"Fiscal Cliff" and other Non-Sense

The "fiscal cliff" has been a hot news topic lately, but where were the investigative reporters when trillions of dollars were sent overseas to bail out crooked banks and God-only-knows who else in 2008?

Our "cliff" is here and it will be a doozie! 

The only question in this "debate" is whether it will hurt the middle class much sooner or a little later. It is going to hurt everyone in time.

If mortgage interest deductions are cut back, limited, or trimmed in any way, housing prices will suffer more than they have already. 

If itemized deductions are limited, average families will see their budgets squeezed more than ever.

If child credits are smacked down, cash will disappear from middle-class households overnight.

I am keeping up on the "news" and will keep you posted on what I think might happen. But nobody knows until the crooks pass the laws that they don't even read!

ALERT! An absolute must-read for all businesspeople!

Hi everybody. I read this and just HAD to share it with as many smart people as I can reach. Please read this article. It explains what is about to happen with the economy in plain language. And it is scary. But to be forewarned is to be forearmed so it could be scarier: if you DON'T read this. "They" do not want you to read this. Please copy the following link and paste it into your browser's address bar. If you have trrouble copying this link, the article is found on the website silvergoldsilver.com which ia a daily read for me, article is called "Exeter's Pyramid"

http://www.silvergoldsilver.com/index.php?option=com_content&task=view&id=163&Itemid=9

Also, beware the MF Global problem......it is going to be clear soon that NO PAPER FINANCIAL ACCOUNT IS TRULY SAFE FROM THE FINGERS OF "them!" They used CLIENT FUNDS, went bankrupt. and nobody including the CME or the "watchdog" CFTC is doing a thing about it. Didn't mean to scare you!

Hola! Que tal! Senor Chavez quiere his ORO! (Gold, I say!)

A huge event occurred today.....Hugo Chavez, remember the guy who said he smelled sulfur on the UN podium where our President "W" had just spoken a few years ago? Yeah, THAT GUY! Well, our amigo de Venezuela has ASKED FOR HIS GOLD BACK! ALL 99 TONS! The NERVE of anybody asking the Bank of Bloody England, and The Most Holy FEDERAL RESERVE BANK OF NEW YORK for their deposited gold back?
I can't wait to see what happens! Maybe a shipwreck is in the cards? Or a downed 747 over the Atlantic, not findable?
Read more commentary from one of my favorite daily bloggers, at silvergoldsilver.blogspot.com
I believe $1,800 per ounce is going to sound like a bargain in the near future, who knows?
Adios Amigos! Hola el Oro!

It's like a snowball just leaving the top of the hill! Weeeeeee

Well, silver touched $42 today! Gold is making a new all-time high daily now in just about all currencies. Can you feel the end of paper money upon us? Soon we will not be able to afford an ounce of gold, or hopefully an ounce of silver either! Anyway, the game of "fiat" money (money backed by nothing, the stuff Lincoln and Kennedy both wanted to get rid of, but instead, that idea "got rid" of them!) is about to implode, I am not sure what will happen, but I can promise if paper money goes worthless, gold and silver will store a heck of a lot of value, and in the words of Van Halen, everybody will want some!

This is the stuff I get

Every day I go to a great blog named silvergoldsilver without any spaces. Google it and you can go there too. On the right he lists his daily reading, so you can just instantly go to Harvey Organ, the best, smartest daily analysis of the physical metals markets there is! Within his Thursday post is an article by a very well-respected gent and here is a teaser, or snippet if you will, from that article pasted in Harvey's blog:
"One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money."
Wow! I would not want to go too much longer in this economy without reading these things....would you?

Can you read ONE article this week?

I want to share a very important article regarding the current silver market. It says what I have been saying for three years now, but very clearly, and with REAL CLEAR THINKING! Paste this into your browser!

http://dont-tread-on.me/11-silver-investor-mentality-shifts/

Great Analysis of a Complex Subject, Silver! What Else?

Well the subject of this blog was supposed to be taxes.....but to be honest, with four trillion dollar wars and more to come, complete meltdowns possible in currencies, stocks, and even cash in the bank, spiraling food costs, nuclear disaster here and there (flooded Nebraska nuke plants...OH I forgot, the American media doesn't cover that!), I see no real hope of any economic recovery very soon, so taxes are just kind of boring these days compared to other topics!
Speaking of my favorite topic, I found a great summary of where the silver market sits right now.
The author of this post from zerohedge.com is Eric Sprott, a Canadian billionaire who is a major metals fund manager and a silver bull! This long article is well worth reading, it explains one very crazy market quite well. Paste the following into your address bar, it is worth a few minutes reading!
http://www.zerohedge.com/article/eric-sprott-lashes-out-against-tyranny-rigged-paper-monopoly-over-silver-price-discovery

As expected, silver is setting new highs daily now

....
Just an update, as of 12:01 AM on Monday 3/7/11 silver is at $36.45 an ounce. It has increased about 30% in the last three or four weeks, basically the 30-plus year ponzi scheme of propping up paper money at the expense of the price of precious metals is coming to a close, and mayhem in the Middle East is probably just the start of this run that the white metal has begun! Hopefully you have bought at least an ounce for yourself in the last few weeks, it will be fun to see how high the price might go! "Back Up the Truck Charlie!"

The End of Precious Metals Markets may be at Hand

.
Here is a great explanation of the silver situation.....do your own research of course, but I am only going to say this....
"Back up the truck!"

The following is from: http://tfmetalsreport.blogspot.com/2011/02/wow.html

Wow
At the risk of sounding crazy. At the risk of ruining whatever minimal "reputation" I may have. Most importantly, at the risk of losing money, I have to say this: I think we have Blythe on the run. Big time. My rationale for this is going to be difficult to summarize in writing but here goes. Bear with me...

Today, 2/16/11, was an extraordinary day of FUTFs and FUBMs in the silver pit on the Comex and I'll explain that shortly but it all needs to be placed into context.

If someone wants to purchase physical silver through the Comex, they must first buy a future or option contract for a "delivery" month. The current delivery contract is the March11. Before the close of trading on 2/28, any holders of March contracts must sell their positions or be forced to take delivery. Those unwilling to take delivery typically "roll" their position into the next month, which is May. If an investor does intend to take delivery, that person must, by the close on the 28th, show in their account enough money to pay for their acquisition. A single contract is for 5,000 ounces so, at $30/oz, you must show available funds of $150,000. For 10 contracts, you must have $1.5MM. This is kind of a "put up or shut up" thing. It keeps goofballs from claiming they want delivery when they really can't afford it. On the 28th, you've got to have the dough in your account to "prove" to TPTB that your are serious. Every delivery month, the EE/Comex plays this game and, every month, enough longs simply roll instead of standing for delivery so that the Comex has yet to default on their obligations to deliver the physical silver.

Now, here's the problem...Monday was 2/14. Only 10 trading days to go until the critical 28th. Heading into Monday's trade, there were still 62,692 open contracts for March. This had to really get the attention of the EE and they, without question, went into Monday with a plan to attack silver and scare as many March longs as possible into rolling to May or later. Unfortunately for Blythe, silver began to rally in the wee hours of Monday morning and broke $30 while she was still sleeping. It closed that day above $30.50. But that wasn't the true disaster for the EE. The real shock was when they got the new OI numbers Monday night and found that the March OI had only fallen to 61,720. Panic surely began to set in. Then yesterday, silver traded even higher, briefly touching $30.90. Earlier today, we got the OI numbers basis yesterday and it was an eye-opener. As of last night, there are still 59,851 open March contracts. And first notice day is now only eight days away!!! Blythe had this information before the general public so she knew, going into today, that she had to attack again and she did. Here's your chart:


Obviously, it didn't work and that's the problem.

Recall for a moment how the EE caps price. They do so by flooding the Comex with an almost endless amount of unbacked, paper silver. Think about that trade, though. To sell short, you need a buyer on the other side of the trade. And now, at this late hour, how can you reduce the open interest in the March contract if you're only selling new paper shorts to resolute longs who intend to stand for delivery in eight days? By raiding and selling, you're only compounding your problem because you are creating more open interest! If you're Blythe, you're left with only being able to freely sell the forward contracts in an attempt to influence the spot and nearby price. Does this explain the current backwardation? Probably.

To the point, however, what's a girl to do? You can see by looking at the chart above that Blythe tried to raid today but she didn't seem to do it with the usual bluster and gusto. How could she? Every new March contract she sells only adds to her problem. She is truly caught in a catch-22. Again, what's a girl to do?

If the March longs stay resolute, she's screwed. Even if only 20,000 stand for delivery, thats 100,000,000 ounces that the Comex has to deliver. By most estimates, that's their entire inventory. She and The Evil Empire must, somehow, convince/force March contract holders to close their positions but if they can't scare them by crushing price, how do they do it? They could get the CME to raise margin requirements but if you're ready to stand for delivery by putting up 100% of the cost in eight days, a margin increase today is of zero consequence.

So what's left? She can't scare people out through raids and she can't finance people out through margin hikes. She's fucked. She/They will be forced to settle again in cash + premium, just as many suspected they had back in December. However, back then it was just a couple thousand contracts. Now it could be 20,000. Shit, it could be 40,000! And the problem is, word is out. What do you think will happen in May?!? Will 80,000 stand for delivery? 100,000?

So the point is this: Ding dong, The Wicked Witch is hurting. Bad. All the years of Evil Empire domination/manipulation of the PMs appear to be coming to a rapid and spectacular end. Watch the Open Interest numbers very closely. They are your tell.
Buy all dips until and unless the OI situation significantly changes.
Now truly appears to be the moment we've been waiting for. TF

"May you live in Interesting Times!" - Some old sarcastic philosopher - HL

Derivatives.....The End of the Financial World as We Know It!

I have attached an article posted on my favorite daily blogsite that I recommend you read too, "Harvey Organ's Daily Gold and Silver Report."
The following is scary, but to be forewarned is to be forearmed, so I've heard!

The REAL Reason Ben Bernanke Leaves A Paperweight
On The "Print" Button When His Finger Gets Tired



Graham Summers
7 February 2011



We've been over the numerous BS excuses that US Dollar destroyer extraordinaire Ben Bernanke has made for QE enough times that today I'd rather simply focus on the REAL reason he continues to funnel TRILLIONS of Dollars into the Wall Street Banks.

I've written about this issue before. But given the enormity of what it entails, it's worth repeating. The following paragraphs are the REAL reason Bernanke does what he does no matter what any other media outlet, book, investment expert, or guru tell you.

Bernanke is printing money and funneling it into the Wall Street banks for one reason and one reason only. That reason is: DERIVATIVES.

According to the Office of the Comptroller of the Currency's Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.

Five banks account for 95% of this. Can you guess which five?



Looks a lot like a list of the banks that Ben Bernanke has focused on bailing out/ backstopping/ funneling cash since the Financial Crisis began doesn't it? When you consider the insane level of risk exposure here, you can see why the TRILLIONS he's funneled into these institutions has failed to bring them even to pre-Lehman bankruptcy levels.



Ben Bernanke is a stooge and a fraud, but he is at least partially honest in his explanations of why he wants to keep printing money. The reason is to try to keep interest rates low. Granted he's failing miserably at this, but at least he understands the goal.

Of course, Bernanke tells the public and Congress that the reason we need low interest rates is to support housing prices. He doesn't mention that $188 TRILLION of the $223 TRILLION in notional value of derivatives sitting on the Big Banks' balance sheets is related to interest rates.

Yes, $188 TRILLION. That's thirteen times the US's entire GDP and nearly four times WORLD GDP.

Now, of course, not ALL of this money is "at risk," since the same derivatives can be traded/ spread out dozens of ways by different banks as a means of dispersing risk.

However, given the amount of money at stake, if even 4% of this money is "at risk" and 10% of that 4% goes wrong, you've wiped out ALL of the equity at the top five banks.

Put another way, Bank of America, JP Morgan, Goldman, and Citibank would CEASE to exist.

If you think that I'm making this up or that Bernanke doesn't know about this, consider that his predecessor, Alan Greenspan, knew as early as 1999 that the derivative market, if forced into the open and through a public clearing house would "implode" the market. This is DOCUMENTED. And you better believe Greenspan told Bernanke this.

In this light all of Bernanke's monetary policies and efforts are focused on doing one thing and one thing only: trying to shore up the overleveraged, derivative-riddled balance sheets of the Too Big to Fails.

The fact that the bank executives taking this money and using it to pay themselves and their employees record bonuses only confirms that these folks have NO interest in taking care of shareholders or their businesses. They're just going to take the money and run for as long as this scheme works.

I don't know when this will come unraveled. But it WILL. At some point the $600+ TRILLION behemoth that is the derivatives market will implode again. When it does, no amount of money printing will save the Too Bloated To Exist banks' balance sheets.

At that point, it's game over for Wall Street and the Fed. Indeed, the derivatives market is simply the largest, most insane debt market there is. In this sense our entire financial system is held up by blatant fraud. The banks don't have anything even resembling accurate accounting. Our former Treasury Secretary and Chairman of the Federal Reserve BROKE THE LAW multiple times and have yet to face any consequences. Corruption, fraud, and even front running are the NORM in the US markets.

On top of this, the US $14+ trillion. And if you include unfunded liabilities like social security and Medicare, you're talking about $70+ TRILLION in total debt on the US's balance sheet.

Let's be blunt here: the US will NEVER pay these debts and liabilities off. And once the financial world finishes pummeling the Euro, we're going to see the US Dollar and Federal debt markets implode.

I cannot tell you when this will happen. All I can say is that it will happen. And you better be preparing for it now.



Graham Summers

********

All Aboooooaard! The Silver Train is about to leave the station! CHOO CHOO!

Here is a great article about "Backwardation." Normally, metal prices would be lower today than the price for a future delivery, due to storage and insurance costs associated with holding precious metals. But during the rare state of "backwardation" the current price is HIGHER than the future price, a sure sign of physical shortage in the present. The link here is a to a good article that explains this fairly well -

http://www.gotgoldreport.com/2011/02/near-zero-contango-in-comex-silver-futures.html

The world economy is going to heck in a handbasket and the money supply is going through the roof in the trillions. I am not a certified financial planner and you should do your own research, but I am putting my savings into physical silver. Think about this...in 1964, a silver quarter bought a gallon of gas (about 25 cents.) Today, a silver quarter buys a gallon of gas (well maybe not in California, but everywhere else) about 2.85 or so.

What has the Federal Reserve (A private corporation by the way) done for us in 98 years? Basically eroded 90% of the value of your dollars! Holding paper money these days is a fool's game, in my humble opinion. I hope this gives you some food for thought!

The Economy a Few Weeks Later, No Surprises

Time flies! But not much has changed since my last post. Exactly as I predicted, Gold and Silver are flying high. Silver is about to pierce $27 per ounce and gold is rapping at the door of Room 1400! ROOM SERVICE!

The "Tea Party" means absolutely nothing, as doesn't the GOP house takeover. None of these professional politicians save Ron Paul (Rand is a chump, bought and paid for by TPTB by the way) will do ANYTHING to A) Audit the Fed B) Stop the bleeding of the defecit in trillions and rising or C) Quit bailing out "too big to fail" who also always seem to be friends of the highest in high places, cronyism at its best.

I hate to be pessimistic, but all I can say is the world financial system is about to implode and gold and silver are the only things I can see that will hold some value while the paper currencies become worthless under the weight of endless money printing.
Besides maybe drinking water and a year's supply of dehydrated foods?

Banks on the Brink? Foreclosures halted all over the place!

I have been fascinated by the news of the past few days. Major banks including GMAC/Ally Bank and now Bank of America, the huge behemoth mega-mortgage maker (they took over bankrupt Countrywide a couple years ago), have had to stop all foreclosure cases in the US due to allegedly fraudulent practices of not having verified actual mortgages on the properties they are foreclosing. It seems there is this huge problem with the mortgages having been bundled into this securitized investment stuff that brought down AIG and Lehman, and this electronic "proof" of a particular home mortgage is not enough for judges to rule on when foreclosures come before them. Tens of thousands of foreclosures have been halted nationwide.

One analyst I read regularly, Harvey Organ, says that this will be the death knell of many major banks, and even our whole system, as now the "assets" that make up the collateral for all the mortgages on the books of these banks is gone, unavailable, "Kaput!" as Lily von Schtoop would say.

I don't know how bad it will be, but I sure as heck wouldn't want to be a shareholder in a US bank that holds a lot of bad mortgage exposure. It seems that the new world order has become very disorderly for the banker types, I hope they don't bring the honest people down with them!

Hmmm, I wonder what the price of gold, silver, platinum and palladium will do THIS week?

Bush Tax Cuts Ending January 1st!

The craziest thing that I have witnessed since working full-time doing lots of income tax returns (30 years) is the way the G W Bush tax cuts that came in about nine years ago have a built-in expiration on 1/1/11. Not only does it scare me that the writers of our laws might be into Numerology, and no, those laws are NOT written by our elected officials, but the difficulty of planning when tax laws expire can be kind of scary too!
Reagan's tax cuts came in and got altered, but they did not have an expiration date like the Dubya cuts do.

Almost all tax brackets are rising in 2011. The 10% bracket will be 15%, 25% goes to 28%, up to the top 35% going to 39.6%. Capital gains rates currently 0% and 15% jump back up to 10% and 20%.

Death taxes, which are technically gone for 2010, go wayyyy back up in 2011 for persons with over $1 million is net assets. I am not recommending suicide, but some families might be hit hard by the new, not kindler gentler inheritance tax rates starting with those dying in 2011.

Some planning for this bump in rates can be done. If you know you will be selling a capital asset at a large gain, generating that gain in 2010 could save tax over the same gain in January 2011.

Credits help tax bottom lines so much, but some good ones are going down. The child tax credit, now worth $1,000 per child under 17, goes down to $500. Lots of other goodies will decrease or disappear.

Now bear in mind that the current Democratic congress is indicating that most of these tax benefits won't be expiring....they will be preserved for families making under $250,000 per year. That is all well and good, but keep in mind that the preserving may just be a one-year-at-a-time extension, and the same expiration threats will just be moved forward a year at a time.

Stay tuned, I promise an update on Obamacare, but to be honest, that huge mess which had no business being passed is so confusing I am still trying to get my head around all the provisions. Too bad our elected officials didn't read it!

Shortcuts to Impressing your Friends

I sometimes feel like a walking trivia book. For some reason, I have a very good memory for trivial facts, though I have a tough time with names and I lose my keys often! But I can tell you that with a few simple web visits on a daily basis I learn a lot! So I herewith give you my two favorite things to read every day, for starters, and maybe you can get some quick knowledge from these goldmines of knowledge too.

www.rense.com - A giant "link" place where the only news you really need to know is listed down the right side by "most recent" and down the left by topic: i.e. Gulf Disaster, Economy Disaster, every disaster you could ever want! Plus he throws in very interesting stories, for instance I just read a Time magazine article from 1942 he linked, where 42 mental patients in Oregon died when a cook used Flouride (RAT POISON, you know, the stuff they add to water supplies) by mistake instead of baking powder in the eggs, the patients started falling and dying, how sad! But without rense.com i don't think I could have found that!

Harvey Organ's Daily Gold and Silver Blog - Just google Harvey Organ Gold and it will pop up, every day he dissects the fraudulent metals markets, and he also includes the most important few financial stories of the day, almost every day.....you have to learn about the fixed metals markets, it could be the easiest money ever available to be made, but hurry as the lid could blow any day and gold will be $5,000/oz and silver $200/oz or who knows?

Enjoy these sites, and the promised tax update is coming, I promise, as soon as my works slows down a little more!

Tax Update will have to wait! You need to read this!

I am working on a post summarizing the new tax laws heading our way 1/1/11. But in the meantime, I found a great article which does agree with what my research has made me suspicious of...I would feel derelict in my duties to you if I didn't share this article.

http://www.marketoracle.co.uk/Article22354.html

In a nutshell, the banks of the world are broke, "kaput" as Lily von Schtupp would say! We are in for a disaster, and the only way to hold any wealth will be gold and silver in my humble opinion.
I do hope that articles like this are wrong, but when you print trillions of dollars and the economy still stinks two years later, something has gone very wrong!
I promise a tax update when I get back from the long weekend!

The Smartest Investing Outfit on the Planet (Not)

Welcome to "Taxes on the Cutting Edge." I was going to start this site off with a summary of current events, like Bush tax cuts slated to end, and Obamacare tax nightmares slated to start, but I just HAD to make this first post something you'll never forget!
I had read where the firm Goldman Sachs (yes THAT one, revolving doors to the White House, Rubin, all those guys from the bailout of '08 and all that) has made a profit every day of the year of 2010 with their trading....every day, not 90%, but EVERY stinkin' day! Well anyone who has invested, or traded, or heck gambled at Gold Country knows that it is VERY DIFFICULT to be right EVERY DAY!
Well, lo and behold, my research has turned up an amazing and should I say sinister explanation for their "good fortune" and "brains" over at GS. They have a supercomputer that DWARFS the NYSE computers. It is located in the nuclear-bomb-proof basement in the same place as the NYSE puters. This supercomputer which I will just call "The Monster" for lack of time to pull out my thesaurus sees every order on every exchange that comes in from everywhere, and it "front-runs" these orders to give GS the edge on any trade anywhere in the world! Remember that day in May when the Dow dropped 1,000 points like nothing? And they blamed it on some "fat-fingered" guy somewhere making a typo? Well that was the Monster doing its thing, it does it automatically, and it can wreak havoc on the markets.
So next time you are deciding to buy 10 shares of Apple to prop up your sagging 401(k) or IRA, remember, some rich dude's computer is seeing your order before it gets executed, and if it so desires, it will make you pay, say 263.50 per share instead of 263.25, and it just made $2.50 off Mr Main Street!
My next post will be much more subdued, unless I get the itch again to get under the PTB's (Powers that be's) skin!