|
Historic Reports
Larry Myles Reports
Big business depends entirely on the
patronage of those who buy its
products: the biggest enterprises
loses its power and its influence
when it loses its customers.
|
Forging Ahead with Gold and Common Sense
January, 2011
A Storm Cometh…
…as our leaders attempt to bend the light
First report of the New Year, and I must
begin with an apology for the 'mail box
full' message many of you received during
the holidays. Rectified only moments ago, I
am both humbled and more than a little
intrigued by the sheer volume of
messages! Let me now attempt to address your
most pressing queries - the price of gold
for the coming year; fate of paper
currencies and the direction of the economy.
I will also attempt to respond to your most
important concern...."why can't we get
out this mess?"
Foreword: I opine from the positive
position of what will benefit the individual
retail investor. Through our business of
gold investment stratagem, we have not only
survived the nonsense of western economies
losing their way, we have discovered one of
the few roads leading to individual
prosperity.
A Gold Price Forecast For 2011?
Back in November of 2008, I suggested that
by Easter 2011, we would be looking at
$1,500.00 gold. With the final days of 2010
behind us, I feel that I am on course;
although possibly only slightly aggressive
on timeline. As to where the price of gold
settles by year end, every important
indicator points to that price being
markedly higher although the battle to crest
the $2,000 plateau will be legendary.
First and foremost, there is a fundamental
belief that gold is considered by the
majority, to be the premium hedge against a
falling dollar. In addition, any event
or crisis that could impact
the dollar will lead to an increased
interest in gold.
By merely staying abreast of current events,
it is obvious that we live in a world that
is moving from crisis to crisis, to the
point of overlap. Perhaps the underlying
reason we are suffering through one negative
event after another; a glaring disconnect
between the leadership we have and the
leadership we need.
Yet there are those who feel that 2011 will
be the beginning of the ‘new normal’; one
based upon the now fragile and pale world
economies righting themselves, and the U.S.
dollar regaining prominence. When it comes
to gold, they persist in their brag and
chatter that the entire rush to gold remains
based upon panic-driven, mass hysteria.
I would imagine the dollar defenders have
willfully chosen to ignore the ice-bergs in
the harbour! These being inflation,
increased social unrest on every continent,
the persistence of economic negativity based
almost entirely on the lack of confidence in
government leaders guilty of lacking
achievement and character, as well as the
obvious erosion in the buying power of fiat
currency. Must it take something as
catastrophic as the collapse of the deeply
flawed European
Union to move the spoiled Keynesian idiot
out of his dull and fouled corner of
existence?
Regardless of how steep the tea of anti-gold
propaganda has been brewed, there is one
bedrock fact the dollar defenders are loathe
to address; Cheap and convenient governments
along with global bankers have succeeded
in setting aside common sense! Their zeal to
promote a monetary system based entirely on
debt has severed the link between paper
currency and commodity metal money.
And try as they might, there is no
concealing or denying they have
also succeeded in
removing the brake on inflation!
The dollar side is
right about one thing; there is a level of
panic – but it is not yet in the streets,
but that too will come.
Instead the feeling of dread, albeit
under-reported and muted, comes from the
community of bankers. I am sure most of you
are already aware that every major fund
around the world is in on the ownership of
gold; also widely reported, every central
bank located in any country with paved
streets, has joined the melee to
buy gold. But to get banks to part with
our gold…gold that is held in
their vaults, tells the real story! And
that is where the whiff of panic lies; as
evidenced by the case of one
Swiss bank,
exposed for refusing
to hand over physical gold to its clients.
Apparently it took some doing, but in the
end the bank (grudgingly) did the right
thing.
If there is
potential for muted and select hysteria,
it might very well be the unseemly spectacle
of banks around the world suddenly appearing
false and fugitive by resisting demands for
the return of hard money to their own
clients; opting instead to offer
tissue-paper currency as a poor and unwanted
substitute.
Thus, without continuing to heap abuse on
the deluded and doltish defenders of the dollar, I can
say with complete honesty that other than
fogs and confusions getting in the way of
reality – gold and silver will continue to
move up the charts. Also, my first-quarter
prediction of $1,500.00 gold will only be a
temporary way station. As to the fate of
all ignoble and shabby fiat currencies, do
your due diligence. I welcome you to start
from
here.
In Response
to: "Why can't we get out of this mess?"
|
Note: As a reality-based optimist,
and focusing only on how we the
people can prosper, my comments fly
directly in the face of the economic
prognostications offered by the
Congressional Budget Office:
Economic Forecast Bleak.
In testimony before the House Budget
Committee, a scathing report which
received scant news media attention,
CBO Director Douglas W. Elmendorf
painted a bleak forecast for the
nation’s economy under the White
House’s no-jobs, no-growth tax and
spending policies. It spells even
deeper political losses for the
Democrats in Congress than are
presently forecast.
Mr. Elmendorf, who was appointed
by Democratic congressional leaders,
told the committee that economic
growth will be painfully slow over
the next several years and that will
keep the national unemployment rate
at an average of 10 percent
throughout fiscal 2011, which ends
in September of that year.
Contrary to Mr. Obama's Herbert
Hoover mantra that economic recovery
and more jobs are just around the
corner, the CBO budget chief said
the economy will grow by a weak 1.6
percent this fiscal year and the
jobless rate will average 10.2
percent.
CBO’s outlook for 2011 is just as
bleak. The nation’s gross domestic
product (GDP) growth is expected to
reach barely 1.8 percent, while
unemployment is projected to show
scant improvement, averaging 9.8
percent for that fiscal year.
The administration's unprecedented
budget deficits are expected to be
more than $1 trillion this year and
next, staying at very high levels
for years to come.
Deficits like these mean the
government's massive debt burden
will be at historically dangerous
levels that will imperil our
country's future and economy's sol
vency, he said.
“It is true that as we push [public
debt levels] in this country to 60
percent of GDP at the end of this
year and beyond that over the next
few years, we’re moving into [debt]
territory that most developed
countries stay out of.”
|
After reading the above, I think it is safe
to say the main reason America continues to
fumble toward a limp and elusive economic
recovery rests solely upon woefully inept national leaders!
Their inability to step up (or step down) and offer bold
and meaningful change where it is needed
most; through a growing reality-based
economy; that would result in prosperity for
America. The imperfection and fallibility of
a neo-classical, one-world economy
experiment has failed utterly. It is time
to move on.
Caution: realize that before the globalists
give up, we can expect class riots choking
the streets of America and Europe.
|
Knowing that our individual judgment
is worthless, we endeavour to fall
back on the judgment of the rest of
the world which is perhaps better
informed.”
-- Critical Assessments Second
Series, John Maynard Keynes
(1937) |
Although I can feel their frustration, I
would prefer to move past the seemingly
endless queue of financial pundits,
small-government advocates and economic
analysts; as they continue to attack the
battered, albeit bastardized theory of John Maynard Keynes.
As to the artificial yet elaborate rubble
known as the Keynesian Theory; history has a
way of exposing flaws, while outing the
charlatans, fools and poseurs. Keynes above
mentioned quote, flawless in its eloquence
and succinct in delivery, has nonetheless
been exposed as lacking in validity.
I do not comment lightly upon Keynes and his
theory; but only after investing the
holiday season by re-reading the
well-written, albeit enigmatic,
General Theory of Employment, Interest and
Money
(complete text).
I feel that other than relying too heavily
upon ‘the great cosmic pool of collective
wisdom’, the Keynesian Theory went over a
cliff, thanks in part to the collapse of the
Bretton-Woods System. As long as Keynes had
at least one major country at least
partially tethered to gold, his fantastic
and flawed theory
enjoyed a degree of relevance.
Another concern I have with Keynes is he was
so tightly wrapped in theory; he failed to
consider the foibles, fears and the
degrading responsibility level of future
politicians! It is these very people
who are now in charge of printing reams of
fiat currency. Mix in the inability to print
gold with the indolence and indifference of
men addicted toward currency printing, and
there is no mystery why we are in a pickle.
This is one of the major reasons why the
price of gold continues to rise.
It is high time that the retail investor
continue to act in an instinctive and
rational manner and stay the course by
remaining participant in the business
of gold. There is little profit to
be made by simply playing the role of the
observer, as western governments stubbornly
cling to an out-dated economic theory,
offering only jeopardy and instability as
reward. All they are doing is proving
the point the collective has neither
the answer, nor the will to return Europe to
an era of economic stability. This lack of
vision and determination will not only
decimate what is left of the European
economy, it will most assuredly impact
future American prosperity.
One only has to study the financial ruin
that is Europe; where rotating councils of
stubborn bankers and inflexible politicians
go around in circles as they continue to
fail in creating their pool of
collective wisdom. Note: Their willful
and preordained failure does not
automatically mean you have to share
their confusion and pain. If you agree that
the mangled cobble known as the “European
Union” offers little worth; and their
debt-backed fiat currency is nothing other
than a poor mimic of its U.S. counterpart,
then you are half way home.
For a fascinating comparison between
collectivism and the power of a single
visionary individual, history
provides a ready example.
We are now bearing witness to a growing
trend in modern-day Europe; a vapid pining
for a return to the meager and bare benefits
associated with the Guild System; renamed of
course as the System of Entitlement.
However, there was a time where European
collectivism was anything but a tepid dream;
it was both aggressive and
malevolent. Under the dubious and
tattered banner of ‘religious liberation’,
Western Europe embarked on centuries of the
religiously sanctioned looting of the Holy
Land (The Crusades 1095-1291).
By the beginning of the 14th
century, most of Europe was exhausted.
Preoccupation with religious wars had
resulted in a shocking lack of economic
leadership. It was a time of turmoil,
diminished expectations, general loss of
confidence in institutions, prolonged
depression, debilitating taxation, along
with devastating disease and plagues.
There was a bright spot…thanks
in part to the focused efforts of a single
visionary – King Charles Robert of Hungary;
a ruler of surprising merit and virtue, who
in 1310 initiated meaningful land reforms, a
political system relying upon adherence to
the honour code, and an economic system
based on gold.
By 1325, Robert minted the gold Florent.
Within a
generation,
Hungary began to emerge as an economic
powerhouse. Over the next two centuries,
through their successful modes and methods,
productivity was positively influenced
throughout all of Europe.
Thanks to a strong currency based on gold,
Hungary experienced the most glorious period
in that country’s history.
Bending the Light by Ignoring The Benefits
Of a Strong Currency
Apparently the examples of the past
are something the current leadership in
Washington has forgotten; evidenced by
America actually leading the global charge
toward “competitive devaluation.”
|
Competitive Currency Devaluation:
When a country attempts to devalue
its currency to increase its level
of international competitiveness.
This temporary ‘advantage’ lasts
only as long as it takes for other
countries to devalue their
currencies. History has proven the
willful embrace of currency
devaluation leads to inflation;
which dramatically reduces long term
gains in competitiveness. |
When a nation attempts to overstep and
contravene against its own currency in a
dead-end attempt to gain the edge in
exports, the results are easily predictable.
As the price of imports rise, the country’s
overall standard of living is reduced.
America will become this nation and there
will be turmoil in the streets. Guaranteed.
My question; if
your
individual standard of living drops, how
does this translate into economic
prosperity
for
the
nation?
As I have written in the past, I am a strong
proponent of
American Exceptionalism, and am
not much interested in the artificially
penned and planned ideal of the stunted,
still elusive
recovery
promised by the current anti-capitalist regime in
Washington.
Good King Robert in medieval Hungary
provided the framework for 200 years of
evidence that an economic system based on
gold can result in an age of
prosperity.
Closer to home and to our timeline, the
example of Warren G. Harding slashing
spending and cutting taxes during the
1920-21 American Depression, delivered an
era of personal and specific
prosperity
in America that has yet to be equaled. What
both men had in common – besides
understanding the sturdy worth of a gold
based currency system – they were unafraid
of shaking up their existing in-country
systems. They believed in their people, and
were unafraid to offer (genuine)
change.
Mind you, the change envisioned by President
Harding would not lead to Marxism in
America, unlike what may happen in America
today.
As 2011 begins, we are still being subjected
to a brand of leadership that desires above
all else to pillage and destroy the ideal of
American Exceptionalism, along with actively
promoting the idea that individual
prosperity is somehow un-American. American
Exceptionalism offers unity, pride and
discipline; whereas the (failed and fading)
regime in Washington appears to offer
the exact opposite. Class warfare has never
worked in America, hopefully this will
remain constant.
Either blithely unaware, or muzzled by dodgy
political agenda, we bear witness to the
rapidly degrading Ben
Bernanke as he continues to encourage the
global printing of yet more debt-based
currency. I find it difficult to believe
that Bernanke does not grasp the fact that
there is no cure offered the economy by
printing more money. At best…at very best,
he may succeed at temporarily papering over
the cracks.
So focused on abusing his mandate of
attempting to use the Fed to reduce
unemployment, he is going to be blindsided
by the predictable consequence of a
Keynesian influenced Fed policy; abundant
inflation. It is a clear case of
out-dated arrogance, trumpeting the ability
to bend the light of a single candle, while
standing in a room already illuminated by
halogen lamps.
Back to the
question of how do we get out of this mess.
It all comes down to bringing the question
home; working on our own individual and
family financial security, while remaining
receptive and responsive to replacing the
dunderheads who now control government.
Wealth Protection Through Common Sense
Investing
I remain pleased by
the efficiency and success of our
business of gold stratagem. Those of
you who have been with me for the last few
years have been introduced to an investment
idea (reality-based investing, a.k.a red
pill investing) that works. With individual
prosperity as our primary ideal, and the
protection of wealth our end game, we will
move forward into 2011 with confidence.
Although (deliberately) not updated from
when it was first written in early 2009, our
common sense simple stratagem continues to
work. Go
here
to review the bones of what is behind our
business of gold.
Remaining Participant In the Business
of Gold
I am not at all sure how long bargain
opportunities will last now that almost
every investment analyst has turned focus
toward the commodity sector – with gold and
silver junior exploration companies being
their overwhelming favourites.
As outlined in our business of gold
stratagem, there are two key elements
that must be in place before entering into
the due diligence process; the importance of
strong and capable management and product
in the ground. As well, do not be afraid
to test your exposure to country risk! More
than ever before, finding and exploiting
gold has turned into a global adventure.
For those who question the jurisdictional
(Nicaragua) implications in working in
Central America, I must point out that
investors will find the country enjoys a
dynamic free-market economy, with
macroeconomic stability achieved through
vigilant management of fiscal, financial,
monetary and currency exchange policies. And
as a result of years of economic
liberalization, and the implementation of
policies intended to stimulate national and
foreign investment, Nicaragua’s economic
performance has shown remarkable results,
with sustained economic growth and
substantial increase in private investment.
I think that Nicaragua has succeeded at
sprucing up its standing within the
international community, as the country now
ranks just behind Canada as a safe
and mining-friendly jurisdiction; as was
recently mentioned in this
BNN clip.
Note: To avoid any suggestion of quarrel
or wrangle, it is only prudent to mention I
assist in the investor relations for the
gold company mentioned by Mark Lackey in the
BNN clip. (Golden
Reign Resources)
Remain
participant in the business of gold, expect
a correction of note early in the year; but
prepare to purchase physical gold
and silver
on the dips!
Larry Myles
604-408-7600
1-877-405-7600
Receive Larry Myles Reports
|
Miles Franklin
is a leading supplier of Gold
American Eagle coins, as well as all
other popular world bullion coins
such as Canadian Maple Leafs,
Austrian Philharmonics, Australian
Kangaroos, and South African
Krugerrands. Perth Mint and Pamp
Suisse gold bars in various sizes
are also available. They also
specialize in Pre-1933 United States
gold coins. Whether you are a
collector or an investor, Miles
Franklin is your home for gold at
reasonable prices. |
Larry Myles is neither a
geologist nor a financial analyst. I do not
purport to offer personal investment advice
nor recommendations. While all statements of
fact are derived from reliable sources, an d
are believed to be accurate, I make no
warrant that they are so. You must do your
own research and check statements of fact
for yourself. My opinions are precisely
that, my opinions. I do not accept any
responsibility for any gains or losses you
may experience resulting from actions taken
based on my opinions. If not otherwise
qualified, you should consult with your own
personal financial advisor before engaging
in any investment activities. Larry Myles
Reports does not provide individual
investment advice, act as an investment
advisor, or individually advocate the
purchase or sale of any security or
investment. Larry Myles may actively trade
in the investments discussed in this
publication. Larry Myles may have a
substantial position in the securities
recommended and may increase or decrease
such positions without notice.
I do not know
your personal financial circumstances. I am
not your personal financial advisor. You
must do your own due diligence. By entering
this web site, or reading LMR reports, you
acknowledge and accept the foregoing. |
