Oldtent Archives 2007 - 2008

What Blizzard . This must be a cunundrum wraped in and enigma cause it’s 85 right now and no snow in site.

This conundrum has nagged and nagged at me for years like my ex-girlfriend I had to finally kick to the curb.  I just want an explanation which makes sense if ya know what i mean!

goldismoney.info   - not sure why exactly I am reposting it..just thought it was interesting.  Whoever was looking for Moggy - she post at thetreeofliberty.com - in case no one has answered.  Post from goldismoney below:

was working outside the polls yesterday handing out Ron Paul info.

Came across a great old guy 72yrs old. He was shutting down his business of 20 years this week because the economy is in the crapper.

I said, “I think we are heading for a depression”.
He said, “Think again, we are already in one.”

We talked for a bit, he agreed that Ron Paul was great and our only real choice. But then said he had re-registered Democrat to vote for Hillary. WTF? “Why on earth?”, I asked.

He said, “I’m tired of voting for the right people so that I can get my heart broken and watch it all go downhill. It’s no use. I’m tired of being lied to and letdown. SO THIS TIME, I’M VOTING FOR THE WORST POSSIBLE CANDIDATE, because I KNOW SHE WON’T LET ME DOWN. I’m old, I want to be around to see it all collapse in flames.”

I thought he was joking, but he was dead serious. His wife on the other hand was voting for Ron Paul.

I can only hope to get to that age, not to mention being able to be that mobile and self reliant. My hat is off to both of them!!

Hope he had a cuppa ready for her when she got in!

….2 feet of snow on it…..They were in the next town… Curling.. 

……He’s 87 she’s 82…and they beat everybody…champions on a regular basis….

…..Dad Just gunned his Little front wheel drive sedan thru the snow and Wind…and made it most the way…..the walked the rest….Pretty Tough old Cunucks….

“Now we have LT US bond prices going through the roof as gold continues going up.  These two don’t add up, unless gold and bonds are signaling something far more sinister, for example a systematic banking collapse.”

Now, supposing we have that systemic collapse, but you still need to go shopping.  Which do you think the shopkeeper is more likely to accept, a twentieth oz. gold coin, or a piece of paper that says it is a  $100 Govt. Bond?

Later tonight, or some other night is fine……….Hope they are okay.

Long term treasury bonds are suppose to be one of the best indicators towards inflationary expectations - similar to gold.  High inflation concerns = low bond prices, high LT interest rates and high gold prices -  like the late 70’s - early 80’s.  Now we have LT US bond prices going through the roof as gold continues going up.  These two don’t add up, unless gold and bonds are signaling something far more sinister, for example a systematic banking collapse. 

I thought the LT bond was in the process of making a rounding top during the middle of last year, but it’s close to frying that hypothesis:

This is incredible and really shows how scared the bond market (i.e. the big money) is of a recession or prolonged disinflationary period IMO.  With a crumbling dollar and sky high commodities the bond price action doesn’t compute in my mind - these bonds are either about to reverse or these investors are looking out 5-10 years and seeing something nasty.  I’ve seen various economists argue this is due to a glut of world savings - but I don’t really buy that.  The last time bond prices were this high, the USD was worth 15% more.  Here is a closer look at the last 5 years:

  (perhaps, that’s it and bonds have *finally* topped out?!?)

And another look at long term rates on the verge of going to half century lows:

….Big Blizzard here…..and my parents are driving back to their home and are late….I may have to go dig them out of somewhere….stand by

“As international investors wake up to the relative weakening of America’s economic power, they will surely question why they hold the bulk of their wealth in dollars…The dollar’s decline already amounts to the biggest default in history, having wiped far more off the value of foreigners’ assets than any emerging market has ever done.” … The Economist

Blackouts crippling South African
gold mines spread to Botswana,
Zimbabwe, and Mozambique

Eskom, South Africa’s monopoly utility, can no longer supply
enough electrical power for the country. Many of South Africa’s
major gold mines have shut down, slashing production by 30,000
ounces of gold a day.

The mining industry is the heart of the South African economy.
And Eskom, in a desperate attempt to get enough power to the
mining industry, has cut off the electricity to other industries,
businesses, homes, and neighboring countries, including
Mozambique, Botswana, and Zimbabwe. Even after diverting all of
this electricity to the gold mines, they’ve only managed to restore
80% power to the mines.

The mines, however, say 80% power is touch-and-go to
re-starting the mines, and they’re scared about the reliability factor.
If the power goes off, they’ll have thousands of workers three miles
under the ground — and they’ll be roasted alive. So this is an
unsustainable way of reopening the gold mines.

As a result, gold production is going to take a major hit this
year. That means higher gold prices, and soaring gold options.
That’s bad news for South Africa’s gold mines, but it’s bullish for
gold, and great for the call options Meyer’s recommending.

Just last month, subscribers following his recommendations
bagged $17,505 profits. More coming as the crisis deepens.

The crisis began in mid-January when one of Eskom’s key
generating plants went down. The problem was exacerbated by a
number of other unforeseen breakdowns, maintenance failures,
and coal supply problems.

Still, Eskom was able to keep the power going to the mines
only by selectively shutting off the power to other customers.
But even that jerry-rigged system broke down in the last days
of January, and the mines had to shut down.

Eskom is struggling to restore electricity, and has the
power up to 80% of what the mines need. But the mines are
afraid to reopen because an unannounced brownout at the mines
could trap thousands of miners 3 miles under the ground, with
no air to breathe and no air conditioning to keep them from
broiling alive.

30,000 ounces of gold per day already lost to production.
And the crisis is deepening. The cut-off to Zimbabwe can slash
another 1,000 ounces of gold a day out of production, and a
similar amount of platinum.

Probably the scariest thing about this entire situation is
that Eskom itself is warning that they’re not going to be able
to get a handle on this disaster until the year 2013 — which
is when they’re hoping their next power plant will come online.

So it looks to us as if they may get the mines going with
band-aids — but it can’t last. It’s going to be fraught with
problems, there will probably be a major mining disaster, and
there are going to be riots, because people all over South
Africa are going to be out of their jobs.

And there’s no way this lost production can be made up
anywhere else around the world. Despite record-high gold
prices, gold production around the world has been stagnant.
It’s actually declined in three other of the world’s top five
gold-producing nations.

Which  may make the validity pretty shaky……..