GoldMoney – Alert!

02 Tuesday Dec 2008

Posted by jschulmansr in Bollinger Bands, capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, inflation, Investing, investments, Latest News, Markets, mining stocks, Moving Averages, oil, precious, precious metals, silver, Stocks, Technical Analysis, Today, U.S. Dollar, Uncategorized

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GoldMoney – Alert!

James Turk

A Successful Test of Support

In the last alert I referred to “the growing body of evidence” indicating that “the correction in gold that began after making a new record high in March above $1020 is ending.” Importantly, this point is confirmed by the following monthly chart presenting gold’s rate of exchange against the US dollar.

To explain this key development in technical terms, after making a new record high this past March, gold retraced back toward its previous record (marked in the above chart by the dashed line). Gold did the same thing back in 1978 after breaking above $200 in July that year (marked by the red circle), its previous record high. Gold climbed another 17% through October 1978, and then corrected the following month by testing $200. Support at that level held.

From there gold never looked back. It began a stellar advance that took it to $681.50, its month-end close in January 1980, the level that was just successfully tested.

The big difference between now and back then is the time needed to re-test support. The correction lasted only one month in 1978, but is now already eight months old. There are a number of reasons for this different result, but one is not the gold cartel. It was active back in the late 1970s too, dishoarding 775 tonnes from the International Monetary Fund in a vain and useless attempt to make the dollar look better by trying to cap the gold price.

The clear conclusion is that governments, even when they coordinate their effort, cannot in the end stop the market from bidding up the price of gold. So it is logical to expect a new record high for gold soon against the US dollar. It is noteworthy that gold closed this past month at new record highs against the British pound, Canadian dollar, Indian rupee and South African rand.

The driving force to exit national currencies and to buy gold is the same now as it was in the 1970s. Gold is better money than national currencies.

Published by GoldMoney
Copyright © 2008. All rights reserved.
Edited by James Turk, alert@goldmoney.com

Don’t Give Up on Gold Just Yet!+ Peter Schiff Bonus!

02 Tuesday Dec 2008

Posted by jschulmansr in capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, Moving Averages, oil, precious metals, silver, Stocks, Technical Analysis, Today, U.S. Dollar, Uncategorized

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Don’t Give Up on Gold Just Yet – Seeking Alpha

By: Keith Fitz-Gerald of Monday Morning

If you were counting on gold to boost your returns this year, chances are you’ve been cruelly disappointed. In fact, when it comes to gold-related investments, virtually every category is down, making this one of the worst years in history for gold investors.

So, why is it that the largest of the large futures traders have some of the lowest net short positions in years? And what does this tell us about gold prices in the near future?

I’ll get to that in a minute. But first …

What Went Wrong?

In my analysis, I’ve identified the three missteps most investors made. First, investors did what they’d been told to do. But in their panic, they flocked to gold on the assumption that the yellow metal would perform as advertised. They forgot the “safety first” strategy that we’ve emphasized this year – one that included a safer, more-conservative way of buying gold.

Strike one.

Adding insult to injury, very few investors (Money Morning readers aside) failed to understand that the massive “de-leveraging” process that’s been part and parcel of the global financial crisis would put downward pressure on virtually every asset class at the same time. And that includes gold. As we’ve seen in the last few months, during times of global panic, investors around the world want the safety of U.S. dollars – and a lot of them – even more than they want gold right now.

Strike two.

But, above all else, most investors failed to realize that gold, just like any other asset, produces the best returns when it is attractively priced. So most investors made the classic mistake of piling in on the basis of performance. In other words, they bought in at the top.
Strike three.

What’s Changed?

During times of crisis, investors have been taught to latch onto those asset classes with the highest relative stability – including gold and precious metals. More often than not, investors who have followed these time-proven practices have been handsomely rewarded for doing so.

This time around, however, the parameters have changed, as the increased use of such “derivative” securities as “credit default swaps” has exacerbated the fallout from the global financial crisis, and touched off the aforementioned de-leveraging process. As asset markets have melted down, hedge funds, financial institutions worldwide, and even government-controlled sovereign wealth funds have taken heavy losses, forcing them to deal with unprecedented margin calls and redemption requests. Because this has never before been part of their crisis-management process, institutional investors have engaged in a massive, concerted effort to sell anything that’s at all liquid – including gold.

Making matters worse, the so-called “carry trade” unwound with a vengeance, forcing offshore investors to buy U.S. dollars in order to offset the sell-off of dollar-denominated assets. In contrast to what you’re hearing on the news, this really is not a sign that the dollar is any stronger than other currencies. Instead it signifies that the greenback is still the global currency of choice – much to the chagrin of Russia, Venezuela and others who begrudgingly tie themselves to it.

It also highlights something that most investors forget, or perhaps never knew in the first place. For better or worse, the dollar is the most liquid of the world’s reserve currencies. Part of that’s because many assets – especially oil – are still predominately traded in dollars.

The problem is that the dollar’s healthy appearance may be just that – an appearance that covers up an inner ill health. These still-hidden maladies have been worsened by the recent machinations of “Bailout Ben” – U.S. Federal Reserve Chairman Ben S. Bernanke – and U.S. Treasury Secretary Henry M. “Hank” Paulson Jr., whose fix-it programs have created a financial Frankenstein that will chase American taxpayers for years.

When the dollar was rallying back in May, and many experts were lauding the move as a turnaround in the making for the long-languishing U.S. currency, we warned investors not to be taken in by the market’s head fake. There were just too many underlying problems for the dollar’s rally to be sustainable. Ultimately, that rally sputtered, and the dollar reversed course and continued its decline.

This time, we again suspect that the dollar is rising too far too fast and that the spike we’ve seen in recent months may be nothing more than a flameout in the making.

However, given the relationship between the greenback and the yellow metal, this leads us to believe that gold could move higher next year if investors lose faith that the dollar merits their nearly exclusive attention right now.

Two pieces of closely related information appear to support this theory:

First, even though gold prices have tanked – a reality that under ordinary circumstances would mean more supply is available – dealers of gold bullion have experienced widespread physical shortages during the third quarter, according to the World Gold Council, a top trade association for the gold-mining industry. That, in turn, led dealers to both charge more and pay more than the spot price would indicate. Particularly strong demand was noted in China, India and the Middle East.

According to a Nov. 19 press release, the World Gold Council also noted that identifiable investment demand for gold in the third quarter was up $10.7 billion to 382 tons – double the levels of a year ago. At the same time, retail investment demand rose 121% to 232 tons, with especially for gold bars and gold coins reported in the Swiss, German and U.S. markets.

At the same time, the SPDR Gold Trust (GLD) – the largest exchange-traded fund (ETF) that invests in the yellow metal – noted that it now holds 755.06 tons of gold in trust, up 6.12 tons from the prior week. This is significant because authorized market participants like GLD have to add metal and increase their trading float when buying pressure is higher than selling pressure. This suggests that gold may be reaching the end of its downside run and that it may behave more like investors expect it to in the months ahead.

Second, we find it especially interesting that the largest of the commercial futures traders now hold the smallest net short positions they have held in several years. According to the U.S. Commodities Futures Trading Commission (CFTC), large commercial traders combined net short positions reflect only 71,116 contracts net short, one of the lowest net short positions the CFTC has reported since January 2006.

Historically, low net short positions have proven to be bullish influences. And net short levels of less than 30% total open interest have proven to be especially bullish.

The wild card here, of course, is that the markets are working through a de-leveraging process that’s far from over, meaning that normal supply and demand relationships are out of whack. Longer-term, however, everything we know about those relationships still appears to be intact.

That’s why we suggest that investors make gold a part of their investment program – if for no other reason than we are approaching levels typically associated with higher, rather than lower, returns.

But we can’t just pile in.

Short-term market conditions will transform anything other than a measured approach into a hazardous foray.

That’s why, when it comes to gold, we’ve repeatedly recited the market mantra: “Gold works over time, but not all the time.” [For insights on actual gold-investing strategies, check out the Money Morning special investment research report, “The Best Way to Use Gold to Protect Your Portfolio and Profit.” The report is free of charge.]

[Editor’s Note: Money Morning Investment Director Keith Fitz-Gerald is one of the top investment commentators in the global marketplace today. A noted columnist and a highly sought after speaker, Fitz-Gerald is also a gifted forecaster. Indeed, he’s especially distinguished himself during the current financial crisis, having told investors to expect historic levels of market volatility and having accurately predicted such crisis “aftershocks” as the big spike in energy and commodity prices that took place earlier this year. A new Money Morning report identifies five such aftershocks that are still to come, and explains how savvy investors can employ such “trigger events” as potential gateways to major profits. To read this report, which details all five of the aftershocks to expect, please click here. And don’t forget to check out Fitz-Gerald’s recently published 2009 stock market forecast, part of Money Morning’s ongoing “Outlook 2009” economic forecast series.]

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$2000 Gold in 2009 says Peter Schiff

Obama, Latest Birth Certificate News – Obama Watch

02 Tuesday Dec 2008

Posted by jschulmansr in 2008 Election, Barack Obama, Currency and Currencies, Electoral College, Finance, Free Speech, id theft, Investing, investments, Joe Biden, John McCain, Latest News, Markets, Politics, Presidential Election, psychology, Sarah Palin, Today, u.s. constitution, U.S. Dollar, Uncategorized

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Obama, DNC elude citizenship lawsuit deadline

My Obama Watch Central – jschulmansr

Obama, DNC elude citizenship lawsuit deadline
Solicitor general’s office dodges questions about birth certificate complaint
By Chelsea Schilling
© 2008 WorldNetDaily

President-elect Barack Obama and the Democratic National Convention

While the Federal Election Commission waived its right to respond to the complaint on Nov. 18, the solicitor general’s office is refusing to say whether the waiver was also filed on behalf of Obama and the DNC.Berg filed his petition on Oct. 30, and according to procedure, a response from the defendants was due today. But when WND contacted the U.S. Supreme Court and the solicitor general’s office, officials referenced the FEC’s waiver and dodged any questions about Barack Obama and the DNC filing separate responses.

America’s Right blogger and legal writer Jeff Schreiber has followed the case closely.

“There are a number of reasons why the respondents here would choose not to respond,” Schreiber speculated. “First, because the court only grants between 70 and 120 of the 8,000 or so petitions it receives every year, perhaps they just liked their odds of Berg’s petition getting denied. Second, because they have made arguments as to Berg’s lack of standing several times at the district court level and beyond, perhaps they felt as though any arguments had already been made and were available on the record. Or, perhaps the waiver shows that the FEC and other respondents do not take seriously the allegations put forth by Berg, and did not wish to legitimize the claims with a response.”

But one thing that is not clear is whether the FEC is filing for itself or on behalf of all respondents, he added.

FEC attorney Gregory G. Garre is listed as the only name under “Attorneys for Respondents.” There are no additional attorneys listed for Obama or the DNC – and the waiver was filed by “respondents Federal Election Commission, et. al,” suggesting the response was on behalf of other defendants as well.

Where’s the proof Barack Obama was born in the U.S. and thus a “natural-born American” as required by Article 2, Section 1 of the Constitution? If you still want to see it, sign WND’s petition demanding the release of his birth certificate.

“As it were, the FEC’s attorney, Gregory Garre, is with the Solicitor General’s office, and does not represent Obama or the DNC,” Schreiber wrote. “While attorneys acting on behalf of a group of defendants or respondents is not necessarily rare, the difference here is the involvement of the Solicitor General’s office, a federal office.”

Court documents show the Federal Election Commission waived its right to respond on Nov. 18.

Berg told America’s Right he was taken aback when he learned that the FEC – a federal regulatory agency – had filed the waiver.

“I’m surprised because I think they should take the position that the Supreme Court should grant standing to us,” he said. “I think they have a responsibility not only to Phil Berg, but to all citizens of this country, to put forth a sense of balance which otherwise doesn’t seem to exist.

“However, if this was filed by the FEC on behalf of the DNC and Barack Obama too, it reeks of collusion,” he said, noting that the attorney from the solicitor general’s office should be representing federal respondents and not the DNC or Obama.

Imaging Guru- “Certification” of Birth Time, Location is Fake

By Bob Unruh
© 2008 WorldNetDaily

A guru on the “Certification of Live Birth” Barack Obama’s campaign posted online to rebut charges he is ineligible to be president due to the Constitution’s “natural born citizen” requirement says it’s a fake, and further, that such fraud is criminal.

The Obama campaign has told WND such allegations are “garbage,” but Dr. Ron Polarik, who holds a Ph.D. in instructional media specializing in computer technology such as printers, scanners and digital imaging, disagrees. His analyses have been posted online in a YouTube video, which also is embedded here:

He explained to WND his four months of research on the images, including nearly 1,000 test images using actual scans and photographs of real certifcates, reveal there are several “giveaways” on the image itself. For example, the document has gray and white between the lettering, not green pixels as the rest of the background document, suggesting someone cut-and-pasted or typed new information that was embedded on top of the background.

Where’s the proof Barack Obama was born in the U.S. and thus a “natural born American” as required by Article 2, Section 1 of the Constitution? If you still want to see it, sign WND’s petition demanding the release of his birth certificate.

Also, Polarik said although the Obama form has a border and seal from 2008, it purportedly was obtained in 2007. He said the seal does not match seals on other documents from 2007, but does match those from 2008. His full report is posted at Polarik.blogtownhall.com.

In Polarik’s view, there has to be a significant reason for a political candidate and campaign to go to such lengths.

“Obviously, there’s something very critical to hide, or they wouldn’t have spent the million dollars in legal fees to prevent the release of his original birth certificate,” Polarik told WND.

“There’s absolutely something to hide,” he said. “If he was born in Hawaii they would have had a luau that would be continuing today.”Not that the people who voted for him would care,” he said, “but they used this forged document to convince the American voters.

“It’s a scary thought to have someone who essentially begins his presidency as a criminal,” he said, because the use of a faked document as identification is, in fact, a crime, he noted.

“It would be hard to perform as president from behind jail cell door at Leavenworth,” he said.

The video has Polarik’s face and voice disguised and he confirmed in talking with WND that he’s using an assumed name because of the threats he’s reported receiving.

Polarik said the issue of the birth location is a “chink” in Obama’s armor, but the Democrat also has declined to release information about his college years, about his selective service and about his passports, including on what nation’s passport he traveled to Pakistan two decades ago when it was illegal to go there as a U.S. citizen.

Polarik describes his findings and conclusions on the video.

WND columnist Janet Porter has written extensively about the birth certification issue.

“Look, we’re not asking for the world here. Neither is the Constitution. Some pretty basic requirements like being 35 years old, having 14 years residency in the United States, and being a natural born citizen. When Senator John McCain was questioned about it, he showed his birth certificate without hesitating. When Barack Obama was asked by courts including the U.S. Supreme Court, he ducked and hid behind the right to privacy,” she writes.

“Ironically, when Obama was running for the State Senate, he won by disqualifying every candidate who ran against him in the primary, including a guy who had been through a nasty and salacious divorce. Even though he had a small child who could be hurt by the information being made public, a court decided that the public’s right to know; outweighed this poor fella’s right to privacy, and he backed out. Obama clings to the ‘right to privacy’ regarding his own qualifications, just not his opponents.”

She also noted the issue won’t go away, and recommended a visit to ObamaForgery.com to review what’s happening.

“These are the facts,” she wrote. “The Constitution requires the president to be a natural born citizen. Obama’s grandmother said she was there when Barack was born in Kenya. Obama refuses to release his original birth certificate. Instead of a birth certificate, Obama’s campaign posted a certification given to those born abroad. Experts have called even that document an ‘obvious forgery.'”

“Our Constitution still matters,” she said.

Her group, Faith2Action, is working on funding for the purchase of time for a new television ad on the issue.

In the Philadelphia Bulletin, constitutional lawyer Edwin Vieira said a multitude of problems could result.

“Let’s assume he wasn’t born in the U.S.,” Vieira told the newspaper. “What’s the consequence? He will not be eligible. That means he cannot be elected validly. The people and the Electoral College cannot overcome this and the House of Representatives can’t make him president. So what’s the next step? He takes the oath of office, and assuming he’s aware he’s not a citizen, then it’s a perjured oath.

“He may have nominated people to different positions; he may have nominated people to the judicial branch, who may have been confirmed, they may have gone out on executive duty and done various things,” said Vieira. “The people that he’s put into the judicial branch may have decided cases, and all of that needs to be unzipped.”

“Let’s say we go a year into this process, and it all turns out to be a flim-flam,” he told the newspaper. “What’s the nation’s reaction to that? What’s going to be the reaction in the next U.S. election? God knows. It has almost revolutionary consequences, if you think about it.”

He continued, “[The birth certificate], in theory, should be there. What if it isn’t? Who knows, aside from Mr. Obama? Does Russian intelligence know it isn’t there? Does Chinese intelligence know it isn’t there? Does the CIA know that it isn’t there? Who is in a position to blackmail this fellow?”

Vieira expressed confidence Obama eventually will be forced to produce documentation.

“Let’s assume that an Obama administration passes some of these controversial pieces of legislation he has been promising to go for, like the FOCA (Freedom of Choice) Act,” he told the newspaper. “I would assume that some of those surely will have some severe civil or criminal penalties attached to them for violation. You are now the criminal defendant under this statute, which was passed by an Obama Congress and signed by President Obama. Your defense is that is not a statute because Mr. Obama is not the president. You now have a right and I have never heard this challenged, to subpoena in a criminal case, anyone who has relevant evidence relating to your defenses. And you can subpoena them duces tecum, meaning ‘you shall bring with you the documents.'”

WND founder and editor Joseph Farah has launched a program to allow concerned voters to express their desire directly to the U.S. Supreme Court for the issue to be resolved.

A conference among the justices is scheduled Friday on a New England challenge to Obama’s eligibility.

“The case is brought by Leo C. Donofrio against Nina Wells, the New Jersey secretary of state, and questions whether Obama is a ‘natural-born citizen’ as required by Article 2, Section 1 of the Constitution,” Farah reported.

“It would seem a simple matter to resolve,” he said. “Barack Obama could have put this issue to rest long ago by producing a complete birth certificate from Hawaii. Instead, he has chosen to stonewall the matter, citing a website post of what can only be characterized as a partial representation of a birth certificate – one that has been criticized as a forgery.

“Meanwhile, some of Obama’s own Kenyan relatives claim to have been present at his birth in Mombasa. This controversy, which some have dismissed as frivolous, is as serious as the literal meaning of the Constitution itself.”

The nation’s Electoral College, the process through which Obama is to be formally voted as the next president, will meet Dec. 15, and his inaugural is scheduled Jan. 20.

Meanwhile, more than 125,000 have signed WND’s petition seeking full disclosure of Obama’s information.

The petition cites the U.S. Constitution’s requirement that no one can be sworn into office as president without being a natural born citizen. It also asserts there are questions about Obama’s reported Hawaii birth, that the Democrat has refused repeated calls to document his birth, that activist judges have declined to require him to shed light on the issue and that Hawaii – at the time of Obama’s birth – allowed parents whose children were born in other locations to register the birth there.

WND’s petition is available online, and more information is available at this link.

Make The Media Cover The Story of The Century!

Janet Porter of Faith2Action

One of the most often asked questions regarding whether or not Barack Obama meets the constitutional requirements for the office of president is: “Why hasn’t the ‘mainstream’ media covered this?” Good question.

Well, one thing we found out in the last election is there isn’t anything “mainstream” about the “mainstream” media. There is no longer any doubt about their pro-Obama bias – even the Washington Post came out and admitted it. If it weren’t for WorldNetDaily, a few radio talk shows and some blogs, we wouldn’t even know about the constitutional crisis we’re in. Interestingly, these are the first things on the chopping block in an unchecked Obama administration.

Look, we’re not asking for the world here. Neither is the Constitution. Some pretty basic requirements like being 35 years old, having 14 years residency in the United States, and being a natural born citizen. When Sen. John McCain was questioned about it, he showed his birth certificate without hesitating. When Barack Obama was asked by courts, including the U.S. Supreme Court, he ducked and hid behind the right to privacy.

Ironically, when Obama was running for the Illinois Senate, he won by disqualifying every candidate who ran against him in the primary, including a guy who had been through a nasty and salacious divorce. Even though he had a small child who could be hurt by the information being made public, a court decided that the public’s “right to know” outweighed this poor fella’s right to privacy, and he backed out. Obama clings to the “right to privacy” regarding his own qualifications, just not his opponents.

Sign the petition to demand the release of Barack Obama’s birth certificate.

The second most-asked question about Obama’s citizenship is: “Don’t you think someone would have found out the answer to these questions before now?” Also an outstanding question. Phil Berg, whose case is now before the U.S. Supreme Court, not only filed suit in August but also copied Democratic Party Chairman Howard Dean on the matter before Obama was chosen as the nominee. I would have thought that something as important as whether a potential nominee is qualified to serve in office might be worth a question or two prior to the party’s selection. But that information was ignored, and now they’re just hoping it will all go away.

It won’t. Not until Obama comes forward with the proof that the American people want and the Constitution demand.

But what can an ordinary citizen do to defend the Constitution? Instead of sitting on the sidelines wringing our hands, we can do something about it. If the “news” channels won’t cover what may be the biggest story of our lifetime, I say, let’s buy it. Help put this television ad on the air – watch it at ObamaForgery.com:

Heard the rumors about Barack Obama’s citizenship?These are the facts:

The Constitution requires the president to be a natural born citizen.

Obama’s grandmother said she there when Barack was born in Kenya.

Obama refuses to release his original birth certificate.

Instead of a birth certificate, Obama’s campaign posted a certification given to those born abroad.

Experts have called even that document an “obvious forgery.”

Obama attended school in Indonesia as Barry Soetoro, when only Indonesian citizens were permitted to attend.

Obama’s school records list his father as Lolo Soetoro and Obama’s citizenship as Indonesian.

Obama traveled to Pakistan in 1981 when it was illegal to enter as a U.S. citizen.

Sixteen lawsuits in 12 states and two cases before the Supreme Court now challenge Obama’s citizenship.

Fact: Our Constitution still matters.

http://www.obamaforgery.com

Illuminati Pictures, who produced the video of expert Ron Polarik, produced this ad that raises as many of the facts regarding Obama’s citizenship as one can fit in 60 seconds. Let’s let America hear them and add their voice to the 120,000 who signed the WND petition in the last few days.

Go to http://www.faith2action.org/ and watch the ad. Any Web donation to Faith2Action from now until Dec. 15 will go directly toward airtime to place this ad on television. How much is it going to take? Well, $12,000 buys a national 60-second ad on Fox News between 5 and 6 p.m. I say let’s buy a few of those and publicize it so the rest of the world finally hears about the constitutional crisis we’re in. Then, the Bill O’Reillys, Sean Hannitys and Rush Limbaughs may decide to cover the story of the century.

Sign the petition to demand the release of Barack Obama’s birth certificate.

Mr. Obama; Don’t Miss Today’s Chicago Tribune!

01 Monday Dec 2008

Posted by jschulmansr in 2008 Election, Barack Obama, Currency and Currencies, Electoral College, Finance, Free Speech, id theft, Investing, investments, Joe Biden, John McCain, Latest News, Markets, Politics, Presidential Election, socialism, Stocks, u.s. constitution, U.S. Dollar, Uncategorized

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Mr. Obama: Don’t Miss Today’s Chicago Tribune!

Source: We The People Foundation

MY OBAMA WATCH CENRAL – Jschulmansr

Full-Page Citizenship Challenge To Run Twice,

December 1st and 3rd

D.C. National Press Club Event: Dec 8th

An Open Letter to Barack Obama:

Are You A Natural Born Citizen of The United States?

Are You Legally Eligible To Hold The Office Of The President?

Our full-page Open Letter to Mr. Obama will be published in the Chicago Tribune on both Monday, December 1, 2008 and Wednesday, December 3, 2008. It will appear in the main news section. Click here to view a copy of the final ad.

Chicago is Mr. Obama’s hometown. His transition team is operating out of the Kluczynski Federal Building in downtown Chicago. He is known to be a regular reader of the Tribune, Chicago’s principal newspaper, with a daily circulation of over a half-million readers.

The Open Letter to Mr. Obama is a formal Petition for a Redress (Remedy) for the alleged violation of the “natural born citizen” clause of the Constitution of the United States of America.
Mr. Obama is respectfully requested to direct the Hawaiian officials to provide access to his original birth certificate on December 5-7 by our team of forensic scientists, and to provide additional documentary evidence establishing his citizenship status prior to our Washington, D.C. press conference on December 8.

A First Amendment Petition to any official of the Government for Redress of a violation of the Constitution is substantially different from the garden-variety political petitions frequently received by government officials. This Petition demands it be given the highest priority for an expedited review and official Response by Mr. Obama.

As a formal “Notice of a Constitutional Violation,” the Petition naturally includes the People’s inherent Right to an official Response. As a time-sensitive, election related Petition involving the Office of the President, failure to Respond as requested would constitute an egregious breach of the public trust and confirm the certainty of a Constitutional crisis.

For the D.C. press conference the WTP Foundation has reserved the Edward R. Murrow Room at the National Press Club from 1-4 pm on Monday, December 8, 2008. We are hopeful that C-SPAN may cover what could be a pivotal, historic event.

The Petition for Redress/Open Letter to Mr. Obama is also expected to have a significant impact on the deliberations of the Electoral College as it proceeds toward selection of the U.S. President as provided for by the Constitution.

Many, many thanks to the many individuals who donated the money needed to cover the costs of publishing the Open Letter and conducting the Washington press conference.

We are now in the process of selecting the forensic scientists who would travel to Hawaii to examine Mr. Obama’s original birth certificate (assuming he responds to the Petition for Redress by directing the Hawaiian officials to provide access to the birth certificate). The budget for this task is currently estimated at $20,000. We need to raise the money quickly. Unfortunately, we are starting from zero and we have but one week before the scientists would need to be in Hawaii.

Click Here For Copy of Ad – Or See Below:

An Open Letter to Barack Obama:

Are You A Natural Born Citizen of The United States?

Are You Legally Eligible To Hold The Office Of The President?

www.WeThePeopleFoundation.org

2458 Ridge Road Queensbury, NY 12804

info@GiveMeLiberty.org

December 1, 2008

Mr. Barack Obama

Barack Obama Transition Office

Kluczynski Federal Building

230 So. Dearborn St.

Chicago, Illinois 60604

Dear Mr. Obama:

Representing thousands of responsible American citizens who have also taken an oath to defend the Constitution of the United States of America,

I am duty bound to call on you to remedy an apparent violation of the Constitution.

Compelling evidence supports the claim that you are barred from holding the Office of President by the “natural born citizen” clause of the U.S. Constitution. For instance:

You have posted on the Internet an unsigned, forged and thoroughly discredited, computer-generated birth form created in 2007, a form that lacks vital information found on any original, hand signed Certificate of Live Birth, such as hospital address, signature of attending physician and age of mother.

 Hawaii Dept of Health will not confirm your assertion that you were born in Hawaii.

 Legal affidavits state you were born in Kenya

 Your grandmother is recorded on tape saying she attended your birth in Kenya.

 U.S. Law in effect in 1961 denied U.S. citizenship to any child born in Kenya if the father was Kenyan and the mother was not yet 19 years of age.

 In 1965, your mother legally relinquished whatever Kenyan or U.S. citizenship she and you had by marrying an Indonesian and becoming a naturalized Indonesian citizen.

You have repeatedly refused to provide evidence of your eligibility when challenged to do so in a number of recent lawsuits. Instead, you have been successful in having judges declare that they are powerless to order you to prove your eligibility to assume the Office of President.

Incredibly, the judge in Hawaii actually said it would be an invasion of your privacy for him to order access to your original birth certificate in order to prove your eligibility to hold the Office of President.

Before you can legitimately exercise any of the powers of the President you must meet all the criteria for eligibility established by the Constitution. You are under a moral, legal, and fiduciary duty to proffer such evidence.

Should you assume the office as anyone but a bona fide natural born citizen of the United States who has not relinquished that citizenship, you would be inviting a national crisis that would undermine the domestic peace and stability of the Nation. For example:

 You would always be viewed by many Americans as a poseur – a usurper .

As a usurper , you would be unable to take the required “Oath or Affirmation” on January 20 without committing the crime of perjury or false swearing, for being ineligible you cannot faithfully execute the Office of the President of the United States.

 You would be entitled to no allegiance, obedience or support from the People.

 The Armed Forces would be under no legal obligation to remain obedient to you.

 No civilian in the Executive Branch would be required to obey any of your proclamations, Executive Orders or directives, as such orders would be legally void.

 Your appointments of Judges to the Supreme Court would be void.

 Congress would not be able to pass any needed legislation because it would not be able to acquire the signature of a bona fide President.

Congress would be unable to remove you, a usurper , from the Office of the President on Impeachment, inviting certain political chaos including a potential for armed conflicts within the General Government or among the States and the People to effect the removal of such a usurper .

In consideration of the escalating constitutional crisis brought on by the total lack of evidence needed to conclusively establish your eligibility, I am compelled to serve you with this First Amendment Petition for a Redress of this violation of the Constitution. With all due respect, I ask that you immediately direct the appropriate Hawaiian officials to allow access to the vault copy of your birth certificate by our forensic scientists on Friday, Saturday and Sunday, December 5, 6 and 7, 2008.

In addition, I ask that you deliver the following documentary evidence to the National Press Club in Washington DC by 10 am on December 8, 2008, marked for my attention:

 A certified copy of your original, signed “vault” birth certificate.

 Certified copies of your reissued and sealed birth certificates in the names Barack Hussein Obama, Barry Soetoro, Barry Obama, Barack Dunham and Barry Dunham.

 A certified copy of your Certification of Citizenship.

 A certified copy of your Oath of Allegiance taken upon age of maturity.

 Certified copies of your admission forms for Occidental College, Columbia University and Harvard Law School.

 Certified copies of any legal documents changing your name.

Each member of the Electoral College, who is committed to casting a vote on December 15, 2008, has a constitutional duty to make certain you are a natural-born citizen. As of today, there is no evidence in the public record (nor have you provided any) that defeats the claim that you are

barred by law from assuming the Office of President because you fail the Constitution’s eligibility requirements.

All state Electors are now on Notice that unless you provide documentary evidence before December 15, that conclusively establishes your eligibility, they cannot cast a vote for you without committing treason to the Constitution.

“In a government of laws, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. ”Olmstead v. U.S., 277 U.S. 438”

Thank you for your understanding and cooperation in this urgent matter.

Sincerely,

Robert L. Schulz

Chairman

We The People Foundation

Golden Choice For Bailout Inflation Protection – Forbes.com

28 Friday Nov 2008

Posted by jschulmansr in Bollinger Bands, capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, Moving Averages, oil, precious metals, silver, small caps, Stocks, Technical Analysis, Today, U.S. Dollar, Uncategorized

≈ 1 Comment

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Golden Choice For Bailout Inflation Protection – Forbes.com

John Dobosz, 11.26.08, 11:50 AM EST

Gold and gold miners have taken flight in recent days as the world begins to focus on an inflationary future.

Since the problems associated with the current financial crisis began to take on a particular menace last summer, the response of our monetary institutions has involved moves that most students of economics would call inflationary, like aggressive reduction in targeted short-term lending rates and credit creation at a feverish pace.

Thanks to the deflationary forces that accompanied the unwinding of leverage in the financial system and in the flagging economy at large, the dollar actually rallied and gold suffered big time. From a post Jimmy Carter high of $1,011 in March, spot gold tumbled 30% down to $712 an ounce.

Now, however, investors seem to be awakening to the inflationary impact of the moves by the Federal Reserve and the Treasury Department. Over the past three weeks, gold has staged a rally, and over just the past week, it has looked more like a lift-off. Spot gold was above $830 for much of this holiday-shortened trading week, a gain of more than 15% from lows earlier this month, with most of that coming just since Thursday.

Moving higher more rapidly than gold bullion itself are shares of gold miners. The Philadelphia Gold and Silver Mining Index (XAU) added nearly 43% in just the past three days. This could indicate simply that the miners were more deeply oversold, or, if it persists, it could mean that investors are looking for escalating gold prices down the line. Either way, it looks like gold and the miners are staging a decent rally that could last until the first quarter of next year, according to Curt Hesler, editor of Professional Timing Service.

Hesler has several mining stocks that he likes for playing the new buoyancy in gold shares, from blue chips like Goldcorp (nyse: (GG) – news – people ) to smaller names like Yamana Gold (nyse: (AUY) – news – people ) and the tiny like US Gold Corp. (amex: (UXG) – news – people ). For smaller investors, perhaps it’s best to buy a basket of miners and jump on the train.

A great way to get into gold miners is through the Fidelity Select Gold (FSAGX) fund, a diversified grab bag that holds a small amount of gold bullion and a long roster of mining companies. Its biggest holdings are in Barrick Gold (nyse: (ABX) – news – people ), Goldcorp and Newmont Mining (nyse: (NEM) – news – people ) and Agnico Eagle (nyse: (AEM) – news – people ).

The expense ratio of FSAGX is one of the things to like most about this fund. At 0.81% it’s nearly half the 1.47% charged by most precious metals funds. Another nice feature is that it trades throughout the day, and you can get in and out when you like and even use limit orders when buying.

Lately the fund has been volatile, but it’s going in the right direction for the bulls. It’s up 40% in the past month. Of course, prior to that, it lost half of its value from late September through late October, overshooting even the steep correction in gold. Many advisers recommend an allocation of 5% to 10% in your portfolio to inflation hedges, like gold.

Click here to sign up to receive Stock of the Week next Monday morning.

Ten investing rules that will help you weather this stormy market – MarketWatch

28 Friday Nov 2008

Posted by jschulmansr in capitalism, commodities, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, inflation, Investing, investments, Latest News, Markets, mining stocks, Moving Averages, precious metals, small caps, Stocks, Technical Analysis, Today, U.S. Dollar, Uncategorized

≈ Comments Off on Ten investing rules that will help you weather this stormy market – MarketWatch

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Ten investing rules that will help you weather this stormy market – MarketWatch

By Jonathan Burton, MarketWatch

LIFE SAVINGS

Learn a lesson — before you get one

Ten rules to remember about investing in the stock market

Especially now. Investment rules are tailor-made for tough times, allowing you to stick to a plan just when you need it most. Indeed, a rulebook is important in any market climate, but it tends to get tossed when stocks are soaring. That’s why sage investors warn people not to confuse a bull market with brains.

So with the economy looking more and more like the oil-shocked, stagflation-strapped 1970s, and stocks recoiling from rising unemployment, record energy prices and falling home values, it makes sense to dust off the old playbook and see how it applies today.

One of the most relevant lists of rules, from a legendary Wall Street veteran, is also among the least known. Beginning in the late 1950s, Bob Farrell pioneered technical analysis, which rates a stock not only on a company’s financial strength or business line but also on the strong patterns and line charts reflected in the shares’ trading history. Farrell also broke new ground using investor sentiment figures to better understand how markets and individual stocks might move.

Over several decades at brokerage giant Merrill Lynch & Co., Farrell had a front-row seat to the go-go markets of the late 1960s, mid-1980s and late 1990s, the brutal bear market of 1973-74, and October 1987’s crash. Out of those and other experiences came Farrell’s 10 “Market Rules to Remember.”

These days, Farrell lives in Florida, and efforts to contact him were unsuccessful. Still, the following rules he advocated resonate during volatile markets such as this:

1. Markets tend to return to the mean over time…

By “return to the mean,” Farrell means that when stocks go too far in one direction, they come back. If that sounds elementary, then remember that both euphoric and pessimistic markets can cloud people’s heads.

“It’s so easy to get caught up in the heat of the moment and not have perspective,” says Bob Doll, global chief investment officer for equities at money manager BlackRock Inc. “Those that have a plan and stick to it tend to be more successful.”

2. Excesses in one direction will lead to an opposite excess in the other direction…

Think of the market as a constant dieter who struggles to stay within a desired weight range but can’t always hit the mark.

“In the 1990s when we were advancing by 20% per year, we were heading for disappointment,” says Sam Stovall, chief investment strategist at Standard & Poor’s Inc. “Sooner or later, you pay it back.”

3. There are no new eras — excesses are never permanent…

This harkens to the first two rules. Many investors try to find the latest hot sector, and soon a fever builds that “this time it’s different.” Of course, it never really is. When that sector cools, individual shareholders are usually among the last to know and are forced to sell at lower prices.

“It’s so hard to switch and time the changes from one sector to another,” says John Buckingham, editor of The Prudent Speculator newsletter. “Find a strategy that you believe in and stay put.”

4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways…

This is Farrell’s way of saying that a popular sector can stay hot for a long while, but will fall hard when a correction comes. Chinese stocks not long ago were market darlings posting parabolic gains, but investors who came late to this party have been sorry.

5. The public buys the most at the top and the least at the bottom…

Sure, and if they didn’t, contrarian-minded investors would have nothing to crow about. Accordingly, many market technicians use sentiment indicators to gauge investor pessimism or optimism, then recommend that investors head in the opposite direction.

Some closely watched indicators have been mixed lately. At Investors Intelligence, an investment service that measures the mood of more than 100 investment newsletter writers, bullish sentiment rose last week to 44.8% from 37.9% the week before. Bearish sentiment slipped to 31.1% from 32.2%. Meanwhile, the American Association of Individual Investors survey was less positive, with bearish sentiment at 45.8% and bulls at 31.4% .

Learn a lesson — before you get one!

6. Fear and greed are stronger than long-term resolve…

Investors can be their own worst enemy, particularly when emotions take hold.

Stock market gains “make us exuberant; they enhance well-being and promote optimism,” says Meir Statman, a finance professor at Santa Clara University in California who studies investor behavior. “Losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks.”

After grim trading days like Friday’s nearly 400-point tumble, coming after months of downward pressure on stocks, it’s easy to think you’re the patsy at this card table. To counter those insecure feelings, practice self-control and keep long-range portfolio goals in perspective. That will help you to be proactive instead of reactive.

“It’s critical for investors to understand how they’re cut,” says the Prudent Speculator’s Buckingham. “If you can’t handle a 15% or 20% downturn, you need to rethink how you invest.”

7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names…

Markets and individual sectors can move in powerful waves that take all boats up or down in their wake. There’s strength in numbers, and such broad momentum is hard to stop, Farrell observes. In these conditions you either lead, follow or get out of the way.

When momentum channels into a small number of stocks, it means that many worthy companies are being overlooked and investors essentially are crowding one side of the boat. That’s what happened with the “Nifty 50” stocks of the early 1970s, when much of the U.S. market’s gains came from the 50 biggest companies on the New York Stock Exchange. As their price-to-earnings ratios climbed to unsustainable levels, these “one-decision” stocks eventually sunk.

8. Bear markets have three stages — sharp down, reflexive rebound and a drawn-out fundamental downtrend…

Is this a bear market? That depends on where you draw the starting line. With Friday’s close, the S&P 500 Index (SPX):

(SPX) 896.24, +8.56, +1.0%) is down 13.1% since its October 9 peak. Not the 20%-plus decline that typically marks a bear, but a vicious encounter nonetheless.

Where are we now? A chart of the S&P 500 shows a couple of sharp downs and subsequent rebounds in the past six months, with a tighter trading range since April. It remains to be seen if we can avoid a tortured period of the kind seen from 2000 to 2002, when sporadic rallies couldn’t snap a slow, protracted decline.

9. When all the experts and forecasts agree — something else is going to happen…

As Stovall, the S&P investment strategist, puts it: “If everybody’s optimistic, who is left to buy? If everybody’s pessimistic, who’s left to sell?”

Going against the herd as Farrell repeatedly suggests can be very profitable, especially for patient buyers who raise cash from frothy markets and reinvest it when sentiment is darkest.

10. Bull markets are more fun than bear markets (unless you are shorting the markets)…

No kidding!

DARE SOMETHING WORTHY TODAY TOO! Bonus: Top Performing Precious Metals Mutual Funds

TOP PERFORMING PRECIOUS METALS FUNDS

FUND	1-Month Return	1-Year Return	3-Year Return
ProFunds Precious Metals (PMPIX)	42.6%	-68.8	-21.6%
Fidelity Select Gold (FSAGX)	35.4	-42.4	0.5
American Century Global Gold (BGEIX)	34.8	-48.5	-4.2
OCM Gold Fund (OCMGX)	34.1	-45.6	1.4
Evergreen Precious Metals (EKWBX)	32.5	-43.5	2.4
Franklin Gold and Precious Metals (FKRCX)	32.0	-50.6	-2.6
Van Eck Intl Investors Gold (INIVX)	31.9	-49.4	2.3
USAA Precious Metals & Minerals (USAGX)	31.6	-47.4	3.0
GAMCO Gold AAA (GOLDX)	31.6	-48.6	-1.4
DWS Gold & Precious Metals (SCGDX)	31.1	-49.8	-3.5

Through 11/24/08. Source: Morningstar.com

Obama just show us the Birth Certificate! What are you hiding?

25 Tuesday Nov 2008

Posted by jschulmansr in 2008 Election, Barack Obama, capitalism, Currency and Currencies, Electoral College, Finance, Free Speech, gold, id theft, Investing, investments, Joe Biden, John McCain, Latest News, Markets, Politics, Presidential Election, Sarah Palin, socialism, Stocks, Today, u.s. constitution, U.S. Dollar, Uncategorized

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Nov. 26th 2008

Obama just show us the Birth Certificate! What are you hiding?

The Following is a collection of the very latest news on the Obama Birth Certificate Controversy- Must Read For ALL Citizens of the United States!

MY OBAMA WATCH CENTRAL- jschulmansr

Orders from new president to spark lawsuit every time
Lawyer lining up plaintiff groups until citizenship dispute addressed!

By Bob Unruh
© 2008 WorldNetDaily

A lawyer who is playing a key role in a California lawsuit urging officials to prevent the state’s 55 Electoral College votes from being recorded for Barack Obama until questions about his citizenship are resolved says he’s organizing plans to challenge, even after the inauguration, every order, every proposal, every piece of paperwork generated by Obama.

“We will file lawsuits on his actions, every time. As long as we have money , we will keep filing lawsuits until we get a decision as to his citizenship status,” Gary Kreep, chief of the United States Justice Foundation, told WND today.

“We’re already talking to groups who are willing to be plaintiffs,” he said.

As WND reported, Kreep filed the California challenge with presidential candidate Alan Keyes as a plaintiff.

The complaint urges the California secretary of state to refuse to allow the state’s 55 Electoral College votes to be cast until Obama’s citizenship and related eligibility to hold office is resolved.

It is just one of more than a dozen legal challenges brought forward so far over Obama’s citizenship. The cases all cite Obama’s clouded history and the U.S. Constitution’s requirement that a president be a “natural-born” citizen.

Sign the petition to insist on release of birth certificate.

There have been allegations he was born in Kenya, not Hawaii as his campaign has reported, that he could be considered a British subject because of his father’s residency in what then was a British protectorate that later became Kenya, and that the “Certificate of Live Birth” posted on his website simply shows his mother registered his birth in Hawaii after he was born but does not document a location.

There also have been questions raised about his travels as a youth, including the years he spent registered as a Muslim in an Indonesian school, and his later travels to Pakistan at a time when U.S. passports weren’t welcome in that nation.

WND senior reporter Jerome Corsi traveled to Kenya and Hawaii prior to the election to investigate issues surrounding Obama’s birth. But his research and discoveries only raised more questions.

The biggest question is why Obama, if a Hawaii birth certificate exists, simply hasn’t ordered it made available to settle the rumors.

The governor’s office in Hawaii said there is a valid certificate but rejected requests for access and left ambiguous its origin: Does the certificate on file with the Department of Health indicate a Hawaii birth or was it generated after the Obama family registered a Kenyan birth in Hawaii?

Obama’s half-sister, Maya Soetoro, has named two different Hawaii hospitals where Obama could have been born, while a video posted on YouTube features Obama’s Kenyan grandmother Sarah claiming to have witnessed Obama’s birth in Kenya.

The California action was filed on behalf of Keyes, as well as Wiley S. Drake and Markham Robinson, both California electors.

“Should Senator Obama be discovered, after he takes office, to be ineligible for the Office of President of the United States of America and, thereby, his election declared void, Petitioners, as well as other Americans, will suffer irreparable harm in that (a) usurper will be sitting as the President of the United States, and none of the treaties, laws, or executive orders signed by him will be valid or legal,” the action challenges.

Kreep told WND today he’s now working with several groups that could serve as plaintiffs to challenge Obama’s actions, even from the Oval Office, should the issue remain in dispute.

“There is a reasonable and common expectation by the voters that to qualify for the ballot, the individuals running for office must meet minimum qualifications as outlined in the federal and state Constitutions and statutes, and that compliance with those minimum qualifications has been confirmed by the officials overseeing the election process,” the complaint said, when in fact the only documentation currently required is a signed statement from the candidate attesting to those qualifications.

The issue is much more important than a single candidate, said Judge Roy Moore, the former chief justice of the Alabama Supreme Court and a WND columnist. He now runs the Foundation for Moral Law.

Moore had his own constitutional confrontation when he was removed from his position Alabama Supreme Court chief justice after he refused to remove from state grounds a monument recognizing the Ten Commandments as the foundation for U.S. law.

“We can survive four years of any president; we cannot survive without a Constitution,” he told WND. “This calls for a major investigation. Our Constitution is at stake.”

Moore said the requirement for a president to be a natural-born citizen is clear in the Constitution. The document, he added, provides procedures to amend the requirement, but that hasn’t been done.

“We live under the rule of law,” he warned, “If we start ignoring that. …”

A WND reader agreed in a letter to the editor.

“If Obama is allowed to take office without proving his citizenship, then we have no Constitution. America as it’s been will be dead. If an easy to understand rule is ignored, then the others harder to understand will be easy to ignore,” wrote Tony Costello.

Moore said, “If a person is not qualified, he’s not qualified. It doesn’t matter who it is, Republican, Democrat, black or white, rich or poor.”

He added the members of the Electoral College have an obligation to verify Obama’s qualifications before voting for him.

But he said the dispute may end up with court action, too.

“The courts are there to uphold the law. People have a right to change the Constitution. But until then it’s the rule of law,” he said.

“I don’t see any reason a candidate who has such a serious question would not come forward with the truth about where he was born,” Moore said.

“The Supreme Court has to answer this. They have to do it by law and not by the popularity of a person. If we do that, we might as well throw the Constitution out the window,” Moore said.

“[Obama] has the answer. He knows where he was born. If he tells something that’s untrue that’s another matter. It’s not an Obama issue, it’s an American issue. It’s about the Constitution of the United States.”

U.S. State Department officials declined to respond to WND inquiries about the process for keeping a U.S. citizenship while attending schools in Indonesia, or the possibility of a U.S. citizen keeping that status while traveling on another nation’s passport.

But several online “fact” sites have reported that the concerns over Obama’s citizenship are much ado about nothing.

Factcheck.org, for example, has posted an image described as Obama’s “birth certificate.” But within the image can be seen the words “Certificate of Live Birth,” which is not the same document. In Hawaii at the time Obama was born the state would issue a “Certificate of Live Birth” to a parent registering a birth, but it does not indicate the location of the birth.

“FactCheck.org staffers have now seen, touched, examined and photographed the original birth certificate,” the group said in a statement accompanying the image of the “Certificate of Live Birth.”

Snopes, also, attested to Obama’s U.S. citizenship, citing information from the campaign itself.

However, WND columnist Janet Porter, who has investigated the dispute, wrote in her column today that there are too many questions to ignore.

“In Hawaii, a Certification of Live Birth is issued within a year of a child’s birth to those who register a birth abroad or one that takes place outside a hospital,” she said.

She cited the work of Ron Polarik, who holds a Ph.D. in instructional media and specializes in computer graphics with over 20 years experience with computers, printers and typewriters.

“Polarik has submitted a signed affidavit and has now released his findings on video at http://www.obamaforgery.com/ with his identity masked and voice altered to guard against the carrying out of threats, which he has already received,” Porter wrote.

“The Summary: The Certificate of Live Birth documents posted on Mr. Obama’s website http://www.fightthesmears.com/, Daily Kos (a pro-Obama blog) and factcheck.org, (a pro-Obama political research group), were found to be altered and forged,” she said.

The researcher cited problems with pixels in the image and a fold line and a blurry border. He asserts the border is a 2007 version while the seal and signature are from 2008.

She also cited issues beyond the birth certificate.

“There’s the matter that Obama traveled to Indonesia, Pakistan, Southern India and Kenya in 1981. He said he went to Indonesia to see his mother. This seemed plausible, except for the fact that his mother returned to Hawaii in August of 1980 to file for a divorce from her second husband, Lolo Soetoro. Unless she went back to pal around with the man she divorced, she wasn’t there at the time of Obama’s visit,” Porter wrote.

“There’s another problem. No record of Obama holding an American passport prior to the one he received once becoming a U.S. senator has been found. If he traveled to Pakistan with an American passport, he wouldn’t have been allowed in – since Pakistan was in turmoil in 1981 and under martial law. It was also on the State Department’s travel ban list for U.S. citizens,” she wrote.

“If he couldn’t get into Pakistan with a U.S. passport, perhaps he went there with an Indonesian passport. But the only way you can get one of those is if you are an Indonesian citizen,” she wrote.

Porter encouraged residents to contact the members of the House Judiciary Committee with a request to hold congressional hearings and write to the U.S. Supreme Court to request a ruling.

On the FederalistBlog the writers concluded:

“A child born to an American mother and alien father could be said to be a citizen of the United States by some affirmative act of law but never entitled to be a natural-born citizen because through laws of nature the child inherits the condition of their father.”

Obama’s mother held U.S. citizenship, but his father never did.

WND also reported that Herb Titus, the Constitution Party’s running mate to Howard Phillips in 1996 and recognized authority on the U.S. Constitution, said it is up the electors from the 50 states to make certain Obama is a natural-born U.S. citizen before they cast votes for him in the Electoral College Dec. 15.

“If they do their duty, they would make sure that if they cast a vote for Mr. Obama, that Mr. Obama is a natural-born citizen,” he told WND.

“I think it should be resolved. The duty is in the Electoral College. Every Obama elector that is committed to casting a vote on the 15th of December, they have a constitutional duty to make certain whether Mr. Obama is a natural-born citizen,” he said.

If the electors fail their duty and Obama proves ultimately to fail the eligibility requirement of the U.S. Constitution, there would be only the laborious, contentious and cumbersome process of impeachment available to those who would wish to follow the Constitution, he suggested.

On WND’s new forum page, the level of frustration was rising. Dozens contributed their thoughts immediately after the forum was posted:

“What makes Obama non-respon[sive] to the simplest of requests?” asked one reader. “Does he think that it is politically incorrect to ask for authentication of the myriad of facts about himself … Is he testing the grounds to see how far he can play with this charade?”

Other comments included:

“Obama won his first election ever by getting three Democratic opponents thrown off the ballot? He’s all for using the law to help himself win. Wouldn’t it be ironic if he is not allowed to serve as president due to the law? … Turn around is fair play!
“Even the left-wing liberal news media is beginning to ask the question: ‘Who is this man we have elected? We really do not know much about him.'”
“Obama’s refusal to produce the ORIGINAL given birth certificate gives us all pause. His silence on these allegations is deafening. The anointed one believes that if he can hold us all back until he’s in the Oval Office he’s hit a home run and he’s ‘safe.’ Ah, not so! Check your law, Obama, and you will see that even if were to make it to the White House you will no longer be able to hide behind those red velvet ropes.”
“There must be something that would have caused him great harm prior to the election, and would have stopped him from becoming elected. What could that little piece of information be?”

Rathergate II: Certification of Live Birth a clear forgery

From FAITH TO ACTION – JANET PORTER

The media bought it. The voters bought it. And now some in Congress are resisting the idea of congressional hearings because they believe that Barack Obama’s “birth certificate” has been posted online.

Not so.

What was posted was not a birth certificate, but something that resembles a “Certification of Live Birth” or COLB, which, even if authentic, does not prove “natural born” U.S. citizenship. You see, in Hawaii, a Certification of Live Birth is issued within a year of a child’s birth to those who register a birth abroad or one that takes place outside a hospital.

It’s Rathergate all over again with more amiss than a 1970s Selectric typewriter. But before I tell you what the experts found, let me ask you a few questions:

If you were a natural born American citizen and had it within your means to quiet all the lawsuits and questions with proof, would you do it?

If you were a natural born American citizen, would you spend thousands of dollars to fight the legal cases against you, or would you simply answer the legitimate question of whether you meet the constitutional requirements for office?

If you were a natural born American citizen, would you forge a document called a “Certification of Live Birth” and tell the public it was a real “birth certificate”?

If someone were to violate the law by manufacturing a forgery in order trick the public, would that be enough evidence for members of Congress to conduct hearings and for a court to issue an order for the critical records, including the original long-form birth certificate (signed by the doctor) to ensure that the U.S. constitutional requirements for office were not violated? After all, Congress is sworn to uphold and defend that Constitution, and the justices on the U.S. Supreme Court are “guardians” of the Constitution. That’s their job, isn’t it?

Ron Polarik, who holds a Ph.D. in Instructional Media and specializes in computer graphics with over 20 years experience with computers, printers and typewriters, has come forth with more definitive evidence than the word processor that tried to simulate a 1970s Selectric typewriter.

Polarik has submitted a signed affidavit and has now released his findings on video at http://www.obamaforgery.com/ with his identity masked and voice altered to guard against the carrying out of threats, which he has already received.

Just Received Into my Emailbox- YOU MUST READ THIS TOO!

From: GOPUSA [mailto:eagle@gopusamedia.com]
Sent: Tuesday, November 25, 2008 12:59 PM
To: jschulmansr
Subject: Team Obama Calls Birth Cert. Request Garbage
— The following e-mail comes from one of our sponsoring advertisers. Through their support, GOPUSA can continue to bring you the best array of conservative news, information, commentary, and discussions.
Source: UNITED STATES JUSTICE FOUNDATION

Team Obama:”All I can tell you is that it is just pure garbage.”

According to the WorldNetDaily headline above, that was the retort of an Obama campaign spokesperson when asked about complaints requesting that Senator Obama produce a valid Birth Certificate to prove that he is constitutionally eligible to be President of the United States.

Article 2, Section 1, of the Constitution of the United States, states, “No person except a natural born citizen of the United States, at the time of adoption of this Constitution, shall be eligible to the office of President.”

The Constitution of the United States is NOT “garbage” and furthermore, securing the rights of the people under the Constitution is NOT “garbage”!

The Obama campaign’s response is an elitist, condescending slap in the face to patriotic Americans. No one is above the law and Team Obama cannot make the question of Obama’s eligibility go away by disrespecting the American people – and, by inference, the Constitution of the United States.

That’s why we just filed an action that Senator Obama will not be able to ignore… an action that WILL NOT GO AWAY!

In fact, in my humble opinion… we will ONLY “LOSE” if we do NOT have the resources we need to carry on for as long as it takes, and we will “win” as long as we can carry on this fight (more on that later).

The Obama campaign has a crack team of high-priced law firms – that’s not three lawyers but THREE LAW FIRMS – that will use every means that money! can buy to fight this action. We’re relying on you and patriotic Americans like you.

Why The “Berg Case” Is Dead In The Water And Why USJF Will Succeed…

You probably already know that Pennsylvania attorney Philip J. Berg filed a suit in U.S. District Court several months back contending that Senator Obama is not a “natural-born” citizen.

And you probably already know that the court dismissed the suit claiming that Berg, as a private citizen, “lacked standing to bring the case.”

Of course, Berg is not the only one who has filed an action and the “Berg Case” is not the only one in which the courts have relied upon the lack-of-standing technicality.

Georgia Superior Court Judge Jerry W. Baxter denied an action saying to the plaintiff Rev. Tom Terry, “I don’t think you have standing to bring this suit.”

Washington State Superior Court Judge John Erlick dismissed yet another suit ruling that even the Secretary of State did not have authority to inquire about Senator Obama’s birth certificate.

Can you believe it? What’s going on? Well, perhaps Berg said it best;
“This is a question of who has standing to uphold our Constitution. If I don’t have standing, if you don’t have standing, if your neighbor doesn’t have standing to question the eligibility of an individual to be president of the United States — the commander in chief, the most powerful person in the world — then who does?”

Of course, Berg’s statement also illustrates why the “Berg Case” and some of these other actions are doomed to fail and why we believe our action WILL succeed!

Simply stated, the lack-of-standing argument is already out there. Yes, it’s egregious but the all too sad reality is that judges will continue to grab onto it like a life-preserver now that it has been put into play… the die has ! been cast!

That’s why USJF is taking a different approach. Our petitioners are Dr. Alan Keyes, Dr. Wiley S. Drake, Sr. and Markham Robinson!

We state in the Petition we just filed with the court:
“The parties in this case have standing to bring this litigation, due to the fact that Dr. Keyes and Dr. Drake, Sr., are candidates on the California ballot for President and Vice President of the United States, and Mr. Robinson is an Elector for the Keyes-Drake ticket, and Vice Chairman of America’s Independent Party, of Fenton, Michigan, which nominated Dr. Keyes for President. He is also a Chairman of the American Independent Party (California), which nominated Dr. Keyes and Dr. Drake for President and Vice President, respectively. Based on the foregoing, it is imperative for SOS to be provided proof that Senator Obama is a ‘natural born’ citizen.”

Alan Keyes and Wiley Drake were actually on the ballot in California and Markham Robinson is an Elector for Keyes-Drake. If they don’t have standing, one would be hard-pressed to find ANY! ONE who has standing and if the court attempts to use the lack-of-standing argument, it’s an implied admission that NO ONE has standing to enforce the Constitution!

The Usurper-in-Chief…

Now… a dose of reality. Frankly, a case of this magnitude could be in the courts for years. There are no quick solutions… BUT THAT’S OKAY.

The key is in the following statement which also appears in the Petition:

“Should Senator Obama be discovered, after he takes office, to be ineligible for the Office of President of! the United States of America and, thereby, his election declared void , Petitioners, as well as other Americans, will suffer irreparable harm in that an usurper will be sitting as the President of the United States, and none of the treaties, laws, or executive orders signed by him will be valid or legal.”

Part of that statement bears repeating:

“… none of the treaties, laws, or executive orders signed by him will be valid or legal.”

In other words, as long as this case is in the courts, a cloud hangs over Senator Obama’s head and for the sake of our Constitution and our Republic, the issue MUST be resolved!

If President Obama issues an Executive Order to rescind the Mexico City Policy and allows the tax dollars of Americans to fund orga! nizations that promote abortions overseas, the door to question the legitimacy of that Executive Order remains open.

If President Obama signs a treaty with an unfriendly power or an agreement with the United Nations, the door to question the legitimacy of that treaty remains open.

If President Obama signs a bill granting amnesty to illegal aliens into law, the door to question the legitimacy of that law remains open.

If President Obama appoints new Commissioners to the Federal Communications! Commission (FCC) who bring back the so-called Fairness Do ctrine, the door to question those appointments and the legitimacy of the actions taken by his appointees remains open.

That’s not to say that he can’t or won’t be able to fulfill the duties of his office, but until this matter is resolved… until he can validate that he is constitutionally eligible to be President of the United States, the door will always remain open to question and challenge the legitimacy of his actions and the dire consequences of those actions.

In short… as long as we have the resources to fight, we’re ahead of the game!

That’s where you come in.
The United States Justice Foundation (USJF) is a nonprofit public interest, legal action organization and has been your conservative voice in the courts since 1979. And since USJF is a 501(c)3 nonprofit, your generous assistance is also TAX DEDUCTIBLE!

You can use this link or the hyperlink below to help – it’s TAX DEDUCTIBLE. Is it worth a TAX DEDUCTIBLE effort of $5000 or $2500 or even $100 or $50 or $25 to defend the Constitution and the integrity of our electoral process?

https://secure.conservativedonations.com/usjf_house/?a=1922

Please use the hyperlink above to make your best TAX-DEDUCTIBLE effort to be a part of this battle.

I’m Not Living In The Real World…

To be brutally blunt, a case of this magnitude may not be won or lost on the merits.

I’m very proud of USJF’s accomplishments over the past 29 years.

We’ve defended Minuteman Civil Defens! e Corps members protecting our borders from illegal aliens.

We handled litigation against Hillary Clinton for campaign finance fraud in her 2000 Senate race.

We’ve submitted testimony before the United States Senate on Supreme Court appointees.

But all that won’t really matter. It won’t matter which side has the most skilled attorneys. Talent, competence and experience do not assure victory.

Here’s the bottom line.

Team Obama presently has THREE LAW FIRMS at its disposal – and a seemingly unlimited ability to raise funds from the far-left for more legal help.

This potentially translat! es to hundreds of attorneys and law clerks who can literally throw paperwork at us until we crack under the sheer pressure and cry uncle.

Team Obama WILL try to wear us down (which by the way is yet another reason why the “Berg Case” and many of the others – as mentioned earlier – are doomed to fail and why we CAN get the job done).

They’ll stall and delay and throw paperwork at us so fast, so furiously and for so long… then they’ll wait for us to break under the strain and give up. Or so they think…

Team Obama doesn’t fear our skill or the merits of our case.

The ONLY THING THEY FEAR IS YOU!

They hope and pray that you will not support our efforts or that! you will grow tired of the fight. What they fear most is that you will join us and support our efforts!

They know that if you support us, we’ll have the ability to take on additional clerical and research staff, cover court fees, file briefs and take on outside counsel on an as-needed basis.

That’s why they’re praying you don’t help us… but we’re praying that you do!

USJF wasn’t approached by a group of hot-shot movers and shakers. We took on this burden because like you we love this great country and we REFUSE to stand idly by while the Left disrespects the Constitution, the American people and our electoral process.

USJF is a nonprofit public interest, legal action organization. We go where others fear to tread. We’re adept at taking on vastly superior forces. And we’re committed to hitting the trenches on this one and will! ing to get bloody if we must.

That’s our promise to you.

But, in the end, our commitment and our “pit-bull” determination doesn’t amount to a hill of beans.

Winning or losing is NOT in our control… and it’s not in Team Obama’s control… IT’S IN YOUR HANDS!

A lot of folks are very angry over Barack Obama’s refusal to validate his eligibility to be President of the United States.

Is it worth a TAX DEDUCTIBLE effort of $5000 or $2500 or even $100 or $50 or $25 to defend the Constitution, the rights of Patriotic Americans under the Constitution and the integrity of our electoral process?

Is it worth forwarding this e-mail to ! your family and friends with a personal note asking them to join the f ight?

The choice is now up to you.

Please help us and after helping us, please forward this e-mail to everyone in your address book.

We’re in… how about you?
The United States Justice Foundation (USJF) is a nonprofit public interest, legal action organization and has been your conservative voice in the courts since 1979. And since USJF is a 501(c)3 nonprofit, your generous assistance is also TAX DEDUCTIBLE!

https://secure.conservativedonations.com/usjf_house/?a=1922

Please use the hyperlink above to make your best TAX-DEDUCTIBLE effort to be a part of this battle.

In His Service

Gary Kreep, Executive Director
United States Justice Foundation

My Note – I made a donation and hope you will join me!!!

jschulmansr

The Summary: The Certificate of Live Birth documents posted on Mr. Obama’s website http://www.fightthesmears.com/, Daily Kos (a pro-Obama blog) and factcheck.org, (a pro-Obama political research group), were found to be altered and forged.

The problem of the pixels: When you have a green patterned document such as this, there should be a lot of green pixels from the background showing up between the letters that appear on the certification. But in this case, instead of green pixels, there are white and grey pixels between the letters, which result when you replace existing text with other text.
There is no second fold line. The pictures show two folds – necessary to fit any COLB into an envelope for mailing, but the document itself shows only one fold. This is another indication of document alteration.
There’s a blurred border. The border has a lower resolution than the rest of the document, which is another indication that it has been altered.
The border is one that is used in 2007 COLBs. As a security measure, Hawaii changes their borders every year. This is when the Obama campaign claims the certificate was obtained. That is fine except for the problem that …
The seal and signature stamp are from a 2008 COLB. As revealed by a process called edging, the Hawaiian seal and signature stamp on the back of the document are revealed to be from the wrong year!

Like with Rathergate, when you’re creating documents, make sure you use only a typewriter that was invented at the time you report the document was manufactured. When posting a “Certification of Live Birth,” make sure you “borrow” only from documents used in the same year!

Be sure to sign the petition demanding evidence of Barack Obama’s constitutional qualifications.

But beyond the birth certificate issue, there’s the matter that Obama traveled to Indonesia, Pakistan, Southern India and Kenya in 1981. He said he went to Indonesia to see his mother. This seemed plausible, except for the fact that his mother returned to Hawaii in August of 1980 to file for a divorce from her second husband, Lolo Soetoro. Unless she went back to pal around with the man she divorced, she wasn’t there at the time of Obama’s visit.

There’s another problem. No record of Obama holding an American passport prior to the one he received once becoming a U.S. senator has been found. If he traveled to Pakistan with an American passport, he wouldn’t have been allowed in – since Pakistan was in turmoil in 1981 and under martial law. It was also on the State Department’s travel ban list for U.S. citizens.

If he couldn’t get into Pakistan with a U.S. passport, perhaps he went there with an Indonesian passport. But the only way you can get one of those is if you are an Indonesian citizen.

That’s quite possible since under Indonesian law, when a male acknowledges a child as his son, it deems the son – in this case Obama – to be an Indonesian state citizen, which was also recorded by Obama’s school record.

So, if he didn’t go to Indonesia in 1981 to visit mom (who had returned to Hawaii by then), might it have something to do with the fact that Indonesian passports expire every five years and it was time for renewal?

Why does that matter?

If Obama would have been a U.S. citizen, 8 USC §1481(a)(2) provides loss of nationality by native born citizens upon “taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state … after having attained the age of eighteen years,” in violation of 8 U.S.C. §1401(a)(1). Simply put, since Indonesia did not allow for dual citizenship, if Obama got that passport in 1981, when he was 20 years old, he effectively renounced any U.S. citizenship he may have had.

So, if the experts are right, Obama forged a Certification of Live Birth to fool America. In addition to the automatic Indonesian citizenship granted to a child acknowledged as a “son” by an Indonesian male citizen, and the Indonesian citizenship listed in Obama’s school records, Obama then traveled to a place where Americans weren’t allowed to go, but citizens of Indonesia were. If he obtained an Indonesian passport on his trip in 1981, he effectively renounced any American citizenship he may have had and cannot serve as president (or “rule” as president, as members of his campaign have stated). These are serious questions that must have answers.

If Obama gets into office without verification that he has met the requirements of the U.S. Constitution, if you care about life, liberty or the family, you’re going to have to make hundreds of calls to try and fight an agenda that seeks to silence you.

There is a way to help prevent this. Our founders sacrificed their lives, their fortunes and their sacred honor. I’m asking you to do three things.

Fast and pray for all the hidden things to come to light.
Call the Republican members of the House Judiciary Committee – in their district offices while they’re home this week for Thanksgiving. Ask them to “Please hold congressional hearings to investigate whether Barack Obama meets the basic constitutional requirements for the highest office of the land.”
Write a letter to the nine Justices of the United States Supreme Court (names are listed below) and put them in a FedEx (or other overnight) envelope to:U.S. Supreme Court
1 First Street, N.E
Washington, D.C. 20543

Our Constitution matters and defending it is going to take an outcry from the public. The electors vote on Dec. 15. The numbers are below and your immediate action is critically needed right now. Do it before defending our liberties costs a lot more than making some phone calls and writing a few letters.

The Republican House Judiciary members: Call them at 202-225-3121, AND most importantly reach them in their district offices:

Lamar Smith (Texas), ranking member, critical in any hearings: 512-306-0439 Austin, 830-896-0154 Kerrville, and 210-821-5024 San Antonio.

James Sensenbrenner (Wisconsin) 800-242-1119 or 262-784-1111 Brookfield

Howard Coble (North Carolina) 336-333-5005 Greensboro, 336-626-3060 Asheboro, 336-886-5106 High Point, 226-229-0159 Graham, 704-209-0426 Granite Quarry

Elton Gallegly (California) 800-423-0023 or 805-497-2224 Thousand Oaks, 805-686-2525 Solvang

Bob Goodlatte (Virginia) 540-432-2391 Harrisonburg, 434-845-8306 Lynchburg, 540-857-2672 Roanoke, and 540-885-3861 Staunton

Steve Chabot (Ohio) 513-684-2723 Cincinnati

Dan Lungren (California) 916-859-9906 Gold River

Chris Cannon (Utah) 800-571-2971 Provo, 801-569-5125 West Jordan

Ric Keller (Florida) 407-872-1962 Orlando, 888-642-1211 Eustis, 888-642-1211 Ocala

Darrell Issa (California) 951-693-2447 Temecula, 760-599-5000 San Diego

Mike Pence (Indiana) 765-640-2919 Anderson, 765-962-2883 Richmond, 765-747-5566 Muncie

Randy Forbes (Virginia) 757-382-0080 Chesapeake, 804-526-4969 Colonial Heights, 434-634-5575 Emporia

Steve King (Iowa) 641-782-2495 Creston, 712-580-7754 Spencer, 712-325-1404 Council Bluffs, 712-224-4692 Sioux City, 712-732-4197 Storm Lake

Tom Feeney (Florida) 386-756-9798 Port Orange, 407-208-1106 Orlando, 321-264-6113 Titusville

Trent Franks (Arizona) 623-776-7911 Glendale

Louie Gohmert (Texas) 866-535-6302 Lufkin/Marshall/Nagadoches, 903-236-8597 Longview, 903-561-6349 Tyler

Jim Jordan (Ohio) 419-522-5757 Mansfield, 419-999-6455 Lima, 419-423-3210 Findlay

Supreme Court Justices

Chief Justice John Roberts

Associate Justices:

Samuel A. Alito
Clarence Thomas
Antonin Scalia
Anthony M. Kennedy
David H. Souter
John Paul Stevens
Stephen G. Breyer
Ruth Bader Ginsberg

How important is the Constitution to you? Forward this to all you know.

Be sure to sign the petition demanding evidence of Barack Obama’s constitutional qualifications.

Proofin’ the prez: Who’s in charge? – Obama Update

25 Tuesday Nov 2008

Posted by jschulmansr in 2008 Election, Barack Obama, capitalism, Electoral College, Free Speech, id theft, Joe Biden, John McCain, Latest News, Markets, Presidential Election, Sarah Palin, Today, u.s. constitution, U.S. Dollar, Uncategorized

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Proofin’ the prez: Who’s in charge?

By Bob Unruh
© 2008 WorldNetDaily

OBAMA WATCH CENTRAL
Proofin’ the prez: Who’s in charge?
Constitutional lawyer says electors have duty to investigate citizenship

A one-time vice presidential candidate who is considered an expert on the U.S. Constitution says it is up the electors from the 50 states to make certain President-elect Barack Obama is a natural-born U.S. citizen before they cast votes for him in the Electoral College Dec. 15.

“If they do their duty, they would make sure that if they cast a vote for Mr. Obama, that Mr. Obama is a natural-born citizen,” Herb Titus, the Constitution Party’s running mate to Howard Phillips in 1996, told WND today.

The issue of Obama’s citizenship has been in the news for weeks as multiple legal claims have asserted the Democrat is not a natural-born U.S. citizen. There have been claims he was born in Kenya, that he’s a British subject because of his father and that he lost his citizenship in Indonesia.

Two of the cases are pending before the U.S. Supreme Court and several others that have fallen by the wayside.

Also, thousands of people are jumping aboard a petition that demands documentation of Obama’s eligibility to hold the highest office in the U.S., not just assurances from party officials.

As of this afternoon, about 70,000 petitioners have joined the effort coordinated by WND founder and editor Joseph Farah.

To participate, sign the petition here.

A report accompanying Farah’s petition explains the many questions raised about Obama’s eligibility, from an apparently fabricated “Certification of Live Birth” posted online to questions about what nation’s passport he used to travel to Pakistan.

One case is scheduled for a conference among U.S. Supreme Court justices Dec. 5. Conferences are private meetings of the justices at which they review cases and decide which ones to accept for formal review. The Supreme Court’s website listed the date for the case brought by Leo C. Donofrio against Nina Wells, the secretary of state in New Jersey, over not only Obama’s name on the 2008 election ballot but those of two others, Sen. John McCain and Roger Calero.

Do you agree with contentions made in “The Audacity of Deceit” about the impact of an Obama White House on the United States?

The case, unsuccessful at the state level, was submitted to Justice David Souter, who rejected it. The case then was resubmitted to Justice Clarence Thomas for conference Dec. 5.

Titus holds a law degree cum laude from Harvard, is admitted to practice before the U.S. Supreme Court and a long list of federal court districts, and helped found a law school. He told WND the framers of the Constitution specifically wanted the electors, citizen voters from all the states, to determine the presidency to avoid chief executives who are indebted to political parties or court decisions.

In 1788, Titus noted, Alexander Hamilton wrote in the Federalist Papers on the issue of the presidential election that “nothing was more to be desired than that every practicable obstacle should be opposed to cabal, intrigue, and corruption.”

“They have not made the appointment of the president to depend on any pre-existing bodies of men, who might be tampered with beforehand to prostitute their votes; but they have referred it in the first instance to an immediate act of the people of America, to be exerted in the choice of persons for the temporary and sole purpose of making the appointment,” Hamilton wrote. “And they have excluded from eligibility to this trust, all those who from situation might be suspected of too great devotion to the president in office. No senator, representative, or other person holding a place of trust or profit under the United States, can be of the numbers of the electors.

“Talents for low intrigue, and the little arts of popularity, may alone suffice to elevate a man to the first honors in a single state; but it will require other talents, and a different kind of merit, to establish him in the esteem and confidence of the whole Union, or of so considerable a portion of it as would be necessary to make him a successful candidate for the distinguished office of President of the United States,” Hamilton wrote in support of the concept of the Electoral College.

If the electors fail, Titus said, “I think it moots the point.”

“I don’t think there is anything in the Constitution [that would allow a challenge based on a candidate’s constitutional qualifications.]

“It would politically undermine Obama’s re-election … and there may be an impeachment if someone concluded he deliberately misled the people, and knew he was not a natural-born citizen,” he said.

Titus said the evidence clearly shows there are questions about Obama’s birth that should be resolved. But he said he doesn’t believe the courts will do anything, nor should they.

“If it’s revealed it’s only going to be [revealed because of] investigative journalism or by Obama himself,” he said.

“It’s only the Electoral College that has the duty and authority to determine is a person is qualified to be president,” Titus said.

“We should act accordingly, get the names of all the electors, including McCain’s electors, and urge them to do their duty,” he said.

He said, however, the bottom line is that there are some people who would rather ignore the Constitution than dispense with a candidate who may be unqualified.

“Politically, [being ineligible] would be a very serious problem for [Obama,]” he said. “But there also would be people who would only shrug.”

“It’s up to the people. Essentially the Constitution is a covenant of the people with their government. If the people don’t insist on their government officials abiding by the covenant, I don’t know what you can do,” he said.

Titus said the basis of a natural-born requirement traces back to the Old Testament, where Moses prophesied about the people of Israel getting a king.

“The whole notion of a natural-born citizen is designed for the purpose of making sure that the chief executive would not have politically divided loyalties,” he said.

Supreme Court would decide?

Meanwhile, a veteran law enforcement officer and director of criminal justice courses says he believes the 2008 election results ultimately could come down to a decision by the U.S. Supreme Court, which issued a ruling eight years ago that helped put George W. Bush in the White House.

The assessment comes from James H. Hafeman, a veteran of decades in law enforcement who supervised an armed security force, taught criminal justice and directed criminal justice programs in Michigan. He submitted a commentary to WND, outlining his evidence.

Hafeman said his argument is based mostly on the U.S. Constitution, which outlines the requirements for eligibility for president, including that the candidate be a “natural-born” citizen.

While replacing a president is outlined in the Constitution, he warned the replacement of a president-elect who is found to be ineligible isn’t simple.

“While many have speculated that an official declaration of Obama’s ineligibility may lead to the appointment of Joe Biden as president, the speculation is inaccurate. Since it was up to the respective political party to properly vet their candidate before a primary election, they may not qualify to be rewarded for their lack of integrity. Additionally there is no separate balloting for president and vice-president; they share the same slot. Obama’s ineligibility would effectively void the entire Obama-Biden ticket,” he said.

Therefore, he said, other provisions likely would come into play.

“We already know that if two candidates have an equal number of Electoral College votes, the members of the House of Representatives will collectively choose the president. Many citizens have been led to believe that it is the responsibility of the House is to decide the winner by majority vote, but that is incorrect. Members of the House of Representatives from each state would meet in a state-caucus type of meeting and vote with all congressional members from their respective state. The majority of the state’s delegation would only have only one vote. Out of the 50 votes allotted among the House of Representative members, 25 plus a minimum of one vote would be required to elect the president,” he wrote.

William Ball, a political science professor at Northern Michigan University, has said, “The results of the Electoral College are sent to the president of the Senate, but if there is no winner, then the House of Representatives, not the whole Congress, decides who will be president. But, in this process the State of Vermont or Wyoming with their one vote each would have as much power as California or New York.”

Hafeman said the Constitution demands the same process for a situation in which a seated president becomes ineligible, but Obama won’t be inaugurated until Jan. 20.

“This may be the first known case where a presidential candidate intentionally attempted to side step the specific requirements of the Constitution in order to run for the office of president,” Hafeman said. “The 12th Amendment is quite clear. If the president is found ineligible, the vice-president shall become the president. However, the key is the ‘president,’ not the president-elect. In other words, if Mr. Obama is found ineligible to hold the office prior to his January 20, 2009, inauguration, the 12th Amendment would not necessarily be the guiding instrument for the Supreme Court.

“The Justices would be free to make their own determination regarding the specifics of the general election,” Hafeman wrote.

So, Hafeman concluded, the high court may have to make some decisions.

If the worse fears about Obama’s birthplace prove true, Hafeman said, the court will have to decide the consequences for providing inaccurate assurances of eligibility.

“Second, what process will be used to designate someone who will assume the office?” he wrote.

“Since all the secretaries of state will be forced to nullify the Obama-Biden ticket, the Electoral College votes would go to the next highest contender. The principle would award McCain-Palin with the total possible Electoral College votes – all 538 electors,” he suggested.

“In the national-interest scenario, the question that might be asked by the Democrats may focus on the question as to whether or not they could hold an emergency national convention in order for the party to re-nominate a president and/or another vice-president candidate. If the Supreme Court declares the entire election invalid, then that may be a possibility, but it is highly unlikely since every other presidential team on the ticket were legitimate,” he wrote.

“The Supreme Court may decide a new election is in order and would have to waive the two-term limitations of George W. Bush so that he can remain in office until the conclusion of the election. The continuation of his term is a viable course of action, but it may not be an action favored by the Supreme Court. Instead, the justices may simply view the anomaly as a political race with an illegitimate and disqualified opponent, which would result in a win for the McCain-Palin ticket.”

On WND’s new forum page, the level of frustration was rising. Dozens contributed their thoughts immediately after the forum was posted:

Other comments included:

“Obama won his first election ever by getting three Democratic opponents thrown off the ballot? He’s all for using the law to help himself win. Wouldn’t it be ironic if he is not allowed to serve as president due to the law? … Turn around is fair play!
“Even the left-wing liberal news media is beginning to ask the question: ‘Who is this man we have elected? We really do not know much about him.'”
“Obama’s refusal to produce the ORIGINAL given birth certificate gives us all pause. His silence on these allegations is deafening. The anointed one believes that if he can hold us all back until he’s in the Oval Office he’s hit a home run and he’s ‘safe.’ Ah, not so! Check your law, Obama, and you will see that even if were to make it to the White House you will no longer be able to hide behind those red velvet ropes.”
“There must be something that would have caused him great harm prior to the election, and would have stopped him from becoming elected. What could that little piece of information be?”

sign the petition here

see my previous posts: Must Read! Barak Obama Birth Certificate Case – Not Over Yet!

and Sign The Petition for Obama to Produce Birth Certificate

Please Leave/ Post Your Comments!

Smart Money Is Starting to Pour into Gold Stocks- Seeking Alpha

24 Monday Nov 2008

Posted by jschulmansr in commodities, Copper, Currency and Currencies, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, precious metals, silver, U.S. Dollar, Uncategorized

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Smart Money Is Starting to Pour into Gold Stocks- Seeking Alpha

By: Boris Sobolev of Resource Stock Guide.com

In our last update, we expected short term weakness in gold followed by an upward reversal.

In the short term, in order to avoid seeing gold close below $700, it must move above resistances of $780-810 relatively quickly and stabilize close to that range.

And we got exactly what was needed, although the metal is yet to stabilize near the $800s. Gold briefly touched $699, making a higher low, and continued to consolidate between $720 and $750. On Friday, gold spiked 57 points or almost 8% to its first resistance of $800.

While there is some resistance near $825-$850 for the short term, the weekly chart for gold is starting to look promising. But before the downtrend line (now between $900 and $920) is penetrated, we cannot say that the correction in gold is over and that the new stage of the gold bull market has begun.

Fundamentals remain exceptionally bullish on all fronts. Real interest rates are negative while inflation expectations have little room to go lower. A huge wave of fiscal stimulus is on the way.

The independent research house GFMS Ltd. had the following to say about gold demand:

Dollar demand for gold reached an all-time quarterly record of US$32bn in the third quarter of 2008. Tonnage demand was also 18 percent higher than a year earlier.

Identifiable investment demand, which incorporates demand for gold through exchange traded funds (ETFs), bars and coins, was the biggest contributor to overall demand during the quarter; it was up to US$10.7bn (382 tonnes), double the amount from a year earlier.

Retail investment demand rose 121 percent to 232 tonnes in Q3, with strong bar and coin buying reported in Swiss, German and US markets. The quarter also witnessed widespread reports of gold shortages among bullion dealers across the globe, as investors searched for a safe haven. During the quarter, Europe reached an all-time record 51 tonnes of bar and coin buying and France became a net investor in gold for the first time since the early 1980s.

Consumer demand for gold jewellery was also at a record with buyers coming back in to the market at lower price levels than previously, around and below $800. India (traditionally the world’s largest gold jewellery consumer, with an average over the past five years of 21% of world jewellery demand), staged a strong recovery during the quarter, with the dollar value of gold in jewellery rising by 65% year-on-year.

These changes in “identifiable demand” were offset by outflows in “inferred investment”. With recessionary fears looming, hedge funds liquidated investment positions in gold as they were forced to raise cash, and institutions liquidated commodity index investments, including gold. The trend largely reflects gold’s better performance relative to other assets and also explains why the gold price did not perform better during the quarter in the face of very strong demand.

Gold sales by central banks are at their lowest levels since 1999.

Total global gold production contracted 0.4% in 2007, to an eleven-year low. In the last four months, several companies have announced that they are curtailing production or delaying projects, and all companies are at least reviewing their spending plans. Randgold Resources (GOLD) expects global gold production to decline by between 15% and 20% in the next three or four years, as unprofitable operations are squeezed out and difficult market conditions delay the development of new mines.

While this is a difficult process, the whole PM industry will come out of this slump stronger and more resilient. Companies that survive will do exceptionally well.

Unlike most stock indices which made lower lows last week, all gold indices made higher lows. This positive divergence gives us reason to believe that smart money is starting to pour funds into gold stocks – pointing to the evidence of the first sector rotation in this bear market.

Friday saw one of the biggest up-days on HUI, which climbed 46 points or 27.5%. Gold was by far the best performing sector in the entire stock market. We believe that these are all signs that the sector rotation to precious metals and related stocks is underway.

If gold continues to hold up strongly and the stock market rebounds or at least stabilizes, the $HUI index could quickly recover to 275-325 levels.

However, gold stocks continue to underperform the metal. In order for the bullish scenario outlined above to come to fruition, we need to see the downtrend line in the $HUI & Gold ratio be taken out to the upside.

We believe that this should happen in the coming days or weeks. This point of view is based on the fact that the Gold/Oil ratio and the Gold/Industrial Metals ratio have soared to the best levels for gold producers in the past 10 years. This allows us to expect substantial reduction in costs of production and capital expenditures for most mining companies.

Paired with the strong gold price, margins for gold producers should start to improve. We do not know of any other sector in the equity market which is expected to see increases in profit margins.

While the above is directly beneficial for the producers, for juniors, the latest round of acquisition activity gives us reason to believe that the juniors are finally bottoming out.

From a negative point of view, continuing tax selling pressure before the year end could temporarily weaken these positives.

Those investors who are considering putting money in the gold sector should consider the following low-risk, cash generating producers: See RSG Newsletter.

Demanding Gold – Hard Assets Investor

24 Monday Nov 2008

Posted by jschulmansr in capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, precious metals, silver, Technical Analysis, Today, U.S. Dollar, Uncategorized

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Demanding Gold – Hard Assets Investor

Written by Julian Murdoch of Hard Assets Investor

Friday night’s headlines were straightforward: “Gold surges to top $800 on safe-haven buying.” And most of the analysis followed a familiar pattern:

The price of gold has declined as a result of liquidity selling
Once everyone sells the gold, the market will stabilize
The price will rally as investors seek a safe haven in the face of monster money-printing by the U.S. government

It’s a convenient story, and one that makes some prima-facie sense. But like any Monday morning quarterbacking (including my own), there’s rarely a way to actually know exactly why something goes up and down. Except, of course, for supply and demand. It’s always about supply and demand.

Which is why I was planning on writing about gold this week even before we saw the metal pop almost 6% Friday, to close at $801.60 (NY Spot), and before we saw the big gold miners like Barrick have monster days, with that company closing up 31%. Pops like that are enough to make anyone sit up and take notice, despite our general concerns about buying miners vs. metals.

Hence my plan to cover gold. The third week in November, you see, is when the World Gold Council releases the supply-and-demand numbers that carry us through the end of the year. And the astonishing thing isn’t so much the numbers, but that they seem to have gone largely unnoticed by the press in describing the rally. Let’s take a look at the charts.

There are a few points to note here. First, this measures demand in tonnes, not in dollars. We’ll get to dollars in a second.

But the big thing to note here is that the 2008 number is an estimate that we’ve created by applying last year’s Q3-to-Q4 trends to 2008. From Q3 to Q4 2007, gold demand dropped an unexpected 15% on a tonnage basis. The chart above suggests that, even if gold demand falls again, total tonnage demand for 2008 will equal 2007. If Q4’08 demand instead remains steady heading into the end of the year, total 2008 demand will be the biggest in the last five years.

Regardless, however, the strong continued demand, particularly from the investment community, is even more dramatic in dollar terms.

In dollar terms, gold is experiencing tremendous demand growth. There’s no rocket science here: The average price of gold in 2007 was just under $700. The average price of gold in 3Q 2008 was $871, down from the first-quarter average of $924. All that means is that that same physical demand is coming at a time of rising prices (or a weak dollar, depending on your perspective).

To put the demand in perspective, here’s the juicy tidbit direct from the World Gold Council press release:

“Dollar demand for gold reached an all-time quarterly record of US$32bn in the third quarter of 2008 as investors around the world sought refuge from the global financial meltdown, and jewelry buyers returned to the market in droves on a lower gold price. This figure was 45% higher than the previous record in Q2 2008. Tonnage demand was also 18% higher than a year earlier.”

This dollar demand is driven almost entirely by increased demand from exchange-traded funds and physical coin investments, offsetting a decline in jewelry demand.

To be fair, this continued demand wasn’t entirely unexpected, nor was it completely unreported. Most of the weekend paper hyperbole about the gold rally did pay homage to demand, albeit without citing the nice hard figures we have from the World Gold Council. But what seems really underreported is that the actual supply demand deficit is frankly staggering.

The reasons for this deficit are fairly straightforward: The quarterly demand is high, and one of the major sources of supply over the last few years has dried up – sales by central banks. The Central Bank Gold Agreement, which set limits on gold sales in 1999 to stabilize the market after the foundation of the euro, is set to run its course in 2009, but the 2008 limits on CBGA sales (500 tonnes per year) aren’t even close to being reached, and the reality is that European central banks may simply be done offloading their excess gold reserves.

If true, that means a major source of supply is simply going away. It’s easy to visualize a pathway from the central banks into the hands of investors-a shift in ownership. But that shift in ownership may be complete, and thus, if investor demand continues, it will rely on other traditional sources of gold-namely mines-to get at the stuff.

That would set the stage for continued deficits, higher prices and busy miners. It strikes me that that’s the real story of last week’s rallies.

MY NOTE: Inother simpler words, demand up and increasing = prices increasing!

Disclosure: Long Precious Metals and Stocks

jschulmansr

Peter Schiff on Fast Money Calls $2,000 Gold in 2009–Gold Stock Bull

24 Monday Nov 2008

Posted by jschulmansr in capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, precious metals, silver, Technical Analysis, Today, U.S. Dollar, Uncategorized

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Peter Schiff on Fast Money Calls $2,000 Gold in 2009–Gold Stock Bull

By Jason Hamlin of Gold Stock Bull

Mr. Schiff was mocked for calling the market collapse before it happened, correctly predicted that gold would reach $1,000 in 2008 and recently schooled the CNBC crew at Fast Money as he predicts the market has much further to drop and gold will hit $2,000 in 2009. If you’ve been a subscriber to Gold Stock Bull for a while, you know we have been making similar calls and are aligned with his views. 2008 may prove to be the last time you will be able to get gold under $1,000 or silver under $10. The liquidation and deleveraging has created a short-term buying opportunity across all commodities and for precious metals in particular. Get some while you still can because when the floor falls out from beneath the dollar, the party is over.

Sign The Petition for Obama to Produce Birth Certificate

21 Friday Nov 2008

Posted by jschulmansr in 2008 Election, Barack Obama, capitalism, Finance, Free Speech, id theft, Investing, investments, Joe Biden, John McCain, Latest News, Markets, Politics, Presidential Election, Sarah Palin, socialism, Today, U.S. Dollar, Uncategorized

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Obama’s state secret: His birth certificate!

By Joseph Farah of World Net Dailey

So much for those pledges of “open government.”

So much for those promises of “change.”

So much for his upcoming oath to uphold the Constitution of the United States of America.

Barack Hussein Obama is still refusing to disclose to the American public something as innocent and as basic as his full, undoctored birth certificate to establish beyond any shadow of a doubt – and that doubt is growing daily – that he is a natural-born American citizen.

Ironically, now that the election is over, the pressure is building. A few bold members of Congress are getting interested in demanding hearings on the issue. The lawsuits are increasing. More pundits and activists are beginning to mobilize.

I, too, am raising the stakes.

Beginning today, I am personally sponsoring a petition campaign right here at this Internet news source, to all controlling legal authorities to determine Barack Obama’s eligibility for the presidency under Article 2, Section 1, of the Constitution and to use all of their persuasive powers to make this information freely available to the rulers of this country – we the people.

I also pledge that this news organization will continue to pursue its own independent investigation as aggressively as it possible can.

To date, here is what we have done:

Dispatched senior staff reporter Jerome Corsi twice to Hawaii to investigate the matter, including an appeal to the governor.
Hired a battery of private investigators in Hawaii to check every hospital for birth records – to no avail.
Sent Corsi to Kenya where he talked with some of Obama’s relatives who clearly recall the birth taking place in Mombasa. (While there, Corsi was detained by Kenyan officials and a press conference he had scheduled was canceled at the last minute at the order of Prime Minister Raila Odinga, who has since made clear he has expectations of payback from soon-to-be President Obama.)

I tell you all this because despite the shroud of secrecy over the birth certificate issue, there are some organizations out there insisting it is all a tempest in a teapot – that the issue is settled, that the birth certificate has been released, that Obama has been determined to be eligible by some mystery authority.

One such organization, Factcheck.org, characterizes any who question its assertion that this matter is settled as conspiracy mongers. But, as for me, when it comes to matters as important as the Constitution of the United States, I do not accept the opinion of armchair researchers. Nobody – not one news organization in the world – has devoted more resources to investigating this matter than has WND.

I hope you will now join me in this fight for truth, justice and the American way by signing the petition. Help me spread the word. Let’s turn up the heat. Send this column and the petition far and wide. Share it with your neighbors. Honor the Constitution. Save this country’s most vital institutions and its honor. Seek the truth. Demand accountability.

Time is running out.

The Electoral College is due to convene Dec. 15 – less than a month.

Barack Obama is to be sworn in as the next president Jan. 20 – less than two months from now.

Do you believe the American people have a right to know for certain their next president is constitutionally eligible for the job?

Without a chance to inspect that birth certificate for themselves, do you think we can ever be certain?

If the Constitution is not taken seriously as concerns the eligibility of the president, is it likely to be taken seriously in other matters?

If you don’t take responsibility and initiative on this issue, I am convinced no one else will.

Take your stand for accountability, truth, the rule of law and the Constitution.

Sign the petition now.

E-mail it to all your friends.

Obama Birth Certificate Petition

PETITION FOR PUBLIC RELEASE OF
BARACK HUSSEIN OBAMA’S BIRTH CERTIFICATE

To: Electoral College, Congress of the United States, Federal Elections Commission, U.S. Supreme Court, President of the United States, other controlling legal authorities

Whereas, by requirement of the United States Constitution, Section 2, Article 1, no one can be sworn into office as president of the United States without being a natural born citizen;

Whereas, there is sufficient controversy within the citizenry of the United States as to whether presidential election winner Barack Obama was actually born in Hawaii as he claims;

Whereas, Barack Obama has refused repeated calls to release publicly his entire Hawaiian birth certificate, which would include the actual hospital that performed the delivery;

Whereas, lawsuits filed in several states seeking only proof of the basic minimal standard of eligibility have been rebuffed;

Whereas, Hawaii at the time of Obama’s birth allowed births that took place in foreign countries to be registered in Hawaii;

Whereas, concerns that our government is not taking this constitutional question seriously will result in diminished confidence in our system of free and fair elections;

We, the undersigned, assert our rights as citizens of the United States in demanding that the constitutional eligibility requirement be taken seriously and that any and all controlling legal authorities in this matter examine the complete birth certificate of Barack Obama, including the actual city and hospital of birth, and make that document available to the American people for inspection.

Sign The Petition

Peter Schiff: Gold Will Rise, Dollar Will Collapse – Hard Assets Investors

19 Wednesday Nov 2008

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Peter Schiff: Gold Will Rise, Dollar Will Collapse – Features and Interviews – Hard Assets Investors

Written by Administrator – Hard Assets Investor

Norman: Let’s see the performance from this point forward; we’ll look back at this again and we’ll revisit this issue.

Let’s talk about something else, something that you have also … and I just mentioned it … the U.S. dollar. You were very, very negative. In the last month, we have seen unprecedented actions by the U.S. Fed in terms of expansion of the monetary basis; in other words, printing money … what you call printing money … and despite that, the dollar has remained incredibly strong.

How do you explain that according to your logic?

Schiff: Everything the government is doing is inherently negative for the dollar, and all of this…

Norman: It’s not playing out that way.

Schiff: It will; you’ve got to give it time.

I remember when I was on television talking about the subprime and people were telling me it’s no big deal, and I said, just wait a while; give it time.
Look, everything that we’re doing – all the bailouts, all the stimulus packages – this is all being financed by inflation. It’s inherently terrible for the dollar.

Norman: But you just said yourself that everything is deflating.

Schiff: But right now, Mike, you’re getting this de-leveraging, and this is benefitting the dollar, so despite the horrific fundamentals for the dollar, it’s going up anyway.
But ultimately, when this phony rally runs out of steam, the dollar is going to collapse, and that’s when we’re going to have a much greater crisis because now you’re going to have a collapsing dollar, which is going to push long-term interest rates up, commodity prices up.

Norman: I still don’t understand why the dollar is going to collapse. So you’re saying that the Fed is just going to allow … or leave this enormous amount of liquidity in there, that at some point down the road, if we recover, they’re not going Scto take it out?

Schiff: Look, they have no control over it. The Fed is trying to artificially reflate our phony economy, right?

We had this economy that was based on Americans borrowing money and then spending it on products. We have this huge debt finance bubble which is collapsing, and it’s being supported by foreigners.

But when this artificial demand for Treasuries goes away, the Fed is going to try to print a lot of money and the dollar is going to get killed.

Norman: All right; I’m going to ask you to hold on. Folks, check back because we’re going to do the second part of my interview with Peter Schiff, so check back to this site. This is Mike Norman; bye for now.

Mike Norman, HardAssetsInestor.com (Norman): Hello everybody, and welcome back for another installment of HardAssetsInvestor.com’s interview series. I’m Mike Norman, your host. Well, he’s back. Mr. Doom and Gloom is here … Peter Schiff, president of Euro Pacific Capital and author of the new book just out, “Bull Moves in Bear Markets.”Peter Schiff, president of Euro Pacific Capital (Schiff): “The Little Book …”Norman: “The Little Book …”; it’s in The Little Book Series. Well look … the last time you were here, things were kind of going your way, but it looks like things have turned upside down.

All kidding aside, I know your big thing over the last seven or eight years has been gold. We’re very supportive of gold on this show; we think that probably people should have some gold as part of their overall portfolio mix. But let’s just look at what happened.Several weeks ago, the U.S. stock market had its worst week in history … even going back to the 1930s … worst week in history. I saw a breakdown of various assets – all assets really – stocks, bonds, gold, commodities, oil. Gold was at the bottom of the list. The top-performing asset, and something that you hate, was the U.S dollar.So how do you explain that? If we are going through the worst economic and financial crisis in history – precisely what gold is supposed to protect against – why would it perform so bad?Schiff: Well, I think it will perform very well; you got to give it a little bit more time.Norman: More time or more decimation?

Schiff: No, what’s happening right now, Mike, is just de-leveraging, and so gold is going down for the same reason a lot of stocks are going down, a lot of commodities are going down. There’s a lot of leverage in this system, there’s a lot of margin calls, a lot of liquidation; a lot of people are having to sell whatever they own to pay off their debts.

Norman: But look at where the money is going … the money is going into U.S. sovereigns, Treasuries … it’s going into the U.S. dollar.

Schiff: For now.

Norman: Why for now?

Schiff: Right now there’s some perception of safety there, but it’s the opposite of the leveraging. If you’re selling your assets, you’re accumulating dollars; but ultimately right now, it’s like there’s been this gigantic nuclear explosion in the United States, and everybody is running toward the blast. Pretty soon they’re going to figure out they’re going in the wrong direction.

Norman: You always talk about gold as a currency, and we have seen currencies appreciate – the yen, for example, the dollar tremendously, for example, but gold has not held up.

Schiff: Well, if you actually look at gold versus other currencies, in the last couple of weeks gold has made new record highs in terms of the South African rand, the Canadian and Australian dollars … so gold was not doing as poorly as many of the currencies, and I think this is all short term.

I think you’re going to see a lot of money moving into gold, and if you look at how much gold has gone down from the peak, the peak was about a thousand … it’s off about 25%. Stocks are off 40%. Gold is still up during this year against the Dow.

Stay Tuned for Part II<!—-> of our interview with Peter Schiff.

Can a Dubai Silver ETF Send Global Spot Prices Higher?

18 Tuesday Nov 2008

Posted by jschulmansr in capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, gold, hacking, inflation, Investing, investments, Latest News, Markets, precious metals, silver, Today, U.S. Dollar, Uncategorized

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Can a Dubai Silver ETF Send Global Spot Prices Higher? – Seeking Alpha

By: Peter Cooper of Arabian Money.net

The Dubai Multi Commodities Center is understood to be putting the finishing touches to an exchange traded fund for silver with a launch likely next month as demand for silver has surged in the past six months.

Local bullion dealers are having to fly heavy silver bullion bars in from around the globe to meet demand as traditional sources closer to Dubai have been exhausted. The DMCC has successfully established itself as a regional hub for commodities trading over the past few years, and has its own swanky new business park with its gold, silver and diamond towers.

City of Gold

Around 20 per cent of the world’s physical gold trade is conducted through Dubai which used to be the epicenter of gold smuggling to India thirty years ago when import taxes were sky high. Nowadays Dubai is a convenient logistics center for commodities traders and still tax free.

The details of the silver ETF are being kept under wraps for the launch but plans seem advanced. Local jewelers have long used silver in a 25:75 amalgam with gold to create white-gold which is popular with consumers.

But clearly the ETF is an strictly an investment product, and demand for the shiniest of metals has been rising strongly, as evidenced by the high premiums now being paid on coins and bullion locally.

ETF price advantage

The latter also gives the ETF a natural advantage. Its price will be closely linked to the lower spot price for physical silver, and not be inflated by the high premiums now paid on physical silver.

Investors will no doubt appreciate this keen pricing advantage, and hope to also profit from the leverage silver offers to the gold price. In previous gold price booms silver has outperformed the yellow metal, and the gold-to-silver price ratio has fallen sharply.

Will the new Dubai silver ETF have a big enough impact on the tiny global silver market to send prices higher like the Hunt Brothers did in the late 1970s when they cornered the market? Well, nothing succeeds like success and a silver ETF in Dubai looks like being the right product in the right place at the right time.

My Note: A Word to the Wise is sufficient!

See My Ealier Post from Today: All The Gold In Saudi Arabia, if they buy as much Silver as they have Gold – Look Out…

My Disclosure: I am long all Precious Metals, Mining Companies, Etf’s, and in my opinion you should be too! – jschulmansr

Dudley Baker: “It’s either the end of the world or a fabulous buying opportunity”

18 Tuesday Nov 2008

Posted by jschulmansr in commodities, Copper, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, precious metals, silver, Uncategorized

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Dudley Baker: “It’s either the end of the world or a fabulous buying opportunity”

Source: The Gold Report 11/18/2008

His pitch is irresistible: “Buy a basket of juniors with warrants and it could be the easiest 500% you’ll ever make.” In this exclusive look at one of the most overlooked and misunderstood investment vehicles, Dudley Baker of PreciousMetalsWarrants.com explains to The Gold Report exactly what warrants are and how they increase the odds of winning vastly higher returns. With a little arm-twisting, Baker even reveals some of his most prized “unbelievable” opportunities.”

The Gold Report: Could you start by explaining what a warrant is and how it differs from a futures contract?

Dudley Baker: A warrant is basically a security. It gives the holder the right, but not the obligation, to purchase the underlying stock at a specific price within a specific period of time. It sounds very similar to a call option except that it really is a security and a warrant will trade in much the same way as common shares. A warrant is assigned a symbol and will trade on the exchange or, in the U.S., it will have U.S.-assigned symbol where it can be traded over-the-counter.

TGR: Are all the warrants traded in the over-the-counter market?

DB: No, no. Most will always be private. Many precious metals investors know ‘warrants’ because they are frequently issued in a private placement. But most of those warrants never trade on any exchange and they’re not transferable. On my website only cover those warrants that are trading, the ones you and I could go out and buy. For example, Warren Buffet conducted a private transaction with General Electric and Goldman Sachs. There will never be a market for those. That’s the distinction, whether it’s a warrant with a private placement or an initial public offering. In rare cases a company can get the warrants listed if they were issued in connection with a private placement.

TGR: So Buffet purchases the stock and then is awarded the warrants. Is it GE or Buffet who decides to make those warrants transferable?

DB: In this case it probably would be Buffet. Since he actually owns those warrants it’s his decision.

TGR: Let’s to back to the private placement example. Aren’t warrants used as a sweetener for a private placement investment? In that case, who makes the decision as to whether those warrants are transferable?

DB: The company will make that decision. In Warren Buffet’s case, let’s say that he’s the only holder of the Goldman Sachs and GE warrants. Even if the company said we want these to trade, there’s nobody to trade them because there’s only one guy, Buffet, who owns them and he’s probably not going to trade them. The chances are that he would just convert the warrants or the company would buy them back at some point. But in the case of the private placement of a mining company, there may be hundreds or even a thousand participants. If the company decides to list those warrants, those 500 to 1,000 individuals could decide to trade them. So now we’ve got some liquidity. And we always need that liquidity. So there are a lot of opportunities even for the bigger companies that have warrants trading.

TGR: So when warrants are initially issued, they could be privately placed, or publicly traded.

DB: Right.

TGR: Are most of the warrants that are publicly traded related to financial transactions other than mergers?

DB: They could be issued in connection with the financing for an initial public offering. A lot of warrants start with the private placements, the initial public offerings, and mergers. So warrants that are trading come about through a number of different circumstances.

TGR: Given the current stock market and the merger and acquisition environment, would you expect increased interest in the purchase of warrants?

DB: You mean what is the future for warrants?

TGR: Yes.

DB: Let’s put it this way. The most important thing is to have a solid understanding of the underlying fundamentals of the company. Do they have a good story? Is there potential for the stock to greatly increase in value? And then we have to ask, maybe before we buy the commons shares: will trading a warrant give us a lot more leverage? If so, what is the remaining life of that warrant? It is especially important in this environment to have as long a life on a warrant as possible. Many of the warrants in our database have three years or more of a remaining life, which is really great. Some of them have four or five years. One actually has an 8-1/2 years going out to 2017. I see great opportunities going forward.

Are we going to blast off in a rally this week, next week, next month? I don’t know. But I’m very confident that in the coming months and years that gold and the junior mining shares are going much, much higher. So I’m very comfortable buying warrants in the juniors. It is critical to have as long a life as possible. I cannot stress enough how important it is to look at that underlying common stock. If the company’s common stock does not go up, there’s no way the warrants are going up. So we have to be confident that the company will be able to execute its business plan. Then we hope for a skyrocketing market here in the coming months and years.

TGR: So the real advantage of a warrant as opposed to the common shares is the leverage.

DB: Exactly and that’s why we’d start looking at a warrant. It gives us a lot more bang for our buck, a lot more leverage. I’m always looking for a minimum of two times the leverage. So if we’re looking for a common stock to go up 100%, I’m leveraged to make at least 200% by buying the warrant.

TGR: How would you compare a warrant to a call option?

DB: Good question. A call option is just going to trade on the Chicago Board Options Exchange, whereas a warrant is actually going to trade like a common stock on the TSX. The main difference we’ve got is time and we always want as much time as possible. There are so many call options out there on the mining shares, but maybe they’ve got 90 days or 180 days, one year at most. That’s not enough time for me. In this treacherous market environment that we’ve had over the last two years, options are really just speculating. I like to think that if we can find a long-term warrant on a good company that has a two-year minimum life—if not three years or more— now we’re investing. This way, time is on my side. On my website I’ve got some examples of my trades and the common denominator of those that generated roughly 1,000% or more return was the fact that all of those warrants had over a three year remaining life when I bought them. Time is the key to my success with warrants.

TGR: I would think time really plays very well right now with the market being at 52-week, if not 5-year, if not 30-year lows.

DB: Incredible, yes.

TGR: It probably can’t go much lower in the next three years.

DB: That’s exactly how I see it. You can make a blanket statement that nearly all of the juniors and warrants are off by at least 90% in value. Either you believe this is the end of the world and the game is over or this is just a fabulous buying opportunity. I was buying this morning. I’ve usually do several transactions each week, so I just continue to build inventory, accumulate mining shares and warrants, which I’ll sell in the future at substantially higher prices. So, if we can find a warrant that, say, has a three-year or longer remaining life, it’s going to be hard to imagine how high it might go in a few years. It used to be that if a stock were trading for less than 10 cents, you’d be crazy to consider it. In this environment, a lot of juniors are selling for less than 10 cents; good companies with cash in the bank. The opportunities out there today are truly incredible.

TGR: You have some mid-market producers trading under a dollar and they have cash flow.

DB: It’s just unbelievable. I’m probably one of the more optimistic guys. I am very positive about where we’re going. It may not be next week, but in the coming two to five years it’s going to be a totally different game. We are just building inventory getting set here for what’s coming.

TGR: How do our readers discover what warrants are out there, particularly in precious metals?

DB: I would suggest that they visit my website, PreciousMetalsWarrants.com. I’ve put together a learning center over the last several months. After I created the database listing all of the companies in the natural resource sector that have warrants trading in the U.S. and in Canada, I realized that a lot of people don’t even know what warrants are. So I built the learning center to answer a lot of basic questions.

Warrants actually go back to the 1920s, so they’ve been around for a long time. Options and futures have gotten all the publicity in the past five to ten years. I’m dusting off the term ‘warrants’ again and bringing it back into play so that investors can see the possibilities. Now that Warren Buffet has reintroduced the word ‘warrant’, it’s great for me. The more people we educate about warrants, the better it is for all of us.

TGR: More liquidity, more traders.

DB: Exactly, exactly.

TGR: Can you share with us some of the companies that you particularly like who are trading warrants?

DB: Let me start with some that are your sponsors. I’m not too knowledgeable about the companies and the leverage fluctuates, so we always have to take a look. I like to think that’s why subscribers need me. I’ve got some special leverage calculations that I do. What may be a good deal tomorrow is not necessarily a good deal next week. I calculate the pricing and the relationship of the warrant to the common shares.

Franco Nevada Corp. (FNV.TO), a royalty and investment company, has a warrant extending to 2012. I’m not suggesting that you run out and buy this warrant, but it does look interesting. Do your own due diligence. See what the leverage looks like and whether you want to get involved. Another one—I don’t know of another analyst that follows this and I have minimal knowledge myself—is Colossus Minerals Inc. (TSX:CSI). It has a warrant out to 2011. So that’s quite a few years. They have gold properties in Brazil. The situation looks interesting.

I like Piedmont Mining Co. (OTCBB :PIED). It’s a small junior exploration company and all of its properties are in Nevada. Robert Shields is president and I feel very comfortable with the management. The price has been decimated, as has most of the sector. But I believe it will be a great opportunity. Another one that you don’t hear much about is Vangold Resources (TSX.V:VAN). It is amazing. I’ve got a small position in it myself. It’s got gold, oil and gas, and beryllium. Again it’s selling literally for pennies and you’ve just got to scratch your head and ask how can this be. A lot of your sponsors are great companies and I just have to believe that virtually all of them present buying opportunities.

The last one is Great Panther Resources (TSX.V:GPR). I love the company and its location. I live in Mexico – just outside of Guadalajara, so it’s about a 3-1/2 hour drive from my home. This is one of my favorite silver companies. I’ve visited Bob Archer, the president, several times and have seen the properties. They’re going to be mining silver way after all of us are gone from this planet. It’s a great operation selling for 10% of its all time high. There are so many wonderful stories out there that will become incredible opportunities in the coming months and years. You just hope that investors realize what they’re looking at because it’s going to be unbelievable. I always say buying a basket of the juniors today or a basket of the long-term warrants is probably the easiest 500% you’ll ever make in your life.

TGR: I liked the idea that warrants allow a company the time to grow because no one really knows when to call the bottom. Is it going to be this quarter, next quarter; will it turn around in 2009? But everyone’s saying in a couple of years we’re going to look back and say, wow, that was cheap back then.

DB: There’s one warrant that just started trading. I bought it for 10 cents. It has over a 4-1/2 year remaining life. I plan on selling it for dollars, many dollars. It’s almost like a giveaway. Maybe it’s just my attitude. I have such strong beliefs about where we’re going. Yes, the draw down that we’ve got right now bothers me, but I’m focused on the longer term. So this is just giving us opportunities to continue to buy at these ridiculously low prices.

TGR: Can you share with us this ridiculously low-priced warrant you bought today?

DB: You’re going to put me on the spot, huh? Okay, the name is Gold Wheaton Gold Corp. (GLWGF) (TSX.V:GLW). Everybody knows Silver Wheaton. This is a totally different company with totally different management but essentially the same business model. Gold Wheaton stock is probably trading around 33 cents. The exercise price is one dollar.

So you ask why in the world would I want to buy this warrant that has a one-dollar exercise price when the common stock is now selling for, say, 30 to 35 cents? The reason is that we’ve got a 4-1/2 year remaining life and the leverage is going to return much better than a 2:1. I have my database and I’ve got leverage calculations on another spreadsheet showing different price points going forward. This is how I look at a warrant. I ask how is this warrant going to perform if the common stock doubles, triples, quadruples, or goes up ten times? I’m looking at the underlying leverage. Is that going to give me my 2:1 or better opportunity? So this morning the Gold Wheaton warrant just started trading. It looks good to me. Who knows? It could go down a little bit more from where what it started trading. But we’re somewhere around the 10 to12 cents range, which just sounds unbelievable when we’ve got a 4-1/2 years or more remaining life. So you buy it, you put it away, and know it’s going to be easy money.

TGR: Dudley, this has been very interesting.

The Gold Report has worked out a special deal with Dudley Baker of Precious MetalsWarrants.com to offer our readers a free 30-day look at his database—full access to his personal portfolio—or what he calls a “Look Over My Shoulder.” You can see everything he owns and get an email any time he does a transaction. Sign up now.

Precious Metals Will Depose Cash from Its Temporary Throne

18 Tuesday Nov 2008

Posted by jschulmansr in capitalism, commodities, Copper, Currency and Currencies, deflation, Finance, Fundamental Analysis, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, precious metals, silver, Technical Analysis, Today, U.S. Dollar, Uncategorized

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Precious Metals Will Depose Cash from Its Temporary Throne

By: Peter Cooper of Arabian Money.net

‘We have just been in Bahrain and everybody is cashed up!’ one banker told me today. My reply was that if everybody is now in cash, then it just has to be the wrong place to be. There are some very good reasons to worry about a large cash position.

Quite apart from the contrarian argument that the crowd is always wrong, you have to consider what is happening to the supply of cash. We know that with the sell-offs in global capital markets there is plenty of demand for cash, but what about the supply?

Money supply out of control

Another banker today showed me a chart of US money supply growth over the past few months, and highlighted a 111% increase. This compared with something like 15% money supply growth in the early 1930s as the US authorities grappled with the Great Depression.

There is an absolute tsunami of money coming into the system. What happens when the supply of something exceeds the demand? The price drops. And that is exactly what is going to happen to the US dollar – the authorities are about to inflate away their debt problem.

It is so simple: The debt stays at the same nominal amount, you print more money and the real value of the debt falls. Of course, in the real world that also means a bond market collapse as inflation will make both the coupon and real value fall.

I wonder how long it will be until cash is deposed as king of the investment world? My guess is that it will not be long after the sell-off ends. How long will that take? It could be at the end of the year as the hedge funds attempt to square their positions, or it might be next spring after another lurch downwards in stock prices.

The bottom for stocks will be the top for cash and treasury bonds. Then inflation will start to emerge and depose cash from its temporary throne. Who will be the new king?

Gold and silver

Step forward precious metals to take a bow. Everybody knows that gold is inversely correlated to the US dollar and that silver is leveraged against the gold price. But why have precious metals taken so long to claim their crown in this financial meltdown?

The straight answer is that hedge funds have been selling assets across the board and turning gold into dollars, or at least the paper gold of futures contracts into greenbacks. The physical demand for gold and silver has been growing strongly all the time, hence the silver coin shortage and the $3.5 billion Saudi gold purchase.

Once the hedge funds stop selling (you always do eventually run out of assets to sell), then gold and silver prices will rally, and the rush out of cash and into precious metals will do something pretty spectacular to the price. Gold and silver stocks, languishing at a 40-year low, should jump and deliver phenomenal performance for new investors and repay the patience of long-term holders.

This article has 9 comments:

0 0
- socrateazz
- 7 Comments
Nov 17 08:31 AM
storms are brewing in the finacial markets. The gales have produced a few waves and troughs. I think the real storm is coming! Unfortunately I think the actions seen so far have mostly added steam to the storm! I see folks finding safe harbor or riding the waves. I see little effort in actually weakening the storm. to weaken the storm one must weaken the cause. What caused the current financial situation? Is it the same things which made life soo good for so long? was it the laziness of many? Was it ignorance of those who think they know? was it greed of those with wealth? was it greed of those who wanted the wealth? was it ignorance of truth? Was it ignorance in beliefs? Was it power abuse? Was it abuse of force? was it special intererest abuse? was it general interest abuse? I could go on A small part ofan ovious problem has been recieving enormous thought while most of the problem is ignored with little concideration of the reasons which can not be blamed on somebody else.

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0 0
- Diabolo
- 8 Comments
Nov 17 08:56 AM
i think we’ve already seen the worst – from now on, we wont have more high-profile bank failures – already had bear, lehman with merrill, aig, fnme, fdmc saved…

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the govt will need to keep pumping these with cash – which at some point will lead to hyperinflation – gold is a great long-term investment… as for short-run, im still bullish dollars… when shit hits the fan, investors flock to dollar and yen!
0 0
- bobbobwhite
- 44 Comments
Nov 17 12:20 PM
Gold and platinum are great longer term investments, but most people want more liquidity and shorter term results. However, we are harshly finding out that it is difficult to impossible to gain both at the same time in the same vehicle, but people still seek that nearly impossible(and lazy) dream and lose countless billions in the process.

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My advice is to never, ever try to get the same investment advantages in one investment vehicle. Does not work. Have one for one purpose, one for another, etc. For example, gold and cash; stocks, gold and cash; bonds, cash and real estate, real estate, stocks and cash, etc., etc. in many combinations that work right for you(Cash means CD’s or MMF).
0 0
Nov 17 01:36 PM
Peter, it seems our thoughts appear to align very well. Is it no surprise that the money supply is up over 100% over the past few months? According to Obama, TARP has already spent some $300B of the $750B. Hence money is being pumped at a RAPID pace into our withering economy.

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I fully agree that this action coupled with the US debt increasing each day, will only result in furthe devaluation of the US. Dollar.

We must recall that the massive sell offs in hedge funds aren’t usually voluntary and fund managers are being FORCED to sell because many investors believe that they are forced to sell. For example in Canada, investors with RRIFs, must pay taxes on at least $10,000 of their investment. However this value was determined at the start of the year, and with some portfolio’s down by over 50%. They are now actually paying taxes on 20% of their current portfolio. Due to the lack of transparent investment advice, we will continue to sell these massive sell offs take its toll on already undervalued equities. It is only a matter of months IMO before we see a commodity correction.

And as we know “Concurrently, the U.S. Government runs large operating deficits in circumstances where its National Debt approximated $9.6 trillion at July 31, 2008, up from $9 trillion at December 31, 2007 and $6.2 trillion at December 31, 2006.”
Quote Source: www.stockresearchporta…/

The question is with the money supply increasing, debt increasing, unemployment increasing, foreclosures increasing, consumer confidence on the decline. How worse can things really get?
0 0
- User 30121
- 269 Comments
Nov 17 02:00 PM
Sonofabitch! An article that TELLS IT LIKE IT IS! Oohhh, are you gonna catch hell from the nay sayers (anti-goldbugs). Thanks for saying it!

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0 -1
- Pangaea
- 71 Comments
Nov 17 02:13 PM
A couple of problems with this article.

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“The bottom for stocks will be the top for cash and treasury bonds.”

At that eventual point, it might indeed be good for gold, but by definition it would also be attractive for stocks.

Also, by any measure of money supply that I follow, it has been stagnant in recent months, not growing at all. This is what the Fed is trying to fight – shrinkage in the supply and velocity of money.

research.stlouisfed.or…

www.nowandfutures.com/…

So until these trends end (money supply stagnation with deflation in all asset classes plus USD and Treasury strength), cash will remain king.
0 0
Nov 17 03:49 PM
“In my opinion, commodity prices can possibly hit new lows in the upcoming months as the recession is still going on. There are a lot of uncertainties that are still at bay and till they have been cleared up, the economy will still be going downhill. Questions pertaining to increasing unemployment? Will the Govt bailout the US Automakers? How much are Corp taxes going to increase next year when Obama is in power? These uncertainties need to be solved before the market actually is stable for investors.

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Hopefully you had found my insight helpful, I usually use the following website as a tool to gather all my data. Best of luck to all investors:
www.stockresearchporta…;
0 0
Nov 17 09:16 PM
We enjoy your articles and more importantly they help us keep things in their proper perspective. Keep them coming Peter, and thank you!!

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0 0
- huskerbob
- 49 Comments
Nov 18 02:18 AM
pangaea: the coming bottom in the stock market doesn’t necessarily mean a bull market for equities. The market could bounce along the bottom for the next decade or two (as it did before the last great bull market) while we deal with the consequences of this mess.
And the Fed and it’s European counterpart are openly trying to weaken their respective currencies. It’s a struggle right now, but they will succeed mightily at some point!
Gold is the enemy of inflation, and the gold market recognizes this. That is why central banks and their allies continue to fight the gold price, as all central banks must.
Do yourself a favor and buy some artificially cheap gold. Get out of dollars while the gettin’s good!

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All the Gold in Saudi Arabia – Seeking Alpha

18 Tuesday Nov 2008

Posted by jschulmansr in commodities, Currency and Currencies, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, precious metals, silver, Today, U.S. Dollar, Uncategorized

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All the Gold in Saudi Arabia – Seeking Alpha

By: Tim Iacono

Tim’s blog: The Mess That Greenspan Made

There was a story out last week in the Gulf News about unprecedented gold buying in Saudi Arabia during the first half of November. According to the report, 13 billion Saudi riyals worth of the metal have been purchased in recent weeks – about $3.5 billion or roughly 140 tonnes at today’s prices.

A quick check of the SPDR Gold Shares ETF (NYSEArca:GLD) shows no similar buying over this time. In fact, the world’s most popular gold ETF has been noticeably quiet during this period, with just 0.3 tonnes exiting the trust earlier in the month, barely noticeable in the chart below.

It also looks like there’s another little wedge pattern forming at around $740 an ounce.
This report by Peter Cooper at ArabianMoney.net, which also appears at Seeking Alpha, lends some credibility to the story in the Gulf News, one of the leading English-language newspapers in the region:

I cannot verify the source but all I can say is that this has the hallmarks of a genuine story, based on my 25 years in financial journalism. First, it was buried on an inside page and the amount was given in UAE currency later in the story – hardly the action of somebody looking to manipulate the gold price, more an indication that the sub-editors did not understand the importance of this story.

Second, this is how the best stories emerge from Saudi Arabia – the market is not very transparent but insiders do notice big changes and pass this information on, and it surfaces as well sourced rumor. I am afraid this is about as good as it gets in the Middle East.

With local stock markets faltering badly and the property market in Dubai and elsewhere beginning what might be a truly spectacular fall, it makes sense that wealthy individuals would seek out more secure assets during this time of uncertainty.

Curious to see what this two-week purchase would look like when laid up against the inventory at the Gold ETF which, incidentally, just celebrated its four year anniversary, the chart below was created with the recent Saudi purchases indicated in yellow.

The 140 tonnes recently purchased in Saudi Arabia amount to about one-fifth the inventory that took four years to accumulate at the Gold ETF.

That’s a lot of gold in a very short period of time.

Full Disclosure: Long GLD at time of writing

Five Ways to Invest in Bottom-Basement Gold – Seeking Alpha

17 Monday Nov 2008

Posted by jschulmansr in commodities, Copper, Currency and Currencies, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, oil, precious metals, silver, Technical Analysis, Today, U.S. Dollar, Uncategorized

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Five Ways to Invest in Bottom-Basement Gold – Seeking Alpha

By Mike Caggeso of Monday Morning

By Mike Caggeso

Gold hit two historic milestones in 2008.

First, in early March, the “yellow metal” hit its all-time high of $1,030 an ounce.

Just three months later, the price of gold for December delivery had plummeted to $681 an ounce, a 21-month low and 33.9% drop from its record high.

Most gold bugs were equal parts puzzled and brokenhearted. The world’s stock markets tanked, as did some of its biggest economies. In such an environment, they thought, gold should have risen. After all, gold is widely considered to be a safe-haven investment when everything else is spiraling south.

However, Money Morning Contributing Editor Martin Hutchinson understood perfectly what other investors did not.

“Gold is not a safe haven against recession,” said Hutchinson. “It’s a safe haven against inflation.”

In the past year, commodities prices skyrocketed – across the board. That was especially true of oil, which hit a record high $147 a barrel. Corn, wheat, and soybeans all hit record highs, as well.

That price escalation tightened household and corporate budgets, and was a primary reason why the U.S. economy posted a gross-domestic product (GDP) decline of 0.3%. With that negative growth, the third quarter was the beginning of what many experts believe will be the nation’s first recession since 2001.

However, the inflation epidemic has waned significantly, as global demand for raw materials has plummeted. Price for such staple foods as corn, soybeans and wheat have all come down from their record highs – in near-lockstep fashion.

Corn futures are down nearly 50% from their summer high of $8 per bushel. The same is true of soybeans and wheat, with each having lost roughly half their value. In fact, wheat hit a 16-month low in mid-October.

As most of us noticed, gas prices have fallen 48% from their July 17 high of $4.114 a gallon.

And not coincidentally, gold has fallen 22% in that same time frame.

However, this report examines the pending commodities rebound – a projected slow-and-steady increase in commodity prices that will reverse the breakneck plunge below fair value that commodities have experienced for much of this year.

Our objective now: To chart the expected path of gold prices in the New Year.

This report also reveals another wild card inflationary indicator that Hutchinson believes will carry gold prices to $1,500 an ounce by the end of 2009.

Two Catalysts For Gold’s Climb

The U.S. Department of Agriculture’s Oct. 10 Crop Production Report said acreage for a handful of staple food commodities has shrunk:

Corn acreage fell 1.2%.
Soybean acreage dropped 1.4%.
Canola acreage dropped 1.9%.
Sunflower acreage shrank 0.8%.
And acreage of dry edible beans fell 0.7%.

That naturally translates to higher prices because it squeezes the supply of the particular commodity. And it does so at a time when demand continues to escalate from populations in China, India and Latin America. And higher prices equal inflation.

But Hutchinson – who correctly predicted this last run-up in gold prices – says there’s another catalyst that’s right now inherent in the U.S. economy that could help vault gold prices to $1,500 an ounce by the end of 2009. And it has to do with the much-ballyhooed $700 billion rescue plan.

The philosophy behind the rescue plan is elegantly simple: By providing a portion of the $700 billion to foundering U.S banks, the Treasury Department believed it could provide banks with badly needed capital, and get them to start lending money once again – jump-starting the economy in the process.

Since September 2007, U.S. Federal Reserve policymakers have cut the benchmark Federal Funds target rate nine times – from 5.25% down to the current 1.0% rate – to increase bank-to-bank lending and bank-to-consumer lending.

“The government is pumping money in so many banks, and that money has to come out somewhere,” Hutchinson said.

Right now, banks aren’t boosting lending. Instead, they are using the cash to finance buyouts of other banks. Even so, that money will “come out” into the economy in the form of higher stock prices for banks. That will make consumer/investors wealthier, and could make them more confident in the economy. If they’re more confident, they will spend. As that happens, food prices should begin ticking upward, adding another set of thrusters to gold prices.

“Everybody thinks that because we’re having a horrible recession, we’re not going to have inflation. I think that’s probably wrong,” Hutchinson said. “I think gold has quite good hidden-store value.”

As gold prices increase, count on more investors leaving the sidelines to invest, too, causing the surge in gold prices to accelerate and steepen.

“As gold goes up, it gets more popular and investors start piling into it,” Hutchinson said.

And if gold gets anywhere near the $1,500 mark, sell. Prices that high will likely fall back or plateau as the Federal Reserve begins raising interest rates and strengthening the U.S. dollar, Hutchinson said.

Five Ways to Play Bottom-Basement Gold

Before we get too far ahead of ourselves, let’s first look at five ways to play bargain-basement gold prices.

The SPDR Gold Trust ETF (GLD) – formerly StreetTracks Gold – is a fund whose shares are intended to parallel the movement of gold prices. Since gold prices started falling along with gas prices, SPDR Gold Trust has stayed within a 0.5% margin of gold prices. This exchange-traded fund (ETF) eliminates any investor concern over storage and delivery while giving them exactly what they want – gold.

Toronto-based Barrick Gold Corp. (ABX) has 27 mines, mostly in North America and South America, and is developing or exploring 11 more. With a market cap of more than $20 billion, it has considerably more liquidity than most mining companies. Barrick is primarily a gold miner, but it also has copper and zinc mining operations. As far as investors are concerned, there are two ways to look at that: It’s not a pure play, per se, but then again, this is a company stock, not a bar of bullion. Also, having operations other than gold can help stabilize the company’s bottom line in case problems arise at a gold mine.

Denver-based Newmont Mining Corp. (NEM) is primarily a gold producer with operations in the United States, Australia, Peru, Indonesia, Canada, New Zealand and Mexico. Its reserves are hovering around 86.5 million ounces. Like Barrick, this is a mining stock play, and is subject to market swings – as well as fluctuations in gold prices. That can be a significant tailwind, especially if you believe the stock market has bottomed out or is close to doing so. Hutchinson – forever a value-oriented investor – warned that Newmont might be a little too pricey now. Investors may want to wait for the company’s stock price to settle before getting in.

Hutchinson thinks the best value for a gold mining stock can be found in Yamana Gold Inc. (AUY), another Toronto-based company that’s small now, but has rapidly expanding production.

But for investors who just want gold – not an ETF or stock – the best avenue is an EverBank Select Metals Account: EverBank accounts has a minimum deposit that is 98% lower than its competitors, and its commission costs are up to 86% lower than other metals’ brokers and bullion banks. It offers two types of gold accounts: Unallocated (your purchased gold is pooled with that of other investors, eliminating storage and maintenance costs; the minimum deposit is $5,000), and Allocated (you directly own the gold you purchase, held in your own private account; $7,500 is the minimum deposit here).

Both types of accounts can be set up 24/7 online. But if you prefer the phone, call 866-326-6241, and be sure to give them the code 12608 when setting up an account.

We should point out that the publisher of Money Morning has a marketing relationship with EverBank, but that’s because its products are among the best in class.

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Simple Moving Averages Make Trends Stand Out

17 Monday Nov 2008

Posted by jschulmansr in Bollinger Bands, commodities, Copper, Currency and Currencies, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, mining stocks, Moving Averages, oil, precious metals, silver, Technical Analysis, Today, U.S. Dollar, Uncategorized, uranium, Water

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Simple Moving Averages Make Trends Stand Out

By: John Devcic of BK TRADER FX The 5 Things That Move The Currency Market

Moving averages are one of the most popular and often-used technical indicators. The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool. You will often hear about three types of moving average: simple, exponential and linear. The best place to start is by understanding the most basic: the simple moving average (SMA). Let’s take a look at this indicator and how it can help traders follow trends toward greater profits.

Trendlines
There can be no complete understanding of moving averages without an understanding of trends. A trend is simply a price that is continuing to move in a certain direction. There are only three real trends that a security can follow:

An uptrend, or bullish trend, means that the price is moving higher.
A downtrend, or bearish trend, means the price is moving lower.
A sideways trend, where the price is moving sideways.

The important thing to remember about trends is that prices rarely move in a straight line. Therefore, moving-average lines are used to help a trader more easily identify the direction of the trend. (For more advanced reading on this topic, see The Basics Of Bollinger Bands and Moving Average Envelopes: Refining A Popular Trading Tool.)

Moving Average Construction
The textbook definition of a moving average is an average price for a security using a specified time period. Let’s take the very popular 50-day moving average as an example. A 50-day moving average is calculated by taking the closing prices for the last 50 days of any security and adding them together. The result from the addition calculation is then divided by the number of periods, in this case 50. In order to continue to calculate the moving average on a daily basis, replace the oldest number with the most recent closing price and do the same math.

No matter how long or short of a moving average you are looking to plot, the basic calculations remain the same. The change will be in the number of closing prices you use. So, for example, a 200-day moving average is the closing price for 200 days summed together and then divided by 200. You will see all kinds of moving averages, from two-day moving averages to 250-day moving averages.

It is important to remember that you must have a certain number of closing prices to calculate the moving average. If a security is brand new or only a month old, you will not be able to do a 50-day moving average because you will not have a sufficient number of data points.

Also, it is important to note that we’ve chosen to use closing prices in the calculations, but moving averages can be calculated using monthly prices, weekly prices, opening prices or even intraday prices. (For more, see our Moving Averages tutorial.)

Figure 1: A simple moving average in Google Inc.

Source: StockCharts.com

Figure 1 is an example of a simple moving average on a stock chart of Google Inc. (Nasdaq:GOOG). The blue line represents a 50-day moving average. In the example above, you can see that the trend has been moving lower since late 2007. The price of Google shares fell below the 50-day moving average in January of 2008 and continued downward.

When the price crosses below a moving average, it can be used as a simple trading signal. A move below the moving average (as shown above) suggests that the bears are in control of the price action and that the asset will likely move lower. Conversely, a cross above a moving average suggests that the bulls are in control and that the price may be getting ready to make a move higher. (Read more in Track Stock Prices With Trendlines.)

Other Ways to Use Moving Averages
Moving averages are used by many traders to not only identify a current trend but also as an entry and exit strategy. One of the simplest strategies relies on the crossing of two or more moving averages. The basic signal is given when the short-term average crosses above or below the longer term moving average. Two or more moving averages allow you to see a longer term trend compared to a shorter term moving average; it is also an easy method for determining whether the trend is gaining strength or if it is about to reverse. (For more on this method, read A Primer On The MACD.)

Figure 2: A long-term and shorter term moving average in Google Inc.

Source: StockCharts.com

Figure 2 uses two moving averages, one long-term (50-day, shown by the blue line) and the other shorter term (15-day, shown by the red line). This is the same Google chart shown in Figure 1, but with the addition of the two moving averages to illustrate the difference between the two lengths.

You’ll notice that the 50-day moving average is slower to adjust to price changes, because it uses more data points in its calculation. On the other hand, the 15-day moving average is quick to respond to price changes, because each value has a greater weighting in the calculation due to the relatively short time horizon. In this case, by using a cross strategy, you would watch for the 15-day average to cross below the 50-day moving average as an entry for a short position.

Figure 3: A three-month

Source: StockCharts.com

The above is a three-month chart of United States Oil (AMEX:USO) with two simple moving averages. The red line is the shorter, 15-day moving average, while the blue line represents the longer, 50-day moving average. Most traders will use the cross of the short-term moving average above the longer-term moving average to initiate a long position and identify the start of a bullish trend. (Learn more about applying this strategy in Trading The MACD Divergence.)

Support and Resistance
Support and resistance, or ceilings and floors, refer to the same thing in technical analysis.

Support is established when a price is trending downward. There is a point at which the selling pressure subsides and buyers are willing to step in. In other words, a floor is established.
Resistance happens when a price is trending upward. There comes a point when the buying strength diminishes and the sellers step in. This would establish a ceiling. (For more explanation, read Support & Resistance Basics.)

In either case, a moving average may be able to signal an early support or resistance level. For example, if a security is drifting lower in an established uptrend, then it wouldn’t be surprising to see the stock find support at a long-term 200-day moving average. On the other hand, if the price is trending lower, many traders will watch for the stock to bounce off the resistance of major moving averages (50-day, 100-day, 200-day SMAs). (For more on using support and resistance to identify trends, read Trend-Spotting With The Accumulation/Distribution Line.)

Conclusion
Moving averages are powerful tools. A simple moving average is easy to calculate, which allows it to be employed fairly quickly and easily. A moving average’s greatest strength is its ability to help a trader identify a current trend or spot a possible trend reversal. Moving averages can also identify a level of support or resistance for the security, or act as a simple entry or exit signal. How you choose to use moving averages is entirely up to you.

For further reading on moving averages, check out Simple Moving Averages And Volume Rate-Of-Change and Basics Of Weighted Moving Averages.

by John Devcic, (Contact Author | Biography)

John Devcic is a freelance writer, market historian and private speculator. After investing in a mutual fund right out of high school and losing his initial investment of $350, Devcic began to believe he could do better with his money then the so-called experts could. Over the years a healthy and sometimes unhealthy obsession with how the markets work and how they worked in the past has made Devcic a true market historian. He reminds himself at all times that the market – while ever-changing – always seems to repeat itself.

Happy Birthday GLD: Gold ETF Excels Four Years Out – Seeking Alpha

17 Monday Nov 2008

Posted by jschulmansr in commodities, deflation, Finance, gold, hard assets, inflation, Investing, investments, Latest News, Markets, precious metals, Uncategorized

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Happy Birthday GLD: Gold ETF Excels Four Years Out – Seeking Alpha

By Adam Hamilton of Zeal Speculation and Investment

Amidst our seemingly endless slog through today’s dark sentiment wastelands plaguing the markets, we have a birthday to celebrate. Four years ago this week, a revolutionary ETF was launched that forever changed trading dynamics within the global gold market. Known today as the SPDR Gold Shares, GLD has been wildly successful by any measure.

GLD’s rise to fame has not been easy. While a few contrarians loved the idea of a gold ETF as a way to broaden investor participation in this gold bull, many investors were very skeptical. Some were downright hostile. Although rehashing all these obstacles GLD has faced is beyond the scope of this essay, I wrote about a gold ETF in 2002 years before GLD hit the market and also GLD itself in early 2006, late 2006, and late 2007. These past essays can still fill you in on GLD’s history and dispel many myths surrounding it.

GLD has overcome much to become not only a juggernaut in the gold world, but in the entire ETF world as well. Last week, GLD was the 3rd largest ETF on the planet with $18b worth of net assets (physical gold bullion in its vaults)! Only the (SPY) S&P 500 ETF and the (EFA) large-cap foreign stocks ETF were larger. GLD is bigger than the famous (QQQQ) NASDAQ 100 ETF, the (DIA) Dow 30 ETF, the (XLF) S&P 500 financial stocks ETF, and the (XLE) S&P 500 energy stocks ETF. GLD is huge!

In order to become the 3rd largest ETF in the US out of a universe now exceeding 800, GLD’s custodians have had to execute on their mission exceedingly well. GLD is simply designed to track the price of gold. It grants stock traders an easy and efficient way to add gold exposure to their portfolios. As I’ve discussed extensively in my past GLD essays, it is not a substitute for physical gold coins as the foundation for a long-term investment portfolio. But it’s not meant to be. It is for mainstreamers not well-versed in gold.

GLD’s advantages to traders are legion. It can be bought and sold instantly in any standard stock account, for trivial stock-trading commissions. It can be shorted if one expects a gold correction. A high-volume and highly liquid GLD options market has also sprung up, providing more sophisticated traders with excellent tools to exploit projected gold moves via stock options. GLD is inarguably the easiest and quickest way to get gold exposure.

And GLD’s contribution to this gold bull has been massive as well, driving the gold price higher for all gold investors whether they own GLD or not. It radically widened investor participation in this gold bull, creating a direct conduit for vast pools of stock-market capital to chase gold. And chase gold it has. As of this week, GLD held an amazing 749 tonnes of physical gold bullion in trust for its investors!

This is a staggering amount of the yellow metal and difficult to understand without context. Traditionally, the largest gold holders are the national central banks of the world. Around 100 countries own gold bullion. If you put GLD in this list of elite central banks, it holds more gold today than all but 7! And after it merely grows another 2.1%, GLD will overtake Japan to become the 7th largest gold holder on the planet.

But although GLD is massive in the world of gold, it remains very small relative to the financial markets. With its $18b market cap last week, 118 individual companies in the S&P 500 are each bigger than it. This is even more impressive considering these companies’ market caps were considered from severely depressed end-of-October levels. The top 20% of the S&P 500, the elite S&P 100 companies, collectively had a $5935b market cap at the end of last month. So GLD has plenty of room to grow despite its size.

By acting as a conduit between stock-market capital and physical gold itself, GLD has really changed the dynamics of the world gold trade. There are many other gold ETFs around the world, but GLD has something like 85% of the total assets of all the world’s gold ETFs. It is the only individual gold ETF that really matters. So in this series of essays I have been studying GLD’s ongoing market impact since its launch.

This first chart plots GLD’s holdings since its birth on November 18th, 2004. I like to compare GLD’s gold bullion held in trust with the performance of the price of gold, slaved to the right axis. Not only is multiplying its initial holdings by 94.3x as of mid-October utterly remarkable, but the way these gold holdings have grown is fascinating. They have been far more stable than even GLD’s most optimistic proponents, including me, originally expected at launch.

While GLD’s holdings have indeed contracted modestly from time to time, its strategic growth trajectory has been tremendously impressive. GLD’s gold has climbed in a somewhat stair-stepped fashion. Of course when gold is surging in a powerful upleg, interest in gold investment is high and GLD grows rapidly. But provocatively, even when gold is not surging, GLD still tends to grow moderately on balance.

If you carefully examine every sharp correction suffered by gold above, within them GLD’s holdings really don’t fall all that much on a percentage basis. I would have expected much larger declines during gold corrections when GLD was born. Also interesting is GLD’s behavior during the long, grinding, sideways consolidations in gold that bleed away enthusiasm. It still exhibited moderate growth during these slow times. This performance is stellar, GLD is truly a rock star.

To understand why, consider how tracking ETFs work. To match percentage moves in the price of its underlying asset, a tracking ETF has to see similar supply-and-demand pressures. But supply and demand for GLD shares from stock traders doesn’t necessarily match that of gold futures from futures traders. So in order for GLD to fulfill its mission, GLD’s custodians must actively augment or retard GLD supply to ensure this ETF tracks its underlying asset’s moves tightly. This isn’t easy.

If stock traders demand relatively more GLD than futures traders are buying gold, GLD’s price will decouple from gold to the upside. GLD’s custodians have to vent this excess demand into the physical gold market in order to equalize the demand pressure differential. So when GLD demand exceeds gold demand, they issue new GLD shares and use the proceeds to buy physical gold bullion. This works simultaneously on two fronts. Increasing GLD share supply absorbs the outsized ETF buying pressure and then buying gold with the resulting stock-market capital forces its price to rise more in line with GLD.

So whenever you see GLD’s bullion holdings rise in these charts, it means stock traders were buying GLD at a faster rate than futures traders were buying gold. And as you can see, outside of a few minor pullbacks, GLD’s holdings have grown relentlessly. This means GLD is becoming ever-more popular and stock traders are buying it up at a faster rate than underlying gold demand. So GLD must issue shares and buy gold to ensure this ETF keeps tracking gold closely.

Now shunting stock-market capital directly into gold is wonderful when ETF demand is expanding. It has accelerated this secular gold bull. But the massive pools of stock-market capital having access to gold is a sharp double-edged sword. If stock traders ever start selling GLD at a faster rate than gold futures selling, GLD will be forced to contract its holdings. If it doesn’t, GLD will decouple from gold to the downside and fail its mission.

If excessive GLD shares are being dumped on the market and it is falling faster than gold, GLD’s custodians have to buy back this excess supply. Where do they get the cash? By selling gold bullion. This works two ways as well. Selling physical gold forces stock-market selling pressure on GLD into the physical market to equalize the differential. And then using the resulting proceeds to buy back GLD shares neutralizes the excessive ETF selling pressure and keeps GLD tracking gold.

So when (not if) a big disproportionate sustained GLD selloff happens in the future, it will lead to gold falling much faster and farther than it would have if stock-market capital wasn’t deployed in it. Personally I’m glad stock investors can get gold exposure via GLD. Yes, it increases upside and downside volatility. But this is typical as secular bulls evolve. The higher a price goes, the more capital gets interested in chasing it. The more capital flooding into a market, the more volatility it generates. Even without GLD, gold volatility would still gradually increase.

But rather impressively, so far we haven’t seen the massive unwinding of GLD positions that many gold investors understandably fear. GLD’s holdings have grown steadily and relentlessly for 4 years running now. And this has happened through mighty uplegs, wickedly fast and brutal corrections, and long grinding consolidations. As long as demand for GLD continues to grow faster than demand growth for gold itself, GLD will have to continue ramping up its vast holdings.

And with GLD’s holdings running at just 0.2% of the market cap of the S&P 500 at the end of last month, there is lots of room to grow. As more stock investors realize the importance of having some gold exposure in their portfolios, many will buy some GLD shares. At 1% of US portfolios, GLD would have to grow 5x bigger from here. This is not an aggressive or unrealistic expectation within a secular gold bull. At 3% of US portfolios, it would have to expand by 15x. This would make it the world’s largest gold holder by far.

Many hardcore physical-gold-coin investors, including me, have long wondered how GLD owners’ resolve would weather a severe correction in gold. Would they panic and dump GLD, exacerbating the decline in gold? Or would they hold steady? Since GLD is such a trivial part of the aggregate portfolio of all US investors, maybe it is just too inconsequential to bother selling. At any rate, this past year was a great test for GLD owners. Gold was crushed, yet GLD still didn’t see disproportional selling. This chart zooms in.

When gold powered from around $750 in October 2007 to just over $1000 in mid-March, it is no surprise GLD’s holdings were growing. Everyone, especially non-contrarian mainstreamers, loves a hot investment. GLD’s holdings grew to an all-time high of 664 metric tons. But gold cracked on a Fed rate cut surprise (75bp instead of the 100bp expected) in mid-March and plunged 15.3% by early May. Did this spook GLD owners? Darned right it did! Check out the sharp drop in GLD’s holdings over this period.

Since GLD owners were selling this ETF at a faster rate than the futures guys were hitting gold itself, GLD’s holdings fell 12.6% over this span. Having this giant ETF release 1/8th of its physical bullion into the market certainly exacerbated this correction. But interestingly as soon as gold stabilized, so did GLD’s holdings. They held flat near 600t until mid-June when gold started rallying again. Remember that as long as GLD’s supply-and-demand trends match gold’s, no changes in holdings are necessary.

From mid-June to mid-July as Fannie Mae and Freddie Mac were failing, gold powered 12.6% higher. Even though gold itself couldn’t best its $1005 mid-March high, GLD’s holdings easily surged well above their March levels to new records. Over this same 5-week span GLD’s gold bullion held in trust soared by 17.5%! Stock traders were buying GLD far faster than gold itself was rising, so this ETF’s custodian shunted this excess demand into physical gold.

From mid-July to mid-September, gold took a massive 23.8% beating. It was brutal, the worst correction of this gold bull. If there was ever a time for the “weak hands” owning GLD to panic, this was it. And while GLD selling was indeed excessive so its custodians had to sell gold bullion to buy back GLD shares to maintain tracking, GLD’s holdings still only fell 12.5%. This is about half as much as gold fell, not too bad. GLD owners didn’t get as scared as I thought they would in such a massive gold correction.

Gold rallied strongly out of its mid-September lows. In fact, on September 17th it rocketed 11.1% higher on a single trading day! It was one of gold’s biggest daily gains ever in percentage terms. This extraordinary move happening on a day when the S&P 500 fell 4.7% drove tremendous interest in GLD. Stock investors flooded into it at a much faster rate than futures traders were buying gold. That day alone GLD bought 36 tonnes of gold, growing its hoard by 5.9%!

In early October as the financial panic hit, gold got sucked into it. Everything was sold due to margin calls, forced fund redemptions, deleveraging, and fear. Sadly gold was sold as well. I recently wrote an essay on this curious selloff if you are interested. From early October until this week, gold plummeted another 22.4%. If this didn’t terrify GLD owners, nothing will. Here we had a once-in-a-generation financial-market panic and gold failed to soar as expected. Its selloff was a terribly depressing development.

But GLD owners didn’t panic. Their resolve was very impressive. At worst, GLD only had to shed 3.1% of its holdings during this steep gold selloff! Even afterwards this week, GLD’s bullion was still merely near 6-week lows and not far from its all-time high achieved in mid-October. If GLD investors were tough enough not to panic in 2008, a year of extraordinarily brutal and recurring gold selloffs, then I doubt they are a big threat in a more normal gold correction not driven by an exceedingly rare global financial panic.

The net result of all this? Check out the trends on this chart. Gold itself has been in a miserable downtrend since mid-March. It even fell under support in August, September, October, and November. Even long-time hardcore gold investors have had a tough time dealing with this psychologically. Yet despite such a rotten price and sentiment environment, GLD’s holdings have been in an uptrend this past year! Indeed GLD’s holdings soared to new all-time highs twice even after gold had started correcting aggressively.

In recent weeks, GLD’s holdings have been discussed in contrarian circles. If gold fell below a certain price, would GLD owners exit en masse? If they did, gold would plummet of course. GLD would have to shed gold fast to buy excessive GLD share supply. In a worst-case panic scenario, GLD could conceivably dump hundreds of tonnes of gold onto the markets in a matter of weeks. Some have likened it to a “rogue central bank” due to this dire potential.

Is this GLD-as-a-rogue-central-bank-like-selling-vehicle possible? Sure, anything is possible in the markets. But is it likely? Certainly not if 2008’s strong GLD holdings performance truly reflects GLD owners’ resolve. And this makes sense. Despite GLD’s large size relative to gold, it is trivial relative to stocks. An average mainstream investor owns so little GLD that it isn’t even worth worrying about for that particular investor. GLD owners passed 2008’s tough tests with flying colors.

Another way I’ve watched GLD evolve over the years is through its trading volume. The more popular it gets, the more its volume grows. This is true both in terms of absolute share volume and capital volume. Capital volume is price multiplied by share volume. Trading 10m shares of GLD in the $40s is not the same as trading 10m shares of GLD in the $80s. Traders’ interest in and usage of GLD is soaring.

In addition to the raw daily GLD share volume in red, this time I added a quarterly-average-volume line in yellow. This yellow line distills out a lot of the random noise and shows the steady growth of absolute daily volume in GLD. Interestingly it even continued growing on balance in Q2 and Q3 2008 in the midst of gold’s latest correction. Growing volume is a sign of a healthy bull capturing the attention of more and more traders. And of course capital volume is growing even faster than share volume due to gold’s higher prevailing prices over the lifespan of this ETF.

Provocatively, GLD had one giant volume spike that wouldn’t fit on this chart. On September 17th it rocketed to 66m shares and the next day it remained incredible at 61m shares. As you can see, this is way beyond GLD’s precedent. What drove this superspike? In past GLD essays, I’ve observed that big gold selloffs can lead to outsized GLD volume spikes. Gold plunges on a given day, GLD traders get scared, and they sell aggressively.

But in mid-September 2008, it was a monster rally that drove GLD volume rather than a selloff. That was the day that gold soared 11.1% in its biggest daily rally in 28 years. This offers another important glimpse into GLD owners’ psyches. When gold soared, enough traders knew about GLD to buy it aggressively. This probably reflects a lot of latent interest in this gold bull among stock traders that is usually overlooked. GLD’s custodians’ performance in keeping GLD tracking gold through such a big and fast surge in demand is very impressive.

This last chart explores the variance between gold itself and GLD. While it seems silly now after 4 years, back in the initial months of GLD’s life naysayers warned it would fail in tracking gold. They thought no one could be nimble enough to actively shunt stock-market capital into and out of gold fast enough to keep an ETF tracking this metal. Thankfully time has proven these fears unfounded, just like most of the other fears surrounding this unique trading vehicle.

Over its entire lifespan, GLD’s daily correlation r-square with gold has run a staggering 99.98%! And yes, this is the r-square and not the raw correlation coefficient itself. It simply could not be any higher. From a stock trader’s perspective, for all intents and purposes GLD’s performance was identical to gold’s. It has fulfilled its mission of tracking gold’s movements perfectly. GLD is a great trading proxy for gold itself.

Early on, GLD tracked gold’s absolute levels more tightly than it does today. The yellow line above is the GLD price multiplied by 10, since each GLD share represents a tenth of an ounce of gold held in trust. As you can see above, this yellow line is falling farther behind the blue gold line as GLD ages. This is totally normal and reflects GLD’s expense ratio. All ETFs charge a small fee for their services, and in GLD’s case this is 0.4% per year.

In return for providing the excellent trading vehicle that GLD has proven to be, its custodians have the right to earn a reasonable profit from their hard work. So each year they sell 0.4% of this ETF’s gold to cover their expenses and earn a profit. This management fee is evident in GLD’s tracking of gold. The red downtrend above shows the 5-day moving average of GLD’s daily variance to gold itself. Its generally tight downtrend proves GLD’s custodians have been doing an excellent job in keeping GLD aligned with gold.

This variance downtrend is the direct result of that 0.4% expense ratio. If you go out 1 year after inception, this downtrend is centered near -0.4%. At 2 years, it is around -0.8%. Not only is 0.4% a year very reasonable for running GLD, there haven’t been any surprises. Like all ETFs, GLD’s net-asset value per share is shrinking slightly every year. But GLD is still deftly fulfilling its mission of tracking gold and providing easy and efficient access to gold exposure for stock-market capital.

Whether GLD is something you own, want to own, or wouldn’t touch with a ten-foot pole because you favor other forms of gold, ultimately it has been very good for this gold bull. All gold investors, regardless of their own investment preferences, want more capital to follow them into gold. We don’t care where this capital comes from, we just want the buying pressure. By creating a conduit between the stock markets and physical gold, GLD has succeeded in radically broadening investor participation in just 4 years.

And as long as this secular gold bull remains intact, GLD should only help gold on balance. The financial panic has driven up investment demand for gold, as GLD’s soaring holdings amidst a falling gold price vividly illustrate. And global mined gold supplies were already falling for years even before gold started correcting and the financial crisis hit. With gold miners’ decimated stock prices and the insurmountable difficulties in getting debt and equity financing today, gold mined supplies’ contraction will accelerate.

On top of this, according to Forbes the US government alone is on the hook for $5 trillion in bailouts so far! Much of this bailout money will be created by the Fed out of thin air and eventually filter into the real economy. And when it does, boy inflation is going to skyrocket. If you think GLD has been popular for the past 4 years, imagine how much more it will be over the next 4 if headline CPI inflation doubles or triples thanks to these asinine socialist bailout schemes? GLD should grow many times over from here.

At Zeal we have long been strategic investors and speculators unswayed by irrational paranoia. Cold hard facts are all that matter, not the endless permutations of wild conspiracy theories. Years before any gold ETF existed, I wrote about how great one would be to broaden gold participation into the mainstream. And since GLD launched, I have fought the many silly myths used to scare investors away from this innovative trading vehicle. GLD has been great for this gold bull!

Today more than ever, investors and speculators need clear thinking and sound analysis untainted by the shrill emotions ruling the day. While the markets are illogical now, they won’t be for long. Panics never persist, but they drive great once-in-a-lifetime bargains that shrewd investors and speculators can capitalize on. If you are tired of being ruled over or unduly influenced by the shifting tides of popular sentiment, join us today. Subscribe to our acclaimed monthly newsletter to grow your market wisdom!

The bottom line is GLD has been a smashing success. By excelling in its mission of tracking gold and providing an easy and efficient way to grant gold exposure to mainstream stock investors, it has grown into the 3rd largest ETF on the planet. And this is even more impressive considering the heavy skepticism and withering attacks on GLD launched from fringe factions within the traditionally pro-gold community.

Whether you or I would own GLD personally or not is irrelevant. The point is many nontraditional gold investors have flocked to GLD and this trend should only accelerate. Broader participation in this gold bull, more capital from more origins bidding up gold, greatly benefits all gold investors. And as 2008 has shown, GLD owners aren’t anywhere near as skittish in a gold selloff as many assumed they would be.

Disclosure: Long GLD.

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