Monday, May 9, 2011

Fractional Reserve Banking

How money is created in a “Fractional Reserve Banking” system. Chapter 7 of Chris Martenson’s Crash

How the US Federal Reserve System creates new money. Chapter 8 of Chris Martenson’s Crash Course

credit : You Tube &

where to buy gold and silver


Kelantan Dinar
Kelantan Dinar
  • Australian Nuggets, Maple Leaf, UBS Kinebar, Suisse PAMP, Singapore Lion Goldonly. No Silver products.
  • Publishes daily buy and sell prices at around 10am, and sometimes updated when prices are volatile.
  • Not all products are available all the time. Best to call Jalan Raja Laut HQ at 03-27726578
  • Other branches may not have stock or have limited supply.
  • Transaction in person over the counter only.
  • Certificate is issued for each coin or for an entire lot of coins.
  •  Malaysia Kijang Emas Gold Coin only. No Silver products.
  • Publishes daily buy and sell prices here.
  • Not all branches have stocks
  • Transaction in person over the counter only.
Public Gold
  • Deals in locally produced gold bars, silver bars and coins
  • No real-time prices published on website. Need to call their representatives.
  • Transaction mechanism similar to NZMint listed above.
  • Deals in gold bars, silver bars and minted bullion coins
  • Coins include Gold Maple Leaf, American Eagle, American Buffalo, Australian Kangaroo, Fortuna.
  • Bars include PAMP gold & silver bars
  • Publishes indicative prices at (which appears to be lower than some equivalents from UOB, but may not be as updated as UOB). Best to check by phone at at +60321728680,
  • Deals mainly in gold Dinar coins and small gold bars (Emirates, 1Malaysia and PAMP SUISSE)
  • Online live Buy and Sell prices
  • Online purchase with flexible payment options, with option for COD if collecting your goods at their office
  • Deals in a very wide selection of gold and silver coins, small and large bars
  • Kelantan Dirham & Dinar, Silver Maple leaf, Silver Koala, Silver Kokoburras, Morgan silver bars, Pamp Suisse, etc.
  • Online live Buy and Sell prices.
  • Online purchase
Hong Cheong Watch & Jewellery Trading
  • Deals in PAMP gold bars. No coins
  • Publishes live rates at
  • Deals in various silver coins (Austrian Philharmonic, Australian Kola, Australian Kookaburra, Canadian Maple Leaf, American Eagle)
  • Online shopping at

Sunday, May 8, 2011

Gaddafi Gold Dinar

When to Exit Silver?

Not Quite Yet: James Turk, Gene Arensberg and Antal Fekete’s take on exiting silver.
Exit SilverBecause silver is a much smaller and more volatile market than gold, we’ve watched it roar back from $8.70 in October 2008 to today’s approximate $38.00 per oz. It continues its seemingly unstoppable bull run and many experts predict $50 per oz before the year is out. It’s painfully evident that the general public has yet to catch onto why they should position themselves in physical gold and silver, but for those who have, let’s talk exit strategy for silver.
I’ve recently learned the mere mention of exiting silver strikes fear in the hearts of many diehard silver bugs around the world, but let’s take a look how we can use silver’s imminent breakout to our advantage. I’ve asked a variety people what their thoughts are on the matter and when asked if and when they would exit silver, many flatly said, “never”. I’d like to direct these people to the following for their consideration:
In a recent correspondence with James Turk, Founder/Chairman of GoldMoney he said, “Most people are probably aware that I am more bullish on silver than gold from a long-term point of view, but they are also aware of my proviso. Silver is more volatile than gold. For example, look what the gold/silver ratio did in 2008, climbing from 46 to 84 in a few months after the Lehman collapse. More recently, the ratio declined from 60 to 39 in about 6 months. This volatility means that silver is not for everyone. But if you are willing to accept the volatility, then I recommend having 1/3rd of your bullion portfolio in silver and the remaining 2/3rds in gold. As the ratio falls, the percent of silver in your portfolio in dollar terms increases. I expect the gold/silver ratio to fall within the next 2-4 years to at least 20-to-1, and I would not be surprised if it reverts to its historical average of around 16-to-1.”
If you agree with industry legend, Turk’s predictions; then instead of selling silver and jumping on a doomed sinking ship (fiat currency), it makes sense to use arbitrage to increase the amount of ounces of gold bullion you own throughout the bull market. Swapping silver for gold along the way to make gains. The questions are when and how much to swap.
Gene Arensberg who writes the highly acclaimed and popular, Got Gold Report, recently told me “I think that we are transitioning into a new era for silver and we cannot rely on the recent past for guidance. The recent past was dominated by massive government dishoarding of silver metal for decades. People got used to having cheap silver but it was an artificial illusion.” Gene pointed out a recent entry titled “GGR Excerpt – The Silver Plan” that discusses his personal plan to exit the silver market: “Since we currently have no need for the silver we have accumulated in years past, we have personally adopted a single plan for our physical silver holdings. We intend to wait patiently, for years if necessary (haven’t we already?), for the time when less than 30 ounces of silver will “buy” an ounce of gold. At that time we plan to convert one-quarter of our silver into gold one-ounce coins. At 25:1 we will convert another quarter. And at 20:1 or better, yet one more quarter will go for the gold. And if silver manages to get all the way to a 15:1 ratio to gold again (see the star on the graph), like it did in January, 1980, the last of our silver will be converted to real money.”
Historical Gold/Silver Ratio
Historical Gold/Silver Ratio
Antal Fekete, a Monetary Scientist and Mathematician who lectures on Austrian economics said this on the subject: “There is a plausible argument for silver catching up with gold and the bimetallic ratio going to 16. I would look at this as a pendulum-like action between 100 and 16.” According to Antal, there are a lot of advantages in buying silver and he’s aware that people are playing the gold-silver arbitrage game, but cautioned to keep some physical silver. In dire economic times, you wouldn’t want to show your gold (people may kill you for it). People should keep small denomination physical silver for small transactions.
I enjoyed this tongue-in-cheek remark from a silver bug when he said he’d exit silver when rap stars on television are flashing chunky silver chains and 10 oz silver bars in their videos, or when his next door neighbour starts buying it. However, the general sentiment among the silver bug community is to hold onto their physical silver as a hedge against inflation and protection for possible hyperinflation. Some silver bugs intend to hold their physical metal and then pass it onto their children as an inheritance that will not go into probate, or to perhaps make a real estate purchase with it when the timing is right. The bugs will certainly not part with their silver for “worthless fiat” currency as they believe that they are holding “real money”. Since Nixon floated gold on the open market in 1971, the Au Ag ratio hit a low of 17:1 in 1980 due in part to the Hunt brothers’ efforts to corner the silver market. Today, in 2011, the current ratio is lingering around 38:1. After reading Gene Arensberg’s plan and viewing his chart here, there were opportunities to swap some silver for gold, but I believe the best opportunities are still to come. Recently, Eric Sprott of Sprott Asset Management was quoted that record low gold/silver ratios are to come and are headed to 20:1 or lower – Some experts feel it could even overshoot to 10:1 because gold may face strong resistance at $2000, while silver will simultaneously barrel on its trajectory.
It makes sense to have the largest portion of your physical metal holdings in physical gold as it offers easier storage, has less volatility and has been the money of kings for over 5000 years. If you`re in a position of holding a lot of silver and little to no gold, a practical way to attain this goal while at the same time capitalizing on silver`s impending breakout, is to watch the gold to silver ratio decrease and swap a portion of your silver holdings for gold at particular milestones. For the record, I’m not a speculative investor and will remain long on both gold and silver as a safe haven and insurance policy against depreciating currencies. I’m not a financial advisor in this jurisdiction or any other.

The Big Boys is Robbing Your Wealth

silver coins

Volcker warns of danger from U.S. deficits

Fri May 6, 2011 10:15pm EDT
WASHINGTON (Reuters) – Former Federal Reserve Chairman Paul Volcker warned on Friday that trillion-dollar deficits posed a threat to the stability of the U.S. economy and the dollar, and said he is frustrated by the gridlock in Washington.
WASHINGTON (Reuters) – Former Federal Reserve Chairman Paul Volcker warned on Friday that trillion-dollar deficits posed a threat to the stability of the U.S. economy and the dollar, and said he is frustrated by the gridlock in Washington.
Speaking before the World Affairs Council of Oregon, Volcker said that “prolonging trillion dollar deficits can’t be a reality” and that the United States is on course to have its public debt exceed the size of its gross domestic product.
“One way or another, we do have to return to a balanced budget,” he said in prepared remarks.
Volcker’s speech came on the same day that the Congressional Budget Office said the U.S. budget deficit had totaled $871 billion for the first seven months of the year, which is significantly above the previous year’s pace. On Thursday, Vice President Joe Biden led a bipartisan meeting in an effort to strike a deal with Republicans on cutting the growing federal deficit and averting a default.
They face an August 2 deadline to raise the country’s $14.3 trillion debt limit.
Volcker, who stepped down early this year as the chairman of President Barack Obama’s Economic Recovery Advisory Board, said he was concerned about how the U.S. consumes and borrows “to the point that China, Japan and other foreign countries hold more than 5 trillion dollars of U.S. government obligations.”
“Consider that statistic in the light of prospects for continuing deficits, doubts about future inflation and the international stability of the dollar,” he said, noting that the U.S. is running out of time to fix things.
In order to address the deficit, Volcker said he agrees lawmakers need to tackle discretionary spending, an area that could help the U.S. save $300 billion from present projections by 2020. But that alone, he said, will not be enough to address the trillion dollar deficits.
“I will put the point bluntly,” he said. “It is simply unrealistic and irresponsible to believe budgetary balance can be achieved without higher revenues relative to GDP. We won’t generate those higher revenues without tax reform.
Separately, Volcker also discussed his views on the progress made so far on the Dodd-Frank Wall Street overhaul legislation and other efforts around the world to bolster regulation of the financial markets.
Volcker was the driving force behind a pillar of the Dodd-Frank law known as the Volcker rule, which cracks down on proprietary trading by big banks. Although he no longer has a formal advisory role in the administration, he still visits the White House on occasion.
In particular, he said he was concerned about a failure to properly address certain key areas including credit-rating agencies, accounting issues and money market funds — an issue the Securities and Exchange Commission plans to explore in a roundtable discussion next week.
“Taken all together, my personal grade on financial reform is incomplete,” he said, noting that it is even more lacking abroad than in the U.S. “I do not equate incomplete with out of time, but I fear that momentum in the reform effort is waning.”
source : Original Source

Saturday, May 7, 2011

China Buying Silver Overnight

China Buying Silver Overnight, Prudent Money Holding and Accumulating Bullion on Dip
Gold and silver are tentatively higher after their 2% and 8% falls yesterday. In silver, speculators on the COMEX continue to liquidate en masse after margin was increased a massive 84% and various stop loss levels are hit, leading to further falls in the futures market.
Cross Currency Rates

Absolutely nothing has changed regarding the fundamentals driving the gold and silver markets and this will likely be another correction in gold and another sharp correction in silver.
Gold and silver’s rise is likely to continue until we return to a world of healthy economic growth, low inflation and positive real interest rates.
Gold in US Dollars - Bloomberg Adjusted for Inflation 1971 to 2011 (Monthly)

It is important to put the falls in gold and particularly silver in context and as ever focus on the long term. The long term inflation-adjusted charts put the gold correction and silver crash (above and below) in perspective and show both as being buying opportunities again. Although buyers should consider dollar cost averaging into position in order to mitigate any further price weakness.
With macroeconomic, monetary and geopolitical risks remaining high – including the threat of terrorism and war – safe haven demand from investors, pension funds and central banks is likely to continue.
The usual gold and silver bubble callers are out in force once again and it is interesting how there appears to be more coverage of gold and particularly silver now than there was with prices rising in 2010 and early 2011.
Silver in US Dollars - Bloomberg Adjusted for Inflation 1971 to 2011 (Monthly)

Indeed, mere rumours that Soros may have sold some of his gold and silver holdings led to massive media coverage.
The fact that John Paulson and a number of other increasingly respected hedge fund managers still own massive gold positions and are not selling did not receive as much coverage as the rumours of Soros selling some of his gold.
John Paulson told investors at a breakfast on Tuesday that he expects gold to hit $2,500/oz to $4,000/oz in the next three to five years.
Also, the massive gold accumulation by Mexico, Russia and Thailand was barely reported in the non-specialist financial press, nor was reported the news regarding Portugal being urged to sell its gold by senior German lawmakers.
Silver’s sell off has been vicious but value buyers continue to accumulate silver bullion. Jim Rogers, who arguably has a better track record than Soros in recent years, remains bullish on gold and silver and told CNBC, “if it goes down I hope I’m smart enough to buy more silver."
Other widely followed and respected investors with expertise on gold and silver such as Peter Grandich and Jim Sinclair are also relaxed about the falls and remain bullish on gold and silver due to the continuing strong fundamentals.
Also, there are reports this morning from the Wall Street Journal and Mitsui that there was decent buying of silver from China at these price levels overnight.
credit :

silver drop as 2008

Silver, Gold Futures Dropping as Soros Reported to Have Sold

george soros
bar silver

Silver futures fell, heading for the biggest three-day drop since 2008, and gold also retreated amid a report Soros Fund Management LLC sold precious-metal assets.
Soros Fund Management sold some holdings because of a reduced risk of deflation, according to the Wall Street Journal, which cited unidentified people close to the matter. Michael Vachon, a spokesman for Soros, declined to comment. The fund held shares in the SPDR Gold Trust, the biggest exchange-traded product backed by gold, and the iShares Gold Trust (IAU) at the end of 2010, U.S. Securities and Exchange Commission filings show.
Silver futures fell as much as 5 percent to $40.465 an ounce on the Comex exchange in New York. The contract was at $41.72 as of 6 a.m. local time, for a three-day decline of 14 percent. Margin requirements were raised 38 percent in since April 26. Gold futures retreated 0.2 percent to $1,537 an ounce.
“Some small, speculative players had to trim their silver positions as they couldn’t afford to pay for such margins,” said Jerome Berset, a portfolio manager at Palaedino Asset Management SA in Geneva, which has 1 billion euros ($1.49 billion) in assets and has maintained holdings in gold and silver. “For long-term players with fundamental views, this may be a good time to get in for both silver and gold.”
The decade-long bull market in gold and silver attracted fund managers from Soros to John Paulson and spurred central banks to add to their reserves for the first time in a generation. Investors in exchange-traded products backed by gold accumulated more metal than all but four central banks, while silver holdings are equal to more than eight months of global mine supply, according to data compiled by Bloomberg.

Gold Reaches Record

Gold reached a record $1,577.57 an ounce on May 2, a sixfold gain since prices bottomed in August 1999. Spot silver rose to an all-time high of $49.79 an ounce on April 25, a 12- fold advance from the low of $4.04 reached in 2001.
The Soros fund held 4.72 million SPDR Gold Trust shares as of Dec. 31, equal to about 460,000 ounces, an SEC filing on Feb. 14 showed. It also owned 5 million shares in the iShares Gold Trust, equal to about 48,800 ounces. The firm had 19,900 shares in Pan American Silver Corp., a Vancouver-based company mining the metal in MexicoPeru, Argentina and Bolivia. There were also stakes in Barrick Gold Corp. (ABX)Kinross Gold Corp. (K) and Novagold Resources Inc. (NG), the filing shows.
Soros described gold at the World Economic Forum’s meeting in Davos, Switzerland, in January last year as “the ultimate asset bubble.” In a Nov. 15 speech in Toronto the 80-year-old said conditions for the metal to keep rising were “pretty ideal” and at this year’s Davos forum he said the boom in commodities may last “a couple of years” longer.

Paulson Holding

Paulson & Co.’s holding was 31.5 million shares in SPDR Gold at the end of December, an SEC filing shows.
Passport Capital Management LLC also sold some gold holdings to lock in profit, the Wall Street Journal reported, citing a person close to the fund. Passport Capital held 3 million put options onSPDR Gold shares (GLD) and 28,100 shares in Barrick Gold as of Dec. 31, according an SEC filing. Two phone calls outside of normal office hours to John Burbank, founder of Passport Capital, weren’t answered.
CME Group Ltd., the owner of the Comex exchange, said this week the minimum amount of cash that must be deposited when borrowing from brokers to trade silver futures will rise to $16,200 per contract at the close of business yesterday from $14,513. A year ago, the margin was $4,250.
“Silver is often the lead indicator for changes in trends, or at least for corrections,” David Wilson, an analyst at Societe Generale SA, wrote in a note. After futures rallied to a record $50.35 an ounce in January 1980, prices dropped 78 percent in four months.
From the start of this year to the end of April, silver futures rallied 57 percent and were the best performer among the 24 raw materials tracked by the Standard & Poor’s GSCI Index.
Silver assets held in exchange traded products fell 1.1 percent to 15,169.80 metric tons yesterday, while gold holdings stood little changed at 2,069.78 tons, according to data compiled by Bloomberg.
credit :