Discount Gold and Silver Trading
A Weekly Newsletter for Sunday, April 15th, A.D. 2012
  Between Friday, April 6th, and Friday, April 13th, the bid prices for:

Gold rose 1.7 % from $1,631.10 to $1,658.50
Silver fell 0.7 % from $31.71 to $31.50
Platinum fell 0.7 % from $1,592 to $1,581
Palladium rose 0.5 % from $639 to $642
DJIA fell 1.9 % from 13,060.14 to 12,801.31
NASDAQ fell 2.0 % from 3,080.50 to 3,017.31
NYSE fell 2.0 % from 8,081.34 to 7,916.55
US Dollar Index rose 0.1 % from 79.94 to 80.06
Crude Oil rose 0.0 % from $102.02 to $102.06

Early last week Gold has shown signs of at least a little strength for the time being as it apparently seems to like the $1650 area.  Investor sentiment for precious metals has eased as the financial concerns have softened here in the states but the European debt crisis remains in the forefront.  Investors seem to be oblivious to the dangers of our situation with the economy and U.S. Dollar.  So we wait for bullion business to pick back up again once the next financial crisis emerges and it will and very soon.

Premiums over melt value for vintage U.S. Gold Type remain at historically low levels.  So examples are the MS63 $20 Liberty and the MS64 $20 Liberty in which their premiums were well over the double the price of gold only three years ago.

The ultra-high grades and rarities are a different market as they continue to do well at auctions resulting in higher prices.  For the next two weeks there are coin shows in Illinois and Michigan.

Once the next financial crisis emerges which will happen before long…it is a great time to take advantage of the $20 Gold Pieces.  If you are looking for something a little more rare…give us a call as we recently picked up some MS67 St. Gaudens and they are just beautiful.

Remember we have 90% Silver for full and half bags at spot…for smaller purchases you are only paying a few cents over spot price. 

BUY LOW/SELL HIGH   Now is the time.

EU: The Big Lie

Edited by Alfred Adask

The BBC recently published “Eurozone crisis: Fear returns” in which they reported:
Just a few weeks ago the head of the IMF, Christine Lagarde, looked at Greece and declared ‘economic spring is in the air’.  Others were equally optimistic.  French President, Nicolas Sarkozy, said ‘The financial crisis is turning. Today the problem is solved.’  The President of the European Council, Herman Van Rompuy, was equally upbeat when he said ‘the turning point in the crisis has been reached.’  The EU's Economics Commissioner Olli Rehn chimed in with ‘the risk of explosion is behind us’.

“Today, such bursts of optimism seem foolishly premature. The eurozone is once again rattling financial markets.” 
Did these officials really express honest “optimism” or did they tell lies intended to create unwarranted public confidence?
Has the EU reached a point where governmental cheerleading (lies) no longer inspires the public confidence? 

The “optimistic” EU officials were either lying or grossly incompetent.   If they understood how fragile the EU economy was when they recently feigned optimism, they were lying.  On the other hand, if those officials truly believed “happy days are here again” a few weeks ago, but the economy is now again in peril, those officials must’ve been too incompetent to see the forest for the trees. 

I doubt that they were incompetent.  Like most, I believe their recent “optimism” was merely a pack of lies.

Economies based on unwarranted public confidence rather than objective reality (truth) are increasingly understood to be based on lies.  Today, insofar as the public accepts the government’s lies at all, that acceptance is temporary and the people are quickly pulled back to reality.  We appear to be approaching a moment when the truth will assert itself, and all the kings’ horses and all the kings’ lies won’t be able to resist that truth or maintain the illusion of stability.  The world’s governments may be about run out of their most important product:  bulls**t.

The BBC continued,
“And that brings us back to the fear that stalked Europe for so much of last year. If Spain and Italy get into trouble how will they be bailed out? The main rescue fund—the so-called firewall—has been strengthened, but it is not big enough to rescue such big economies as Italy and Spain.” 
I.e., there’s not enough money available to bail out a major EU country—but several such countries are in peril.

•  The Financial Times reports (“Spain and EU reject talk of bailout”) that,
“Spanish ministers and European Union officials took turns on Tuesday to deny that Spain needed an international bailout, in an effort to soothe the bond market.” 
How did they try to “soothe” the bond market?  With lies.  They know they don’t have enough currency to bail out Spain so—in order to shore up false public confidence—they deny that Spain needs a bailout. 

But how long can any market be “soothed” with lies?  Must there be a moment when the truth becomes inescapable and the lies fail? 

Governments seemingly say No—their lies can be effective indefinitely. 

Those who own gold and silver disagree.  They’re betting on (investing in) the principle that the truth must ultimately prevail.  If that principle is borne out in the EU, that same principle must also apply in the US—which has financial problems even greater than those of the EU.  Of course, the US has been able to seemingly avoid its financial problems because the US fiat dollar is (or at least, has been) the “world reserve currency”.  But as the world moves away from relying on the paper dollar, the fiat dollar’s capacity to shield the US from financial truth is failing.
“Luis de Guindos, Spain’s economy minister, ruled out a bailout of the kind already provided to Greece, Ireland and Portugal by the EU and the International Monetary Fund, saying Spain ‘does not need a rescue at this time’.” 
Spain is at that awkward stage:  Too big to be bailed out, but not “too big to fail”. 

The EU doesn’t want to admit that it’s too weak or poor to save Spain.  Spain doesn’t want to admit it needs to be saved—but can’t save itself.  If a bailout is impossible, the EU and Spain are still doing all they can to maintain public confidence in order to buy time.  Spain will hold together so long as the Spanish people accept their government’s lies and retain confidence in Spain’s economy.  But if the public rejects the lies, Spain may fall into recession, depression or political chaos.

(Note that Spain’s recent prosperity has been largely dependent on Spain’s access to credit rather than Spain’s actual productivity.  Prosperity based on credit (rather than productivity) is an illusion that must ultimately collapse under the weight of truth.)
Elected in November, Spain’s centre-right government of Mariano Rajoy had hoped that its economic and financial reforms would soothe the markets, especially when combined with the €1 trillion in extra liquidity doled out to eurozone banks by the ECB's longer-term refinancing operations.” 
EU governments are more determined to “soothe the markets” than “soothe the people.”  But the “markets” are nothing more than indicators of the people’s moods, values and productivity.  The people are primary; the markets are secondary or “derivative”.  And yet, EU governments are determined to “soothe” the secondary markets rather than the primary people

Market manipulation is similar to claiming to warm a house by holding a match under a thermometer.  If the temperature on the thermometer rises, the house must be warmer, right? 

Wrong.  Manipulating the indicators does not alter the reality.  Manipulation only alters the public’s perceptions—and only temporarily.  Modern governments are based on the premise that primary reality can be altered by controlling the secondary indicators.  Manipulations of the prices of gold and silver are classic illustrations.  Governments believe they can control the people by injecting lies into the markets.

But heating the thermometer to create the illusion that the house is warm is a lie.

Is the modern governments’ determination to “sooth” markets rather than people evidence of governmental stupidity?  Or have governments been warming (or cooling) the “thermometer” for so long that they’ve become incapable of actually heating or cooling the house?   If EU governments lose their ability to manipulate the markets (and the people no longer believe that their homes are warmer because the government-controlled thermometer says so), those governments will have nothing left to “soothe” the people.  Then the people tend to riot or revolt.
"It's very disheartening for Spaniards," said one senior official in the Popular party government.  Another said: "We inherited a financial deficit and a deficit of credibility. . . Obviously, we would like there to have been a greater restoration of credibility than there has been." 
Here, we see evidence of the government’s mindset.  From government’s perspective, the problem is not productivity; it’s credibility (public confidence in governmental lies).  Government still believes that if it can restore public confidence in its lies, the economy will work just fine. 

Those who invest in gold disagree.  They think that the system is ultimately based on objective reality (truth) rather than appearance.  While appearances and illusions of prosperity may keep people happy for a while, eventually the people will demand the right to eat an actual steak rather than settle for the “appearance” of a steak.  Governments that can’t provide an actual steak may be overthrown.
Investors have long criticised the lack of budget discipline in several of Spain's autonomous regions, and questioned the government's ability to restore fiscal order.” 
From gov-co’s perspective, why do we need “budget discipline” if gov-co can spin currency out of thin air?  Why worry about “fiscal order” in an economy that depends only on subjective public confidence rather than objective reality?  Why rely on the expensive truth when lies have been so cheap, plentiful and effective? 

A:  Because sooner or later the cheap lies fail and people are left to starve until they rediscover the truth.
“Now they are also worried about the need to recapitalise former savings banks crippled by bad property loans.” 
The idea of recapitalization suggests several questions:  Can fiat currency ever truly be deemed “capital”?  If not, can you truly “recapitalize” a bank with intrinsically-worthless fiat currency?  Does real “recapitalization” require real money (gold or silver)?  If a bank is “capitalized” with fiat currency, is that bank “capitalized” with lies?  Can anyone truly be a “capitalist” who believes a fiat currency is capital?  Is the capitalist system failing because it’s inherently corrupt—or because there’s no longer any real capital (gold/silver) in circulation? 

•  The heart of all modern, Keynesian economies is the illusion that a fiat currency made and controlled by government is not only sufficient to run an economy, but is superior to real money (capital) like gold or silver.  All of the governments’ other lies and illusions are ultimately based on the “one big lie” that a man who sells his tangible labor or tangible property can be actually “paid” with a fiat currency that has no intrinsic value.  

With fiat currency, the 1st person selling is not actually paid by the 2nd person buying.  Instead, the 2nd person buying hands the 1st seller some coupons (fiat currency) that can be later “redeemed” by some 3rd party who will provide “payment” in the form of the 3rd party’s tangible labor or property to the 1st party in return for the 2nd party’s fiat currency.

I apologize if that description sounds incomprehensible.  The concept of real “payment” is hard to understand and hard to explain.  Let me try to illustrate.

Suppose I (1st party seller) sold some of my tangible labor (part of my life) or my tangible property (say, an automobile) to you (2nd party buyer), and you “paid” me with a stack of intrinsically-worthless paper dollars.  Have I actually been paid? 


I have not been paid for my tangible labor or property until I’ve received an equivalent quantity of tangible labor or property.  If I’ve sold a 2,000-pound automobile to you, and you’ve only given me some pieces of paper in return, I have not been paid.   At best, I’ve only received a promise to pay--it’s not even your promise. 

Instead, it’s up to me to make good on your implied promise to pay me by finding some other (greater) fool (3rd party seller) who will accept the intrinsically-worthless pieces of paper you gave me as “payment” for his (3rd party’s) tangible labor or property.  Thus, when I accept your pieces of paper as in return for my tangible property, I’m betting that I can find some 3rd party willing to make good on your debt by giving me some of his tangible labor or property in return for the intrinsically-worthless pieces of paper I received from you.

Will I “pay” the 3rd party seller by exchanging my tangible labor or property for his?  No.  I’ll merely give him the intrinsically-worthless pieces of paper I received from you, which he can later trade to a 4th fool who’ll give the 3rd party tangible labor or products in return for worthless paper.

Thus, your debt to me will be paid with the tangible labor or property of some 3rd party, and my debt to the 3rd party will be paid by the tangible labor or property of the 4th party, etc..  In a fiat monetary system, the actual buyer in a particular transaction never really “pays” his debts by exchanging his own tangible labor or property for the seller’s tangible labor or property.  This contrasts with a gold/silver-based monetary system where the seller’s tangible labor or property (may car) is instantly exchanged for the buyer’s tangible labor or property (your gold or silver coins). 

On the face of it, we might accept the fiat monetary system.  Does it really matter if I (the 1st party seller) am not “paid” by my 2nd party buyer, so long as I am later “paid” by receiving the tangible labor or property of some 3rd party seller? 

Maybe not, but there’s a problem:  the original 1st party (the government) that first spends a fiat currency never has to actually pay the associated debt by providing tangible labor or property to original 2nd party seller.  The 2nd, 3rd, 4th and 5,000th parties are all paying someone else’s debt with their tangible labor or property.  But the original 1st party who first spends the fiat currency into circulation never actually pays anything tangible in return for whatever government purchased.  With a fiat currency, the government’s only tangible “payment” is the cost of paper and ink required to create the fiat currency.

With a currency backed by gold and silver, the government (the original 1st party buyer) actually pays its debts by redeeming its pieces of paper with tangible gold and silver.  With a fiat currency, the gov-co never truly pays by providing tangible labor or products in return for the tangible products that it buys.  Thus, freed by fiat currency from the need to actually pay its debts, the original 1st party (the gov-co) could grow infinitely large and wealthy. 

Fiat currency is conducive to big government and a police state.

Here’s another problem:  What happens when we reach the “last party”?  Apparently, the original 1st party (government) never actually pays but all of the intermediate parties do pay (eventually)—but what happens to the “last party” who accepts a fiat currency in trade for his tangible labor or tangible property, and then discovers that there are no more fools willing to redeem that fiat currency with their own tangible labor or property? 

In the same sense that the original 1st party never actually pays its debts with tangible labor or property, the last party is never actually paid by receiving tangible labor or property.  By definition, the very last party in the fiat currency “chain” can never be paid with tangible labor and property for his fiat currency.  Sounds like a Ponzi scheme, doesn’t it? 

Fiat currency is conducive to an economic collapse.

•   Modern, Keynesian economies are built on the premise that the people can be indefinitely deceived into believing that a fiat currency is a “payment” every bit as good as gold (real money).  But history has shown repeatedly that fiat currency is a lie that will inevitably fail and collapse the economies of nations that believe that lie.  Even so, modern governments have painted themselves so far into the fiat currency “corner” that they have no choice but to continue to advocate—and perhaps even enforce--the lies built on fiat currency. 

Anyone who wants liberty restored to the EU or The United States of America should begin by eliminating fiat currency and restoring a gold- and silver-based monetary system.  It’s hard for Americans to understand, but Ron Paul’s attacks on the Federal Reserve and fiat dollars are on the right track.

For the best in pricing and service for gold and silver coins, call Melody at 1-800-375-4188. Be sure to listen to DGSTC live on Short-wave 7.415Mhz M-F 4:00PM ET, and 3.215 MHz M-F 11PM ET.

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Discount Gold & Silver Trading Co. provides all forms of precious metals including gold, silver platinum and palladium whether you are buying or selling. Our inventory includes but not limited to the American Gold, Silver, Platinum Eagle and numismatic products including rare, investment and circulated coins. Silver dollars, silver bars, rounds are on hand for the silver investor. Foreign gold is also available. Call for information regarding your precious metal gold and silver IRA. 1-800-375-4188

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Discount Gold and Silver Trading, PO Box 507, Port Matilda, PA 16870 · 1-800-375-4188