All-ahead Full for Gold

By Scott Silva

Editor,  The Gold Speculator

5-23-11

Gold is riding high now and its price will move higher as more economic data confirms the US economy will remain sluggish for the foreseeable future. Gold regained the $1500/oz level since dropping from its all-time high of $1577.40 on May 2^nd.  The week-long sell-off in gold early this month was modest compared to price drops of other commodities. But gold did not experience the parabolic rise of silver, oil, wheat and some other commodities over the last six months.  Instead, gold has seen a steady rise in price, a long bull move dating back to January 2001.

What is propelling gold higher?  A big part of the answer is government intervention in the financial markets and the stubbornness of monetarists who cling to the false notion that as “Masters of the Universe”, they indeed can control economies at the local, national and global levels. Like the forlorn bond trader Sherman McCoy in Tom Wolf’s Bonfire of the Vanities,  Ben Bernanke is coming to realize his “sure thing” is in a reality a colossal cropper.

The economy is not responding to any form of stimulus—not the $835 Billion stimulus package; not near-zero Fed fund rates; not Quantitative Easing 1; not Quantitative Easing 2. By every measure, Washington economic policymakers have failed.

Some say that the emergency actions of the Fed and US Treasury averted a steep depression in 2009. We will never know for sure. What we know from history is free markets recover more quickly from depressions than economies that are “managed” by central planners.  The depression of 1920 lasted only two years because President Harding’s hands off monetary policy allowed for natural recovery. The Great Depression lasted eleven years, largely because of FDR’s stimulus spending programs and Fed’s mismanagement of the money supply.

In the current case, bank bailouts and the subsequent easy money policies have created some terrible unintended consequences. Excess liquidity in the system has caused a rapid rise in commodity prices, which is causing inflation at the producer and consumer levels. The US Dollar is losing value compared to other currencies and is losing purchasing power. Demand is weak so, despite low interest rates, businesses are not expanding and unemployment is high.

The numbers tell the story: GDP growth 1.8%; Unemployment 9.0%; Core Inflation 2.1% (actual inflation 6-10%);  2011 Deficit $1.6 Trillion; US Debt $14.3 Trillion.

Something has to change. At his press conference last month, Chairman Bernanke announced he is ending Quantitative Easing 2 on schedule at the end of June. This would be quite a change. But the gold market has said no to the Chairman’s pronouncement. Gold has climbed in price, signaling there will be something like QE3 in late June. At the least, QE3 (sotto voce) will be continued Fed buying and expansion of its balance sheet through reinvestment of proceeds from maturing issues.  A more formal QE3 may also be in the offing.

But here’s the rub. Chairman Ben, like Homer’s Odysseus, attempting to navigate the Strait of Messina, must avoid Scylla to port and Charybdis to starboard.  Continued easing will accelerate inflation, devalue the Dollar and inhibit business growth (low capital costs favor consolidation rather than organic growth).  Any reduction of Fed assets will raise interest rates and slow whatever recovery is underway, which might cause a double-dip recession. Tightening will also impact interest rates on US Debt. All are bad outcomes for the economy.

The Chairman is facing dissent to continued easy money policy by members of the Fed. Last week, Thomas Hoenig, long-serving president of the Federal Reserve Bank of Kansas City, publically challenged the accommodative policies that the central bank has pursued since 2009. While many of the Fed’s Board of Governors and members of the Federal Open Market Committee view near-zero interest rates and massive infusions of cash into the economy as the best path to economic recovery, Hoenig believes the policies are “…sowing the seeds of the next financial crisis. When you put this much money into the economy, it's got to deploy. Some of it is deployed into commodity assets. You're going to have volatility in that environment, and we are seeing volatility.”

“The inflation of the 1980s started in the mid-'60s. It is a slow process along the way, but if you leave policy easy, then inflation will eventually catch hold.

This inflation we're seeing is in everything now. It's not just in gas. Companies are telling me, ‘We're seeing 20 percent price increases in our inputs and passing along 10 percent or more.’ We're starting to see the psychology of inflation slowly change.”

If it were up to Hoenig, the Fed would cut the easy money era short, right now. He is not alone. Narayana Kocherlakota, president of the Minneapolis Fed, has voiced concern that excess bank reserves may create much higher inflation than we are seeing now. Today, Fed banks are holding $1.6 Trillion in excess reserves. Kocherlakota advocates selling $15 billion-25 billion of MBS a month, which would restore Fed balance sheet assets to more traditional levels in five years instead of the 30 it would take for the bonds to mature.

Maybe the Fed and others in Washington will come to realize that the best course of action for the Fed is to take their hands of the wheel and feet off the pedals. They’re not connected anyway. Only free markets determine what is to be.

Time will tell. In the meantime, gold is telling us that prudent investors are hedging their bets that the US economy will turn up sharply anytime soon.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the fiat money and growing inflation?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

One word: Gold.

By Scott Silva

Editor,  The Gold Speculator

5-16-11

“I want to say one word to you, Benjamin.  Just one word: Gold.” If Mr. McGuire had given that advice to Benjamin Braddock (a.k.a The Graduate) in 1967, Benjamin might be much better off today. Instead, his advice to the young man was “Plastics.”

In 1967, the average price for gold was $34.95/oz. Of course, gold prices were not allowed to float in the US until 1971, but if young Benjamin had invested $4,000 in gold instead of that little red Alfa Romeo Duetto Spider convertible, he would have made a small fortune by now, roughly 42 times his money.  A pristine ’67 Alfa Romeo spider is selling for $15,000 or so today.

Why has gold increased so in value? One word: Inflation.  The purchasing power of the US Dollar has decreased steadily since 1967. It would take $6.47 today to buy the same item that sold for $1.00 forty-four years ago, a 647% increase in price. Benjamin’s college tuition alone would cost over $212,000 today. Certainly, there have been periods in US history when prices did not rise each year. In the last century, average annual prices fell in 1921, 1927, 1928, 1930-1933, 1938 and 1939. In 2009, average annual prices declined 0.4%, but since then prices have increased each year. According the Bureau of Labor Statistics, the US inflation rate is 2.1%, but this number is understated. Fuel prices are up more 27% from last year. Food prices are up by double digits year-over-year.  Import prices are up 11% from last year. Producer prices are up, too. Housing prices remain depressed, but overall, prices for almost all other goods and services are higher now than a year ago, and the year before that.

Some say that high commodity prices cause inflation. Others attribute higher inflation to corporate greed. With gasoline prices at $4.00/gal or more, the lynch mobs are out for Big Oil CEO’s. At a Congressional hearing last week, a senator remarked that “unchecked corporate greed has given them $30 Billion in profits last quarter”.  But the US oil refiners are accounting for the higher cost of imported oil, which has been at $98-114/bbl for the last five months. Today US consumers are still paying $4.00/gal to fill their tanks. And they are likely to buy gas at $5.00 or more before demand decreases due to price.

These arguments miss the point about the cause of inflation. Higher commodity prices and corporate greed are not the causes of inflation.  Contrary to popular opinion, inflation is not about price increases for goods and services. Inflation is about increases in money supply. The general increase in prices comes only by the increase in money stock. The inflation we are seeing now at every level is in fact due to increases in money supply. This is the case now, and it has been the case for every period of inflation in history.

Aristotle defined the four properties of “good” money. Money must be durable, portable, divisible and have intrinsic value.  Aristotle’s definition has stood the test of time. For more than 2,000 years sound money has been proven to be a good medium of exchange as well as a store of value. The only time gold money lost its intrinsic value is when governments debased coins used by the general public (reduced the gold content in a coin by substituting industrial metal at the same weight), while hording pure gold coins for themselves.

Fiat money has never been good money because it lacks intrinsic value.  Governments debase fiat money by printing more of it. Increasing the money stock chases good money out in the same way Copernicus described in his 1519 treatise  Monetae cudendae ratio: "bad (debased) coinage drives good (un-debased) coinage out of circulation.”  This concept has become known as Gresham’s Law. These days, the Fed seems intent on codifying Gresham’s Law. Since 2008 it has printed $2.7 Trillion of the paper stuff to support various fiscal stimulus packages and bank and industry bailouts. More paper money chasing fewer goods and services causes prices to climb. Inflation is a tax on every consumer who buys with paper money.

An example of inflation brought on by the printing of fiat money occurred in the US Civil War era. During the war, both the federal and the confederate governments issued paper currency to finance war expenditures.  The federal government issued $450 million “Greenbacks.” Inflation soared. Northern currency fluctuated in value, and at its lowest point, it took 2.59 inflated Greenbacks equaled $1 in gold. The Confederate paper currency lost much more purchasing power; $60-$70 equaled a gold dollar.

At the end of the war, President Johnson authorized the Treasury to repay Federal war bonds with gold. This reduced the outstanding Greenbacks by 20 percent which propped up the value of Greenback dollars and drove down the Greenback price of goods. In the election of 1868, the Democratic presidential candidate Horatio Seymour repudiated the “Ohio Idea,” which proposed that war debts be repaid with Greenbacks rather than gold.  Predominantly western Democrats who first offered the fiat money financing idea became known as “Inflationists.” Seymour lost the presidential election to Ulysses S. Grant 214 to 80. Inflationist policies financed other wars including WWI, Vietnam, Iraq, Afghanistan and now Libya (WWII and Korea were paid for primarily by tax increases).  

Gold money leads to lower price inflation.  Studies show that price inflation is lower under gold standard monetary regimes than in fiat money regimes.  The classical gold standard prevailed in all the developed economies in the period from 1880 to 1914. Then, authorities maintained the value of national currency in terms of a fixed weight of gold, or the mint price. During this period, the mint price was set at $20.67 per ounce of gold. Under the gold standard, the purchasing power of gold tends to equal the long-run cost of production.

We can see from the chart, from 1880-1913 inflation averaged about 3 percent annually in Australia and Finland, about 2 percent annually in the Netherlands, and slightly less in the United States. For the other nine countries, the average inflation rate was between plus and minus 1 percent for the period. Average inflation over 33 years of these 13 countries on the gold standard ranged from –0.6 to 3.0 percent.

Today’s economies use fiat money and employ muscular monetary policy such as inflation targeting.  Since the collapse of Bretton Woods, central banks have attempted to maintain low inflation and relative price stability.  Clearly, these policies are failing. As the chart shows, the average inflation rate was much higher in the modern period (again for 33 years, from 1968 to 2001).

So what can the individual do today to protect his wealth against rising inflation?  He can buy and own gold. Gold has maintained its intrinsic store of value against the ravages of inflation and debasement of fiat currencies for decades. Today’s economic environment is characterized by unprecedented expansion of the money supply, which ensures prices will continue to rise for the foreseeable future.

The real price of everything…is the toil and trouble of acquiring it. The

same real price is always of the same value; but on account of the variations

in the value of gold and silver, the same nominal price is sometimes of very

different values.

                                                                                         Adam Smith (1776)

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the fiat money and growing inflation?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

TIME FOR EQUITIES, OR NOT

By Scott Silva

Editor,  The Gold Speculator

5-9-11

The recent sell-off in commodities, particularly gold and silver, has caused some investors to consider investing in the broader stock markets. The stock markets have lagged gold and silver the last few years, but earnings are improving and many believe equities are ready to take off. Is this the case? Will the equity markets outperform precious metals over the next six months?

To answer this question, we first must understand the factors that drive the equities and commodities markets. We then can make rational judgments on allocating investment assets.

The largest US equity markets include the NYSE and the NASDAQ, on which over 5,000 issues representing $17.4 Trillion are traded each day. The most frequently used stock market indices are the Dow Jones Industrial Average (DJIA), the Standard & Poor 500, and the NASDAQ Composite.

Earnings are the single most important metric for a company. Equity prices move as a function of future earnings expectations. The key measure is Price/Earnings, or PE ratio. The DJIA is currently trading at 14.4 times earnings;  S&P 500 at 16.84; and the NASDAQ at 12.62. These are all lower than PE’s seen a year ago.

Gold and silver do not have PE ratios. The price reflects the value the buyer is prepared to pay for the metal. That value is typically a premium over the value of paper currency.  Therefore,   precious metals are considered to be stores of value.

Future earnings for equities are driven by many factors including top-line revenue, operating costs and overhead. As large part of operating cost and overhead is personnel cost.  In recessions, most companies cut back on personnel and slow production in an effort to save costs. Today, US unemployment remains high, 16% by one government measure (U-6).

Part of operating costs is the cost of money, or interest cost. Low interest rates usually encourage capital expenditure, but since the financial meltdown in 2009, banks have slowed lending, reducing CAPEX for many companies despite very low interest rates. Today, the banks are holding $1.4 Trillion in excess reserves.

Wall Street stock analysts predict earnings for a traded issue using sophisticated financial and market analysis. An important input is company guidance, the company’s own projections for the next quarter or year. But the cat-and-mouse game between Wall Street analysts and company officials can create self fulfilling prophesies that lead to market “surprises”.  The company may understate guidance in an effort to lower Wall Street consensus estimates. Printing numbers that “beat” the street usually propels the stock price up.

So what is the outlook for stocks compared to gold and silver?

We see from the chart for the DJIA, there have been two significant technical breakouts since the financial meltdown of 2009. The first was a breakout of the head-and-shoulder pattern on July 20, 2009. This was a run from 9,000 to 11,258 on April 26. 2010, a 25% gain. The second breakout occurred November 29, 2010 at 11,092. That move continued up to 12,876 the high last week, a 16 % hike. The next resistance levels are 13,000, then 13,790 and 14,119.

What could slow gains in the DJIA? Many think inflation is already eating into earnings, and seen more earnings erosion coming. Higher global commodity prices are affecting source prices. Now, higher labor costs are pushing up manufacturing costs in China. High fuel prices continue to hinder the global recovery. Slowing demand is also a factor. US GDP growth slowed to 1.8% for 1Q11, down from 3.2% for the previous quarter. World GDP for 2011 is forecast to slow to 4.4% average down from 4.9% average in 2010.

Stock prices have been pushed up by the Fed’s easy money policy. Near zero interest rates have kept margin rates low. When the Fed tightens, the stock market slips. We have seen rate hikes kill stock rallies before.  But tightening (or even just ending Quantitative Easing 2) is likely to impede the fragile recovery. So it is not clear that the Fed will indeed forsake its easy money policy in June as scheduled.

On the other hand, gold and silver have outperformed stocks for the last few years and are likely to outperform stocks for the next year or more. Despite last week’s pullback, today’s market action shows the precious metals are resilient and poised to reach new highs.

This is because the forces that favor the precious metals remain intact. Political unrest in northern Africa the Middle East threaten the major oil supplies.  The EU has failed to fix its sovereign debt crisis; more bailouts are required for Greece, Ireland and Portugal. Global inflation is on the rise. Oil is trading above $100/bbl. The US debt crisis will hit states and municipalities, and upset Federal budget negotiations. The US Dollar is likely to remain weak. Uncertainty will continue to be the norm.

Uncertainty will continue to propel the precious metals up. Gold is trading above $1500/oz and silver, hurt by massive increases in margin requirements and selling by large hedge funds last week is leading the precious metals rebound, up 6% today, reaching $37/oz or better as new buyers come in.  Technical analysis is pointing to $47/oz for silver in the next few months, a retest of the $50 resistance level. Gold is trending to $1600 over the same period.

To reach the 14,000, the 2008 high, PE’s would need to expand to 16.19 for the DJIA, representing a 12.4% gain today’s price for the index. At $47/oz, silver would have gained 27% from today’s price.

For my money, gold and silver are the better trades.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the higher prices and economic uncertainty?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

BALANCING ACT

By Scott Silva

Editor,  The Gold Speculator

5-2-11

Ben Bernanke is on the tight rope, trying to balance between unemployment and inflation. This is a difficult balancing act; no one before him has successfully reached the twin mandated goals of price stability and full employment using monetary policy alone. But monetary policy is the only tool in the Fed’s tool bag. The Chairman is persistent, but he is on a fool’s mission. His easy money strategy has not created price stability nor reduced unemployment. To the contrary, Fed monetary policy has contributed to precisely the opposite result--growing inflation and high unemployment. And there are unintended consequences of the Fed’s prolonged accommodation, namely, the death of the Dollar and rise of the commodities bubble.

For gold bugs, the Fed’s single-minded easy money policy has been a godsend. Since the Fed began its ultra-low interest rate and Quantitative Easing policies in 2008, the Fed balance sheet increased by $2.1 Trillion and gold has doubled in price. Silver has quadrupled over the same period.

Many consider the price of gold to be the barometer for risk facing the economy. During good times, gold prices tend to lag stocks, bonds, real estate and other investment assets. Gold tends to outperform when there is uncertainty in global economies and dollar-denominated assets are in decline. The Fed’s easy money policies contributed to the real estate bubble, which ended in the financial crisis of 2008 and the drop in the Dollar. Gold led commodities out of the abyss of the financial meltdown.

Over the last two years, massive and continued Quantitative Easing (QE2) combined with economic weakness in the EU and political uncertainty in Africa and the Middle East has weakened the Dollar and pushed gold to record highs. But the weakening Dollar has also fueled inflation in every asset class except real estate, and the US unemployment rate remains above 8%. Clearly the Fed’s monetary actions have failed to achieve mandated goals.

I say it should not be the Fed’s mission to solve the unemployment problem in the United States.

As we have seen, near-zero interest rate policy does not create jobs, and Quantitative Easing does not create jobs.  Further, the premise that there is a balance between inflation and unemployment, as represented by the Phillips Curve is fundamentally flawed.

The Fed mandate emanates from the Keynesian notion that there is a trade-off relationship between inflation and unemployment, and that economic prosperity can be achieved by the proper balancing of the two variables.  But the stagflation of the 1970’s defeats the Phillips Curve. The current economic situation is proving the theory to be false once again.

Today, the Fed recognizes inflation to be 2.1%, but in fact inflation is closer to 10%. According to the US Labor Department, US unemployment is 8.8%, but actual unemployment (U-6 rate) is 16%.  Latest GDP growth has slowed to 1.8%, down from 3.1% in 4Q10. These numbers represent stagflation, the condition of simultaneous high inflation and high unemployment.  The Federal Reserve cannot set the magic interest rate that achieves a balance of tolerable inflation and unemployment.

As readers have seen on the pages before, the road to US prosperity is not through government intervention in the markets. On the contrary, it is the private sector that is the engine of growth. Government should help create the environment for private sector growth.  US private sector expansion has created more permanent jobs than any government stimulus program, including the 1930’s WPA programs.

The environment that is most conducive of economic growth is one of smaller, less intrusive government. Pro-growth economic policy is one of low corporate and individual tax rates, responsible fiscal policy (much lower government spending), lower government regulation and sound money.

History has shown that tax cuts, not tax increases have stimulated job growth and prosperity in the United States.  The “soak the rich” approach to tax policy is a myth. Government revenues actually increase when taxes are reduced. In the1920s, tax rates were slashed from over 70 percent to less than 25 percent. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.

In the 1930s Hoover and Roosevelt pushed marginal tax rates to more than 90 percent. In the early 1960’s Kennedy cut tax rates to 70 percent which increased revenues to $94 billion in 1961 and $153 billion in 1968, an increase of 62 percent. When Reagan cut tax rates in the 1980’s, tax revenues climbed by 99.4 percent.  

In 2003 Bush cut the dividend and capital gains tax to 15 percent each. The U.S. economy added 8 million new jobs from 2003-2007.  From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history.

But tax cuts are not part of the current Washington plan forward. Instead, tax hikes are planned to help fund continued deficit spending. This will continue to pressure the Dollar and impede GDP growth. Industry will continue to bump along like Vonnegut’s Harrison Bergeron, weighted down with excessive regulation and class-leveling “fair” taxes, set by the Handicapper General.

There are better choices for investors seeking to maintain their wealth. Investors can choose to protect their wealth by owning gold and silver. Today’s pullback provides a good entry point. The bull market in gold and silver has a long way to run.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the higher prices and economic uncertainty?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

THE JUST PRICE

By Scott Silva

Editor,  The Gold Speculator

4-25-11

It the price of gold too high?  Or gasoline? Are high commodity prices unfair? Are high prices the result of greedy speculation and market manipulation and therefore, unjust?

Many, particularly in government think so, and have set out once again to get to the bottom of market manipulation and criminal speculation. Thursday the president ordered the Department of Justice to investigate price gouging in retail gasoline sales now that the price of gasoline has topped $4.00/gal in many states. In January, the Commodities Futures Trading Commission

(CFCT) put forward new rules aimed at reining in “runaway speculation” in the commodities markets.

Is there a case for government control of commodity prices in the name of justice? What is the just price of a good or service? What does that mean for the current bull market in gold, silver and commodities in general?

Historically, market prices have been considered to include a moral component. One might think the Bible might define the concept of just price, but it does not directly. Although the term “just price” does not appear in Scripture, “just measure” and “just balance” appear several times. The Book of Proverbs states that "a false balance is abomination to the Lord: but a just weight is his delight."  It follows that commerce is moral or just absent fraud or deceit in transactions.

But commerce has not always been considered a pious activity, even when conducted honestly.

Plato saw man’s role as subservient to the greater welfare of the collective. Aristotle distained commerce, money-making and especially retail trade, because his concept of fair exchange centered on utility rather than the accumulation of money. The ancient Athenian government set grain prices under law at a level it thought to be just, which inevitably led to severe grain shortages. But the shortages created by the price control laws also created a thriving black market for grains, which ultimately saved thousands from starvation.

Under Roman law, prices were generally determined by the interaction of buyers and sellers. Under the Justinian Code, laissez-faire in transactions was the norm; buyer and seller each expected to buy cheap and sell dear. But there were limits; it was considered immoral to buy and sell for gain, to speculate, or to buy goods to sell for profit without improvements, or sell an item at a higher price for a credit transaction, which implied usury. In AD 301, Diocletian, in an effort to curb inflation, fixed by edict the maximum sales price of beef, grain, eggs, clothing and other articles and prescribed the death penalty for anyone who sold items above the fixed maximum.

As a result, producers quit bringing goods to market, opting instead to supply the black market, which flourished despite the risk of the death penalty. The Edict was later abandoned.

The early Church Fathers saw commerce to be the result of greed. The assumption was all commercial activities involved immoral means.  One party's gain in a transaction was thought to only be achieved unfairly by another party's loss. These ideas continued into the Middle Ages.

The concept of the just price is most often attributed to the medieval Roman Catholic philosopher and theologian Thomas Aquinas.  In his Summa Theologica, Aquinas discusses the concept of the just price in his "Treatise on Prudence and Justice" called "Of Cheating, Which Is Committed in Buying and Selling."

According to Aquinas, trading is cheating, and therefore a sin. The just price is that price that covers the cost of production and market expenses and allows the producer to maintain his social status. In Aquinas’ view, traders and speculators produce nothing, therefore they cannot profit morally from trading goods or services.

But there is a more enlightened view of just price that accounts for not only the cost of production but also compensation for labor and risk incurred, or the labor theory of value as put forward by Locke, Smith, Ricardo, and Marx. We can see clearly from his arguments, Aquinas fails to recognize the economic value of labor and specialization in day-to-day commerce.

Thanks to Adam Smith, today many have come to know that the invisible hand of the market and the forces of self-interest, competition and supply and demand drive prices and economic activity. Some believe the invisible hand to be a secular force; others see the hand of God in the marketplace.

So what about the recent prices of commodities, in particular gasoline and gold? Are their current prices just? I say yes, and here’s why.

The price of retail gasoline is primarily based on the price of oil, the price of which is based on supply and demand. The market price for oil is high now because buyers fear supply disruptions due to popular revolts in several oil producing countries. Right now there are more buyers than sellers of oil, so prices have been bidding up. Last week, Saudi Arabia cut oil production  800,000 bbl/day, which likely will keep prices high. And demand for oil by China and India is growing along with their economies. China and India will require 8.5 million bbl/day more oil by next year. Should anyone expect prices to fall with growing demand and lower supply? The demand curve doesn’t slope that way. Market prices that accurately reflect supply and demand are just.

But some say it is unjust to buy a futures contract for $108/bbl expecting the price to be higher in three months. Speculators are vilified for “greedily bidding up the price of oil, which has led to $4.00/gal gas”. But there are speculators that have shorted oil, too. And if price controls for oil are implemented in the US today, traders would simply move to other markets to trade. The oil market is global.

Recently a US Senator proposed that the commodities markets such as the CME require 50% margin to trade futures contracts. He reasoned that the additional capital requirement would limit the number of open contacts held by speculators. But changing margin requirements has had little effect on open interest volume in the past. The CFTC adopted position limits on 28 commodity futures and option contracts on exempt and agricultural commodities. It is not clear that position limits will have its intended effect.

 Anti-gouging legislation has proved equally ineffective. The federal government can prosecute companies and people for price fixing, that is, conspiring with each other to raise prices, but not for price-gouging. Many states have anti-gouging statutes, but few complaints ever result in charges, fines or trials. Cases are hard to prove, since most businesses tend to raise prices for items important to people. Today’s concern is not new. In 2005 Hurricane Katrina knocked out about 95 percent of oil production in the Gulf; refineries there produce about 25% of US domestic consumption. Gasoline prices spiked 40% to reach just over $3.00/ gal. Government anti-gouging rhetoric filled the media. $3.00/gal gas sounds like a bargain today!

Like oil, gold prices have climbed to new highs over the last several years. Unlike oil, the price of gold is driven primarily by investment demand.   Investors are attracted to gold for its intrinsic value and its ability to insure against instability and protect against risk. Since 2009, gold prices have climbed 209%

What price is the just price for gold?  The market price at any given time is the just price, because that is the price agreed to by buyer and seller. In the exchange, each party enters into a just bargain; otherwise the trade is not made. For gold, the price includes a risk premium for economic uncertainty, political unrest, war, inflation and the debasement of fiat currencies. The price of gold captures precisely the future outlook without the baggage of earnings-per-share, book value or any other accounting measure of worth. Gold has proved to be an excellent investment for the investor and the speculator for the last several years, and it will continue to preserve wealth for individuals who own gold.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the higher prices and economic uncertainty?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

THE SQUEEZE IS ON

By Scott Silva

Editor,  The Gold Speculator

4-19-11

The squeeze in on. Yesterday’s downgrading of the US economic outlook by Standard & Poor provided the catalyst for US Dollar shorts to cover, which drove the Dollar index up, breaking

its 15% decline over the last 10 months.  S&P revised its outlook on the US AAA credit rating to negative from stable, citing the massive US debt and Washington’s apparent inability to cope with it its fiscal problems; "we believe there is a material risk that U.S. policy makers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013."  While the S&P maintained the country's top AAA credit rating, the rating agency called the odds at one in three that the U.S. credit rating could be downgraded within two years.

The US stock market responded with a broad sell-off; so did the FTSE in the closing hours.

Actually, the Dow had opened 60 points lower on renewed EU worries over the imminent default in sovereign debt by Greece, but the S&P announcement on the wires soon after the NYSE open drove the Dow and the S&P 500 down.  The US Dollar, on the other hand, traded up as short sellers scurried to cover.

Gold and silver, however, traded up to new highs as investors traded out of stocks and into safe-haven positions in the precious metals. Gold nearly hit the psychological $1500/oz benchmark reaching $1497.20 before closing at an all-time high of $1490/oz on Monday. COMEX May Silver closed at 43.275, a new 31-year high.

Did Monday’s gains in gold and silver come by way of the short squeeze?  Maybe so. Many believe that rise gold and silver over the last several years is the result of a “bubble” in the precious metals. Certainly, there are shorts in gold and silver. But the shorts are hurting today, to the benefit of the longs. (Full Disclosure: I have been long gold and silver and gold and silver stocks for years, now). The simple truth is there is no better safe haven for investors facing uncertain times than the precious metals. Despite the shorts, gold and silver have made dramatic gains over the last ten years, while the stock market has limped along. In the last decade, the S&P 500 index has gained 16%. In the same period, the price of gold has more than quintupled. And silver has outperformed gold over the last twelve months.

Gold has been considered the safe-haven asset since ancient times. Whether coined, exchanged and accumulated as money, or purchased as a hedge against debasement of fiat currencies, political crises or economic instabilities, the yellow metal has maintained its intrinsic value against all other commodities and asset classes.

Following WWII, US inflation was highest in 1946, 1974, 1975, 1979 and 1980.  During those five years, the Dow stocks returned an average -12.33% in real terms; in those same years gold returned an average 130.4%.

History shows gold moves up with higher oil prices. In the ealy1970’s, when oil prices climbed from $2.44 to $10.36/bbl, gold prices rose 268%.  In the late 1970’s, when oil jumped to $26/bbl, gold prices gained another 254% to $631/oz.  

The current oil shock, caused by civil war in Libya, pushed oil to over $108/bbl. Although there is now a shooting war in Libya and continued violent unrest in the Maghreb and the Middle East, political risk in the oil producer states accounts for only a portion of the oil premium- maybe $15 a barrel or so. We can see this in the long term chart for oil and gold that West Texas Intermediate oil closed at its support level of $108/bbl seen before the run-up to $152/bbl in 2008, and before the collapse in 2009. But there were no popular uprisings in northern Africa in 2007. So what has driven the price of oil, gold and silver up since 2009?

The major reasons for the rise in gold, silver and oil are easy money and deficit spending policies. Since 2009, central banks have flooded the world with more and more paper money. More dollars, Euros, Yuan and Yen have steadily pushed up commodity prices at the expense of currency values. The US Dollar, for instance, has fallen 17% since February 2009, when the $838 Billon American Recovery and Reinvestment Act of 2009 was passed. The current US deficit is $1.6 Trillion; the US Debt is $14.2 Trillion, nearly 100% of GDP.

So now Standard and Poor has sent a dunning letter to the Washington central planners, warning it will downgrade the US sovereign debt rating if serious fiscal reforms are not implemented in the next two years.

We’ll see. In the meantime, I’m buying long the precious metals.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the continued deficit spending and growing inflation?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

ROADS TO PROSPERITY

By Scott Silva

Editor,  The Gold Speculator

4-12-11

Today, the US government is open for business, having narrowly averted a budget driven shut-down at the stroke of midnight Friday, the Dow is above 12,400,  reported US unemployment is trending down, the Fed is closer to ending Quantitative Easing on schedule in June, and the government reports inflation is low and the economic recovery is taking hold.  But also today, gold hit a new all-time high and silver is trading at a 31-year high. Can a strong US economy and high gold and silver prices go hand-in hand? Why to people continue to buy gold and silver?

Historically, investors and speculators alike tend to shun precious metals in
good times, favoring instead almost any other asset class (e.g. equities, debt instruments and real estate).  So are we really headed for good times in the near future?  Comparison of today’s situation to the Reagan years sheds some light on this important question.

            Like Reagan, Obama came into office during recession. Gold had quintupled during Jimmy Carter’s recession; gold has hit a new all-time high under Obama.  Gold prices fell 40% (from $750/oz to $450/oz) under Reagan’s 8-year presidency.

In the current recovery, real GDP has averaged 3%.  Employment as defined by nonfarm payrolls and reported by the BLS has edged down from 10.2% in early 2010 to 8.8% in March.  During Reagan's recovery real GDP averaged 7.7 percent annually while nonfarm payrolls rose by 5.3 million.  Reagan reduced inflation from 12.2% when he took his first oath of office as president to 4.4% in his last year of office. Today, inflation is negligible at 2.1%, according to the Fed.

Why are there such major differences in US economic performance under Obama and Reagan?  Reagan saw free market, private-sector enterprise as the road to prosperity.  Obama has chosen massive expansion of the federal government as the way forward.

Obama's first act was an $835 billion government-spending package.  One of Reagan's first decisions was to cut $50 billion (($100 billion in today’s dollars) from domestic spending.  Obama focused priorities on nationalized health-care, energy cap-and-tax-and-trade, and pro-union card check. Reagan focused on free market measures; he ended wage and price controls, deregulated all energy prices and fired the striking federal union air-traffic controllers.

 Reaganomics spurred growth through limited government, a strong dollar and lower taxes. Reagan slashed marginal tax rates from 70 percent to 28 percent. Reagan’s lower tax rate policy (attributed to the Arthur Laffer) actually raised tax revenues from $300 billion to $450 billion.

The current administration seeks to raise tax revenue, particularly for the nation’s highest earners. In his fiscal 2012 budget, released in February, the president would allow the Bush tax cuts to expire for income above $200,000 for individuals and $250,000 for couples at the end of next year.

Reagan increased the defense budget to defeat the Soviets and end the Cold War. Reagan did not win the Nobel Peace Prize. Obama is waging shooting wars in Iraq, Afghanistan and Libya; he accepted the Nobel Peace Prize for 2009.

Under Reagan, overall federal spending dropped from 23 percent of GDP to 21 percent. Obama has grown the size of government to 25 percent of GDP.

Reagan ran a budget deficit of about 3 percent of GDP, the same percentage left by Carter. Obama’s 2011 budget deficit is $1.6 Trillion or 11% of GDP.

 Reagan believed in sound money and a reliable currency. It was Reagan’s pro-growth tax cuts and counter-inflationary monetary policy that ultimately reversed the 15-year decline in the US Dollar.  Since 2009, the Fed and central banks have flooded the world with more and more paper money. More dollars, Euros, Yuan and Yen have steadily pushed up commodity prices at the expense of currency values. The US Dollar, for instance, has fallen 17% since February 2009, when the $838 Billon American Recovery and Reinvestment Act of 2009 was passed.

Overall, Reagan's free-market, pro-growth policies created 21 million new jobs as real GDP averaged 3.5 percent annually for seven of his eight years in office. The unemployment rate dropped by over 50%.  The stock market doubled, and household net worth expanded by

$8 trillion.

The Obama administration believes that increasing the size and scope of government is the path to prosperity.  In 2009, rather than allow large banks, insurance companies, mortgage companies and Detroit automakers to fail due to market pressures, Obama nationalized them using taxpayer dollars to bail them out.  That same year, the administration projected its new stimulus package would “create 3 to 4 million jobs.” But most of the funds went to state governments that used the windfall funds to close their own budget gaps. Few permanent jobs were created. The private sector jobless rate actually increased.

So which is the path to prosperity?  Gold and silver prices give the answer. The price of gold has nothing to do with political ideology or government reports on the status of the economy. The gold market sifts through the myriad of economic data, investor sentiment and global events to measure reality with crystal clarity. Gold is trading at all-time highs, in direct contradiction to reports of sustained growth in the world’s largest economy. It just might be that massive deficit spending and easy money policies have little or no stimulative effect on the economy and that government spending does not create jobs in the private sector. Because the government must tax or borrow in order to spend, it takes money from individuals and businesses that otherwise would go to consumption, savings or investment to produce more wealth.

Likewise, the gold market shows government reports of low inflation and growing employment to be false. We have seen on these pages before that actual US inflation is closer to 10% than the reported 2.1%, and the actual US unemployment rate today is 16%, a rate not seen since the 1930’s.  As many have correctly observed, flooding the markets with new printed money debases the currency and raises prices for all.

The precious metals market is also telling us that its move up has a long ways to go.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the continued deficit spending and growing inflation?  We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com  with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

GOLD AND SILVER ON THE RISE

By Scott Silva

Editor, The Gold Speculator

4-4-11

Even if stability were to return to the Middle East and North Africa, and Japan gets its damaged reactors under control, gold and silver will reach new highs over the next several months. There is no doubt that the popular uprisings in Egypt, Tunisia, Bahrain and now Yemen and Syria, and the shooting war in Libya have threatened stability in the region. Oil prices have spiked to over $100/bbl as Libyan refineries shut down, cutting off 1.6 million barrels a day to global supply. Libya is the world’s 12^th largest oil exporter. Iran, emboldened by the fall of the Mubarak, long time US ally and friend to Israel, for the first time in thirty years sent warships through the Suez, an act Israel’s prime minister described as “a provocative, unprecedented Iranian military presence” in the Mediterranean. More than two million barrels of oil transit Suez each day through the canal and its adjacent pipeline, accounting for at least two percent of global oil output. The political upheaval in Egypt was a surprise to many on watch. Events moved quickly in Egypt; the regime toppled in weeks. Traders (and defense analysts) worry popular unrest will spread to other countries in the region, including the world’s top oil producer, Saudi Arabia. Already, new clashes have erupted in Morocco, Jordon, Algeria, Yemen and Syria.

Gold prices have jumped since the first protesters took to the streets in Tunis and Cairo. Gold is a traditional safe haven for investors. Gold has gained 7 % since January 28, the day that the Egyptian government shut down internet service in an attempt to deny communication among protesters. Silver has gained 37% over the same period. Although the military has assumed control of the Egyptian government, it remains unclear what form the government will take after the scheduled September elections. And the outcome of the war in Libya is far from certain.

But there are other reasons gold prices will remain high. As you have read in these pages before, US government intervention in the financial markets is demolishing the US Dollar. The primary causes are unchecked deficit spending and the Fed’s easy money policies. The conviction to continue massive deficit spending is evident in the president’s $3.7 Trillion budget request for FY2012. Analysts project it will double the national debt to $23 Trillion by 2021. House Republicans are proposing a 2012 budget that targets $4 Trillion in cuts over the next ten years. Whatever budget level is negotiated, funding for much of the budget will come from continued government borrowing, that is, selling US Treasurys to the public and foreign investors. But borrowing at extreme levels (over 100% of GDP) may jeopardize the credit rating of US sovereign debt. Moody’ Investors Service has already indicated that it may be forced to downgrade its economic outlook for the US based on current projected debt levels. Investors seeking to preserve their wealth flocked to gold when the president’s budget was released.

Another factor driving the price of gold higher is new evidence on rising inflation. Commodity prices have been rising steadily since 2009. In fact, commodity prices as reflected in the CRB index have broken through the 2008 high, last week reaching a new high at 689. Higher commodity prices are now flowing into producer prices. The Producer Price Index (chart below), has increased over 23% in the last two months, recovering from the lows of the 2009 meltdown and well over its 2008 high.

Consumer prices are moving higher now as well, despite statements by Chairman Bernanke to the contrary, prices for almost every consumer item (except single family housing) are on the rise, some at double digit rates. For the past 3 months, the core inflation, as measured by the CPI, has moved up 3.9%. Food and energy prices have pushed up 3.1% and 28% over the same period. At the same time, the US Dollar has lost value against other currencies, reducing purchasing power. The US Dollar has lost 35% of its value in just the last ten years. Together, the combination of rising prices and a weaker dollar is a recipe for disaster.

Investing in the stock market is not the answer. Easy money has buoyed up stock prices in the last few weeks; the Dow closed over the 12,000 mark last month for the first time since 2008. But stocks prices are likely to slide steeply when the Fed is forced to tighten in a belated attempt to curb inflation. Continued government intervention may cause the economy to slip into stagflation, that eerie economic nether land of slow growth, declining wages, high unemployment and double digit inflation reminiscent of the Carter years.

Prudent investors can fight the ravages of inflation and debasement of the currency by investing in gold and silver. Gold has maintained its value during periods of high inflation. For example, gold tripled in price during the early 1970’s oil embargo, when oil prices suddenly spiked. In the late 1970’s gold prices climbed as much as 526% in Carter's first three years in office as the president struggled with stagflation. Today, as the Fed continues to print money to support more federal deficit spending, we are seeing once again, the onset of debilitating inflation at all levels.

Investors from around the world benefit from timely market analysis on gold and silver and portfolio recommendations contained in The Gold Speculator investment newsletter, which is based on the principles of free markets, private property, sound money and Austrian School economics.

The question for you to consider is how are you going to protect yourself from the vagaries of the continued deficit spending and growing inflation? We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010, and 55% for 1Q2011. Subscribe at our web site www.thegoldspeculatorllc.com with credit card or PayPal ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055

COMING FLIGHT TO GOLD

By Scott Silva
Editor, The Gold Speculator
2-1-11

The battle to increase the US Debt limit will increase financial tensions in the US and impact markets around the world. The US debt is approaching its legal limit of $14.3 Trillion. The debt limit sets the amount that the US Treasury can borrow from its citizens other government agencies and foreign investors by selling AAA-rated US Treasury securities, also known as US sovereign debt instruments. As with all spending measures, the US debt limit is authorized by the US Congress. Although Congress has authorized every increase in the debt ceiling requested by preceding presidents, this time the issue is likely to be a decisive political fight between Congressional deficit hawks and the progressive administration. The stakes are much higher than political victory; the sovereign credit rating of the United States is at risk; Moody’s Investors Service warned on Thursday that lack of U.S. government action on the budget deficit increases the likelihood of a negative outlook on the country’s AAA credit rating. Moody’s report came just hours after Standard & Poor downgraded Japan’s sovereign debt to AA. Today, S&P downgraded Egypt’s rating as its government teeters on collapse.

The statutory limit on US federal debt began with the Second Liberty Bond Act of 1917, which helped finance the United States’ entry into World War I. The sale of Liberty Bonds to the public at large helped keep interest rates low. Before World War I, Congress authorized specific loans, such as the Panama Canal loan, or allowed the Treasury to issue specific types of debt instruments, such as certificates of indebtedness, bills, notes and bonds. The Second Liberty Bond Act expanded Treasury authority to aggregate debt instruments. Debt limit legislation in the following two decades set separate limits for different categories of debt, such as bills, certificates, and bonds.

In 1939, Congress created the first aggregate limit that covered nearly all public debt. US debt tended to approach the limit under the new rules. For example, the 1919 Victory Liberty Bond Act (P.L. 65-328) raised the maximum allowable federal debt to $43 billion, far above the $25.5 billion in total federal debt at the end of FY1919. The debt limit in 1939 was $45 billion, only about 10% above the $40.4 billion total federal debt.

Congress raised the debt limit to cover the costs of World War II in each year from 1941 through 1945, when it was set at $300 billion. After World War II ended, the debt limit was reduced to $275 billion. The limit remained at $275 billion until 1954 (the Korean War was financed primarily by tax increases). After 1954, Congress reduced the debt limit twice and increased it seven times, until March 1962 when it reached $300 Billion, the same level as a the end of World War II. Since March 1962, Congress has enacted 75 separate measures that changed the debt ceiling.

How did we get to such a precarious position today? The answer is unchecked deficit spending. Most of the debt buildup has come from the various spending measures enacted stimulate the economy and solve the financial crisis of 2008-2009. In July 2008, the Housing and Economic Recovery Act increased the debt limit by $800 billion to $10.615 trillion. In October, a $700 billion increase was attached to the Emergency Economic Stabilization Act of 2008. In February 2009, the American Recovery and Reinvestment Act of 2009 raised the statutory limit to $12.104 trillion -- an increase of $789 billion. Last February, The Statutory Pay-As-You-Go Act of 2010 (P.L. 111-139) raised the limit to the current level of $14.294 trillion, an increase of $1.9 trillion.

The effects of a negative outlook report or credit downgrade of US sovereign debt would be devastating. The floor would drop out of the US bond market. US interest rates would spike, sending a shockwave through the stock market. Massive Wall Street sell-offs would spread to equity markets around the world. Retirement accounts would be washed out. Real estate values would plummet. GDP would grind to a halt and unemployment would reach or exceed Great Depression levels. The US Dollar would collapse and ultimately succumb to a de facto new reserve currency, perhaps the BRIC Bancor, the UN Special Drawing Rights established by Russia, China, India and Brazil. The United States would relinquish its role as the strongest economy on the globe, and join the ranks of fallen empires.

By way of comparison, Japan's long-term government debt is set to reach 869 trillion yen ($10.57 trillion) at the end of March this year, or181 percent of its GDP. Greece’s debt is 137 percent of GDP; Ireland is at 113%, according to data from the Organization for Economic Cooperation and Development. Could the US be close to such dire straits?

In a recent letter to Congress US Treasury Secretary Geithner said that if the government hits the debt ceiling, it would not be able to pay interest to those holding Treasury bonds and would default on that debt, "causing catastrophic damage to the economy, potentially more harmful than the effects of the financial crisis of 2008 and 2009."

The battle lines are drawn for a gangbuster Congressional showdown between fiscal conservatives in Congress and the high-spending White House. Any compromise will come only after bruising confrontations and divisive campaigns that are likely to whipsaw the markets, as we saw when the House rejected the initial $700 Billion stimulus bill and again when the Administration outlined it’s “stimulus by spending” plan. In January 2008, when the president’s stimulus plan finally was unveiled, the stock market tanked – the worst January performance in 113 years.

There can be no doubt that the next several months, if not the next two years will be a period of great uncertainty in the financial markets in the US and across the globe. And as we have seen during the last few weeks, political tensions in Tunisia, Lebanon, Egypt and Jordan are changing the balance of power in a region important to the developed world.

In uncertain times, prudent investors turn to the stability and certainty of hard assets, such as gold and silver. Gold has proved to be a safe haven and a hedge against the vagaries of inflation, political turmoil, war and revolution.

The question for you to consider is how are you going to protect yourself from the slings and arrows of outrageous fortune? We publish The Gold Speculator to help people make better decisions about their money. Our Model Conservative Portfolio gained 66.7% in 2010. Subscribe by visiting our web site, www.thegoldspeculatorllc.com and pressing the PayPal button ($300/yr) or by sending your check for $290 ($10 cash discount) The Gold Speculator, 614 Nashua St. #142 Milford, NH 03055