My last daily was on August 4th. Gold was $1,648.80 and silver was $38.88. Can you believe that gold has risen $680.60 in the last year? And silver is up 26.05; a whopping 144.78% (after-market, 5:51 PM). I would never have imagined that my being away would have such a positive affect on the markets.
Susan and I had originally planned to be away for three weeks, but by the end of the trip, we had seen it all, done it all and were starting to get homesick. For all that is wrong with our country, it is still better than any of the alternatives.
Last year, Susan’s boss bribed her to stay on until the end of the year and promised her an all expense paid trip to Italy for the two of us, including first class airfare and accommodations. That was a deal that was too good to pass up so she worked until the first of the year.
We also were talked into going on an African safari with two other couples and as much as I hate flying to Europe, I decided that we should combine the two trips into one. People who know me said, “David will never make it for three weeks.” They were right.
Truth be told, I suffered withdrawal from not being able to write the daily and I really missed our dog, a Bichon named Shuggi. If you are a dog lover, you understand, and if not you probably think I am nuts.
If you aren’t interested in the details, skip this section and go straight to the articles that I have put together for you. I have had many requests asking for a few pictures, so I will cull out a few of the two hundred and fifty that I took on the trip and insert them here, along with my opening comments.
Here is my lovely wife Susan – she looks happy, doesn’t she. How lucky am I? Susan and a lot of gold and silver. She’s got to be one of the best looking 65 year olds around! And she’s nice too. What more can one ask for?
We flew to Paris with Jim and Diane Cook. Jim is the owner of Investment Rarities and a very dear friend. Jim gave me my start in the business in 1983 at IRI.
We changed planes in Paris and flew to Naples, Italy. Then we drove south a few miles to the Amalfi Coast. We stayed in a five star hotel, on top of a mountain, overlooking the Mediterranean Sea.
We toured the Amalfi coast. It is populated by homes, built into the side of steep cliffs, unlike anything here in the US.
We visited the Isle of Capri, off the Amalfi Coast. It’s magnificent! It might be the nicest place I have ever been. The white estate in the center of the picture, above the fort, was once owned by Sophia Lauren.
The highlight of the first few days was a trip to Pompeii. It was destroyed in 79 A.D. when Mt. Vesuvius erupted for two straight days. Most of the residents left at the first sight of the eruption. The people who remained were all killed by poison gas. Pompeii was covered with up to 60′ of ash and was only discovered in the middle ages. They have been excavating the ruins for the last two to three hundred years and still have only uncovered 60% of the city. It was preserved exactly as it looked like, nearly two thousand years ago.
Next up was Rome. Rome is one city you should put on your travel list and if you ever get the chance, don’t miss it. Walking among 2,000-year-old ruins is a wondrous thing, especially for a history major like myself.
Here are two pictures of the coliseum.
And the Forum
And we spent half a day at the Vatican.
Its splendor is hard to describe. Whether you are Catholic or not, it should not be missed. It is populated by some of the finest works of Michelangelo and Bernini. The Sistine Chapel and St. Peter’s Basilica were awe-inspiring. We were not allowed to take pictures in the Sistine Chapel. The Japanese paid for its renovation a few years ago and they own all of the copyrights to the paintings. Imagine that!
I will discuss our last week in Tanzania in tomorrow’s daily. Suffice it to say, the first week in Italy was as good as it gets.
Now, back to reality – I can tell you first hand that the dollar is a pariah currency in Europe. I purchased a Gillette razor in Amsterdam for $30. It cost $12.95 here in Minneapolis. A cup of coffee was $8. The Italians want Euro, not Dollars. Europe is damn expensive!
When we got home, Susan had a pile of magazines awaiting us along with the usual bills and junk mail. She commented that all of the high fashion magazines are showing gold, gold, and more gold. It is the “in” color this year. I wonder why?
If you want to get your blood pressure up, here is where YOUR tax dollars went after the financial crisis in 2008.
On top of the $160 billion in loans from the Treasury Department, banks – including those based overseas – borrowed $669 billion from the Fed, with the Fed’s peak balance at one point reaching a staggering $1.2 trillion.
According to Bloomberg, the $1.2 trillion is about the same amount as homeowners owe on 6.5 million delinquent mortgages, three-times the size of the federal deficit in 2008, and more than the total earnings of federally insured banks in the last decade.
The Fed had refused to disclose the specific sums it lent to the banks in 2008 – but was compelled to by the Dodd-Frank regulatory reform law.
The leaderboard (via Bloomberg):
· Morgan Stanley – $107.3 billion
· Citigroup – $99.5 billion
· Bank of America – $91.4 billion
· UBS – $77.2 billion
· Goldman Sachs -$69 billion
· Deutsche Bank – $66 billion
· Barclays – $64.9 billion
· JP Morgan Chase – $48 billion
· Hypo Real Estate Holding – $28.7 billion
· Societe Generale – $17.4 billion.
What about the rest of us? I guess we are not too big to fail. My friend Warren says, “We’re too small to save.”
It looks like I am wrong again. I predicted that gold would hit at least $1,800 by year’s end. Here it is in late August and gold is $1,908.20. Why $2,000 looks like a cinch in the near future. Investor’s worldwide are finally waking up to the fiat currency game and they want out. There is no place to go that makes as much sense as gold and silver. Even our friend, Frank Suess in Switzerland is touting gold instead of the Swiss franc. We moved all of our Swiss annuity clients out of the Swiss franc in 2003 and 2004 and into gold. We were ahead of the curve. We usually are. Get aboard now or you will miss out.
For over a decade, most of my friends, acquaintances and family members thought I was crazy every time I started to talk about gold and the economy. Like comedian Rodney Dangerfield says, “I don’t get any respect!” Well, I hate to tell you, but “I did tell you so.” I think people are FINALLY starting to listen. Not everyone, but some – and those who aren’t will eventually come around. The bull market is trampling all of the non-believers – except for people like Ned Schmidt and Jon Nadler. If you are foolish enough to listen to their bearish views, you deserve what you will surely get.
What does Richard Russell have to say about gold today? “Everybody now waiting to see if Bernanke says anything of substance on Friday. Market thinks he will throw Wall Street a bone — but it doubts QE3, that would be too obvious. Gold seems to be looking for more fertilizer in the mix.”