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Will FT-900 Bring about the “next 9/11” in April, 2014? What is Jeff Opdyke talking about?

Checking out the teaser pitch for Opdyke's Sovereign Investor newsletter, similar to Porter Stansberry's "July 1, 2014" dire predictions.

By Travis Johnson, Stock Gumshoe, February 12, 2014

Jeff Opdyke has a pretty inflammatory ad going around these days for The Sovereign Investor, it’s all about how the consistent export of gold from the US — as reported in form FT-900 — will lead to America experiencing it’s “next 9/11” moment in April of this year.

The basic argument is that the US Treasury Department has been secretly selling off the gold from Fort Knox for years, consistently exporting more than can be explained by the mining production and internal consumption of gold in the US, and that the global public is becoming aware of this but will be shocked into action in April.

The April date comes from the fact that he says China has tended to release information about their gold reserves only every five years or so, and they last reported their gold holdings in April, 2009. Next release, whenever (if) it comes, will call attention to the huge hoard China has been building (though it may be largely from mining, as I believe all Chinese-mined gold is required to stay in China)

Here’s what Opdyke says about the gold export anomaly:

“Here’s what I found out: Since 1991, the U.S. has been consistently exporting large quantities of gold on a net basis.

“And the amount of gold the U.S. has exported is well above and beyond what the US should be capable of exporting.

“Let me show you what I mean…

“Using data from the Gold Fields Mineral Services, the US Census Bureau, the US Mint and Bloomberg, I was able to determine the U.S. total demand and supply of gold during those 20 years.

“During that time, the U.S. had a total amount of 7,532 tons of gold available for consumption… but the U.S. consumed 7,605 tons.

“So, we consumed more than we had available to us. That implies we should have been a net importer of gold.

“But oddly enough, we were not. In fact, we exported a massive 5,504 tons.”

I don’t know how reliably these import/export figures describe the real situation in the world, since gold is fungible and recyclable moves around the world in both paper from and in bullion form pretty easily (it doesn’t just get exported from one place, imported to another, and consumed — it could just as easily be exported again to another customer), but there are certainly plenty of folks who believe that the Treasury is hiding empty vaults at Fort Knox. They buttress this both by saying that the Federal Reserve has been dragging its feet at Germany’s request to repatriate its gold (though that’s not at Fort Knox), and by noting that many politicians over the years have asked for audits of both Fort Knox and the Federal Reserve, to no avail.

Just as an FYI, Fort Knox is the US bullion depository — it’s the gold that the government owns, managed by the Treasury Department. The Federal Reserve doesn’t have anything to do with Fort Knox, but has a separate gold bullion depository in Manhattan that is filled with gold owned by the central banks of other countries in the world … it’s the Fed-held gold that Germany has asked to have back, not Fort Knox’s gold. I don’t know if that makes any difference in the grand scheme of things, but they are separate — the US government owns only a tiny portion of the gold that’s being held by the Fed. And yes, it seems sketchy that it is going to take the Fed seven years to give Germany its physical gold back, and that they’ll be returning less than Germany holds with the Fed in New York and less than they initially wanted back within German borders — but “seems sketchy” applies to a lot of global finance, banking, and government posturing, I don’t know if that means there’s really any problem with the availability of that gold in the Fed’s vault or not.

So the basic argument from Opdyke ends up being pretty similar to Porter Stansberry’s argument that we’re on the cusp of the global economy losing faith in the US dollar as the world’s reserve currency, and that the loss of this faith will and would mean that the dollar falls versus other currencies and against commodities, meaning imports would be more expensive for Americans and our wealth and standing in the world would be eroded. Porter also intimates that we’ll see social unrest.

There is a clean and attractive logic to all of that, and it makes some sense given the history of currencies and central banks that points to shakeups every 30, 40, 50 or 100 years, depending on who you ask — the waves of currency dominance have mostly tracked the rise and fall of global empires as the Dutch currency and Spanish currency each had a century or so of global importance before the British Pound took over in the 18th or 19th century, then the British Pound collapsed around WWI and the US dollar began to rise, followed by the gold standard being coopted in the 1930s and then abandoned in the 1970s as “fiat” currencies took over both in the US and worldwide, followed by … well, whatever happens next.

And yes, it is absolutely true that we owe much of what we take for granted — cheap imported goods, cheap energy — to the fact that pretty much everyone in the world has agreed on the dollar as their medium of exchange… and, perhaps more importantly, that we’ve been able to build up a massive debt by borrowing money in a currency whose supply we control. With it not being missed by many that we used a chunk of that borrowed money to build the most powerful military in history.

The hegemony of the dollar is clearly eroding to some degree, partly because dollars should be losing value as we print more of them in order to pay off our debts, though the dollar has held up much better than many folks expected in the last few years … arguably because most other currencies of any size seemed more dangerous, what with Greece and their ilk threatening the Euro, and China’s currency remaining under strict control, and the Japanese Yen being aggressively devalued to save that economy… etc.

I’ll leave the big picture thinking to you — I have some sympathy with the view that the US dollar should be losing value more quickly than it has, and that eventual significant devaluation is the only reasonable way to deal with our un-payable federal debt … though I also think that in the current hair-trigger world of global trading and financial engineering it’s quite possible that all of these changes happen slowly enough that the dollar doesn’t appear to crash. The logic of the dollar’s demise is almost impeccable, but logic doesn’t drive the global economy — and, as we’ve seen in the past, crises send people fleeing to the dollar even if logic tells them that the dollar is doomed. At least, so far.

And I do buy a bit of gold or silver bullion now and then to diversify my savings, I’m mindful of real assets owned by companies, and I sometimes hold foreign currencies (though I don’t have any at the moment)… but it’s worth noting that a productive company that produces or owns something important to people should be relatively agnostic, over the long term, regarding the currency in which their daily business is transacted… failing currencies wouldn’t be good for any business operating in that currency, obviously, but strong businesses have survived worse.

Porter Stansberry’s trigger point for his similarly-described collapse of the dollar is the enactment of the Foreign Account Tax Compliance Act (FATCA) this Summer — that’s the new tax and reporting regime that the US government is pushing through to improve reporting for banks and to catch more tax cheats, and that looks like it will be a big regulatory burden for banks…. and possibly a better solution to tax evasion, though I’m no expert on the details. Porter thinks that will lead banks to exit the US market and avoid the dollar. That sounds fairly extreme to me, though it will certainly impact banks if and when it’s enacted (it’s already been delayed at least once, to July 1, and many folks think the banks will keep chipping away at it and delaying it or altering it to cut out the teeth).

Otherwise, Porter is essentially spinning the same tale that he marketed extremely aggressively in his “End of America” pitch a few years ago — that you need to get into assets that you don’t have to report to the government (like American Eagle bullion coins), and get some money overseas (get a foreign bank account while you can, buy real estate in other countries), and buy farmland to protect your family, etc. etc. You can see Porter’s latest version of this spiel here if you’re so inclined.

Opdyke has a fairly similar pitch (you can see it here if you’re curious), though his trigger point is different, coming in April instead of July. The basic idea is the same: the dollar’s going to collapse, the world as you know it will change dramatically, buy something that will hold its value if the dollar falls (ie, don’t stuff your greenbacks under the mattress or in a savings account — turn them into something else).

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Like Stansberry, he cites four things to do … and they’re very similar to Stansberry’s stipulations: buy precious metals, sell bonds that mature in more than five years, generate income with trading (selling options, it appears), get some of your money out of reach of the US government, and buy real estate in some select foreign countries. Frankly, it sounds kind of like Opdyke took his lead from Porter’s “End of America” spiel of a few years back and just twisted it a bit … though, to be fair, the folks who have been suggesting the decline of the American Empire have shared similar kinds of ideas for decades (and built a few newsletter-publishing empires in the process).

[And if you’re curious, Porter’s “World’s Most Valuable Asset in a Time of Crisis” is, yes, still farmland. I’m afraid I’m going to be sticking with my farm share subscription for a while and not tilling to earth myself, but still, it’s hard to argue that owning a farm is a bad thing if you’ve got money burning a hole in your pocket.]

Opdyke’s trigger point, that awakening to the fact that China has more gold than the US or than the Federal Reserve, will, he says, come not with a gradual change over decades but with a “bang” … he quotes an oft-cited study on this point:

“Economists Carmen Reinhart and Ken Rogoff explained this phenomenon in their best-selling book ‘This Time is Different’, in which they examined hundreds of confidence crises. They call it the ‘bang’ moment. Here’s how they explain it:

‘Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence is the key factor that gives rise to the ‘this-time-is-different’ syndrome. Highly indebted governments can seem to be merrily rolling along for an extended period, when bang – confidence collapses, lenders disappear, and a crisis hits.'”

So … will a future announcement about Chinese gold reserves shock the world, or will the enforcement of FATCA drive the rest of the world away from the dollar? Will the dollar collapse with a bang or continue to deflate in value with a whimper as it has for most of the past 50 years? Or even surprise everyone and go the other direction?

I dunno. And I bet geopolitical surprises will play as much of a role as central banks and interest rates. But let’s look into what investment Opdyke is teasing as a way to protect your wealth in this eventuality.

The first thing he points to is physical bullion ownership — which Porter Stansberry and several other folks also say is important, they think it’s critical that you avoid owning just “paper gold” through ETFs or through the futures market, but own actual physical gold you can touch … or, secondarily, own real, audited, allocated gold held in some (preferably foreign) vault that you can have delivered to you if and when needed. Lots of other heavily-hyped newsletters and precious metals pundits have talked up the importance of “physical” gold and silver — I think the last time we wrote about it was for a Palm Beach Letter teaser about the “paper silver” crisis.

And there are a couple more esoteric ideas in the bunch, too, that I can’t really opine on without sounding uninformed — like the foreign real estate pitch, which has him touting a few opportunities to cut taxes by relocating overseas (including a thinly-veiled hint about “Galt’s Gulch”, which is the name often given to Doug Casey’s Cafayete, Argentina expatriate haven). It all ends up sounding like solutions for the wealthy and government-averse or profoundly tax-averse, or for the young and idealistic — who else would go to the hassle of buying foreign real estate and moving halfway around the world? It just sounds exhausting. I moved my family 600 miles in search of higher taxes and worse schools, and if I never move again I’ll be awfully pleased.

Yes, I know that Porter and others say that the “normalcy bias” leads those of us in the comfortable American middle class to think that the government won’t really get that bad or confiscatory, that “they” won’t come for our gold or our retirement accounts, and that this is a throwback to the fact that so many hundreds of thousands of Jews stayed in Nazi Germany until it was too late to escape, failing to see the clear writing on the wall … but I choose to hear that as more offensive than it is prescient.

But anyway, we do eventually get to something that’s more like an “investment” thought.

One of the ideas Opdyke pitches is related to precious metals — here’s how he teases it:

“… there’s an even better way to profit from the rise of a new monetary system. It’s a gold investment few people know exist.

“A small group of investors have figured out a unique way to profit from gold. They’re striking special deals with certain companies involved in the gold industry.

Nolan Watson, for example, started using this strategy back in 2008. So far, he’s already increased his investment by 809%. That’s enough to turn a small investment of $25,000 into almost a quarter million dollars.

“Gold expert John Doody has increased his portfolio by more than 1,200% with this strategy. And many consider him one of the best gold investors of our time.

“Here’s what he said recently:

‘I love [this investment]. You just make these deals and move on to the next one.’

“I call this strategy ‘Golden Streams.’ And it has performed much better than the metal in recent years….

“While gold is up 61% since 2008, the ‘Golden Streams’ investment is up 352%. The good news is you can also participate in these deals right from any brokerage account.

“And what’s really amazing is this special class of gold investment has nothing to do with ETFs, bars, coins, options, mutual funds or investing directly in gold miners. And yet, it has managed to beat all those types of gold investments.

“While ‘Golden Streams’ have performed extremely well in recent years, I expect them to go parabolic once investors lose faith in the dollar.

“Even if gold moves to just $3,000 an ounce, I expect this investment will move more than 700%. That’s enough to turn each $20,000 into a little more than $165,000.”

Sound familiar? Yes, indeedy — Opdyke is teasing the old streaming/royalty concept in precious metals. Which, frankly, is my favorite way to invest in mining as well — but it’s been awful over the last year, getting much the same downside as the actual large mining stocks and falling worse than the price of gold. In general industry parlance, Streaming refers to usually larger investments made in “almost ready to produce or expand” mining operations that give the buyer the right to buy a substantial portion (typically 8-30% or so) of the gold (or silver) mined at a set price, typically fixed at roughly a third of what the then-current commodity price is.

This strategy was developed and commercialized by Silver Wheaton (SLW), which made streaming deals for silver with big non-silver mines (silver being a valuable byproduct that the miners could monetize by pre-selling it to SLW). Nolan Watson was the CFO at Silver Wheaton when they perfected this model, and later went on to found Sandstorm Gold (SAND, SSL in Canada), which is presumably one of the stocks being teased here, and Sandstorm Metals and Energy (SND in Canada, STTYF on the pink sheets), which focuses on base metals (and is still a bit of a train wreck after some bad deals). Sandstorm Gold continues to be my largest mining investment and largest and preferred gold equity investment, but it’s sure been a rough ride as gold has fallen.

Royalties are often the result of investments made into a mining project at a much earlier stage, or of early work by a prospector or settlement to a land owner, and if bought they cost the investor less than streaming deals, and they yield a flat percentage-of-the-gold (or other metal) produced that’s typically far smaller (1-5% or so). The two largest passive gold mining investment companies are mostly royalty owners, Franco-Nevada (FNV) and Royal Gold (RGLD), though they also do both own some streaming deals and some non-gold assets.

So it’s hard to picture a world in which those aren’t the three “Golden Streams” investments Opdyke teases, if only because they’re by far the largest and most accomplished and viable of the existing royalty/streaming companies that are gold-focused — unless you throw in Silver Wheaton in place of one of those to get your silver exposure instead of gold (SLW has a little gold exposure too, but it’s very small)… SLW has been by far the most volatile of the four over the years, but is also by far the largest (the volatility comes largely from the fact that silver has almost always been much more volatile than gold). All four of those streaming/royalty firms are up since 2010 or so … but all are also down considerably (dramatically, even) from their highs of late 2012, when all the world seemed to think that gold and silver were simply not allowed to fall in price. Leverage is fun when prices are moving up and a $100 move in the price of gold causes your stock to go up to 20 or 30% in a month or two, but when gold falls 25% that same leverage means your stock can fall by 50%, sometimes more.

The John Doody quote, by the way, is from a conference call the Phase 1 Investor folks had with Nolan Watson, SAND’s CEO, when they recommended that stock a couple years ago — we covered their teaser pitch for it at the time, but Sandstorm Gold has since put the transcript up online here.

And yes, Opdyke and I aren’t the only ones who like the idea of these “passive” precious metals investments — the benefit of royalties and streaming deals is that you don’t have to worry too much about cost inflation in mining, or about delays in mine development causing a cash crisis or dilution … on the flip side, the downside of these kinds of deals is that same passivity — you end up pretty stuck if the operator is desperate for cash or losing money and can’t finish building the mine, or simply decides to shut the mine down for a while if prices are low. Diversification should help with that, as will counting on Sandstorm or Royal Gold or Franco-Nevada to choose projects wisely, projects that are sustainable and profitable and low-cost, with potential upside from future exploration or expansion … but it does sometimes backfire on the royalty or streaming deal owner if a few partners go bad at once. That’s how Sandstorm Metals & Energy got into trouble a while back, and it’s hitting Sandstorm Gold a little bit right now — the larger RGLD, SLW and FNV are reliant on a few tentpole projects but otherwise are far more diversified than the smaller SAND.

So … all that gives you something to chew on when it comes to the “big picture” stuff … and at least a few royalty and streaming stocks to consider that are likely Jeff Opdyke’s three “Golden Streams.” Got an opinion on any of it? Well, what are you waiting for? That friendly little comment box below isn’t going to fill itself …

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WGH
Member
WGH
February 12, 2014 11:55 pm

Gold should be traded at (max) $800 an ounce. The $US dollar will continue to be strengthened for years to come (especially when the US start exporting LNG). Opdyke and Porter are self serving investors.

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misterkel
Member
February 13, 2014 7:11 am
Reply to  WGH

Not sure about that gold thesis.
Check out the book Gold Wars: Battle for the Global Economy – trending on Amazon.
It’s good on specifics of manipulation and FRN strains, but doesn’t prognosticate on outcomes too much.

Dollar will continue to slowly decline while China accumulates gold. China will gradually put the Rem into global circulation with a gold backing and bid for the world reserve currency status. With the BRICS rising power and the disgust at US actions and hegemony, they will likely win the day, but it will play out fairly slowly.
my $.02

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Jem Crowne
Guest
Jem Crowne
March 10, 2014 10:36 pm
Reply to  misterkel

What is Rem?

jambola16
Member
jambola16
March 28, 2014 1:56 am
Reply to  Jem Crowne

chinese currency is yuan or remnibi(rem)

Robbo
Member
Robbo
February 15, 2014 1:40 pm
Reply to  WGH

Stansberry is a fraud (has been sued by SEC. His mentor, Mark Ford is an even greater fraud…you can google him…he even changed his name.

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archives2001
archives2001
February 18, 2014 5:30 pm
Reply to  Robbo

These characters all belong to the conglomerate of James Dale Davidson:
check him out.

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David A
Guest
David A
March 7, 2014 11:04 pm
Reply to  Robbo

Blah Blah Blah. I have followed much of advice and made a lot of money. And I mean a lot. I am amazed at how much S&A bashing goes on here. Perhaps jealousy. I could care less what “he” is or is not. I’m laughing all the way to the bank.

Mike
Guest
Mike
March 13, 2014 3:38 am
Reply to  David A

Not to sound persnickety, but it’s “couldn’t care less”, not could care less!

wendy3491
wendy3491
April 2, 2014 4:07 pm
Reply to  Mike

Nice to see someone finally pointin out this pervasive error. Thanks

wendy3491
wendy3491
April 2, 2014 4:10 pm
Reply to  Mike

Just saw my typo: it should be “pointing” instead of “pointin.”

Joe
Guest
Joe
June 25, 2014 6:17 pm
Reply to  Mike

There is noting wrong with “I could care less.” It is the subjunctive.

This least understood and and most badly used part of the English language can yet be highly expressive. Many professional grammarians do not have a feel for it, thus the endless, pointless and boring arguments about “I could care less.”

The subjunctive is used to express wishes, possibilities, no possibility, hypothetical situations and all the things that are not completely real. Could, would and should are words that often express the subjunctive. In the phrase, “I could care less,” the speaker is saying that there is no possibility for him or her to care any less about this matter. It is similar to saying, “Could I forget.” meaning there is no possibility of forgetting.

The subjunctive is often used to express irony, by comparing an wished for situation to reality as in, “You should be so lucky.” Detractors say that the two phrases (could care and couldn’t care) are are the same just that “couldn’t care” is correct. This is not true. There is a touch of irony in the phrase, “I could care less,” meaning hat the speaker would like to care less but it is impossible. You don’t get that with, “I couldn’t care less.”

But regardless of all that, it is an accepted idiom in all the standard dictionaries – even in British dictionaries.

So if you don’t like it, should I care?

Joe
Guest
Joe
June 25, 2014 6:22 pm
Reply to  Mike

Sorry – a few minor typos in my post.

David A
Guest
David A
March 27, 2014 10:30 am
Reply to  Robbo

This is old news. Blah Blah Blah. I continue to make money from his knowledge.

David
Guest
David
June 9, 2014 11:43 pm
Reply to  Robbo

Sounds like sour grapes to me. I have made a lot of money with them. So either I am delerious or you are an idiot.

Johnk2
September 14, 2014 4:20 pm
Reply to  David

What did you make money on?

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takeprofits
Irregular
March 28, 2014 12:04 pm
Reply to  WGH

Yes indeed,, a $17.5 Trillion debt should certainly inspire confidence in the U.S. dollar which has already lost at minimum, 95% of its original purchasing power. My question to WGH that started this thread would be, where do you come up with a fair price for gold at a maximum of $800.? You present ZERO facts to back up your “opinion” which you are certainly entitled too, but that is all it is, but not a very well informed opinion. Based on the amount of “dollars” created out of thin air in just the last decade, having ZERO intrinsic value, gold should be at a minimum of $10,000 per oz. remember I am just as entitled to my opinion as you are to yours. The difference is, I have studied the Federal Reserve Act since I was a teenager, (over 60 years) and know, and know that I know, that it is a Ponzi scheme that is in the last gasp of its collapse, whether that turns out to be 5 months or 5 years. The system can not survive in its present form, it is mathematically impossible.

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Steven White
Steven White
March 29, 2014 9:52 pm
Reply to  takeprofits

Well said.

sunny
Guest
April 3, 2014 2:50 pm
Reply to  takeprofits

what do u think about gold this month

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robinsteel
September 29, 2014 1:16 pm
Reply to  takeprofits

thanks Myron…where may I read more of your Junior mining articles?

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himagain
Member
himagain
April 27, 2015 7:37 pm
Reply to  takeprofits

Being at the other end of the planet does give one a better perspective on matters, I believe, but doesn’t allay fears or improve accuracy by much, however:
Do we really believe that it isn’t all, meaning ALL, just a Ponzi scheme?
Of course in Comment areas of most Websites there is the typical spread from very clever to moronic, understandably, but where are the discussions about the real causes for inflation/deflation, the insanity of currency value shifts?

I actually did personally gain considerably from oh, yes, definitely insider knowledge in the truest sense , when told exactly what when and how the economy in Australia was to be “reset” in the next 3 years, 30-odd years ago.

It was a bonus to me for a good job well done for one of the world’s genuinely biggest companies in the ’70s. What was even more valuable was the information I was given as to how the planet was actually run and its programmed future for the next 50 years.
UNfortunately, like all great investment chances, one should have picked his parents more carefully – access to cheap capital is always the key and there wasn’t enough to carry me all the way through really severe health problems in the next 30 years.
But nothing has changed, nothing at all.
I would like to get in on the (30 year old plan) for the transition of power to the extraordinary Sino-Russian pair who don’t really need the rest of us at all!
Anyone still with any real money would probably have the best chance of not being eaten by the Bear, by investing in India, where we are still remembered fondly….
But it is difficult today to make sure you are paid in hard gold or silver, isn’t it?

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Ronald E. Baker
Irregular
Ronald E. Baker
February 12, 2014 11:59 pm

Porter Stansberry has gone on like this for years, much like his “Randy” mentor Doug Casey. I recall his other mentor, Bill Bonner of Agora Inc, fomenting similar terror through James Dale Davidson,s little treatises in the 1994 to 1996 era, with essentially the same pitch as Porter recent diatribes. One of the worst of Porter’s “doomsday disasters ahead” rhetoric was his prediction of the collapse and bankruptcy of General Electric in 2010, set to occur by 2011 or 2012. His promotion of Casey’s valhalla in Argentina, in light of recent financial chaos there ,offered his readers a similar escape into utopia. The background “noise” from Porter’s perma-chicken little promotions is getting boring, so I canceled out.
Can you comment on James DiGeorgia’s promotion of new secret “Sun Gas” Energy made from solar power & water with new Princeton Univ. science discoveries? It is set to make abundant fuel cheaper than natural gas, be 20% more efficient; therefore replacing much natural gas used in power plants today? Di Georgia offers a ground floor opportunity, just like early days Apple and Amazon investors discovered years ago. What’s up here?

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GALT
GALT
February 13, 2014 2:34 am

Your clues seem to suggest “hydrogen”, with solar power ( used as electricity ) to electrolyze water into it’s component parts. H2 & O……..unfortunately, the process is “inefficient” from an energy perspective…..in that it requires more energy to separate the elements, than one gets when one burns them, although the burning is efficient and produces pure water as a result.

If one regards externalities and prices them into the final result, this method is preferable to all other energy sources, and given total solar energy potential, production of hydrogen gas as a combustable fuel, where required would cancel the inefficiencies, making it the correct and sane choice.

Or it could be more exotic, like using element 44 to do the same thing, by adding sun and water ( instant electrolysis ) but scalability and availability present problems. ( be interesting to see what this actually is……neither of these is new, and unless they have managed to alter the laws of physics, use of the word efficiency in terms of energy conversion, would not be appropriate until solar and other renewables are providing, over 100% of worldwide energy consumption.)

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Leo S
Guest
Leo S
February 13, 2014 10:02 am
Reply to  GALT

Galt, You are correct. You cannot repeal the second law of thermodynamics, which is the conservation of energy.

Ventureshadow
Guest
Ventureshadow
February 13, 2014 12:21 pm
Reply to  Leo S

1st law of thermodynamics = conservation of energy
2nd law of thermodynamics = entropy increases with time

Frank
Frank
February 15, 2014 8:03 pm
Reply to  Ventureshadow

Good work Ventureshadow.
Too many people want to talk about Second Law of Thermodynamics without knowing what it is!

John Harris
Member
John Harris
February 14, 2014 1:34 pm
Reply to  GALT

If the very real and measured climate change we see happening is actually caused by Humans burning carbon based fuels (coal, oil, natural gas, and wood), as most world scientists agree is the case (though many republicans and their big business and oil and coal supporters deny that for obviously self serving reasons), well if we are changing the climate as seems to be true, we must move from gasoline and liquid fuels for transportation to something else. Electricity is fine for short hops but batteries are just not the ticket for long drives in cars let alone in trucks, or for trains or planes where liquid (or compressed) fuels are for the foreseeable future still needed. Hydrogen is the answer for such a fuel that does not contribute CO2 to the earth. Sure it takes more energy to separate it from water than you get back but you get back a bit less energy and only water back when it burns and that is the beauty of it. Hydrogen does not affect climate change when burned. Now if you have abundant cheap energy to make it like solar or nuclear power that do not contribute to climate change well then you have the magic combination of fuel for transportation in a future where CO2 emissions will be banned or taxed beyond practical use. Solar is fine of course but intermittent, so I would bet the world finally wakes up and builds nuclear plants to replace all the coal and gas plants, eventually powers, heats and cools buildings with electricity from nuclear, and generates hydrogen from nuclear power for transportation. Virtually no more CO2 and we save the earth’s climate. New nuclear plant designs are both safe and don’t create high level wastes so eventually (hopefully soon) the tree huggers will wake up to that and stop blocking nuclear power. It will take taxes on carbon fuels to make it happen fast enough to save our climate but that I hope too will happen over the next decade. Yeah I know dream on – and buy land in the far north well above sea level because the rich oil and coal barrons don’t want that to happen and after the Citizens United decision by the Supreme Court, they can buy enough politicians in DC to block any carbon taxes.

O2.

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Ray
Guest
Ray
February 18, 2014 1:38 pm
Reply to  John Harris

While it is possible that burning carbon based fuels (coal, oil, natural gas, and wood) does cause some global warming it is far less than the earth’s wobble and our sun getting hotter. Burning less will help but only delay the final outcome.

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jimfire
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jimfire
March 14, 2014 4:14 pm
Reply to  John Harris

Man have you drank the global warming kool-aid The number one global warming gas is water vapor aka clouds, so burning hydrogen will just warm the earth faster you idiot.There is no proof that co2 is warming the earth it is only .06 percent of air and weighs 1.5 times heavier imagine that it stays low to the ground by the plants that breath it. Maybe you should study science instead of listen to phony scientist on the government payout trying to steal our money.

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John Harris
Member
John Harris
March 17, 2014 5:58 pm
Reply to  jimfire

Maybe Jimfire, you should read a bit first before calling others idiots. Start here for instance http://www.skepticalscience.com/water-vapor-greenhouse-gas-intermediate.htm as it debunks your claim that hydrogen will warm the earth faster. Yes water vapor is the biggest greenhouse gas, but it constantly recycles itself as rain or snow back to the earth. The amount held as clouds or vapor is dependent on the temperature overall of the earth. The warmer the earth (from say other gases like CO2 that persist for a long time) the more water vapor that evaporates from the oceans and lakes. That actually amplifies the warming of the planet from the warming the CO2 (and methane and other more persistent green house gases) create. But if you simply add more water vapor from burning hydrogen, it cycles back as rain or snow very quickly. The amount of water vapor in the air stays fairly constant so long as the overall temperature of the earth remains constant. The earth has to warm to hold more water vapor in the air so burning hydrogen will only increase rainfall provided the earth is not warmed by other means. And if it did warm by other means then oceans will quickly evaporate more vapor into the air whether or not you burn hydrogen.

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Cornel
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Cornel
March 27, 2014 1:38 pm
Reply to  John Harris

To John Harris: You said “Hydrogen is the answer for such a fuel that does not contribute CO2 to the earth. Sure it takes more energy to separate it from water than you get back”.
My reply to your statement is just where the hell is all this energy to make hydrogen going to come from? It will come from fossil fuels. I don’t know anyone stupid enough to spend more fossil fuel energy to produce less of their so called “clean” energy! Look at it this way…a gasoline engine produces first generation energy. An engine running on Hydrogen will first burn carbon, then it will be transferred into electric energy, then it will used to produce hydrogen, then the hydrogen will be used to run an engine in a car. That’s four generations of power which is highly inefficient. You progressives have no logic. Also, carbon dioxide is not a pollutant, it is plant food. Plants grow quicker and healthier when you increase carbon dioxide. Without it they die.

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John Harris
Member
John Harris
March 27, 2014 3:36 pm
Reply to  Cornel

To Cornel:
I suppose I am longwinded and write more than you can manage to read in one setting. I apologize. But had you read all of that post (or thought about all the various sources of energy) you would realize that electicity can be made in lots of ways other than burning carbon fuels. Nuclear is the elephant in the room for robust dependable electric power with no CO2 emissions but there are a slew of other sources of electricity that produce less or intermittent electricity without burning carbon fuels from hydroelectric, to solar, wind, geo-thermal, and even tides. Most of those I object to on other reasons (dams screw up rivers, wind turbines ruin the lives of anyone living near one, wind and solar are intermittent, etc) but nuclear power from new safe style plants is the answer (in my view), and could easily produce electricity so abundantly as to make hydrogen production easy and relatively cheap without carbon fuel. As to your claim that CO2 is not a pollutant – that is semantics. Put enough of it in the room you are in, enough to displace the oxygen, and you die so I would call that a pollutant in that case. Sure plants need it but they seem to have had enough to keep growing just fine centuries ago before we added lots more to the atmosphere from carbon fuels. More that what was in the air 100 years ago can be regarded as a pollutant if it changes the climate and floods coastal cities or kills millions through more severe storms. Your evident anger toward progressives itself seems to have no logic.

Adam Roberts
Guest
Adam Roberts
April 7, 2014 7:27 pm
Reply to  Cornel

If the powers that be would dump (not literally -) the uranium and switch to thorium based reactors, we could temporarily solve the energy problem… at least until all the kinks could be worked out on a mass scale hydrogen infrastructure. Thorium cannot be used to destroy the planet so I guess the neocons frown on it’s use.
Energy is everywhere and energy cannot be destroyed, it can only be transformed into different forms. There are enough sources of consistent (free) energy on this planet, other than fossil fuels, to provide us all with the electricity we demand. Ocean tides, wind currents, heat from beneath the planet, and of course the sun provides massive amounts – “all” we have to do is change it into usable energy.

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Brian
Member
May 16, 2014 8:46 am
Reply to  Cornel

Couldn’t we covert a Nuclear Power Plant to Make Hydrogen. Then Store or Pipeline that as a replacement of Gas. I realize there still is a carbon footprint in the mininng and construction of a facility. Also i have seen articles on using existing nuclear waste as fuel for more modern reactors.

John Harris
Member
John Harris
May 16, 2014 11:29 am
Reply to  Cornel

To Brian,
To make hydrogen you need electricity which can break apart the two hydrogen atoms from the oxygen in water (H2O). You would still need that nuclear plant (or a new version based on say thorium instead of uranium) to create the clean electricity to separate the hydrogen from the oxygen. And yes breeder reactors (used a lot in France) can be fueled by the waste from the conventional nuclear plants – but alas breeders don’t make plutonium that can make bombs so here in America we had no use for breeders and as a result we can’t seem to figure out what to do with our high level nuclear waste – go figure,

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Alan Harris
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Alan Harris
May 16, 2014 2:45 pm
Reply to  Cornel

Theres a zillion ways to generate power….all have some form of pollution. But the trick is to generate it centrally so that the pollution can be captured and contained with rather than being spewed out of a grillion exhaust pipes all round the country. I really like the idea of splitting water into hydrogen which when burned turns back into water. It doesnt matter that its ‘inefficient’. Hydro power goes 24/7 and is mostly wasted at night. Ditto wind/wave power. Loads of nuclear is wasted off peak. Look at all this shale gas! Converting any waste energy to hydrogen, so that it can be stored makes sense.

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John Harris
Member
John Harris
May 16, 2014 4:03 pm
Reply to  Cornel

To Alan,
Nice last name by the way…. I suppose you can say that nuclear or hydroelectric make some form of pollution but so far as I can see that would only be during the construction of the dam or the nuclear plant. Once running hydro has virtually no pollutant emissions. Nuclear needs thorium (or uranium) that gets dug out of the ground with machines that pollute and transported by truck or train that presently pollute. But Thorium is a waste by-product of almost all mining operations so I discount the digging leaving just the loading and transport – and those machines can run on hydrogen if we make it. So I see nuclear as virtually pollution free save for the one time building of the facility, and compared to the huge output of power that is tiny. Wind by the way gets criticized (properly) due to large construction cost relative to tiny output. And I object to wind on many other grounds – intermittent, needs a federal law to require a 7 to 10 mile setback from inhabited structures (as Europe and CA require), requires new power lines strewn all over the place to pick up that intermittent power at high cost, and those transmission towers like the wind turbines are both a blight on the landscape). I like nuclear. Dams block rivers that should not be. But I certainly agree that anywhere we have power that is simply unused we could make hydrogen.

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Alan Harris
Guest
Alan Harris
May 16, 2014 4:46 pm
Reply to  Cornel

Hi Bro ‘arris. Maybe I was a little narrow in my definition of pollution. Maybe I should have said risk of…..
….’ So I see nuclear as virtually pollution free…… ‘
Go tell that to the Japanese!!

John Harris
Member
John Harris
May 16, 2014 6:12 pm
Reply to  Cornel

Dear Bros Allen
The reactors in Japan are nothing like the nearly infinitely safer designs like thorium that oddly enough has been available since 1970. The problem in Japan was due to terrible placement and design. Thorium inherently can’t melt down in that way even if you turn off all the power, walk away, and an earthquake hits. It does not need the containment vessel or constant cooling. Heck you can barely keep them reacting like trying to burn wet wood on a camping trip. Unless you keep stoking it with more fuel and moving the inside fuel to the outside constantly the dam thing goes out. So radioactive “pollution” due to accident is just not an issue with these types of reactors. Even conventional uranium reactors, while slightly risky – yes 3-mile island, Chernobyl, and now Japan – are still far less risky and cause far fewer deaths than coal mining (to say nothing of respiratory disease from burning coal, mercury poisoning (read autism), and the environmental dangers of coal ash stored after it is burned. Even existing nuclear plants are far safer than coal. And by pollution we normally are not including accidents like the one in Japan nor the coal mine fire in Turkey. We are usually referring to the normal emissions when the plant is working normally. Anyway new style nuclear reactors do not carry even the minimal risk of existing uranium reactors and better yet do not have high level waste to dispose of. Neither type has CO2 emissions that contribute to global warming and that is key in this thread.

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Alan Harris
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Alan Harris
May 16, 2014 6:17 pm
Reply to  Cornel

Bro: Who’d have thought global warming was a prob when coal fired power was developed. Whatever next?? Gods fickle

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Natasha
Member
Natasha
February 14, 2014 8:53 am

Hi – I did some research on this Sun Gas pitch and I believe the company he is pitching is
SolarThermoChemical LLC of Santa Maria, Calif.
SolarThermoChemcial has a Cooperative Research and Development Agreement for the project and plans to manufacture and sell the system after the project ends.
The full story is in this link:
https://www.pnnl.gov/news/release.aspx?id=981
Travis, I would really appreciate your views on this technology and its potential future.

sdmaley
March 18, 2014 2:01 pm
Reply to  Natasha

‘Twill be interesting to see what they eventually settle on. Methanol was tossed into the mix (under Efficient Chemical Storage Option) in a Dec 2013 release from PNNL: http://www.tricitiesresearchdistrict.org/wp-content/uploads/PNNLSolarPACES-2013.pdf

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Johnk2
September 15, 2014 7:56 am
Reply to  Natasha

Energy taxation! Government is helping by financing these energy projects.

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Natasha
Member
Natasha
February 14, 2014 8:56 am

PS. The description of the technology in the pitch is quite wrong and a bit sensationalized. the correct explanation can be found in this link:
https://www.pnnl.gov/news/release.aspx?id=981

aunt_barb
aunt_barb
February 15, 2014 8:07 pm
Reply to  Natasha

Which pitch do you mean by “the pitch”?
Did you intend your two links to be the same ?

Either way, thanks for the intriguing recommendation. ‘Twas news to me, and I found it both informative and provocative–as you are so often.

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Ispy
February 20, 2014 12:03 pm

@ Ronald Baker; Re the Sun-Gas promo: FWIW

According to a friend of a friend the 4 companies they’re touting are CHK, COG, NRG and SPWR.

It sounds like there are a lot of unknowns and there are several companies that are working on competing technology that are private so it’s a bit of a crap shoot.

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advantedges
March 14, 2014 2:42 am
Reply to  Ispy

Natasha – I am glad you are interested in the NRG and SPWR pitch by DiGeorgia. I also noticed you made reference to the PNNL, or Pacific Northwest National Lab. The four stocks mentioned are correct, (Gumshoe will be proud!). Having lived near the National Lab, I am aware that there are a number of projects active at any given time. The “Sun-Gas” concept is one that the folks at PNNL are not talking a lot about, probably because it is not ready for “prime time.” I am not sure of the connection between the National Lab and SPWR and NRG. I have talked with associates who have traveled in California near a new energy installation that may very well be the NRG project. We all need a lot more information on the specific project(s), together with the science and source of funding for developing Sun-Gas. I am not certain what CHK or COG have to do with the project, as the NRG and SPWR initiatives are in the West. it will be interesting to see whether the National Labs or any of the other entities will be willing to provide us with answers to any questions we might have.

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enuhfer
enuhfer
February 13, 2014 12:20 am

” I moved my family 600 miles in search of higher taxes and worse schools, and if I never move again I’ll be awfully pleased. ”

That line brought a guffaw and made me glad I read Gumshoe rather than pay to read newsletters that try to scare people into subscribing or into expatriating.

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B.J. Davies
Member
B.J. Davies
February 13, 2014 1:55 pm
Reply to  enuhfer

M.O.V.E. is a 4-letter word.

Richard Doty
Member
Richard Doty
February 18, 2014 9:28 am
Reply to  enuhfer

I’m glad I’m not the only one that got a chuckle out of Travis’ moving/taxes/school line !!

advantedges
March 14, 2014 2:20 am
Reply to  Richard Doty

I got a laugh out of his Move Joke – a little slow on the uptake,almost a month later! Yes, Travis, Moving thousands of miles away may sound romantic to a young adult with no worries and Mom’s credit cards, but to those who have moved for work, it is a hassle!

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Johnk2
September 15, 2014 8:04 am
Reply to  enuhfer

I move 20 times in my 26 years in the Navy. Nice to be back home again.

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budwood
Member
February 13, 2014 12:37 am

I certainly have no information regarding a US dollar crash. However, such could be temporarily beneficial to the powers that be in the USA government.
In the meantime, there seems to be likelihood that several USA states will secede. If so, there will probably be some big crisis and I, for one, am not going to ignore the possibility. Timing? Probably well before any federal 2016 election.

iceberg
Member
iceberg
February 18, 2014 1:37 am
Reply to  budwood

The United States is divided beyond repair. I just hope we can divide into two separate Countries and survive….will probably come together with a plan since the survival of both ‘new’ America’s will depend on it. It’s going to happen, stay tuned for ‘America, part 2….or would it be part 3, 4, 5 or what?

ericsarmy
ericsarmy
February 13, 2014 12:41 am

I love the balanced, down to earth views of this site. That said, I still believe gold is a good investment long term, so are guns thou 🙂

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Edward
Guest
Edward
February 13, 2014 12:57 am

I also like royalty streamers and have held SLW for years and done well. I do read several newsletters and find about equal mix on both sides of this issue. History also supports to some degree the failure of heavy debt, wasteful spending, excessive social programs and corruption in government, We have it all. I find it interesting that the Federal Reserve can go this long with no audit, no oversight and not effort by congress to correct this. The same for no annual audit of Ft. Knox( is any gold actually there?). No real good explanation of why Germany has to wait for their gold so long, and they don’t seem to be throwing a fit, I would be, and our government would be if the situation was reversed. The US seems to not be the only reserve, but the largest for sure. An article just last week maybe by Davidson(can’t recall) explained that the EURO and YEN I think were 2nd and 3rd. These nations trade frequently among themselves and settle in their own currency, not like oil and the petro dollar. China, Russia, and others are doing more of the same. China at this point is far down on the list, but is moving up. Now Japan, Euro and others are also printing money and others may follow, this may allow the dollar to remain popular for some time as it may viewed in a crisis as less bad that the others. There even books out there that suggest Presidents have been assinated for attempting to shut down the Federal Reserve, so you can find most any reading material to base any explanation on, like, who wrote this and why? Now if you take gold and silver in your on safe keeping you best have equal amounts of lead for your protection, if it goes like some suggest, someone may kill you to get it. I have thought about this a great deal and find little answer in the newsletters that really make comiong with an answer any easier. I am not sure having gold in a foreighn bank or deposit of some type will guarantee you will have access to it, or that it will even be there, look at Germany.
Now, I am old, and if the spelling, grammar and rambling is incorrect, sorry. That is my two cents worth, before O that would have been a dollars worth.

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Skptk
Member
Skptk
February 13, 2014 3:24 am
Reply to  Edward

Before FDR, it would have been 94 cents worth.

Stick
Member
February 13, 2014 4:10 pm
Reply to  Edward

Concur. If things get so bad that you’ll need gold and silver bullion and weapons, you’re not going to want to be alive. Someone, maybe the gobment, will always out weaponize you. You’ll constantly be checking your six. Think seeking refuge in some third world country or European basket case locale is the answer – think again! Best we try to fix our problems.

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KG
Guest
KG
February 18, 2014 8:52 am
Reply to  Stick

I agree with your assessment of life after the Dollar collapse. I think it’s in many American’s
mythology to want to return to “somekind” of pre-governmental “paradise”. However, when you look at the rest of the world when Government collapses, it creates a living hell rather than the “free market” paradise.

Craig
Guest
Craig
February 24, 2014 11:30 am
Reply to  Edward

Kennedy was outspoken about ending the Fed Reserve and was killed very quick. It’s amazing how there has never been one reporter or anyone from the senate or congress ask any of the Fed Chairmen through the decades who they work for. Many of us know the Federal Reserve is privately owned and we know who the original owners were back in 1913. We all live in an illusion. The Fed Reserve vampires own our fake two party system. Their wealth is unimaginable as America is a constant state of bankruptcy and no doubt receivership to them.

KG
Guest
KG
February 24, 2014 6:47 pm
Reply to  Craig

Let us remember why the FED was created in the first place. America has
suffered from the regular failure of Capitalism. Here is a list of all of the Panics (recessions) And Depressions America suffered from since its beginning:
The Great Recession of 2007
The Recession of 1980
The Recession of 1973
The Recession of 1958 – 1961
The Recession of 1945
The Great Depression of 1929 – 1942 including the Recession of 1937
The Recession of 1918 – 1921
The Recession of 1913
The Panic of 1910
The Panic of 1907
The Panic of 1896
The Panic of 1893
The Long Depression of 1873 – 1885: Includes the Panic of 1873 and Recession of 1882
The Panic of 1857
The Panic of 1837 followed by the Depression of 1839
The Recession of 1825 – 1826
The Recessions of 1822 – 1823
The Depression of 1815 – 1821
The Depression of 1807
The Recession of 1802
The Panic of 1797
The main reason for the FEDs creation was to prevent Capitalism from failing every few years.

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John Holbrook
Member
John Holbrook
February 25, 2014 1:38 am
Reply to  KG

Hi KG,
I won’t even try to dazzle you with my historical prowess, but according to your list (especially in the 20th Century, many of the panics and depressions occurred slightly before, during or just after a great military conflict. I would imagine World Wars I and II spanning 1918 – 1945 had a bearing on those incidents. After all war costs us plenty. From 1958 – 1973, there was the Viet Nam Police Action. In the interim, some of the banking scandals and increased government spending and so many other financial schemes and deceptions from the 1970’s right through to the present including the War on Terrorism have had their toll on our economy.
Perhaps it’s just me but the FED appears to be one of the great mysteries to the American public. I have heard stories that it consists of several nation’s representatives that decide how America spends and values her currency and whether that’s true or not, isn’t it time we justify how our money is valued or spent? In less than three hundred years haven’t we built this nation up from a mostly agrarian society to the most powerful nation ever? One that provides well for her citizens and for those who desire to become citizens of this great land? Haven’t we earned the right to exclude ourselves from the scrutiny of other nations and have their respect for our sovereignty, as we respect theirs? There has got to be an answer to our present dilemma that doesn’t include giving up our American way of life and doesn’t spell disaster for other nations. We’ve prided ourselves on how far we’ve come, but there is still much more growth ahead of us as a great nation co-existing with many other great nations on a beautiful planet. Let’s not destroy any part of it. Let’s learn how to grow together and build a safe world for ourselves and our future generations.

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KG
Guest
KG
February 25, 2014 6:48 am
Reply to  John Holbrook

Indeed, I would like to agree with your sentiments.
However, Capitalism and war go together. As long as there are
competing interests fighting over limited natural resources their
will be war. And the Capitalist system seems to be geared towards a
war like economy no matter what political persuasion is there.

welchtt
Member
welchtt
March 11, 2014 4:21 pm
Reply to  John Holbrook

I’ve always thought of it as envy and war go together.

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Mike
Guest
Mike
March 13, 2014 3:53 am
Reply to  John Holbrook

KG does look a little like Karl Marx I think 🙂

takeprofits
Irregular
March 21, 2014 4:14 pm
Reply to  KG

Responding to your conclusion, it thats the case the FED has been a miserable failure.e

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KG
Guest
KG
March 29, 2014 5:19 am
Reply to  takeprofits

Indeed. About as successful as Capitalism. When did capitalism fail? 1929 and 2008.

takeprofits
Irregular
March 29, 2014 6:39 pm
Reply to  Craig

Craig: You have well articulated some serious truths that the average American citizen has not yet come to terms with. It is totally absurd that a private corporation has obtained a monopoly that enslaves us all. Even worse is the fact that by creating money out of thin air and being allowed to charging interest on it the Federal Reserve Act has in effect legalized what would otherwise be considered counterfeiting. Look at an original dollar bill, instead of being labelled, “legal tender for all debts public or private” when it was created it clearly said it was exchangeable for gold or silver coin, in other words it had a value that it represented, while today it is just a scrap of paper with no defined value for which it can exchanged.

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takeprofits
Irregular
March 28, 2014 12:21 pm
Reply to  Edward

And a pretty good 2c worth at that (06) Edward, but how many people know that the definition of a dollar was set in the Coinage Act of 1792 as 417 grams of standard silver?
Today it is a travesty of language to label a pretty piece of paper with numbers printed on it as a dollar, let alone MONEY! Unless you understand the difference between money and currency, an opinion on economics is not based in fact.

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arch1
February 13, 2014 1:03 am

I followed Porter for some time but became disillusioned with his touting Argentina as a safe haven. Yeah , great record of government stability. Travis I think you are clear eyed on this. I did alright buying physical gold @ 285 & selling @ $900+,too bad it was just one Krugerrand. I personally think silver has more opportunity for uptick if it ever goes back to historic gold/silver money ratio, plus being of great need in industry. Commodities of any kind quickly bite if you guess wrong. Futures markets were first used for forward contracts so a farmer might at least have a shot at repaying loan to plant crop. My father was a successful farmer/rancher who told me “expect in any three year period,1 losing year 1 breakeven year & hope 3rd year is good enough to go thru cycle again.” Also said best road to survival in business was controlling costs. I have not been able to disprove either statement. As to worlds currency I think it impossible to derive sanity from what is clearly insane. Use debt as basis of money worth? I believe only reason dollar not falling is the worse state of other money…..All vapor….1,s & 0,s flying around in a circle. In reality money is just a way of keeping track of other wealth; often very tenuous relationship . As to when ???? predict something long enough eventually you may be right. In our time “pigs do fly” if someone will pay their airfare.

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arch1
February 13, 2014 1:08 am
Reply to  arch1

Additional thought: my best investment has always proved to be gaining the goodwill of others; especially true in time of trouble.

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arch1
February 13, 2014 4:28 am
Reply to  arch1

ADD: pigs comment above could/ should be p.i.g.s. as in eurozone crisis; seem to be heading back to the food-trough

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bj
Member
February 18, 2014 6:08 pm
Reply to  arch1

I don’t know yet if I will do alright buying physical gold @ the top for about $685 (I don’t remember exact price.) But I’m still holding AND MAYBE too bad it was just one Krugerrand!

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Stephen Steinfeldt
Irregular
Stephen Steinfeldt
February 13, 2014 1:23 am

I think Chicken Little had a pertinent thought regarding the discussed topic.

takeprofits
Irregular
March 21, 2014 4:37 pm

The answer to your statement could possibly be; “the mills of the gods grind slowly, but very fine” In other words, man can get away with defying natural laws of the universe for a very long time, but eventually he ends up paying the piper. Mathematics is just as certain as the law of gravity, ultimately it can not be defied. That however is what our misguided leaders attempted to do when they established the Federal Reserve Act. in 1913 that allows private bankers to be the creators of our currency which we are forced to borrow into existence as DEBT, providing them with the ultimate monopoly. Their mantra is, “the magic of compounding” selling the masses on the idea they can get rich through compound interest. Bursting that bubble is very simple by basic mathematics and applying some critical thinking. Yes it works for the elite, but if everyone was a net recipient of interest, who would be left to pay it? They got you, the simple fact is interest is never created under our fractional reserve banking system, ONLY THE PRINCIPAL, which means the only way that interest can be paid in perpetuity is if new loans keep being contracted at a sufficient level of increase to cover any principal paid back, (to maintain liquidty, but also the accumulated interest. Bottom line, the only thing that can happen under our debt based currency creation system is that the un-payable interest accumulates as debt. Ironic is it not, the elites can indeed “COMPOUND” their ill-gotten wealth, while the masses debt keeps on compounding, just a more humane form of slavery.

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deanbob
deanbob
September 27, 2014 5:11 pm
Reply to  takeprofits

I like your ‘out-of-the-box’ thinking.

philippe
Member
philippe
February 13, 2014 2:14 am

The biggest problem of all Western economies is a shrinking workforce. This means we dont have enough cash to pay out all retirement benefits that were accumulated. This will drive down the value of all currencies vs hard assets (we call it inflation). until one finds a way to increase the workforce size (which is a near improbability) the world will muddle along–its not the US that’s at risk first, its countries like Japan that borrow more every year than they could hope to collect in taxes just to pay the interest on their debt. Yes its bad in the US, but on a relative basis, and currencies are a relative thing, the US is in better shape than most of the other world economies. Just to relativize for the reader, Japan should have been in chapter 11 years ago,,,it may prolong its agony for many more…The US has at least as many options in its arsenal and is about 20 years behind Japan..so I think the USA is here to stay. Re Gold, current real costs of production, (all in) are over 1000 USD/oz…so long term there is a floor…will it become a store of safety…probably not. In a world of barter–one where currencies have broken down–gold probably is less valuable than other tradeables..think sheep or camels—you get my point….Re investment in foreign markets, do it through US companies with massive sales abroad…its safer and the companies are required to show transparancy of reporting with studies show tends to positively be reflected in long term results…sorry for being so long winded

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Jack G
Member
Jack G
February 14, 2014 11:05 am
Reply to  philippe

Good stuff for 2:14 in the morning. Enjoy reading the comments as much as the commentary. Travis attracts knowledgeable readers.
At the end of the day demographics will drive the economy. Just read a study that claims by 2025, 30% of all blue collar jobs will be done by robots. It will be interesting to see how that, along with a shrinking work force and insufficient job training resulting in jobs going unfilled combined with a chronic high unemployment rate.
This should continue to increase gap between the haves and have nots, making for an interesting challenge to our economy

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Mark
Member
Mark
February 18, 2014 10:54 pm
Reply to  philippe

Work force prob is a non issue solution is robotics – they are finally coming of age

prob will be distribution of wealth as huge numbers of jobs disappear

takeprofits
Irregular
March 29, 2014 6:51 pm
Reply to  philippe

The interesting thing Philippe is that the U.S. economic policies are fast tracked on the same path Japan has been on the past 20 years or so. You are certainly right that Japan should have been in Chap 11 years ago, but the main reasons the U.S. is not already there is two fold, the shear size of its economy and the their privileged position of being the worlds reserve currency, which they have horribly abused. What extended the privileged position was the “PETRO DOLLAR” agreement with Saudi Arabia that required oil to be purchased in “dollars” a factor that is rapidly changing as China Russian others (now 22 nations) that have agreed to trade using their own national currencies, completely bypassing the dollar. The less the demand, the lower the price, and as the dollar falls the price of gold will increase.

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Larry Lewis
Guest
Larry Lewis
February 13, 2014 2:28 am

There is another factor that has been left out here. That is, Christine Lagarde that controls the IMF has stated at the beginning of Dec 2013 that she would like to have a “global currency reset” within 90 days. That would bring her timing to the end of Feb 2014. Last year in Aug or Oct (I can’t remember) 204 nations came together, minus the US, and talked about a rebalance of everyone’s currency to be within 3% – 5% of each other. That would crush the USD overnight and cause the USD to fall 30% – 50%. Then inflation would come a little later leading to hyperinflation. It is not looking good for paper currency.
Then when China states how much gold and silver they have, they will probably state they will have a gold/silver backed Yuan. That would be another crushing blow to the USD being backed by faith in their politicians? I hate the saying, but “cash is trash.”
Voting power in the IMF is based on a quota system. Each member has a number of “basic votes” (each member’s number of basic votes equals 5.502% of the total votes), plus one additional vote for each Special Drawing Right (SDR) of 100,000 of a member country’s quota. The Special Drawing Right is the unit of account of the IMF and represents a claim to currency. It is based on a basket of key international currencies. The basic votes generate a slight bias in favor of small countries, but the additional votes determined by SDR outweigh this bias.
Put a match to paper, it turns to aches. Put a match to gold it melts back into gold.

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arch1
February 13, 2014 3:07 am
Reply to  Larry Lewis

Larry I think problem with IMF re-balance is committee setting ‘worth’ seeks best deal for self not you. IMHO Value of a thing is what “good ” you get from it. Price is set by want/desire, Cost is what ” Bad” you suffer in acquiring thing.
I think Phillipe is correct about foreign assets but I prefer company based in country of investment. One more barrier to confiscation by beloved leader. Canada comes to mind altho I regret selling TTM for a triple. Should have bought more.

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enuhfer
enuhfer
February 13, 2014 2:01 pm

If governments can control manipulate both the currency and the price of gold,
loss of control becomes less of an issue, and there’s not a clear division between banks and government any more. Interesting paper on gold manipulation at
http://sprottglobal.com/markets-at-a-glance/maag-article/?id=8816.

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takeprofits
Irregular
March 28, 2014 12:47 pm
Reply to  Larry Lewis

Larry (10): Your closing comment reminds me of top gold critic/disbeliever Warren Buffett who is in the “barbarous relic” camp of gold being useless, paying no dividend or interest etc. What is usually cited is that you “can’t eat gold”, in other words, that in a crisis it won’t keep you alive, which is true, however the same holds true for paper currency. I suppose you could eat it but given the chemicals in ink it would be more likely to make you sick than provide and life sustaining nourishment. Others point out that farmland may well be the best as a “wealth preserver” but again it is not very divisible or transportable, SEEDS might be better from that perspective. The point is that nothing in 5000 years of human history has proven to be a better combination wealth preserver / trading medium with world wide acceptance than gold and silver. Paper currency on the other hand is only backed by the hot air of politicians and all fiat currencies eventually collapse due to human greed and manipulation by the elite, they do not protect the common man.

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takeprofits
Irregular
March 29, 2014 6:58 pm
Reply to  Larry Lewis

When you say it is “not looking good for paper currency” you are bang on, if not understating a solid case. When your currency is brought into existence as debt, but you need a rising level of currency to sustain a growing economy, then to replace fiat currency being paid back, and also cover the interest taken out of the system, (never created in the first place) the only thing that is compounding is DEBT.

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cynicalanddisgusted
Member
cynicalanddisgusted
February 13, 2014 2:43 am

John Mauldin, certainly no wacko, has also written about the “fractional reserve banking” of gold bullion: http://www.mauldineconomics.com/ttmygh/what-if .

When John Mauldin gets scared I pay attention

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arch1
February 13, 2014 4:15 am

Shawn; Thank you Speechless! WOW!

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meassassin
February 13, 2014 9:55 pm

As frank says – Wow. Okay I was gonna say Wooooo. Nice summary of situ.

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Richard Doty
Member
Richard Doty
February 18, 2014 9:56 am
Reply to  meassassin

Mauldin should also be praised for his insertion of observations such as:
“The whole thing is as baffling as Kim Kardashian’s fame. “

mohiudin
Member
mohiudin
February 13, 2014 2:50 am

Inspite of the anticipated threat to the USdollar, it still remains a safe investment for us living in Pakistan. It has appreciated a lot against our own currency i. e, the Ruppee. I do think it is a good idea to invest in stocks of emerging markets and properties outside the USA.

baygreen
February 13, 2014 3:23 am

Your views are I believe honest and to the point, the Germany wanting there 35 t and if I heard correctly we said (US) we would give them 5 and the rest in 7 years. The Treasury Dept./ Gold Vault is said to be owned by the Chinese now , but as far as the product inside they did not say. I wonder if the Central Banks have a nice lease agreement with China, New York is the next China Town according to Chase selling there buildings to China the building will be turned condo’s by the affluent from Hung Kong with not many units left to sell on the blue prints (STREET TALK) what would Rockefeller think his landmark up for sale around the world for 1.5 Bil $ and was sold to China for 1/2 of that 750,000 Bil$, sounds like a movie, ( TAKE A BOW ) the hidden door theory which already has a back up of several months because of the individuals hiding mirror. S Porter just keeps throwing the nuts to the animals in the zoo as long as the people buy the cups of nuts from them, there has to be a code in New York for that, I can not see the security searching every ones pockets and purses for nuts, the animals would have already made the de shelling machine.
I have no idea if any of that is true but I am sure the Media has a gag order on it. I like you have some of Nolan’s stash and was lucky enough to have bought and sold at the right times and am on his dime, how long I don’t know but the management has survived with the same phone numbers to call for tee times. Also was able to put some Yuan on the side just to be patriotic, they will throw the key away on anything. Also have done well on selling puts on ANV this last year which ended up owning a fair amount and have recently sold for a good lick and kept some on the house like playing craps being on the house’s side you just have to stay there for a while, KWM noise now guess keep Tug along. There is a lot going on in Nevada with some institutions doing the analyst code talk. But I will be back in that just don’t know when.
The Gumshoe is fair and the irregulars are good, I will be around listening and learning, have not had time but with the Ben B. change etc. do you see Bank warrants out there to your liking Travis and what is you feeling on yours know?
Thanks for the article and your members and the Thinkolater .
Take care all.

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Don Exum
Member
Don Exum
February 13, 2014 3:47 am

Gentlemen,
I read with interest and considerable enlightenment the many comments above, and resolved to remain silent at the risk of being thought a fool, rather than open my mouth and absolutely remove all doubt..

Richard Doty
Member
Richard Doty
February 18, 2014 10:00 am
Reply to  Don Exum

Amen !!

vivian lewis
February 13, 2014 9:30 am

Ah gold! I have a history of gold. My great-uncle Jack, a broker in Germany, in 1936 converted his wealth into gold bars and paid someone to ship it across the Rhine to France. Then he and his family moved to New York and took possession. Uncle Jack then bought a seat on the NY Stock Exchange but not being a citizen yet he had to rent it out.
He later became the family’s link to share-ownership and my first broker, when I was 9,
before you had to have a taxpayer ID and be grown up to own stock. (I bought AT&T and
IBM, in case you are wondering, not gold.) His last name like mine was Oppenheim and his brokerage firm was Abraham & Co. My great-uncle was Jewish; so am I.
When I got married a neighbor in California gave me a $5 gold piece (with an Indian head
on one side) that her family had hidden from the confiscation of private gold holdings under Franklin D. Roosevelt. She told me to wear it in my shoe while walking down the aisle, and I did. It would, she said, bring prosperity. (She had never married herself.)
Then I lived 15 years in France starting under De Gaulle and (with a break) ending up under Mitterrand.
The French love the yellow metal. Under Le Grand Charles they tried to bring down the US dollar by breaking the link at $35/ounce to gold, but in the end, it was the French franc which got devalued. Under Mitterrand everyone scared of the left bought gold, Swiss francs and (aha!) dollars to save themselves from Socialist-Communist expropriation.
A few lessons from the above:
1) if you are facing expropriation or death because of your ethnicity, gold is a good way to extract yourself from Vietnam or Nazi Germany or leftie France. I tend to feel that this is not a lesson for present-day Americans;
2) attacks on the dollar for geo-political reasons by foreign countries do not to work. Their own currencies depend on the dollar, not just the French franc, but China’s huge hoard of US T-bills. So they cannot attack the US$ without it having negative consequences for them;
3) Without panic, without hysteria, a stake in gold via an ETF or a physical holding maker sense for most portfolios as a diversification away from stocks, bonds, real estate, and commodities. My website gives a way to buy physical gold cheaply and, of course, legally, without being snookered into the gold-coin racket or crudy assets. Beware Frank de Georgia with mispriced coin-dealing;
4) Conspiracy theories play to the paranoid element among newsletter subscribers and are nonsensical. The US Government is not hollowing out Fort Knox on the sly; the Fed is taking its time paying out gold to Germany (part of which may reflect my late great-uncle’s stake, for all I know) because of technical factors; the government, having legalized Americans’ right to own gold under Nixon is not going to return to the confiscatory policies of FDR’s first administration because the situation is different.
5) Gold coins are illiquid and heavily marked up and not an investment vehicle for sensible people. There is no conspiracy about the World Gold Council against gold which it exists to promote on behalf of gold mining companies! The gold in the GLD ETF exists and is tapped when people redeem their shares and replenished when they buy them again. The World Gold Council also sponsors the physical gold vehicle I recommend on my website where I run a paid ad (because I agree as well as because I am paid.) To imagine that gold mining companies are collectively hiding a hole in the ETF accounts requires a level of paranoia which exceeds even the logic of the Baltimoreans: Bonner, Davidson, Stansberry, Casey et al. They are peddling newsletters and doing it well while also pitching to a right-of-center senior readership.
6) There are even more extreme millenairian end-of-days voices out there who argue that we face the imminent end of civilization as we know it. The gummint and black helicopters from the UN are coming to take away their guns. They will ruin anyone who listens to their financial advice on gold– or anything else.

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Richard Doty
Member
Richard Doty
February 18, 2014 10:06 am
Reply to  vivian lewis

Vivian, thanks for your thoughts and advice.

Robert Vaughn
Guest
May 28, 2014 7:54 pm
Reply to  vivian lewis

So it is almost June ; now what ?

Opposeablethumb
Irregular
February 13, 2014 9:56 am

So If I get this correctly for a “stream” I am paid for the gold that is mined. The miner is paid to mine the gold in dollars. The dollar becomes worthless. Why does the miner keep mining to be paid in dollars? Perhaps he will now demand to be paid in gold. Or am I confused?

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takeprofits
Irregular
March 28, 2014 1:12 pm

There is nothing wrong with paper currency per se Travis, it is certainly more convenient than any precious metal, the problem comes with human greed in respect to how much is issued and how it is valued. While I am not advocating for the return of our previous gold standard,
(Breton Woods Agreement) it would be pretty hard to argue that our 43 year experiment with fiat currency (backed by nothing, since Nixon repudiated the gold standard in 1971), is anything but a colossal failure! Look at the results, DEBT is increasing exponentially, particularly since Obama took office. Even with a virtually zero interest rate policy, debt is still climbing and realistically can never be repaid in any kind of sound money. A “RESET” as was advocated by Christine Lagarde recently is admittedly an absolute necessity.
How to achieve that is a gordian knot with no easy answers. My question to everyone is simply this. By what line of reasoning, fundamental truth, logic, laws of the universe or any other term you choose to use, requires that our currency be borrowed into existence as debt on which a privileged few, (calling themselves bankers) have a monopoly on creating out of thin air and demanding interest on what they create for the price of paper and ink?

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Leo S
Guest
Leo S
February 13, 2014 10:22 am

This is another thread I would like to stay on

charlier1955
February 13, 2014 10:26 am

Travis;
I know you own warrants on SAND. I believe you rolled out of the April 2014 warrants into the Sept 2017 warrants sometime in the fall. I have been studying warrants since last summer. I have found liquidity to be a real problem. I am now looking at some new ETFs as an alternative to warrants. JNUG is a 3x fund on Jr gold miners. You can even buy options on it. How about buying an out of the money call and an out of the money put with sell orders at at 10 times purchase price. Much safer than buying lottery tickets. Any thoughts?

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Glen Fisher
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Glen Fisher
February 13, 2014 11:10 am

I think lottery tickets would be the better bet!

Anonymole
Member
Anonymole
February 13, 2014 11:53 am

The status quo is working out quite well for the wealthy of the world these last 4 years. Why would they let any event or policy change that? They won’t. Only when the rich are threatened, and they’re not, will we see a global policy shift.

As to the dollar’s future: the incestuous relationship between FedFunds rate, crude oil, gold prices, the dollar, foreign banks, and lately, QE (and the FED banks incapacity to lend), leads one to infer that no one can predict what will happen to the dollar in the coming year. They’re all buggering each other behind the bar, but it’s us, the commoner, that get’s screwed in the end.

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takeprofits
Irregular
March 28, 2014 1:27 pm
Reply to  Anonymole

No need to remain anonymous, you presented an honest and well reasoned thesis and as per my previous post, you hit the nail on the head when you stated: “The status quo is working out quite well for the wealthy of the world these last 4 years. Why would they let any event or policy change that? They won’t.'” The only thing I would change in that statement is your time frame, it should be a HUNRED years plus since the Federal Reserve Act was sneaked through Congress, even the then President regretted it after the fact. Indeed, ” it is the commoner that gets screwed in the end” and that is why human greed will not allow an honest policy and currency that favours the common man to be brought into existence, the elites will not voluntarily give up their power to remain leaches on society at large.

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