Jim’s Mailbox

Posted at 1:07 PM (CST) by & filed under Jim's Mailbox.

Jim,

Thanks for everything you teach us. I’ve been listening for 10 years, and your lessons are most valuable to me.

Be well,
CIGA Elon the Viking

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Dear Elon the Viking,

A major congratulations because you are willing to take chances. Extremely well done.

Respectfully,
Jim

 

Hi Jim,

It appears that Currency Induced Cost Push Inflation could be the least of our problems if these dire warnings about potential cyberattacks materialize.

Not much we can do to prepare for that!

Regards,
CIGA Black Swan

Dear Black Swan,

Get off the grid, like me, as fast as you can. A small hobby farm is as important as gold. If a cyber attack takes place it is more important than gold.

You might find the lifestyle infinitely better than metropolitan living.

Be able to bug out under any condition. Alternatively, move to the family hobby farm.

Jim

Threat of ‘Spectacular’ Cyberattack Looms: Official
By Camilla Lyngsby | CNBC

The U.S. is at war, a cyber war. And businesses and government are at risk, said Eric Rosenbach, Deputy Assistant Secretary of Defense for Cyber Policy in an interview with CNBC.

"I read my intel brief every morning at 5:30 a.m. and it’s never a very good news story at all," Rosenbach said. "There are a lot more attacks, and I hate to admit it but I fear that there will be some type of spectacular attack against the United States or one of our allies before there is comprehensive legislation and real appreciation to take this seriously."

Just one month ago, Secretary of Defense Leon Panetta made headlines when he warned that the U.S. is in a "pre-9/11 moment" or a "Pearl Harbor" scenario, referring to a potential chain of cyberattacks against the country.

Rosenbach, Panetta’s right-hand man on cyber-security, echoed that chilling warning to prepare for a digital 9/11.

Congress failed to push the Cyber Security Act of 2012, a bill that enabled the federal government to take control of all communication capabilities-including the cybersecurity standards of water, power, and utility companies-during a cyber emergency, through the Senate in August.

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Dear Jim, Dan, Trader Dan, Monty and Eric,

I wanted to thank you and share that I’m really impressed by how reactive and reachable you are. In a time where real expertise means money and is mostly reserved for an elite who can afford it, I can’t express how honored I feel to be answered, nor how I respect your generous daily actions toward the CIGA community.

I’m reading Jim’s blog nearly every day, as I’m a long term physical investor in gold and silver. I’m reading Dan’s blog nearly every day, as I’m trading a bit more dynamically both metals through CFDs, and I like to compare with his analysis.

I’m no millionaire, just the average guy (but lucky enough to be already the "one percent" if I compare myself to the 7 billion people on this planet, 20% starving from hunger), having saved some half million € through hard work by now for me and my family, and simply trying to survive through this mess by investing half of them into gold (2/3) and silver (1/3).

Your calm confidence, based on facts, thoughts and experience, is a ray of light through the cloudy sky of "Gurulike blogs" full of permabull speeches which harm the community at least as much as it helps it.

I can’t tell you how thankful I am for your accessibility. I’m trying to share this information with those around me who are willing to listen.

Hats off,
CIGA Thierry

Dear Theirry,

There is a deep need for people willing to give their time to those that ask for help.

Who else out there is doing or willing to do this? It requires working 7 days a week all day, and most evenings. There is absolutely no one else outside our team here willing to do so.

There is a need and we try to fill it without having our hands out so that only a 1% guy can talk to us.

By the way, they do as well.

Jim

 

Jim,

I have been a fan of yours since you first predicted the OTC derivative meltdown years ago, but I have to wonder if you have actually read the book "When Money Dies" regarding the Weimar hyperinflation.

As that book documents, the debt deflation following the hyperinflation is what put Hitler in power, not the hyperinflation which occurred within the span of a few years.

The Western world has been living under inflationary regimes for more than half a century which is hardly comparable to what happened in Weimar Germany. The skyrocketing price of gold is actually indicative of deflation because it indicates the deflating value of the currency relative to a traditional store of value. A currency is only as strong as what you can buy with it, and the West is overinvested in residential real estate which is non-exportable and keeps low-skilled (tradespeople) and no-skilled (salespeople) employed. The Asian economies, meanwhile, have cornered the world market in electronics both quantitatively and qualitatively. Adam Smith dismissed residential real estate as real capital more than 250 years ago.

Just because the price of gold goes up doesn’t mean that a national currency isn’t deflating.

Regards and respect,
Robert

Robert,

Your view is a static analytical viewpoint. You see the world as a group of still pictures with no interconnection. I see the world in motion with each event connected to the next and to that event before it occurred totally in motion and interdependent.

With respect, I am right. With respect, your view is how the majority of people think incorrectly. I am a visionary because I see it all moving in a motion to finality and then starting again.

I believe is spirals, not cycles. So did the mathematical teaching of DaVinci in the golden number.

What gold is doing right now is nothing more than a long wide uptrend channel. It is rising quite nicely in that context, and will continue to do so.

If your computer screen has a nose print on the monitor, you can never understand gold. If you think in static pictures, you can never predict accurately.

None of this is an insult to you. This is what all higher education institutions teach you. Static is not how the world works. Motion is how everything works so you can see tomorrow in present time.

Taking the language of mathematics (it is a language) to spiritual speculation (trying to conceptualize the non-conceptual) you would conclude that everything really happens only in present time.

Jim

 

Hi Jim,

I just wished to point out what has changed since you posted the following on March 4, 2009:

Gold’s job is, and will always attempt to during periods of monetary stress, balance the INTERNATIONAL Balance Sheet of the USA.

Putting the Numbers Into The Equation:

$3,125,000,000,000 / 260,272,000 ounces of gold = $12,006.67 per ounce of gold. ($3,125,000,000 as of January 1, 2009)

CIGA Rich Gold had provided at that time a couple research links:

http://research.stlouisfed.org/fred2/data/FDHBFIN.txt

http://en.wikipedia.org/wiki/Official_gold_reserves

As of April 1,2012, the numbers are:

$ 5,292,000,000,000/ 260,272,000 oz = $ 20,332 per ounce to balance

This change occurred in just 40 months. Quite the growth rate?

Appreciate your comments,
CIGA Steven

Dear Steve,

Your premise and math is 100% correct.

This is the worst nightmare a central bank can have, certainly when it is the financial leader of the reserve currency.

This is why gold will find a place in the new reserve, basically a one world currency in order to try and prevent this from occurring.

Regards,
Jim

 

Does the Trend In Oil Confirm The Concerns of The Lemmings?
CIGA Eric

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Selling gold because economic concerns ranging from the fiscal cliff, civil unrest in Greece, and/or declining oil prices is suggesting deflation around the corner?

Fear is a powerful motivator.  Impulsive decisions motivated by fear are fast and easy; they rarely ask for confirmation from investment discipline such as money flow, inter-market analysis, or critical thought.

A quick look at money flow analysis reveals growing bullish concentration in the crude oil market despite growing fears that the economy is going to hell in a hand basket in 2013.

Why would the invisible hand be accumulating oil to near statistical concentration if this were the case?  Perhaps the headline guided consensus is wrong about current economic conditions.  Or, maybe the market knows more about a military strike against Iran than MSM.  Either way, market forces are not confirming the fears of the lemmings so eager to jump off the cliff.  This is nothing new.

Chart: Crude Oil (WTI) and Crude Oil Diffusion Index (DI)
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Headline:  Oil Heads for Weekly Decline as Economy Counters Mideast Tension

Oil headed for the fourth weekly decline in five in New York as signs of a slowing economy in the U.S., the world’s biggest crude user, countered concern that tension in the Middle East will disrupt supplies.

West Texas Intermediate futures were little changed after falling 1 percent yesterday as a report showed U.S. unemployment claims climbed to the highest level since April 2011. Crude stockpiles grew last week to the highest since July as output rose to an 18-year high, according to the Energy Department. Oil pared losses after Israel said it’s ready to escalate military operations against Gaza.

Source: bloomberg.com

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Jim,

Don’t own any curves, especially being over 40.

Would think that if Shanti’s curve were moved in a north east direction the 3 lows, including the current one, might just line up.

There’s also a nice triangle formation developing with your green line being the top line.

Thanks for the fun,
CIGA Brian

Brian,

Excellent fit. Try for what one line will show, hitting the most touch points rather than the complex application you are doing well.

Jim

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