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(opyr.ight· Martin A. Armstrong All Rights Reserved. N()y~ 7thi 2009

CotnmentsWelcome.:Ar-mst.rongEconomics@GMail.CON(Tnternation8.11y)

IvlQuld like .t.o thank the. many people 1?ho have been writing from arouildt:l1e 'world. It is en.couraging

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so many, providing valuable insight into t:rendsaround the woi-ldirom China, 1 Sovie,tRepubliqs I SouthA.:fr,ica, Brazi 1.. ,AiJstralian,andlndia _ IbEdieve 'We can SUl;"vive the, fOlly of governmeiXt,se,vgn if they:cefuse' to listen. The key is under'standingi::hena:eure of events, and that aL'l.ows Us to corre(~t1,1 make the deoisiou-to h~ on the oppo!?iteside.

Iwo.uld like:t,:oalsof::.1it;i..n.k ali myoId friend and former:: clients for their ·S:upp.ortandto know that they have continued to g-ather::infprmatian that s$i~es U$ ,all in times of crisis.

tveare., standing,on thepr;ecip,ice 6£ a.ne.we.:ta in global-'sociaT~ecOri;oh1;ics .tl9wWe .ente.r thisnewag'e is

of, .critical im,pot,t,~.b.Ce.Gbvernrnent is lncapabJe.t:o doing .anything for:: any ref,orm. of'its. own a:pnse of po:W:er is not

up for ne,gotii.<3.,tiqn.Wernti$t'weatherthe, stCrrn,andto qO~

so we need to ,uridei;s:tandits'na.ture. Just as the 19}Os Great Dep:;ze~s.ion set' in,moti'O.n: profound-changes that were even manifes-tin geop.olit.i,cal c;PIlfrOp.tatidnsrweh.avenoV! reached sucb .a crossi-aa.ds. ,8-, de.bt cri.sis has' its tentacles deeply embed¢led intb' Eiver;y sec,tor right ,intog6ve:tnmenL This is the distincti0.urrqrna", mere st.ockmark~t crash that ne ve r alter:s t'h~ec;(JpOr(ly . IOi)·g-terrri." we: ,,,,-rese·piously still over-levetqged"and ,r,>dme, banks ar e ,St.i,lltrY'~ng to be " heCige f'unds and ha\r~.·to s.peculate to make' a profit . That ,is a key Harning signt.nat-the. "lors,eis yect tpgq:me.' , , " ,

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FObner Cha.irmah of Pi'inr::et:"bn~CSInt:e:rnati~fLt:d. and the FotmdcrtiOri For'l'he StudyOf,Cyoles

OLD ba:sbeenone otthe mosthi3.f:ed subj~cf:s ~ong the SOcialists ~oause o/itheach . dollar it advCUlces, i-trev€:t=ilsrneqell,lsiqnth9-t they seek to live within .. YetOOU) has beet), .:tmi$coI1¢eived stqre of wealth perhaps

s ince the. dawn 6ftirue.,Iti.EgY,pt:( its beautY'reflect:ed b"Ieco1or'oftlie Sl.lI1, and as SUch, . it was Qrtlyallowed tobepJ_ssess~dby :rbyalty. The firstuee of gold was jewelry. ,When we, dig up royal graves even in Asia to Greece/ .. goldisiound. adornin.9' the~rS'oI1slJqrieq ". We find gold death rpa$ks and crowns •. :EVen speqtctcula:r . GQu>cups ha:VebEeenCiJ;S'COvereCI, .wi th . :l;ncredible Gatv]_ngs •. Where tne~yptiausmir1ee, (~J:pinNumidig.{theBahy16r,j_anS'minedGOIDirt ,fJ.Prkey - Sardis. The later·Byzanti.rieErhpire located in :TLltkey post 337AD, had long

run out of GOLD resources in . Turkey "and relied greatly upon Numidia. When the .

Arabs cut off North Africa, the Byzantine Empire beganits-fall. The great Monetary Crisis of 1002, signaled the end o/Cis . near; The .access ,to the al)ilitytoincreqs~tl1e ffiQneYS4Pply cametqanen¢hTlie ooipage bfG()ID£,or the first time'begin$t()be depas€:d )'nixed with$ilverlosii;lg its gOlden qqI6t'.Tllishas always. ~ thed6Wpfall of a, 00fD ~ whereby ,the supply cannot .'.0$ .. secured to ensure .steadyecotlomiQ growth and by defaultt. itwil.limposeDEM:.ATIctmRYeconomiccontraQtionsretaming the grovtth of society and the economy. It is why GOU:> isthehed.ge aga;tDSf:governrnent, but:-. should never .I:ie theiIOffiQia,l!l 9Qvernment standard of IU()ney"

There Will be hard Core gold standard erlthl1s'iasts . who will stop reading by now and throw darts at any pictlJre·of J:'tli3.They ca,nproba:b1 y join together wii$ti1e$ochHis.t:.~fVJho hate my guts as welLEor you. see, eacl1.idea ofsubject.matti:tr,ha:s,a cii::cleto the concept. Go left and right far enough

and What. you end up 'with iscoriCensusfor diffSrE!ht:reasotls ..

'rhespqia1ist hates ,rtiebecause their Marxistdrea:m is to subordinate all wealth so they do not have to work as hard and to puni$fianyone who has mqr(3 thMttiertk. The goldstandarden.t11.ll.siast.s think if ~ was mqrtey,thiswould; ·561"ea11. problems. .Both thus' ha.te, my guts. because T fure to challenqewha:ct:hey say.. It is not rnyopin-

. " . ,"' '.", . ,- ... " .... - .. - .. -,,_. "_', ,.

Ion-, ;Lt;isbd.sE;d upOh observation.

1

~qra~ of. Syracuse, Sicily COIJSiderecL to be perhaps the rIDstbeautiful 'Of all the ancient Greek COins.

It was the largest silver den.crnina.tion everr,rUtlt¢d.It pictures Arethusa Who wasa:peautifuli:1ymph who gave herI1aIl16 toaspringatElis. The RivergOdALpheus.fel1inlovew:i.th·herand she fled transfqrrning he):,self . ihtd a spr;ing-j but Mpb.eus:crea.t€:!ClaundergroUnd 1;"i\7& to be W]_t:h, her,f'br late.tnity.

. . .

ThoSe; who know me understand that ,:rvrill always separate my. BEtJ:EF from OBSER~CN. . An opinion to me is just that. It iSDO;t: ever, worth "lE:lr.:Ytnud!1· ror it is limited byt:hevery pers¢tt; Qf.f~r.iI1g it • If·; thcrt perSOnh$sneve.r expe:G:i;eaCeg'W:a:r; then he can not, foresee one evercailing.We . all haveopihions and we all have beliefs DIan array of subjects. Yeti' if weaJ:e seek,ingto. gather more tl1anopipions,

we havetorc>lltl1e sleeves up and do just

a little work. The MEl'1IOIl)mGY:toacqUire knowlEdgeahdtirlde1;"standing, requires pure tmbiasE¥J_ . Ol3$ERVl\TI~. This has always been my creed •. Like the old Tv commercial With the Qla lady and the hamburger - "Where's th8Be¢f!n·

GOLP wa$coti:Eiscatedby P.tankli.n D. Roos-: evelt iIlordertopreventitfrom being USed as a check against his p:Jlicies.He fbl:"bid

<3.11 contracts inOOr.n as well. Yet we can .in tact '.tmuik his c6t1~in, TedclyRcx:lsevelt.For youSee.,l'eddy was. a ancient coin collector. Re was so inspired by the Greeks who Ga.+'Ve¢l their coins in high relief thatgi3.ve them the gualityof trueart~ When 'l'eddybecarrie president, he. ol:'de,l:"edtheU8Mihtto make a. new

$20 g6ldcoiD in high ·relief .asthe· Greeks.

,IIe commissiont9dAugust Saint-Gaudens to now desigtl.sllcha. wotkof art~

. The· High Relief US $20 ·GC>ldC?oin of 1'0'1 . InSpired by Teddy Roosevelt

Pictuted a,bQye, is the Saint-G$,llde[lsl$20

, OOLDcoin.Eventhedate was in Roman Nfuner...;. als, not Arabie. Why is this of any interest tcday?Becaue;epf'l'E!ddy,Franklinhad to make an ·exceDtion Jor coin collectors. If. he did notex;cl~ec()llector C01J1s,hi$t¢ry In fact would have . been· lost. HoWeveJ:",ohde an exception was made'lthe G011) trade existed

in coin fqpn in the. United Statespre-,1 975. Mexico,Austriai dl1,d· Hungary! sold gold to Americans by circumventing US law. They made what became 'known: as: f1restrikes" whereas in Mexico theymirited meOOm 50 . peso that was p3;tpEltuallyda,ted 1947. The Eurol?ffU1s,struck 1908 coin,sperpetl1ally~ So tl1e GUID trade waS alive and well qartied out by coin dealers pre 19'75, when it t:eccune legal to oWn .. COI.D even in bar"forrn.

:t grew up .~ the.<DID trade _and working in . the' f:ieldfrom a teenager right through high. schObLWhile others wereQut pumping gas or del.iveringnewspapers, Twas selling GOLD. It opened my eyes fu so many wayS. Perhaps most of all, it exposed.me to the falsehood of social sciences and put me

in the middle of a cbnflict. In the Darq SCience, futhing was· randCir!. So::ialsCience,

everything was random. soi t cannot J;:18 pr.eCiicted.

Somebody was dead., 'WIOn.g a[ld it wasn It the

phy$ics t~(:her.

2

:QlackFrid.ay 1869

.A.:tsernl.nars around the world, I W01.:Lld often. expiaW 'that 'perhaps what inspired me to investigate cycles,was my high. school ..... teaohe.rsh6Wed.ah old' blaqk& white movie one day.en.tH:'led~t::of; th~ 'l.'<:Y@l.Thiswctsa filrrtaOOtitth~Gold . Panic of 1869 t.tIatwas thebHth (lime te.nnIlBIaCk Fr:i..daylt that was certainly" not. about; shopping as it is used toClay fqrtne day after· Thanksgiving.

BackfhetttheUSabandoned the Golq

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S~dp:tiJjgthe Civil War. The Pq.ni.cW<is

blamed on aplottocorner the market of GOI1) that at the time traded on the, New York StocJ exChange in ~Sf.):E Tigreer1ba,cksll .mecming that; thlswa:Stbe t:tue recip:tbcal of . dollars whereby the termJ1greenbackif meant that they .had nothing on the reverse side but green

. ink.~

Mtlchbfthis history of this Partie has been marliptilat~ 1::lyi:xJ:th government and the Gold st:andatd er¢Wd to suggest that this event took place ,l::ecause the money was_not Pack«t by (;PW..Tl1is is nottrue!Peopie who had deposited $20 in OOID, wanted to sell it for

$162 dripaper-, hut the bankers handed them $20 in paper, 'sq t:heYP'tqrtedhangingthe bankers.

Photograph of the Black Board from the New York Stock Exchange.on September 24th~ :869 showing the tick-by-tick prices of GOLD trading d~ring the Pan1C o~ 1869~ The w~ltlng at the bottom is that of the Chairman of the Commlttee charged to lDvestlgate ~vents on that fateful daYI James Garfield (1831-1881) who later became the 20th Presldent

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Whenever. one·. Looks at histo;t:'Y. it .1s wise to remember 1 the victor gets the last word no .IIla.tt~ if .he isthe·def$1der· or the oppressor .Ma,k,~no . ti1istaJ.;:i2!~ut it, Thomas Jefferson.· narrowly escaped his home because the. English sent an armyt.ogocapture one man toTI.angh.i..rrt.beCattsehewrdte the Dec Ia-: rati,on of ItideQe.ihdence. Had the English WOD, Jefferson would be . known ·~o ,4istoryasa: traitor instea,d ota tQundiI1gf~er. This is why hectJi1$ideroo this his oohtributicino

The1?anic of· 1869 has been distortedl:)y both sides to ·Iittheir arguments. The ns didnpt:is:$ue paper money a:fter its birth iri 1789tlrtt:ilth¢ Civil war. 'I'hetettn cc:irnrtloruy used n~n dbesn6t :r;"eflectany lack of backing bytDo), but the lack of:tnterest since the first notes thatbegan tocirculate Were <3,. der.ivative oia l:xtmd.-drculating paper cun-ency that had an iI1te:t:est:rate schedule cirttl1et'$YE?rsereflecting the\i'alue of the note the longer it remained in the hands 6fthepeople. It was a circulating form of credit. When t:hegovernment stopped. paying interest. and just printed I1bteswith 110 interest sd'ledUle on the reverse, this is w. ha.tt:netetfu··GreetibaCkJltiiiLn'teantfbr

............................... y ...

when yqu fli£)t;:edit civ~r,thei~ was nothing there except. the green ink on t:he reVerse. Thusii: W&stheabsencE! df il1t!9re$t' ~ not GOw.

Nevertheless,bet:ausetneFederal Government was no1.op9"e:I; .minting (IjO) coins, t:he circulq_tiIig Ctil:'l:'¢n¢){P$¢ai:tte these notes khC)Wti as nG;r:eeribacksll thatnowbegpn to even trade on the New:yo:r"kStockExchange as we trade future9tocla.Y. The rise ana. . fall in

"prices wer~ aref:leci;~0x1,ofCflilF1IlENcE in who was wirirlihg .tti$Wqt'.

The attempt. tp 'cori)erthe market in OOID indeed crecttedthePatiic of 1869, but there was a strong undercurrent of political corruption. TherewCl.i3mUch distrust and extreme C()nflict~ ¢ver <~managementof the the Federal GdVeb1J1[~tE!ve.t sfnce Lincoln ij'adcreatedthe fi¥st.:rncorne .'!'ax in 1862

to raise money tOpa'yfCirthe war. It was widely believed that.thi.swas unconstitutionc yet no formal 6ha;lJ-epgeWets heard by the Stlpreme cour.t tmt:i:l§l?!:~ VllS that was decided 011 JanuqJt:"y· 24tht18~1 upholdirig the direct taxasOOristitutiona.l..The reasons given was that a dlrecb.Eaxwas on realprOp'erty tax and .apol1 .• htx..11ence, the Court . helq an Irlcgne~",asp.either,provingthat tn.a" Supreme Cpu:ti:hgsCldD.e: ·more. to destroy the Jights cifPeople thaneve:rprotectthern.

The attemptto.comerGOID led by Jay GOUld and .. James Fisti,.· wa$ $aid to Invclve the Grant Adminis~tiotlahClD@ielButtert i.eld . wno.t1as A$$istantO:S'Tieas'Qi'8r6

4

'J1J.edQi:iousfootitiote·to history invqlvingthe .Gold.Panl.c of 1869, invplves.·GeneralPaniel··But::terfield Wl1Qq.qguJ.l:"ed a :teput:~tionthp.t: wp's ®itediverse" Wbileh~ iscr.ed{tea astne autho:t ·of the 'J;'.3pS pla;yedby military at funerals, he; was also a celebrated participant in the noted scanqa;i involvi!1gGefieral Booker.

GeneIraJ.· Joseph.HOOke:t . . . d·

The two Were qlo$epersonal fr~en s

antitheit . lleaciggart;;et's; became ·quit;:e notorious fOl:" the wild women and tile

drinking. 6thergenera,ls during the ciV'~1 War Were displease(j atth,egoing:s~dl1.tpat hp.c1becc)fne wide;ly1<n.Qi1fl apCl 110017 and. prothelll tbSuCl:1artextept ,that ~e wamenwho engage in the. profession. asprostitvteseven tcday(are.often Just callednhookersll denoting iliis scandal thq_tg~sbacktothe Civil War .It rnustge quite a distinction to h?-yeprostitl.ltes renamed after you i:hatlCistsfor hundreds df yeZtrs·t:Jjere.a:Eter~

GeneJ:'cUDptd.el Buti:aficlCl (.1831 -1,901)

JayQjlild bcl_a made a lot. cifqon~Y frOm the. railroads, He got involved with James Fisk and the two' became involved with Tammany Hall. They succeeded in then making Boss 'lWeed a director of the . Erie Railroad. Tweed arranged for favorable

legislation.. . .

G6uJ_dandFiSk ;aidedDa:nie.l J:Jt:eW

in his waragain:sttheErie Railroad, that was controlled by Cornelius Vander...; bilt. They became directors a.n.d. thus carried out; a very clever plan to take control of the corppanyaway f:tqn that of Vanderbilt.

TweedandGou.1d became the :3ubjects 0. f:PO. litica.lca:tr.· •. ·;t.oot1s. byThcmas r~-t. w .. ho in 1869 rnadetherri quite. famou.s, :Eb:rit was Nast whoal$o Created. the :image of UnCle Sam - a lasting t:tibuteto·his pol.Lt.Icaf cartoons .• In October 1871, Mr. Tweed was indicted for fraud. It would be Goold who put up his bai.l o:E$Jmi.lli:Oh. William MatcynlilQ$$" Tweed waS 9'iveo.·;3. . trial by jur:y where he wGistoundga,tl:ty of 204 counts o:E'fraud . He was sentenced to 12 year-S .ijovettiber19 t1873~'I'W€Erl.bad escaped:EromP:t:"ison December 4th., 1875 and fleer to ~~ Tweed ;Eled. Cltba,artc'i Wgs then caPttirediri. Spain who r~t~ him to New York state prison Noverni:ler 23,1876 Where he diedinHn8. of. a lack bfcC!J::B~

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Gould and Fisk were more !l1Cl.hiPl1igtol:"S Ja.y Gould (1836.., 1892}

thananythinge;t:$~·. Theyusedbehind~tliEl'-sGene'""

machtnatzlons , not-to speculate, but tong the game ·sb that they would PFlvegu:aranteed trades. Thei:texpioits 't.-riththe Erie Railroad wa$ just one eii:iu1\Ple. Theirstyil$Of bli$'iness Was akin to tying an opponent's hands and putting a bag over their head and then proceed to. claim it

was a fair :Eight. ..

James·Fisk (1835 - 1872}

The. GOIDcorner scam was ·wh_et'e: th.eY hO!A-6(i to force the price of GOID higher to new levels on the theory that when the Covernmentreturned to the GOLD standard for payments, that tl1eywould have to now adopttheop:m.market priCe they had created.

They involved Abel Corbin,.wh6 wap President Grant's brother-il1~law who convin.cErlGrqnt to hire General Daniel Butt.er£ield as Assistant Treasurer. Butteri:ield's j.ob was to iTIformGouldand Fisk if the Trec;J,sLtry Would sell any' gold.'l'hisconspiracy to. rig themarl<;,ets: was haw inpiace.GQUld l::egan

to buy OOIDaggressi vely' only du±'.ihg·the sumner of 1869 - in August to be exact. What we are looking at was a Very Sl1ort-liv8d $caIn that lasted all but about; 3.14 months',

5

Gould profited. from the scam when all was said ab.d done ... But the proces.sexpbsed the .: temperqment 'of . the times. For . Y9usee, most ba,rtk8, werechart$3. by t:l1e $t?1:;eS, not the Federal Goverpm$l.t. Tl1is 'creGlted.a v~st period of Wildca:tBankiilg as'if;.was ImC\~ . between. H:f16 and 1863 ..

The, ;;l,dvent:o;E the. CivilWa,r ~se:1 many problems,. Tlit;;bUlk ,6f·. -the, IIlOney.supply was. paper. GU17ren¢yissued by each ,~~." Tne . notes were :t:busbaCked by each .barlJ< 9I1o. not the federal or state gdvernments .. Therewas the whole battle ,of Andrew Jackson against 'the Bank of the United States,whioh he was

deter:rnineq tp.· destroY- . .

As the CiVil war' ,began, the FE0.Eilial Government issued paper currencytnatwas a form of circulating bonds with an interest payment sch$1ule On the back. But the cost of the war could @t befub.dEd. byco:trt_ '. The gbverruilentneed8cl·¢redit.There was no reaL

sYstem of Wr~ deaTets. . ..

These WilQcat banks were allover the·

~i~' S~~$~~~~th:~~f::$'

detecting CQunter::fiets. This also l$l1tto the widespreadc];'eation of small·bqnksJ., bot branching, forhllen ;;lsmallbank.couldbe locat:edih$bro~:q~mOt~areamakin9 'it> Very Qifficult ifnQt.;i.rnpqssible; to i'edeerrtthese notes. This led to ,ust printing mo11eYWith no backing whatsoever . .,.... pure fraud. .

This$lls14@Ill q~ .Wildqlt "13aIIk:ir;g, . .:ted .. t:o the ·p"o_niqQf.la37 ·.and. eventual1yt:h~e.1"aB the globql.flc<J9tqgiqnll .i:.b$.tappear@iwtt:h tire P<;miQPf: 1ep7~ fI§lPce,a:s me C±'V:i.lW~ now catn$upor:it:fiescene,. theF$3.eralQ0vern.,... ment needed the . credit and was running out of .cash •. WefindhherncaneTax ap~ing in 1862,an.d t.hen'W~ fi[ld the Natiooa1,Bcmk·,Act

~e 1~f;th~~Su~:a~~oir:~:.~saridWa$

During thedivil Nar/notonlxwas ffiCjneysCatice:, iIi tan:9iblefQrm,bqtsowas just about 9flYn1eb:l.J.: inclUding rJi,ckelan.d copper', Wefihd 3 ¢¢ht pieces tl1at W9uld

have been struck i.tJ. hi¢kel,issued·in silver. topper was scarcer so there was a real shod fall regarding¢Oinage in generaL . This led to privatestores:milltingthl9irow;ncoirts

artd tPstage stamps being $1cas~ in mica to serve as circulating coins. .

~%s~U4=~or:;= .•. ~~

OCtobet' 41:li, .. 1&73

(Source: Frartk_ wsl:teJ·s.··.IllJJsttatedWewspa~

" . This proyideSaback$.r9P,i:crt:he view of ~ersi:ltthat :time.r-rl1eYVl~eshady sorts. .of people who . Were rlQt.highlYr¢gaJ:"d~ ". So when thepriee of oomro$~ to $16:2.50 on September 24th, 1869,thEiy Wete.indl~ed then besieging the banks in ,NewYorktow±thdraw t1::te:ir gold coin depc:>sits:to $ellthernon

the New York Sto¢k. EXch.:tilge. ,Y;lAerr t.l1e~§rs thoLight themselves ¢lev~ood handed 'them a .$20 rioteinstead of a $2Qgold coili, yoti

can image what took place.,

The l'(lbb .~ .. <J.r:aggl.ng~er$butto the $tteetahdhabgingthet\.Thi$p:tor:npted the governrnent to sen.dirIthernilitiaand attempt to stop tire blOcd~she<:l ~ 'rbisis, the origin of the term Black Rciaay, not having Mytflin9 to do with shQ)?PilI1g' ..

G:tMt was forced 1:QreE;I;'lQnd. .. He. sent out a neW's release ¢la.ifuitJ,gpewa$ going to sell $40 million in gold,. Tna:t sparkecta majot se11ingpanic and' within just minutes the price fell to the$T30'arep.O:f COurSE, this. ar1no]1I1C8meptwas deliW:rate.ly false,. There was no$40mil+~qn, }:n)_p$4million.

Frank:I:i.n.neIano Roosevelt (H382~ 1945 ) (Pres: 1933-1945)

I·· . F we. aregoitig .' to€iXPlo:re .history, we must do it with· . .:i.·View to ·.simplyreport what we '., discover. ·We· .cannoti ·I()okto . form history to match a predetermined ()q.tccme. Xi we do

that, weal?e()nlYl~v:iJl9'?i del1.ision~ This Jswhy . w.h§"1YZ@;):9(J1):._.iit".hl,~6tyi,S9nEithing else jumps out- the ... S:brUggle :betweenthe Private ihterests andthe.self;"'_interest of Public entities created by the· ruling class ..

.i:;vR realizedthatt.heohlY w.ay to force his agenda upon tl1$natipn, w9csto· confiscate oor..D. He would create irifla.tion byrne devaluation of the dollar, but unless he coUld control the Q)ID supply, he could not benefIt from it. He wanted to capture that profit tq fund his. agenda.

NEVERha$ t:lif::GOU) ~ ever worked for the very same reason they argue against a paper .standard - ];:Oliticians just cannot be trusted. They have debased :!:hecpinage i created taxes and hunted citizens to confiscate their wealth, all

in the name of increasing their money supply so they may retain personal power. It. matters not what the currency is based upon, for if it is 1:0 becontrolledpy2tLshQn~strq\:m/itWill be no more reliable thana 74,7 tJ:glt just, rap out of fuel in

mid flight. . .

Many ~ple.thihk tMt !l!6Irt@ht)}w·l~.weMa, a GQPO- .. ~. ·that. this will $oIV$··a1.1the

. problefus-..TlleIOhges't running world . currency wasbhat of the Eyzantine Empire.known as the SOt.Ius - a. gqld OOi11 of. incredihl!? pride .50

it was rngintainet3,foJ:;'hundreds ofyear.s WithOut. QEbasement ... When.· the .statie regan ·to r®·.out of funCls,ittoobeganto be deba.seddl.:itltig the Great Monetary crisis of 1092.

AGOI.D ~AIID is only as goodapthe integrity· ofthepCllit,ical ru1ingcl9,ss.J:fWe look at Br:"ettQIl Woods, d three-,year-olpqo1.ild figlireout thesystetn wou1.dcOllapse •. How ¢an ariy6nein their right mind create a system where gold is F:txFJ::) at $35 per ounce, yet you dONQI'fix the aInountofddllal?syou l?l,"int?

. There are just sometningstxJlitician$ qQ that, are just BRAIN DEAD.-

The .prQblem, we have. is POLI'l:':L~$r. !lot: what wecall.money'!PoliticiansarehQp:less. They CNLYsee their own self-intierestandas suoh they will never .even cOnsider What if

they arewTong! They cause wars. Destroy our :Euture;a;ndbave no clUe about; how to run a state honestly.

tbn1ii :Eorg .. ef::.The invention ofpapat I)'bneYi:rrtl)ewestdartte in the united state$ during-the .. oolotii;:i:;Lera hl=cause there was a shortage of coin. YoU 'have heard of a Piece of Eight~That was a . one ounce silver coin struck. by the Spanish called 8 Reals and to d:-eatecirc\,1latingrtlOney,they were cut up

1 k .-, ..• u2 b·''''''''' 4· b' ···8· b··ts· . $ II

.ieaple -:-" . ··1~, ·..ly::o, ].. .9,.

The English~rede$perate.f6rcash, so they demandedt;hat allpttr¢ha,ses ':;by~ America was to be ,ingold or silver I whereas anythingpurChasedfrClIl America, waste be made only in cop~~TheEnglish were draining gold and Silvl$-r frOIll; the colonies creating such

a shortage, ·Pa~cutrenC7wa$ the. answer. The first to apF'€arwere playing cards cut up and signed in Canada promising to pay as soonast,heshiP'.~ in. The early form of lOOCl.eve:lpped. int:.Q .papar lOOney· 'and became widely used d~ingt11etoIQnial 'Clays. The birth of the UniteCi.States, brought the end to this urisoundfifu.nce and theonl yI)'bOOy was then gold and silver. rtwasthe dawn

of the civil war that created pap:rmoney and c::rea:t:ed publiC ·CieJJt,as. 'Well as the first primary dealer (19th century version of Gol2lmanSachs).

Panic of 1873

The.Pat;J.:iq q.f1873 was aglbbal con1:agi9h unl:i.he the Panic of . 186Q' that was caused by a localmampt:il:a ... tion. JUstas··theteWas great euphoriaa£terthefall· of the.BerllnWalliri1989 and the unification of Germany sparked tremendous expectations of a vibrant East Ge.rmcmeconomythat would match thatof1:heWest bl.lilt upon unreaJistic exr;ectatlons that jU$.t~caI).se the people were • German, they would work as bard as t:he west GertrIa.tlS,tfle same trend appeared between 1870-71 with the grea.t: Gel:1na±1 Unification. There Was excessive speculatioIlinGeriilahy and Austria that end with a Crash of· ·1873 .that in Germany became. known as'the ufounders.} ··:Ye¥sll··'.~ahre.

CO- __ ~'--'~'_""''''''''''.'''''.'''"'.'''''.'''''''"'~~~~'.'':"~''._"'".''Q'~."~_'_·~,"":"~_n_r·_:._n.~'n.~"..,.".., •••• "'.W •• ""' ••• W, •• __ ,~.~~~.

There .wai.··iigr'$at li1::erizationbf .. ~ cbqx:tti;lte J,.aw at this tirde.tnat sparked afouridingof eit:erprises Onamajbrsca1e. In£act, you even find the birth of Deutsche Bank~This . mixed with greatetlpho,!:'ia ,over .. 'tll€! .. military victOl:yagainst France in1871thatendedWithF;tW1~ ha.vil1gtq tna.kehoW its repargt~onJ?9.Yments.··to Ger:many. This . .led .to widlespr$d ·$Pec\l1~tive ... feyer.thatca.1.1sed thest:OCkIllClI."kets .to soar. Nevermele'ss;Bistilarck'sv;LctorY·QverFrance. tvas . followed by1;:heGermanderilOIJetization of silver that regan on November 23rd, 1871 and resulted ihthe intioollct:ibriof the GaID MARK·ouJuly 9t±h,18T3 .

,'.l'neCbIitagfonbegan with the crash on May 9th, 1873, oh1:he Vienna S1:ockE:XGhat).ge. This lea to a: t:(jllapse of tllelJattldng system. '.rh;Lscontra9i±.i,on in capita.lM.d .. tr~e.mov±ngtotl1e: .,OO+D .: S'I'ANARO .. had the huge effeqt:_ of _forpj;hgPEFLA'l'ICN upon the whole, eC$nCnly.T:tiis.spre·ad to Berlin wheref:he . railway effipire' of Eethel Henry .. Strou.s~g crashed from·being overleveraged .anqt1i~ whole .: Ge,r."""'l.tla,npt1:l?ql,e Pttrst wide ot$n. .1\5. glwaYi$:, 13;£Srnat:¢K. tQ.rried to protectionism

in 1.879.

BismarkJs<·denpnetization of silVer cr:ea.teda deflationary contagion on silver grouncttht:;lWQrld.$i1ver would.naturally I;X)\.ltrbut Of Gerrnanyto places where i1:was still. corusidered m6ney, andexchangeqfor rom. This .arbitrage continued tq . dC)rtlil'1at~ the last .qunr:tei'·century in me 1800S •. '.V® effeCt was,c1\2arlyfelt in the Uni, ted states. and playa,1t$yrb,1l ih what ~camekri6wr.L as thE! O:>iIJag¢.ACt o£ 1873 . The Congress had f"ollowedstiit . and alsodenonetized silyer· placing the country· on a(I)lJ) S'I'ANt1A$J. ·Canada· joil1E:!d thi$ffiOVe:and what. we.s$ewa.s arnassiye wave Of deflation for wbatthii1y did was :ceducethe lTlbrieysupply overnight.. 'I:his ha:d the, effect of causing a silver

crisiswo;clqwiqe. .. .

q<:iyc06ke ;&'(jtl:QPer Jay (b::)ke&tompany

:ctitl}e;! UniteC1 $tates,tl1e $i.~verminer:s . and farmers would call this the uCrimeC£. '73. This Wsf:he P2.g±l'lhin~ pi wl)atlws . al~o~en called the Lof.l9 .oepressi¢nthat lasted £01:'

26 Ye&si.intil.the p;&U<····.in ihter;$st ra.tes hit in 1899. Even the short~termcollapsel we saw a 65rnonth c1eclineecon.omica11y C()!TIpared. to

Ct. 4.3rnbnth decline froITI1929~ ..

BydenDne:tizmg $ilY'er r the g'Qyertin1ent retroactively transformed all prior debt now into. payable • only inOOID..Peoplemay have: rorrowedsilveJ:",and now owed G()I,D.. T~ stress within tileecqnomy waS ·£ar~ch.ing and it was thi$ '90I1StructlV;e Mlertdrnerlt.qta.ll, debt that pt:itpressure on the banks.

'I.'heGoldnan SaChs of the daYY1qS Jay CQoke&caup.;mywhowa,s by far the wealthiest banker in . the CX)uhi:::ry" althougll the l::ffilk .. had la.sted ortlybetwe$1l 1861 ahdJ873 (t2 years). Prior to the Civil War , the US was largely a creditornati,on. Secreta,ry of the Tr¢asury Sa1mof1Cha.seturnedtO .,ray .C'09ket:o sell US goyetbrnent.rohds torais¢ n)Cii1ey~CbCke had been BbletQ sell private co:t;pcr$.te J:;bhdS aroundtheworld,arid this Chase turned to him toiJeeffect1.vely the fj117st .l?,r;ima:ry D:!aler.!I'he amount sold Wa.s$~()O. T!lil1ipn payable in 20 years, but callable in just 5yrs

8

The offidial.'view of the' National Bureau

of Economic :Research, ctassiflesthe deep economic decline. li3-S;til}gat :first 65 months between (x.Tcb~l:'.le7g :@.d .Ma.t:ch 1879. While thetewaS$0r.new1'iqt, dfaeCbnoinic J:ounce, the elii;ire :tQngoeptessiOticonsists of at

i tSlI)Qst extreir!e'Ta total of thefollowiI1g 253mbrit:hSgoing~into January 1901 during which n4 monthsshoweci add;itiotJal econonuo

declineS. .. .. .

Ja,yCQpkE!, .§.. .• ~ ... wast:h,$first So c~11¢qltwire house";f01;' they-were the,fir$b to 1,J.S:et:.het~legraphte.¢.htiQlogytoCdtifirm sales6f securities. 'Cooke . es:tablished a vast, networ'kof sales agents around the C0untry,incltldingCC)ges~ent. smq.llbarlks PrlclJ.I1$u:r:artce¢dropanies· .$long with t);rok$:'s inrea,l.esta,te. Lt. wast:h,e inyelitid]jof the te.1egr.3_PAthat waswlsely used byCobkeartd er.Ja.bled . his firm togr~bw ~to.the largest at that time in, history. To this daY/innova~' tions he pubinplg_ce'fbrmtqefound2ition of tne:bt()ke:ra.geit;ldu,qtJ::;y.

CQOkeC}.lsobe.eame:tliuSap Investment Ba..tiJ<er, and ·thisWa.s . his downfall. In 1870 t the Northern Pacific Railrood' turned .to him to sell i;t~ Cones exclup~vely ~The$aleof thebopds. did not go . w~ti..GQOke became the lq.rge§t11oI~twi.tD. a 75%'.stak~ i;n theW'hole ¢o.rnpan,y. c.:;ooke·wast,h$11tcYingtoextricate h$itSelfby eXpanding· the railroad into the second cransoontineni:al service.

.Theconta.gion ~1: ~ga.I1. in E1.'U:'ope; hit the PS market::; a,.fewfl1QnthS later . Fbi you s$E=,Ylhenthere is widesprea:dgldbal invest._ ·inent,· ·acrash in one region causes investql;s there rostart se11ip9Qtbet" investments in orCleJ::'to:talse mGlIl.ey •. ':r1lfs±S Wlly •.. ~ ~talanal1§isfail$, be\Ca:u$e .~ •. WillQt-ash ·.dueto~l~tals that paVe .J:tbthing 1::0 .. db.wit:h .loca1events. ~ . ~ CON .'1' A<; I 0 Nt.

The Panic struckor($ePi:ertiber18th, 1873 when. it: became wj_delywoWntl:lr;ttJay Codke &:~p,.iYWas·e~seQtQ Northern Pa.cific JRailro<;id. Detosit:orsb2gan a run on the .bank. rushing to withdraw their funds • This led tot:hecollCipse of tllebanJ<.CtiOkehadthen w.ritten. liabilities q_HaiI1$t .t¥P?ptOO .. future ~arnin.gs from the Northern Pacific. When @kecbuldnbt raiSEr cash by selling enough l::DI1ds to meet the obligations, it had to suspend its op9rations onllie 18th •. The f~:nn washeadquartereq in Philagelpbia. Its stock trsded on the New'.(orj( Si:b0k Exchqttge.When tlleE~cMrIge learned COOkeSl.l$I?8nqed all its operations r it. was too late • Share prices plwnrtleted causing a chain reaction asrne

. dominoef.fect led to rtms Ql1. banks tProughQut New York that appeared formont.hs.

There can be no doubt .tbat the massive contraction inthemoneysypplyoau$ed by tnovingexclusively ·tQ tlle Gqld· St::a:l:lda:cd, bad 5$t inm6tion the worse depression in history~

Whil€l someec0nQfnis.ts bave tried to QisputetheJi):n.gI)apression .p:Jint:l,ng to the· tlpticks in prices. and sboeks, ill general, if Look at . theF.concxnic;C()nf:i~~l, it peakectinFe9~Y'18[78.'.['h,e deCline mOved into 18BZ..This,. cbino:i.;cled now with the worst eC911o$fcCr$sh±ri.Eran.oe.The leading stock was l'Uitio:tl~~de that had risen frcm 500 francs in 1'879 to) ,.Q(,)O.l'h,e economtccrash continued intotb.e en.dof the decade. This' boom had GomeCl.t ·tne ., e~nse of Germany and the '(Jni.te,d.St~Ws. Just as capital bad moved into ,Jq;t?p£btthe Bubhlein 1 989, thesq.m.e took place whereas ca,pita.lfledAme:ricaan(l Germany to J3'I:an:Ce. 'l'pi$ieqtphardfe'elings whereas the :E'te.tt¢b:bl~dthe'Jewish""'German banksaI1d t:.he'Et'e.efuci.$ohs to "conspire "then a~itiStt:h.e' .cath,olics. ManyFrenchhrok¢J::'s Were wi~ out .. tnfact, Paul. Gallguin, the .famous painter,.. hq.d}::een a stock broker who lost his job ~9rCingh:i.rri to change careers and become. 9' pail1t::e1t.

The¢Qllapseof. the economic wave from

. thepea~ ih 1878" marked a sea~ch3,nge for tilis was me end otaPublic COnfidl:mce Wave and frorn1882 into t~29, we were lClC)ltingat thebirlh 9faJ?rivaf:eCdIlfidence waVe that is inherMi;lymore vblatile. Yet. what we

are looking at is tbeoollapse of confidence in government. This led to the widespread view that thedemonetiza.t.i()n df silvert:aking place during that wave,. cOlIb::-a:¢ted rnone=.¥ and crsated a dotn.inO""'e=.ffec.to~ oontraction .. This is why. we liave this gfeatf:X)litical battle with the Silver IJem:x::ranscmd the culmination of thisl:;eliefwithths 1896 presidenti,;;l.l Convention speectlbyW:Llliarn.Jerrmings Bryan, a.boutthoU shall.nbt c:1jjeifymankind ona cross o~ gOld.

The criticism of gove:rnment led to the. the B1and""AlJ,.:ison Aqt'of 1878 that now forced the Trea,suryt:o bl.lysilver at high prices. It was xeplacedlh 1890 by the S~ SilvexPm:'c.baire Act: that forced.adoublingih the value of si.lvera.t a ratio of 16: 1 to GOLD.

9

-------.~ .. -.------------~--

18a6

1951

2016

64.61 Year Gold Cycle

, .

irltrY;1ELgtb everrUiiderstand how to plot:. ··~·.overextended_periodS of 'l'IMErwe titus.f::t:eali;zet_hatWhat :l.SUp under a .Q)U) STANDARQ ;Ls.d()Vi'Il~j:la :6:'~rn.3.rket.,andWhat isdoWrlbecaffie the oppOSite - OP! When '$I.D" ismoney,it. rises in v~l]1$ crea:l;:ing1;:ne. . ~ttcN·tn ·everythingelse. Duril'lgpe:d<:x:is Ofpr$~13IVe )l,m:r.ATICN under a GOID$T~J thep1.l1:'Ch$$lI.n.9' ~werofGJI.D. declines • SO' Whet1WeeN6lJt.:l;Y1::0 charttnill or attempt to. coU}pt"clieuqcycJ,.ica,ltren¢ls, it can get very confusitig. .Y:ouhave to}{now; the mOneta_ty . history of . the periOd juSt to get things ¢or'+:,~ct in your head. Therefore,i:ih.ebes:l;:

W2J.yto .l09~at $Lt> is. f1:"Offi. a . cyclical view that re£l.ects''lURNING1?Qnus j_rrespective of whe.tfierit: is a hi911 O;r Jow.

T!;lisis thereasortwhy you have many analysts claiming we will see another ~t ,Cepression with massive DEE'tATIOO, Wt' cC)h OJjly~nunderthe current moneterry sYst@rn where . it "is the lX>I..IJffi thatistriotIe~t&

DePt GOpo,what t,peya.re sayingislliat the 'IX)L"LARshould rise, stocks collapse, and thatshouldt:ake CQrtirrlbditiesandGOt.Ddown ariClbheCCNE'IDliNCE in gover~tml;1$t thep rise~Once ¥()u1)llderstand it is the money' thatist:hg j_ssU$dict:at.ing the outcome of the e.ritire f4tJire\9conomically,you start

top 90rttprehend far' too many people 2l0nlt.have a blil~a? to w~t the hell they are saying. I realize tha_twpat !amsqyingmay seernto l::e di,ffic1l1t tb1.Jhd$r'stand causing some to clahll! am speaking intongues,]::)ut slap yourself In ti1e face until t.o wakeup and

smell .the )::O$6S.. .

what J.SIUClrJey':l§ the key to underst$hd+-, ing what we are deq;lin9with.So I have now prdvidedPbiu;;e'~zipdPhase B of the Gold . Cycle. T first PtlPlisned ba:d~ in 1979. If

we .1oOk-at .1?l1;:$e'Awesee i:hree main targets 1869-193"4,.., 1999..:Her.e.we have.thePanlc of 1869,t:he 1934cbnDisca.tiondfGQLDand the deval\:iatiortpfthe:qDllarrelative to GOlD, and then we have 1999 - the low in OOmp::ost~ 1980~ In a strict setiS<5l, the15ewere all key turning pq£ntsinrne mofie"taryhistbry.

. Pnase 13:p;tbv'idest8S.o, the high in

OOLD pd.¢essincewehave the 184S califorma. Gold Rush, 1851 AtiscraUartGQld RUSl1, 1886 Witwatersrand Gbld" Rush in $oUtl1,A.~tica,· and the 1898-99 .K,JondikeGoldRush,. thet915 mgh duringWqr:lcl W@I, and·the 1980 hignp:;>st- 1971 Floq:tihg.~<;i1q.ng~Rq.te System.' WE3ihave 1821 thatwa$.a h~gnf611ow:Lng the PaniC of 1819tba:twas the first. major financial crisi in-the USAwlth widespread regi ~s.tat€\ debt collapse and bank .failures.la86 was a drop in purChasing p::l',VerofWm for it was the single one-year :recovE!ry betweenecQnornic recessions at 1882'-'1885 and laST-18SS. 1951 was when the Feds.let the Federal Reserve

act freely abandoning the tna.nCiafory· ~upsort for Us Government Debt at par startirlg the. 86%. de¢J.ine in't:.h,E? va.lue oiDS bonds by 1981 • The next target j1lElts.O- happens to be 2016 that lines up· with a 17 .2, year rally in row prices from the 1999 hi$tod,c lo\« -"'c1ecline in t:l1eP}l£pbasipg: P?wer of .·the dbllar. W~n

we look atGQtl)j hgpeiully you are si;:artin,g to see, this is a very' Critical market to under.stand •.

10

TheGdt.Jj sTANOARDis no more the answer tbb)_tr6CQtlQmJ,C .. m~dblems·. tha11.' .Karlr4:rrx·~ i:r1SBne icleap'4 tqking all privat.e aS~,ets .

aWay t;r;OInthepeopleandhanding them overt

. to the p:iliticiaris. The GJID· Sl'ANDARO is awonderfullaea of utopia • However, it:ts

'no more plrq,ctiqal ·tha.'1Communisim.

Tli~pre$urnptiQn behind the ideas Qf bbtliMa:dctSlll /1:irlq th~'GQLDS'l'ANPlllIDis that. insomertrysi:erious Way, QUrtpliticia:nsare' honest 'rIlel1whowill alw.3.ys look after us as afai::1ier'p:cmoi:her caresalsout their child. l<eeplnmind,scme parents abuse their own childtenap,d!:ib 'trre like1ihqt,ci'. of use.ver fihditighOhe'st poll tlciahSis l,tke.eW9tingJusnceForAll.'l'hoseare wor~fbr schoolchlla.ren to pledge in school. They mean nothing t<J thoE]'e in fX)Wer ...

Wefu.yetd .~. prac;tical-to say-the least. •. We havet.b create a sysf:.erftthat in everypcissi1:>leway retains the liberty f()r the."pedpj_e~W$ Wil1 ... NE!VERhave. a Free Press tirti:i+we elldllIc.Um TAXES to stqPthe main threatsagaiPstP~lishers if . the.y dowt actirit;heapp:topriate Hpat:riotic~'marrner. we must adopt the full privileges oftlie l?resstdenSure they fulfill their vital :futl(:!t~Ql;l as B.. cheek agp_iU$tp:Jlitical911Q eXec~tLve.C:0rtt1ption* unlesspeopleqan t;ree1Y tal}c.tq th~ press 1 ,~··will P$Ve:t agaii1·KnOwSCartoals l:i,kewat~rgai:e.

'~"is not gold. It.isthe,ftill <and qornpletepr~B¢tive capaqityofthef)2bple tl:1a.t,oonstltllt!$ tbe nation. ·GbtJ)··is tlJ.~ . free ·~·.· • .9:gainst themisrilana;gement ,of ·the state~ .: It ··.i$,.·NQl'·.a ··~.a~t .. ;thf1atiOIl!. Ri<.:fhb now, we have Social Security rnade.ari ,qnnoUI1cernentthat since there is deflation. ar1qtp.~CJ?I Pasl;::een negative,th~e . will

be NCJ.cost.of living increase'. YetGC1flfhas maq~ne.Wl:tighs,! 'lfwe were. b:.,~lY IbQ@Ilgat:

OOLOasa. hed1eagainst inflatiQl1,til$rrit should have .declined, not riseh •. This.· is what,t .qm. ta1kinga:l:x:mt. It is .a . BEtx:;E again$t:.tbE;G;JVerl1!I\etlt anct:i;t~ pqlicies.and Dot merely 8, .. private a,sset;thcit g~$tlpand ' dbwnwith . itifla;tionas do hOU,s'es,.

that~:l§s12=i!r: :n~;r:~=~$~ i:h~

1i3.I1d 'of .liberty. If Govertlttleht:wei"et6t:i:'q to confiscate·· GbtDagain,tliis is .the sign: of tyrartny pysheer force. .CO·notthenfu sl.,lrprj_se~ if :tql1ks don't rpilab~ yb1.lr' ,s't:i:'eet.

'M.Cli!EYmustgtowwi thttieeC6Potny' and ther;:bpulation.'rherna$',.sive WIig-l)3presS±Qn that truly lasted for 26 years with the fttst :J,qw ,6SmQnthpf];"om the. high, Gqrnpared to we; (jreat E$pression, 43 monthse.~on6tUic~llyspeaki{lgl:34month $tQck:wa:tket,,'was causedbythte aeroo,netiZati6:n of.silverthat ,shrunk the mOney s~pply and constructively cqI),vEq'?edall debts to now OOLDloans .•

Th.~gtowthof $LO supPli~sc:~:nn,ot be bbttt:fdlied bymal1~Th,erefor$, .whatt06k: place during the late 18.00s i . wasarnas$ive wave ofdef1ation. If werettlrIledtq the GOtlJ" sr.t'ANDA.Ri:J today, then by fixing the price Of ~, priyate assetts must decline :for. if,.thesupply q~ ·money. canqat.g:t:oW, .. the Value of tnat rnoriey will 1:"'ise. ii'lp:tq::prtion l:oth totheeconomyand'J;:OJ,)1.lla;tion.Debt .i:l$comes virtually impossible to maintain fqrwbatever you borrow tcday, you will have 1:dtepay' Witil Illbrebf Yburl.:j:OO.rtqrnorrow .not less.

~. supplyshbUld eX:Pandwit.h the. economy and the population growth. This is ·Bl1e,.onJ.yway to allowth~ 9enet:alsooial $C9rlOmy ttl ,pecot(¥::: more.stgble., QUrPr'9bl§!'n with 'i:E1atlfclirrenciesas irtG$t'inan.ybr :i,n Colonial America, hasal'Way§r;.een,and with 11Qexceptibn whatsoever, the integrity of thel;Plli:,iC,ians .. 1'heYaJ:?8 whowecannqt tr4$twith'our futtt:t-e@d~STberestraJ_n~ 'for .'bhe., good oftl1epeople. .

. DEBr must be afulished pUblicl,y. We carm.ot continue to undermine our oWn future

·~ib~~~~¥:~cil~~dr~~i~lfo~:Xl~~~ar

.old to pay? ThE!t,isWhcltwe aredoihg~ {)tlr self .... intet'e$t' willr1,lin tb.$ $i:c.tti2!anQ put at risk generations to conflidb and war.

Sch()()l~5, t:t:'a$h. cC)~leqtion,things ,like this sho:tildbe private.1'l1.E\sti;lt:e .'caI;1 no more provide WeseServ:t¢esat:a.reasbtEble cost than at:erroristwill iIifbrrnthe JddS and women to leavefufore heltills hirtISelf. It .. is far cheaper' to provide.' sUbsidies for $e_ pear'~ it is to l:~}( eV?ltyO:ne St) high inptbperty taxe$$atpe,Qplecah J;1Qlbnger affordto:tetireihtl1e'hQUS$tb.eyraisE!d

their children fbrdecade.s. .'

We.are livingpn ,;:rcredit.c;;trclcm.d the .DElBI' will' gq intodefaglt· ~CCip.sed;f a lack. o buyers. This, is why GJLb ,Will saar as the rea 11 .IfElX;E against the state.

The£eft>tej·tirtder-standirtg the role that ~. has played throughout history is vital for we cannot comprehend the future without de:lineating the past. It has never been the OOLD STANDARD that gives rise or fall to sound money. It has been the politi.cians whO control the lS1lles.

Hopefully,youdan, see : what I amtalkingal:::out Inso-: far as even charting gold in the historicaL sense of time. and circurn:stances, presents .'. a challengingproblern for it depends upon whatr is HDIleY at the time ybu.arecharting the course of prices. If. it is gold that is roney, then . it· ~.·\oiith ~f1at:.iOIl.aIld

fall$Wit:h1r:tfUtt.iPri~Wb.¢» . .. .

gold. i~il£;ree·trorket,·then. it willdeclfn¢withde:fiaBonandr;i_sewith in£1atioP. Iuridet~ stand that myal.ldience is .ROW diverse and not justtl'temq.jor tita_ns Qf f;:heworld economy .

. Iamtrying not ,to . use complicated terms ahdtobring thisSubjectqown.. to ~th.When one speaksonly·t:qtfu?$~in his. own illdustpy, he skips a lotbecatise it is presumed to be the corefundamen.t:a1sthat need not .bEa. re~ted ". Ln the real world, not.,~ietional.-p?litical.eQ.?l}Ql!I¥, there'ares~things that are not saicl,l::eG$,J.1Se.everyoneunderstands them who. ate

students oftlle.field. It is lik.eeco11Onlic· sta.tist;.ips.Tl).epressoften.compar8.GDP of bne nation1:oC\no1:her~Theyfail to .• grasp the fact that every COutltry Iise$aCliffereIlttwist to. the fOrmti],a~ .It$1~er:fundaJrentalanalyS:i.s fails more often thari. not,becausewhatt:he people l~iIlgit ·fa:i1. to unqerstarld, istbJ;ll;t,he~r comparisons are starting from a point. o:f staUst,ies:,thatareOOgusandpolitiQally tnaniPtllatedto begin with~ The old golden rule

of analysis~Gc¢l:a~in'= GaringePUtl GQld i.:SOOOOl:ea hedge against inflation than I. amt:he ~i~tat;Camp Iavid.I arnat CanP.Fott..Di:x:a.ndGoldis a .lledge .. against rx>liti¢

IDismana~-· . . .

. GQDD:tS )\FREEMARl<m''l'HROUGHWHIUITHEWQW VCfPES . c»l .•. "Ftl'I'URE CbNFlDENCE

12

M 0"\ g co r- \0
0"\ 0'\' 0. '..- ~
a-. 0"\ 0. 0. 0 0
..- "r"'" N N N N orb isperha.ps' thefuOst impbrtantmarket, oiall. It willl:le 0tU:'guiding l±ghttoth~ nearf'llt.l1r~' for there lies a Very yrliqJ,l~, ~~t more>sq 'than, anyot:h$1" in011.],o.ing the stock and bond markets. This is a Fina.ncial CCxt:nOOity that is truly a ~I worldwide markets recogn:tzed in every country. This is the

only ~C?i"lawid~ma.rfiet thatperf'()f1I1$' a ti:higuei6leasa vote' ofg-lo~l confidence. The:DowJoI1es Industrii:Us can at t~R only reflect domestic concernswhei1" ihterriational,capital flees. But GQLDis the same thing in. all languas'es and alWays hasoeeh. Even if the USi:ried to confiscate OOID .and outl.9-VVit ina desperate rneasure to' retaitip:>wet',notmerely will they use 'tankS agaiDS.ttheir ' own people as they did during the summer of 1'932, just like Chim, but they cannot prevent its riseotitside,' 't:he unitE!Ci st:at;es ..

While gold eXceeded the $1,OdO level during 2008, it never-clbsed above 'that nurnl::ier""oo a monthly basis, untri.L no';;" in:.Septernber 2009. Weare'" seeing the sttp:t:le tvendchanges that I have beenp:>iutihgo'Ut th.attheDQ.w wotildmove countep..t;Cendtothe US$ because it would assume a Tole asa ddme~tiC 'hedge"'a.~instinflat.:i.on a.s it dlCi in 1932 'going il'lto 1937. The c()rrelat,iQl'l t:pt.h~ Ciollar,relative; to GOLD 'has a1,s6 l:~9Uhto blOOII1~

As we go· irito year~end,a clQse for December ABOWtbe' 2008 high of $1' i 033.90()tl. a:n;eg.r~stfutur~pasi~ . willsj_gn31 a,.V$::Ysqrongpqsture in . 2010 and w-esnotildrnovellP to test'£fie ,top of the BrimaryChan:nel' 11lustrat Qnpage 15.ThiE{ target will stand'at '

the 1.300-15001eye1£0201 O. Things ' wil.! p~ttoget,Wlitically'§el:'i;ol.lS if we startto'e~d this ~1& f 100 it t;>rovid~s ~upp:!rt thereafter.,

'lhe broad ~uPP9rt will now rise t:opri.marilythe $730 area withfJ;t;st, SUppOrt at $848.-875. The major ~~ppq+t, ' .• for the bullriiatket liesat$6U2-540 .. Only an annual closing back below this

"'aJ:ew()uidsi'~l a revers a! in trena~'

T~hnJ.C$;i$I;lPP(:>rt win. :qe.atthe $800 levelfb}? 20tO. Holdingthisw:\.lJ" keep the' bul1ishrnornentum in place. We should. seea. t<=IfipQl:'ary high in 2010-11 with. q_ retest.o:f SUPFOrt perhaps into 201 2.-13 witharaIIY'inro 2016.

13

:..::.~.

1960 NY Fedetal ReserVe Photo

There is still some central bank selling of gold. f1uch of what the US is doing is servicing the retail market itself with minting 1 ounce bullion coins. Europe is still selling gold reserves, but all of these sales are being absorbed. The interesting factor today compared to the 1980 rally is that where new mines were opening up and production was riSing, here we have production from the mines and even South Africa decliriing. So for those supply/demand fundamentalists, the supply is declining while the demand is rising, and there is scarcely enough GOLD to go around in a real major economic crisis.

For now, there appears to be monthly turning points due in November 2009 and April 2010. If OOLD were to make new highs after November, then we could expect a rally going into April 16th, 2010 or. so where we could reach a temporary top at the Prlinary Channel top. If we see a decline going into April, this could lead to a very explosive rally with a rally into Oc:tober 2010. It does appear that the BIG change in trend may be in October /Noember 201 0 with a 1 2 month trend thereafter. An Oct/Nov '1 0 low would point to an explosive rally for the following year & vice versa.

15