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Tag Archive: money

May 30

Bitcoins V.S. Gold & Silver – Which one is Better OR Are they the Same

Gold bullion vault Bitcoins V.S. Gold & Silver   Which one is Better OR Are they the Same

Plenty of people still have a difficult time wrapping their heads around what bitcoin is or why it even has value, especially as the virtual cryptocurrency continues to scale record heights. How isn’t this a Ponzi scheme, many have wondered?

A good way to look at it is to compare it to gold. What gives a shiny metal that doesn’t have a whole lot of real utility–outside of jewelry and limited industrial use–any kind of real world value?

The only reason gold has value is because one day, way back when, long before recorded history, society simply decided that this yellowish precious metal should represent “money.” From that day forward–as that idea spread virally across the globe (or at least the small part of the planet then settled by homo sapiens)–gold came to be worth something in the eyes of the people.

Uninscribed Lydian gold coins Bitcoins V.S. Gold & Silver   Which one is Better OR Are they the Same

Uninscribed Lydian coins made from electrum, a naturally occurring gold and
silver alloy, 6th century BCE. The first gold coins of the Grecian age were struck
in Lydia around 700 BC.

As a representative (and thus store) of value, it became a universal intermediary between goods and services. This was the natural, inevitable economic evolution of the barter system. As it retained its value over time–and eventually throughout human history–gold gained cultural credibility. That’s the quick and easy answer.

Why the chemical element Au? There’s its obvious aesthetic qualities. But gold’s longevity comes from scarcity; its limited quantities were never able to keep up with demand. Since the beginning of human history, a total of 171,300 tonnes of gold have been mined.

As the human economy evolved, we’d eventually transition from gold to paper money, but up until the end of World War II, gold remained a fundamental piece of the financial system in the form of the gold standard, by which governments pegged the value of their printed currencies to amount of gold they owned.

After the war, the gold standard was partially abandoned with the establishment of Bretton Woods, yet the world system remained implicitly tied to it even as countries adopted the U.S. dollar as their reserve currency, being that the U.S. promised to maintain the price of gold at $35.

Then in 1971, due to the financial strains of the Vietnam War, President Nixon ended the direct convertibility of the dollar to gold, thus establishing the U.S. as a fiat currency, money that was backed only by the credibility of the U.S. government. No longer elementally linked to the modern economy, gold still kept its value as an investment asset, given its historic credibility and cultural relevance. Today, one ounce of gold is worth over $1600.

Bitcoin, in its present form, has a stark resemblance to gold. Both are backed by no one. Both are, relative to fiat currency, inconvenient for day to day use. Your gold coins or bitcoins (yet) won’t do much good at the grocery store. Both lack intrinsic value. If the apocalypse arrived tomorrow, your gold and BTC won’t help you survive against the zombies. Both have value only because society has confidence that they will maintain said value over time.

Bitcoin, of course, has been around only since 2009, so it doesn’t have the same kind of long term credibility. But the supply of bitcoins, like gold, are also constrained, built into its elegant mathematical model. There’s hard limit of 21 million bitcoins to be mined, which is predetermined to be reached during the year 2140. So as bitcoin demand and adoption continue to outpace its supply, its price will increase in lockstep.

So why bitcoin? Because bitcoin is gold on steroids, designed for a society that lives through the internet. Bitcoin is designed with the ideals of the contemporary cyber movement in mind: decentralization, peer to peer, cryptography. Easily transferable in ones and zeros, it’s a storage of value for a virtual society. As a payment system, it’s a temporal store of money that can be easily sent across the globe securely and speedily without counterparty risk. No matter the price of bitcoin, these benefits will always give it purpose. With bitcoin trading over $60, its market capitalization is approaching $700 million.

bitcoin chart Bitcoins V.S. Gold & Silver   Which one is Better OR Are they the Same

The benefits of this model are clear. Given its self-contained nature, it eliminates the need for inherent human interference. There’s no need for a central bank because bitcoin self-regulates. Certain aspects of it are, of course, vulnerable, such as mining, as well as security. Every month, it seems, we hear a new report of a hacked bitcoin wallet. Millions have been lost since 2011.

Yet these issues are self-correcting over time given bitcoin’s incentivization dynamics. Security of data and money is a concern that predates bitcoin and even currency; better practices and technologies can help prevent theft. And it wouldn’t make sense for any one entity, for instance, to attempt to monopolize mining, except to destroy it. After all, this part of the system is somewhat transparent, and bitcoin’s value will be retained in the degree that it is decentralized. If one entity controlled the world’s bitcoin output, it wouldn’t be worth very much, so trying to take over bitcoin doesn’t make financial sense.

Even destroying it poses problems, tantamount to eliminating the world’s gold supply. It’s possible that certain governments or companies even could attempt to cripple it, either through regulation or attacks on the system, yet destroying it completely, for now, seems out of the question. We have to look no further than BitTorrent. Despite years of assaults from the likes of Hollywood, the RIAA, and U.S. government, torrenting continues to drive the majority of internet traffic.

And as long as bitcoin survives, it will rebound. As long as it exists, it will grow. So ignore the warnings of hype and talk of a bubble, in the long run, it’s all more or less irrelevant. The value of bitcoin could crash again, like it did in the summer of 2011. Or it could keep skyrocketing. Whatever happens, neither gold nor bitcoin are going anywhere anytime soon. In the end, that’s all that really matters.

UPDATE: Heres charts for bitcoin and gold since the Nixon Shock. (via reddit)

gold charts Bitcoins V.S. Gold & Silver   Which one is Better OR Are they the Same

May 10

What is Bitcoin? “If” and “How” it Will Impact My Life

What is bitcoin What is Bitcoin?  If and How it Will Impact My Life

Despite the various opinions on Bitcoin, there is no question as to its ultimate value: its ability to bypass government restrictions, including economic embargoes and capital controls, to transmit quasi-anonymous money to anyone anywhere.

Opinions differ as to what constitutes “money.”

The English word “money” derives from the Latin word “moneta,” which means to “mint.” Historically, “money” was minted in the form of precious metals, most notably gold and silver. Minted metal was considered “money” because it possessed luster, was scarce, and had perceived intrinsic value. While the former two attributes cannot be disputed, the latter is generally not accepted by everyone. Critics have argued that precious metals have no more intrinsic value than any other medium of exchange.

Despite some of the various interpretations of the attributes of money, it is generally agreed that money is something that represents a generally accepted medium of exchange, has value, and can be used to make payments. Today, the most common form of money in the world is fiat paper currency. Fiat money is issued by a central authority, most often central banks or governments.

The definition of money, however, has become even more problematic with the advent of so-called “cryptocurrency.”

Cryptocurrency is a nebulous word, but its meaning may be easy to decipher.

Cryptocurrency is composed of two words: “crypto” or “cryptography” and “currency.” Cryptography is an amalgamation of two Greek words and in its most elemental form means a “secret writing.” Today, cryptography has a more technologically advanced application. Cryptography may be defined as the enciphering and deciphering of information or communications in a secret language or code. Cryptography is used to secure communications between persons, organizations, businesses, and governments.

Currency may be defined as a medium of exchange in circulation.

Together, cryptocurrency may be defined as a peer-to-peer digital currency based on public and private keys, digital signatures, and encryption.

Essentially, the concept of cryptocurrency is based on the Internet. Similar to the Internet, cryptocurrency is a borderless technology of decentralized network infrastructure that transmits and interconnects information, communication, and data globally.

Origins of Cryptocurrency

The origins of cryptocurrency may date back some fifteen years, with some dating its origins well over twenty years. According to Bitcoin.org:

Bitcoin is one of the first implementations of a concept called crypto-currency, which was first described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of a new form of money that uses cryptography to control its creation and transactions, rather than relying on central authorities.

Bitcoin is one of the first implementations of cryptocurrency and was developed in 2009 by a mysterious person, known only by the pseudonym Satoshi Nakamoto. Brilliant and persuasive, Satoshi Nakamoto argued that fiat currencies are faith-based and cannot be trusted. Instead, he envisioned a system of money that was without a central authority (i.e., decentralized) and founded on the principles of mathematics.

According to Nakamoto:

[Bitcoin is] completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust. The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

Like many great thinkers before him, Satoshi Nakamoto feared fractional reserve banking and warned that the system of banking founded on consumer trust and confidence was a farce. He understood that with the advent of strong encryption, trust was no longer warranted:

A generation ago, multi-user time-sharing computer systems had a similar problem. Before strong encryption, users had to rely on password protection to secure their files, placing trust in the system administrator to keep their information private. Privacy could always be overridden by the admin based on his judgment call weighing the principle of privacy against other concerns, or at the behest of his superiors. Then strong encryption became available to the masses, and trust was no longer required. Data could be secured in a way that was physically impossible for others to access, no matter for what reason, no matter how good the excuse, no matter what. It’s time we had the same thing for money. With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.

Rumors abound as to the real identity of Satoshi Nakamoto, with some speculating that the Central Intelligence Agency (CIA) may be the true developer behind Bitcoin. Irrespective of his real identity, whether a person or an organization, Satoshi Nakamoto abruptly left the project sometime in late 2010, bequeathing his project and work for others to continue.

Bitcoin was founded as an open source application and is released under the MIT license. It is generally described as a “community driven project,” and on September 27, 2012 the Bitcoin foundation was created “to standardize, protect, and promote Bitcoin.” Since its initial development, Bitcoin has grown exponentially in value and popularity.

Defining Bitcoin

Bitcoin is a digital currency with no central authority. It is a quasi-anonymous peer-to-peer technology that can be used to send and receive money in what is commonly called a “wallet.” Because of its decentralized stature, Bitcoin differs from most other digital currencies available on the Internet. Unlike other digital currencies and payment processors, for example, Bitcoin does not utilize accounts – no accounts are created, no personal information is demanded, and no identification is required. Instead, Bitcoin utilizes public and private keys and digital signatures, which are based on public key cryptography, to generate addresses from which bitcoins may be sent or received. According to one online resource, “a Bitcoin address is a 160-bit hash of the public portion of a public/private ECDSA keypair.”

Payment is made when one address owner sends (i.e., digitally signs) bitcoins to another address. Bitcoin addresses begin with the numbers “1″ or “3″ and are generally between twenty-seven and thirty-four alphanumeric characters in length. A Bitcoin address is similar to a PayPal email address. However, unlike PayPal addresses, a Bitcoin wallet may generate unlimited addresses. Ownership of addresses are never in question – generated addresses have at least one secret number, known as a private key, and are stored locally in a Bitcoin wallet. It is this secret embedded private key which assigns ownership of Bitcoin addresses. Because ownership rests in the secret private key, it is imperative to back up the Bitcoin wallet data.

Here are some additional things to consider:

  • The Bitcoin currency is abbreviated as “BTC.”
  • Bitcoins may be procured by mining, buying, or selling goods or services in BTC.
  • Bitcoins are mined by solving complex mathematical equations.
  • Bitcoin is “inflation proof.” Only 21 million bitcoins can be mined and thus “minted.”
  • There are over 11 million bitcoins currently minted in circulation.
  • Bitcoin transactions are irreversible.
  • It is recommended to use an escrow service for large business transactions in bitcoins.
  • Bitcoin transactions are instantaneous and can be verified in as little as ten minutes.
  • Transaction fees are modest.
  • It is recommended to generate a new Bitcoin address for every new transaction.
  • All Bitcoin transactions are recorded in a “block chain.”
  • The block chain prevents duplicate transactions.
  • Bitcoin transactions are not entirely anonymous by default.
  • To anonymize Bitcoin transactions, it is recommended to use anonymization services, like Tor.
  • Always encrypt a Bitcoin wallet with a strong password or strong encryption.

Bitcoins may be traded online for other digital currencies, redeemed for precious metals, or exchanged for fiat currencies. While the block chain may publish all Bitcoin transactions, it cannot easily compromise anonymity. Perhaps the greatest threat to Bitcoin anonymity are third party exchangers. Most digital currency exchangers are registered Money Services Businesses (MSBs) and follow the “know your customer” (KYC) reporting rule followed by virtually all financial institutions. This requirement forces anonymous Bitcoin users out of the dark – though there are some legal and not so legal ways around identification. Some exchangers do not require identification – but oftentimes place a predefined pecuniary cap on transactions. Exchangers’ fees vary, and the methods of payment vary, as well – though bank wire, Western Union, prepaid debit cards, money orders, and PayPal are the most popular.

More recently, with the advent of Bitcoin debit cards, physical bitcoins, and various other Bitcoin services, it is becoming easier than ever to use bitcoins virtually anywhere in the world – online and offline. No-name prepaid debit cards also add considerably more privacy to Bitcoin transactions, especially when exchanging bitcoins for fiat currency. In most instances, this may be one of the best methods of exchanging bitcoins for fiat currency, principally due to the inherent privacy of no-name prepaid cards and the high reloading capacities of some prepaid debit cards.

The Future of Bitcoin

Bitcoin popularity has grown exponentially in the last few years. While bitcoins have no intrinsic value, they are considered valuable because they “are useful and because they are scarce.” Although not everyone agrees Bitcoin is money, they do not all agree for the same reasons. Establishment economists reject Bitcoin because it lacks a central authority. Others reject it because it has no intrinsic value. But virtually everyone agrees that Bitcoin is to some extent a “bubble,” similar to other currencies, in that it booms and busts. But unlike fiat currencies, which generally have no protective measure against inflation, bitcoins are inflation-proof.

Despite the various opinions on Bitcoin, there is no question as to its ultimate value: the ability to bypass government restrictions, including economic embargoes and capital controls, to transmit money quasi-anonymously to anyone anywhere virtually instantaneously irrespective of geopolitical restrictions. While virtually all digital currencies can more or less do the same, no other currency offers an equal combination of peer-to-peer transactions, strong encryption, anonymity, and liquidity that Bitcoin has possessed up to this point.

In the Islamic Republic of Iran, a state particularly hard hit by US sanctions, for example, the value and interest of Bitcoin is rapidly rising. According to Business Week:

Under sanctions imposed by the US and its allies, dollars are hard to come by in Iran. The rial fell from 20,160 against the greenback on the street market in August to 36,500 rials to the dollar in October. It’s settled, for now, around 27,000. The central bank’s fixed official rate is 12,260. Yet there’s one currency in Iran that has kept its value and can be used to purchase goods from abroad: bitcoins, the online-only currency.

Iranians are buying and selling goods and services nationally and internationally with bitcoins. The Iranians are not alone, however. The perceived value and importance of Bitcoin is growing everywhere, especially in Europe. After the so-called “Cyprus haircut,” whereby the European Troika purloined the savings of the people of Cyprus, more and more people are sensing the value of a peer-to-peer cryptocurrency, free from the control of governments and central banks.

Because bitcoins offer strong privacy; can be used to bypass government restrictions and regulations; can be used to send money anonymously instantaneously anywhere in the world; can be used for so-called “money laundering”; and can be used to purchase so-called “illegal goods and services” anywhere in the world, there is some indication that in the very near future the Bitcoin may become more regulated under the Financial Crime Enforcement Network (FinCEN). This would not come as a surprise. However, it seems that for the present, only exchangers have to register as Money Services Businesses (MSBs).

While Bitcoin is by no means the only digital currency or peer-to-peer cryptocurrency, it is at the moment by far the most private, popular, and best implemented.

There is no indication that this will change anytime in the foreseeable future.

James Black is the author of The Privacy Book. For more information, please visit www.sovereignpress.org

May 06

German Euro Founder Calls for ‘Catastrophic’ Currency to be Broken Up

Euro break up German Euro Founder Calls for Catastrophic Currency to be Broken Up

Source: telegraph.co.uk

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is “leading to disaster”.

“The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt,” he said.

“The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later,” he said, blaming much of the crisis on Germany’s wage squeeze to gain export share.

Mr Lafontaine said on the parliamentary website of Germany’s Left Party that Chancellor Angela Merkel will “awake from her self-righteous slumber” once the countries in trouble unite to force a change in crisis policy at Germany’s expense.

His prediction appeared confirmed as French finance minister Pierre Moscovici yesterday proclaimed the end of austerity and a triumph of French policy, risking further damage to the tattered relations between Paris and Berlin.

“Austerity is finished. This is a decisive turn in the history of the EU project since the euro,” he told French TV. “We’re seeing the end of austerity dogma. It’s a victory of the French point of view.”

Mr Moscovici’s comments follow a deal with Brussels to give France and Spain two extra years to meet a deficit target of 3pc of GDP. The triumphalist tone may enrage hard-liners in Berlin and confirm fears that concessions will lead to a slippery slope towards fiscal chaos.

German Vice-Chancellor Philipp Rösler lashed out at the European Commission over the weekend, calling it “irresponsible” for undermining the belt-tightening agenda.

The Franco-German alliance that has driven EU politics for half a century is in ruins after France’s Socialist Party hit out at the “selfish intransigence” of Mrs Merkel, accusing her thinking only of the “German savers, her trade balance, and her electoral future”.

It is unclear whether the EU retreat from austerity goes much beyond rhetoric. Mr Moscovici conceded last week that the budget delay merely avoids extra austerity cuts to close the shortfall in tax revenues caused by the recession.

The new policy allows automatic fiscal stabilisers to kick in, but France will stay the course on the original austerity. “It is not about relaxing the effort to cut spending. There will no extra adjustment just to satisfy a number,” he said.

Mr Lafontaine said he backed EMU but no longer believes it is sustainable. “Hopes that the creation of the euro would force rational economic behaviour on all sides were in vain,” he said, adding that the policy of forcing Spain, Portugal, and Greece to carry out internal devaluations was a “catastrophe”.

Mr Lafontaine was labelled “Europe’s Most Dangerous Man” by The Sunafter he called for a “united Europe” and the “end of the nation state” in 1998. The euro was launched on January 1 1999, with bank notes following three years later. He later left the Social Democrats to found the Left Party.

May 02

The Past Two Weeks Saw Chinese Housewives Buy $16 Billion Worth of Physical Gold

The first four months of year saw Americans sell $16.6 billion worth of gold via GLD; the past two weeks saw Chinese housewives buy $16 billion worth of physical gold.

Joe Weisenthal says this selling of GLD overwhelms physical demand:

joe file gold etf The Past Two Weeks Saw Chinese Housewives Buy $16 Billion Worth of Physical Gold

 

But, as you see, it’s been a mere $16.6 billion worth of gold sold year-to-date – ie four months – via the paper gold vehicle GLD. In the past two weeks, Chinese buyers have bought $16 billion worth of physical:

chinese Housewives gold rush keeps price from falling The Past Two Weeks Saw Chinese Housewives Buy $16 Billion Worth of Physical Gold

According to “Voice of China” radio program, one of this year’s most popular phrases may be “Chinese housewives” – as a major force which reportedly spent 100 billion yuan (US$16 billion) over the past two weeks purchasing 300 tons of gold and thus helping to sustain gold prices at US$1,468 an ounce.

The “Chinese gold rush” has prevented short selling, where gold is sold and then bought back when prices fall. The practice was seen as a possible bid to shore up the US dollar – gold is often regarded as a means of safeguarding wealth against a weak dollar – and to maintain stable interest rates in the US.

This is just China. There is also Turkey, Thailand, Dubai, India, etc. where a similar physical frenzy is going on.

Mrs. Wang two weeks ago:

Apr 09

Lessons From the Newest Electronic Money – Bitcoin

Bitcoin Lessons From the Newest Electronic Money – Bitcoin

One of the more interesting developments of the modern electronic age of money has been the rise of Bitcoin, a decentralized digital form of money.  If you’re not familiar with it or you’re confused by what Bitcoin is, you’re not alone.  It’s a fairly new, innovative and complex form of money.  And that’s right, Bitcoin is definitely money.

Today’s Dominant Form of Money Versus Bitcoin

Anyone who understands the basic tenets of Monetary Realism know that many things can serve as money and many things DO serve as money.  After all, anyone can create money, but the trouble is in getting others to accept it.  And since money’s primary purpose is in the means of exchange, just about anything can serve as money as long as it meets that primary purpose.  The thing is, there aren’t all that many things that meet that need on a broad level.  For instance, lots of people like to claim that gold is money (which it is), but gold isn’t accepted for payment in many places.  Therefore, MR says that gold has a low level of moneyness (to better understand the concept of moneyness please see here).  Gold is money, but it’s just not a very good kind of money.  Bitcoin is actually very similar.  If you have Bitcoins you can buy certain things online that only a Bitcoin merchant will allow you to buy.  These merchants accept Bitcoins as a form of final payment.  To them, it’s a form of money with a very high level of moneyness.  But to a company like Wal-Mart a Bitcoin is like a gold bar.  It doesn’t give you access to anything in their store therefore its moneyness is virtually nil in a Wal-Mart.  Most retailers around the world view Bitcoins similarly.

In the USA, the primary form of money is bank deposits because bank deposits are the form of money that dominate the US payments system.  The US payments system, which is maintained by private banks, is the primary playing field for the purpose of exchanging goods and services.  In other words, if you want access to the most convenient and widely accepted form of payment (bank deposits), you need to become a member of the US payments system usually by becoming a bank client.  This gives you access to credit cards, debit cards, a bank account that allows you to withdraw/deposit cash, etc which allows you to interact on the US payments system.  Becoming a bank client is kind of like opening a Ticketmaster account so you can obtain access to the means of exchange to gain entry into a theater performance (you just want access to the tickets that give you access to a performance).  In the case of banking, you open an account in order to gain access to the US payments system so you can access the performance that is the US economy.  Obtaining Bitcoins is similar in many ways, but very different as I’ll describe below.

 

READ FULL ARTICLE HERE:  http://pragcap.com/is-bitcoin-money

Mar 20

The U.S. Economy: Mainstream Media says Proclaims Recovery “More LIES!”, Truth is a Total System Failure

No matter how often the pretty people on television tell us that the U.S. economy is getting better, it isn’t going to change the soul crushing agony that millions of American families are going through right now.  The stock market may have gotten back to where it was in 2008, but the job market sure hasn’t.  As I wrote about a few days ago, the percentage of working age Americans that are actually employed has stayed very flat since late 2009, and the average duration of unemployment is hovering near an all-time high.  Sadly, this is not just a temporary downturn.  The U.S. economy has been slowly declining for several decades and is nearing total system failure.  Right now, many poverty statistics are higher than they have ever been since the Great Depression.  Many measurements of government dependence are the highest that we have ever seen in all of U.S. history.  The emerging one world economic system (otherwise known as “free trade”) has cost the U.S. economy tens of thousands of businesses, millions of jobs and hundreds of billions of dollars of our national wealth.  The federal government is going into unprecedented amounts of debt in order to try to maintain our current standard of living, but there is no way that they will be able to sustain this kind of borrowing for too much longer.  So enjoy this bubble of false prosperity while you can, because things will soon get significantly worse.

As the U.S. economy experiences total system failure, it will be imperative for all of us not to wait around waiting for someone to rescue us.

And I am not just talking about the government.

Today, millions upon millions of Americans are waiting around hoping that someone out there will hire them.

Well, the truth is that our politicians have made it so complicated and so expensive to hire someone that many small businesses try to avoid hiring as much as possible.

Businesses generally only want to hire people if they can make a profit by doing so.  When our politicians keep piling on the taxes and the regulations and the paperwork, that creates a tremendous incentive not to hire workers.

Michael Fleischer, the President of Bogen Communications, once wrote an op-ed in the Wall Street Journal entitled “Why I’m Not Hiring”.  The following is how Paul Hollrah of Family Security Matters summarized the nightmarish taxes that are imposed on his company when Fleischer hires a new worker….

According to Fleischer, Sally grosses $59,000 a year, which shrinks to less than $44,000 after taxes and other payroll deductions. The $15,311 deducted from Sally’s gross pay is comprised of New Jersey state income tax: $1,893; Social Security taxes: $3,661; state unemployment insurance: $126; disability insurance: $149; Medicare insurance: $856; federal withholding tax: $6,250; and her share of medical and dental insurance: $2,376. Roughly 25.9 percent of Sally’s income is siphoned off by Washington and Trenton before she receives her paychecks.

But then there are the additional costs of employing Sally. In addition to her gross salary, her employer must pay the lion’s share of her healthcare insurance premiums: $9,561; life and other insurance premiums: $153; federal unemployment insurance: $56; disability insurance: $149; worker’s comp insurance: $300; New Jersey state unemployment insurance: $505; Medicare insurance: $856; and the employer’s share of Social Security taxes: $3,661.

Over and above her gross salary, Bogen Communications must pay an additional $15,241 in benefits and state and federal taxes, bringing the total cost of employing Sally to approximately $74,241 per year. Sally gets to keep $43,689, or just 58.8% of that total.

Are you starting to understand why so many businesses are hesitant to hire new workers?

 

The big corporations can handle all of the paperwork and regulations that come with hiring a new worker fairly well, but for small businesses hiring a new worker can be a massive undertaking. That new worker is going to have to almost be a miracle worker in order to justify all of the hassle and expense.

But the federal government just keeps piling more burdens on to the backs of employers.  That is one reason why there is such an uproar over Obamacare.  It is going to make hiring workers even less attractive.

These days, most small businesses are trying to get by with as few workers as possible, and many big businesses are trying to ship as many jobs as they can overseas.

Sadly, even if you do find a good job it can disappear at any moment.

The following is from a comment that a reader named Jeff recently left on one of my articles….

It’s sad what’s happening here in this country. So many lucky ones defend it. In America it’s not exactly about hard work anymore, it’s about who you know always. The ability to keep people stupid as well as in debt was established here well by corporations also. You cannot start a solid hiring business like you could years ago.

I know many of folks who don’t break a sweat and earn more money than I ever will in a week. The system is getting crazy only creating two extremes. I fought for this country right after 9/11 as a young naive person. Using my grandfather’s old stories to see the dream that this country was always suppose to have.

The company I still unfortunately work for (cause other places are worse), 4 years ago they froze our salaries. No raises yet, this is when the company was bought by an investment group for 500 million.

Now we are getting sold to Japan for 1 billion. A 500 million dollar profit. Sorry if I may be ignorant in this way of business. But it seems the only one who benefited from this is that group of investors. 400+ well skilled jobs lost, no raises or rewards, a whole lot more work and contract obligations to meet, and less contact with management when problems surface.

I just think the United States of America is becoming the world’s poker table.

I want out of this country so bad. I don’t even know what happen to people here. The younger generation scares me how dumb they are and everyone seems so easily bought with eyecandy.

 

Can you imagine that?

Can you imagine your boss walking in one day and declaring that the business has just been sold to foreigners and that you are about to lose your job?

In America today, it can be absolutely soul crushing to lose a job.  It isn’t as if you are going to run out and get another fantastic job in a week or two.

When you are unemployed, people look at your differently.  It gets to the point where you don’t even want to interact with other people because you know that your unemployment is probably going to be the number one topic of conversation.

When you are out of work for six months or more, it is easy to feel like a failure – especially when so many other people are looking at you as if you are a failure too.

But in most cases, individual Americans are not to blame for not being able to find work.

Rather it is the entire system that is failing all of us.

The U.S. economy is bleeding good jobs and the middle class in America has become a bizarre game of musical chairs.  When the music stops each round you might lose your spot.  You just never know.

Looking for work in the United States in this economic environment can be a demoralizing endeavor.  For example, a recent Esquire article described what one unemployed man named Scott Annechino found when he attended a job fair in San Francisco….

A glass elevator carries him to the third floor, where the front-desk girl, who knows it’s her job to be cheerful, told him the job fair is supposed to be.

A pasty kid, maybe thirty, in a too-big shirt and a cheap tie, greets him and tells him the companies are set up in rooms along the hall and that he should definitely visit all of them. Annechino, forty-four years old, wearing his best suit and shined black shoes, walks to the first exhibitor: Devcon, a home-security company. The door is closed, no one inside. Annechino looks around for an explanation. “Oh, I just got an e-mail from my contact there saying they wouldn’t be able to make it today,” the pasty kid says, fingering his BlackBerry.

A couple of other potential employers who were supposed to be here didn’t make it, either — Konica Minolta, Santa Clara University. “Yeah …” the kid says. Annechino moves to the next room. State Farm. They’re looking for people who can put up fifty grand to start their own insurance agency. The Art Institute is next, mostly looking for people who might want to go to art school. New York Life. The U. S. Army, where men wearing fatigues and combat boots offer brochures.

That’s it.

If you want to check out the rest of the sad unemployment stories in that article, you can find them right here.

But even if you do have a job, that doesn’t mean that everything is just fine.  Average American families are finding that the prices of the basic things that they need are rising much faster than their paychecks are.

According to one recent study, more than half of all Americans feel as though they are really struggling to afford just the basics at this point….

“Every retailer wants to think ‘Everything I sell is worth it! Shoppers will love it’, but the hard reality is 52% Americans feel they barely have enough to afford the basics,” said Candace Corlett, president of WSL/Strategic Retail.

Just buying food and gas is a major financial ordeal for many families these days.  On average, a gallon of gasoline in the United States now costs $3.83.  Many Americans burn up a huge chunk of their paychecks just going back and forth to work in their cars.

So what is the solution?

Well, according to the Obama administration the answer is even more government dependence.  The federal government is now actually running ads encouraging even more people to go on food stamps….

Can you believe that?

Apparently having 46.5 million Americans on food stamps is not enough.  The federal government is spending our tax money on advertisements that try to convince even more Americans that they need to be on food stamps.

What the American people really need are good jobs, but those keep getting shipped out of the country.

Meanwhile, people are becoming increasingly desperate.

For example one Colorado man was recently caught stealing parts from toilets in public restrooms….

Donald Allen Citron, 48, faces 18 charges, including burglary and theft. He’s accused of stealing toilet parts from several locations, including Southwest Plaza Mall, University of Denver, and Craig Hospital.

Most of the crimes happened in just a few minutes, but police Citron is a plumber and all he needed was a wrench and a screw driver to steal pipes and the plumbing in toilets. The items he’s accused of stealing are valued at around $6,400.

They are calling him “the crapper scrapper”.

Other Americans are not willing to stoop to crime and instead suffer quietly and anonymously.

A reader named Katie recently left the following heartbreaking comment on one of my articles….

I’m almost homeless. Through no fault of my own I’d like to point out. I don’t drink, smoke, or do drugs. I don’t even eat fast food unless I have too.

Four years ago I had a house, car, family, stuff, an IRA, and really everything that people in this country aspire to. I had a great job that I enjoyed so did my boyfriend. Even our relationship was great.

We didn’t get hit by the economy right away. We were in Katrina damaged parts of the country and there was still a lot of construction going on and the economic boom that comes with it.

Then I got laid off. Doesn’t seem to matter that I go to interview after interview. I use indeed, monster, craigslist, and newspapers to search for jobs even outside my area.

Now my boyfriend has passed away suddenly, and his family got everything. I personally have only a living father left, who hasn’t the room but I’m camping in his yard. All my friends say they don’t have the room either. Which makes me wonder just how much of friends they are. Considering if the situation was reversed I have in the past and would open my home to anyone that needed help.

If something happens to him I really don’t know what I’m going to do. I need to get on my feet and I know that jobs are hard to come by. I’m sick of the people who have jobs saying ‘get a job you lazy bum’. I’m hardly lazy and I’m trying desperately to be employed; not being homeless would be rather awesome in my opinion. I’m not picky, regardless of my degree I’ll pick up trash or clean toilets. McDonald’s, Taco Bell and the other fast food places don’t even bother with a call back. And when I call to inquire about my application it’s always the same, ‘we will call you when we make a decision’. Such a cop-out.

So no. In my (granted meaningless opinion) the economy is not getting better. To even suggest that when unemployment is so high or the rate of food stamps. Is utter ludicrous at best. I notice that those talking heads on the cable news and radio never seem to mention that the homeless shelters have a higher occupancy level than ever before. Nor would they mention the fact that we have those shelters in abundance now across the country in comparison to the Great Depression.

I’m getting real tired of hearing how great the economy is doing. When obviously it’s not. All you have to do is open your eyes and see. Business are not coming back yet and foreclosed homes sit empty everywhere. The unemployment rate only counts the people who are getting unemployment benefits. So the people who fall off the unemployment benefits don’t get counted. Because the must have gotten a job, right? Hardly. In fact the homeless in this country are almost never counted correctly. It’s too hard to count them all, or at least that’s the excuse.

I know it’s meaningless, especially to those who see homeless and immediately have a bias, but that’s my opinion on the current state of our economy. You can count me in the 80%. Only a fool would see this as a recovery.

Please say a prayer for Katie and the millions of other Americans just like her.  It can be absolutely soul crushing to lose everything that you ever worked for and not see any light at the end of the tunnel.

Unfortunately, the U.S. economy is not going to be improving in the long run.  What we are experiencing right now is about as good as it is going to get.  The truth is that it is pretty much downhill from here.

It is fairly simple to figure out what is happening to us as a nation.

You can’t keep buying far more than you sell.

You can’t keep spending far more than you bring in.

You can’t keep running up debt in larger and larger amounts indefinitely.

The U.S. economy is running on borrowed money and on borrowed time.

At some point, both are going to run out.

Are you ready for that?

Feb 09

FBI says paying for coffee with cash a potential terrorist activity, urges coffee shop owners to report cash-paying customers

Purchasing a cup of coffee using cash instead of a credit or debit card, using Google Maps to view photos of sporting event stadiums and large cities, and installing software to protect your internet privacy on your mobile phone — these and many other mundane activities are now considered to be potential terrorist activities by the Federal Bureau of Investigation (FBI). And the agency is now distributing a new series of flyers as part of its new “Communities Against Terrorism” (CAT) program that urges shop owners and others to report such “suspicious” activity to authorities.

“The Communities Against Terrorism program is funded by the Bureau of Justice Assistance through the SLATT Program to provide law enforcement agencies with a tool to engage members of the local community in the fight against terrorism,” writes SLATT.org, the program of the U.S. Department of Justice’s Bureau of Justice Assistance that is promoting the program, on its website. “To assist law enforcement in the outreach effort, templates of flyers containing potential indicators have been created for distribution to specific industries” (https://www.slatt.org/CAT).

The SLATT program offers both on-site and online training (indoctrination) for coffee shop owners, financial institution employees, tattoo shop artists, and many others into how to spot potential terrorist activities. Included among the many propaganda flyers the FBI is distributing as part of the campaign are ones for how to spot terrorists at local hobby shops and beauty supply stores, for instance, as well as flyers for owners of farm supply and home improvement stores (http://publicintelligence.net).

This little gem warns internet cafe owners to watch out for and report customers that always pay for their coffee with cash, as they could be terrorists (http://info.publicintelligence.net). Another ridiculous flyer intended for owners of boat shops warns them to be on the lookout for people interested in becoming certified scuba divers, as they could be terrorists (http://info.publicintelligence.net).

Be sure to check out the entire set of flyers here:
http://publicintelligence.net

A few years ago, this type of outlandish fear-mongering and Stasi-style spying on citizens would have been considered a crazy conspiracy theory by many. But today, the U.S. Department of Homeland Security (DHS) with its “See Something, Say Something” campaign, the U.S. Transportation Security Administration’s (TSA) “First Observer” citizen spying program, and the TSA’s Visible Intermodal Prevention and Response” (VIPR) internal checkpoint force, together with the new FBI spying program, are making this police state nightmare in America a tangible reality (http://www.naturalnews.com/034867_TSA_Super_Bowl_surveillance.html).

Sources for this article include:

http://www.infowars.com

http://www.slate.com

https://www.slatt.org/CAT

May 18

Ron Paul: Sell Fort Knox Gold Next Big Question in Debate on Federal Debt Limit

NEW YORK — The next big question on the federal debt limit could be whether to start selling the government’s holdings of gold at Fort Knox — and at least one presidential contender, Ron Paul, has told The New York Sun he thinks it would be a good move.

The question has been ricocheting around the policy circles today. An analyst at the Heritage Foundation, Ron Utt, told the Washington Post that the gold holdings of the government are “just sort of sitting there.” He added: “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.”

His comment came in the wake of not only the government having reached the statutory debt limit of $14.29 trillion but also the release of a report by the Heritage Foundation of a report on asset sales. The report outlined how a “partial sales of federal properties, real estate, mineral rights, the electromagnetic spectrum, and energy-generation facilities” might garner the federal treasury $260 billion over the course of the next 15 years.

The report did not mention the possibility of selling the government’s holdings of bullion, though the 261.5 million ounces of gold the Treasury Department lists in its reserve position would, at a recent price of $1,492 an ounce, would theoretically fetch $390.2 billion. The Wall Street Journal reported Monday that a group of Republican congressmen supports the idea of selling gold.

Officials of the Obama administration have taken notice — and disagree. The assistant Treasury secretary for financial markets, Mary Miller, wrote in a posting on the Treasury Department’s Website May 6 that “fire sale” of the government’s financial assets, including gold, would not be a “viable option.” She urged instead a raising of the debt limit.

An unnamed senior administration official was quoted by the Washington Post as saying, “Selling off the gold is just one level of crazy away from selling Mount Rushmore.” The Wall Street Journal, in its dispatch Monday, reported that Treasury “could be forced to rethink” their opposition if the budget talks fail.

A study of gold reserve sales in the late 1990s noted that seven nations — Australia, Austria, Belgium, the Netherlands, Portugal, and Sweden — had then recently sold off substantial portions of their gold reserves. The sales, which amounted to 48% of those reserves, presaged a 26% devaluation in their nation’s respective currencies. Between 1999 and 2002, in 17 separate auctions, Britain sold off half of its gold reserve, netting $3.5 billion. What Britain sold is now worth $10.5 billion.

In September 2009 the International Monetary Fund authorized sales from its gold reserves. At the conclusion of its sales, the IMF had disposed of 403.3 tons of gold or 13% of reserves. Over half was purchased by the central banks of India, Sri Lanka, Mauritius, and Bangladesh. In early 2011, Communist China announced plans to increase its gold reserves from to 10,000 tons by decade’s end from the 1,200 tons it currently holds. Mexico has acquired 93.3 tons of gold this year, while Thailand added 9.3 tons to its national reserves this March. Russia added 22.5 tons in January and February.

In August 2010, a leading figure in the monetary debate in Congress, Ron Paul, a Republican of Texas, called for an audit of the federal government’s gold reserves. “If there was no question, you’d think they would be very anxious to prove to us that the gold is there. . . . ,” Dr. Paul then said, “In the early 1980s when I was on the gold commission, I asked them to recommend to the Congress that they audit the gold reserves – we had 17 members of the commission and 15 voted not to the audit. I think there was only one decent audit done 50 years ago.”

“If we ever get around to deciding we should use gold in relationship to our currency we ought to know how much is there,” Dr. Paul added, “Our Federal Reserve admits to nothing and they should prove all the gold is there. There is a reason to be suspicious and even if you are not suspicious why wouldn’t you have an audit?” In March 2008 the Times of London quoted a spokesman of the American treasury as saying that American gold holdings “are audited every year by the Department of Treasury’s Office of Inspector General. He confirmed that although independent auditors oversee the process they are not given access to the Fort Knox vault.”

Dr. Paul told the Sun today that he reckoned the sale of gold reserves would be “a good and moral decision. An individual would have to do the same.” The sentiment is echoed by another big name in the debate on monetary reform, Edwin Vieira Jr., who told the Sun he has little hope of the government moving to sound money and would prefer that it coin its gold holdings in pieces marked with their weight and use them to pay off debts, particularly individuals — who might be owed, say, tax refunds.

Mr. Vieira is a proponent of what he calls the “absolute separation between currency and debt.” He considers specified weights of gold and silver as the only constitutional currency. “Redeemable currency,” he says, “is an oxymoron.” And given that America is in an era of fiat money with no plans on the government’s part to mount a reform, he says of the government: “They don’t need the gold. They’ve just been sitting on it since Roosevelt stole it.”

However, one of the most famous advocates of the gold standard, Lewis Lehrman, opposes the sale of the gold holdings of the American government — or any part of them. “Under no circumstances should the United States consider selling a single ounce of gold,” Mr. Lehrman, who runs the internet project, told the Sun. “On the contrary, depending upon the facts and circumstances and the level of prices, the United States might be a gradual buyer.”

Mr. Lehrman, who had served in the early 1980s with Dr. Paul as a member of the United States Gold Commission, had just been this afternoon interviewed by Diane Rehm of National Public Radio, on which he called for American leadership in restoring a gold standard. He did not suggest that it could be done immediately, but he argued that this is the time to start, saying: “We have all the grounding and the basis for the United States taking the lead in establishing the convertibility of the dollar today.”

Mar 01

Gold Jumps & Silver Skyrockets to Record Highs on Libya Unrest, Wisconsin Protest & Rising Oil Prices

Gold rose to settle at an all-time high Tuesday above $1,431 an ounce as chaos in Libya and political turmoil in the Arab world prompted safe-haven buying and soaring oil prices boosted bullion’s inflation hedge appeal.

Unrest across the Middle East and North Africa, which unseated leaders in Tunisia and Egypt before spreading across Libya, Bahrain, Yemen and Iran, fueled a 6 percent rise in gold prices in February.

“What gold needed was a catalyst, and it found it in the form of tensions that are surfacing in the Middle East and rising oil prices, which served as an inflationary threat and also led to political instability,” said Mark Luschini, chief investment strategist of Janney Montgomery Scott, a brokerage that manages $53 billion in client assets.

On Tuesday, Iranian security forces fired teargas and clashed with anti-government demonstrators protesting the treatment of opposition leaders. The United States said Libya could descend into civil war if Muammar Gaddafi refuses to quit, after word of unspecified Western military preparations.

Gold has rallied strongly since uprisings in Tunisia and Egypt unleashed a swathe of popular protests across the region, sending oil prices to 2-1/2-year highs and raising investors’ concern about the potential effects of high energy prices on economic growth. U.S. light sweet crude oil futures soared $2 to $99 a barrel.

Spot gold // [XAU=  1431.25  watchlist down Gold Jumps & Silver Skyrockets to Record Highs on Libya Unrest, Wisconsin Protest & Rising Oil Prices  -2.45  (-0.17%)] //   rallied to a session peak of $1,432.10 an ounce — surpassing its previous record of 1,430.95 set on Dec. 7. The metal was last bid around $1,429 an ounce, extending its winning streak to three consecutive trading days.

U.S. gold futures // [GCV1  1438.40  watchlist up Gold Jumps & Silver Skyrockets to Record Highs on Libya Unrest, Wisconsin Protest & Rising Oil Prices  24.40  (+1.73%)] // for April delivery settled up $21.30 to end at $1,431.20 an ounce.

Bullion rose 6 percent in February, its largest monthly rise since August. It traded mostly sideways last week, then gained on Tuesday on resurgent safe-haven bids.

Silver // [XAG=  34.66  ---  UNCH  (0)] // hit a fresh 31-year high at $34.57 an ounce and later climbed 1.9 percent to $34.46. Silver has risen about 11 percent this year.

The gold-silver ratio, which shows how many ounces of silver it takes to buy one ounce of gold, approached a 13-year low. Silver has risen amid limited supplies for near-term delivery and on prospects of rising demand for industrial metals as the economy recovers.

Bernanke Comment Helps

Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee Tuesday that the recent surge in oil prices was unlikely to have a big impact on the U.S. economy, but could dampen growth and raise inflation if sustained.  Bernanke’s comments boosted gold as he offered no hint that the U.S. central bank was considering winding down its loose monetary policy, which also sent the U.S. dollar to a 3-1/2 month low against major currencies.

“From the start of crude oil’s ascent based on Libya, you are seeing general risk issues become more of a front burner in peoples’ psyche,” said James Dailey, portfolio manager of the TEAM Asset Strategy Fund.  “You’ve had the U.S. long-term Treasurys rally. You’ve had a lot of the things that traditionally occur when people start to get afraid, all except the U.S dollar rally,” Dailey said.

Since the Fed cut interest rates to 0.25 percent in response to the global financial crisis in late 2008, gold has risen 70 percent.

In a reflection of investor ambiguity on gold, holdings of the metal dropped in the SPDR Gold Trust // [GLD  140.03  watchlist up Gold Jumps & Silver Skyrockets to Record Highs on Libya Unrest, Wisconsin Protest & Rising Oil Prices  2.369  (+1.72%)] // , the world’s largest gold-backed exchange-traded fund.

In addition to fueling higher oil prices, turmoil in Libya has added to geopolitical uncertainty, which has led to a rebound in gold prices. Gold traded on the Comex rose $21.30, or 1.5%, to settle at $1,431 an ounce — a new record when not adjusted for inflation.
The sharp rise in oil prices overshadowed some encouraging corporate and economic news. General Motors (GM) racked up another impressive month of sales in February, as consumers snapped up new GM models despite soaring prices for gasoline. The Detroit-based automaker reported Tuesday that year-over year sales in February rose 46% for a total 207,028, exceeding analyst estimates, as well as GM’s own expectations.

Rival Ford Motor (F) reported Tuesday that its February sales rose 14% compared to a year ago, in part due to strong sales of the revamped Ford Explorer sports-utility vehicle, which debuted in late 2010. In all, auto sales in February ran at the strongest annual pace since the federal “cash-for-clunkers” program.

In economic news, activity at U.S. manufacturers expanded last month at its fastest pace in seven years. The Institute for Supply Management said its manufacturing index rose to 61.4 from 60.8 the prior month. The gauge easily beat economists’ average outlook, which stood at 60.5 for February. Alas, autos and manufacturers could stop the bleeding among stocks inflicted by oil.

Feb 17

Silver rises to New All Time high as mints start to ration coins

The price of the precious metal hit $31.37 a troy ounce on Thursday, up 16 per cent since mid-January and the highest since March 1980. The world’s leading mints have reported record sales of silver coins in January and some, including the Royal Canadian Mint and Austrian Mint, have had to ration sales

 “We have sold everything we can produce in silver and have demand for at least twice that volume,” said David Madge, head of bullion sales at the Royal Canadian Mint, which produces the silver Maple Leaf coin. Silver coin sales at the US Mint and the Austrian Mint also hit record levels in January.

The surge of buying has both boosted silver prices and helped push the market into “backwardation” – an unusual condition in which forward prices are lower than prices for immediate delivery. While investors are buying, miners have been selling their future silver production to lock in gains, which has depressed long-dated futures prices.

Dealers said smaller investors saw silver as a cheaper alternative to gold with greater potential for gains as they look to preserve their wealth against rising inflation and currency weakness.

The Austrian Mint sold 1.53m ounces of its silver Philharmonic coin in January, more than double the level a year earlier, according to Andrea Lang, marketing director.

“We could have sold more,” she said, adding that the mint would boost production to 2.2m ounces in February and March.

The US Mint sold 6.4m ounces of silver American Eagle coins in January, 50 per cent more than the previous record month, and have already sold 1.7m ounces so far in February.

Silver prices have outpaced gold in recent months as the improving economic picture has caused investment demand for gold to wane but has boosted silver’s industrial demand – which, in spite of rising investor flows, still accounts for 80 per cent of total silver consumption.

Both metals were buoyed on Thursday by renewed concerns over political stability in the Middle East. Gold gained 0.6 per cent to $1,382.90 a troy ounce, the highest in a month, but off the all-time peak of $1,430.95 touched in December

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