Free Republic

In case you're not paying attention, the silver market has gone nuts today, surging until near $50, before collapsing to around $46. It's the most controversial, hotly-followed asset class in the world. So what's the real story. Earlier this month, Philip Klapwijk of GFMS presented a very through, complete look at the silver market: from its demand, its production, and where the current market stands in history. It's definitely a great, complete lesson. CLICK ABOVE LINK FOR THE REST

<p>Congressman Paul Ryan, one of the least insane men in Washington, has a ten-year plan.</p> <p>President Obama, one of the most insane spenders in Washington, has a twelve-year plan.</p> <p>After hearing the president’s plan, Standard & Poor’s downgraded the U.S. sovereign-debt outlook to “negative.” Ah, the fine art of understatement. In 1940, after the fall of France and the evacuation from Dunkirk, presumably they downgraded Britain’s outlook to “spot of bother.”</p>

The greenback has been in decline for a decade, but the latest slide is setting off alarms. Still, a collapse seems unlikely given the lack of a real global alternative to the dollar's status. Housing crisis, 2007. Banking crisis, 2008. Unemployment crisis, 2009. European debt crisis, 2010. For 2011: a dollar crisis? You will probably hear more warnings to that effect soon if the U.S. currency continues on its current path. Although the dollar has mostly been falling against its major foreign rivals since 2001, the slide this spring is taking it to levels that fit conveniently with a variety...

Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market. The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world's predominant national currencies. A combination of factors accounts for the weakness, with the Federal Reserve's easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the financial mess in Washington leading the way. In short, as trader Dennis Gartman noted Thursday, "the rout...

Members of the International Monetary Fund emerged from their huddle in Washington last weekend resolved to keep every option open to slow the flood of dollars pouring into their countries, including capital controls. That's a dangerous game, given the need for investment to drive economic development. But it's also increasingly typical of the world's reaction to America's mismanagement of the dollar and its eroding financial leadership. The dollar is the world's reserve currency, and as such the Federal Reserve is the closest thing we have to a global central bank. Yet for at least a decade, and especially since late...

Back around 2005 when housing was booming, far from a sign of economic vitality, the proverbial "rush to the real" signaled a growing economic downturn. Thanks to a dollar in freefall as evidenced by a spike in the price of gold, always limited capital was migrating toward the hard, unproductive assets least vulnerable to currency devaluation. To put it simply, the real recession was the housing boom. Since the dollar's lurches in either direction tend to set the tone for global currencies, our monetary error was something shared by everyone as a run on paper currencies around the world fostered...

Gold futures rallied above $1,500 an ounce on Wednesday, as the U.S. dollar fell sharply and investors bought the precious metal as a hedge against inflation and economic uncertainty. Gold for June delivery /quotes/comstock/21e!f:gc\m11 GCM11 +0.47% rose $10.70 to $1,505.80 an ounce in electronic trading on Globex. The weaker dollar, European sovereign-debt worries and Standard & Poor’s move Monday to cut its outlook on the U.S. sovereign rating have all spurred appetite for gold. In the currency markets on Wednesday, the greenback posted steep losses as the euro /quotes/comstock/21o!x:seurusd EURUSD +1.25% rallied 1.1% to $1.4498. The dollar index /quotes/comstock/11j!i:dxy0 DXY...

Gold extended gains to a record in New York as a drop in the dollar buoyed demand for the metal as an alternative investment. Futures surged yesterday after Standard & Poor’s revised its U.S. credit outlook to negative. Gold has jumped 5.3 percent this year as the dollar dropped 4.8 percent against a basket of six other currencies including the euro and British pound. Gold prices may keep rising for “some years into the future,” Blackrock Inc. fund manager Evy Hambro said in an interview with Mark Barton on Bloomberg TV’s “On the Move.” Gold for June delivery rose $1.60,...

The most astounding feature of the political fray as the 2012 election comes into view is that not a single Republican other than Congressman Ron Paul is stepping forward to brand as his or her own the issue of honest money. The whole party is into the negotiation with the president over the budget, and the underlying issue--the failure of our fiat currency--is up for grabs. It is true that there's plenty of blame to go around on the dollar. It had a value of 265th of an ounce of gold on the day that George W. Bush acceded to...

This week the dollar has had the classic opportunity to rally aggressively. Global risk appetite has subsided, commodity currencies have fallen and investors were willing to take profit. Instead, we have witnessed only a feeble attempt to rise. The dollar is more than sick, it’s terminal. With the Fed expected to now trail all other Cbanks when it comes to tightening, is putting the dollar near the bottom of the G10 carry trade league and up there with the classic funding currencies. Even the hawks are unable to save their currency from the abyss. Expect the fears of a...

In the United States, the media's interest has been focused on who won the game that was the potential government shutdown.  As usual the reporting is based on a sporting event and not the importance of the change of direction the shutdown represents.  At the moment there is no winner or loser; that will be decided if and only if spending is dramatically reduced and government begins to shrink appreciably.   Many of us have repeatedly called attention to the financial markets and international uncertainty precipitated by American monetary, fiscal and foreign policies by focusing on bell-weather commodity prices, particularly...

Frustrated by "the suffering of real families," President Obama's former top economic adviser recently called for action: "If I have a complaint about policy these days, it's that we're not doing enough," Christina Romer said in a speech last month at Vanderbilt University. "I think there are tools we have tools we have that we can use, and I think it's shameful that we're not using them." With unemployment still near 9% and the "real" unemployment rate at 15.7%, "we can't afford not to do more," Romer tells me in the accompanying video. "For heaven's sake with this many people...

Let the word go forth: On Friday, March 25, 2011, Warren Buffett predicted the decline of the U.S. dollar. In a speech given in New Delhi (where he's hunting up some cheap Indian stocks), the chairman of Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) warned investors to avoid "long-term fixed-dollar investments" such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money our government has pumped into the economy, when combined with interest rates so low they're practically giving money away, are combining to dilute the value of the dollar. As a result, Buffett warns:...

Believe it or not Ripley! The People’s Bank of China(PBOC) recommended yesterday that 1 billion Chinese consider buying gold as a hedge against inflation and to preserve values in a world where currencies can fall. The PBOC Financial Markets Review came out just as several major currencies were indeed declining in value against gold; the dollar,1%, the Swiss franc,2.5%, t he British pound, 2%, and the Japanese yen, 2%. Wow! Be like the Fed telling you to buy oil stocks or crude oil futures due to expectation higher gasoline prices this summer. So, add the PBOC to other secular influences...

Here is a thought experiment concerning two men who have issued money. One issued gold and silver coins that will today bring more in dollars than he charged for them. The other issued paper notes that are today worth but fraction the gold or silver they were worth at the time they were issued. One man is facing the possibility of years in prison after a federal jury found his issuing of money to have been a crime. The other man is walking around free and being treated by the authorities with great deference. Which is which? It turns out...

The front page of Section R of the March 14 edition of The Wall Street Journal was devoted to the pros and cons of investing in gold. The section posed the question, “Is gold a good investment?” It then, of course, presented two different points of view. One writer, a certified financial planner, answered, “Yes.” The other author, a chief investment officer, said, “No.” A better answer to the WSJ’s question would be, “Gold had better not be a good investment, because if it is, we are in for a dismal economy.” Of course, by the time that the WSJ...

The following is adapted from a speech delivered on February 16, 2011, at a Hillsdale College National Leadership Seminar in Phoenix, Arizona. TO BEGIN, consider one of the most important measures of property, the kilogram. It’s a measure of mass or, for non-scientific purposes, weight. According to the papers last week, a global scramble is under way to define this most basic unit after it was discovered that the standard kilogram—a cylinder of platinum and iridium that is maintained by the International Bureau of Weights and Measures—has been losing mass. You may think that this is impossible. Of all the...

Spending power erodes, and Fed may do more damage Guess what? Your pocket has been picked. I don’t mean your wallet, or even its contents. What I am referring to is the buying power of the money it contains. The consumer price index (CPI) tells the story. As you know, it measures the change in prices of a fixed basket of goods and services that the typical household supposedly purchases every month. The recent trend of the CPI does not reveal much to worry about. In 2010, consumer prices rose a relatively benign 1.5%. However, there is more to this...

US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the world’s largest economy have now risen by a quarter over the past four weeks. Such a sharp rise in US benchmark market interest rates matters a lot – and it matters way beyond America. The US government is now servicing $13.8 trillion (£8.7 trilion) in declared liabilities – making it, by a long way, the world’s largest debtor. Around $414bn of US taxpayers’ money went on sovereign interest payments last year – around 4.5...

Those nagging whispers warning that the United States is heading for an Argentina-like currency crisis are getting louder. The prospect of a prolonged devaluation of the US dollar is just one more challenge in what has already been a difficult period for savers and investors. Have we really reached the point where the greenback is in danger of becoming an “also ran” currency? (Snip) This correction has already started as millions of unemployed Americans can attest. The Federal Reserve has conceded that unemployment will remain elevated through 2011.