By MoneyMorning.com.au

Be warned, there’s trouble on the horizon. And it could have major implications for every Aussie wage earner, saver and investor…

Two worrying news stories came across our desk this morning. First this from ABC News:

‘Federal Treasurer Wayne Swan has refused to rule out increases in income tax as the Government tries to plug a revenue shortfall in its budget.’

And this from the Australian:

‘Treasury officials are sharpening their focus on the $460 billion held in self-managed superannuation funds as the Gillard government searches for ways to recoup tax revenue to pay for disability services and school reforms.’

Got that? We bet you thought you were saving to fund your retirement so you don’t have to live off tinned hotdogs and two-minute noodles.

But what’s really happening is that the Australian government needs your retirement money so it can fund its wasteful and excessive spending.

Four years ago we warned about the government’s plan to raid your retirement savings. Few people believed us, but now it’s happening.

Last year we decided we’d had enough. So we founded and set up the Hands Off My Super petition. You can sign it here.

Maximising Your Returns Safely

But there was a key paragraph in the Australian article. It’s this:

‘Critics of self-managed funds believe they use the capital gains tax exemptions more aggressively than others because they usually have only one or two members who can move quickly to buy investment properties, while big funds hold large property portfolios over longer terms with benefits shared by hundreds of thousands of members.’

We’ve got one word for you: Socialism. If you want to take care of your own life, savings and retirement, then clearly the government and lobby groups consider you to be selfish and a threat to society.

This is why it’s more important than ever that you fight back against the incursion of the State into your private affairs. A topic we’ve discussed in Pursuit of Happiness is the opportunity for Aussies to live overseas when they hit retirement.

Our old pal Nick Hubble has even come up with four top overseas locations where Aussies can live almost like a king.

But living overseas isn’t practical while you’re working and trying to save for retirement. That’s why it’s important you use the period of your working life to safely maximise your investment returns.

Cheers,
Kris
Join me on Google Plus

From the Port Phillip Publishing Library

Special Report: How to Hunt Down 2013′s Biggest Stock Market Winners

Daily Reckoning: Mind the Gap: What Lies in Store for the Australian Dollar?

Money Morning: When Will the Inflationary Stock Boost End?

Pursuit of Happiness: Put the Future on Hold, Plan for Today First

By MoneyMorning.com.au

Did you hear the U.S. Mint just ran out of silver? In mid-January, the Mint suspended sale of the 2013 run of its popular U.S. ‘Eagles’.

The new silver Eagles sold out fast. They went on sale, and buyers bought everything they could lay hands on. Within days, the shelves at the Mint were stripped bare. It’s not the first time that this has happened.

The Mint quickly announced that it’s obtaining new supplies of silver. It will stamp out more Eagle coins. There will be more to buy, or so they say. And yet… people in the silver markets are squirming – and I’ll tell you more about that, below…

Right now, silver sells for US$31.50 per ounce, give or take. That’s if you can find somebody to sell you their silver at that price. If you’re a normal, everyday retail buyer, good luck trying.

Let’s say you want to Buy some silver. You call up one of those companies that advertise on the radio and find out that there’s a markup to $40 or more for 1-ounce bullion coins. That’s if they have any to sell to the likes of you. After all, are you a big wheeler-dealer?

If you want the fancy versions of silver coins – ‘uncirculated’ and ‘proof’ specimens – the price is twice (or more) the posting for basic metal.

The bottom line is that silver is hard to get. You have to plan ahead to obtain the metal, and even the U.S. Mint gets its numbers wrong, now and again.

From what I’m seeing – and I’ll explain this, below– one of these days, the Mint might not simply resume sales so quickly. It won’t have the basic metal. And I suspect we’re going to see silver prices move much higher.

The Global Silver Shortage

First, let’s review the global scramble for silver. How much of a problem is it? Well, it’s not just the U.S. Mint that has to worry about supply. Industrial users are in a bind, as well. I mean big, important companies.

Here’s an example. Last summer, I visited a storage vault dug deep into solid rock and buried in the hills north of Zurich, Switzerland. It’s a massive complex, right down the road from a Swiss Army base (and that’s no accident). You can enter this facility only by prior appointment, because the Swiss customs department has to do a background check on you. The Swiss are very thorough, you may have heard.

The vault is constructed with huge steel beams and enclosed by thick, reinforced concrete walls. Accompanied by an armed guard, you have to walk down a long, sloping set of corridors and then take an elevator to get to the deep levels.

Heck, it’s like visiting a secure, military command bunker — of which I’ve seen a few in the course of my life’s journey. Finally, after a hike, you arrive at the business end of this facility.

This is no fly-by-night, rent-a-locker storage operation just off the interstate. It’s world-class. It’s a Swiss Fort Knox. In fact, in one zone of the vault, the Vatican keeps its gold. Seriously. As the vault manager told me, ‘Ja, de pope. He puts his faith in God. But he keeps his gold in Switzerland.’

Don’t laugh too hard. That line about the pope is sort of funny, but there’s a serious point to be made with all the security — physical, political and legal — for precious metals. Storing gold in Switzerland? ‘Uneasy lies the head that wears a crown,’ as Shakespeare wrote in Henry IV, Part II. Today, even the Vatican is worried, evidently.

In another zone of the same complex, a German automaker — a household name whose motorcars are revered across the world — stores industrial quantities of silver, and I mean a LOT of it. Here’s a photo of just a few pallets that belong to the German company.

These pallets cover the floor of a large room and are loaded down with innumerable 22-pound bags (10 kilograms, actually) of .999 fine silver. There’s way more silver than what you see in the photo, but it’s among the few pictures I was allowed to take.

Why does the German company store dozens of pallets of silver in a secure vault deep in the mountains of Switzerland? It’s simple, really. So that the metal is there when the carmaker needs it. As one purchasing manager explained later in my travels, ‘For some metals, like silver, there’s no such thing as ‘just in time’ delivery anymore.’

In other words, this German company buys silver when it’s available. In fact, the company buys as much as it can acquire. Then it stores and stockpiles the material in a vault in the mountains of Switzerland, right next to the pope’s gold.

The moral of the story is that when you need something, you need it. It has to be there when the time comes. That’s the key to the silver story.

Why Isn’t This ‘News’?

Are you beginning to suspect that perhaps there’s something going on with silver? Maybe there’s — not to put too fine a point on it — not enough silver to go around?

Exactly. Despite many silver mines across the world and the silver developer wannabes out there raising cash on the stock markets of the world, there’s just not enough physical metal to meet actual demand.

Oh, yes, people trade ‘paper silver’. But real silver — the kind you put into 22-pound bags — is scarce. It’s scarce enough, at least, for one of the largest German automakers to store its silver in a Swiss vault, next to the pope’s gold.

Then again, does anything about this silver issue strike you as odd?

In particular, high demand and scarcity of silver isn’t exactly a news item in the mainstream U.S. media, right? Is the story on ABC News? CBS’ 60 Minutes? MSNBC? Is silver part of any plotlines on NCIS or CSI? Does Jay Leno crack jokes about silver? Nope.

So, asks the skeptic, is this silver scarcity thing a ‘real’ story? Well, sez I, in reply, what would it take to get silver into the news?

For the average U.S. media-absorber — including almost all of the political class who set national spending and monetary policy — the global scarcity of silver may as well be happening on the far side of the moon.

Heck, in the U.S., with its low-common-denominator Potemkin media, the silver story may as well not exist.

Since I’m on the topic, I have to wonder what it would take for the U.S. media to pick up the silver story. I suppose Oprah would have to interview Lance Armstrong and Lindsay Lohan about the metal.

Jennifer Aniston would have to hit the talk shows, smile demurely and discuss the decline of the dollar. Brad Pitt would have to sit down with Joan Rivers and explain why everyone ought to buy precious metals as part of their fashion statement.

Then the silver story might get some traction. People might begin to care about the monetary and industrial squeeze that’s reflected by the supply and demand issues behind silver.

Until then? The investment field is wide open. You can set yourself up to make some money. With silver prices poised to head higher, now’s the time to find your favourite silver bargains and buy in cheap.

Byron King
Contributing Editor, Money Morning

From the Archives…

Two Questions to Ask Before You Buy Another Stock
8-02-2013 – Kris Sayce

Are These 5 Blue-Chip Stocks Still a Good Buy?
7-02-2013 – Kris Sayce

Don’t be Long and Wrong on this Stock Market Rally
6-02-2013 – Kris Sayce

Perceptions of Beauty and Stock Valuations
5-02-2013 – Satyajit Das

This Share Market Rally Has Angered Some Investors
4-02-2013 – Kris Sayce

By www.CentralBankNews.info     Japan’s central bank will continue to “pursue aggressive monetary easing” in an effort to reach its 2 percent inflation target but said the country’s economy appears to have stopped weakening and other economies were showing signs of improving, a slightly more optimistic view than last month.
    The Bank of Japan (BOJ), which last month doubled its inflation target and launched open-ended asset purchases from 2014 to help keep interest rates low and boost growth, did not specify any targets but just said it would buy assets and pursue monetary aggressive easing “as long as the Bank judges it appropriate to continue with each policy measure respectively.”
    Japan has been locked in the grip of deflation and weak growth for almost 20 years but has become much more determined to pull out of the slump after pressure from the new government under Prime Minister Shinzo Abe, who will shortly name a new bank governor to replace Masaaki Shirakawa who is resigning next month.
    The BOJ said it would maintain its benchmark overnight call rate steady at 0-0.1 percent, unchanged since 2010 when it lowered the target from 0.1 percent, a goal that was introduced in 2008. The BOJ’s asset purchase program, known as quantitative easing, was also launched in 2010 with the size of asset purchases slowly being increased over the years.

    Last month the central bank said it would buy 13 trillion yen of assets every month from the beginning of 2014 when the current 101 trillion yen program expires. Under the new governor, who has yet to be named, the BOJ is expected to increase the size of its asset purchases.
    In its statement, the BOJ repeated that it would pursue monetary easing until it achieves its price stability target “at the earliest possible time” and it would be on guard for any signs of an “accumulation of financial imbalances” as it will take “considerable time” before its policy permeates the economy.
    Japan’s Gross Domestic Product contracted by 0.1 percent in the fourth quarter, the third quarterly contraction in a row, for annual growth of only 0.3 percent, slightly down from the third quarter’s 0.4 percent.
    But noting that overseas economies are picking up, which has eased the pace of the fall in Japanese exports,  the BOJ was slightly more optimistic, saying “Japan’s economy appears to have stopped weakening,” compared with last month’s statement that “Japan’s economy remains relatively weak.”
    Although business investment is weak there has been some resilience in non-manufacting, public investments is rising, housing investment is picking up, private consumption is resilient and industrial production appears to have stopped decreasing.
    Echoing last month’s statement, the BOJ said it expects the economy to “return to a moderate recovery patch as domestic demand remains resilient partly due to the effects of various economic measures and overseas economies gradually emerge from the deceleration phase.”
    However, the forecast for inflation has not changed, with the BOJ still seeing consumer prices falling in the short term and then being around 0 percent thereafter, the same outlook it provided last month.
    In December Japan’s consumer prices dropped by an annual 0.1 percent – the seventh month in a row with falling consumer prices – compared with November’s 0.2 percent annual decline.

    www.CentralBankNews.info

By www.CentralBankNews.info     Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

By www.CentralBankNews.info     Ghana’s central bank kept its policy rate steady at 15.0 percent, saying the risks to inflation and economic growth were fairly balanced and inflation is expected to remain within its projected band of 9.0 percent, plus/minus 2 percentage points by the end of 2013.
    The Bank of Ghana, which raised its rate by 250 basis points in 2012, said the major upside risks to inflation were the possible removals of utility and fuel subsidies, wage negotiations and balance of payments. Among the downside risks were the unwinding of fiscal imbalances, declining inflation expectations, global inflation and monetary growth.
    In January Ghana’s inflation rate was stable at 8.8 percent from December, with a decline in inflation during the second half of 2012 due to lower food prices and tight monetary policy.
    The economic prospects for Ghana’s economy have improved due to improved sentiment and optimism by business and consumers. Private sector credit growth is above trend and credit conditions have eased somewhat, the bank said.
    Ghana’s Gross Domestic Product expanded by an annual rate of 1.7 percent in the third quarter, down from 2.5 percent in the second quarter and sharply below 8.7 percent in the first quarter

     www.CentralBankNews.info

By www.CentralBankNews.info     South Korea’s central bank held its base rate steady at 2.75 percent, as expected by most economists,
saying it expects inflation to remain low and the economy’s negative output gap to persist for a considerable time due to the sluggish global economy.
    The Bank of Korea (BOK), which cut interest rates by 50 basis points in 2012, said Korea’s economy remained weak although investment has increased amid generally better exports.
    “Going forward, the Committee anticipates that the negative output gap in the domestic economy will persist for a considerable time, due mostly to the slow recovery of the global economy in consequence chiefly of the sluggishness of economic activities in the euro area,” the central bank said after a meeting of it monetary policy committee.
    The BOK said it expects the global economy to recover modestly but there are still downside risks to growth from the fiscal crises in the euro area and fiscal consolidation in the United States.
    The BOK also said inflation is expected to remain low, mainly due to low demand.

    In January Korea’s inflation was 1.5 percent in January, slightly up from December’s 1.4 percent, but below November’s 1.6 percent. The BOK targets inflation of 2.5-3.5 percent for 2013-2015.
     Korea’s Gross Domestic Product expanded by 0.4 percent in the fourth quarter from the third for annual growth of 1.5 percent, the same as in the third quarter.

    Last month the BOK cut its forecast for economic growth and inflation in 2013 and said the pace of recovery in the first half of this year would be below South Korea’s long-term trend. For 2013 it forecasts growth of 2.8 percent, down from a previous forecast of 3.2 percent forecast.
    The headline inflation rate is forecast to rise to an average of 2.5 percent in 2013, down from its previous forecast of 2.7 percent, and then rise further to 2.8 percent in 2014. In 2012 the inflation rate was 2.2 percent.
     Earlier this month BOK board member Moon Woo Sik said he saw no immediate need to alter interest rates unless South Korea’s economy declines further.
    Last month the central bank also said uncertainties related to the fiscal issues in the euro area and the United States remain downside risks though the global economy is expected to continue to recover modestly.

AUDUSD is facing the resistance of the downward trend line on 4-hour chart. As long as the trend line resistance holds, the rise from 1.0226 could be treated as consolidation of the downtrend, and another fall to 1.0200 is still possible. However, a clear break above the trend line resistance will indicate that the downtrend from 1.0597 has completed at 1.0226 already, then the following upward movement could bring price to 1.0700 zone.

Daily Forex Forecast

You shall not crucify mankind upon a cross of gold.

– William Jennings Bryan

The season of fasting is upon us. No more high living. It’s time to
cinch up our belts… to put on a gaunt face and a smug look. Alone
among friends and associates, we will keep Lent.

So neglected is Lent that even Google has forgotten about it. When we searched for it, it proposed “lentil soup.”

Lent is meant to rehearse the 40 days and nights that Jesus spent
fasting in the desert before going public. We remember the lean days
with prayer, meditation and self-denial. No alcohol will cross our lips
from Ash Wednesday till Easter Sunday. (Except on Sundays. And saints’
days. And national holidays. And days that begin the letter “T” or have a
date that is a prime number.)

Yes, dear reader, we will be true to the church calendar, with a few emendations of our own.

Why? Because we wish to remember that periods of gluttony and
wantonness must be followed by periods of fasting and correction. Yin
and yang must be kept in balance. Pain and pleasure… good and bad…
right and wrong — all must get what is coming to them. Otherwise, the
entire world gets out of whack.

We fast to remind ourselves that there are hardships… there are
lean periods in life. Not just in our drinking lives… but in our
economic lives… and in our emotional lives too. There is adversity.
There is pain and penance. We fall in line, observing church rituals, so
that we don’t fall apart when real adversity hits us in the face. We
endure Lent so we can enjoy Easter.

Yes: Corrections are a part of life.

You correct your mistakes… or you are corrected by them. No other outcome is possible.

But along comes the doctrine and practice of modern central banking.
All these MIT-educated central bankers have a different idea. They work
tirelessly to avoid correction… to prevent pain… and to bring back
the good times of free-spending revelry. Now they have a program — “QE to Eternity” — which promises to keep the economy pain free forever.

A “Wicked Project”

To fully understand how this came about, we step back to the founding
of the United States of America, in whose Constitution today’s central
bank money was specifically prohibited. The states (which had the power
then to mint their own money) were not to “make any thing but gold and
silver coin legal tender in payment of debts.”

James Madison, in The Federalist Papers, described allowing
paper money as “improper or wicked project.” And in his 1819 Dartmouth
College v. Woodward decision, Chief Justice John Marshall explained that
paper money had “weakened the confidence of man in man and embarrassed
all transactions between individuals by dispensing with a faithful
performance of engagements.”

Not that paper money was necessarily the work of the devil, but Satan had a hand in it. When you can counterfeit money — and get away with it — it’s a hard habit to stop. You are soon hooked on it.

Congress resorted to paper money — greenbacks — during the War
Between the States. Five hundred million paper dollars were issued. This
led to higher prices, which pleased debtors. They borrowed in expensive
money; they repaid in cheap greenbacks. Prices in the North rose 75%
from 1860-1865.

A Cross of Gold?

After the war, the greenbacks went away. But the desire for cheap money continued.

Farming was the largest sector of the economy in the 19th century.
Typically, farmers borrowed to expand their farms during booms, when
prices were high. Then, in the correction, they cursed the bankers who
had lent them money and railed against the gold standard.

Late in the century, William Jennings Bryan took up their cause as
his own. The rural proletariat had gone bust in the farm crash of the
1880s… and now found itself so deep in debt it was willing to take up
with a fool like Bryan, if he promised relief.

The roads choked up with dust when Bryan came to a cow town in the
Midwest. There, he ranted and raved against all that the farm folk
detested — often sweating like a hot shower in the summer heat.

“You shall not crucify mankind upon a cross of gold,” he roared to the approving hallelujahs of the yokels.

The speech had a ring to it. It was a rhetorical flourish with great
power. Remembered and repeated, it is still today probably more readily
recognized than Lent. But it was empty: nothing more than bombast and
fraud.

There is some liturgical disagreement about it. But Lent generally
ends on Good Friday, when Jesus was crucified on a cross of wood. Since
then, millions have been crucified financially by paper money (a wood
product). No one has ever been nailed to a cross of gold.

What Bryan had against gold was the same thing that all paper money pushers — including modern central bankers
— have against it. Gold is uncooperative and stiff-necked. You borrow
it and you have to pay it back. The lender expects to get his money back
in real money.

And since the supply of gold rarely grows faster than the supply of
goods and services for which it is exchanged, prices remain more or less
stable. Debtors are not let off the hook.

Prices rose from 1800-1913, when America’s central bank was founded,
by 176%, says Paul Moreno. New discoveries of gold in Alaska, South
Africa and Australia had increased the money supply significantly. But
that was nothing. In the 100 years since, when paper money was the stuff
most often issued by the U.S. Treasury, prices have gone up 448%.

Bryan got his way after all. Nobody in America suffers from an honest
currency. Nobody pays back as much as he has borrowed. Even contracts
with “CPI adjustment” clauses fail to make the lender whole; the feds
have seen to that too.

More to come, tomorrow.

By Bill Bonner

http://www.billbonnersdiary.com/

By www.CentralBankNews.info     Georgia’s central bank cut its benchmark refinancing rate by 50 basis points to 4.75 percent as inflation is forecast to below the bank’s 6 percent target in the second half of 2013.
    The National Bank of Georgia, which cut rates by 150 basis points in 2012, said preliminary data showed that economic activity slowed in the fourth quarter,  indicates a decline in prices.
    Lending activity remains low, due to low demand which is expected to weaken further, the central bank said.
    Inflation in Georgia has been negative for the last six of eight months, with prices down 1.6 percent in January, following December’s fall of 1.4 percent, due to lower food prices.
    Georgia’s Gross Domestic Product rose by an annual 2.5 percent in the fourth quarter of 2012, down from 7.3 percent in the third quarter.

    www.CentralBankNews.info