Gold and Silver Pep Talk
Just like everyone said it be, gold and silver are getting slammed while the dollar climbs ever higher. Of course stocks are going higher as well (as predicted here; my reason was "because") and all are happy about the new normal.
Well, I thought I would throw out some kind of metals item so precious metal fans do not get too down this holiday season!
In what could serve as a model on how to investigate a problem and make known the results, the Royal Canadian Mint has figured out where their missing gold went:
Canadian Mint Reveals How It Miscounted Its Gold And Lost Millions
We are not talking huge numbers here (about 20 Million) but at least they got to the bottom of things and came clean.
A strange little bill was passed in the State of Georgia that seems a little weird:
Georgia General Assembly House Bill 430My take on this bill is that Georgia has ended the policy of only assigning face value to gold and silver coinage (including junk silver) and will require fair settlement by spot price of the metals as it relates to bullion coins. Interesting.
By: Representative Franklin of the 43rd
To amend Title 7 of the Official Code of Georgia Annotated, relating to banking and finance, so as provide a short title; to provide legislative findings; to define certain terms; to require any bank or lending institution serving as a depository for the state or any department or agency of the state to offer and to accept gold and silver coin for deposit; to amend Title 50 of the Official Code of Georgia Annotated, relating to state government, so as to provide legislative findings; to define certain terms; to require the exclusive use of gold and silver coin as tender in payment of debts by or to the state; to provide for related matters; to provide an effective date; to repeal conflicting laws; and for other purposes.
Are States Too Big to Fail?
Loyal reader Watchtower wanted some input on whether states/cities/counties could go bankrupt and noted this Robert Prechter article in regards to that line of thought.
My take is that the States will not be allowed to "fail". Consider the ginormous amount of assistance states have had in two forms already:
-Stimulus money meant for "shovel ready" jobs and projects was instead used as revenue for state budgets across the country. There is no telling how many jobs were "saved" due to this huge money pile.
-The Federal super-ultra-mega extended unemployment benefits program has really bailed out the states in terms of easing jobless claims benefits by state as well as keeping demand up which helps tax revenue.
Taken together these two items are major support structures. Neither seems likely to end soon.
Of course individual counties may go the bankruptcy route, and several have (Mish always covers these stories):
Vallejo County CA Used BK to Break Union Contracts
Jefferson County Alabama Looks at BK
Detroit in Bad Shape
I do not believe a state will be allowed to go bankrupt. Why panic about Citi and not about California? The Federal government will drag us all down with any state that needs help.
Also consider a new funding angle: Bribes for Health Care Votes
It seems the states will have money coming in to help!
Too Much Money
The Automatic Earth sums up what ails the United States and permeates the political landscape:
If a politician can be elected only when (s)he has enough money (i.e. millions of dollars, and for a president hundreds of millions) to run a campaign, then the resulting policies will be dictated by those who donate that money. And since one dollar equals one vote, the grandma who ate mac and cheese for a week to donate $10 to Obama has no say, while a financial institution that gave $10 million does.Read the whole thing.
If the events of the last 2 years have taught us anything it is that the same people that run banks into the ground are the same people (not the same type, the exact same people!) tasked with bailing them out. Inbreeding at it's finest. Why there are no laws against such things (at least you cannot marry your cousin!) is beyond me but I am rational thinker. How Neil Kashcari goes from doling out TARP funds to big honcho over at PIMCO without missing a beat is appalling.
Anyways, from the department of "No Kidding":
Study Finds That Of All Factors Determining The "Bailoutability" Of Crappy Banks, Ties To The Federal Reserve Are Most Critical
Shocking isn't it? Oh, you are not shocked? Me neither.
Have a good night.