had that speculator move, Volcker came in and dramatically increased interest rates because inflation was spinning out of control, and subsequently the gold price fell. But that is very unlikely to happen this time because it would bankrupt the government. The market will eventually push interest rates up.
Investors just need to be patient. This move will happen. We have been in a 17-month consolidation and this is quite normal in bull markets. All this type of action does is build massive energy for the next move. So investors simply need to sit tight and hold on to their positions in gold and silver. Time is on the side of the longs, and solidly against the bears.”
© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
KWN has now released the audio and all three parts of the Maguire writtens interviews. You can read the written interviews by CLICKING HERE. You can listen to the eagerly anticipated audio interview by CLICKING HERE.
The interviews with Andrew Maguire, Marc Faber, James Turk, Bill Fleckenstein, Egon von Greyerz, Felix Zulauf, John Hathaway, Gerald Celente and Eric Sprott are available now. Also, be sure to listen to the other recent KWN interviews which included Art Cashin, MEP Nigel Farage, Michael Belkin and James Dines by CLICKING HERE.
Eric King
KingWorldNews.com
To return to BLOG click here.
Coming Soon: $10 Trillion Of Yearly QE & Fantastic Gold Chart
Today Egon von Greyerz stunned King World News when he stated that the Fed may increase QE a shocking ten times in coming years. Greyerz, founder of Matterhorn Asset Management, also provided a tremendous chart. Here is what Greyerz had to say in this remarkable and exclusive interview: “Eric, as we discussed last week I was expecting gold to make a low this week. So far we had a closing low on Wednesday at around $1,564. We will see if that holds. As always, in these cases where we have some kind of cycle low there is always price action that cements that low. ”
http://kingworldnews.com/kingworldnews/ … Chart.html
Statistics: Posted by yoda — Sun Feb 24, 2013 3:52 pm
View full post on opinions.caduceusx.com
American • California’s budget windfall could end soon, officials say
California’s budget windfall could end soon, officials say
The governor’s budget office advises in a report that the surprise $5-billion bump in revenue in January may be an accounting anomaly.
By Evan Halper, Los Angeles Times
February 18, 2013, 7:02 p.m.
SACRAMENTO — The surge of revenue that showed up unexpectedly in state coffers last month may well be offset by a revenue dip in coming months, according to Gov. Jerry Brown’s administration.
The surprise money has been the source of much speculation in the Capitol. Unanticipated tax receipts filled state coffers with more than $5 billion beyond initial projections for January — more tax dollars than are allocated to the entire state university system in a year.
The revenue bump was historic. But the question for budget experts was whether lawmakers could begin allocating the windfall toward government programs and tax breaks — or whether the money amounted to an accounting anomaly.
Brown’s budget office now advises in an official cash report that it is probably the latter. Lawmakers need not do much reading between the lines to understand that the governor does not see the revenue boost as an occasion to pack the budget with extra spending.
The report says the extra money was "likely the result of major tax law changes at the federal and state level having a significant impact in the timing of revenue receipts."
That is: Taxpayers were paying a share of their bill early, getting income off their books in the hope of limiting exposure to the tax hikes that recently kicked in.
The administration was expecting that money to arrive in April. Now, officials are saying it won’t, and that just as January’s receipts soared, they’ll be offset by a spring plunge.
http://www.latimes.com/news/local/la-me … 2584.story
Statistics: Posted by yoda — Tue Feb 19, 2013 12:37 pm
View full post on opinions.caduceusx.com
Do Wall Street Insiders Expect Something Really BIG To Happen Very Soon?
Why are corporate insiders dumping huge numbers of shares in their own companies right now? Why are some very large investors suddenly making gigantic bets that the stock market will crash at some point in the next 60 days? Do Wall Street insiders expect something really BIG to happen very soon? Do they know something that we do not know? What you are about to read below is startling. Every time that the market has fallen in recent years, insiders have been able to get out ahead of time. David Coleman of the Vickers Weekly Insider report recently noted that Wall Street insiders have shown “a remarkable ability of late to identify both market peaks and troughs”. That is why it is so alarming that corporate insiders are selling nine times as many shares as they are buying right now. In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April. So what does all of this mean? Well, it could mean absolutely nothing or it could mean that there are people out there that actually have insider knowledge that a market crash is coming. Evaluate the evidence below and decide for yourself…
For some reason, corporate insiders have chosen this moment to unload huge amounts of stock. According to a CNN article, corporate insiders are now selling nine times more of their own shares than they are buying…
Corporate insiders have one word for investors: sell.
Insiders were nine times more likely to sell shares of their companies than buy new ones last week, according to the Vickers Weekly Insider report by Argus Research.
What makes this so alarming is that corporate insiders have been exceedingly good at “timing the market” in recent years. The following comes from a recent CNBC article entitled “Sucker Alert? Insider Selling Surges After Dow 14,000“…
“In almost perfect coordination with an equity market that was rushing toward new all-time highs, insider sentiment has weakened sharply — falling to its lowest level since late March 2012,” wrote David Coleman of the Vickers Weekly Insider report, one of the longest researchers of executive buying and selling on Wall Street. “Insiders are waving the cautionary flag in an increasingly aggressive manner.”
There have been more than nine insider sales for every one buy over the past week among NYSE stocks, according to Vickers. The last time executives sold their company’s stock this aggressively was in early 2012, just before the S&P 500 went on to correct by 10 percent to its low for the year.
“Insiders know more than the vast majority of market participants,” said Enis Taner, global macro editor for RiskReversal.com. “And they’re usually right over a long period of time.”
There are other indications that the stock market may be headed for a significant tumble in the months ahead. For example, as a Zero Hedge article recently pointed out, the last time that the financial markets in the U.S. were as “euphoric” as they are now was right before the financial crisis of 2008.
And as I mentioned above, some people out there have recently made some absolutely jaw-dropping bets against stocks which will only pay off if there is a financial crash at some point in the next few months.
According to Business Insider, the recent purchase of 100,000 put options by a mystery investor has a lot of people on Wall Street talking…
According to Barron’s columnist Steven Sears, someone made a big bet against the financials ETF yesterday (ticker symbol XLF), and it has everybody buzzing.
The trader bought 100,000 put options on the ETF (a put option increases in value when the price of the underlying asset, in this case, the ETF, goes down).
To put that number in perspective, Sears writes, “Few investors ever trade more than 500 contracts, so a 100,000 order tends to stop traffic and prompt all sorts of speculation about what’s motivating the trade.” According to Sears, the trade “has sparked conversations across the market.”
Reportedly, those put options expire in April.
And as Art Cashin of UBS has noted, there was also another extremely large bet that was placed recently that is banking on a financial crash within the next two months…
A Very Big Bet In A Somewhat Unlikely Instrument – My friend, Jim Brown, the ever-alert consummate professional over at Option Investor pointed us to a rather unusual trade. Here’s what he wrote in last night’s edition of his valuable newsletter:
In past years I have reported on trades that were so large it appeared someone had inside knowledge of a pending event. Sometimes those were massive put positions on the S&P. A new trade just appeared that suggests there will be a market event in the near future. Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days. You would have to be VERY confident in your outlook to risk $11 million on a directional position with the VIX at five year lows and the markets trying to break out to new highs.
So does all of this guarantee that the stock market is going to move a certain way?
Of course not.
But when you step back and look at the bigger picture, it does appear that Wall Street insiders are preparing for something.
Meanwhile, the government continues to assure us that happy days are here again for the U.S. economy and that we don’t have anything to worry about.
The Congressional Budget Office has just released a report that contains their outlook for the next decade. The report is entitled “The Budget and Economic Outlook: Fiscal Years 2013 to 2023″, and if you want a good laugh you should read it.
Here are some of the things that the CBO believes will happen…
-The CBO believes that government revenues will more than double by 2023.
-The CBO believes that government revenue as a percentage of GDP will rise from 15.8 percent today to 19.1 percent in 2023.
-The CBO believes that the unemployment rate will continually fall over the next decade.
-The CBO believes that the federal budget deficit will fall to just 2.4% of GDP in fiscal year 2015.
-The CBO believes that the federal budget deficit will only be $430 billion in 2015.
-The CBO believes that we will not have a single recession over the next decade.
-The CBO believes that inflation will stay at about 2 percent for the next decade.
-The CBO believes that U.S. GDP will grow by a total of 67 percent by 2023.
Wow, all of that sounds great until you go back and take a look at how CBO projections have fared in the past.
In fact, Bruce Krasting has gone back and looked at the numbers from the Congressional Budget Office’s Budget and Economic Outlook 2003. I think that you will find the differences between the CBO projections and what really happened to be very humorous…
Estimated 10-year budget surplus = $5.6T.
Reality = $6.6T deficit. A 200+% miss.
Estimate for 2012 Debt Held by Public = $1.2T (5% of GDP).
Reality = Debt Held by Public = $11.6T. A 1000% miss.
Estimated fiscal 2012 GDP = $17.4T.
Reality = $15.8T. A $1.6T (10%) miss.
So should we trust what the CBO is telling us now?
Of course not.
Instead, perhaps we should listen to some of the men that successfully warned us about the last financial crisis…
-”Dr. Doom” Marc Faber recently stated that he “loves the high odds of a ‘big-time’ market crash“.
-Economist Nouriel Roubini says that we should “prepare for a perfect storm“.
-Pimco’s Bill Gross says that we are heading for a “credit supernova“.
-Nomura’s Bob Janjuah believes that the financial markets will experience one more huge spike before collapsing by up to 50%…
I continue to believe that the S&P500 can trade up towards the 1575/1550 area, where we have, so far, a grand double top. I would not be surprised to see the S&P trade marginally through the 2007 all-time nominal high (the real high was of course seen over a decade ago – so much for equities as a long-term vehicle for wealth creation!). A weekly close at a new all-time high would I think lead to the final parabolic spike up which creates the kind of positioning extreme and leverage extreme needed to create the conditions for a 25% to 50% collapse in equities over the rest of 2013 and 2014, driven by real economy reality hitting home, and by policymaker failure/loss of faith in “their system”.
The truth is that no matter how much money printing the Federal Reserve does, it is only a matter of time before the financial markets catch up with economic reality.
The U.S. economy has been in decline for a very long time, and things just continue to get even worse. Here are just a few numbers…
-The percentage of the civilian labor force that is employed has fallen every single year since 2006.
-According to John Williams of shadowstats.com, truly accurate numbers would show that U.S. GDP growth has actually been continuously negative all the way back to 2005.
-U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
-One recent survey found that nearly half of all Americans are living on the edge of financial ruin.
-According to the U.S. Census Bureau, there are more than 146 million Americans that are considered to be either “poor” or “low income” at this point.
For many more statistics that demonstrate that the U.S. economy has continued to decline in recent years, please see this article: “37 Statistics Which Show How Four Years Of Obama Have Wrecked The U.S. Economy“.
So where is all of this headed?
Well, after the next major financial crisis in America things are going to get very tough.
We can get a hint for how things are going to be by taking a look at what is going on over in Europe right now.
Can you imagine people trampling each other for food? That is what is happening in Greece. Just check out this excerpt from a Reuters article…
Hundreds of people jostled for free vegetables handed out by farmers in a symbolic protest earlier on Wednesday, trampling one man and prompting an outcry over the growing desperation created by economic crisis.
Images of people struggling to seize bags of tomatoes and leeks thrown from a truck dominated television, triggering a bout of soul-searching over the new depths of poverty in the debt-laden country.
The suffering that the Greeks are experiencing right now will come to this country soon enough.
So enjoy this false bubble of debt-fueled prosperity while you can. It is going to end way too soon, and after that there will be a whole lot of pain.
View full post on The Economic Collapse
Do Wall Street Insiders Expect Something Really BIG To Happen Very Soon?
Why are corporate insiders dumping huge numbers of shares in their own companies right now? Why are some very large investors suddenly making gigantic bets that the stock market will crash at some point in the next 60 days? Do Wall Street insiders expect something really BIG to happen very soon? Do they know something that we do not know? What you are about to read below is startling. Every time that the market has fallen in recent years, insiders have been able to get out ahead of time. David Coleman of the Vickers Weekly Insider report recently noted that Wall Street insiders have shown “a remarkable ability of late to identify both market peaks and troughs”. That is why it is so alarming that corporate insiders are selling nine times as many shares as they are buying right now. In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April. So what does all of this mean? Well, it could mean absolutely nothing or it could mean that there are people out there that actually have insider knowledge that a market crash is coming. Evaluate the evidence below and decide for yourself…
For some reason, corporate insiders have chosen this moment to unload huge amounts of stock. According to a CNN article, corporate insiders are now selling nine times more of their own shares than they are buying…
Corporate insiders have one word for investors: sell.
Insiders were nine times more likely to sell shares of their companies than buy new ones last week, according to the Vickers Weekly Insider report by Argus Research.
What makes this so alarming is that corporate insiders have been exceedingly good at “timing the market” in recent years. The following comes from a recent CNBC article entitled “Sucker Alert? Insider Selling Surges After Dow 14,000“…
“In almost perfect coordination with an equity market that was rushing toward new all-time highs, insider sentiment has weakened sharply — falling to its lowest level since late March 2012,” wrote David Coleman of the Vickers Weekly Insider report, one of the longest researchers of executive buying and selling on Wall Street. “Insiders are waving the cautionary flag in an increasingly aggressive manner.”
There have been more than nine insider sales for every one buy over the past week among NYSE stocks, according to Vickers. The last time executives sold their company’s stock this aggressively was in early 2012, just before the S&P 500 went on to correct by 10 percent to its low for the year.
“Insiders know more than the vast majority of market participants,” said Enis Taner, global macro editor for RiskReversal.com. “And they’re usually right over a long period of time.”
There are other indications that the stock market may be headed for a significant tumble in the months ahead. For example, as a Zero Hedge article recently pointed out, the last time that the financial markets in the U.S. were as “euphoric” as they are now was right before the financial crisis of 2008.
And as I mentioned above, some people out there have recently made some absolutely jaw-dropping bets against stocks which will only pay off if there is a financial crash at some point in the next few months.
According to Business Insider, the recent purchase of 100,000 put options by a mystery investor has a lot of people on Wall Street talking…
According to Barron’s columnist Steven Sears, someone made a big bet against the financials ETF yesterday (ticker symbol XLF), and it has everybody buzzing.
The trader bought 100,000 put options on the ETF (a put option increases in value when the price of the underlying asset, in this case, the ETF, goes down).
To put that number in perspective, Sears writes, “Few investors ever trade more than 500 contracts, so a 100,000 order tends to stop traffic and prompt all sorts of speculation about what’s motivating the trade.” According to Sears, the trade “has sparked conversations across the market.”
Reportedly, those put options expire in April.
And as Art Cashin of UBS has noted, there was also another extremely large bet that was placed recently that is banking on a financial crash within the next two months…
A Very Big Bet In A Somewhat Unlikely Instrument – My friend, Jim Brown, the ever-alert consummate professional over at Option Investor pointed us to a rather unusual trade. Here’s what he wrote in last night’s edition of his valuable newsletter:
In past years I have reported on trades that were so large it appeared someone had inside knowledge of a pending event. Sometimes those were massive put positions on the S&P. A new trade just appeared that suggests there will be a market event in the near future. Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days. You would have to be VERY confident in your outlook to risk $11 million on a directional position with the VIX at five year lows and the markets trying to break out to new highs.
So does all of this guarantee that the stock market is going to move a certain way?
Of course not.
But when you step back and look at the bigger picture, it does appear that Wall Street insiders are preparing for something.
Meanwhile, the government continues to assure us that happy days are here again for the U.S. economy and that we don’t have anything to worry about.
The Congressional Budget Office has just released a report that contains their outlook for the next decade. The report is entitled “The Budget and Economic Outlook: Fiscal Years 2013 to 2023″, and if you want a good laugh you should read it.
Here are some of the things that the CBO believes will happen…
-The CBO believes that government revenues will more than double by 2023.
-The CBO believes that government revenue as a percentage of GDP will rise from 15.8 percent today to 19.1 percent in 2023.
-The CBO believes that the unemployment rate will continually fall over the next decade.
-The CBO believes that the federal budget deficit will fall to just 2.4% of GDP in fiscal year 2015.
-The CBO believes that the federal budget deficit will only be $430 billion in 2015.
-The CBO believes that we will not have a single recession over the next decade.
-The CBO believes that inflation will stay at about 2 percent for the next decade.
-The CBO believes that U.S. GDP will grow by a total of 67 percent by 2023.
Wow, all of that sounds great until you go back and take a look at how CBO projections have fared in the past.
In fact, Bruce Krasting has gone back and looked at the numbers from the Congressional Budget Office’s Budget and Economic Outlook 2003. I think that you will find the differences between the CBO projections and what really happened to be very humorous…
Estimated 10-year budget surplus = $5.6T.
Reality = $6.6T deficit. A 200+% miss.
Estimate for 2012 Debt Held by Public = $1.2T (5% of GDP).
Reality = Debt Held by Public = $11.6T. A 1000% miss.
Estimated fiscal 2012 GDP = $17.4T.
Reality = $15.8T. A $1.6T (10%) miss.
So should we trust what the CBO is telling us now?
Of course not.
Instead, perhaps we should listen to some of the men that successfully warned us about the last financial crisis…
-”Dr. Doom” Marc Faber recently stated that he “loves the high odds of a ‘big-time’ market crash“.
-Economist Nouriel Roubini says that we should “prepare for a perfect storm“.
-Pimco’s Bill Gross says that we are heading for a “credit supernova“.
-Nomura’s Bob Janjuah believes that the financial markets will experience one more huge spike before collapsing by up to 50%…
I continue to believe that the S&P500 can trade up towards the 1575/1550 area, where we have, so far, a grand double top. I would not be surprised to see the S&P trade marginally through the 2007 all-time nominal high (the real high was of course seen over a decade ago – so much for equities as a long-term vehicle for wealth creation!). A weekly close at a new all-time high would I think lead to the final parabolic spike up which creates the kind of positioning extreme and leverage extreme needed to create the conditions for a 25% to 50% collapse in equities over the rest of 2013 and 2014, driven by real economy reality hitting home, and by policymaker failure/loss of faith in “their system”.
The truth is that no matter how much money printing the Federal Reserve does, it is only a matter of time before the financial markets catch up with economic reality.
The U.S. economy has been in decline for a very long time, and things just continue to get even worse. Here are just a few numbers…
-The percentage of the civilian labor force that is employed has fallen every single year since 2006.
-According to John Williams of shadowstats.com, truly accurate numbers would show that U.S. GDP growth has actually been continuously negative all the way back to 2005.
-U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
-One recent survey found that nearly half of all Americans are living on the edge of financial ruin.
-According to the U.S. Census Bureau, there are more than 146 million Americans that are considered to be either “poor” or “low income” at this point.
For many more statistics that demonstrate that the U.S. economy has continued to decline in recent years, please see this article: “37 Statistics Which Show How Four Years Of Obama Have Wrecked The U.S. Economy“.
So where is all of this headed?
Well, after the next major financial crisis in America things are going to get very tough.
We can get a hint for how things are going to be by taking a look at what is going on over in Europe right now.
Can you imagine people trampling each other for food? That is what is happening in Greece. Just check out this excerpt from a Reuters article…
Hundreds of people jostled for free vegetables handed out by farmers in a symbolic protest earlier on Wednesday, trampling one man and prompting an outcry over the growing desperation created by economic crisis.
Images of people struggling to seize bags of tomatoes and leeks thrown from a truck dominated television, triggering a bout of soul-searching over the new depths of poverty in the debt-laden country.
The suffering that the Greeks are experiencing right now will come to this country soon enough.
So enjoy this false bubble of debt-fueled prosperity while you can. It is going to end way too soon, and after that there will be a whole lot of pain.
View full post on The Economic Collapse
Agriculture • Why the rare burger may soon become endangered
Why the rare burger may soon become endangered
It is a far cry from the traditional burger sold at fast-food outlets. All over the country restaurants are putting “gourmet” burgers on the menu, offering them from rare to well done.
Officials are cracking down on choosing how your ‘gourmet burger’ is cooked
By Ben Leach8:10AM GMT 09 Dec 2012
Now council officials are cracking down on the freedom to choose how your burger is done, warning restaurants not to offer them rare or even medium-rare.
A number of celebrity chefs are affected by the move, including Gordon Ramsay, whose Maze Grill restaurant sells a burger for £12, Angela Hartnett, whose York and Albany’s bar menu includes burgers, and the Soho House chain, run by Nick Jones, the husband of broadcaster Kirsty Young.
All face being asked at their next routine inspection how they offer their burgers after the decision by Westminster city council, which regulates food safety in more restaurants than any other local authority.
The decision is expected to be followed by other councils, but critics fear it could lead to questions over the safety of rare steaks and raw meat dishes such as steak tartare.
The policy is to be the subject of a legal ruling.
After routine inspections by environmental health officers, Westminster council challenged the way Davy’s was serving its £13.95 burgers at one of its restaurants in central London. Davy’s has taken the case to the High Court, which experts say could set a legal precedent as to whether or not diners will be able to order meat rare.
A Davy’s spokesman said: “The burgers are produced from high quality ingredients and Davy’s contends that it has safe measures in place to serve rare or medium-rare burgers.”
James Armitage, the council’s food health and safety manager, said: “This is about making sure customers are eating meat that is not a threat to their health. It is possible to produce burgers that can be eaten undercooked, but strict controls are essential.
“We have enlisted the UK’s top expert on E. coli, Prof Hugh Pennington, to get this matter resolved and he has outlined that rare minced meat that is not correctly cooked and prepared can kill.”
But John Cadieux, the executive head chef for the Burger and Lobster chain, said: “If you follow the guidelines to the letter then you’re going to destroy the burger industry.
“Not only that but you’re opening a Pandora’s box, because where do you finish? Steak tartare, runny eggs … the list is endless.”
According to the Food Standards Agency (FSA), there are no rules banning the sale of raw or rare meat by restaurants or caterers.
Tony Lewis, of the Chartered Institute of Environmental Health, said: the case would have “nationwide implications”.
“At present the guidance from the FSA is that for burgers the meat should be cooked at 158F (70C) for two minutes,” he said. “If Westminster loses the case we will have to reassess.”
http://www.telegraph.co.uk/foodanddrink … gered.html
Statistics: Posted by yoda — Sun Dec 09, 2012 4:27 pm
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American • Why the U.S. Dollar Is Not Going to Zero Anytime Soon
Why the U.S. Dollar Is Not Going to Zero Anytime Soon
July 23, 2012
The market considers a variety of inputs in pricing the value of a floating currency. The dollar has more going for it than is generally understood.
The conventional view looks at the domestic credit bubble, the trillions in derivatives and the phantom assets propping the whole mess up and concludes that the only way out is to print the U.S. dollar into oblivion, i.e. create enough dollars that the debts can be paid but in doing so, depreciate the dollar’s purchasing power to near-zero.
This process of extravagant creation of paper money is also called hyper-inflation.
While it is compelling to see hyper-inflation as the only way out in terms of the domestic credit/leverage bubble, the dollar has an entirely different dynamic if we look at foreign exchange (FX) and foreign trade.
Many analysts fixate on monetary policy as if it and the relationship of gold to the dollar are the foundation of our problems. These analysts often pinpoint the 1971 decision by President Nixon to abandon the gold standard as the start of our troubles. That decision certainly had a number of consequences, but 80% the dollar’s loss of purchasing power occurred before the abandonment of dollar convertibility to gold.
The depreciation from 1971 on looks rather modest on this chart. Clearly, dropping the convertibility of the dollar to gold did not change the overall depreciation dynamic much; the dollar had been losing purchasing power since the turn of the century.
cont
http://www.oftwominds.com/blog.html
Statistics: Posted by yoda — Sun Jul 22, 2012 2:15 pm
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These 12 Hellholes Are Examples Of What The Rest Of America Will Look Like Soon
Do you want to see where this country is headed? If so, don’t focus on the few areas that are still very prosperous. New York City has Wall Street, Washington D.C. has the federal government and Silicon Valley has Google and Facebook. Those are the exceptions. The reality is that most of the country has been experiencing a slow decline for a very long time and once thriving cities such as Gary, Indiana and Flint, Michigan have become absolute hellholes. They are examples of what the rest of America will look like soon. 60 years ago, most Americans were decent, hard working people and there were always good jobs available for anyone that was willing to roll up his or her sleeves and put in an honest day of work. But now all of that has changed. Over the past decade, tens of thousands of manufacturing facilities have shut down and millions of jobs have left the country. Cities such as Cleveland, Baltimore and Detroit were once shining examples of everything that was right about America, but now they stand out like festering sores. The “blue collar cities” have been hit the hardest by the gutting of our economic infrastructure. There are many communities in America today where it seems like all of the hope and all of the life have been sucked right out of them. You can see it in the eyes of the people. The good times are gone permanently and they know it. Unfortunately, the remainder of the country will soon be experiencing the despair that those communities are feeling.
The following are 12 hellholes that are examples of what the rest of America will look like soon….
#1 Gary, Indiana
Gary, Indiana was once a great industrial city.
Today, it is one of the ten most dangerous cities in America, and the population has fallen by about 50 percent.
The following is from a recent Daily Mail article….
Frequently rated one of the ten most dangerous cities in the United States, Gary once boomed with jobs and opportunities but now faces the acute difficulties of America’s growing rust belt, with 22 percent of families in the once-great city now lying below the poverty line.
This modern American ghost town began life as home for workers at the United States Steel Corporation plant until economic competition from abroad forced a 90 percent job cut.
It is hard to describe what is happening to Gary without using the word “depressing”. You can watch a great video that shows what Gary, Indiana looks like these days right here.
This is what happens when industry leaves and there are no jobs. Gary has become a wasteland and there is essentially no hope for a turnaround.
The following is how James Kunstler described what he experienced when he traveled through Gary, Indiana recently….
Between the ghostly remnants of factories stood a score of small cities and neighborhoods where the immigrants settled five generations ago. A lot of it was foreclosed and shuttered. They were places of such stunning, relentless dreariness that you felt depressed just imagining how depressed the remaining denizens of these endless blocks of run-down shoebox houses must feel. Judging from the frequency of taquerias in the 1950s-vintage strip-malls, one inferred that the old Eastern European population had been lately supplanted by a new wave of Mexicans. They had inherited an infrastructure for daily life that was utterly devoid of conscious artistry when it was new, and now had the special patina of supernatural rot over it that only comes from materials not found in nature disintegrating in surprising and unexpected ways, sometimes even sublimely, like the sheen of an oil slick on water at a certain angle to the sun. There was a Chernobyl-like grandeur to it, as of the longed-for end of something enormous that hadn’t worked out well.
Sadly, Gary is far from alone. There are a whole host of other formerly great U.S. cities that are degenerating into hellholes as well.
#2 Chicago, Illinois
There is something truly special about Chicago. Most of America loved the Bears of the Walter Payton era, the Bulls of the Michael Jordan era and the Cubs of the Ernie Banks era. Chicago is also known for great architecture and great pizza.
But these days “the windy city” is becoming known for other things.
The murder rate in Chicago is up 38 percent so far this year, and the recent spike in violence in the city has made national headlines.
As I noted the other day, there are only about 200 police officers in Chicago’s Gang Enforcement Unit to deal with an estimated 100,000 gang members.
That means that those officers are outnumbered 500 to 1, and more gang members pour into the city every single day.
The escalating violence in Chicago was detailed in a recent article in the Telegraph….
“This is a block-to-block war here, a different dynasty on every street,” said a dreadlocked young man heavily inked in gang tattoos who calls himself “Killer”.
“All the black brothers just want to get rich, but we got no jobs and no hope. We want the violence to stop but you ain’t safe if you ain’t got your pistol with you. Too many friends, too many men are being killed. We don’t even cry at funerals no -more. Nobody expects to live past 21 here.”
The victims and killers are mainly black males aged between 15 and 35, often with gang affiliations – but not exclusively. A seven-year-old girl, Heaven Sutton, was buried this month after being gunned down at her mother’s street sweet store. And last week, two girls aged 12 and 13 were shot and badly-wounded as they walked home from a newly-opened community centre.
If you are thinking of moving to Chicago, you might want to think again.
#3 Detroit, Michigan
I have written repeatedly about Detroit because it is a perfect example of what the rest of America is going to look like soon.
Once upon a time it was regarded as one of the top manufacturing cities the world had ever seen, but today it has become a total hellhole.
There are very few decent jobs available, poverty has exploded and crime is everywhere.
If you can believe it, 53.6% of all children in Detroit are living in poverty, and only 25 percent of all students in Detroit graduate from high school at this point.
And as I wrote about recently, justifiable homicide in Detroit increased by a whopping 79 percent during 2011, and the rate of self-defense killings in Detroit is now approximately 2200% above the national average.
Is it any wonder that you can still buy a house for $100 in some areas of Detroit?
The truth is that many areas of Detroit now resemble a post-apocalyptic wasteland. Perhaps that is why one team of investors actually wants to turn some of the worst areas of Detroit into a zombie theme park….
Derelict areas of Detroit face being taken over by hordes of ‘flesh and brain-eating zombies’ if an ambitious business plan takes off.
Entrepreneur Mark Siwak wants to create live-action terror theme park ‘Z World’ on Motor City’s run-down and abandoned streets.
Customers would pay to be chased by professional actors and try to seek shelter in ghostly homes, factories and businesses.
You can see some great video of the “ruins of Detroit” right here.
#4 Stockton, California
Stockton is one of the ten most dangerous cities in America and it recently made national headlines when it declared bankruptcy.
Unfortunately, as spending on law enforcement has declined it has given the criminals a lot more room to operate in Stockton. The following is from a recent Business Insider article….
The city has cut more than $90 million in spending over the past few years, specifically in its police department. The city has cut over one quarter of its police jobs, which has led to a “surge in murders,” and has created an “emboldened criminal element” in the city. According to police spokesman Joe Silva, the city has had 87 murders since the start of 2011, 29 of which have already occurred this year. In contrast, there were 35 murders in 2009 and 48 in 2010. With six months left in the year, there have already been more murders in the city since the start of 2011 than the two-year stretch of 2009-2010.
A while back in Stockton a billboard was put up with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”
#5 Flint, Michigan
Flint, Michigan is a city that Michael Moore has made famous. Flint once supported hordes of middle class workers thanks to a thriving auto industry, but today it is a just a rotting shell. It looks like a war went through it and nobody bothered to clean up the mess.
At this point, the murder rate in Flint, Michigan is worse than the murder rate in Baghdad. That is how nightmarish things have become in Flint.
The following is from an article in the New York Times….
It’s not that the cops here are scared; it’s just that they’re outmanned, outgunned and flat broke.
Flint is the birthplace of General Motors and the home of the U.A.W.’s first big strike. In case you didn’t know this, the words “Vehicle City” are spelled out on the archway spanning the Flint River.
But the name is a lie. Flint isn’t Vehicle City anymore. The Buick City complex is gone. The spark-plug plant is gone. Fisher Body is gone.
What Flint is now is one of America’s murder capitals. Last year in Flint, population 102,000, there were 66 documented murders. The murder rate here is worse than those in Newark and St. Louis and New Orleans. It’s even worse than Baghdad’s.
Politicians love to go to Flint and make speeches, but things never get any better. The following are comments that Joe Biden made about Flint, Michigan during a recent speech he gave to promote a jobs bill….
“In 2008, when Flint had 265 sworn officers on their police force, there were 35 murders and 91 rapes in this city. In 2010, when Flint had only 144 police officers, the murder rate climbed to 65 and rapes–just to pick two categories–climbed to 229. In 2011, you now only have 125 shields. God only knows what the numbers will be this year for Flint if we don’t rectify it.”
But don’t look down on Flint – these kinds of conditions are coming to where you live soon enough.
#6 West Philly
Did you know that 36.4% of all children that live in Philadelphia are living in poverty?
There are some sections of Philadelphia that are actually very nice, but there are others that look like society has forgotten about them for decades.
A recent article by Jim Quinn entitled “More Than 30 Blocks Of Grey And Decay” described the depressing conditions in West Philadelphia. Quinn refers to his drive through this area as “the 30 Blocks of Squalor”….
The real unemployment rate exceeds 50%, murder is the number one industry, with drugs a close second.
But it was not always this way. Once upon a time, West Philly was actually a thriving area and was full of middle class families.
So what happened?
That is a very good question.
According to Quinn, the physical decay in West Philly is matched by the social decay….
The once proud homes are in shambles. Bags of garbage dot the landscape. Most of the people who live here are parasites on society. Personal responsibility, work ethic, education and marriage are unknown concepts in this community. Even though more than 50% of the students in West Philly drop out of high school and the SAT scores of West Philly High students are lower than whale ****, the bankrupt school district spent $70 million to build a new high school/prison to babysit derelicts and future prison inmates. The windows do not have steel bars yet, as the architect was smart to put all windows at least eight feet above street level.
These days there is a lot of despair in “the city of brotherly love”. It is so sad to see what is happening to what once was such a proud city.
#7 Cleveland, Ohio
Cleveland has always had a love/hate relationship with itself. Many who live there call it “the mistake by the lake”, but the truth is that it was once a truly great city.
Sadly, today it is symbol of what has gone wrong with America.
There has been a steady stream of businesses that have left Cleveland and today 52.6% of all children that live in Cleveland are living in poverty.
There are not enough good jobs in Cleveland anymore, and so there are not enough workers to buy the tens of thousands of homes that have been foreclosed or abandoned.
So what is being done with all of those empty homes?
Unfortunately, they are being torn down.
The following comes from a recent CBS News report by Scott Pelley….
Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year – and plan to demolish 20,000 more – rather than let the blight spread and render nearby homes worthless.
Does that seem right to you?
Should Cleveland be destroying tens of thousands of homes that families could be using?
Something has gone very, very wrong in this country.
#8 Camden, New Jersey
If you want to see what a hellhole looks like just visit Camden, New Jersey.
Although you will probably want to take an armed escort with you.
As industry has abandoned Camden, the gangs have basically taken over. The “growth industries” in Camden these days are drug dealing and prostitution.
In an article entitled “City of Ruins“, reporter Chris Hedges described what life is like in Camden at this point….
There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch.
Not that other cities in New Jersey are shining examples for the rest of the world either.
For example, if you want to get really depressed just drive through the bad parts of Newark some time.
#9 St. Louis, Missouri
According to U.S. News and World Report, the most dangerous city in the United States is St. Louis.
If you have a death wish, just wander around the streets of East St. Louis at night.
There is a decent chance that someone will shoot you.
Things were not always this way in St. Louis. But today things have gotten so bad that you can find packs of wild dogs roaming the city digging through trash and threatening children.
The following is from a report by the local CBS affiliate in St. Louis….
…Lewis Reed is sounding the alarm. “I’ve witnessed packs of dogs, 10 and 15 dogs running together, and I’ve seen all these dogs I’m talking about they don’t have collars, they don’t have tags, these are truly wild dogs,” he said.
Reed says stray dogs are terrorizing the north side. “It’s obscene that parents have to walk their kids to school, in some parts of the city, with a golf club to fend off wild dogs.”
This kind of thing is actually happening in America?
#10 New Orleans, Louisiana
The problems that New Orleans has experienced have been well documented.
But unlike most of the cities listed above, at least New Orleans has an excuse. New Orleans permanently lost 29% of its population after Hurricane Katrina, and large sections of the city were essentially destroyed by that storm.
Even today, there are still some areas of New Orleans that look as if they have just been bombed.
It has been estimated that about 20 percent of the homes in New Orleans are still standing vacant, and poverty is rampant. New Orleans will probably never fully recover to the level it was at before Hurricane Katrina hit.
#11 Oakland, California
Oakland has always been in the shadow of San Francisco, and the contrast between the two cities continues to grow.
Oakland has always been considered one of the more dangerous cities in America, and this year crime rates in Oakland are rising rapidly. The following is from a recent article in the New York Times….
At the beginning of April, murders in Oakland were up 26 percent over a year ago, rapes were up 41 percent, and robberies were up 35 percent.
When Chief Batts arrived as a “change agent” in 2009, the police department employed 837 officers. It now has 635. The department no longer responds to burglaries that are not still in progress, and frequently does not respond to other calls for help.
So if your house has been robbed and the burglars are gone what are you supposed to do?
Due to a crippling lack of resources, the previous police chief decided that his department would no longer be able to respond to all crimes.
The following is a partial list of the crimes that police in Oakland are no longer likely to respond to….
- burglary
- theft
- embezzlement
- grand theft
- grand theft: dog
- identity theft
- false information to peace officer
- required to register as sex or arson offender
- dump waste or offensive matter
- loud music
- possess forged notes
- pass fictitious check
- obtain money by false voucher
- fraudulent use of access cards
- stolen license plate
- embezzlement by an employee
- extortion
- attempted extortion
- false personification of other
- injure telephone/power line
- interfere with power line
- unauthorized cable tv connection
- vandalism
So what do you do if you are a victim of one of those crimes in Oakland?
That is a very good question.
#12 Baltimore, Maryland
If you can believe it, Baltimore was actually once a great city.
But today it has become a crime-ridden, drug-infested hellhole.
I used to drive up to Baltimore all the time. It truly is a “blue collar” city. There are a lot of really hard working people there.
Unfortunately, there are not nearly enough jobs for everyone and a lot of people have turned to drugs and crime.
There are some areas of Baltimore that you really should never enter by yourself. If you do go into them, you might not make it back out.
There was one incident in Baltimore earlier this year that was particularly disturbing.
One poor young man had gotten drunk and was apparently wandering around all by himself. Some thugs approached him and they clearly sensed that he was vulnerable. So they knocked him to the ground, stripped him of his car keys, his watch, his money, his cell phone and his clothes.
A crowd gathered around to watch, and instead of helping the man, several of them got out their cell phones and laughed hysterically while they recorded the incident with their cell phone cameras for YouTube.
What made all of this even sadder is that this happened right in front of a Baltimore courthouse.
What in the world has happened to this nation?
All of us that still love this country should be deeply saddened by everything above.
America is rotting from the inside out, and if we are ever going to find any solutions we need to start admitting how bad things have really become.
The truth is that our problems are not limited to one political party, one special interest group or to one region of the country. The social decay that is plaguing America can literally be found everywhere.
For much more on this, please see the following four articles….
1) “25 Signs The Collapse Of America Is Speeding Up As Society Rots From The Inside Out“
2) “70 Reasons To Mourn For America“
3) “20 Signs That Society Is Breaking Down And That America Has Been Overrun By Psychos“
4) “12 Factors That Are Turning The Streets Of America Into A Living Hell“
So don’t laugh at Detroit or Cleveland or St. Louis.
The rest of the country is declining too.
If the city where you live is not a hellhole already, it will be soon enough.
View full post on The Economic Collapse
International News • Will Canada Soon Go Cashless?
Will Canada Soon Go Cashless?
By Richard Giedroyc, World Coin News
June 05, 2012
http://www.numismaster.com/ta/numis/Art … leId=25295
First the Bank of Canada began issuing polymer (plastic, if you like) rather than paper-based bank notes. Then the Royal Canadian Mint announced it will be ending production of the 1-cent coin later during 2012. Now the mint has posted a video online through which it is introducing what it calls MintChip, a product that could replace both coins and bank notes entirely!
We may live in a technologically advanced society, but where do you draw the line between the physical world and what represents that physical world? Since this is the Around the World column I’m allowed to editorialize. Let me rationalize what MintChip represents.
At one time a financial transaction might have required someone to trade two goats for a cow, or 50 cowry shells for a bowl of rice. This was later replaced with coined money that represented the same goods (and eventually services as well) in value. In more recent history the bank note and the check have each gained acceptance as substitutes for higher value coins.
From there we’ve made the leap of faith into credit cards—cash you don’t have, but hope to have at a later time, then into debit and pre-paid or smart cards. Isn’t it at least a little bit ironic that a mint, the very place that is supposed to strike the coins we use in circulation, to be the one to suggest we begin using a virtual, an electronic form of money you might envision being used in an intergalactic Star Wars type movie?
According to the RCM, this virtual currency MintChip does have physical forms, but they aren’t the sort of thing you can hand someone over the counter. MintChips will include microSD cards and USB sticks, which are used as flash drives through which files are transferred between computers. This is a far cry from gold, silver, or even aluminum coins, not to mention that folding stuff we call bank notes.
There is a certain amount of privacy associated with buying or selling something using coins and bank notes. Officially the RCM said, “No personal data is required or exchanged” when making transactions with the MintChip. This statement may proved to have been made prematurely. Your physical location can be tracked by the signals your cell phone gives to nearby cell towers. Since MintChips will be a form of electronic money the mint’s statement needs to be re-evaluated even before Canada figures out how the MintChip is going to function.
The RCM is offering a reward in a contest to develop smartphone applications for the MintChip. The very fact the mint says it has five patents relating to the MintChip it has yet to unveil and that the mint requires a contest to develop further ideas for this new invention suggest no one really knows if your privacy will become enjoyed or not.
There are many reasons coins and bank notes are used worldwide even in an age where computers and electronic wizardry dominate our society. First, yes—dominate “our” society, not all societies worldwide. There is a certain amount of security in owning what money represents rather than owning money itself. This has been proved many times over. The hoarding of all metal coins during the American Civil War is only one example.
Another factor regarding all modern electronics and computers that tends to be overlooked by almost all civilians using them is the potential for sabotage through electronic warfare. I don’t know if the US Army still has this policy in place, but during the 1970s every military system that used a computer was required to have a paper hand-calculated system as a backup. If a country such as Canada were to rely primarily on an electronic monetary system that electronic system could be completely destroyed by a hostile power, likely from a remote location.
The RCM video says, “Every since the beginning of time people have been buying and selling and using whatever currency was available. But today’s digital economy is changing faster than ever, and currency has to change, too. Imagine a whole new breed of transactions that are smaller, faster, and virtually everywhere. That’s where MintChip comes in—Using a chip, you securely load value onto a smart phone, USB device, computer, tablet, or cloud—or maybe even some future device.”
Irrational exuberance? The RCM may yet need a think tank to rationalize what it is developing much more than it needs a contest to flush out more uses for the MintChip.
Statistics: Posted by DIGGER DAN — Tue Jun 05, 2012 2:40 pm
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