An equitable division of the Caspian’s offshore resources have bedeviled the region since the December 1991 implosion of the USSR, putting the Soviet Union’s previous cozy arrangements with the Shah’s Iran “into the dustbin of history,” to quote Leon Trotsky.

Before the collapse of the USSR, the Soviet Union and Iran effectively divided the inland sea amongst themselves, according to the terms of the 1940 Soviet-Iranian treaty, which replaced the 1921 Treaty of Friendship between the two countries, which awarded each signatory an “exclusive right of fishing in its coastal waters up to a limit of 10 nautical miles.” The treaty further declared that the “parties hold the Caspian to belong to Iran and to the Soviet Union.”

Since 1991 three new nations have arisen in the Caspian basin to contest this bilateral arrangement - Azerbaijan, Turkmenistan and Kazakhstan. For the past two decades the five nations have wrangled about how to divide the Caspian offshore waters, and little has been achieved.

Amidst the disagreements Azerbaijan, Turkmenistan and Kazakhstan have tentatively moved cautiously to develop their offshore reserves in sectors that they believe would be indisputably within their future assignations under an eventual five-state agreement.

Even within these cautious offshore margins, Azerbaijan and Kazakhstan have increased their output in the last 15 years by 70 percent.

But at issue are the diametrically opposed positions of Iran and the Russian Federation about how to develop an international Caspian consensus beyond the now moribund 1921 and 1940 treaties. Iran insists that all Caspian nations should receive an equitable 20 percent of the Caspian, while the Russia Federation has consistently maintained that the five Caspian riverine nations should receive their portion based on the length of their coastline. Under the Russian formula, Iran’s sector would consist of 12 percent to 14 percent of the Caspian’s waters and seabed.

The stakes are high - in 2009 the U.S. government’s Energy Information Administration estimated that the Caspian could contain as much as 250 billion barrels of recoverable oil along with an additional 200 billion barrels of potential reserves, in addition to up to 9.2 trillion cubic meters of recoverable natural gas.

Accordingly, all five Caspian nations have been delicately developing their offshore Caspian reserves in areas that will undoubtedly remain theirs whatever eventual agreement is hammered out between Azerbaijan, Iran, Kazakhstan, the Russian Federation and Turkmenistan. The Russian Federation and Iran are the last two nations to move “offshore.”

Alekperov said, “Five hundred billion rubles ($16 billion) will be invested in development. This huge amount will provide an opportunity for sustainable development in the region.”

Astrakhan Region Governor Aleksandr Zhilkin waxed lyrical on the importance of the agreement for the long-term development of Astrakhan’s shipbuilding industry, situated on the lower Volga, the Russian Federation’s major river emptying into the Caspian. Zhilkin commented, “All shipyards in Astrakhan Region will have work for the next ten years. Vagit Yusufovich (Alekperov) mentioned that Lukoil is investing more than 500 billion rubles ($16 billion) over the decade.

Zhilkin’s remarks to reporters are hardly an idle boast, as he stated that Lukoil had paid more than $16.1 million in taxes last year to Astrakhan’s regional budget.

So, the Russian Federation, like its four Caspian neighbors, is now beginning to tiptoe into its offshore waters, all the while insisting that its vision of divvying the inland sea prevails.

The last two decades have seen an apparent pragmatism slowly evolve over the Caspian offshore resources, first in Baku, followed by Astana, Ashgabat and more recently and reluctantly, Tehran and Moscow. While the issue of a final disposition of the Caspian’s offshore waters remains significant if for no other reason than the various proposed undersea pipelines such as Turkmenistan-Baku, which could be an influential element in the European Union’s projected $15 billion Nabucco natural gas pipeline reverie, all five nations seem to be moving cautiously towards planting their offshore flags in areas unlikely to arouse their neighbors.

It will be interesting to see if they meet in the middle.

Source: http://oilprice.com/Geo-Politics/International/Tensions-Increasing-Over-Caspian-Energy-Riches.html

By. John C. K. Daly of http://oilprice.com

The $99.36 to $99.99 combination should act as a pivot zone, controlling the market’s short-term direction. Since the steep Gann angle moves up at a rate of $4.00 per week. This market is going to have to close above $103.36 on a weekly basis in order for it to maintain its torrid upward pace.

Bullish traders will want to see the market continue to hold $99.36 this week. Since last week’s close was at $98.99, the market will have some catching up to do early in the trading session. A failure to regain the steep uptrending angle will be another sign that buyers are lightening up their positions and that sentiment may be shifting to the downside.

It sounds complicated, but it’s not. This market is being driven by momentum at this time. A slowdown in momentum will show up on the charts and will be the first indication that an overdue correction is about to begin. Traders have to watch for this momentum shift because the market is vulnerable to a correction of its rally. The first downside target is a 50% price level at $87.28.

Fundamentally crude oil is being driven higher by a combination of economic and external events. From an economic standpoint, the market was boosted by a weaker U.S. Dollar and a slight easing in the uncertainty over conditions in the Euro Zone. Political changes in Greece and Italy helped fuel a shift in sentiment late in the week, driving up demand for risky assets.

Earlier in the week crude oil’s link to the Euro was demonstrated after the yield on Italian 10-year government bonds surged to a new lifetime high of 7.48%. Crude oil prices plunged sharply lower on Wednesday, but this loss was regained after Italy’s Parliament on Friday approved an amendment to the country’s 2012 budget regarding new austerity measures. This then allowed for the resignation of Prime Minister Berlusconi without having to go through a long, drawn out process.

Political and economic conditions also improved in Greece after new Prime Minister Papademos approved the country’s latest austerity plan and accepted the terms of the Euro Zone’s 130 billion Euro bailout proposal. This action helped turnaround the Euro late in the week, giving traders the confidence to buy riskier assets like equities and commodities.

A couple of U.S. economic events also helped boost energy prices. On Friday, preliminary data showed that U.S. consumer sentiment rose to its highest level in five months in November. A drop in U.S. jobless claims also helped contribute to demand for higher-yielding assets. It appears that the U.S. economy is holding steady just waiting for the situation to improve in Europe.

Last Wednesday, the U.S. Energy Information Administration reported that U.S. crude oil inventories fell by 1.4 million barrels the week before to 338.1 million barrels. This came as a surprise since analysts were looking for an increase of about 0.5 million barrels. A report that China imported 29.6% more crude oil in October than last year was also a sign of an improving global economy.

Finally, early last week the U.N. reported that Iran was producing weapons grade Uranium like for its military operations. This fueled talk of an impending embargo of Iranian crude oil. Any disruptions in the supply chain will be bullish for crude oil prices, given the tight supply/demand situation.

All of the key fundamentals support higher prices, but traders will have to deal with the reality that many of these factors have already been priced into the market. The key to higher prices will be whether shorts will continue to be pushed out of the market and if buyers will continue to demand crude oil at such lofty price levels.

The fundamentals say yes, but the charts say the market is vulnerable to a near-term correction because of overbought conditions. Bullish traders should approach the market with caution as it approaches the psychologically important $100 per barrel level.

Factors Affecting Crude Oil This Week:

Supply and Demand:  With economic conditions improving in the U.S. and conditions getting better in Europe, demand for crude oil is expected to increase. This is likely to show up as a drawdown in U.S. inventory this week. Weekly inventories are going to have to continue to decrease to support $100 crude oil.

European Sovereign Debt:  Conditions seem to be improving in the Euro Zone because Italy and Greece have agreed to play by the rules. This will allow the European Union finance ministers to work on raising the money it needs to fund any future bailouts. The unknowns remain Spain, Portugal and Ireland. Will problems arise in these countries which trigger another setback?

U.S. Economy:  This week’s key reports include consumer inflation, producer inflation and retail sales. All are major reports tied to the strength of the U.S. economy. Traders will be watching for growth since this will be linked to any future decisions by the U.S. Fed to implement additional quantitative measures.

Source: http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-November-14-2011.html

By. FX Empire

Used with permission.

While it will cheer nuclear advocates, overall the report makes for grim reading.

Pulling no punches, the report states at the outset, “There are few signs that the urgently needed change in direction in global energy trends is underway.”

Stripped of its cautious language, the IEA report essentially noted that should present trends continue, the world’s governments through a lack of progressive initiative embracing alternative energy sources would continue to rely on ‘tried and true” fossil fuels, resulting in increased pollution, more fossil-fuel dependency and increasingly upward energy prices.

For environmentalists, this is all good news, but the report contained a caveat virtually anathema to all green movements, that accordingly, governments should reconsider their reluctance to embrace nuclear power, as it does not generate greenhouse gases.

Like many discussions in Western economies since 2008, when the global recession first began to draw blood, the issue of reliable energy production ultimately devolves down to dollars and cents issues.

The grim reality for environmentalists is that no single renewable energy resource, from wind power to solar energy through biofuels, has remotely become competitive with kilowatt hours of electrical energy generated by coal or oil-fired power plants. The debate pits those opposed to a transition to greener technologies to those considering the bottom line, despite greenhouse gas emissions.

Even worse for the environmentalists, the IEA report advocates that as a short-term solution, governments ought to reconsider nuclear power, as it produces zero CO2 emissions. Projecting into the future the report notes, “A low-nuclear future would also boost demand for fossil fuels: the increase in global coal demand is equal to twice the level of Australia’s current steam coal exports and the rise in gas demand is equivalent to two-thirds of Russia’s current natural gas exports. The net result would be to put additional upward pressure on energy prices, raise additional concerns about energy security and make it harder and more expensive to combat climate change. The consequences would be particularly severe for those countries with limited indigenous energy resources which have been planning to rely relatively heavily on nuclear power”

But while sketching out a bleak scenario should governments remain largely disengaged to the larger issues involved in energy production, the IEA report nevertheless ends on a cautiously optimistic note, with its authors concluding, “International concern about the issue of energy access is growing. The United Nations has declared 2012 to be the ‘International Year of Sustainable Energy for All’ and the Rio+20 Summit represents an important opportunity for action. More finance, from many sources and in many forms, is needed to provide modern energy for all, with solutions matched to the particular challenges, risks and returns of each category of project. Private sector investment needs to grow the most, but this will not happen unless national governments adopt strong governance and regulatory frameworks and invest in capacity building. The public sector, including donors, needs to use its tools to leverage greater private sector investment where the commercial case would otherwise be marginal. Universal access by 2030 would increase global demand for fossil fuels and related CO2 emissions by less than 1%, a trivial amount in relation to the contribution made to human development and welfare.”

Accordingly, what is most notable about the IEA report is two things.

First, energy options beyond dependence on traditional fossil fuels such as coal and oil not only exist, but are available in significant amounts to make a serious contribution.

Secondly, as Germany’s experience in weaning itself off nuclear energy is showing, the alternatives are more expensive than current power production modes.

According to the IEA’s scenarios then, the issue of global power production over the next two-three decades devolves upon two major issues.

The first is cost, which will undoubtedly be an uphill struggle for many governments seeking to meet the population’s rising energy demands, who will be loathe to endure increasing energy bills.

The second consideration is the contentious issue of global warming, and the impact of traditional fossil fuel-fired power plants belching vast amounts of CO2 into the atmosphere.

While even the most diehard proponents of traditional power plant electrical generation to not deny that their facilities emit significant amounts of carbon dioxide, they denigrate the concerns of environmentalists as ‘fuzzy science.”

So, at the end of the day, the two fundamental issues facing the world’s nations seeking to satiate their population’s demand for reliable and inexpensive power devolve down to cost and scientific projections. We’ll leave the final word to the IEA, which laid out three scenarios, ranging from best- to worst-case - “The wide difference in outcomes between these three scenarios underlines the critical role of governments to define the objectives and implement the policies necessary to shape our energy future.” Accordingly, the major question is whether global governments will have both the cash and political will “to shape our energy future” to the best possible ends

Source: http://oilprice.com/Energy/Energy-General/IEA-Report-Calls-for-Governments-to-Embrace-Nuclear-Power.html

By. John C.K. Daly of http://oilprice.com

Government should protect us from evildoers who would rip us off and engage in immoral and illegal activity, but to take money that does not belong to them and purport to act benevolently as the creator of prosperity is nothing but delusion. One wonders if this is purposefully created delusion intended simply to control the masses or if government officials actually believe in their self created fantasy. Taking money out of my pocket on a regular basis to give to someone so they can go buy groceries, does neither of us any good in the long run. For myself, I receive no benefit for that money taken and the recipient ultimately learns dependency. Extrapolate that out to a few million people and see what you get. The only one that really benefits is the politicians stealing the money from you and I end up getting votes from the people they give the money to.

It is interesting to note that even before the President’s speech he is calling for Congress to to pass his jobs bill and do it quickly, for the benefit of the country of course. In other words, Obama is saying, don’t really take a look at what I’m doing or the actual details of this plan, just pass it because I know what is best. We are also being told by the President’s press secretary Jay Carney that the things the President is proposing will bring unemployment down to below 9%. Let’s not forget that we were also told that the President’s $787 billion stimulus would not let unemployment get beyond 8%. If you are counting, we are currently at 9.1%.

And we’re supposed to believe that someone who has never hired a single employee, but has organized plenty of mobs to protest evil, greedy corporate America, is going to tell small businesses and big businesses how they ought hire people. Oh, the President can tell businesses how they should hire more people and put America back to work, but can he do a simple ROI calculation on investment and revenue from real sales of real products or services and see if there is actually a profit after all the government intervention and red tape. I think not.

Apparently that math escapes the President as he likes to showcase businesses that receive government stimulus and hire 150 people at a cost of $2 million per job. Or he likes to push the green job thing on us and these businesses fail to live up to their promised hype or they just simply go out of business as did Evergreen Solar. Never mind that this proves what reckless spending government stimulus really is, instead of admitting that fact, we’ll just blame those rascal Germans on this gargantuan failure because we cant quite fit Bush into this one.

The most productive thing our current President does these days is give speeches and so we will be treated to yet another one come September 8th. This will be somewhere between the 4th and 10th time Obama will state that he has a plan to create jobs and this, finally, will be his main focus, at least until another vacation or round of golf.

“Republicans in Congress are insisting on a different approach — a cuts-only approach -– an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all.  And because nothing is asked of those at the top of the income scale…”

My emphasis added.

Really Mr. President, wealthy Americans are not contributing anything at all to this orgy of government spending? And exactly nothing is being asked of them, as if it is their responsibility to cover for you and your wife’s over-the-top-jet-set-vacations, endless golf outings and trips around the world as your contribution to the crisis we are now facing? This kind of rhetoric from the Propagandist in Chief who acts more like a king than a president, is designed to do nothing more than incite people into thinking that not only do the rich benefit from the poor, but in the process they also contribute nothing. As a supposed leader, the President is insinuating that the rich don’t pay any taxes.

The only thing further from the truth than the statement in quotes above, is that the person who now resides in the White House is actually qualified to be President.

Of course the rich are contributing to the revenue base that runs this country, they are contributing greatly. For example, a person who earns $100,000 per year pays approximately $22,000 per year in taxes, while someone who earns $1,000,000 a year will be paying $320,000 per year in taxes. So, a person who makes 10 times what a $100,000 per year earner makes, will pay 14.5 times the amount of taxes than the lesser earner does. I guess the government parasites are right, the rich don’t pay their fair share, they pay way, way too much.

Another way to look at this is to ask if the person making $1,000,000 a year actually uses $320,000 worth of government services in that year. Does the fact that they make that much money create such a burden on the system that they need to pay all that extra money? What about the money a top earner spends, does that contribute to the economic system that runs the wheels of commerce or should we just tax them more? Let’s have a look at that.

Not only does the high income earner spend lots of money, many times they also pay a premium for services that the rest of us never really see and all the money they spend obviously goes into someone else’s pocket whether that be profits for a business, wages to employees of those businesses or directly to individuals for goods and services. Let’s say a $1 million a year earner buys a $100,000 automobile, that money gets divided up amongst the:

Salesperson
Sales manager
Dealership owner
Receptionist that greets customers
Service advisers
Mechanics that service the car
Administrators that service warranty claims
Janitor that sweeps the dealership floor
Auto detailers
Auto shipper

And then we move on to the manufacturing process. These people also get a cut:

Auto assemblers
Assembly floor manager
Quality inspectors
Auto designers
Engineers
Parts fabricators
Tool makers
Inventory and stock personnel
Parts buyers
Parts expeditors
Parts suppliers
Material suppliers
Parts designers
Raw material suppliers
Parts shipping and transportation
Process engineers
Procedure writers
Assembly trainers
Facilities maintenance personnel

And then there’s the cut the government gets in:

Waste disposal fees
OSHA inspectors
Tire taxes
Battery taxes
Hazardous waste certifications
Emissions inspections and taxes
Permits
More permits
Environmental impact fees
Possible gas guzzler taxes

All that and more is paid by the rich person who injects their wealth into the economy of just buying an expensive automobile. Yes, wealthy people buy luxury items, but someone has to make and then sell those items and as you can see from the list above there are a lot of people along the process to getting an automobile to market and then to the consumer.

Beyond just purchasing transportation, rich people also buy the same things you and I buy. And then there are those extra premium fees mentioned earlier. We recently went to Ft Lauderdale and although I love this part of South Florida it can be very expensive to live there. Almost everywhere you turn you have to pay for items and services that the rest of us rarely see. Yes, we had to pay for those services while we were in Ft Lauderdale, but the people who live there pay for them every day. Some of those fees include parking at hotels and on the street. It costs a minimum of $20 a day to park at any of the hotels in town or on the strip or $6 for 2 hours while you go eat breakfast at a hotel. If you want to go downtown and shop add $6 to $12 on top of your purchases for the privilege of parking near shopping.

Property taxes are also much higher in areas like Ft Lauderdale. On top of the cost of your dwelling and property taxes, there are then either condo association and maintenance fees or home owner association fees that pay for people to keep the outside of you building from crumbling or the common areas of your neighborhood mowed and tidy looking. Gee, those silly maintenance and lawn workers, they have to eat too you know.

No, we’re not done quite yet. If you have a lot of money and can afford to stay in Ft Lauderdale in the more exclusive hotels, beyond the cost of either paying for parking at the hotel or renting a car that puts money into the local economy there is that rip-off hotel tax we have in Florida. All Florida hotels have the tax, but when you stay in an expensive hotel, such as in Ft Lauderdale, you obviously pay more for that. For instance, if you were to stay at the W on Ft Lauderdale Beach for 3 nights at a cost of $400 a night (a cheap rate by the way), your 3 day stay will cost you $1,200 plus $72 state sales tax, plus $78 Florida State Hotel Rip-Off tax because apparently the money tourists are bringing into the state by vacationing here, just isn’t quite enough. Did you get that? Someone who stays at the W in Ft Lauderdale Beach for 3 nights pays an extra $78, on top of all the other fees and taxes, just because the state of Florida demands it.

It is obvious that people who have money, spend money, and that money doesn’t just go into a black hole, it goes to pay the salaries of people who provide the goods and service that cater to people with wealth. It keeps the economy humming along at a pretty good pace but, according to our President and many members of Congress who continue to beat the class warfare drum, what the wealthy are doing to contribute to the economy is absolutely nothing.

Government acts as if the money they spend belongs to them, when in fact, it doesn’t. The height of absurdity and propaganda comes from this White House infographic where it is shown how much the policies of George W Bush added to the national debt vs what Barack Hussein Obama policies added to the debt. The evidence that this group of thieves who are now running the show thinks that government money actually belongs to them is at the bottom of the infographic where the Bush tax cuts are being blamed for adding $3 trillion to the debt. That’s like me going over to my neighbors house and stealing $100 and then claiming that it cost me money when I decide to return $50 to him out of the goodness of my heart. It wasn’t my money to begin with and it costs me nothing to return any or all of the money to him.

The bottom line is that the rich do pay their fair share as do the rest of us. We give enough money to the parasites in Washington, they don’t need any more money. The real question is, when is the government going to stop creating more social programs, more bureaucracies, more government Czars and more inventive ways to spend our hard earn money and start reigning in the orgy of spending?

We are waiting…

Honestly, this isn’t all that surprising these days in a society that is getting completely out of control. While social networking sites such as Twitter and Facebook have made these modern day pirate mobs easier to put together, no one should be all that taken aback at the reason this is happening. Why? Simply because this is exactly what the Federal government has been doing to its citizenry for decades in the form of confiscatory taxes, fines for breaking arbitrary rules, and fees and regulations stifling businesses in endless red tape. What these flash mob youths are doing is just acting out on the beliefs the government has fostered in its dependent voter base. That being that those who don’t have are entitled to whatever they want from those that do have.

Congress has become less of a governing body and more of a thug organization over the years with legislation that does little good and in reality just creates chaos. Have a look at what the Community Reinvestment Act did over the last 3 decades for an example of government thuggery. Just as violent flash mobs swoop in and do their chaos quickly before the police can come in and take care of the situation, making it hard to identify the real perpetrators, the government hides regulations in enormous 2,100 page bills and then acts innocent and unaware when their work is shown to be destructive. Isn’t it interesting that with the financial meltdown of 2008 and the ensuing mortgage and foreclosure crisis still wreaking its havoc today, no one in the federal government has yet to be even remotely blamed for their policies (that is except for George W. Bush who the media and President Barry Soetoro keep pointing the finger at).

And now with the looming debt crisis and the government edging ever closer to default if the debt limit is not raised, it is very doubtful that we will get out of this situation without some form of increased taxes. For decades both parties have wastefully spent us into oblivion and the answer always has to do with increased revenue. With entitlements and government bureaucracies continually growing like a cancer there isn’t any way Uncle Sam can can continue to pay its bills without bringing in more money. And you can bet that with the new ObamaCare mandate slated to fully take effect in 2014 (if we don’t destroy ourselves before then) there will be even more government agencies created to make sure you and I are buying our insurance and hospitals and doctors are complying with the 2,000 some pages of government obfuscation.

Flash mob thuggery is what our government has become. They are in effect saying, “We are going to create these agencies, build this bureaucracy, expand our influence and spend as we please, all the while demanding more from you, and there isn’t anything you can do about it.” Even the people we send to Washington to take care of the wasteful spending quickly get infected with the entitlement mentality doing little more than finding ways to funnel taxpayer dollars to their constituents, in effect preserving their own government job for a few more election cycles.

As long as the federal government thinks it can vote itself a raise and simply take more money from the rich, the poor, people who smoke, people who drink, people who start businesses, people who make over $250,000 a year…name your group because you are all eligible for government wealth confiscation, then you will have thugs involved in flash mob violence. Why not take what doesn’t belong to you, the government does it all the time? I’m not advocating thievery here, our politicians do a good job of that already.

Something has gone very wrong in this country when individuals think they have a right to some sort of product or service when in fact, they don’t. No, you don’t have a right to medical care. You have no right to be treated in a hospital, in a doctor’s office or any medical facility, by a nurse, by a doctor or have any right to any medical test whatsoever. No matter what the media says or our politicians legislate, you do not have a right to something that requires the labor of someone else. That would be slavery.

Legislation can try to force some sort of law upon the masses and try to make us pay for the medical care of others as with the forced ObamaCare plan, but that still guarantees you no right to those services or the labor of individuals who must administer such services. You never have a right to something that you do not own. You have a right to life because that is what you already posses. You are a living being and you have a right to go on living because that is what you are already doing. You own your life, therefore you have  a right to it. Life and liberty are inherent rights and they do not impose a burden on anyone else. You do not automatically own the right to the labor of another human being to burden them regardless of what any politician tells you. Unless an agreement has been reached between individuals in exchange for money or something else, and goods or services have been promised, you have absolutely no right to the labor of another person.

Medical care is only a formless concept without the labor of another person to either examine you, administer a test on you, take some sort of internal picture of your body, perform an operation on you or assist you in walking because you have broken your leg or a myriad of other service performed by medical personnel. Without agreement or payment of some sort, you do not have the right to simply sit in your home while going about your daily duties and claim the right to the labor of a doctor. A doctor’s labor is not your right. A nurse’s labor is not your right. A medical technician’s labor is not your right. By what standard can anyone claim that the labor of an individual is their right just by default? If you can lay claim to the labor of a doctor, you might as well claim that you have the right to have me come to your home and vacuum your floors. You don’t!

No matter how you slice it, claiming the right to medical care is claiming the rights to labor of another person, and you simply have no right to make that claim.

While once again the evil, exploiting rich will be blamed for wanting to take money out of the hands of people who desperately need it, and conservatives will be accused of “giving tax breaks to the rich,” it seems like no one ever stops to ask the question, or emphatically makes it known, exactly who’s money is it that has funded these new entitlements and additional bureaucracies? And who funds the current ones that are bleeding the country dry? Besides just printing money as the government pleases, the money spent on these entitlement programs must come from somewhere. Why is it that the argument over taxes and out of control government spending almost never focuses on where the money comes from? Why is there not a single politician making that the center of their mission?

If anyone were to think about the argument for less time that it takes you to read this, it is obvious where the money comes from, that would be taxes. And where exactly do those taxes come from? Your pocket and my pocket and the deep pockets of businesses that actually produce a product or provide a service and hire people. Taxes come from the pockets of productive people. They do not come from those that are non productive or from the government. The government does not produce, it only loots and when it need more, it simply demands it or prints it out of thin air. Government does not hire a single person, implement a single program, hand out a single $1 food stamp, sign a single welfare check or give out a single slice of yellow processed American cheese food that is not paid for by a source of revenue from productive people. And let’s get one thing straight, every cent a corporation pays in taxes, finds its way back to you or I in the form of higher prices. Companies are in business to make a profit and will pass everything back to the consumer in some way.

The businesses that supply our jobs in this nation all originate from individuals who at some point in their lives decide that they want to do something different than most of us. Some make huge sacrifices of time and money to further their education, take enormous personal risks, do endless hours of research, deal with endless government red tape and do a multitude of other tasks to get their businesses off the ground and make them successful. Those businesses then give jobs to qualified people who can help those companies be more productive and earn more money. Without profits, businesses do not survive and without the businesses that sell products and provide services to people and the visionaries behind those businesses, products and services, there would be no jobs to go to.

The government then steps into the middle of all this and demands at the point of a gun (try not paying taxes for any length of time and see if armed government agents don’t pay you a visit) what amounts to extortion payments from both the business owners and the workers they have hired. All businesses offer their products or services for sale first to consumers who look over what is for sale, make the best choice and then pay for what they need or want. Government on the other hand, simply demands the money up front and then tells you what they may or may not do with it. Much of the time, they don’t even know what they do with it. The only difference between looters that rob stores or homes after a natural disaster and the United States Government, is that the looters at least have the courtesy to wait until after the disaster happens, government creates the disaster by its ever expanding looting practices.

Exactly why does the government think they are entitled to our money? Exactly what gives them the right to demand an ever larger portion of our earnings? What exactly are we getting these days for this government sanctioned extortion?

Who’s money it is again?

1. Gold is used as a reserve for currencies: Since history gold has got its own value and this value has kept increasing since time. This is the reason why a certain percentage of gold is always used as a reserve for all the paper currencies issued by most of the countries. Thus, it takes the biggest role of playing the reserve for most currencies of the world.

2. Gold can save you from deflation: When there is deflation, we often see the prices and business activities slowing down. The same had happened during the recent global economic recession. However, though you will see price of all commodities fall down sharply, the price of gold will only be affected the least. Therefore if you have already invested in gold, you can save yourself against the ill-effects of deflation.

3. Gold can save you against political insecurity: No type of political insecurity can affect the price of gold. When there is political unrest in a nation,most people tend to move to other countries and this has a staggering impact on the price of the financial products and real estate. Despite all such changes, the value of gold will never see an adverse result. The extreme convenience of handling gold helps sustain its value during uncertainties.

4. Gold has high liquidity: Liquidity is measured by the capability of an asset to be turned into cash. Just like the forex market, gold also has high liquidity and you can turn it into cash whenever you want. Any gold dealer or a bank can give you cash in exchange of gold. As the price of gold is increasing with time, you can gain a huge amount of money.

Successful investing is all about diversifying your portfolio in a manner that will ensure minimum risks and maximum gains. Donít have all your eggs in the same basket as this may make you more prone to future losses. Invest in gold and save yourself against all the negative effects of the market. Use the proceeds to get out of debt and lead a debt free life.

This is a good illustration of how the government at the hands of the Federal Reserve has devalued our money. Back in the early to mid 1960’s you could get a gallon of gas for 20 to 30 cents. Later, I remember some time in either 1967 or 1968 my dad pulling into a Zayre’s gas station in Melbourne Florida and the price on the sign in front of the station was 24 cents a gallon. So, for a little over a couple of dimes you could get yourself one gallon of gas back in the 1960’s in some places.

Obviously that is not the case today as gas is getting close to $4 a gallon in most locations around the country and in some places in California it is even over $5 a gallon. Gas is no longer 20 cents a gallon, but if you have a dime minted around that time before 1965, your dime contains about $5 worth of silver, just enough to get you about 1 gallon of gas. The dimes face value is worth about 2.5 liquid ounces of gas but, the precious metal in that silver dime in its coin form is worth about 1 gallon of gas today.

If you want to see the approximate value of a 1964 and before dime, head over to eBay and have a look at the number of silver Roosevelt dimes priced between $4 and $6 for sale. At the time of this post there were 884 auctions that fit those criteria. So, in 46 years a dime has gone from being able to buy you a half a gallon of gas to buying you 2.5 ounces of gas. This has all happened because of currency devaluation caused by inflation. Inflation is a scheme cooked up by the Fed to subtly take your money and spend wildly on social programs in an increasingly wasteful manner. Once we went off the gold standard in 1973 gold started to skyrocket in price, but so did government spending.

Our money used to be based on a tangible asset, gold, but when we went off the gold standard, that allowed unrestrained credit expansion by the government to pay for it’s social and welfare schemes. The payment for those schemes came from taxation only partially, the majority of the deficit spending came from the sale of government bonds, in effect borrowing the money from bond holders.

If you want to understand the way the scheme of deficit spending works, read a fascinating article written back in 1966 where the author states:

But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes.

It might interest you to know that the article was written by former Fed Charmian Alan Greenspan.

When money is based on a tangible asset it’s value remains nearly the same and inflation has a much harder time taking hold in an economy. Back in the early 1900’s when we used to use the $20 gold piece as legal tender, it would buy you a really nice suit and today as the price of gold hovers around $1,500 an ounce, that same gold piece with one ounce of gold in it will still buy you a really nice suit. And the same dime, or two of them, you used in 1965 that bought you a gallon of gas will still buy you a gallon of gas today.

And we’re supposed to trust that he government is doing right with our money today?