By Martin Armstrong: The high on gold on the AM London Fixing was $850 back in 1980.
However, when we index this to the government CPI adjusting it for
inflation, the 1980 high corresponds to a price of $2,305.18 in 2011
dollars. This is a far more important number than all the nonsense of fiat and hyperinflation. Gold in “real” terms has NOT
exceeded the 1980 high yet even today. A 911 Porsche in 1980 was only
about $50,000. So you are not there yet. For gold to back off, shake the
weak players out of the trees, is a necessary and healthy thing that MUST take place to rejuvenate the market for the next blast to REAL
highs. Even when there was a gold standard, inflation rises and falls
and then gold moves opposite declining with inflation as assets rise
against gold, and it rises in value during deflation as the dollar does
today. There is NEVER a period when anything is ever
fixed forever. Even behind the Berlin Wall there was a black market for
West Germany marks and dollars.
This is the problem most people have. When I say there is sizable
resistance in the 2300 level technically, this is actually supported by
the real fundamental view from an inflationary perspective. Likewise,
looking at gold only in dollars FAILS to grasp its true
trend. Gold may decline as the dollar rises currently, but is it
declining in terms of yen and euro? Everyone acts according to their own
currency. If I recommend buying something in Mexico because it will
double in peso terms but omit that the peso will decline by 75%, in
dollars you will lose your shirt.
By Locust: America is trapped in insanity by law, just as I’ve been saying for seven years.
For that long I have repeatedly screamed and ranted that Public Law
107-40 (also known as the AUMF) was the bane of our existence, that we are trapped in a DAFT and insane perpetual war, and that we should draft California Congresswoman Barbara Lee as the People’s Candidate for President.
Here is what she recently said:
Rep. Barbara Lee (CA),
The administration is using the Authorization for the Use of Military Force
passed by the House on Sept. 14, 2001, as one of the justifications for
the lethal use of drones. As the only member of Congress who voted
against this blank check, I believe now more than ever that we must repeal it.
And here is what I say and have been saying for seven years now:
We could already be out of this mess, but you haven’t done what is necessary.
I will put out these three steps yet again, and hope beyond hope that somehow this time they will take hold, and we can regain our peace and sanity.
1. Stop ignoring Public Law 107-40. We are losing our freedom because
you ignore this evil and malicious law that granted unlimited and
unchecked power to the Presidency. Barbara Lee is exactly right when she
calls for the repeal of this egregious legislation, and that’s why I
have repetitiously called for that repeal for, what was it, oh yeah
seven long frickin’ years.
We must end Public Law 107-40 before it ends us. We are running out of time.
There’s a horse’s ass
in the health job
You’ll have to excuse me if the following observations are already
played out in Blighty. I still don’t have internet access – I mean, it is
only eight days when all’s said and done – here in deepest rural
France, and thus I’m not party to any wider debate going on about the
threats to public health in Britain. But the two main UK news items on
this subject last week mark out very clearly just how little reality is
applied to mainstream news coverage these days in the land of my birth.
I’m referring (if you haven’t already guessed) to How Horsemeat
Horror Happened, and Health Hero Hunt goes NHS-Hitting. I have been
listening to Radio Four digitally (via the telly) most days, searching
in vain for even a scintilla of insight about what these news stories
are really about, but shafts of light were there none. However, as it
happens, on this occasion I do have some solid history and experience to
bring to the party.
The “Oh-my-God-Jade’s-been-scoffing-Dobbin” episode has shown the
British at their daftest and most gullible, I’m afraid. The media have
reflected this in seeming unable to make their minds up about whether
this is a story about eating poor dear horsey, or whether there really
is a public health issue. The truth is that it isn’t about either of
those things, it is a story about the traditional, innate criminality of
the wholesale meat trade.
As a national culture, we attach the standard anthropomorphic values
to horses because – as with cats and dogs – we have a sporting and
quasi-domestic relationship with them. Having thus awarded them honorary
human status, we believe we must not eat them, because that would be
cannibalism. Thus all the French, Koreans and Chinese are cannibals,
QED.
UK BANNED Press TV: Prince harry and Scandals surrounding him. In his latest pose after
coming back from Afghanistan mission he described killing Afghans as
computer game. Human rights: Churchill ordered use of chemical weapons
in Iraq 100 years ago. International: Britain and EU dilemma. How the
British parties reacted to Cameron's latest remarks on EU. Some are wary
of further European Union (EU) integration while some others even
support withdrawal from the 27-nation bloc. Society: Britain's
intelligence agencies are planning to install black box-style
surveillance devices in the country's telecommunications network in
order to monitor the UK public's online activity. Source
Submitted by Tyler Durden: In the 40 years or so since the end of the
Bretton Woods system, we have seen competitive devaluations occur again
and again. However as SocGen notes, it appears Japan just keeps coming
out on the losing side. Based on Real Effective Exchange Rates (REER), Japan's currency is 80% stronger now than in 1971 while the US (and South Korea interestingly) are about 40% weaker.
Submitted by Tyler Durden: As the European parliament attempts to create a
budget and Draghi repeats how the temporary lull in European growth is
merely a prelude to a growth renaissance in the second half of the year (not to be confused with the verbatim lie rehashed by European dignitaries in 2012, 2011, 2010 and 2009),
it appears a few leaks of truthiness are seeing daylight in the
disunion. In a shockingly frank interview, the CEO of Saxo Bank
describes the Euro's recent rally as illusory and that "the whole thing
is doomed," as the continent is not supported by a fiscal union. As Bloomberg reports, Lars Seier Christensen says he would be a "seller of the EUR at anything near 1.40," noting that "right
now we’re in one of those fake solutions where people think that the
problem is contained or being addressed, which it isn’t at all."
Confirming that the only thing holding the farce together is political
not economic efforts, he sums the situation up perfectly: "people have
been dramatically underestimating the problems."
Via Bloomberg,
Lars Seier Christensen, co-chief executive officer of Danish bank Saxo Bank A/S, said the euro’s recent rally is illusory and the shared currency is set to fail because the continent hasn’t supported it with a fiscal union.
“The whole thing is doomed,” Christensen said
yesterday in an interview at the bank’s Dubai office. “Right now we’re
in one of those fake solutions where people think that the problem is
contained or being addressed, which it isn’t at all.”
A recent report into the Fukushima Nuclear disaster of 2011 has
shown that more than forty percent of children have thyroid
abnormalities.
RT: The Tenth Report of the Fukushima Prefecture Health Management
Survey, released earlier this week, with data up to January 21, 2013,
revealed that 44.2 percent of 94,975 children sampled had thyroid
ultrasound abnormalities. The number of abnormalities has also been
increasing over time as well as the proportion of children with nodules
equal to and larger than 5.1 mm and any size cysts have increased.
The
report has also revealed that 10 of 186 eligible are suspected of
having thyroid cancer as a result of the exposed radiation.
On
Wednesday, the Fukushima Prefectural Government announced that two
people who were teenagers at the time of the Fukushima No. 1 meltdown
have been diagnosed with thyroid cancer, bringing the total number of
cases officially confirmed by authorities to three. All have undergone
surgery and are now recovering.
Around 360,000 youths at the
time of the disaster have to be repeatedly checked to see if they have
been affected by the radiation.
Alex Jones examines how payroll tax increases and other measures are
being used by design to contract the economy and implode the western
standard of living, under Agenda 21. 1992 Rio conference head Maurice
Strong made this clear when he stated, "Isn't the only hope for this
planet that the industrialized civilization collapse? Isn't it our
responsibility to bring that about?"
Submitted by Tyler Durden: With the G-20 (and G-7) concluding with what
appears to be a slap on the wrist and a wink-and-a-nod to Japan, it
seems the game of competitive devaluation will continue. Much pixel and
ink has been spilled the 'potential' winners and losers in such an
evolving game, but as Bloomberg notes, there has been one winner in the
last 10 years each time the world has fretted over "currency wars". As fear (and actuality) of currency wars flares, the USD has borne the brunt of the buying.
From 2004's JPYtervention to Mantega's 2010 comments and each time in
between, when competitive devaluation is on the world's lips, then the
USD is implicitly bid as the currency du jour is offered to any and
every willing carry trade riderthere is. The trouble is - for the lowly
US investor - each time the USD is bid, so the US equity market has hit an FX-translated earnings hump and fallen back.
So while talking heads will exaggerate the nominal performance of
Japanese and British equity markets as their currencies free-fall,
perhaps the US investor should be careful what they wish for.
As the world's reserve currency, the effect of a devaluation of a
non-reserve currency (i.e. everything else) is implicitly to put upward
buying pressure on the USD...
The Pareto distribution suggests that costs could be cut by 80% across the
entire economy.
Economist Vilfredo Pareto's (1848 - 1923) data-driven discovery that 80% of the land
in Italy was owned by 20% of the population led to the Pareto principle,
known as the 80/20 rule.
Research has turned up an astonishing range of natural and social examples of the
80/20 rule: fixing 20% of software bugs eliminates 80% of the tech support calls,
20% of the customers are responsible for 80% of the complaints, and so on.
The Pareto distribution is not a Newtonian law of precise prediction, it is
a power law probability distribution: it projects probabilities and ranges,
not exact numbers. For example, the top 25% of U.S. wage earners pay 87%
of the Federal income taxes. The point is not precision but the basic distribution.
The 80/20 rule can be further reduced (80% of 80 is 64 and 20% of 20 is 4) to a 64/4
rule: the 4% "vital few" have outsized influence on the "trivial many" 64%.
We can see the rough outlines of this distribution in income and taxes:
The top 1% of taxpayers reported almost 17% of all taxable income and paid 37% of all
income taxes; the top 5% reported 32% of all income and paid 59% of the taxes, and the
top 10% earned 43% of the income and paid 70% of the taxes.
As I have often noted, most recently in
The Fiscal Cliff's Structural Endgame (December 28, 2012), and
Why the Middle Class Is Doomed (April 17, 2012),
roughly 70% of all financial wealth is held by the top 5%. That is remarkably close
to the 4%/64% distribution we would expect.
Can 4% of Homeowners Sink the Entire Market? (February 21, 2007) Answer:
yes, 4% of mortgages defaulting collapsed the global housing bubble.
