Make a Difference and Become Involved, Let Your Voice Be Heard

Why aren't you more involved with government? Why not get involved with debates about where this country is heading and how we are going to get there? Maybe you don't have the time or you don't know how to write your congress people. Whatever the reason, the best time to stop being passive and start becoming active is right now!
There is now an easy to make your voice heard and hopefully, (just maybe) you too can make a difference: sign a petition on https://petitions.whitehouse.gov where they say:

“My administration is committed to creating an unprecedented level of openness in government. We will work together to ensure the public trust and establish a system of transparency, public participation and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in government.”— President Barack Obama

(Mind you, I'm not normally a big fan of Obama, but in this statement I whole-heartedly agree!)

Here are some examples of petitions (there are many more):

Petition	Link
Perform an assayed public audit of all the Treasury’s claimed 8,100 tons of gold and net of swaps, loans and sales.	http://wh.gov/PQxr
Place all members of the government under the same healthcare legislation that ordinary citizens are, with no exceptions.	http://wh.gov/PNgM

That petition to "Perform an assayed public audit of all the Treasury’s claimed 8,100 tons of gold"?

Here is what the folks over at ZeroHedge have to say about it:

That is one petition, which unlike all the other gimmicky wastes of time, that we (and certainly the German people if not the Bundesbank) would wholeheartedly endorse, and one which we hope promptly crosses the 25,000 signature threshold needed for a formal response from the White House.

Sadly, the response will be one denying what the people demand, but it will be interesting to see just what excuse the White House uses to shoot down an idea that is far more worthy of people's time and attention than "minting" coins whose only real symbolism is that America is flat broke.

Let 's change that and all get active!  Sign this petition now!

Facebook IPO

[2012.05.18] Is Facebook IPO the fantastic opportunity that many hope for?

[WSJ] Facebook Readies IPO Filing http://online.wsj.com/article/SB10001424052970204573704577187062821038498.html

Or a risk that inflated expectations will not be met? I am glad some people are asking themselves these questions:

[Financial Times] Critical scrutiny awaits Facebook’s IPO  http://www.ft.com/cms/s/0/68da0002-4aa6-11e1-8110-00144feabdc0.html

[2012.09.05] That IPO didn't turn out that well did it?  It didn't even take 4 months for this implosion.

The Apple Factory

This American(?) Life visits the Apple Factory in China: Read the transcript or listen to the audio of the show which has more emotional nuance.

Read Why Apple Makes iPhones In China and Why America’s Factories are Screwed for more discussion.

Apple Reports Earnings: [WSJ] Apple registered earnings of $13.1 billion, or $13.87 a share, up from $6 billion, or $6.43 a share. Revenue surged 73% to $46.33 billion. About 58% of revenue came from international sales.  [BetweenTheNumbers] reports that at the recent valuation of Apple shares ($455) the market capitalization of Apple was briefly higher than the GDP of Greece. (This is not really a fair apples-to-apples comparison, pun intended).

Lest you get too depressed by all this news, over at Google, an entirely different funny geek theme emerges, that of the Badass Engineer. However, much of this humor is directed at an audience of software engineers, so I give a fair warning to non-geeks.

Visualize the All the World's Gold

05-Jan-2012: This fact-filled graphic was just posted on ZeroHedge All The World's Gold
That is 165,000 metric tons = $8,487,797,102,400.00 at $1,600 per troy ounce.

25-Jan-2012: Of course you could laugh at all the news from the SLV fund and the January 25 Fed announcement RNN examines the Gold and Silver price action after the Fed's FOMCAnnouncement

Inspirations for 2012

Recharge your batteries with Sarah Peck's amazing Do Something SlideShare and then continue to her blog for more interesting readings.

If you are statistically inclinded, see Incredible Things that Happen Every 60 Seconds on the Internet

I don't think either of these things have much to do with the other.  In fact, the anti-couch-potato musings of Sarah Peck are probably the polar opposite and antidote to the "drown me in an ocean of meaningless facts, Facebook updates, Tweets, and other trivia" that the Internet dishes out every second of every day.

More MF Global and What it Means

02-Feb-2012 - Yahoo http://finance.yahoo.com/news/exclusive-mf-global-triggers-regulatory-220755040.html CFTC Considering extensive changes to how it regulates and reviews commodity trading institutions:

"Under the current regulatory system, the CFTC does not examine any futures commission merchants such as MF Global itself and instead is reliant on self-regulatory organizations such as CME to oversee them. Gensler has said it is not an ideal system."

"The CFTC changes being proposed would be divided into three groups.
The first batch would include changes to internal policies and procedures, and would most likely not be made public. A second group would involve changes to CFTC rules, and would need to be put out for public comment. The third group would result in changes to the law and would require action from Congress."

28-Jan-2012 ZeroHedge - 3 Months after MF Global Bankruptcy, investigators think the money vaporized.



11 Dec 2011 Unambiguous Wealth 2 – The MF Global Chronicles http://fofoa.blogspot.com/2011/12/unambiguous-wealth-2-mf-global.html

01 Dec 2011 Unambiguous Wealth: http://fofoa.blogspot.com/2011/12/unambiguous-wealth.html

Let's just see what are the objectives of the regulators of the USA, shall we?

SEC - The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.


CFTC - "The CFTC's mission is to protect market users and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives that are subject to the Commodity Exchange Act, and to foster open, competitive, and financially sound markets."


CME Group, which is composed of four Designated Contract Markets (DCMs) or Exchanges called the CME, CBOT, NYMEX, and COMEX, Although all four exchanges have been merged to form CME Group, each exchange remains a separate self-regulatory organization. Although the individual exchange rulebooks have been substantially harmonized, important differences remain.


Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.



US Dept of Treasury

Federal Reserve

FINRA

Merry Christmas 2011 and Happy New Year 2012

Fed Christmas Video: http://www.youtube.com/watch?v=Xk4AJHJuxUo

Twas the Night Before (Eurocrash) Christmas

Bull in a China Shop: http://www.youtube.com/watch?v=Nk_zpMory-0

China Gold Bull in Huaxi: http://www.youtube.com/watch?v=vC-NQ2tHiE8

Ron Paul 2012

I had a nice big sign (about 2 ft x 4 ft) on my front lawn "Ron Paul for President 2012".

Someone stole it.

My message is: "The United States has a Constitution and a Bill of Rights, and the First Amendment states: 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.'. 

I fight for your right to free speech.

Why don't you respect my right of free speech?"

I think I will replace the sign.

Measurement Moron

Here is a funny story.  

The other day I went to the bagel shop deli to pick up some breakfast.  I asked for a dozen bagels and 6 oz or so of sliced Lox.  The girl came back after a few minutes with a puzzled look and asked "6 oz of Lox is barely one slice, do you really want 60 oz?"

Incredulous at the idea of geting nearly four pounds of Lox, I said "No, I want about 6 oz, just slightly less than one-half of a pound."

Acting as if she knew what I wanted, she said, "Oh, OK" and flitted back to the weighing machine.

After I bought and paid for my items, I looked at the package of Lox.  It said exactly 0.60 lbs. 

What do you think happened?  

I guess the deli scale reads in decimal measures of pounds, rather than pounds and ounces. 

And it seems obvious that she did not know the difference between ounces and hundredths of pounds and probably didn’t know there are 16 ounces in a pound.  She may only vaguely realize that pounds is a unit of weight.

Here is my reconstruction of what probably happened behind the deli counter.  Originally, when I asked for 6 ounces, she started putting Lox on the scale.  After the first slice, it probably read 0.06 or more which caused her to come back to me to clarify what I meant by "6 oz".  After I said "slightly less than half a pound", something clicked in her head so she must have known that "one half" was a reading of 0.50, but she still went back to the scale and gave me 0.60 pounds of Lox.

She probably doesn’t even know what she doesn’t know.  She certainly did not ask me, "Ok, I don’t know about 6 oz, do you know what that is in pounds or how many slices?"

SAD, VERY SAD – It seems our educational system is failing our youth in some subtle and not so subtle ways. 

US Federal Reserve (THE FED)

21 Dec 2011 - Fed proposes rules to tame Wall Street risk-taking
Fed gives banks another "pat on the back, job well done".  Although Dodd-Frank bill was advertised as putting tough new rules on banks, the Fed now shows its hand: the rules will not be any tougher than agreed international rules (Basel III).  Meanwhile, two days ago the price of Bank of America sank below $5/share on a closing basis- below the minimum price level that some funds have for their equity holdings.  Until banks go back to showing bars of gold in their vaults, why should anyone trust them?

MF Global

Does anyone really believe the MF Global executives when they say the "have no idea" what happen to over $1.2 billion of customer funds? This is such a bald-faced lie that I cannot imagine our Congresspeople and investigators cannot see through this scam.

MF Global is a fraud and a criminal enterprise. They have been lying about their misappropriation of customer funds for use in their own proprietary trading schemes in every deposition and so-called "investigation". Claims of ignorance and shoddy record keeping are nothing but a smoke screen.

Logic calls out for a different interpretation. I know from vast experience of building such electronic marketplaces that all electronic trading systems are designed with a series of audit trails and logs such that every order, every action, and every trade is captured with virtually 100% accuracy. The systems know to the penny what each customer account is worth at every second of every day, within small differences only due to fluctuating prices of assets. In addition every electronic funds transfer is logged with meticulous accuracy and attention to detail. And 99% of all that information is flowing through the computer systems without ever being touch by human hands.

So the question about the “missing customer money” should be turned into a series of technical questions:

• Do you have systems to track the flow of funds?
• Do you have systems to track the orders and trades executed by customers?
• Do you have similar systems for your proprietary traders?
• How accurate are these systems?
• What percentage of assets and funds transfers must be manually reconciled at the end of each trading day?
• Do the systems ever cross each other?  In what way?
• Are you required by regulators such as FINRA and the SEC / CFTC to maintain records?

In my estimation you will see a technical picture of amazing attention to details -- with obvious places to look for the $1.2 billion dollars, which I assure you did not simply vanish into thin air!  Yet the picture that the MF Global senior management is trying paint is one of complexity, confusion, irregularities, and ignorance. 

13 Dec 2011 - MF Global Conflicted Interested Parties (Tough Questions for MF Global, Conflicted Trustee Giddens & SIPC President Harbeck): http://www.zerohedge.com/contributed/tough-questions-mf-global-conflicted-trustee-giddens-sipc-president-harbeck

13 Dec 2011 - Second Senate hearing on MF Global bankruptcy: http://www.reuters.com/article/2011/12/13/us-mfglobal-hearing-highlights-idUSTRE7BC1AV20111213 

14 Dec 2011 - MF's Corzine said to know of customer fund misuse:
http://www.reuters.com/article/2011/12/14/us-mfglobal-hearing-idUSTRE7BC1AE20111214 
 
So you can begin to understand quote like these:
 
CHAIRWOMAN DEBBIE STABENOW ON FRUSTRATION OVER LACK OF ANSWERS:



"It's now been a month and a half since the firm collapsed and customer money is still nowhere to be found. This isn't the Dark Ages. MF Global didn't keep their books with feather quills and dusty ledgers. The rules about keeping customer money segregated are pretty straightforward. That it's been over a month, and teams of lawyers and forensic accountants still can't figure out what happened, raises very troubling questions."

LOTS, LOTS MORE on MF Global is here http://barnhardt.biz/index.cfm

Let's pray for the farmers, investors, and other people who had money tied up in MF Global that justice is eventually served and the criminals are punished.  Write your congresspeople and demand that justice is served and the rule of law is upheld!

21 Dec 2011 - E-Mail Clues in Tracking MF Global Client Funds "Ms. O’Brien is considered an expert of sorts on the protection of customer money at futures firms."  yet she, a treasurer at MF Global, appears to be directly implicated in the transfer of customer money to JP Morgan. [...] "Since MF Global’s collapse, Ms. O’Brien has been working for the trustee overseeing the liquidation of the firm’s brokerage unit, helping lawyers and accountants understand the firm’s operations.".  How convenient!  Sounds like we are letting the criminals themselves investigate the crime scene.  She should be behind bars or in the witness room surrounded by forensic accountants and tape recorders.

Rhodium

Rhodium Prices Higher as ETC and ETF Funds Set to Launch (26 May 2011)

(14 Dec 2011) What have rhodium prices done since the ETF launch?  Well they have gone down.

We are approaching $1400 USD an ounce.  I imagine that industrial users of rhodium are just happy as clams that they can buy raw materials so much cheaper than before.  I had occasionally looked at rhodium prices in relation to other precious metals because I believed that it was not as heavily influenced by massive speculators and hedgers.  But I now doubt that to be true.  I think the the formation of ETF funds linked to commodities simply enables high-frequency traders and algorithms to better latch onto the underlying price discovery system, and once liquidity is achieved it allows them co-opt the price discovery mechanism in their favor.

Federal Debt Ceiling

As we will begin to see over the next few weeks we are watching a slow motion train wreck called the Federal Debt Ceiling.  Here are a few stories that will appear to be psychic (when viewed in retrospect)

1. Treasury Ending issuance of SLGS as of Friday
2. Treasury Auctions will put debt over the debt ceiling by Monday 5/15/2011
3. Heritage Foundation - Says Sell Federal Assets to Balance Budget, like Treasury Gold in Fort Knox? 5/16/2011
4. America's Deepening Default Chasm (5/22/2011 - FT - complete via google jump)
5. Policy Fatigue.  Accidents can happen?  Do you want these politicians driving the US economy? (6/9/2011)
6. US Treasury Secretly Weighs Options to Avert Default (7/7/2011) A small team of U.S. Treasury officials is discussing options to stave off default if Congress fails to raise the debt limit by the Aug. 2 deadline
7. A Trillion is a Big Number (9/5/2012) We just broke through $16tn debt.  Rick Santelli summarizes, in words and tables that any 6 year old girl could comprehend, why "a trillion is a big number"

USA Already Defaulted?

Has the unthinkable already happened?  If so, why haven't we noticed yet?  What am I talking about?  Why, the greatest financial debt default in history. 

Of course what so many people fail to realize is that seldom do we see an outright single event where a company, state or sovereign government decides to stop paying all its debt all at once.  Instead these things happen very slowly.

My claim is the United States has already started to "default" on its "debt" in various ways. Let me just mention a couple of them, and see if you agree.

• The bond-holders of GM and Chrysler.  They should have been first in line.  But instead the US courts violated all kinds of contract law when they decided to put the unions and pensions ahead of the bond-holders.  Its a default, pure and simple.  Why didn't anyone make a fuss?
• Freddie Mac and Fannie Mae.  Two government "sponsored" enterprises who for years operated with lower interest rates on their paper and benefited from higher bond ratings because of an implicit government guarantee.  FRE (now FMCC) stock used to trade at $60.  Today it closed at $0.25.   FNM (now FNMA) stock traded for years at a price of more than $80/share.  Today it trades on the pink sheets for $0.30. How low do these government institutions have to go before someone considers it a "default"? 
• For 2010, the US Social Security Administration announced there would be no increase in the Monthly Social Security and Supplemental Security Income (SSI) benefits payments due to "no increase in the Consumer Price Index (CPI-W) from the third quarter of 2008 to the third quarter of 2009."  Then why did SSA increase the Minimum Quarterly Earnings needed to earn one Social Security credit from $1,090 (2009) to $1,120 (2010)?  That seems like a 3% increase to me. Who really believes the CPI-W anyway?

We will continue to see big and small examples of "fee increases" and "benefit reductions" until the situation gets really out of hand.  As in Greece, people here in the USA will be rioting in the streets.  Then maybe the meaning of the word default will be understood in all it shapes and disguises.

Joanne Scholldorf: Instead of your description: Try using the meaning of the word forum to describe what your blog is about: A collection of articles, etc. why not enhance the description. Joanne Scholldorf: The public square or marketplace of an ancient Roman city that was the assembly place for judicial activity and public business.b. A public meeting place for open discussion.c. A medium of open discussion or voicing of ideas, such as a newspaper or a radio or television program.2. A public meeting or presentation involving a discussion usually among experts and often including audience participation

Produce the Note - Fighting Foreclosure

A recent posting on InvestorCentric Blog describes a way to stall foreclosure if you should be in such a desperate situation as that. It also features a YouTube video interview of Chris Hoyer that aired today on Good Morning America:

The FOX Orlando TV Station also spread the word on “Produce the Note”

For more information on tactics to forestall foreclosure see the Consumer Information Network

People Beginning to Realize Gold is Money

Of course, gold has always been money. It is just that governments and central bankers around the world have tried to convince people that their paper debt certificates are even "better than gold" because they pay interest on their debt.

I've spent the last 3 years studying economics, gold, precious metals investments and a great variety of ideas around the preservation of weath. I cannot say I have it all figured out, but I'm more knowledgable than I was three years ago. It makes sense to me that much of what some of the gold bugs have been screaming about for years is starting to come true. Namely:

• Gold and Silver was once the basis of money in the United States and Britian. It is no longer, having been replaced by fiat currencies.
• Most countries in the world are on a similar fiat currency system, with fractional reserve banking being the whole basis for currency distribution and management.
• Gradually, as a country moves government surplus to government deficit spending, the debts of that government become increasingly unsustainable. That is, governments begin to require ever increasing amounts of new debt in order to pay interest and principle on the prior debts. Once that process begins it is very hard to stop.
• Money in the form of fiat currency begins to behave in unusual ways. Where paper money (or Federal Reserve Notes - FRNs - to be more technically accurate) was once thought to be an asset it can increasingly be viewed as more of a liability - that is, as someone else's obligation to pay, namely the government/central bank in question.
• Physical gold having been trusted for more than 5,000 years as money, as a store of wealth, and as nobody's obligation to pay becomes the final form of money.

In this blog, I'm going to write about my thoughts on money, precious metals investing and other topics. I hope you will enjoy it!