Are you a deflationist? Or an inflationist? No matter which way you believe the wind will blow, the truth is this: it’s up in the air. But, as Jim Rickards explains, there are things you can do to cover your assets, no matter which one wins the tug-of-war. Read on…
Smart meters are supposed to be our saving grace. Reduce pollution… reduce blackouts… and keep you and your family safe. The truth, though, is the exact opposite. What’s the true agenda behind smart meters? And why are you being lied to? Read on…
You hear a lot about gold these days. But what about silver? Chris Campbell speaks out about the moon metal with one shocking confession. Read on…
Markets have you spooked? You’re not the only one. In today’s Laissez Faire Today, you’ll hear from three market experts on how to stay safe, no matter what direction the overall market heads. Read on…
Savvy investors: Two experts weigh in on why having your own personal gold standard… and betting that Ebola will get worse… could be your best investment decisions of 2014. Read on…
Sometimes life deals you lemons. It’s up to you to make lemonade. This month’s Insider Cellar recommended winemaker had no intention of making wine when his family settled just north of Santa Barbara. When our reluctant winemaker’s father walked his land in the early 1980s, he was probably disappointed when he discovered the soil did not have the nutrients to support his strawberry crop
America has about 4% of the world’s population, yet houses 25% of the world’s incarcerated. What’s going on here? Chris Campbell digs deep into the industry to figure out the truth. While many blame the private prison industry, the real culprit, says Chris, begins right outside your door. Read on…
Bitcoin has been pretty quiet lately. But that doesn’t mean big things aren’t taking place behind-the-scenes for the digital currency. In today’s Laissez Faire Today, Chris Campbell pulls back the curtain and shows you how Bitcoin is quietly slipping into the mainstream. He also shows you why now could be the time to buy now, or forever hold your peace. Read on…
Want to get rich? Don’t listen to financial “gurus,” says Chris Campbell. In today’s Laissez Faire Today, Chris shares a Zen proverb and shows how understanding it is the only real way to get rich (and live a rich life). Read on…
Ben Franklin once said, “An ounce of prevention is worth a pound of cure.” In today’s Laissez Faire Today, you’ll learn about one FREE website that has the potential to not only keep your family safe – but also open your eyes to what’s happening in your own neighborhood. Chris Campbell has all the details. Read on…
This month, I’m going to tell you a hard truth. It’s one that Wall Street brokers and financial analysts try to hide. It’s one that most newsletter writers choose to ignore. In fact—when it comes to the financial world—this is a “secret” that everyone knows… but no one will mention.
All over the world, power is dying. The dictators and tyrants of the world are no longer able to wield it like they once used to. And they’re losing it to the “little guy.” Chris Campbell shows you how to be the king of your castle by taking advantage of this fact. Today, you’ll learn how to grab “power gaps” in the market and channel them into your product idea or project. Read on…
The fireflies along the tidal rivers of Malaysia show "feats of synchrony that occur spontaneously, almost as if nature has an eerie yearning for order." Chris Campbell tells you where else this might occur in the world. Also, new technology may revolutionize the agriculture industry and what we think of as a farm.
Jeff Davis is running for Governor in Hawaii and has an interesting campaign strategy. Also, what motivates hackers is revealed and the findings might surprise you. Finally, Ferguson is discussed in a new light. Chris Campbell has more...
The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
They lurk somewhere in everyone’s 401(k) program. Tick, tick… And it might be years before you discover them. Tick, tick… By the time you do… Kaboom! It’s too late. They’ve already blown up your retirement.
When’s the best time to invest in something? When everyone else is trying to get their money out of it. It might go against conventional thinking, but following the crowd usually makes you miss the real opportunities. At one monetary metal conference recently, the smartest guys in the industry sat down to discuss where these real hidden gems lay.
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
Greetings from Maine! Right now, I’m writing from within foghorn distance of the sea. And this gives me an opportunity to tell you a down east tale that should serve as a warning to every investor: Maine’s Great Gold Swindle.I’m not talking about central banks, or manipulation of today’s markets. I’m talking about something from […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
One industry is expected to grow from an estimated $77 billion sector by the end of 2014… to around $700 billion in 2024. And that, frankly, is a conservative estimate, as you’ll see below. This isn’t because of some resource boom or new discovery. This isn’t because of funny business or a trader play. This is real spending, done by real companies to combat a very real threat. It’s already an established industry but poised for exponential growth. Because the problem it combats is growing exponentially.
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
Remember that correction we’ve been quietly talking about over the past couple of months?Well, it might be right around the corner. Stocks waited until the last day of the month to nose-dive. The S&P 500 posted its first 2% down day since April — and the Dow wasn’t far behind. Early this morning, futures continue […]
A great technology solves a problem that we didn’t know we had. It makes us aware of deprivations we didn’t know existed until we discover the new thing. Once discovered, we can’t go back.People in the 1950s, for example, never missed the smart phone. They were pleased to have a phone at all. But today, […]
Where do great investors come from?I’m not sure what the hurdle rate for greatness is, but Guy Spier has put up impressive results. His Aquamarine Fund has returned 463% since inception in 1997, versus just 167% for the S&P 500 (a broad proxy for the market). Put another way, $1 million invested at inception is […]
In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.The U.S. was already the world’s commercial powerhouse, having eclipsed the British […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
I made a choice five months ago. And that choice has saved my life. This wasn’t some instantaneous decision, with danger near. It wasn’t some great “eureka” moment, either. There probably isn’t a person out there who would question what I did. In fact, more and more people are making the exact same choice every day. And each one does it to the sound of applause.
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
Less than 1% of the world’s gold is mined in India. The rest comes from somewhere else. Still, India can’t get enough. It is the largest consumer of gold in the world, buying nearly a third of production in recent years. Some estimates say that 10% of all gold is held in India.
Indians save roughly 30% of their income, as opposed Americans, who save 5%. Plus, Indians are getting richer all the time. Once a very poor country, the rich and middle classes now outnumber the poor in this nation of 1.2 billion. The country has the sixth-largest economy in the world.
If people are left alone, high gold demand going forward is a lock.
Yet India’s policymakers are disturbed. Yellow metal purchases have widened the country’s current account deficit to 5.4% of GDP.
The Reserve Bank of India (RBI) has produced a report indicating “a need to moderate gold import, as the insatiable appetite for the yellow metal could jeopardize economic stability,” reports BullionStreet.com.
So the Indian government and its central bank are trying to get people to buy other financial products. “There is a need for banks to introduce new gold-backed financial products that may reduce or postpone the demand for gold imports,” the RBI report said.
The central banking wonks are thinking that if the Indian public can be made aware of financial paper instruments such as gold accumulation plans, gold pensions, and gold-linked accounts, it will drop its obsession with the barbarous relic.
A leading Indian trade body said country’s gold imports could fall to just 550 tonnes next year, little more than half of the peak of 967 tonnes in 2011.
Well, good luck with that. The people of India have cultural, historical, and traditional reasons to buy gold. They consider it the most valuable asset there is. Indians want to own gold like Americans want to own houses.
Ganesh Rathnam related a story that explains India’s gold obsession. When his father, a pediatric surgeon, wanted to buy land to build a new clinic, he mortgaged his wife’s jewelry to raise the purchase money. “Similarly, millions of people in India have capitalized their businesses or farms, or secured their basic necessities after severe business reversals, by pledging their gold jewelry,” he writes.
Last year, 60 Minutes ran a segment, “India’s Love Affair With Gold.” Correspondent Byron Pitts was stunned that the Indian people consider gold purchases as savings. Indians do not believe that they are spending when they buy gold, but, instead, that they are putting their money in a savings account. Oftentimes, a savings account that is worn around the neck or wrist.
There are 22 official languages in India, so there are 22 ways to say gold. And nothing says gold in India like a wedding. Half the country’s gold purchases are for wedding jewelry. It is said in India, “If there is no gold, there will be no wedding.” Gold must be widely owned, because there are 10 million weddings a year. Some are extravagant affairs that last for days on end.
Parents start accumulating gold for their daughter’s wedding day as soon as she is born. This gold represents some financial security that the bride brings to the union. It also gives the bride some economic status in the relationship. And while it provides security, gold is hardly ever sold, but instead passed on for generations. But it can be mortgaged if needed.
Gold is a symbol of purity and is considered sacred, but also signals prosperity. Jewelry does the talking and gold speaks loud and clear. Not for vanity’s sake, however, as gold is considered honorable. You can’t have a family without gold. The yellow metal is a way of life.
A gold analyst told Pitts that it’s impossible to explain to an Indian that gold might go down in price. Indian society has been around a few thousand years. People learn a thing or two in that time. First, save money for the unexpected. Second, don’t trust banks. And third, don’t trust the government’s paper money. They’re not interested in mutual funds and other financial products.
Even the poorest people in India buy gold, saving a little each week to buy a gram at a time.
“Gold has a rich tradition in the Hindu epics, the Ramayana and the Mahabharata,” writes Rathnam. “It was associated with the pomp and splendor of the gods and kings who appear in these mythological stories.”
He explains that silver coins were widely used in India during the reign of the Mauryas circa 250 B.C., and the first gold coins were issued widely during the Gupta dynasty around A.D. 250. India has been a collection of kingdoms and fiefdoms often at odds. Gold was easily hidden, “enabling ordinary citizens to avoid being looted by marauding armies,” Rathnam writes. The kings changed, as did the coins, and thus gold became the preferred medium of exchange and store of wealth.
After India’s foreign reserves were decimated by its war with China, the government instituted the Gold Control Act of 1962, which forbade private ownership of gold bullion and forced all bullion to be turned into jewelry.
In the 1970s, tax rates reached 95%, and the Indian currency, the rupee, plunged in value. Indians took to not only hiding assets from the taxman, but also trying to survive inflation. Gold and real estate were the chosen vehicles. Rathnam also points out that bank deposit insurance in India is the equivalent of just over $2,000, making bank deposits a risky asset.
But finance minister Chidambaram Palaniappan doesn’t care about tradition or prudence. He sees gold purchases as consumption that has contributed $64 billion to the country’s widening current account deficit.
While the average Indian loves gold, the country’s bureaucrats do not. The numbers tell the story. The Indian government owns only 360 metric tons, while private gold holdings are estimated to be 15,000 metric tons. It is, indeed, the people’s money.
An Indian gold expert told 60 Minutes’ Pitts, “If India sneezes, the gold industry will catch a cold.”
The government is trying to make it sneeze, but the people are wise. Thousands of years of tradition will likely keep the gold market healthy, no matter how much the politicians hate it.