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To: carranza2 who wrote (27422)3/4/2012 10:53:11 PM
From: benwood
2 Recommendations   of 29454
 
I read that. He sounds a tad ignorant. You cannot get 1 gbyte/s (8 gigabits/s) to your iPad via an app you purchase. You are constrained by the wi-fi hardware in your iPad, the router it is connected to, and the pipe they have to their service. If you are e.g. in a Starbucks, chances are you are limited to sharing a 3 to 6 megabit/s pipe with everybody else in the cafe.

I'm sure that 1 GByte/s is a mathematical stretch comparing how long it would take the original e.g. MS Word window to pop up in two cases:

a) locally (say 5 seconds) on a desktop PC reading files from internal hard disk drives
b) from a remote server which only sends something like an X-window to your iPad, the client (say 1 sec) -- meaning the only data which actually passes from the server to your client is a compressed graphics window

If the .exe and library files needed by your self-contained computer total 200 megabytes, then your local PC reads 1 GB in 5 seconds. The end result is you see the MS Word app window on the screen.

If you use their service, and it works as advertised, then you see the MS Word app window staring at you in 1 sec.

So a sales person will take that inference of 1 GByte/s bandwidth and say that's what you get.

If you REALLY had 1 gigabyte/sec bandwidth, then you'd have enough bandwidth to stream 200 blu-ray movies simultaneously.

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To: benwood who wrote (27424)3/4/2012 11:01:09 PM
From: carranza2
   of 29454
 
the response to your point is at the bottom of the article. i don't have a sufficiently deep technical background to make a knowledgeable comment:

pogue.blogs.nytimes.com 

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From: Tommaso3/5/2012 8:47:21 PM
4 Recommendations   of 29454
 
Here's Peter Schiff with just exactly the same take on Buffett that I was posting [I include all his contact information from the email I got, which should serve as gratuitous advertising rather than any copyright violation]*:


*upon further review I see no claim for copyright by Schiff, so all this is public domain.


BUFFETT'S BURSTING BUBBLE
by Peter Schiff, CEO of Euro Pacific Precious Metals


The gold doomsayers have found their champion in the media's favorite financial advisor and one of the world's richest men. Warren Buffett, the man dubbed the "Oracle of Omaha," has repeatedly and publicly denied that gold is an investment, and called gold buyers "speculators" and people "who fear almost all other assets." In fact, Buffett claims that gold's rise has the same characteristics as the housing and dot-com bubbles, and it is only a matter of time before it reverses course. He doesn't mean that the price will decline because of austerity measures and a free-market interest rate, mind you. He just asserts that because he's deemed it a bubble, it will inevitably burst.



The financial world by-and-large views Buffett as an objective observer, a rare investor who still considers the best interests of common man when he speaks. Each year, there is much hullabaloo over the letter Buffett writes to the shareholders of Berkshire Hathaway. When Buffett makes a claim, the financial world coos and repeats it without question.



I concede that Buffett is a talented investor and a great communicator. He clearly has had great success and has much to offer. But that shouldn't blind anyone to the fact that Buffett is not a trusted observer. He's a crony capitalist who bends the truth to serve his long-held ideological commitment to big government.



In the early stages of the financial crisis, when I was writing and promoting my first book Crash Proofto warn private investors about trouble ahead, Buffett was accumulating shares in companies such as Goldman Sachs, Wells Fargo, Bank of America, and General Electric. I knew these companies were insolvent, so I wouldn't touch them with gardening gloves on. When the credit markets seized up, Buffett worked behind the scenes and in public to make sure each of his pet companies were bailed out. This was not by coincidence. Buffett actually stated in September 2008 that he would not have invested in Goldman Sachs if not for the implicit guarantee of federal assistance. As a result, he profited at the expense of taxpayers at the very time when they were losing their savings in the markets. Meanwhile, many "in the know" politicians bought Berkshire stock during the height of the crisis, making a profit from their votes, and giving them incentive to revere Buffett all the more. Buffett once said if that if the government didn't bailout failed companies, he would be "having my Thanksgiving dinner at McDonald's instead of having a big dinner at my daughter's." Seems like there were two bloated turkeys at that meal.



If Buffett were a true capitalist, he would be in favor of gold. He has noted that the value of the dollar has fallen 86% since he took over Berkshire Hathaway in 1965 and even said in his latest shareholder letter that investors are "right to be fearful of paper money." But he continues to harp on gold. It seems the only unit of account Mr. Buffett approves are shares of his own company!



The adoption of an independent measure of value like gold presents two problems to Buffett. First, it would reduce the nominal returns of his dollar-based investing strategy. Second, it would restrict Washington's ability to goose the financial system in his favor.



In the 19th century, when gold and silver were legal tender, the outsized returns to which Buffett has become accustomed were much harder to earn. Most people kept their money in physical bullion or bank deposits - and earned a real rate of return. Now, under the fiat system, working folks are forced into the more complicated world of equity investing. This, too, can generate real returns, but it's a tougher playing field for the inexperienced.



Also, the fiat system artificially balloons the financial services portion of the economy. In the 19th century, fortunes were made more often by business owners than simple equity investors. People were more likely to rewarded for providing a productive service than having direct access to the Fed's discount window.



A quick look at Berkshire's performance verses gold since the Credit Crunch goes a long way to explaining Buffett's antipathy toward the yellow metal:


Source: Google Finance
But Mr. Buffett's lack of credibility goes deeper than a differing monetary philosophy. He has been in the press since last August claiming that he pays less taxes than his secretary - and urging Congress to pass a "Buffett Rule" mandating a 30% minimum tax on millionaires. The natural reaction is to say, "If you want to pay more, go ahead." But Buffett has gone on record saying that it's not enough for him to lead by example, and demanding that all of America's well-off bear the burden of Washington's reckless spending binge.



The problem is that Buffett's entire argument is constructed on deception. Buffett is rated as the third richest man in the world for managing the nearly $393 billion in assets, and he highlights that he pays only pays 17.4% of his income in taxes. But this is because he earns less than 1% of his annual wealth from his salary, while over 99% is earned as the largest shareholder of Berkshire Hathaway. Buffett claims that he discounts his Berkshire holdings because he plans to give it all to charity when he dies. So, it's not that the tax rates are so low, it's that Buffett plans to give away 99% of his wealth.



But even accounting for this clever accounting trick, Buffett is still grossly understating his personal tax burden. He owns roughly 1/3 of Berkshire's outstanding shares, the profits from which are subject to a 29% corporate tax rate. Last year, Berkshire paid $5.6 billion in taxes - and the IRS says they owe $1 billion more! In addition to corporate taxes, Buffett is also subject to an additional 15% capital gains tax on his stock when he cashes out, not to mention any future estate tax, leaving many to conclude that his share of taxes is certainly higher than his secretary's.



You might wonder what Buffett would hope to gain by understating his own tax rate. To answer that, you have to understand Buffett's ideological background. His father, Howard Buffett, was a US Congressman known for his staunch libertarianism. As has been recounted by biographers, Buffett resented being uprooted from his Omaha, NE home to move to Washington, DC and felt estranged from his stoic father. That is to say, Buffett's commitment to the nanny state runs very deep.



But also, as mentioned earlier, Buffett personally benefits from the current corrupt state of affairs. He gets prestige from nominal gains in his stock price. He gets bailout money to guarantee the insolvent companies in which he invests. Even that estate tax that will hit him when he passes currently allows him to buy out other businesses at a steep discount.



It also shouldn't be a surprise that humble Howard was a staunch advocate of gold and silver as money - nor that wealthy Warren rejects precious metals as having "no utility."



The media has built Warren up to be a demigod, a straight-talking Nebraska boy that can hold his own against the vipers of Wall Street. But he is just a man with a talent for making money, and his motives should not be beyond reproach. Is he advocating the use taxpayer money to bailout his business interests so he can profit? Is he being honest about what money is? Does he even understand the business cycle?



Gold prices will only go down when governments change course and make significant cuts. Until then, gold is not in a bubble. It's the only way to protect your wealth; and in the current economic condition, it's poised to go much higher. I think it's high time Buffett takes to heart his father's wise words: "For if human liberty is to survive in America, we must win the battle to restore honest money."



Peter Schiff is CEO and Chief Global Strategist of Euro Pacific Precious Metals, a gold and silver coin and bullion dealer offering honest products at competitive prices.

If you would like more information about Euro Pacific Precious Metals, click here or go to our website, www.europacmetals.com. For the fastest service, call 1-888-GOLD-160.

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To: Tommaso who wrote (27426)3/7/2012 1:16:36 AM
From: jmiller099
9 Recommendations   of 29454
 
You have finally come around to the proper way of thinking on this matter. Please reference this and what you responded to!
siliconinvestor.com

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To: jmiller099 who wrote (27427)3/7/2012 2:02:17 AM
From: Jim McMannis
   of 29454
 
Seems Tom was a Buffett man before he discovered Warren wasn't what he thought he was.
Go Tom Go.

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From: Tommaso3/7/2012 9:19:20 AM
   of 29454
 

Gold Far From Bubble Phase: Marc Faber

Source: Karen Roche of The Gold Report(3/2/12)

http://www.theaureport.com/pub/na/12730

With more than 40 years as an economist to his credit and claiming gold as the "biggest position in my life," Gloom Boom & Doom Report Publisher Marc Faber assures us that gold is nowhere near a bubble phase, but cautions that corrections of 40% are not unusual in a bull market. At the end of March, Faber will share his secrets for surviving corrections at the World MoneyShow in Vancouver. In advance of that appearance, he sat down with The Gold Report for this exclusive interview where he discusses his bias for portfolio diversification in terms of geographies as well as asset classes.

The Gold Report:After Standard & Poor's (S&P) downgraded a cluster of Eurozone countries in January, you came out saying that downgrades should have been even deeper, depending on the country's credit-worthiness. S&P did give below-investment-grade ratings to Portugal and Cyprus-BB and BB+, respectively-but you indicated that some of these countries warrant CCC ratings. Do you anticipate additional downgrades?

Marc Faber: If you accounted for the unfunded liabilities of most European countries, as well as the U.S., the quality of the government debt would be significantly lower. In other words, yes, I do expect to see more and more downgrades over time.

TGR: Could that happen in 2012?

MF: Yes, and some thereafter.

TGR: Have the markets priced in further downgrades already or should we expect a bigger impact in the next round?

MF: I don't think the market has priced it in because the yield today on U.S. 10-year government bonds is 2%, and 3% on 30-year bonds. If the market were priced properly based on the quality of these bonds, the yields would be far higher.

TGR: Did yields change much with these recent downgrades?

MF: Yes, particularly in the U.S., where investors perceive U.S. government bonds as safe. The U.S. will pay the interest as long as it can print money. But suppose you buy a 10-year government bond that yields 2% and inflation is perceived to be 5-7%. To what extent would investors still buy these bonds? That question will arise one day.

TGR: You've discussed investors leaving the European markets in favor of a "safe haven" in the U.S. Would U.S. bonds continue with such low yields with the European downgrades?

MF: For a while, yes, but at some point people will wake up and realize that the U.S. will default through a depreciating currency-in other words, through printing money-or by not paying the interest on the bonds. I don't think the U.S. will stop paying the interest, but printing more money will weaken the currency and produce higher inflation in consumer prices, asset prices and commodity prices. So being in U.S. government bonds will result in losses to investors through currency depreciation.

TGR: You've pointed out that negative real interest rates force people to speculate, which creates enormous market volatility. That seems to be happening now, but apparently investors are keeping a great deal of money on the sidelines as well. If that comes in, would it make the markets even more volatile? Or would you say the smart money will stay on the sidelines and the speculative money is in play already?

MF: I think there is a lot of money on the sidelines. Some will stay there, because people who don't trust the system anymore will just keep it there. Some will be invested, but it may not go into equities. It could go into some other asset class, perhaps hard currencies such as gold and silver, or real estate, which is now relatively inexpensive in the U.S.

As for volatility, it increased sharply last year, but has diminished over the last three-months. I expect we'll see increasingly very high volatility in all asset classes in the next few years. The money in an environment of negative real interest rates will flow. It might flow into fewer and fewer stocks, or into fewer and fewer assets that could go ballistic on the upside.

TGR: Which asset classes would you expect on the speculative upside?

MF: We had the NASDAQ bubble 12 years ago, the housing market bubble probably five years ago, and I would say also a bubble in commodities in 2007-2008, when oil spiked to $147. What's next, I'm not so sure. I could imagine some stocks, maybe some precious metals, in a bubble stage-not the entire market necessarily.

TGR: Could you delineate characteristics of stocks that will appreciate versus those that will stagnate or lose value?

MF: If we look at the market, we have some stocks where the outlook is perceived to be particularly bright, and then there are others-for instance, Eastman Kodak Company (EKDKQ:OTBPK)-that are at the opposite end of the spectrum. It depends on the fundamentals and the imagination of investors. I wouldn't necessarily buy up, so I'm not saying it will go down. Maybe it will go up further. But in general if you buy the company with the largest market capitalization in the world you're not going to make a lot of money.

TGR: What captures the imagination of investors?

MF: Basically mania fed by excessive liquidity, with more and more people convinced that something is the Holy Grail. It was the NASDAQ in 2000, Asia before 1997, housing from 2000 to 2006-2007, or more recently China. Exactly what it is, I don't know. But when a market has been strong, the media write about it and people are attracted to it. Then some useless academics write books about why stocks, or real estate, always go up, and so forth. The media again write that up, and more people flow into that sector.

TGR: A couple of weeks ago James Turk told us that he thinks the low price for gold in 2012 was already established early in January. What makes you think it will pull back?

MF: The big rally into Sept. 6, 2011, took the gold price to $1,922/ounce (oz) and then it dropped until the end of the year, touching $1,522/oz on Dec. 29. It has rallied, and is now above $1,700 again, but I don't think the correction is entirely over. Corrections of 40% are nothing unusual in a bull market.

As an adviser, my duty is to always inform people of investment risk. I'm not saying I expect gold to collapse, but telling people the gold price will go up leads them to leverage up and speculate. If the gold price drops $50/oz, they're wiped out. All I'm saying is that, in my opinion, the gold price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop lower. It depends on global liquidity and on money printing by central banks. We could have a big correction if global liquidity tightens or they stop printing money.

TGR: Over what timeframe are you looking at the correction?

MF: This year the gold price may not exceed the $1,922/oz high that we reached on Sept. 6. Maybe it will. I'm not a prophet. I'm just telling people that I'm buying gold and holding it. I don't speculate in gold. If you buy gold, you better understand that the price could always move to the downside. If you don't understand that, don't invest in gold-or in anything.

TGR: Investment show commentators have been talking about gold being in one of those mania bubbles you described because it's been increasing for 11-12 years. Do you agree?

MF: No, gold is not in a bubble. It wasn't in a bubble in 1973, either, but it still corrected by 40% then. I don't believe gold is anywhere near a bubble phase. A bubble phase is characterized by the majority of market participants being involved in a market space. I saw a gold bubble in 1979-1980, when the whole world was dealing-buying and selling gold 24-hours a day, globally.

TGR: But not since then?

MF: No. If you went to an investment conference in 1989, 90% of the people there would have told you they owned shares in Japanese companies. In 2000, 90% of them would have said they owned NASDAQ shares. Only about 5% of the participants at an investment conference today would tell you they own gold. Very few people in this world own gold.

I don't believe that we're in a bubble.

TGR: Should people who aren't yet in gold or want to add to their position wait for a correction?

MF: I have argued for the last 12 years that investors should buy a little bit of physical gold every month and put it aside without concerns about corrections. If you don't own any gold, I would start buying some right away, keeping in mind that it could go down.

For the last 40 years in my business I've seen people always lose money when they put too much money into something and then it goes down. They panic and sell, or they have a margin call to sell-and lose money. I own gold. It's my biggest position in my life. The possibility of the gold price going down doesn't disturb me. Every bull market has corrections.

TGR: What do you think about silver as an alternative precious metal to hold?

MF: Gold and silver will move in the same direction, up together or down together. At times, silver will be stronger relative to gold, and at other times gold will be stronger relative to silver. My friend Eric Sprott thinks that silver will go ballistic. I don't know. I own gold.

TGR: You're on record as recommending that investors maintain diversified portfolios, with 20% to 30% each in gold, real estate, equities and cash. Focusing on equities, as we've discussed, means tremendous volatility. What are your thoughts? High value? Large cap? Dividends? Something more speculative, perhaps gold mining shares?

MF: Because I live in Asia, I am quite familiar with the Asian markets and economies. I have a bias toward Asian equities, especially because I can find deals in places such as Malaysia, Thailand, Singapore and Hong Kong-stocks that give me 4-7% dividend yields. With yields at those levels, at least I'm paid to wait. Even if they're cut 5%, I'd still get better cash flow than I would from, say, U.S. government bonds. Consequently, I feel reasonably confident owning such shares.

Because I have allocated only 25% of my portfolio to equities, if the markets were to drop 50%, I would have funds elsewhere in my portfolio to buy more equities. That's not a prediction for a 50% market decline; it's just to say that I'm positioned in such a way that I could put more money in equities through a) my cash flow, b) my income and c) my cash position. And I do own some gold shares through stock options, because I'm a director of several exploration companies.

TGR: Given that you're satisfied to, in essence, being paid to wait with dividend-paying stocks, do you consider yourself a buy-and-hold investor?

MF: With my asset allocation of 25% in equities, I can afford to hold them. If I had 100% in equities, I would be more inclined to take profits from time to time.

TGR: Let's get back to Asia for a moment. Headlines in the U.S. have focused lately more on what's going on in Europe, with Asia basically relegated to page 2. What's your perception of the markets and economies there?

MF: We don't have recessions yet, although there have been slowdowns in economic activity and some corporate profit disappointments. The big question is whether we have a problem in six months to one year's time that results from a meaningful slowdown or even a crash in the Chinese economy. That may happen.

Second, it's not everywhere, but in some cases I see bubbles in the real estate market, as there are in everything that relates to luxury-luxury properties, paintings, collectibles, the luxury department stores and shops, the Swiss watch companies. They're all doing very good business. I think there's a bubble essentially in everything at the high end of the market. That concerns me a little bit. It may continue for another year or so but will not last forever, so I'm relatively cautious.

Having said that, lots of companies in Asia do not cater to the high-end consumers but to the rising middle class. I believe they are reasonably well positioned to weather even a recession.

TGR: If China's bubble in those luxury goods and real estate bursts, would the Asian markets go down in tandem?

MF: Yes, I think so. Last year the Chinese markets-by the way, also India-grossly underperformed the U.S., so maybe the market has already discounted a Chinese slowdown to some extent. But because I happen to think that it hasn't discounted the Chinese slowdown entirely, yes, I think the markets are still vulnerable.

TGR: Are your investments in the Asian markets focused on companies that are not catering to the high-end, like food and items that the middle class buys?

MF: Yes, I have a mixed portfolio of both industrial and residential real estate, healthcare companies, retailers, food companies, agricultural companies, finance companies and banks. So, it's fairly broad.

TGR: Are those financing companies and banks Asian-based or internationally based? That sector is certainly out of favor in North America.

MF: I have no Chinese banks, but I own banks in Singapore and Thailand and finance companies in Singapore, Thailand and Malaysia. Actually, I'm also positive about some financial stocks in Europe and America. Simply because of the money printing, these financial institutions are benefiting at the expense of honest people who have savings that yield nothing while their cost of living is progressing at 5-10% per annum.

I took a taxi the other day from New Jersey to Manhattan. The Lincoln Tunnel has raised its toll by 50%, from $8 to $12. But the government, brainwashed by incompetent academics at the Federal Reserve, will tell you that inflation is 2%.

TGR: You mentioned liking finance companies in Europe and America because of money printing. How does that benefit them?

MF: I don't like them. In investing, it's not a question whether you like or dislike something. It's a question of price. The best company or the worst sector may be overvalued at one price and undervalued at another. I happen to think that having weakened to around the 2009 lows last fall, when the S&P dropped to 1,074 on Oct. 4, the financial sector was very cheap. Since then, there have been big rallies for Citigroup Inc. (C:NYSE), Bank of America Corp. (BAC:NYSE) and other banks. I saw opportunities there, but with the market rallying so much, I believe it is now overbought and due for a correction. We will see whether it's just a correction or a resumption of a downtrend.

TGR: Which do you think it will be?

MF: I don't know. We haven't seen a correction yet. I think it's about to start. Then we will have to see the shape of the correction, which could last a month. After that, we'll have to look at the shape of the recovery-the number of stocks that will participate, the number of new highs and so forth.

TGR: You've indicated that your portfolio allocation includes real estate. Do you consider real estate a good value in North America now?

MF: I travel around the world all the time and I'm interested in the formation of prices so I have an idea about trends in prices. You have to consider real estate prices in the context of currency valuations. For example, five years ago, homes in Australia and Canada were inexpensive and now they aren't, but not necessarily because prices have gone up. Although prices don't necessarily track with whether a currency increases or decreases in value, in those two cases, the value of the currencies also has increased.

The U.S. does have areas where real estate is incredibly low relative to other parts of the world. I can buy homes in Atlanta and Phoenix for less than I'd pay in Thailand, and because the GDP per capita in the U.S. is of course much higher than in Thailand, on a relative basis, those homes in Atlanta and Phoenix would be attractive.

As a foreigner, I am not interested in investing in U.S. real estate for various reasons, including taxation, management and regulation. But if I were a U.S. citizen, I would say now is a relatively good time to buy real estate and rent it out and net a yield of maybe 6-8%. Many of my friends who own rental apartments do very well on rental income. Many of the people who no longer qualify for mortgages can rent.

TGR: In terms of asset diversification, to what extent ought the average U.S. investor focus on international equities or real estate?

MF: I think U.S. citizens should focus very much on diversifying their assets internationally. Only Americans still believe that America remains the most important economy in the world. Everybody else knows it has become relatively less significant over the last five years. Everybody, including Americans, should be global investors, and Americans should have at least 50% of their money outside the U.S. I would argue that a global investor should have maximum 40% in Europe and in the U.S., with the rest in Asia, Latin America, Africa, etc.

It's very difficult for Americans to open bank accounts overseas, but buying real estate overseas is one way to diversify, and that's not a problem. Maybe the U.S. will close this loophole one day, but for now U.S. citizens may buy real estate in South America, Europe or Asia-anywhere in the world. That's what I would do.

TGR: Do you consider investments in stocks that are based in international areas part of the diversification?

MF: Basically you want exposure to rapidly growing economies. This is best achieved by buying companies that have large exposure in the emerging economies rather than the U.S. and Europe. The Coca-Cola Company (KO:NYSE) is a U.S. company but the bulk of its business comes from outside the U.S.

TGR: You're scheduled to speak at theWorld MoneyShow , coming up in Vancouver March 27-29. We understand that in your presentation, entitled "The Causes and Investment Implications of Dishonest Money," you'll be discussing unintended consequences of large fiscal deficits and expansionary monetary policies. Would you give us some highlights of what you plan to cover?

MF: Basically I will try to explain that instead of smoothing out the business cycle, government interventions have created more economic and financial volatility and have had very negative consequences for the U.S. in particular. And as I pointed out earlier, these measures, such as some of the fiscal and monetary measures we've talked about, are based on erroneous economic sophism.

TGR: What do you think people will learn from listening to your presentation?

MF: That in this environment of money printing, cash and government bonds are not very safe and that you have to navigate through different asset classes. Under normal conditions, cash and government bonds are essentially the safest investments-not investments with the highest returns, but the safest. That is not the case today.

TGR: And we appreciate the pointers you've made about some of those different asset classes. Thank you very much.

Swiss-bornMarc Faber , who at age 24 earned his Ph.D in economics magna cum laude from the University of Zurich, has lived in Hong Kong nearly 40 years. He worked in New York, Zurich and Hong Kong for White Weld & Co., an investment bank historically managed by Boston Brahmins until its sale to Merrill Lynch in 1978. From 1978 to 1990, Faber served as managing director of Drexel Burnham Lambert ( HK ), setting up his own investment advisory and fund management firm, Marc Faber Ltd. in mid-1990. His widely read monthly investment newsletter, Gloom Boom & Doom Report, highlights unusual investment opportunities. Faber is also the author of several books, including Tomorrow's Gold: Asia's Age of Discovery (2002), which spent several weeks on Amazon's best-seller list and is being translated into Japanese, Chinese, Korean, Thai and German. He also contributes regularly to leading financial publications around the world. Much also has been written about Faber. Nury Vittachi, one of Asia's most popular writers and speakers, published Riding the Millennial Storm: Marc Faber's Path to Profit in the Financial Markets (1998). The Financial Times of London described him as "something of an icon" and Fortune called him a "congenital contrarian and shrewd Swiss investment advisor."

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From: Tommaso3/7/2012 9:22:40 AM
   of 29454
 



    Will Doomsday Bill Help Gold and Silver Shine?
    By Eric McWhinnie
    March 05 2012 Share5



    In an effort to shore up its broken financial system, the European Central Bank recently completed a second round of its long-term refinancing operation. Around 800 financial institutions came to the ECB to borrow 530 billion euros in the form of low interest three-year loans. However, the new shot of liquidity is doing little stem the Greek tragedy. As of Monday morning, interest rates on Greek one year bonds have surpassed 1,000 percent for the first time ever. In comparison, interest rates on Greek bonds hit 100 percent for the first time in September. The dire situation in Europe has many wondering if the financial crisis in the United States could also worsen.

    The state of Wyoming recently brought up legislation to launch a study into what the state should do in the event of a complete financial collapse in the country. The bill was rejected by the state House of Representatives, and would have allocated $16,000 for a panel of legislators and emergency managers to study various measures, including a new state-issued currency. “I guess a lot of people think if you’re trying to prepare for a disaster, it makes you seem crazy,” co-sponsor Kendell Kroeker said. “I was interested in it mainly because I don’t think there’s any harm in being well-prepared.”

    Don’t Miss: Dr. Ron Paul Shows Ben Bernanke What Real Money Looks Like

    Although Wyoming’s “Doomsday Bill” was defeated, it does not eliminate the need to prepare for financial distress. The bill’s sponsor, state Rep. David Miller, R-Riverton, explained that although he does not anticipate a major crisis hitting America soon, people should be protected against financial stress, such as the national debt exceeding $15 trillion with no signs of slowing down. Apparently, other states fell the same as Wyoming. Lawmakers from 13 states are seeking approval from state governments to either issue their own alternative gold and silver currencies, or at least explore it as an option.

    “In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, the State’s governmental finances and private economy will be thrown into chaos,” said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year. Utah became the first state to introduce its own alternative currency last March, when Governor Gary Herbert signed a bill that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment.

    As the financial situation worsens in the U.S., more states and citizens will find comfort in gold and silver as hard assets that can not be devalued through excessive money printing. New data shows that the U.S. monetary base, which is increased by the Federal Reserve, reached a record high of $2.8 trillion in February. Furthermore, America’s constantly increasing national debt is expected to cost more than $5 trillion in interest payments alone over the next decade, according to projections from the Congressional Budget Office. Interest rates on U.S. bonds are near record lows, and the CBO estimates they could rise to 5 percent by the end of the decade. However, if interest rates rise just one percentage point above the 5 percent estimate, it could add around $1 trillion to interest costs.

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    If you would like to receive professional analysis on equity miners and other precious metal investments, we invite you to try our premium service free for 14 days.

    To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

    To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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    From: Tommaso3/7/2012 9:30:53 AM
       of 29454
     
    Greek Crisis Illustrates Value of A Personal Gold Standard By Craig R. Smith
    Chairman, Swiss America


    Feb. 16, 2012 We are often asked this question: "What good will gold do in a meltdown of the system or a failure of our currency?" One only need look across the Atlantic for the answer. Today Greece is in major trouble economically and socially. Riots are breaking out in Athens and business disruptions are rampant. To establish value on the street for everyday transactions (such as food and gas), Greek citizens are using gold, U.S. dollars and, when they can be found, Euros. However the Euro's buying power has been greatly diminished in recent months. Fine art and collectibles are even being used as tender in private transactions for everything from automobiles to plastic surgery. Gold coins are more readily accepted than regional currencies or the Euro at the moment. Interest rates on the drachma and Euro are now over 17% and climbing. Some long-term money is as high as 30%. Bonds are being discounted by as much as 60% for liquidity. The average Grecian citizen with a portion of his/her money in physical gold find themselves with very little or no disruption in their every day life, short of their favorite local market perhaps going up in flames amid rioting. The stores that are still open prefer gold coins and U.S. dollars over any other form of payment because they know they will be accepted worldwide. Holders of gold are discovering their buying power has actually strengthened in a crisis. Gold owners are actually able to buy more goods and services with their ounce of gold than they could buy just six months ago - even if the price of gold was unchanged! Greece is a excellent illustration of why a minimum of 5% to a maximum of 25% of your assets should always be held in physical gold for emergencies. Not for the potential return on investment. Not just to make money. But simply to assure that no matter what happens, your lifestyle will not be drastically altered. Having a valuable commodity, such as gold, in a crisis to exchange for your everyday needs is critical. Gold is real, liquid money worldwide. If you don't own any yet, buy it at any price! Owning gold offers peace of mind during times of upheaval, disaster or financial collapse. As the Greek crisis clearly demonstrates, taking steps to put yourself on a personal gold standard is no longer a luxury but a necessity in today's uncertain world.

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    From: Tommaso3/7/2012 9:36:54 AM
    4 Recommendations   of 29454
     
    More good news on NGD. The warrants with a strike price of $15 and an expiration in 2017 are still quite cheap. Symbol NGDAF (for U. S. pink sheets investors).

    newgold2011.q4web.com 

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    From: Tommaso3/7/2012 11:38:50 AM
    1 Recommendation   of 29454
     
    Took my own advice and more than doubled my position in the New Gold warrants. On the following assumptions:

    1. In the next five years, the inflationary effects of central banks all over the world creating money backed by nothing will be felt.

    2. The price of gold will rise substantially from current levels in that five-year period, as people increasingly use it as a store of value against depreciating currencies.

    3. New Gold will greatly increase production while holding down or lowering production costs.

    4. The price of New Gold stock will rise well above the $15 strike of the warrants, making them worth (at the following NGD stock prices):

    NGD NGDAF warrrant

    $20----- $5
    $25 -----$10
    $30----- $15
    $40----- $25
    $50----- $35

    Some long time followers of New Gold think it will eventually hit $100.

    I think that there is little likelihood of losing money on the warrants, and an excellent chance of a fivefold profit at the current price (about $3.40).

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