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A letter to my friends. From
Boris
October 10, 2008
The ignorant over-educated bean
counting central bank economy experts were, and are still wrong. What they are
learning at their liberal universities about finance is not the field of
economics, but the field of political policy, and what they believe the effects
of government control over the real economy will be.
Real economics, as
distilled in the classic school, also known to some people as the Austrian
School, postulates that every government interference in the real economy will
result in the opposite being achieved. It postulates that the real economy
survives in spite of government controls, not because of it.
One
could argue that the fancy titles some "economists" and "financiers" have, are
not that at all, but are degrees of high specialization in corporate governance,
methodology,and intra and inter corporate transactions based on the national, or
now global regulatory climate at the time. That their understanding is
restricted and biased to the belief that the regulatory zeitgeist of centrally
controlled economies is effective in its control. It is withing this
bubble of understanding that they see the economy and the markets.
It is
these "experts" who have missed the present trend, while people who have a basic
understanding of classic economics have been predicting the currently unfolding
events with incredible detail for a very long time. Two of the concepts of
economics which have been studied and dissected the most, are the basic concepts
of inflation, and credit expansion. Within the context of a
controlled economy, inflation is the injecting in the market of more fiat
currency, particularly in large amounts; and credit expansion is a relaxing of
lending norms above the needs of the market. Both of these result in
over-investments in sectors of the economy in which they are not needed. This
trends must eventually crash, many times bringing the whole economy with it.
Over the last years the result of central bank inflation and credit
expansion has been the mal-investment in the housing and mortgage financing
derivatives industry. The particularly scary part of the present crash, is not
that the central banks and their bean counters at the top seem to not only have
let it happen, but in all their elite glory, to have engineered it. It is to
each of us to either believe that theory, or not. But, we are seeing a
consolidation of financial power and a transfer of wealth from the "people" to
the bankers via the bail outs through currency diluting inflation. An easy
way to visualize this is to imagine the central bank producing wine, and then
adding water to it to give a share to the bankers. The bankers keep their
share at the cost of the dilution of the rest of the wine on the
table.
The "bail outs" were forced to pass by the strong arm tactics of
central bankers and their friends around the world. In the US, thus far
non-controversial congressmen have commented on the record to have been told
that unless the bail out bill passed they would wake up to martial law the next
morning. Surprising? No. Shocking? Yes. It is this bail
out with its accompanying 500 pages of regulations and trillion dollars worth
of free money to the connected bankers -which will surely again be
mal-invested- and will restrict credit to the other real and productive parts of
the economy, and the ensuing inflation that guarantee that this will not be a
mere recession, but a deep and long lasting depression.
There is a
lesson and silver lining in all of this; people are learning about the dangers
of central banking and fiat currencies, they are learning that the only
economies that work have been those based on solid metal backed currencies, they
are learning that for a hundred years while the US had no private central bank,
there was the longest period of growth, economic prosperity and near zero
inflation.
Perhaps this will be the driving force the US and the
world need to get rid of the privately owned central banks and the shills at the
government doing their bidding, returning the money making power to the
government as the constitution dictates. Perhaps now is the time to
legalize competition from private currencies that would most likely be back by
gold.
If you start hearing calls for a Canada-US-Mexico currency,
or calls for a global currency, run don't walk to gold. They would first
crash all currencies, then have you start from zero.
Below I have
included a few emails I have sent to my friends over the last year making the
case for gold. I recommend that you read them, as the advise still
holds as strong as ever. The fiat currencies are being diluted now more
than we had imagined they could, the markets are getting new regulations daily
and being ham stringed. From my point of view we are not near the bottom of the
markets, and there will be no upward correction in the next few years
-accounting for inflation-. So, make sure to take your losses in at least a
portion of your portfolio, buy physical gold you can hold and hide, and in the
next few years when you start reading about the raising standards of living in
the Asian countries, you cash your value holding gold and sent it east to work
for you.
Best wishes to all of you,
Boris
Morales
786 486 4446
January 14,
2008
Gold! Why? Because people are just
beginning to get pessimistic about the economy and because prospects for any
bail out would cause greater inflation which could get much worse before it
turns into deflation or more correctly stagflation, because it is super cool to
hold gold in your hands and know it is yours, and because even at
an all time high price of $895 it is still much cheaper than the price of
gold on 1980 which was about $850.00 which adjusted for inflation
would be about $2150.00 in today's dollars giving it quite a bit of room
to grow.
If you are investing for the long term nothing beats
gold, specially as a diversifying asset. With the risk of a
world wide recession gold makes for a nice alternative to the stock
markets which would be very difficult to predict right now as there is no upward
trend for any particular segment.
Third world countries are opening
their economies more every day and their standards of living will over the long
term catch up to the lowering standards of Americans as they compete with a more
liberal -free- agenda and America is stuck in its highly mortgaged economic and
political scene.
Just imagine the hundreds of millions of Chinese,
Indian and Brazilian people who will reach middle class status and will want to
buy gold the finite resource.
And mostly I
recommended gold because a return to fundamental economic
philosophies is bringing gold back to the forefront. The
internet is allowing many people to learn about solid and fundamental economic
theory and all those people want to have gold as part of their
portfolio of investments. Unbacked paper money which is mostly a new phenomenon
is being exposed at a rapid pace through cyberspace as being worth no more than
the faith traders put into it.
I guarantee you a quickly changing
market over the next four years in all markets, so why not invest in
gold our old friend in times of uncertainty?
Boris
Morales
_______________________
June 27,
2008
Here is a quick letter to remind you that real inflation
is eating away liquid assets, and that there are no fundamentals to reinvigorate
the stock market in the near future. Many people are investing their assets on
dividend paying foreign markets to avoid the American collapse, but as you know;
when America catches the flu everyone sneezes. Which brings me to my
point:
Financially it has always made sense to keep at least 5 to 10
percent of one's portfolio in metals. To me, that advice is today as timely as
ever. Last we spoke you told me that you had decided not to short the
metals, and now it seems that it was a very smart decision. Even under attack by
the IMF, gold has had a substantial jump up.
All the
fundamentals seem to be aligning in favor of gold; loss of
credibility in the dollar, hyper inflation, historically expensive commodities,
limited production, today's gold price is about 45% of its highest
price ever if measured on inflation adjusted dollars, markets around the world
are settling for what appears to be a long rest, and real estate is still
historically overpriced.
To understand the risks associated with
gold we must understand that the main danger to its price continues
to be mass sale of it by government bodies such as the World Bank. But
with central banks printing as much bail out money as they are, much of that
money will go to absorb those sales; New money has few places it can go to now.
With historical prices as indicators, and inflation cranked up to high,
metal prices don't have much downward space to go to (limiting risk), and at
least 50% space to go higher (based on max historical price in dollars adjusted
for inflation). If I'm wrong and the economy recovers quickly, losses on
the basic metals will be limited. If the analysis above is right price of
gold will go up substantially and help shore up some of the losses
in other sectors of your portfolio.
Consider this email just a gentle
reminder to keep some metals in your portfolio.
Your
friend,
Boris Morales
786 486 4446
_______________________
August
25, 2008
Friends, the physical market
_______________________
August 28,
2008
The Case for
Gold
By Boris Morales
Miami.
FL
Gold has served us well for over 6000 years, during which
we have been able to thoroughly assess its reaction to financial and general
world events. The lessons learned are simple and straight forward. There
are two axiomatic rules that never change: in times of stability, it remains
stable, in times of instability it gains in value against paper currencies,
helping smart investors mantain their purchasing power. These simple and elegant
equation has somewhat been distorted over the last hundred years of
international central bank manipulations. Central banks managed to depress
the value of gold, first by hoarding it by confiscatory decree in the first half of the
20th century and by selling
it off in the last half.
Now that it has been reported that banks are
running out of the physical item, -which resonates true due to utter lack of auditing- they seem to be resorting to complicated and not
so complicated contract selling, and paper receipt selling manipulations
without having to avail themselves of the actual gold. The
good news for gold bugs is that the colluding central banks and the
dealers seem
to be running short of the physical item, with the result of 'on the street prices' divorcing themselves from 'spot' or 'market
manipulated prices. Good news for gold bugs because if
resourceful they can beat the manipulators by buying at their 'spot' price and
waiting for physical delivery. It seems that the manipulators are seeing
the last days of the game as gold becomes scarcer and investors
wiser.
Gold prices which reached as high as one thousand
dollars this year, have dropped to about 800 over the last couple weeks.
It has since then been in a slight bounce looking for a bottom. The floor
appears to have held steady in the early eight hundreds and seems
ready for a technical high bounce over the next weeks.
With world
currencies declining in unison due to the expected recession or depression in
the horizon, gold is on standby ready to serve as a steadying, real
purchasing power wealth insurance. The dollar is weak and in an economy
fed by Asian dollars, any disruptions in the flow from the Asian tit would have
grave consequences for the American Economy. The uncertainty in the future of
the major financial institutions, make goldgold bull cocktail.
Some
people might argue that those wars might be a thing of the past if the
Democratic candidate is elected. But on reading the positions put forth by the
candidate's main foreign policy advisers, it might just get worse
during a Democratic administration. Lets remember that the current
Democratic Congress has acted as the current administration's rubber stamp and
given them a blank check to do war with Iraq, Iran and possibly Russia at
will. If McCain's advisers appear to be more rabid warmongers that the
Neo-cons in the White House, the Democrats getting ready for presidential power
appear to be even more completely divorced from reality in their desire for more
imperial wars the country can't afford. Leaving us in what seems a one party
system with incestuous factions presenting themselves as fighting for
power.
Now we have the biggest international armada since the 1991 war, composed of
American, French and English ships. forming in the straight of Hormuz, and
threatening Iran. For good measure we have a NATO Armada within spitting distance of Russia getting bigger
by the day, "delivering humanitarian supplies" to the Caucus nation of Georgia.
The Russian Navy and NATO ships have been making strategical moves in concert
and against each other. It is a potentially catastrophic situation and an
unwarranted game of nuclear brinkmanship, being advanced mostly by imperialist
dogmatist in America who desire to strengthen Georgia -a western government puppet- to control the Caucus
region and its energy products and routes.
Put all of this together, add
inflation and we have the perfect cocktail for a bull market
in gold for the foreseeable future.
To recap; the dollar is
weak, bank crisis continues unabated, goldgold prices,
world currencies are declining in unison, of course inflation joins the party,
the petro regions are a cinder box filled with well armed Armadas ready to do
war or posturing for war, both Democrat and Republican candidates and their
advisers openly stating that the war policy will continue the same or get
worse.
Just one word of advise; in these uncertain times make sure
you have your gold where you can touch it and where you can keep it
from greedy government hands. that much important now
in any portfolio. But compound this with the risk of wars in the oil producing
regions and we have quite the manipulation appears to
be loosing steam, technical graphs point to a rise in
counting central bank economy experts were, and are still wrong. What they are
learning at their liberal universities about finance is not the field of
economics, but the field of political policy, and what they believe the effects
of government control over the real economy will be.
Real economics, as
distilled in the classic school, also known to some people as the Austrian
School, postulates that every government interference in the real economy will
result in the opposite being achieved. It postulates that the real economy
survives in spite of government controls, not because of it.
One
could argue that the fancy titles some "economists" and "financiers" have, are
not that at all, but are degrees of high specialization in corporate governance,
methodology,and intra and inter corporate transactions based on the national, or
now global regulatory climate at the time. That their understanding is
restricted and biased to the belief that the regulatory zeitgeist of centrally
controlled economies is effective in its control. It is withing this
bubble of understanding that they see the economy and the markets.
It is
these "experts" who have missed the present trend, while people who have a basic
understanding of classic economics have been predicting the currently unfolding
events with incredible detail for a very long time. Two of the concepts of
economics which have been studied and dissected the most, are the basic concepts
of inflation, and credit expansion. Within the context of a
controlled economy, inflation is the injecting in the market of more fiat
currency, particularly in large amounts; and credit expansion is a relaxing of
lending norms above the needs of the market. Both of these result in
over-investments in sectors of the economy in which they are not needed. This
trends must eventually crash, many times bringing the whole economy with it.
Over the last years the result of central bank inflation and credit
expansion has been the mal-investment in the housing and mortgage financing
derivatives industry. The particularly scary part of the present crash, is not
that the central banks and their bean counters at the top seem to not only have
let it happen, but in all their elite glory, to have engineered it. It is to
each of us to either believe that theory, or not. But, we are seeing a
consolidation of financial power and a transfer of wealth from the "people" to
the bankers via the bail outs through currency diluting inflation. An easy
way to visualize this is to imagine the central bank producing wine, and then
adding water to it to give a share to the bankers. The bankers keep their
share at the cost of the dilution of the rest of the wine on the
table.
The "bail outs" were forced to pass by the strong arm tactics of
central bankers and their friends around the world. In the US, thus far
non-controversial congressmen have commented on the record to have been told
that unless the bail out bill passed they would wake up to martial law the next
morning. Surprising? No. Shocking? Yes. It is this bail
out with its accompanying 500 pages of regulations and trillion dollars worth
of free money to the connected bankers -which will surely again be
mal-invested- and will restrict credit to the other real and productive parts of
the economy, and the ensuing inflation that guarantee that this will not be a
mere recession, but a deep and long lasting depression.
There is a
lesson and silver lining in all of this; people are learning about the dangers
of central banking and fiat currencies, they are learning that the only
economies that work have been those based on solid metal backed currencies, they
are learning that for a hundred years while the US had no private central bank,
there was the longest period of growth, economic prosperity and near zero
inflation.
Perhaps this will be the driving force the US and the
world need to get rid of the privately owned central banks and the shills at the
government doing their bidding, returning the money making power to the
government as the constitution dictates. Perhaps now is the time to
legalize competition from private currencies that would most likely be back by
gold.
If you start hearing calls for a Canada-US-Mexico currency,
or calls for a global currency, run don't walk to gold. They would first
crash all currencies, then have you start from zero.
Below I have
included a few emails I have sent to my friends over the last year making the
case for gold. I recommend that you read them, as the advise still
holds as strong as ever. The fiat currencies are being diluted now more
than we had imagined they could, the markets are getting new regulations daily
and being ham stringed. From my point of view we are not near the bottom of the
markets, and there will be no upward correction in the next few years
-accounting for inflation-. So, make sure to take your losses in at least a
portion of your portfolio, buy physical gold you can hold and hide, and in the
next few years when you start reading about the raising standards of living in
the Asian countries, you cash your value holding gold and sent it east to work
for you.
Best wishes to all of you,
Boris
Morales
786 486 4446
January 14,
2008
Gold! Why? Because people are just
beginning to get pessimistic about the economy and because prospects for any
bail out would cause greater inflation which could get much worse before it
turns into deflation or more correctly stagflation, because it is super cool to
hold gold in your hands and know it is yours, and because even at
an all time high price of $895 it is still much cheaper than the price of
gold on 1980 which was about $850.00 which adjusted for inflation
would be about $2150.00 in today's dollars giving it quite a bit of room
to grow.
If you are investing for the long term nothing beats
gold, specially as a diversifying asset. With the risk of a
world wide recession gold makes for a nice alternative to the stock
markets which would be very difficult to predict right now as there is no upward
trend for any particular segment.
Third world countries are opening
their economies more every day and their standards of living will over the long
term catch up to the lowering standards of Americans as they compete with a more
liberal -free- agenda and America is stuck in its highly mortgaged economic and
political scene.
Just imagine the hundreds of millions of Chinese,
Indian and Brazilian people who will reach middle class status and will want to
buy gold the finite resource.
And mostly I
recommended gold because a return to fundamental economic
philosophies is bringing gold back to the forefront. The
internet is allowing many people to learn about solid and fundamental economic
theory and all those people want to have gold as part of their
portfolio of investments. Unbacked paper money which is mostly a new phenomenon
is being exposed at a rapid pace through cyberspace as being worth no more than
the faith traders put into it.
I guarantee you a quickly changing
market over the next four years in all markets, so why not invest in
gold our old friend in times of uncertainty?
Boris
Morales
_______________________
June 27,
2008
Here is a quick letter to remind you that real inflation
is eating away liquid assets, and that there are no fundamentals to reinvigorate
the stock market in the near future. Many people are investing their assets on
dividend paying foreign markets to avoid the American collapse, but as you know;
when America catches the flu everyone sneezes. Which brings me to my
point:
Financially it has always made sense to keep at least 5 to 10
percent of one's portfolio in metals. To me, that advice is today as timely as
ever. Last we spoke you told me that you had decided not to short the
metals, and now it seems that it was a very smart decision. Even under attack by
the IMF, gold has had a substantial jump up.
All the
fundamentals seem to be aligning in favor of gold; loss of
credibility in the dollar, hyper inflation, historically expensive commodities,
limited production, today's gold price is about 45% of its highest
price ever if measured on inflation adjusted dollars, markets around the world
are settling for what appears to be a long rest, and real estate is still
historically overpriced.
To understand the risks associated with
gold we must understand that the main danger to its price continues
to be mass sale of it by government bodies such as the World Bank. But
with central banks printing as much bail out money as they are, much of that
money will go to absorb those sales; New money has few places it can go to now.
With historical prices as indicators, and inflation cranked up to high,
metal prices don't have much downward space to go to (limiting risk), and at
least 50% space to go higher (based on max historical price in dollars adjusted
for inflation). If I'm wrong and the economy recovers quickly, losses on
the basic metals will be limited. If the analysis above is right price of
gold will go up substantially and help shore up some of the losses
in other sectors of your portfolio.
Consider this email just a gentle
reminder to keep some metals in your portfolio.
Your
friend,
Boris Morales
786 486 4446
_______________________
August
25, 2008
Friends, the physical market
is completely divorced from the futures price. The time to strike is
now.
_______________________
August 28,
2008
The Case for
Gold
By Boris Morales
Miami.
FL
Gold has served us well for over 6000 years, during which
we have been able to thoroughly assess its reaction to financial and general
world events. The lessons learned are simple and straight forward. There
are two axiomatic rules that never change: in times of stability, it remains
stable, in times of instability it gains in value against paper currencies,
helping smart investors mantain their purchasing power. These simple and elegant
equation has somewhat been distorted over the last hundred years of
international central bank manipulations. Central banks managed to depress
the value of gold, first by hoarding it by confiscatory decree in the first half of the
20th century and by selling
it off in the last half.
Now that it has been reported that banks are
running out of the physical item, -which resonates true due to utter lack of auditing- they seem to be resorting to complicated and not
so complicated contract selling, and paper receipt selling manipulations
without having to avail themselves of the actual gold. The
good news for gold bugs is that the colluding central banks and the
dealers seem
to be running short of the physical item, with the result of 'on the street prices' divorcing themselves from 'spot' or 'market
manipulated prices. Good news for gold bugs because if
resourceful they can beat the manipulators by buying at their 'spot' price and
waiting for physical delivery. It seems that the manipulators are seeing
the last days of the game as gold becomes scarcer and investors
wiser.
Gold prices which reached as high as one thousand
dollars this year, have dropped to about 800 over the last couple weeks.
It has since then been in a slight bounce looking for a bottom. The floor
appears to have held steady in the early eight hundreds and seems
ready for a technical high bounce over the next weeks.
With world
currencies declining in unison due to the expected recession or depression in
the horizon, gold is on standby ready to serve as a steadying, real
purchasing power wealth insurance. The dollar is weak and in an economy
fed by Asian dollars, any disruptions in the flow from the Asian tit would have
grave consequences for the American Economy. The uncertainty in the future of
the major financial institutions, make goldgold bull cocktail.
Some
people might argue that those wars might be a thing of the past if the
Democratic candidate is elected. But on reading the positions put forth by the
candidate's main foreign policy advisers, it might just get worse
during a Democratic administration. Lets remember that the current
Democratic Congress has acted as the current administration's rubber stamp and
given them a blank check to do war with Iraq, Iran and possibly Russia at
will. If McCain's advisers appear to be more rabid warmongers that the
Neo-cons in the White House, the Democrats getting ready for presidential power
appear to be even more completely divorced from reality in their desire for more
imperial wars the country can't afford. Leaving us in what seems a one party
system with incestuous factions presenting themselves as fighting for
power.
Now we have the biggest international armada since the 1991 war, composed of
American, French and English ships. forming in the straight of Hormuz, and
threatening Iran. For good measure we have a NATO Armada within spitting distance of Russia getting bigger
by the day, "delivering humanitarian supplies" to the Caucus nation of Georgia.
The Russian Navy and NATO ships have been making strategical moves in concert
and against each other. It is a potentially catastrophic situation and an
unwarranted game of nuclear brinkmanship, being advanced mostly by imperialist
dogmatist in America who desire to strengthen Georgia -a western government puppet- to control the Caucus
region and its energy products and routes.
Put all of this together, add
inflation and we have the perfect cocktail for a bull market
in gold for the foreseeable future.
To recap; the dollar is
weak, bank crisis continues unabated, goldgold prices,
world currencies are declining in unison, of course inflation joins the party,
the petro regions are a cinder box filled with well armed Armadas ready to do
war or posturing for war, both Democrat and Republican candidates and their
advisers openly stating that the war policy will continue the same or get
worse.
Just one word of advise; in these uncertain times make sure
you have your gold where you can touch it and where you can keep it
from greedy government hands. that much important now
in any portfolio. But compound this with the risk of wars in the oil producing
regions and we have quite the manipulation appears to
be loosing steam, technical graphs point to a rise in