Saturday, April 10, 2010, in Phoenix, AZ, the Ludwig von Mises Institute will hold a seminar titled The Inflationary Path to Despotism.  As the title suggests, the seminar will deal with how the debasement...

Saturday, April 10, 2010, in Phoenix, AZ, the Ludwig von Mises Institute will hold a seminar titled The Inflationary Path to Despotism.  As the title suggests, the seminar will deal with how the debasement of a nation’s currency often leads to despotism.

With our fedgov now inflating the dollar at unprecedented rates, this event should be of interest to all gold and silver investors who live in the Phoenix area.

The seminar is smartly planned.  It will be short, with the welcome at 9:30 a.m. and the closing remarks at 2:00 p.m.  See the invitation below for more details and how to register.  Most registering is done online.

Despite it being a short seminar, five top speakers are on the schedule, including Charles Goyette, a former Phoenix radio talk show host and now New York Times bestselling author of The Dollar Meltdown.

Other speakers include Douglas French, who received his doctorate under the tutelage of Murray Rothbard. French is an authority on bubbles, as in the recent housing bubble that just about crashed the world’s financial system.

Thomas DiLorenzo has authored or co-authored ten books and is well known for his criticism of the myth that Roosevelt’s New Deal ended the Great Depression.  DiLorenzo is an economics professor at Loyola University.

Jeffrey Tucker is an authority on the works of Henry Hazlitt, one the 20^th century’s great economists and writers.  Tucker presently serves as the editorial vice president of the Mises Institute.

Robert Murphy earned his doctorate at NYU and today is a prominent voice for free market economics.  Murphy was once employed by Art Laffer, of the famous Laffer Curve.

I and most of the CMIGS brokers will be at the seminar.  We would love to see as many CMIGS client as possible there.  To encourage you to be there, CMIGS is buying breakfast for CMIGS clients who attend.

The breakfast will be in the Arctic Room at 7:00 a.m.  Starting that early, we should have ample time to discuss the metals markets and current events that affect the metals markets, such as inflation and fedgov mandated programs.

If you plan to join us for the breakfast, please call Shannon or Jenny at 602-234-2300 and let them know.  The restaurant needs to know how many to plan for.

The Mises invitation is below.  Note than online registration is available.

The Inflationary Path to Despotism (Mises Circle, Sponsored by James M. Rodney)

April 10, 2010
Phoenix, Arizona, Hilton Airport

Register Here (Students: see end of this page for Student Scholarship Application.)

From Ancient Rome through modern-day America, money inflation has been the means by which the state extracts wealth without recourse to taxation.

Such a monetary policy leads to gutting savings, punishing investment, and the launching of economic cycles and even soaring prices and banking disasters. But perhaps the greatest cost is in human liberty itself. The intellectual tragedy here is that few make the connection between the quality of money and the rise of despotism.

The prospect of hyperinflation in our future is the great horror that awaits us on the current path. It will not only mean death to the dollar but the rise of a ghastly statism.

This Mises Circle is devoted to exploring the relationship and providing a path toward permanent freedom. Admission is $85 per person and this includes lunch.  Through the generosity of James M. Rodney, each attendee will receive a complimentary copy of Henry Hazlitt’s The Inflation Crisis and How to Resolve It.

8:30 a.m.  Bookstore Opens and Registration Begins
9:30 a.m.  Welcome
9:45 a.m. “Inflation’s War on the Free Market” Douglas E. French
10:15 a.m.”War and Inflation: Financing the Empire” Thomas DiLorenzo
10:45 a.m.  Discussion and refreshments,  Bookstore Open
11:00 a.m. “The Cultural Upheaval of Loose Money” Jeffrey Tucker
11:30 a.m. “How Bernanke Is Using the Printing Press to Win Friends and Influence People” Robert Murphy
Noon          Lunch, Bookstore Open
1:15 p.m. “The Command Economy: Surging Forward into the Past” Charles Goyette
2:00 p.m.   Closing Remarks
3:00 p.m.   Bookstore Closes

James W. Fogal CFP®, Director of Development for the Institute, is available during breaks and after adjournment to discuss charitable/tax saving strategies.

Location: Grand Ballroom of Hilton Phoenix Airport.   Accommodations: call 480-894-1600 before March 19 and mention Mises Institute for a rate of $139 per night single or double, plus tax.  .

Scholarships for full-time students are available.  To apply, open the student scholarship form with Adobe Acrobat and save the completed form in pdf on your computer.  Email the saved file plus a copy of your student ID, or fax to 734-448-8148.

Questions?  Call 334-321-2100 or email.

Many Americans are buying gold and silver as hedges against a feared decline in the value of the dollar.  Considering that the current fedgov fiscal year deficit is forecast at $1.75 trillion, buying...

Many Americans are buying gold and silver as hedges against a feared decline in the value of the dollar.  Considering that the current fedgov fiscal year deficit is forecast at $1.75 trillion, buying the metals seems a prudent move as a devastating decline in the dollar is almost a certainty.

But, too many Americans do not realize that inflation often brings more losses than declines in the purchasing power of currencies.  Perhaps the greatest cost is in human liberty itself, and too many people are unaware of the connection between a decline in the quality of money and the rise of despotism.

The Ludwig von Mises Institute is spearheading the efforts to educate people to what the future holds if inflation is not halted. Not only are we set to see a decline in the value of the dollar but also a loss of our liberties.

One-day Phoenix Seminar

On April 10, 2010, the Institute will present a one-day seminar in Phoenix, AZ.  It is titled The Inflationary Path to Despotism.  The seminar is smartly planned.

Registration is 8:30 a.m. to 9:30 a.m., at which time a 15 minute welcome is given.   Then five speakers are allotted 30 minutes each.  (Actually, Charles Goyette a former local Libertarian talk show host and author of The New York Times bestseller The Dollar Meltdown will speak for 45 minutes.  See the Mises Institute invitation below for the details.)  Registration is online.  Follow the link in the invitation below to register.

Free Breakfast

I’ve already registered, and CMI Gold & Silver Inc. clients who plan to attend the seminar are invited to join me for a free breakfast the morning of the seminar.  At this time, no program is planned for the breakfast, but undoubtedly there will be great conversation about the metals markets and the country’s current state of affairs.

If you will be taking me up on the free breakfast, please call CMIGS’ office and ask for Shannon or Jenny.  They will be keeping track of how many will be joining me.  Local number is 602-234-2300.

As the invitation notes, “You will profit intellectually and otherwise from the meeting.”  Of that I am certain. Gold and silver investors will be doubly rewarded. Please register and be there.  Only at a Mises Circle event do you get the opportunity to hear such esteemed members of the Austrian School.

The Inflationary Path to Despotism (Mises Circle, Sponsored by James M. Rodney)

April 10, 2010
Phoenix, Arizona, Hilton Airport

Register Here (Students: see end of this page for Student Scholarship Application.)

From Ancient Rome through modern-day America, money inflation has been the means by which the state extracts wealth without recourse to taxation.

Such a monetary policy leads to gutting savings, punishing investment, and the launching of economic cycles and even soaring prices and banking disasters. But perhaps the greatest cost is in human liberty itself. The intellectual tragedy here is that few make the connection between the quality of money and the rise of despotism.

The prospect of hyperinflation in our future is the great horror that awaits us on the current path. It will not only mean death to the dollar but the rise of a ghastly statism.

This Mises Circle is devoted to exploring the relationship and providing a path toward permanent freedom. Admission is $85 per person and this includes lunch.  Through the generosity of James M. Rodney, each attendee will receive a complimentary copy of Henry Hazlitt’s The Inflation Crisis and How to Resolve It.

8:30 a.m.  Bookstore Opens and Registration Begins
9:30 a.m.  Welcome
9:45 a.m. “Inflation’s War on the Free Market” Douglas E. French
10:15 a.m.”War and Inflation: Financing the Empire” Thomas DiLorenzo
10:45 a.m.  Discussion and refreshments,  Bookstore Open
11:00 a.m. “The Cultural Upheaval of Loose Money” Jeffrey Tucker
11:30 a.m. “How Bernanke Is Using the Printing Press to Win Friends and Influence People” Robert Murphy
Noon          Lunch, Bookstore Open
1:15 p.m. “The Command Economy: Surging Forward into the Past” Charles Goyette
2:00 p.m.   Closing Remarks
3:00 p.m.   Bookstore Closes

James W. Fogal CFP®, Director of Development for the Institute, is available during breaks and after adjournment to discuss charitable/tax saving strategies.

Location: Grand Ballroom of Hilton Phoenix Airport.   Accommodations: call 480-894-1600 before March 19 and mention Mises Institute for a rate of $139 per night single or double, plus tax.  .

Scholarships for full-time students are available.  To apply, open the student scholarship form with Adobe Acrobat and save the completed form in pdf on your computer.  Email the saved file plus a copy of your student ID, or fax to 734-448-8148.

Questions?  Call 334-321-2100 or email.

 The World Gold Council recently updated its World Official Gold Holdings, as of March 2010.  These are the data that everyone cites when talking about “official” gold holdings.  The report raises...

 The World Gold Council recently updated its World Official Gold Holdings, as of March 2010.  These are the data that everyone cites when talking about “official” gold holdings.  The report raises interesting issues, all of which are bullish for gold, especially the central bank activity in the gold market.

First, China admitted to “long-term purchases” of gold. In April, China’s central bank, the People’s Bank of China, revealed that it had bought 454 tons since 2003. As a result of the purchases, all of which are believed to have come from domestic sources, China now officially owns gold reserves of 1,054 tons and is number five on the World Official Gold Holdings list.

Meanwhile, Russia’s central bank continued to accumulate gold, also primarily by purchasing gold in its domestic market.  Purchases accelerated in the second half of 2009 when Russia’s gold reserves increased by 87.1 tons, versus 30.6 tons purchased in the first six months.  For the year, Russia’s gold reserves increased 22%, to end the year at to 641.5 tons, which now puts Russia in the 9th slot in the table of World Official Gold Holdings.

Of course, the really big news in the gold market in 2009 was India’s central bank purchase of 200 tons from the IMF in an off-market transaction.  Additionally (and generally overlooked), in two other off-market transactions Sri Lanka bought 12 tons and tiny Mauritius bought 2 tons.

When the IMF announced in February last year it was going to sell 403.3 tons of gold, it agreed to do so under the Central Bank Gold Agreement (CBGA), an agreement(s) under which European central banks have been selling gold in coordinated efforts so as not to disrupt the gold market.  However, when India stepped forward, before the IMF could go to the market, half the gold the IMF intended to sell over a five-year period was gone.  Now, there is speculation that the remaining gold will also be sold off-market and not under CBGA.  The IMF has said that it plans to the sell remaining the gold “in a transparent manner.”

Regardless of how the remaining 191.3 tons are sold, the gold market is prepared to handle it.  Monthly CBGA sales slowed rapidly in 2009 and by September had all but dried up.   In December 2009, CBGA sales of only 1.61 tons were reported, compared with sales of almost 43 tons in December 2008.

What is now happening in the gold market is a far cry from the 1990s when the first CBGA was announced.  Then gold was in a bear market and headlines of proposed central bank gold sales (and speculation of IMF sales) roiled the markets.  Now, IMF gold sales only bring speculation as to which central banks will be the buyers.  From day one, I’ve said that IMF gold sales would not deter this bull market.  IMF gold sales are only feeding a voracious demand.

Although none of the three credit rating agencies have yet downgraded US debt, all have issued threats that they may do so if the US does not get its financial house in order.  The chances of the US getting...

Although none of the three credit rating agencies have yet downgraded US debt, all have issued threats that they may do so if the US does not get its financial house in order.  The chances of the US getting its “financial house in order” are not good.

Consider these headlines across the country: “Social Security IOUs due, Retirement program faces $29 billion shortfall in 2010.”  This, of course, is on top of all the money being spent to “stimulate the economy,” to fight two wars and to extend unemployment benefits.

For decades, workers poured money into the Social Security Trust (sic) Fund, creating a “surplus,” a surplus defined as SS tax receipts in excess of expenditures.  No actuarial planning was done, based on the life expectancy of the members of the plan, as would have been the case had the SS fund been a private annuity plan.  So, seeing all those dollars pile up, our representatives in Washington liberalized benefits and added to the rolls as they sought to buy votes, creating still greater liabilities for the SS Fund.  But, that was not the really bad news.

Despite the liberalizing of benefits, the baby boomers’ taxes poured into SS coffers, creating a trust (sic) fund that officially stands at $2.5 trillion.  However, the $2.5 trillion does not really exist.  Congress spent the money and issued non-salable IOUs that can be redeemed only via Congressional action.

The SS Administration cannot simply sell their bonds as can a bank that has purchased US Treasuries.  So, this year Congress will have to take action for the SS Administration to come up the $29 billion shortfall.  As presently calculated, the Trust Fund will be emptied in 2037, unless benefits are reduced and/or SS taxes are increased.

The dire straits of Social Security have been known for decades.  Yet nothing was done.  So, how is it that the three credit rating agencies can say (unless tongue in cheek) that the US needs to get its financial house in order and expect anything to happen?

According to the Financial Times, investors “remain unconcerned that the US (debt) will be downgraded . . .” because the US economy remains the world’s largest and the dollar remains the world’s reserve currency.  “This is important as it means central banks and investors will still need to buy its debt.”

Two thoughts arise when considering how blithely people dismiss the current state of financial affairs in the US.  One, few Americans realize that our financial systems is nothing but a house of cards, which means they are really vulnerable to its fall.

Two, the supposedly informed people know how bad things are, but they want to keep the uninformed in the dark as long as possible because the longer the uninformed are kept in the dark the easier it for the informed to protect themselves (buy gold and silver at low prices).

I suspect the informed are quietly buying gold and silver while denigrating those who do.  When the collapse starts for real, it will be very difficult to move into the metals.  Investors who bought precious metals in the wake of the financial crisis of 2008 experienced just how hard it was to get gold or silver in any form.  It is much better to repair the roof before the rain starts.

A recent Financial Times noted that the proposed overhaul of US financial rules threatens the credit ratings of Bank of America and Citibank.  Standard & Poor’s, one of the world’s top two credit...

A recent Financial Times noted that the proposed overhaul of US financial rules threatens the credit ratings of Bank of America and Citibank.  Standard & Poor’s, one of the world’s top two credit rating agencies, says that as proposed, the rules would make it less likely that the banks would be bailed out by taxpayers if the bank ran into trouble again.

BofA and Citibank are two of the world’s largest lenders.  If their credit ratings go down, their costs of borrowing will go up, resulting in higher costs for borrowers.  Looks like another barrier to a quick turnaround in the world’s economy.

Meanwhile, Moody’s, the other premier credit rating agency, warned early this month, again according to the Financial Times, that “the triple A sovereign credit rating of the US would come under pressure unless economic growth was more robust than expected or tighter action was taken to tackle the country’s budget deficit.”

The Obama administration’s proposed budget for 2010 forecasts a deficit of $1,565 billion ($1.565 trillion), which is 10.6% of projected gross domestic product, the highest ratio of debt to GDP since WWII.  Even more alarming, projections of the overall debt-to-GDP ratio for the US are seen as rising from 53% in 2009 to 73% in 2015 and 77% by 2020.

Still, Moody’s says this understates the overall US debt level.
“Using the general government measure, including state and local governments as well as the federal government, which is used internationally, this ratio would be over 100 percent in 2020.”

Ironically, a few days ago gold’s sharp price decline was attributed to money pouring into dollars because of concerns of how Greece’s financial problems would impact the European Union and its currency, the euro.  It appears that scared money moved from the weak to the less weak.