Two Great Round Table Discussions
Hour 1 :
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Hour 2 :
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Hour 1 :
Segment 1 through Segment 4 – The first round table discussion features Rick Ackerman, Richard Postma AKA Doc, and Gary Savage. We discus where the gold market is going through the summer, whether individual companies or actual metals are better investments, and predictions on what will happen in the conventional markets.
Hour 2 :
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Great show by the way, guys!
Many thanks, Silverbug Dave!
A bit of an experiment that I happy to say had a pretty positive outcome.
Further proof that it is never all about one person!
Very interesting discussion. Thank you Team Korelin!
Many thanks for refering to us as a team!
Guys, please take my duplicate comment off.
I heard some analysts saying they expect silver to outperform gold on the rally. Right no, it has not done that.
http://stockcharts.com/freecharts/gallery.html?s=%24silver%3A%24GOLD
The Silver:Gold ratio is still falling. Usually that happens in a correction. There aren’t many times when gold outperforms silver on a rally (except the summer of 2011 where gold played catch up after silver topped that May – and then we have had declines ever since). Do your analysts find this factor bearish?
Jay is EXACTLY RIGHT in all that he says on your show. He’s a top man.
Agree, Jay was awesome. Love to hear more from him on his topic today. Good comments Dave.
Cheers BirdMan. I just took a look at some stocks on stockcharts.com.. The royalty/streaming companies: FNV is outperforming SLW right now. FNV has passed two quite significant previous highs as Rick Ackerman likes to see. The ratio FNV:SLW is still rising, as is $GOLD:$SILVER. Taking Royal Gold instead of Franco-Nevada to compare with Silver Wheaton, Royal Gold is slightly underperforming SLW, whereas FNV is outperformng nicely, so it’s not really conclusive. Bob Hoye likes to look at the gold:silver ratio rising as a sign of problems in the credit markets, i.e. downside for most bonds and widening credit spreads. Any thoughts?
Plus, any ideas on why Agnico-Eagle AEM has held up so well in this gold smash?
I definitely agree with both of you regarding your opinions of Jay!
With regard to the economic problems of the US.
Once there was a Constitutional Admendment to have direct election of Senators, instead of nomination by the states, the fate of the US was sealed.
Democracy never lasts for more than about 5 generations.
The problem is (as Alexander Tyler Wrote in 1780 +/-) once the electorate realizes it can vote for themselves largesse at the expense of taxpayers the system sdecays into terminal collapse. I often describe this as congressmen simply bribing the voters for a vote using taxpayers own money.
There are several ways to eliminate this:
TERM LIMITS, to eliminate permanent congress critters.
Voting proportionality in all elections, a weighted votes proportional to the tax paid. (This has the added advantage of giving no votes to illegals that pay no taxes.)
A balance budget amendment, that limits amount of taxation and/or welfare handouts. – you cannot buy votes unless there is money available.
I still love the US and will visit occasionally, but (while you were not noticing) it is not even close to being free or the best place in the world to live.
(I got to see my first double rotor helicopter-type drone last week. I was surprised to see a huge united states flag decal on the side of it.)
Closing arguments were given in Bradley Manning’s case on Friday. I feel sorry for the whistleblower, who will propaply spend the rest of his life in Jail, while the illegakl actions on which he blew the whistle were never even investigated or punished.
Very interesting comments CFS about our elected officials.
Balanced budget? Of course I completelt agree!
Manning? I am studying that situation right now and will have have some words tomorrow or Tuesday.
propaply should be probably
At least the US has a sense of humor.
As I’m looking at various sites in Europe, an pop-up ad occurs.
“Fill in your name and address to enter for the US Green card lottery.”
I almost fell off my chair laughing!
What was the context Professor?
That was a fascinating show guys. Amazing discussions all round. Jays comments really hit the spot for me though when he began discussing family and social issues leading to declines in the empire. I have often tried to time the beginnings of the family breakdown to when the women’s movement began in the mid sixties. Without upsetting any of the gals out there we cannot help but notice how the emancipation of women from the home while being beneficial to the individual did have a very negative outcome on the structure of the family. Divorce rates rose dramatically in tandem with the new demands placed on full time work for our better halves but the outcome was a generation or two of children who grew up with the television or game-boy as a babysitter. Loyalty to old fashioned values went into decline. There seems to be little love between siblings or family members anymore which is so unlike what my own parents enjoyed. Instead we have nurtured a cult of selfishness that masquerades as independence and is valued above obedience to our parents. Few people I know have even made plans for their Mothers and Fathers in old age. Fewer still expect them to come home and live with them. That is the states responsibility of course. Let the government babysit pops and mammy in old age but don’t burden us with their care seems to be the theme. If that is an outcome of the great success of women’s emancipation into the workplace then we have all failed. sometimes there is value to be found in traditional roles and for those families that continue to practice old time values they will all be substantially better off in the long run that the beggar thy brother attitudes of today’s adult children.
Birdman…in agreement 100% BTW Jay has an awesome weekly radio show, a lot of great guests,topics etc.
He does indeed. I am listening to one of Jay’s shows now (after hearing all of this kereport weekend show, of course)!
Many of these mothers and fathers have their grown up kids at home and are currently surrounded by their grandkids and their son’s’ girlfriends! I know a few of them. Their kids often can’t support themselves, so their parents are on their own financially in their old age, I think. Retirement? Forget it!
SD,that is the exactly Whats happening to my oldest sister and husband, late 50’s with daughter and grandkids.Their home is absolutely turned upside down.
You can retire but you must be smart about your finances and see debt for what it is enslavement by a few for the many. When there are good times prepare for the turnaround because it always comes and always has. DT
ditto….DT
Amen, Machine Gun!
All depends on how you define “retirement” Silverbug Dave!
You can listen to Jay’s show by going to http://www.voiceamerica.com and/or http://www.libertyexpressradio.com.
I believe that a lot of the change we are seeing in the break up of the family in North America and now with civil unrest in the muslim world is caused by inflation. Society in the past was never structured where a family needed two incomes to survive.
The muslim world where the man is in charge is going to go through a host of changes many of which we as North Americans have already faced only they will find themselves having to accept these changes in a much shorter time frame.
There are simply too many people living on this planet and the demands being placed on the World’s resources are forcing change at an unbelievable rate and the effects on the family structure are being felt everywhere now and in the developing nations this is happening at warp speed.
I don’t like the breakdown of the family unit but the human rights of women in a male dominated society like India needed to and are being addressed. That’s why they say take life one day at a time. DT
Limited resources on our planet means we should expect very slow to no growth and even negative in the future and that is seen by major companies showing no revenue growth but higher earnings through cutting expenses or buying back shares. Economies can’t keep growing forever and have to go through a declining cycle. Some high tech companies can grow revenue as they don’t actually need physical resources but create value through information systems and don’t have to produce goods.
I particularly like your final paragraph!
I could not agree more Bird!
Spot on Bird Man over your depictions of family life….the new selfishness ‘beggars’ belief in what really matters. Thanks, Andrew
Amen Reverend!
Thanks Andrew. It is interesting the same theme is playing out in all the heavily indebted entitlement societies and countries around the world. Where I live there is substantial regard for family. It is very traditional but also supportive for the most part. Such a difference it is really hard to even explain to outsiders who would find it very foreign.
You are fortunate Bird.
Interesting story: We were in Republic, Washington last week where we ended up in a brew pub after dinner. I was talking with a waitress there and I asked the question whether or not she had spent her entire life in this little town of 350 and pretty isolated in the mountains. She answered no that she spent a bit of time in the Seattle area but moved back. I asked her why and she looked me straight in the eye and said, “because the people here are real”!
Interesting comment don’t you think?
That gal was straight up I bet. Small towns let you get to see the nitty-gritty of human nature in a way you never experience in a city. I have lived in many. The strangest of behaviors are accepted by town folk as normal. It is all perspective. Live and let live is the best motto…..and turn the other cheek. You need a thicker skin to live in a village and a more positive outlook on people. Patience is really a virtue! I think I have been to Republic once, by the way. It was a very long time ago now and so I am not a hundred percent sure. The ex and I were on a mission to shop antiques across the state at one time and we went on tour from town to town buying what caught our interest. The weird part is I can hardly recall all the places we went too anymore nor what we bought except that Northern Washington seemed a paradise and peaceful oasis compared to Vancouver which is so close by.
Definitely isolated,Bird, but definitely very,very cool!
Thanks Jay for your God-fearing sights.
Re the failure to produce, Plutarch said:
‘An imbalance between rich and poor is the oldest and most fatal ailment of all republics’.
For sights read insights!
Al, great timely show, always enjoy the weekend report especially with guests like Jay,Rick and Doc. The question is if a society and culture are at such critical mass who can we turn to ? It’s good to have our financial house in order but what kind of world are we headed for ? Mankind clearly can’t do it on it’s own.
Hopefully by God’s mercy we will see a renewal
I think everyone would do well to check out the powerful message of Mercy on http://www.marian.org as the show successfully conveys, we are in major troubled times.
Many thanks, Mike.
AfterI address all the comments, I will check it out.
One of the best weekend shows! Thanks.
Teamwork is what it is all about, Clark.
Thank you.
Al et al – thanks as always. Ref Segment 7 and ‘the Dow Jones running out of steam’ along with Detroit, David McAlvany says that the laws of gravity affecting Detroit are of course those ready to pull down the U.S.
Speaking of the Dow, he sees a decline in the index of at least one third, or rather the longer QE goes on the greater the possibility for a 50% crash. This stands to be a 2-4 year process although it could be sooner making a Dow/Gold ratio of 2:1 perfectly feasible, with gold going to between $4,200-4,500.
Metals/Miners – Constructive. Further work required. Nevertheless, hang in there guys/gals, rewards forthcoming await those who can exhibit discipline/patience & perseverance. Phase III lays in the offing.
Enjoy the weekend.
Many thanks Simon!
Good show today but to you boyz listen to this hear KE Report with one of those new fangled tablets or do you use an old fashion puter?
I used to use the old puter with blue tooth head phones but just go one of those nook hd plus for only $149. Good for listening to this.
Yes it certainly is Old Timer (kind of like me!)
Took me awhile to figure out how to use mine though!
Big Al, I still use the puter since it is easier for me to type.
Mostly use the tablet for listening and reading.
A SECOND OPINION a story about PULLED PORK BUTT AN ACORN AND A DISCUSSION ABOUT CREATION
Over Sunday morning I fired up the grilled and started to smoke an 8 pound pork butt.
I had applied a dry rub on Saturday and began the joy of heat application.
This has become an unofficial Sunday of the British Open tradition.
Cook low and slow starting early with the time difference causing an apparent early tee off.
During this twelve hour outdoor process I was dismayed that my AC unit started clicking noting it was not going to repair itself. I think the smoker was too close to the AC and stressed it.
The next day a repairman came quoted me $900 to repair the fan motor while handing me glossy brochures for a new unit. His eyes were empty….sullen.
My second opinion repairman quoted $400 and it will be good for several years.
While the second repairman worked on the unit I heard the impact of an acorn fall from a higher branch.
Out of the corner of my eye I saw the acorn hit. I went over to pick up the acorn thinking it was a little early for them to come down.
It was not yet fully grown. I commented to the repairman “In late summer early fall I wear a hat out here because these things can hurt!” I added “these things are designed to penetrate the ground!” I showed him the sharp point on the tip of the nut.”
Interestingly the repairman’s eyes lit, he said “I am glad you said designed!”
I replied the first five words of the Bible begin “In the beginning God created.”
I finished “That is a great beginning to a great book!”
The repairman that was doing honest work appreciated the distinction between the acorns being part of creation versus the misconception that it evolved randomly. He accepted my offer of a pulled pork sandwich and slaw after the repair was complete. We had an awesome discussion about various topics.
The understanding that we are created is what liberated The United States from an oppressive monarchy. When we lose the understanding that we are created we do so at our own peril. The first repairman arrived in a new shiny truck with laptop mounted to the dash. The second repairman arrived in a tired but well stocked truck. He limped with an obviously tired hip.
When Jay and Allen discussed our “morals deficit” and “20 generation cycle”, respectively, it made me think.
I have to agree with them both that the United States has lost the meaning of its own creation.
When you lose this important fundamental perspective you set yourself on a wayward course.
There is hope. When someone acts like they know everything….especially when they sit in a well-appointed corner office….especially when said office sits above a marble lobby….even when they drape a stethoscope around their neck….it is wise to obtain a second opinion.
Dennis M,
I actually read this outload. To my wife.
Thank you!
Enjoyed the whole show, especialy the 2nd hour with Jay Taylor and Allen Butler.
One minor point tho, unfortunate there was so much background noise, I got the impression whoever was causeing it didnt think the guests opinions were worthy of focusing on. Why have them if not going to listen to them?
Otherwise I thought it was a very good show. Thanks to everyone.
It sounds like someone is “picking your feet in Poughkeepsie” with an open mike.
http://www.youtube.com/watch?v=siuwOnqz2uk
Agree – like someone’s tearing up sellotape.
Trust me guys,I will get this fixed!
The opinions of all are very important.
Trust me this will be fixed.
I’m quite worried about the future of this country. Good show today, and Cory, you’re a star I tells ya. And I like this Web site. Do you up date it too besides do the interviews. What software do you use for it?
Big Al If you are permitted?? What company are you and Cory involved with in Winthrop,Wa. Thanks.
Not in Winthrop which was a halfway stopping point.
The company is Adamira and is actually located in Republic.
More on this tomorrow.
one of my nephews has great mechanical skills. but he is presently raising mary jane as a pot farmer. he just relocated his operation to a remote part of Missouri and will be wholesaleing his crop back to east coast. Sad. if I ask him he will deny it. his brother told me about it. rather than make 40k per year working , he is probably making 80 or 100k per year as a pot farmer. I am not a happy uncle. love to all pray for peace. s
Scott, I say “all the best to him”. I keep hopeing that some day the people and governments smarten up and see the benifits of hemp and pot.
Until then, we have to go along with the illegal farming even if they are not paying the tax they should.
That has always bothered me that a pot grower can make so much money and not pay a dime in tax. oh well I guess.
In Canada, Justin Truedue wants to legalize and tax. ITS ABOUT TIME.
Nice to reduce the profits of organised crime, put the money into government coffers and create some many needed jobs.
Not that governments need the money of course, they can print. lol
matt…..thanks for the post……there is a lot of info.in the article…when reading an article like this you can understand how Clinton….left office with $175 million ,and when he went into office he was dead broke,,,,or should I say some of the people who were around him wind up dead.
Hi Matt. I think there have been a few people saying exactly these things for a long time. Good post.
The Many Uses of Hemp – The Information Distillerywww.informationdistillery.com/hemp.htmCached
SimilarThe Many Uses of Hemp Hemp is one of the most useful plants on Earth. For thousands of years, humans have used parts of the hemp plant for food, textiles, …
I have to agree with you benb.
Don”t blame you Scott.
Is it a legal grow there. Apparently it is in Washington for medical purposes.
Sharp dip for NEM yesterday and a great buying opportunity. I picked up many shares but sold off when the horrible quarterly results came in. The shares kept going up later as they must have been discounted already. I am waiting for next week as it looks like the dollar has come down too fast and is likely due for a bounce now.
I just bought a house in Tri cities Washington state. [Kennewick] . I got a nice 2 bed 2 full bath house for 170K . Real estate in eastern wa. is relatively cheap compared to Seattle area . I am retiring over in Eastern WA. not to far from Idaho. WA state has no income tax, and fairly low R.E. taxes. the area I am moving to does not have a rapidly uptrend in R.E. prices , but should slowly increase. best to all S
Some good friends of ours live in Richland.
Canyon Lakes is agreat golfcourse in Kennewick as isHorn Rapids in Richland.
You should enjoy it there.
QE is only going up over time. Fed and the gov’t is are just too embarassed to come out and say it but will keep mentioning eventual tapering just to make it look like they are under control and managing the fiscal problems. I have loaded up on Intel and it is on a confirmed buy signal now and has low volatility. It will only go up at a snail pace.
Fed now owns 31% of treasury market. link to article among other things.
Next week is a really big “auction” LOL of new treasury issues. On top of that the Fed will release its monthly MOPE. The Fed and associates have in last several years tried everything to get out from under their imposed and self created problem of debt only to make the situation much worse. The main problem the US government and Fed has is their models are false, there is no way out for them going forward in their model except to continue into extremes which are certain to bring down both the Fed and government.
Things just got even worse for Huldra Silver shareholders:
http://finance.yahoo.com/news/huldra-silver-obtains-ccaa-protection-000727620.html;_ylt=Am9ox8jkFOWmIexOOcIVEkiiuYdG;_ylu=X3oDMTIxdmYzYjNrBG1pdANXaWRlIFF1b3RlcyBNb2R1bGUEcG9zAzMzBHNlYwNNZWRpYVJlY2VudFF1b3Rlc1BvcnRmb2xpb3NXaWRl;_ylg=X3oDMTFkcW51ZGliBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3BtaA–;_ylv=3
My feelings are that now it is very dangerous to be in stocks as they will be trending to lower levels. I believe we will start to see further liquidation in stocks, we are now living in a world of stock delusion, by early September we will see the dangers of the situation in financial markets.
I also feel that there will be a crash this year and I am thinking October after the 22nd but If you have precious metal and you know how to exit the parabolic rise you will be prepared. DT
Matthew, thanks for the link regarding HDA.Not looking good.
I have to say it again.
This company never had much interest for me.
Yes, i remember your comments regarding HDA Thanks,Big Al.
Is recti the plural of rectum?
quote:
“Nine Taiwanese were caught by South Korean custom offcials while trying to smuggle gold into the country. Each smuggler carried about 24 pieces of gold, weighing up to 12 pounds, in their rectums. They were promised “a night on the town” in Seoul in exchange for their service. South Korean police have issued warrants for arrest of the man behind the smuggling ring.”
– See more at: http://www.ntd.tv/en/programs/news-politics/runlist-news/20130726/81858-9-arrested-for-smuggling-gold-in-rectums.html#sthash.zAhxtTtH.dpuf
I can’t vouch for the safety of above link.
IS that how they get droopy drawers………..
To test if gold is real – bite it.
Might want to wash it first. haha!
a brighter meaning might be brought to mind,,,,when someone says” up yours”
oh,,,ha,ha……
Maybe they are real life leprechauns and when they expel the booty there you will have it…… a “pot of gold”.
http://www.yellowtoilet.com/
The plural of rectum I believe is recta.
The smugglers were secreting the contraband in the lower parts of the alimentary canal, between the sigmoid flexure of the colon and the anus also known as their recta.
More commonly known individually as their respective rectum.
Whatever happened to quality reporting?
AL,
“Lone Star” is the “beer of Texas”.
Al,
” Moosehead” is the breakfast of champions. DT
DT…Moosehead is THE best beer ever. Can’t find it anymore in Fl. ….Cheers ..
And Guinness is the nector of the gods!
Jerry, go to total wine, they have it there.
Remember the children who come to this site!
I know. I was just experiencing a brain freeze.
WE CANNOT HAVE THAT NOW!!!!!!!!!!!!! CAN WE??????
Why does India count gold imports in trade deficit calculation.
It can be understood why to include import of oil in such a calculation because it is consumed as energy or in the manufacture of products. In the end all you have is an empty barrel not wealth. The consumption of the oil may have added comfort as heat. It may have added utility in transport. It may have become plastic in a toy or food packaging. The oil’s purpose was temporal and is then gone.
Gold on the other hand is money.
As the below story indicates the Indian peasants wear their wealth as a protection against inflation. The Indian people have a strong desire to not participate in fractional reserve banking and the paper fraud that it is.
When the University of Notre Dame adds gold leaf to its’ famous dome the addition of the metal does not make the University poorer.
Just as when an Indian woman obtains a gold bangle bracelet the country is not poorer as a result.
Just because the wealth is added in a dispersed manner does not mean the wealth was consumed and is now gone.
A country’s motivation to discourage the import of what is money is not because the country really goes into any deficit as a result.
The reason the import of gold is being discouraged is that the metal allows the citizenry to escape the fraud of the banking system.
Gold is a tool of liberation. We cannot have that now!!! Can we?
http://www.foxnews.com/world/2013/07/27/india-seizure-smuggled-gold-soars/?intcmp=obinsite
No we can’t Dennis M!
Good Show Big Al, keep up the good work. My favorite is Jay Taylor & Alan Butler in how great our country IS. By faith it IS. 10 generations or not reasonings aside. If our forefathers had that in their minds when they fought for Freedom, they would have quit early and gone home to get hung for treason. I`m glad they stood their ground. Fight the good fight of faith. We can overcome ————– the 13% that support Obama.
We can and we will Dennis.
I found this link a few days ago from Paul Craig Roberts: USA is lawless, his prediction or expection is by winter, the 2nd downturn of the great recession will be in place. Unemployment explodes, more foreclosures, and the mind set at the White House is that we(the US) can win in a nuclear war from us launching a 1st strike on both Russia, and China. —— This is really a doom & gloom report http://www.youtube.com/watch?feature=player_embedded&v=buqJP7y115s with Greg Hunter – published July 23, 2013
I don’t agree with him at all.
Sarah Palin is still hot in more than 1 way.
Watch her take the media to task on Greta.
The redneck clipboard is classic.
A list of scandals scrawled on the back of an envelope.
http://video.foxnews.com/v/2568392203001/palin-obama-stalling-and-stirring-chaos-with-phony-claim/
Thanks Dennis M.
Gold to decline further?? People reading technical charts may well be seeing what the bullion bears want them to see, a kind of 3 card Monte. I highly recommend listening carefully to the second half of this interview of Alasdair Macleod that explains the GOFO rate in the LBMA and the recent report on bullion holds at the Bank of England.
http://www.maxkeiser.com/2013/07/kr476-keiser-report-jihadist-safe-haven/
Backwardation is now happening in London but not at the COMEX which is not happening. The main reason for this is because the COMEX is almost entirely a paper traded market whereas almost all of the Western physical gold trade comes out of the LBMA (London Bullion Metals Association a kind of gentleman’s club where prices of gold are set for good market delivery of 400 ounce gold bars). Gold prices are physically set in London then followed with paper leverage on the COMEX, but the COMEX does not actually set prices of bullion because the total available gold in inventory is only a tiny percent of contracts.
Alsadair explains that the total amounts of gold sold and shipped out of London from the beginning of this year far exceeds all available hedged gold from producers and removed from ETF’s like GLD. In previous reports this physical discrepancy was calculated to be around 1,300 metric tons which Alasdair said must be coming from some available source most likely the Sovereign Banks. He has been alerted from the BOE’s website that total inventory as recently reported is about 5,200 mts whereas on their year end statements is was 6,500 mts, a 1,300 mt drop.
Bear market squeeze could now start should the shorts of these gold contracts not be able to obtain physical. Is this why the inventories at the COMEX is dropping? Most of the Bullion banks have already cleared there shorts leaving the Hedge funds with the largest short positions for many years. Should only a tiny fraction of the contracts sold by these Hedge funds go to delivery in either London or New York, the sellers are forced to get bullion from some place and if the big bullion vaults be reluctant to supply more gold, where is this gold going to come from? Leased rates for gold at the COMEX has been rising significantly for last couple months, while forward contract rates at the LBMA are now in backwardation. Is this a set up for Big Short Squeeze that can not be settle in physical requiring either a rapid rise in price necessary to obtain bullion or settlement in paper which could be regarded as default? Would the so called regulators and owners at the COMEX or LBMA allow for paper settlement instead of physical delivery, and if so what would be the consequences of doing so?
Many questions, but the fact remains there is way too much paper out there and so little actual physical available for settlement in gold. If the Western markets allow gold trades to go to paper settlement, would other items like oil, wheat, silver or other things follow? Judging from the past gambles by these markets anything is possible, but in my opinion if gold goes to paper settlement we are likely to witness rising fear in holding paper contracts for anything else in these specified markets. If the operators of these markets would only be allowed to take these risks if authorized by their governments with acceptable consequences.
I take no credence in the faith of my government at this time given the actors now playing. Trust and confidence is sorely lacking so be prepared for the most incredulous stupidity of all times.
SPOT ON!!!!!!!!!CLAY
Great points Clay!
The Keiser interview of Alasdair Macleod was compelling.
“Spot on” you might say when intending the pun.
The fact is we live a world starved for collateral and inundated with tenuous promises.
Like most prom dates this financial system begins innocent, polished, fragrant, handsome and pretty. But history tells us it will end drunk, disheveled and the financial now worthless prom dress discarded in a ball on a floor next to the hotel room bed.
This market will end jaded and ugly.
Another depiction of Clays comments.
Bob Cratchit did not have six children during financial repression.
He had the six kids during the boom times.
When Tiny Tim the youngest of the 6 was born his condition symbolized the economy.
The boom turned. Things were far less than perfect. Without a benefactor people will simply die.
Many may not have produced six children in this Malthusian influenced world.
However many will regret their polished stone counter tops that months after installation they sealed to prevent radiation transferring to their organic boneless chicken breast. There will be a myriad of expenditures that will be wished undone.
There will be a plethora of indulgences that will have been in hindsight been better stored.
So so true, Dennis! However my sense is that many people who’ve en-suited every room in their house, or who’ve concreted over any green spaces available to grow vegetables won’t actually acknowledge their folly. They will just end up miserable and impoverished.
….and bitter!
Completely agree Reverend!
Really a great analogy Dennis M!
Good interview. Thanks Clay.
Traders who trade strictly on technicals should be cautious when reading indicators on a chart. The old saying “Be careful what you ask for, you just might get it only to find out it was not what you thought you would be getting”, applies to gold in this world flooded by fiat currencies. If the currencies are rising in amounts everywhere and laying their derivative eggs into the quad trillions, what should happen when they hatch? Analogous logic where the derivative eggs begin hatching, where is the food going to come from to feed? Where are the worlds resources capable of coming from to feed all this growing paper contracts? There is limited supply and yet the debts, paper contracts and financial instruments keep expanding almost exponentially. I am not one to forsooth a calamitous catastrophe, but only a fool would ignore current warnings.
I saw that Clay, Max has great guests and does excellent interviews. One reason he is so popular I guess.
Cant remember which bank AMO? They were settling in cash instead of metal if I recall correctly. Nothing happened. Settling in cash might not be as big a deal as suggested.
It occured to me the other day, the banking cartel is in Russia, it funded the overthrow of the Zar and has been there ever since. Easy to forget they are part of the same system the west is involved with.
Whats to stop the Russian banks from supplying some gold?
Maybe not, but there may very well be gold available yet to keep the price to exactly where the moneychangers want it.
I still think everything that is happening is intentional to move gold to china to back the yuan, its just time for another reserve currency. Maybe this is all about getting labour rates in line with the rest of the world. Just sayin.
I think you are spot on in your last paragraph.
Sounds alot like what David Morgan has said on the last paragraph, http://www.youtube.com/watch?v=6tuuzUW3ktg ……..this is just me speaking …Yet it is known that the Rothschilds are in Asia, China, so it could that they could be on the receiving end on grabbing the West`s gold going East, as to buying physical gold from JPM bullion banks etc., and not necessarily China being the net buyers of the gold going East. ….. There`s more ways to escape capital controls from the ole USA. It could be the rational thinking of the transfer of wealth from the West to the East, by dropping all that paper on the market it achieved price suppression of gold, and a way to escape capital controls of wealth transfer to the East. Like whose buying what ? China ? Or central bankers trying to leave a sinking ship in the West.
Yep, on the surface it seems that transferring assets from the West to the East might make some sense if you are convinced that the economies of the West are or soon will be “done”.
Lots of interesting ideas out there, huh!
Considering the above and yes Dennis M. O’neil is absolutely correct “starved for collateral and inundated with tenuous promises”, maybe those who own gold should be less concerned about the gold price and more about what price they would sell their gold for. Judging from the majority of populations in the world I would say they are not selling their gold but instead buying more. Only a tiny handful of people are selling gold and they are not selling any of their own gold but actually selling other peoples gold.
What do the generals and admirals of the US know that the politicians either don’t or ignore? Could WWIII come and go without so much as a firecracker going off? Could those that lose the war be faced with reparations like that after WWI? Remember only a few Germans started WWI, but all Germans paid for it many times.
I have to disagree that there are only a few people selling gold, I see lots selling, its the amount they have to sell that is in question. Always has been the question, “will supply meet demand?” so far, it has.
This is all better than a reality show anyway.
I wonder if people will ever wise up and get tired of being manipulated and ruled by the moneychangers? We shall see I guess.
benb: Who are the people selling gold? Are they household in China, India, Russia, the US who? Sure some of the people in the world might be selling their own gold but I suggest they are only a tiny percentage in both number of people and total amount of personal gold being sold. Take look at the gold scrap tonnages being reported sold by the World Gold council, it is down considerably from last year.
No I don’t think on a significant percentage basis people are selling their gold, on contrary it appears to me that people world wide are buying significant amounts more than any person gold is being sold.
Clay you are onto something.
The GLD and SLV diluted physical off-take since their inception.
And lately they have exaggerated the selling.
It may be true that there is/was selling but the same is selling of what never really was.
People bought promises they confused as metal.
Now the mirage is sold off and people perceive it as disregard for the metal.
Hellman’s mayonnaise used to stress that you have to break some eggs to make real mayonnaise.
http://www.youtube.com/watch?v=M2JGTfPNAzc
Well the “best precious metals” investing practices requires the real deal.
Not some papered over Miracle Whip.
Clay, lol, the people selling are the same people your buying from, or me or anybody.
No shortage, just a matter of price, for example I am selling, just not at the spot price. But that wasnt really my point, and I agree with what your saying, all the gold you want is available in Calgary for example or Surrey Boarder Gold or NW Mint, lots of other options.
This discussion has gone on before. My point is..”Has/is demand being met?” and so far it has been. There are logical arguments out there that have the price of gold dropping. Me? I continue to buy physical (never a problem getting it) on a monthly basis and trade paper. poorly but I trade it.
Good to see the issue of collateral is finally getting the airtime it deserves. There have been a flood of great articles addressing the subject lately. We have many terms and acronyms that are used daily in our discussions that tend to confuse about the basics of credit issuance and what supports it all though. They have tended to shroud the simple mechanics that create systemic risk and that don’t often get discussed. At the very heart of our financial system is this little issue of collateral backing which is of such importance it stands to destabilize everything if not managed well. When we discuss counter party risk or rehypothecation or unfunded liabilities we are really talking about the trust (and hope) we all place in a system that is not supported by sufficient assets to balance the ledgers today nor in the future. In our hearts we know that in this big game of musical chairs someone is going to get left holding the bag. We all hope it will not be us individually but in truth it will be all of us collectively.
Detroit for example. Sure Detroit might be an ice cube on the iceberg, but even so what we see his huge. What lies underneath I suppose can be calculated based on the fluid its floating in, but what if that is also wrong. What if the iceberg is the collateral being floated by a fluid of derivatives and credit based on confidence and promises?
I doubt Maynard Keynes ever imagined what we have today, and if he did it would be a bad nightmare.
I guess the question is this…..how long can we keep inflating asset values before we hit the wall? A stock market crash would obviously be devastating right now as would another round of declines in home prices. Both must be maintained until private debt is adequately delevered to allow savings rates (and fresh investment) to rise without risking growth destabilization or we will indeed see our day of reckoning. I have grave doubts. A financial shock now would be economically devastating to most citizens in our society and it would lead to very heightened levels of unemployment, social discord and political dissatisfaction. We would certainly be on the road to a long period of deflation and economic contraction. It is hard to fathom just how long it might last but my best guess is we would not emerge from the collapse for several years at best. It could be much more than a decade before stocks recover even to todays highs. Best to be flush with cash and debt free during the days ahead. I would not criticize anyone who bailed out of their assets and various debt yokes in the coming months that is for sure.
The 16th amendment made the citizen a subject.
Subject to being deemed collateral.
Our labor is collateral.
Just the fruits of the labor of a imprisoned slave is owned by the “master” the labor of a over spending government with an income tax is owned by the “slave master government.” Those who think they are free are delusional.
Bird Man: I must disagree with your statement: “Both must be maintained until private debt is adequately delevered to allow savings rates (and fresh investment) to rise without risking growth destabilization or we will indeed see our day of reckoning”.
We need to take the shock now !! Your method of inflating asset values until debt is delivered has never worked and the history books are full of examples of failure. Too lengthy to list here. To be short and to the point…Take the hit now and let the American people recover as they have done before. Get the damn government and the stinkin fed out of it and let capitalism repair the damage. Just my opinion. Regards !!
Except for the part where we usually end of with a cycle war of major proportions after the bust, Jerry. I think that is what they are trying to head off by pumping the system with steroids and cash.
I would agree with you, Bird.
A housingp housing price collapse plus a 40% decrease in the Dow and the game is over.
Big Al,
Keep inflating assets and building more debt and the game is definitely over. what would you suggest?
Jerry,
Are you taking about people or countries?
Agree. Spread over 5 years or more both are possible. Even likely.
Our retirements are probably not going to be the dreamy relaxation in the sun we all imagined, Al.
Well I don’t know, Bird.
I say that because retirement (conventional) has never been in the cards for me.
If I stopped being active, I would first be a raving alcoholic and then a customer for a mortician.
I am having way too much fun to even think about retirement!
Something so obvious, I wonder why I only heard of it now.
Add the values of the 6 original Roman numerals:
I = 1
V = 5
X = 10
L = 50
C = 100
D = 500
total = 666
What does it mean?
-probably nothing.
Holy smokes!
I’m told that the same number can be arrived at with the old VISA card, Irwin – not sure how quite!
I think this question has been raised before, but I still don’t know the answer.
What is the price of “something” which is:
A/ not for sale? or
B/ not available?
You are FREAKING me out Irwin! Did you come up with the math on roman numerals out of your head? That is interesting for sure. On the question of price…….we might also ask, what is the value of an asset that has no bid? What is the price if nobody wants it?
Like Detroit housing for example.
No, am ashamed to say that I didn’t figure out the Roman numerals myself, simple as it is.
Agree … Jerry’s math looks like my grade 7 paper (fail). If the miners decided to sell no gold, or mine no more, and Indian women never sell their jewelery, and all other supply vanished, there is no price. I know – highly hypothetical.
A+B=AB…..A-B=A ….B-A=B….B over A = A>B…….answer if A is great than the sum of B, then B is must be less than A,,and therefore the answer is A is not for sale, therefore B is not available at a greater discount than all the sums put together……………
Good one Jerry. But your math is terrible! Do you work for a bank?
I think the Bushes call that “fuzzy math”…………
http://www.youtube.com/watch?v=7EPTCm9RVRM The crash of 1929 nothing but blue skies do I see! DT
Nothing But Blue Skies Do I See……….
You been drinking?
Willy Nelson has the best BLUE SKIES tune……maybe Dennis Disco will bring it up on the hit tunes……………….
Another Slam Dunk interview with guest Alasdair Macleod.
http://www.zerohedge.com/news/2013-07-28/alasdair-macleod-europe-hot-mess
In France 80% of the people are not working and being supported by only 20% who are. Dreadful is way too timid a word to describe. If I heard correctly, France now taxes some people more than 100% of what they earn.
thanks for the post…………The French are really in trouble…… and USA may be close at hand…..with 101 million on food stamps……..or approx. 1/3 of the people.
Thanks Clay
Gold not,off,to a good start this week. Usually Sunday night sets the tone for the remainder of the week. They’re out of the gate and gold is already stumbling.
I would not call gold down a bit over five bucks stumbling!
Whoever has always been always will always be.
We are what we are hoping to understand.
I have decided to become a lurker and just drop by occasionally to read some posts and listen to a few programs.
It has been a blast, no regrets here, bye all! DT
You sure DT? Some of your posts have been terrific. You will be missed.
PTL
I personally will miss your contributions Machine Gun.
All the best to you, my friend!
Take it slow DT, Best Andrew
Lately there has been a raft of great articles over at Zero Hedge. Far too many to link and discuss. There is one there today I thought to make note of though as it is expressing what has become a recurring theme. The title is “1994 Redux? “It’s A Bear Market Waiting To Happen”.
The article is based on a fascinating commentary from UBS and its commodity team.
They are discussing an idea that has become a near anthem amongst the major banks with regards to worries over high public debt, excessive credit and leverage, the future of commodity prices, demographics trends. The over-riding thesis and conclusion they arrive at is that deflation now lies ahead.
Just a few short years ago this was an idea reserved for lunatics and outsiders.
I think it is worth a read especially as what they are now openly discussing was not so long ago the territory of blog writers and armchair economists who fretted legitimately over our economy and the outcomes they foresaw. In other words, what we have all been discussing here and elsewhere for the past 5 years has now gone mainstream. The difference is that the banks offer a unique perspective and sometimes a raft of new charts that were not previously available to most of us.
Just the fact that we are now getting confirmation of some of our deepest worries is a good reason for everyone to sit up and start paying close attention again. If you have been getting lost in the inflation/deflation debate and cannot sort it out in your heads then this article might help.
I believe we are now heading inevitably into a long period of slow or even negative growth that can not be avoided. The banks will prefer this outcome over one that is highly inflationary (or hyperinflationary!) so we had best keep that in mind. The question will be “which banks will survive”? One thing is certain….more will make it under a deflation scenario than will make it under serious inflation or worse. The later would wipe many out so the obvious choice if only two are available is to tough it out in a negative growth environment.
During the last Great Depression commodity and resources prices fell quite hard. As we approach an inevitable credit crisis in China that is based around an unstable asset bubble of unusual proportions I expect that commodities will suffer another similar serious decline. That time of reckoning is fast approaching as growth has been faltering for several years in a row now. A property price correction will rapidly bring the issue of extreme credit and leverage out in the open. No doubt the China bulls will wonder later how they could not see the obvious but that is just to be expected when you operate from a basis of confirmation bias.
The situation there is seriously magnified by the fact that China is the largest consumer of global commodities by a long mile. In almost every category they take the highest percentage of annual production. In some cases that amounts to more than half of world output.
It should be VERY CLEAR to anybody paying attention that a credit event in Asia emanating primarily from China (we can worry over Japan another day!) will have serious deflationary impacts on the global economy as it will represent a hit to resources. There is not enough money anywhere in the globe to paper over this problem and so it afflicts us all in the end.
Debt to GDP ratios will be compounded and negatively skewed in many Western nations as a result. If you are European and already unemployed the outlook might actually get worse if that is even possible. It is hard to conceive of what sort of programs might become available to counter the effects but I doubt monetary policy will be able to counterbalance the shock.
It is much more likely that fiscal initiatives involving direct social supports will be most in demand as we slowly work our way through the process that lies ahead. This will be done against a backdrop of high current deficit spending which suggests to me some hard choices cannot be avoided in the future and some programs will risk downsizing while others may face elimination.
But what will they be when the majority of spending is already on social programs, health and pensions? My sense tells me that reality must eventually meet expectations face to face. How long that takes to play out is anyone’s guess. Years I imagine. There is no denying our living standards will drop as a result though and that some assets will wither continuously for many years to come as retirements in the developed nations increase rapidly.
We have all been given the gift of time to prepare though for what is coming since the GFC of five years back. Some used that time well and might even prosper as a result but most took no evasive action to head off what must now follow on this part of the cycle.
Probably the two most important things a person could have done (and the simplest) were to get out of debt and put away some savings for harder times. Credit is going to tighten further in the future, debt will be a noose for those who misunderstood its meaning during a time of falling asset prices, but high leverage will be financial death for the remainder.
For those of you who did not save nor build a productive income generating enterprise let’s hope that you at least cut back on the debt you were carrying and kicked the credit cards out of your life. The future may be far less certain than the past but it sure is inevitable. Time to prepare is growing shorter by the day.
1994 Redux? “It’s A Bear Market Waiting To Happen”
http://www.zerohedge.com/node/476942
Deflation has always been the predominant force at play for the last 5 years and was NOT reserved for lunatics and outsiders. If some people are slow to catch on that is their problem. Why do you think Bernankemis printing so much? He has been deathly afraid of deflation. He is desperately trying to create inflation. If the FED and the government don’t intervene we get deflation. Plain as day.
You mean that deflation has been understood by anyone who actually paid attention I am guessing. Surely if you have been reading gold websites and any of the popular economics forums these past years, James, you will no doubt have noticed that most people raged on about inflation and how it would soon send metals prices “to the Moooon”! By comparison those who dwelt in the deflation camp have been the small minority view and even the rabid hyperinflationistas have attacked their ideas regularly. At least you recognized the main trend but sadly most did not. How else to explain how so many have lost such substantial sums on gold and silver and resources? The inflation theme that guided them and has been espoused by some quite famous commentators was a mirage based on an incorrect analysis of the the function of QE and other interventions.
By the way, James…..the Fed is not “desperate’ to create inflation. Had that been their goal we would already have it by now. I would hazard it is easier to generate inflation than most appreciate but that the risk is too high. Consider that interest rates would have spiked had inflation targeting been the main theme. That runs counter to the Feds primary goal of flattening the rate curve to prevent against a debt payment shock that would have been the outcome on the fiscal side of the ledger.
Gold Backwardation Conspiracy Nonsense
-by Mish Shedlock
quote:
“The philosophical question regarding whether or not “gold is money” is an interesting one.
If indeed “gold is money” (not an ordinary commodity like corn, copper, or oil), then severe backwardation implies skepticism as to whether future gold contracts will really be delivered.
“Thus, backwardation claims fuel all sorts of theories about gold shortages, gold leasing, and price suppression.
“However, the charts provided by Nick at Sharelynx and Bron at Gold Chat show that claims of backwardation are essentially nonsense. ”
http://globaleconomicanalysis.blogspot.ca/2013/07/gold-backwardation-conspiracy-nonsense.html
Trader Dan – Thursday, July 25, 2013
“There is no backwardation occurring on the Comex at this present time for any time interval whatsoever.
“I am attempting to teach folks about this so as to prevent the spreading of more disinformation that so frequently afflicts the gold bug community. This is the reason why more often than not, many of them get discredited and end up doing disservice to their cause.
“The reason why some contracts occasionally have a last trade price higher than a more distant month is because the more distant months are not trading as frequently because there is no liquidity in those months.”
http://www.traderdannorcini.blogspot.ca/2013/07/gold-backwardation-misinformation.html
Thanks for the links Irwin. The gold camp is famous for grasping at any thin reed floating past us in the river of information that MIGHT support their case for higher prices. Any day now…… Almost all of it has amounted to nothing though including the very popular “paper versus physical” theory which is about as fruitless as all the other ideas being bandied about. Backwardation is just the latest desperate attempt to encourage everyone to pile back into the gold trade. I am less than impressed. Even the very convincing “supply and demand” of physical metals theory has yet to pan out as silver is in global surplus and gold is still trying to recover to past volumes of metal being sold into the market. The best one ever was an idea I minted myself (as a joke). “Gold is going from West to East”……well maybe it is but that is because the dynamics and low interest rates on savings in the Chinese banking system encourage this to happen and not because there is a vast conspiracy to deprive us all of our gold coins and embitter Western nations. So you know what does matter? It is the makeup of WHO is now doing the buying and going long. That should be telling us that the bottom is not really too far off. I happen to believe we will still go below 1000 dollars before this correction is over but will accept that conditions on the ground do sometimes change and I may be wrong this time. We will see by fall I suspect. If we get a September/ October market correction gold is going to take another swan dive. That should be a good time to buy physical for those who don’t lose too much in an equities rout. Miners should also come to the market so cheap it is shocking and make your eyes water (as if they aren’t already dirt cheap!). I am hedging my bets here. Autumn is normally the gold season…….but NOT ALWAYS.
Did you notice the chart of Oil Futures Spread in Mish’s article? That is stunning!
I’ll have to look for spread charts of other commodities; as one commodities trader said, “we’re in a commodities bear market and will stay there until we’re not”.
See if you can come up with one on Potash. Now that just might be interesting for a whole lot of different reasons. I love how so many analysts keep saying now is the time to buy it, by the way. They seem to always forget that potash was profitable at 150 dollars a tonne as recently as 5 or 6 years back and had been stuck in that range for quite some time. We will be returning to those lows in my opinion (or even worse).
Bird man – I agree the majority of investors and commenters were expecting and banking on inflation, and we might end up getting it. However there were plenty of knowledgable people who were in the deflation camp. Many who even stated correctly that gold does well in a deflationary environment. Gold does not need inflation, this is the myth many investors are caught up in. Years ago many analysts pointed out gold usually goes down at first in a deflationary environment, but then will eventually outperform all other assets.
I decided long ago inflation or deflation gold is the asset of choice.
Good point about gold falling FIRST in a deflationary environment before beginning to outperform. It matters a great deal when you buy and whether the purchase is made in real or nominal terms relative to the economy and currency value at the time. This is not the early 1980’s gold crash we are now seeing. My view is that prices will be crushed before gold really takes on the dimensions of a well valued asset in the coming period of deflation. Mines will close in large numbers first too and in the intervening years that those properties languish unloved the moment will arise when they present an outstanding bargain for a select group of investors. Yes they are cheap now. Yes, they will probably get a lot cheaper too before we have a resolution. The downward trending cycle will not end peacefully for most gold bugs who will be forced to liquidate before the opportunity to get seriously reinvested arises. Many thousands have already been squeezed badly and are already selling or considering bailing out for good. Most will depart in complete disgust but there are always going to be a few die-hards who will hang on come hell or high water. It is because we have not yet arrived at the stage when mines close down in large numbers that I doubt we are at the true bottom. That event is a precursor to the final bottom and is an essential ingredient in this larger cycle that is leading to a deflationary resolution globally rather than merely suggesting that golds past bull market is still alive and well. The gold bull is dead. Nor are we in a true gold price recovery in case anyone still has doubts. What is happening now is just a dead cat bounce….a suckers bounce. You had best be careful buying it in my opinion.
Point taken, thanks Bird.
Peter G. sez:
“Critical period for gold. The $1,350 area (Point A) was once key support and now is key resistance (Plus 50-Day M.A in that area-point B). Two closes above it and we can say the market has indeed turned- but not before!”
http://www.grandich.com/2013/07/critical-for-gold/
Good call by Peter. Gold will likely take another fall before breaching resistance.
The question, Bird, is how big a fall if it, in fact, occurs?
My bottom line of 968 may turn out to be a little optimistic, Al.
Certainly hope not, Bird!
Yes $1350 is the new strong resistance. The new critical strong resistance keeps getting lower and lower. Classic bear market.
Try this article on for size, James (see below). The writer, a very bright guy named Cam Hui out of Vancouver BC is one of the best analysts that can be recommended for free. He often posts on Seeking Alpha and I note he has had a great track record the past two years. Cam is not impressed with the recent rise in gold prices and muses exactly as I have done on the slowing of the Chinese economy and its relationship to to resource prices going forward. I recommend him strongly as a guy who offers a sober second analysis that resonates well with me and often goes against the crowd that is more fluff and feathers than real substance. His article “How Sustainable Is The Commodity Rebound?” is a must read as are so many other of his posts there.
How Sustainable Is The Commodity Rebound? ~~ Seeking Alpha ~ Cam Hui
http://seekingalpha.com/article/1579462-how-sustainable-is-the-commodity-rebound
We’ll see!
I am not making any more bets with you Big Al!!!1
Did I loose the last one?
Regardless, the red wine is on me!
“Regardless, the red wine is on me!” ~~ Al Korelin
I am going to start drinking again just for you Al. We will have a great talk about all things. Strictly booze related of course……nothing serious.
Bird,
If you quit drinking for a reason, for God’s please don’t start up again.
This is a subject I know a lot about.
Al, can you maybe get Cam to come on the show to express his personal views?
The guy is a genius in my opinion. A great writer and a very good analyst. His record speaks for itself. You might not like what he has to say but he has shown a great aptitude and an intuitive talent where metals are concerned without descending into the whole conspiracy thicket and getting lost in the flavour of the day theory.
Give him a call when you are up in Vancouver next. I bet he will be pleased to offer a comment.
We will be contacting him, Bird.
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James Dines gave an interview a couple of years ago and said that the central planners and conventional investors would be defeated by paradox and irony.
Well, the markets certainly abound with seemingly bizarre paradoxes and ironies, where the exact opposite of what should happen happens.
In Europe, the central bank prints money and bails out countries – the Euro goes up. If they don’t print money and practice sound finance, the Euro falls precipitously and everyone says their curreny is rubbish.
In the UK, we have more quantitative easing per unit of GDP than any other country (except maybe Zimbabwe; only joking) and the pound rises against the Euro.
Conclusion: in order to give your exchange rate a boost, print money!
In the USA, well, where to start? Bernanke announces QE to buy Treasury bonds and the yields go up. Then commentators say that means Bernanke and QE are failing. Straight afterwards, the yields went down to new lows. Nobody said that Bernanke is a now success. Bernanke prints money and debases the dollar. What happens? The dollar goes up! The economy starts to roll over, what happens? The stock market goes up like a rocket ship.
I thought inflation should cause interest rates to rise. The yields on bonds fall whenever the economy looks bad. So Bernanke prints money and the yields go up. Then later, they go to new lows. Bernanke needs to print money to make the yields go down further! He needs buy bonds and to cause inflation to make interest rates fall! What is going on?
The threat of deflation rallies the dollar. Everybody seems to like the dollar when the economy stinks. Bernanke needs to print money to drop the dollar and make the US more competitive. So he prints money to drop the dollar and the dollar goes up and the US economy is said to be improving!
Bernanke says he might stop QE eventually or taper it gradually. The markets crash because maybe they think the US will go bankrupt. Bernanke allows the government to take on more debt by buying their bonds even though they are bankrupt. He buys bonds that will never be paid back and everyone is happy. Unless they are on food stamps.