I was interviewed on the Fox Business Channel regarding the Utah Legal Coin Act in early June 2011. Here is a little background and some interview questions. />   /> For the first time since 1971, gold and silver are once again considered legal tender in at least one part of the United States. The State of Utah passed the “Utah Legal Tender Act,” which “recognizes gold and silver coins that are issued by the federal government as legal tender in the state and exempts the exchange of the coins from certain types of state tax liability.” />   /> The law, signed by Governor Gary Herbert on March 25, is a voluntary system that provides an alternative to the fiat-based Federal Reserve notes that are created out of thin air in unprecedented proportions. />   /> The most significant change from a practical perspective is that the Utah’s state tax code now considers gold and silver coins issued by the U.S. Mint as currency rather than an asset, which means since it is considered money it cannot be taxed. However, federal taxes still apply on these transactions. />   /> The Utah Legal Tender Act (HB 317) is designed to reinstate gold and silver coin as an optional medium of exchange in Utah intrastate commerce. The bill recognizes the inherent and inalienable right of citizens to voluntarily employ these time-tested, inflation-proof, complementary currencies to foster economic development throughout the state. The bill draws its authority from Article 1, Section 10 of the United States Constitution which provides that no /> state shall make anything but gold and silver coin a tender for payment of debts. Grounded in long-standing principles enshrined in the supreme law of the land, this statute addresses current, pressing monetary issues in modern American society—issues to which gold and silver coin solutions are uniquely suited. />   /> Because the founders of our nation had experienced firsthand the ills attendant with unbacked fiat currency, they provided in Article 1, Section 10 of the United States Constitution that no state is to make anything but gold and silver coin tender for payment of debts. Unfortunately, we’ve departed from the wisdom they imparted, and embraced a medium of exchange that has no intrinsic value whatsoever. The value of today’s dollar is upheld by governmental edict, backed only by the indebtedness of our nation and its citizens. Because of sharp increases in our money supply, our national debt is on an upward trajectory, set shortly to eclipse our gross domestic product. Since there is no historical precedent for a totally fiat money system such as ours ever lasting more than a few decades, prudence dictates that alternative, sound means of exchange be put in place well in advance of any potential crises, such as those endured by the fiat-financed nations and empires of the recent and distant past. />   /> Even absent the specter of catastrophic consequences, an alternative sound money system confers many benefits on citizens and state governments alike. Such a system serves as a refuge from the ills that fiat money produces, including the insidious “inflation tax” that our current monetary system imposes. Consider that the U.S. dollar has lost more than 95% of its purchasing power since decoupling from gold and silver backing. By contrast, sound money systems of the past continued virtually inflation-proof for centuries on end. />   /> States that have tried in the past but failed to enact their measures />   /> Virginia House Joint Resolution 557 /> Georgia Constitutional Tender Act /> Ohio Honest Money Project /> Idaho Silver Gem Act, Bill No. 633 /> South Carolina House Bill No. 4501 /> Missouri House Bill No. 561 /> Washington House Joint Memorial 4010 /> Colorado Honest Money Act (HB09-1206) /> Indiana Senate Bill No. 453 /> Montana House Bill No. 639 /> New Hampshire Gold Money Bill 1.1. />   /> Because of the co-dependent relationship between Congress and the Federal Reserve, the likelihood of any sound money reform coming out of Washington DC is remote indeed. Individual states, exercising their sovereign authority, are best equipped to restore sound money to its prior status as a trading currency. So look for a sound money comeback on a state-by-state basis. It makes sense to first support states that are well positioned to make sound money a reality today. Then as the movement gains momentum, reluctant jurisdictions will see the advantages of embracing sound monetary systems. />   /> More information can be found at: www.utahsoundmoney.org. />   /> We have received feedback on this from many people so far and many are of the belief that Gresham’s Law (http://en.wikipedia.org/wiki/Gresham’s_law) will mean that no one will spend real money (gold or silver) into circulation. We will not argue with the concept but will make the case that the market will decide and perhaps there will be some who want to “spend” their profits into the community. For example, when silver was approaching the $50 level there could have been (in theory) people who wanted to take advantage of that price and spend some profits for some good or service. />   /> Also, we think that some merchants favorable to sound money principals might offer a discount for real money being used in a transaction. We can envision two prices — a silver price and a fiat price. Again, the market will decide and it is our hope that real money circulates enough to encourage other states to adopt such measures. We find it interesting that some of the opponents of the law come from the CPM Group: />   /> We, of course, side on the principle of sound money and think the U.S. has not instilled confidence for a very long time. I am scheduled to fly to Utah and be with Governor Gary R. Herbert for a ceremonial signing of this law. We again are hopeful that other states will follow and the principle of fair weights and measures will once again be restored to the people. />   /> Mexico at the National level />   /> Another aspect of putting silver into circulation is one that graced these pages many times, the proposal led by Hugo Salinas Price to reinstitute silver as money along side the peso. This of course implies silver being used again as an alternate means of payment at a national level. />   /> Mr. Price has written numerous articles about the possible return of silver money circulating along side the Mexican peso. Let me state that when we first put this into our report so many years ago we lost some very angry subscribers because “we” did not understand Gresham’s Law! Quite the contrary, but these quick-to- judge people would not take the time to read and understand the proposal in full. />   /> Again we are NOT suggesting that this will catch on right away but will more likely develop momentum over time. />   /> David Morgan

When it comes time to seller your silver or gold, do not sell it too cheap.  Make sure you get full value.

Many CMIGS clients liquidate their holdings to coin shops in their areas because they do not want to go to the trouble of shipping their metals back to us, mistakenly believing that shipping precious metals is not safe, is difficult or is costly.  When selling locally, sellers often leave thousands of dollars on the table because small local dealers cannot match CMIGS’ bids for gold and silver products.  (We know this because sellers tell us what small shops offer.)

Some silver sellers seem especially reluctant to ship because of silver’s bulk and weight.   No way of getting around silver’s bulk and weight, but shipping silver to CMIGS is safe and packaging it is not difficult.  CMIGS has posted a slide show that details how to package your silver for shipment.

We chose to a slide show so that viewers can click through (and click back) in viewing.

View How to Ship Silver.

After viewing, please use the comment feature below if you feel so inclined.  We like to know what our clients think of our projects.  A shorter How to Ship Gold slide show is planned for the near future.

A final note: you do not need to have purchased your gold or silver to sell to CMIGS.  Daily, we buy gold and silver from investors who bought from other dealers.

David A Banister- www.MarketTrendTorecast.com

In my most recent few forecasts for subscribers and public articles I’ve discussed a major correction in Gold, and it dropped $208 within 3 days of that forecast several weeks ago as Gold traders will recall.  Last week I wrote about further consolidation being required in what I’m seeing as a either 4^th wave likely “Triangle Pattern” that will consolidate the 34 month run from $681 to $1910 into August of this year, or a 3 wave “A B C” pattern.  We are right now in some form of C wave, it’s just a matter now of confirming if we are going to get a “D and E” wave to follow, or the C wave drops lower before we bottom.

A Triangle pattern serves to let the “economics of the security” catch up with the prior large movement upwards in price.  In essence, the crowd behavior pushed the price of Gold a bit too high too fast, and this consolidation pattern lets the fundamentals catch up to price action.  We had a parabolic move I discussed many weeks ago, and those always end badly to the downside.  The $208 drop in three days is a typical reaction to a spike run like that.  At the end of the day though, I had been forecasting what I call a “Wave 3” top and was looking for a multi week or multi month consolidation pattern before Gold could move higher.

Let’s examine what that triangle projection may look like.  They take the form of 5 waves, or what we can call ABCDE in a pattern.  The biggest drop is always the “A” wave, and that was 1910 to 1702 in 3 days or less.  The next biggest drop is the “C” Wave, and that was 1920 to 1793, noting it was a Fibonacci 61.8% drop relative to the A wave.  In other words, each successive wave down in the 5 wave triangle is smaller.  This is due to the sentiment finally shifting and the trading patterns moving from people chasing the hot sector or stock or metal, to the long term investors accumulating the dips.

If we end up consolidating in a “Triangle”, then Gold should end up looking something like the below pattern I drew, with a target of $2,350 per ounce many months out:

The other pattern we are watching for at TMTF is the ABC Correction pattern.  We had the A wave down to 1702, which corrected 50% of the move from 1480-1910 in 3 days. Rarely do you get a major move down like that and not get some type of “re-test” of that low, but because the fundamentals for Gold are strong and getting stronger, we are favoring the Triangle pattern still as most likely.  With that said, there is a fat and juicy “Gap” sitting in the chart around 1660 on Gold and dropping down there is what a lot of traders are watching. If that were to fulfill, then we will see an ABC correction ending around $1643, and then Gold will begin another multi month rally to new highs:

At TheMarketTrendForecast.com I teach people my crowd behavioral methodologies and give them reliable forecasts in advance so they can be prepared with their investments.  Consider working with us and following the SP 500, Silver, and Gold by going to www.MarketTrendForecast.com  You can take advantage of a 33% discount over the next 48 hours as well.

There are many reasons why pension fund managers, private investors and even governments are beginning to add bullion to their portfolios. Perhaps the most important reason for this shift is that bullion provides superior insurance in times of financial uncertainty such as we are facing today.

Until governments solve their debt problems and no longer need to debase their currencies through unbridled money creation, a fully diversified portfolio should include gold, silver and platinum both for wealth protection and growth.

Read the rest of article here…

http://www.silver-investor.com/pdf/7-18-11GoldSilverandPlatinum.pdf

“No assets of the Libyan Central Bank have been stolen, gold or otherwise,” declared the bank’s new governor, according to a Reuters dispatch out of Tripoli.  Here’s the dispatch:

TRIPOLI (REUTERS) –

Libya’s central bank, under control of the country’s new leaders, said on Thursday none of its assets had been stolen and that it had sold 29 tonnes of gold to help pay salaries.

“No assets of the Libyan Central Bank have been stolen, gold or otherwise,” the bank’s new governor Gassem Azzoz told reporters in Tripoli, adding that if fallen leader Muammar Gaddafi had taken gold, it was not from central bank coffers.

Only a few days ago, supposedly credible witnesses said that hundreds of trucks were seen leaving Libya loaded with gold.  Now, only days after “new leaders” have taken over, 29 tons have been sold to “help pay salaries.”  Is Libya’s gold really safe?

Twenty nine tons at $1850 gold would be some$1.7 billion dollars.  That’s a lot of money to “help pay” salaries.  Supposedly, Libya was financially sound, being one of the world’s largest oil exporters.  So, why was it necessary to sell the family jewels to meet payroll?

I’m not so sure that Libya’s gold is safe, nor its other assets, especially its oil.

There is no single topic of greater importance to the cause of liberty and peace than the nature and control of money. When free market participants are no longer able to choose their medium of exchange, a critical part of the free market dies. The resulting seeds of a centrally planned economy slowly grow and suffocate the power of choice. Productivity and prosperity begin to decline as the incentives for producers are removed. When a chosen few are granted the exclusive right to counterfeit legal tender, the power of individual votes is eventually drowned by a sea of new money.

It’s a complex relationship that the majority of people simply don’t understand. The following video does a good job of introducing the topic in a way that will, hopefully, generate further interest. For a more complete understanding of the subject, I highly recommend Murray Rothbard’s What Has Government Done to Our Money? (Available for download as a free PDF.)

The video makes a couple of points that are particularly worth noting. The first is the fact that government decreed gold standards don’t work. In theory they put strict limits on how much the government can spend. But in reality, when a government feels restricted by a gold standard, it simply reneges on it’s promise to pay in gold. This is precisely what the British government did in 1914 and the United States in 1971.

The second important point is that wars are enabled by fiat money, as it allows governments to simply print the money required to pursue them. It could also be argued that empires are formed by those countries that most successfully inflate their money supply. At the same time, however, this expansion of money and debt also plants the seeds of their demise. Eventually the ever expanding debt forces an end to an empire’s overreach through the process of bankruptcy.

If we are ever to keep real fiscal reins on the government, then we must get the government out of the business of money. Abolish all legal tender laws and let the free market choose its medium(s) of exchange. Put it in the Constitution that the government may only tax and transact in gold. Require a referendum on all spending initiatives, with the cost to the individual attached. Watch how few spending measures are approved when voters see the real cost of each bill, instead of paying through the hidden taxes of inflation and debt accumulation. Watch how few senseless wars are fought when voters see the large war tax deduction on every paycheck.

Today, Monday, August 15, 2011, marks the 40th anniversary of the US default on the dollar’s convertibility into gold. It was the world’s de facto reserve currency and thus began an experiment with a reserve fiat currency that was doomed to failure before it began, because there has never been a successful fiat currency in all of history.. August 15, 1971 was just like any other day for most people, and President Nixon’s unprecedented decision to cut the US dollar’s gold international convertibility was largely ignored by the public. The majority of citizens didn’t understand the implications for their financial future. Contrast that to today, where a historic downgrade of US debt and a very public $2-trillion increase of the debt ceiling dominated headlines and the television news.

To read the rest of this article please click HERE

JW Jones – http://www.optionstradingsignals.com/specials/index.php

Back on August 7^th the S&P 500 was in the midst of a panic induced selloff and the bulls were running scared. Prices were collapsing and the bulls were racing to the exits. In the following weeks, piles of money flew out of equity mutual funds as the retail investors rang the register and pulled their money out near the lows which seems to be a regularly recurring event.

While most market participants were clearly panicking, I was sitting back watching the market push lower with complete focus on being ready to initiate long positions near the lows. I sent out multiple warnings to members of my service to raise cash and reduce risk. I sat in cash and watched the madness unfold in real time.

Admittedly I did not expect the selloff to be as severe as it was and unfortunately I did not get involved with any short exposure. However, my focus is always forward looking and opportunities will present themselves again and protecting my trading capital is always my primary focus.

My article that went out August 8^th was focused on downside momentum in the marketplace as well as key areas where I expected price action to hold at support. I was expecting the S&P 500 to find support around the 1,130 price level. I will be the first one to admit I am not one for making bold predictions, but I’m not scared to identify key long term support levels which have the tendency to mark bottoms in price action.

While price ultimately undercut my 1,130 target price level on the S&P 500, the following day a giant reversal bar formed which captured my interest and on August 10^th I entered long positions with tight stops below the recent lows and members and I were quickly rewarded. I closed the remainder of the trade today and locked in a 32% return based on maximum risk in essentially 1 week using a basic option strategy which levered up my position.

Now I find myself with very little exposure and I’m pondering what to do. First of all, a quick glance at the short term momentum charts illustrates that price action is still extremely oversold. However, oversold conditions could worsen further potentially. The chart below illustrates the amount of stocks trading above their 20 period moving averages:

It is obvious that price action in the S&P 500 is clearly oversold and equities have considerable room to rally. However, I would point out that oversold conditions can be worked off as function of the passage of time and not just higher prices. I continue to believe that we will see the S&P 500 test the 1,220 price level and will likely move on to the 1,250 area. If price action can work above the 1,250 price level the neckline of the head and shoulders pattern will act as a key resistance area. The daily chart of the SPX is shown below:

The key levels outlined correspond with major support areas that are either carved out by previous pivot lows or through Fibonacci retracement levels. At the very least, I expect price action in the S&P 500 index to test near the 1,220 price level as it will mark a .500 Fibonacci retracement area.

I would not be at all shocked to eventually see the neckline of the head and shoulders pattern backtested to verify resistance. The head and shoulders pattern that helped propel prices lower is clear when looking at the weekly chart. I first wrote about the pattern back on July 8^th and presented the following chart:

It is entirely plausible that Mr. Market thrusts lower from here to shake out longs. If that scenario plays out it could potentially carve out a double bottom or another basing pattern which would give active traders another entry point to get long. I think we are weeks from having a possible test of the recent lows on the S&P 500 as it is going to take the broad marketplace quite a while to digest the selloff and work off oversold conditions as a function of time and/or price.

Price action would be healthier if we pulled back a bit here before attempting to attack the resistance at the key 1,200 price level on the S&P 500. If prices continue to race higher in a short period of time I would consider the price action to be more of a warning that lower prices are around the corner.

While anything could happen, I believe that the S&P 500 will test the recent lows which need to hold desperately. I want to be a bull very badly, but right now unfortunately I cannot be bullish because a variety of indicators and analysis suggests that lower prices may await us.  

By now most readers recognize the monster bull market that gold and silver have enjoyed for nearly a decade. I do not intend to provide a history lesson, but during the last equity selloff investors and traders alike fled to Treasuries and the yellow metal for safety while nearly every other asset class sold off. Gold put in a new all-time high on August 11^th and price quickly sold off.

Since then we have seen gold climb back up and at this point in time it appears to be poised to test the recent highs. Some market pundits say gold is in a bubble while others say prices will work higher. In my estimation as long as the Federal Reserve has loose monetary policy gold prices will continue higher over the long term. At this point in time it does not appear likely that the Federal Reserve will tighten monetary policy until after the election at the very earliest.

Instead of arguing the economics behind gold prices and the inflation/deflation debate, I am more interested in where price action may be headed. At first glance on the daily chart of gold futures it could be said that gold has accelerated significantly higher in a short period of time. There are plenty of traders that believe gold has gotten ahead of itself and desperately needs a strong correction to shake out weak ownership.

Interestingly enough these same traders and investors have been calling for a major selloff in gold for quite some time. While I have written about coming corrections, I have always maintained a long term bullish stance on gold and silver due to the Federal Reserve’s current monetary policy.

Yet again, I find myself expecting to see gold selloff in what could play out as a double top on the daily chart. I am going to be watching the price action closely looking for a possible entry to take advantage of lower prices. At the same time, I am not willing to go charging in until I see some confirming signs that gold prices will head lower.

If gold prices push above the recent highs with additional momentum gold will trade higher yet. The next few days should be very telling as a large move could be setting up in the yellow metal in the near term. The daily chart of gold is shown below:

While the daily chart clearly illustrates the potential for a double top to emerge, the weekly chart has a more parabolic look to it. If a significant correction in the price of gold sets up for traders to take a longer term short trade, then a major reversal or topping pattern should come into focus in the next few weeks.

While a short term trade to take advantage of lower prices in gold might produce some fast money, longer term traders need to be patient and let gold confirm lower prices before getting involved. The weekly chart of gold is shown below:

Ultimately I do believe we need to see a healthy pullback in gold that works off some of the overbought conditions that are present in the price action. If investors continue to view gold as a safety trade it is obvious that prices could continue higher based on uncertainty coming out of the sovereign debt crisis going on in Europe. As of right now, it appears gold could go either way but probability favors the downside.

Logically it would make sense that if the S&P 500 rallied gold would selloff. Unfortunately Mr. Market rarely embarks upon the logical until he has convinced enough market participants to behave irrationally. It should be interesting to see what Mr. Market has up his sleeve this time.

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This material should not be considered investment advice. J.W. Jones is not a registered investment advisor. Under no circumstances should any content from this article or the OptionsTradingSignals.com website be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. This material is not a solicitation for a trading approach to financial markets. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This information is for educational purposes only. 

Over the last 100 years, Americans have completely lost control of their Constitutional money; to the point where they must pay a tax to essentially make change. Imagine breaking a twenty dollar bill and only getting a ten and a five back, with the other five going to the government. This is the potential problem one encounters when attempting to spend gold or silver money. It’s no accident. The laws are specifically set up to force everyone to use fiat currencies.

In order to restore sound money to the market, there are a couple of laws that need to be changed. One is the repeal of legal tender laws, but perhaps more importantly, is an end to the taxation of gold and silver.  This is precisely what the Sound Money Promotion Act does. Senators Jim DeMint R-SC, Rand Paul R-KY, and Mike Lee R-UT are the sponsors.

The objective of the current system is to force everyone to store their wealth in dollars, where it can be surreptitiously taxed via inflation. To paraphrase Keynes, not one man in a million will recognize the nature of this game. This enables the government to run enormous deficits and provides a bailout mechanism for the banks whereby their losses and can added to the public debt.

In order to spend gold or silver money, one must first convert them to dollars. If you were coginzant enough not to store your wealth in a depreciating currency, then you are legally required to pay a penalty for that. When you convert gold to dollars, you are not paying a tax on the ”gains” in gold, but rather the losses in the dollar that you would have suffered through its debasement. Think about that for a second. It’s a critical point of understanding.

Currently we are all trapped in a global currency war in which every country believes it can solve its problems by debasing its currency the fastest. A difficult game to win for sure, and one that tends to destroy middle classes in the process. More and more people are waking up to this reality every day. They are opting out of paper money as a store of wealth and choosing gold and silver.

I’ve consistently noticed an interesting reaction as people begin to save in precious metals. They start to enjoy the process of saving and accumulating real money. I predict that even after the fiat currency crisis passes, that many will not want to part with their real money. That they will want to continue to store their wealth in gold and silver. And ultimately, the thought will occur to many, “why can’t I just spend my money directly? Why must I first convert it to paper and suffer the losses”?

Right now, most people still don’t know what sound money means, or why it’s so important. As a result, the current version of the Sound Money Protection Act will likely go nowhere. But a critical lesson, as to why gold and silver have been money for thousands of years, will soon be taught again. Perhaps then enough people will understand, and we will have our Constitutional money returned to us.