Wednesday, August 31, 2011

Banknote of the Month, September 2011 - Special shout out to Max Keiser & Stacy Herbert

Greetings fellow silver-enthusiasts and opponents of endless monetary abuses by central banks.  I have taken the liberty of producing my very own limited edition Greek Drachma series (consisting of all of two notes), in artistic protest of JP Morgan's silver price suppression scheme, as well as the EU's attack on Greece's national sovereignty.   They are two old 100 Drachma Greek notes, over-stamped with "Crash JP Morgan - Buy Silver", the meme that Max Keiser began a few months ago.

Bank of Montreal Offers Foreign Banknotes in new ATM

Dear Readers,
You may have heard about gold ATMs in Vegas and Bahrain, but now there is a foreign banknote ATM in Vancouver - very interesting!  Its a new evolution in getting physical banknotes into the hands of people outside the national boundaries of the issuing country.  To understand the real significance of this event, I advise everyone to read Friedrich von Hayek's classic essay "Choice in Currency - A Way to Stop Inflation."  It may be downloaded at the IEA website here:

My Hong Kong Dollar collection:

Source of Article:

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/29/11 -- BMO Bank of Montreal today announced BMO's new Oakridge Center branch in Vancouver, B.C. will be the first bank branch in Canada to offer a Foreign Exchange Currency (FX) ATM. The new service offers customers instant access to U.S. Dollars, British Pounds, Euros and Mexican Pesos.

"Among Canadians, British Columbians are frequent travellers abroad," said Jennifer Muench, Vice President, Vancouver District, BMO Bank of Montreal. "Partnering with Thomas Cook to offer this FX service will provide local residents this added banking convenience when planning a trip."

The newly relocated branch, now at 103 - 650 West 41st Avenue in the Oakridge Center, represents a $1 million investment into the community and offers customers a wide range of innovative banking tools and financial services. In addition to the FX ATM, the branch also features the "Virtual Advisor," a webcam video conferencing service that offers immediate access to additional BMO financial experts such as mortgage specialists and financial planners, and the 'Discovery Centre', a computer kiosk used to access Online Banking, financial tools and calculators, and view a demonstration of BMO MoneyLogic, an intuitive online tool designed to help consumers budget and save money.

"These innovative technologies are designed to make our customers' financial transactions easier and more convenient," said Terry Tan, Oakridge Branch Manager, BMO Bank of Montreal. "The new branch, located in one of Vancouver's most prestigious malls, includes a team of financial experts, cutting-edge service technology and extended banking hours that will provide this vibrant and diverse community with a great customer experience."
The state-of-the-art facility also offers two ATMs, access to commercial account and deposit services, a complimentary coin counter, and a Safestore Automated Vault which offers safety deposit boxes.

"To celebrate the opening of our new branch, we encourage new customers to open a Youth Account between August 29th and October 31st and receive a matching $25 deposit, courtesy of BMO," added Mr. Tan.

Media Contact:
Laurie Grant

Friday, August 12, 2011

Ron Paul: The Dollar was 370 grains of silver and that's still the definition

Technically, it was 371.25 grains, but please watch this INCREDIBLE interview regarding the US Dollar with Texas Congressman and Republican presidential candidate, Dr. Ron Paul.  He is right on the money, so to speak.

He has been researching these issues since 1970 and was on Reagan's gold commission in the 1980s.  It was for that commission that Dr. Edwin Vieira Jr, of Harvard, wrote his famous two volume magnum opus, "Pieces of Eight",  which Constitutionally, historically, and legally proves the true definition of a united States "dollar", as mentioned in the Constitution, is 371.25 grains of fine silver (per the Coinage Act of 1792 and many other documents, court cases, and sources - 1,722 pages worth).  Dr. Paul wrote the forward to that book, which has recently been re-published with updated information by the Gold Money Foundation.  OK, enough chatter, on to the amazing interview about rapidly unfolding events:

Money has to come out of the market as Ludwig von Mises taught:

Thursday, August 11, 2011

Daniel Hannan on The Global Economy

I think Mr. Hannan's analysis is spot-on, though we must recognize that he is essentially calling for a deflationary depression when he calls for less money-printing and higher interest rates.  This would possibly save the system and is the right thing to do under Austrian economic theory, but it would cause great turmoil (not that the current path is not). If you have ever read Bix Weir, he has theory on why we have not yet done what Mr. Hannan is so logically suggesting, but that is a story for another post.  Now on to his article:

'I beseech you in the bowels of Christ, think it possible you may be mistaken' 

Let’s review what brought us to the present economic catastrophe. Interest rates were kept too low for too long. Banks were encouraged – in some cases obliged – to lend money less discerningly than they wanted. Public and private debts were too large. State spending was rising, squeezing the productive bit of the economy in order to engorge the unproductive bit. Perhaps worst of all, a crony-capitalist nexus had grown up, in which the distinction between governments and large corporations was blurred.

When the crisis hit, there was no slack to cushion the impact. Yet governments responded, not by re-examining their assumptions, but by doling out more of the medicine that had sickened the patient. Interest rates were lowered even further. Banks were told to lend even more recklessly. First financial institutions and then entire countries were bailed out by taxpayers. Inflation was deliberately stoked. Spending and borrowing rose to undreamed-of levels. Large corporations and, indeed, entire EU member states began to conduct their affairs – logically enough, I suppose – on the assumption of a taxpayer-funded guarantee.

These policies have, utterly predictably, failed. The countries which decreed the biggest bailouts have generally suffered the worst downturns. Far from averting recession, their governments have burdened generations yet unborn and unbegot with debt.

I don’t say write these things for the sake of saying “I told you so”; I’ve been in politics long enough to know that no one likes a smart-aleck. I’m writing them, rather, because many of the world’s leaders are still, incredibly, pursuing the same policies that got us into this mess. Interest rates are still being kept artificially low, at least in Britain. Inflation is rising as the economy slows. Larger and larger bailouts are being decreed in order to keep the euro intact. Spending is higher now than it was when Gordon Brown left office, and 2011 will be the third year in a row in which the state has accounted for more than 50 per cent of our GDP.

Three years after the collapse, it is surely time to change course. We need to stop printing money and start raising interest rates, to cut taxes and scrap regulations, to rebalance the economy toward the private sector. Are these ideas really so radical?

-Daniel Hannan, writing in The Telegraph, August 10th, 2011

Tuesday, August 9, 2011

Bond of the Month, August 2011 - USA Postal Savings

From 1911 to 1967, the Post Office of the United States (not to be confused with the current USPS, which is a quasi-private entity, complete with a "dot-com" address), sold certificates of deposit that payed 2% annual interest and were backed by the faith and credit of the United States government.  As you can see, they are similar to US Savings Bonds, in that they have an individual's name on them, a denomination, the issuing location, and the date they were issued (non-negotiable, non-transferable).  The USA is not the only country to do this; the idea began in Britain and is also very popular to this day in Japan.

The purpose they served was to give people with small amounts of money - or people who lived in rural areas - an opportunity to safely save money without needing access to a private bank account (keep in mind, 1911 was many years before the FDIC, so private banks were not widely trusted, especially small-town and rural banks).  It was both safer and more profitable than putting green-backs under the mattress, without requiring the capital needed to buy a $10,000 Treasury bond.  

There was a main depository in each state, though they could be bought or cashed at any branch, so far as I know.  It was also a cheap way to finance the government debt.  In my opinion, it was an excellent system, but it fell out of favor due to the FDIC, which gave private banks the same government guarantee of safety that Postal Savings enjoyed.

I plan to write more about these later, and how they might tie in with a reinstatement of Glas-Steagel, the re-nationalization of the Postal Service, the US Treasury market, and other issues.  For now, just look at the nice pictures! :)

Monday, August 8, 2011

Resource Nationalism - The biggest risk to miners

I have thought this to be the case for some time, and now there is an article to back it up.  A little "confirmation bias" on my part perhaps, but if you think about it, governments in unstable countries often seize natural resources like oil and mines.  If you invest in mining shares, consider all the risks, which include hostile action by the government where the mining operation is located.  


LONDON (Reuters) - Resource nationalism is the biggest threat facing the mining sector this year and next as governments seek to take advantage of higher commodity prices to try to restore fragile finances, advisory and accountancy firm Ernst & Young (E&Y) said on Sunday.

"Because the mining and metals sector rebounded quickly from the global financial crisis, it became an early target to help restore treasury conditions," the firm said.

E&Y said it had identified at least 25 countries in 2010/11 that had increased, or announced plans to increase, their government take via taxes or royalties. Governments have also been looking to lift local participation in projects, a trend E&Y thinks will only increase.

Global miners Anglo American and Xstrata criticised resource nationalism in recent result's statements as concern grows over the topic.

Australia has announced a controversial plan to tax carbon pollution , Peru and Tanzania are both considering windfall taxes, while South Africa's new royalty regime came into effect in March, E&Y noted.

The lack of skilled staff remained the second-biggest threat to the industry with Australia alone needing an additional 86,000 workers by 2020, it said, citing the Minerals Council of Australia.

A shortage of skilled labour is also a factor behind the highest new entry in the top 10 list, with capital project execution coming in at number five at a time when some companies are spending as much as $100 billion on expansion plans.

Other new entries include supply interruptions - mainly due to the number of natural and environmental disasters over the past year - and fraud and corruption as miners have moved into riskier countries at a time of tighter regulations.