Gold Swaps

Follows is a discussion of gold swaps. Over the past week or so, the S&P 500 has been forming a topping chart pattern and today has seen simultaneous down moves in both the S&P and the gold price. Gold price suppression theorists will cite this day in their argument that there are artificial forces working on the gold price. Apparently a down move in the indexes back in 2008 during the financial crisis correlated similarly with today’s gold action.  

Inquiries made by the Gold Anti-Trust Action Committee toward the Federal Reserve and the Bank of International Settlements regarding the derivative trading of Gold Swaps conducted from underlying U.S. gold inventories have not been absolutely transparent. On the one hand, the Federal Reserve has responded with “in connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.  (letter dated Sept 17, 2009 from the Federal Reserve is associating with Freedom of Information). On the other hand, they have recently made a simple assertion that gold swaps are not executed with U.S. inventoried gold reserves.   

Bill Murphy of Lemetropole has been beating the drum of gold price suppression since 1999. Although not a subscriber to this site over at Lemetropole, I have had the privilege of witnessing his fervour in person at conventions here in Calgary over the years. In fact, he was instrumental in a presentation showcased by the Gold Anti Trust Action Committee to congress some ten years ago regarding evidence of surreptitious trading patterns associated with the gold price.

 Through my own education of derivative markets, I came to learn of short selling and naked options.  Gold swaps fit right in to this category of financial instruments. Chartered accountants certainly didn’t Know much about them during the 2008 financial crisis having failed to ensure disclosure during audits. What if the U.S. government has over extended itself in its interest in gold swaps when inventories don’t support the trades? Then what?  

Jim Rickards has recently been leading the charge to help the public understand surreptitious gold trading through his most recent book “The New Case for Gold”.     

Canadian Trade Talks

Should Canadian farmers be selling wheat and barley to Saudi Arabia when Saudi Arabia has historically oppressed women and still does to this day? Does a country conducting international trade compromise its values if profiting from a country from which values conflict? Should politicians in high office frustrated by diplomatic overtures abroad turn to twitter to voice grievance? Should a Canadian confident in his /her position that we have a weak Prime Minister contend that all policy initiatives by the federal government will commensurately be weak? Is it fair to impact the livelihood of commercial operators because of international political grievance?

The above questions arise in the context of a spat between Saudi Arabia and Canada over this past week. It’s frankly unsettling to witness such weakness. My position is that Canada has been compromising its values over time with respect to trade and shouldn’t be surprised that a peculiar twitter remark should be received with outrage from an internet platform limiting in its communicative power from a nation bereft of bestowing respect upon women. What’s even more surprising is that Ms. Freedland seems like an intelligent woman who should have known better. She should have know that the incarceration of women’s rights advocate is a sensitive matter and that a frustrating social media appeal could actually undermine diplomatic efforts to liberate the woman.

Our country, Canada, has some soul searching to do with respect to trade policy in the context its values and protectionist sentiment arising from the U.S. New alliances are forming and Canada has a place at the tables but must affirm its position with clarity complemented with trade deals rooted in the fabric of cooperation with partners of whom it can look dead straight in the eye.     

Being In The Know

We often think we’re in the know when we really aren’t. We come to know because of what we’ve been told but who has been doing the telling and why? In spite of the profligacy of information on the internet, we are deservedly suspect. The question becomes “what do we do and where do we turn?” if information has relevance in designing our lives. 

Conspiracy theorists appeal toward our insecurity of knowledge. Through their inflammatory portrayal and oftentimes sharpness in intellect, they can even dislodge us from sound judgment. We can only harbour outlook through experience, education, reason, and observation. However; what we lack is information deliberately kept from the public domain.

From the period 2004 to 2007 I took the time to digest insights from speakers adept in the field of Austrian Economics. Having studied basic economics through my financial education, I have been rather fascinated about the contrast in the Keynesian model versus this Austrian model and whether there would be any implication to me directly in the context of these models duelling alongside future economic events.

This brings me to Jim Willie of his Golden Jackass website. Jim is a no nonsense fellow with a P.H.D. in statistics. Jim showcases himself as an economist without the credentials of an economist. He has an interest in world affairs as they relate to our monetary system and speaks with an inflammatory style typical of someone imbued of conspiracy yet logical and charismatically intelligent. His stories mostly correlate to postulations. One wonders about the worthiness of his sources but his ability to incite in my estimation supersedes any laxity inherent to his research. 

He was one gentleman that struck me the deepest during this period of my economic inquisition. This weekend with the Dow Jones Industrial Average approaching a double topping chart formation, I wonder if elements key to Jim’s world view will trigger the next market correction.

During the past two weeks, I have immersed myself in learning specific market trading mechanics pertinent toward portfolio protection. I’m happy to share. Simply subscribe.      

 

           

The Success Sabotage Game

Having just about put a wrap on a very good book this weekend in the personal development genre, I reflect on experiences and relationships all while laying down a new guitar riff. I have things in the office to do on this beautiful summer weekend but the philosopher in me has taken over.

I took up Dean Graziosi on his offer to attend a free seminar and get a meal and book on him. I enjoy seminars as a way of gauging my mindset in the context of others who have achieved successes and wish to share while prepared for “the catch”. Typically, presenters deliver on their word as has Dean.

I’ve yet to gain a full understanding of the man’s history but I certainly do appreciate his sincerity in his book, “Millionaire Success Habits”. What I do know is that he put real estate to work and applied Tony Robbins’ principles in acquiring results. While others were challenged by the no doc mortgage debacle and economic pessimism in 2009, Dean apparently snapped up properties.

My message today surrounds the power of the pragmatic mind developed through failure and the social acclimatization toward risk avoidance. Frankly, the attendance of a seminar pertaining to wealth related concepts in Canadian society is mostly viewed as gullible or naive as opposed to entrepreneurially provocative. The propensity to defer to a messenger’s motive syncs with the suspicion entrenched within a society’s affinity toward liberalism. 

You know that folks seek solace in the shortcomings of others.  You hear it at work and you see it in headlines littered through websites encouraging your clicks. Marketers even target your need to be soothed.  There is a cultural aberration at play which must be called out and identified in your mind in order for the full force of your individualism to be actualized. I’m talking about the influence of this phenomenon in your mind as young as preschool. Negativity abounds and you are better equipped to handle it when you become attuned to its source.

Oh ya…the book, “Millionaire Success Habits” by Dean Graaziosi.              

What Is A Hedge?

A hedge is a position taken in the financial markets for the purpose of protecting against an unfavorable move against ones’ portfolio. The term “hedge” can be used in other contexts but I bring this financial usage to your attention because of the unfortunate absence of its deployment generally speaking by individual investors.

When the typical Canadian makes his/ her annual trip to the bank for transferring funds into the RRSP fund, the banker who really doesn’t know much about investing simply cycles the money into mutual funds. There’s no reason for the banker to do any differently because typically the portfolio holder knows no different either. Banks are in the business of not losing you money because they wish to retain your business. Mutual funds are convenient for them because they can rely on diversification through a professional fund manager. The trouble one encounters is back end fees, mangagement fees and “over-diversification”. Yes, being over-diversified has the effect of dumming down returns.

In my accounting practice, I frequently remind my clients to spend a couple of hours per week delving into financial education while learning about stock market investment opportunities. I believe that nobody is more concerned about your net worth and your retirement than you. Hence; you need to be in charge and fully accountable to your own financial growth.

Now back to hedging. You may have heard the terms “inherent risk”, “systemic risk”, and “geopolitical risk”. They are all fancy terms akin to abstract art and I’m certainly not going to spend time expounding upon the ultimate essence of their meaning. However; I am going to refer to the ever present matter of monetary stability and its lack thereof as a good reason in itself to be “hedged.”

First world countries have become more and more indebted. You thought the U.S. was bad. Well, in the U.K. every man, woman, and child owes some other country $127,000 USD. It kind of puts all the fuss around Princess Kate in perspective.  While the English pander to the residents of Buckingham Palace and obsess over pregnancy rumours, each and every Englishman, Scot, Welshman, and Irishman wake up to a future of financial bondage.  Per capital, the U.S. is at a mere $58,200 per citizen.

Here’s what’s weird….there’s really no record of reconciliation of these debt obligations with creditors available in the public doman. You see….governments issue debt instruments like bonds and treasury notes in the context of their borrowings so one would expect to see these all accounted for by a reporting body such as the International Monetary Fund (IMF). Hence; the settlement of such instruments and the creation of new ones could be viewed with transparency.

What about gold? Does gold still play a role in the creation of debt instruments? Well, no. However; countries around the world still view gold as a financial instrument. It used to be the case in the U.S that the production of a dollar bill could only be undertaken by assigning a gold unit concurrently. This is no longer the case since the Nixon administration. Fractional reserve banking today does not utilize gold as a variable in the production of new money.

What has been the reaction by the IMF in a culture of debt proliferation? Well, they created their own monetary unit called the “SDR” (Special Depository Right). It’s reasonable to derive that the unit was created in the context of currency mismatches, unreconciled debtor/ creditor accounts, and imbalances in sovereign gold reserves. Could the SDR become a material talking point in place of rumours around Kate’s next “baby bump”? I’m not certain that that populous has the appetite for reality TV to go along with milk and morning corn flakes.

Hence; you might learn more about hedging and what it can do to protect your portfolio.

Twenty-Five Per Cent of Canadians Say They Face Economic Hardship

This is what an Angus Reid poll has concluded from a sampling of 2,542 Canadian adults. I’m not surprised and below I make some attributions for the troubling statistic:

1.       Trade school not seriously introduced to 16 and 17 year olds in our           system of education

2.       Liberal culture unsupportive of propelling the individual toward                 entrepreneurship

3.       Propensity to defer responsibility

4.       Proliferation of employment agencies and head hunters buffering             effect of take home pay

5.       Opportunity cost associated with young adults pampered at home             by their parents

6.       Inconvenient and costly legal system incapable of expeditiously                 handling contract disputes

7.       Poor partnering of industry and education system

8.       Absent household budgeting / undisciplined allocation of after tax             dollars

9.       Psychological compulsion to showcase lifestyle undeserving of                   income

10.   Employer payroll costs effect on tempering wages

Second Half 2018

Here you are. It’s summer and you think you owe yourself more idle time because the young ones are out of school. Wrong. It’s actually time to roll up your sleeves and show them what work is all about. There are those outstanding odd jobs around the house and the pet projects deserving of attention as well as the pursuit of continuous learning. Learning is growing and we should be doing some of it every day in order to keep the creative and inspirational juices flowing. We are inundated with stories of troubled minds through the media and at every turn there are references to chemical imbalances or hereditary predispositions when perhaps the biggest contributor to mental aberration is idleness.

The summer of 2018 will depart us and when you look back, let it be a time of productivity as well as play. Throw yourself into something worthwhile which will bring you pride. Capture memories of family adventure while incorporating engaging activities. Stimulate yourself intellectually because as the old adage goes, “leaders are readers”.

Additionally, I encourage you to reflect on your place within the economic system in the context of who you know you to be.  Nobody really knows you better than you. We fool ourselves into thinking that constructive feedback from those close to us should form a larger barometer of our being but this strategy is really rationalization for delay when in actuality the fear of execution persists.

If you are serious about taking a hard look at yourself and your current participation within the economic system, you may pick up a copy of my ebook, “Your Business Mind”.  

  

 

Signs of Erosion In Civic Health

 

1.       Fraud and corruption

2.       Dishonored contracts

3.       Property rights disrespected

4.       Rural crime frustrates farmers

5.       Civil suits backlog court houses to the benefit of lawyers receipts

6.       Littering and indifference to the infraction

7.       Brashness and deceit in politics as winning formula

8.       Inattentiveness to the elderly

9.       Pronounced tail gaiting at the speed limit

10.   Proliferation of public debt accompanied by perpetual deficits

11.   Rising pedestrian deaths

12.   Propensity to relax rules and regulations

13.   Quickness and inclination to judge others

14.   Isolation of children

2.      Police detachment with better things to do than respond to                        trespassers and bike thieves

16.   Closure of arts / music venues

17.   Graffiti

18.   Loitering and the ambivalence toward it

19.   Decline in volunteerism

20.   Usury and government’s perception and reaction to it

Out of the Valley – Book Review

Are you intrigued by the psychodynamics of dating? Have you ever wondered if that man or woman of yesteryear could have been the one? Have you suspected that that articulate attractive and poised person of interest may just have a chink in the armour? Then, Out of the Valley is for you. Cam Clark’s well constructed characters of Scott and Candice will have you reaching for this paper back at every idle moment. Although cast in darkness, it’s unwound through evolution and discovery. You’re there at their dinner table. You are transfixed by what will come of the text messages.

Cam juxtaposes between thoughts and words helping you with the disconnect. It’s the most appealing portrayal of human nature’s propensity for reservation in the face of fear. There is adversity and its confrontation. There is modesty in Scott’s manner. There is revelation in undiscovered strength and there is plot which hosts this pair. 

Have you ever found yourself in the valley? Perhaps, you’re there right now grasping for a foot hold up the escarpment in need of some edification. Cam describes the view from the valley with eloquence and meanders through the depths with gracefulness not representative of the state but typical of his writing style. 

Available on Amazon.

 

 

  

Good Samaritan Alert

After a strenuous bike ride today, I disembarked at the Marlborough station and started walking the bike down the off ramp. Upon hearing a bang, I looked into the parking lot below and a man had just turned a sharp looking white car into a large lamp post with a cement base. It was either an absent minded moment or he was distracted by his phone. He was alone in the car.

After one circle around the off ramp, I turned again to see how we was handling the assessment of the dent on the passenger door panel. By this time, a middle aged woman had arrived on the scene having exited her teal Mitsubishi Mirage and I’m intrigued. She must have seen what I heard. I make my way down and I just have to check this out. As it turns out, this woman had seen a young Jamaican man in emotional distress by the circumstance and felt compelled to console. It was that simple. She had also perceived that the young man may have been new to Canada and that he may need help in navigating the insurance system and claims process.  I complimented her sense of exemplary civics and rode home refreshed from the fatigue of a long bike ride.