Ron Paul and Vince Vaughn Grabbing Grub

Ron Paul supporter and actor Vince Vaughn grabs some barbecue, alongside Ron Paul, at Dr. Paul's   annual barbecue at his home in Lake Jackson, Texas, Saturday.

Photo via Gage Skidmore

The first three people, who in the comments section correctly identify the guy in the background with the snazzy pants, get a one week free trial to the EPJ Daily Alert.

(ht US News)

Edward Snowden's Letter to the President of Ecuador – full text

Text of a letter by Edward Snowden to the President of Ecuador, Rafael Correa. Written in Spanish; obtained and translated by the Press Association, London (via The Guardian)

There are few world leaders who would risk standing for the human rights of an individual against the most powerful government on earth, and the bravery of Ecuador and its people is an example to the world.

I must express my deep respect for your principles and sincere thanks for your government's action in considering my request for political asylum.

The government of the United States of America has built the world's largest system of surveillance. This global system affects every human life touched by technology; recording, analysing, and passing secret judgment over each member of the international public.

It is a grave violation of our universal human rights when a political system perpetuates automatic, pervasive and unwarranted spying against innocent people.

In accordance with this belief, I revealed this programme to my country and the world. While the public has cried out support of my shining a light on this secret system of injustice, the government of the United States of America responded with an extrajudicial man-hunt costing me my family, my freedom to travel and my right to live peacefully without fear of illegal aggression.

As I face this persecution, there has been silence from governments afraid of the United States government and their threats. Ecuador however, rose to stand and defend the human right to seek asylum.

The decisive action of your consul in London, Fidel Narvaez, guaranteed my rights would be protected upon departing Hong Kong – I could never have risked travel without that. Now, as a result, and through the continued support of your government, I remain free and able to publish information that serves the public interest.

No matter how many more days my life contains, I remain dedicated to the fight for justice in this unequal world. If any of those days ahead realise a contribution to the common good, the world will have the principles of Ecuador to thank.

Please accept my gratitude on behalf of your government and the people of the Republic of Ecuador, as well as my great personal admiration of your commitment to doing what is right rather than what is rewarding.

Edward Joseph Snowden.

The Real Kentucky Derby: Mitch McConnell to Face Strong Challenger

Alison Lundergan Grimes

Slate reports:

 Mitch McConnell's Kentucky Senate seat isn't quite safe yet: Kentucky Secretary of State Alison Lundergran [sic] Grimes, a Democrat, officially declared her bid today to defeat McConnell in the 2014 middterm election. Grimes is quite popular—she was elected with over 60 percent of the vote—and has been urged by Bill Clinton to challenge McConnell[...] 

Unpopular as McConnell may be, President Obama provokes even more ire among Kentuckians, and McConnell will likely attempt to connect Grimes to the president and his party. 

Winklevoss Twins File to Launch Bitcoin Tracking Stock

In an S-1 filing with the SEC, the Winklevoss Bitcoin Trust, headed by Cameron and Tyler Winklevoss, said it will sell around $20 million worth of shares, which will each represent a fraction of a single bitcoin, the digital currency the twins have invested in.

According to the S-1 filing:

The investment objective of the Trust is for the Shares to reflect the performance of the Blended Bitcoin Price of Bitcoins, less the expenses of the Trust’s operations. The Shares are designed for investors seeking a cost-effective and convenient means to gain exposure to Bitcoins with minimal credit risk.[...]The Sponsor believes the Trust to be the first exchange-traded product that seeks to track the price of a Digital Math-Based Asset such as Bitcoins. Some of the distinguishing features of the Trust and its Shares include directly holding Bitcoins using the Trust’s proprietary Security System, storage of the Trust’s Bitcoins in various premises of the Trustee located in the United States, the experience of the Sponsor’s management team, the use of as custodian, third-party vault inspection and the use of a security consultant to advise on upgrades to the Trust’s technology and custody procedure.

The S-1 filing listed the following risks of dealing in Bitcoin, among others:

•  Currently, there is relatively small use of Bitcoins in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in the Shares.

• The administrators of the Bitcoin Network’s source code could propose amendments to the Bitcoin Network’s protocols and software that, if accepted and authorized by the Bitcoin Network’s community, could adversely affect an investment in the Shares.

• If a malicious actor or botnet obtains control in excess of 50 percent of the processing power active on the Bitcoin Network, such actor or botnet could manipulate the source code of the Bitcoin Network or the Blockchain in a manner that adversely affects an investment in the Shares or the ability of the Trust to operate.

• As the number of Bitcoins awarded for solving a block in the Blockchain decreases, the incentive for miners to continue to contribute processing power to the Bitcoin Network will transition from a set reward to transaction fees. The requirement from miners of higher transaction fees in exchange for recording transactions in the Blockchain may decrease demand for Bitcoins and prevent the expansion of the Bitcoin Network to retail merchants and commercial businesses, resulting in a reduction in the Blended Bitcoin Price.

• If the award of Bitcoins for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may cease expending processing power to solve blocks and confirmations of transactions on the Blockchain could be slowed. A reduction in the processing power expended by miners on the Bitcoin Network could increase the likelihood of a malicious actor or botnet obtaining control in excess of 50 percent of the processing power active on the Bitcoin Network or the Blockchain, permitting such actor or botnet to manipulate the source code of the Bitcoin Network in a manner that adversely affects an investment in the Shares or the ability of the Trust to operate.

• The acceptance of Bitcoin Network software patches or upgrades by a significant, but not overwhelming, percentage of the users and miners in the Bitcoin Network could result in a “fork” in the Blockchain, resulting in the operation of two separate networks until such time as the forked Blockchains are merged. The temporary or permanent existence of forked Blockchains could adversely impact an investment in the Shares.

• Intellectual property rights claims may adversely affect the operation of the Bitcoin Network.

Here’s the is the filing.

Snowden Issues Statement Condemning Actions of Both Obama and Biden

In a new statement, NSA whistleblower Edward Snowden said President Obama was employing “old, bad tools of political aggression’’ in his campaign to prevent Snowden from gaining political asylum.

"Although I am convicted of nothing,’’ Snowden said, the Obama administration “has unilaterally revoked my passport, leaving me a stateless person.’’

He also accused Vice-President Joe Biden of pressuring foreign leaders to deny his extradition requests.

Below is Snowden's full statement. He sounds cornered:

One week ago I left Hong Kong after it became clear that my freedom and safety were under threat from my government for revealing the truth. My continued liberty has been owed to the efforts of friends new and old, family, and others who I have never met and probably never will. I trusted them with my life and they returned that trust with a faith in me for which I will always be thankful.

On Thursday, President Obama declared before the world that he would not permit any diplomatic “wheeling and dealing” over my case. Yet now it is being reported that after promising not to do so, the President ordered his Vice President to pressure the leaders of nations from which I have requested protection to deny my asylum petitions. 

This kind of deception from a world leader is not justice, and neither is the extralegal penalty of exile. These are the old, bad tools of political aggression. Their purpose is to frighten, not me, but those who would come after me.

For decades the United States of America have been one of the strongest defenders of the human right to seek asylum. Sadly, this right, laid out and voted for by the U.S. in Article 14 of the Universal Declaration of Human Rights, is now being rejected by the current government of my country. The Obama administration has now adopted the strategy of using citizenship as a weapon. Although I am convicted of nothing, it has unilaterally revoked my passport, leaving me a stateless person.

Without any judicial order, the administration now seeks to stop me exercising a basic right. A right that belongs to everybody. The right to seek asylum.

In the end the Obama administration is not afraid of whistleblowers like me, Bradley Manning or Thomas Drake. We are stateless, imprisoned, or powerless. No, the Obama administration is afraid of you. It is afraid of an informed, angry public demanding the constitutional government it was promised — and it should be.

I am unbowed in my convictions and impressed at the efforts taken by so many.

Why the Multicultural Marxists in the Media Want To Destroy Paula Deen

By Thomas DiLorenzo

Celebrity chef Paula Deen has lost tens of millions of dollars for having admitted in a deposition to uttering the "N-word" some thirty years ago at a black thief who was holding a gun to her head in her restaurant at the time.  She is also accused in a lawsuit of discriminating against black employees, although hundreds of her black employees still go to work every day, and hordes of black customers showed up at her restaurant to support her last week according to boob tube images.  No one knows if the lawsuit is a Jesse Jackson-style shakedown or a legitimate discrimination lawsuit.

In fine Duke Lacrosse Team fashion the media immediately condemned Paula Deen as a Public Enemy in the harshest of terms, forcing several large corporations to cancel their contracts with her.  An accusation of racism by one single person is enough for them.

The reason for this, which we've all seen many times before, is that the multicultural Marxists who dominate the universities, the media, and much of the government, are paternalistic racists who believe that black people can never, ever, make it on their own without special help from them.  But here' s the catch:  all of the government programs that have been enacted to supposedly help "the poor and minorities" have been calamitous failures.  The welfare state has all but destroyed the black family in the inner cities and destroyed the work ethic for millions of Americans of all races.  The government school monopoly has destroyed the opportunities of more black children than if it had been run all these years by the KKK, as Walter E. Williams has said.  The war on drugs has imprisoned millions of young black men for non-violent crimes, and has also been the main source of black-on-black murder via drug gang shootouts.  "Urban renewal" has destroyed minority neighborhoods everywhere and replaced them with public housing hellholes.  After destroying their families and their educational opportunity, the state then entices thousands of young black men and women to join the military where many thousands of them die or get maimed for life in the state's aggressive wars.

Read the rest here.

U.S. Cities Where It’s Cheaper to Buy Than Rent

9. Birmingham, Ala.

Monthly cost of ownership: $504 (5th lowest)

Monthly cost of rent: $1,232 (18th lowest)

8. Kansas City, Mo.-Kan.

Monthly cost of ownership: $503 (4th lowest)

Monthly cost of rent: $1,260 (21st lowest)

7. Toledo, Ohio

Monthly cost of ownership: $450 (2nd lowest)

Monthly cost of rent: $1,194 (10th lowest)

6. Memphis

Monthly cost of ownership: $511 (7th lowest)

Monthly cost of rent: $1,336 (35th lowest)

5. Warren-Troy-Farmington Hills, Mich.

Monthly cost of ownership: $567 (17th lowest)

Monthly cost of rent: $1,522 (44th highest)

4. Gary, Ind.

Monthly cost of ownership: $560 (14th lowest)

Monthly cost of rent: $1,518 (45th highest)

3. Dayton, Ohio

Monthly cost of ownership: $469 (3rd lowest)

Monthly cost of rent: $1,278 (28th lowest)

2. Cleveland, Ohio

Monthly cost of ownership: $541 (12th lowest)

Monthly cost of rent: $1,462 (48th highest)


1. Detroit

Monthly cost of ownership: $338 (the lowest)

Monthly cost of rent: $1,138 (4th lowest)

(Via MarketWatch from data assembles by 24/7 Wall Street)

The Socialist Destruction of France

By Eric Margolis

Nice, France – I’m just down to sea level from the 2,600 meter high mountain forts on France’s wild, vertiginous Alpine border with Italy.

The Cote d’Azur, or Riviera, is buzzing with summer activity: packed beaches, traffic jams, crowded restaurants, outrageously priced hotels and an armada of yachts jostling for scarce marina space.

Looking at all this opulence and conspicuous consumption one would not know that France is plunged these days into economic and mental depression. French call it "morosité."

French are an excitable people. They often strike me as an unstable mix of Germans and Italians. When French spirits are high, they are unstoppable. Just think of Napoleon’s armies and the "furia francese." But French morale can sink just as fast. Today, France’s spirits are down in the dumps.

Other nations would be lucky to have such problems. In spite of uncontrollable debt, high unemployment, strikes, and declining industry, bountiful France is still one of the world’s most beautiful nations and best places to live.

French have one of the world’s best, most responsive health care services. Its food, wine and culture astound and delight. TGV high-speed trains zip through the beautiful countryside. Unlike much of western Europe, France is a large nation with varied topography, and distinctive regions. Some 75% of French spend their lavish, six-week vacations in their own country.

French still read books, study history, and, for the most part, eat real food. Never mind all those silly academic studies that tell you Auckland, New Zealand is the best place to live, France is the world’s premier destination and place to live.

Now, the bad news. Glorious, beautiful, well-run France may be facing the end of its "bel époque." French industry has been ruined by overly powerful unions and their political allies in the Socialist Party.

One would be crazy these days to open a factory in France with its absurd 35-hour work week, endless vacations, surly unions, strikes, and social costs that add 50% to worker’s salaries. Laying off workers during downturns or closing plants involves siege warfare, with posturing socialist politicians fighting employers at every turn.

Read the rest here.

Argentine President Battles Inflation by Launching Government Clothing Line

By Simon Black

Buenos Aires, Argentina

Well... this has turned out to be one of those epic fail travel stories.

I was supposed to be in Cape Town this morning, where the entire city has been shut down due to the presence of Barack Obama.

But apparently when you fly to South Africa from Argentina, you're required to have a certificate of Yellow Fever vaccination. I didn't have a certificate on me. So I was denied boarding, despite having traveled to Africa numerous times without one.

Funny thing is that I've actually had a Yellow Fever shot. And I even have the original certificate sitting in my safe in Santiago. So I'll probably now have to head back to Chile, get this silly piece of paper, and then start all over again.

What a complete waste of time.

To be fair, Buenos Aires is a great city to be stuck in. There's never a shortage of things to do-- from the cultured and divine to the city's seedy underbelly.

There's a reason that so many Wall Street refugees came down here to huddle at the onset of the financial crisis in 2008-- it's cheap, and it seems to remind everyone of New York.

The more interesting part about Buenos Aires, though, is that this place is the headquarters for the central planning bad idea bus.

Argentina's President, Cristina Fernandez, continues to tighten her stranglehold over the nation's economy and society.

This country is so abundant with natural resources, it should be immensely wealthy. And it was. At the turn of the 20th century, Argentina was one of the richest countries in the world.

Yet rather than adopting the market-oriented approaches taken by, say, Colombia and Chile, Argentina is following the model of Venezuela.

Cristina rules by decree here; there is very little legislative power. She may as well start wearing a crown.

Just in the last few years, she's imposed capital controls. Media controls. Price controls. Export controls.

She's seized pension funds. She fired a central banker who didn't bend to her 'print more money' directives. She even filed criminal charges against economists who publish credible inflation figures, as opposed to the lies that her government releases.

Inflation here is completely out of control. The government figures say 10%, but the street level is several times that.

Curiously, even Cristina acknowledges that prices are way too high. But rather than rein in spending and stop the money printing, she's digging her high heels in even further by launching a new clothing line.

This new brand-- NYP (Nacional Y Popular) will be owned and run by the government, selling everything from jeans to shirts to shoes at prices below 100 pesos (less than $20 officially).

In every instance, they just keep going further down the rabbit hole of more government control, more central planning. It's like living inside the pages of Atlas Shrugged.

It's a shame. This is a beautiful country with very enterprising people. Many of the top entrepreneurs in Latin America come from Argentina. Plus, they make the most hilarious jokes about their own government.

They say, for example, that they live in a 'dedocracy' (dedo means finger, so they're saying that nothing happens without Cristina's touch).

Being here in this laboratory of central planning makes a few things abundantly clear:

1) Printing money does not create wealth. If it did, Argentina would be one of the richest places in the world again.

2) All of these policies that are 'for the benefit of the people' almost universally and up screwing the people they claim to help.

Printing money creates nasty inflation. If you're wealthy, it leads to asset bubbles, which can make you even wealthier. If you're poor, you just get crushed by rising prices. Or worse-- shortages (remember the recent Venezuelan toilet paper crisis?)

3) Desperation leads to even more desperation. The worse things get, the tighter government controls become... which makes things even worse. It's a classic negative feedback loop.

Both the United States and pan-European governments are varying degrees of this model, with only a flimsy layer of international credibility separating them from the regime of Cristina.

So Argentina is really a perfect case study in things to come.

Simon Black writes and is Senor Editor  at SovereignMan.com

RIZZO: The Chicago School of Economics is Dying

Economist Mario Rizzo, who earned his PhD in economics from the University of Chicago, recently commented on the collapse of the Chicago School of economics.

The Chicago-tradition as created by Milton Friedman, George Stigler, Gary Becker, Harold Demsetz, Ronald Coase, Yale Brozen, and others is dying. The new generation of economists at Chicago is not much different from economists anywhere else. There are some exceptions, of course. Unfortunately, the Chicago-school generation did not adequately reproduce itself at Chicago. The energy behind that approach is gone.

SOLVED: The Female Brain

The entire video below is pretty fascinating, but it is one hour and twenty-nine minutes long. If you really want to understand the difference between the male and female brain, go to the 41 minute 30 second mark, this part of the presentation is only 3 minutes and 20 seconds long.

The speaker is Martin L. Rossman, MD and he is speaking at the University of San Francisco Medical School

A Few Thoughts on the 100 Degree Temperatures and the Crony Climatology Complex

The record breaking temperatures in the western half of the United States are sure to bring out in full force the climate scam artists. No doubt they will they will claim, with little proof, that the current hot weather is part of a global warming trend, brought about by evil business. They will scream that businesses must be regulated to prevent this global warming trend from continuing. And they will announce that money must be spent in ways that just so happen to benefit the crony climatology complex.

In truth, climatology  is a very complex science. Very few scientists, if any, understand it to any in detail. The best scientists in the field will tell you this.They will tell you that much more research and analysis must be done. But this won't stop the opportunists and the cronies to pretend they understand the problems and know the solutions. They want to shut down all discussion and thinking about the subject, now. The less they know, the more they want to end research and discussion on the topic.

The President is one of these climate science obstructionists. He won't let us see his Harvard grades, but he will nevertheless stand before the world, as though he is an expert, and declare:

 We don’t have time for a meeting of the flat-earth society.

Implying that the research on climatology is complete, the President surely takes the masses for fools.

Here's what real scientists say. From a 2012 paper by the  Research Council of Norway:

Although the expressed political needs regarding science results primarily relate to the impact of anthropogenic greenhouse gasses, there is also a need for increased research on the impact of human activity on land cover and land-use change, especially in relation to the albedo and the biogeochemical and hydrological cycles.Furthermore, a good understanding of the climate system cannot be reached without a dedicated effort to understand the contribution to climate change from natural climate processes. The geological history very clearly documents a strong climate forcing associated with solar variability, although the exact mechanism has not been identified. This should call for a coherent international effort, but surprisingly, the worldwide scientific effort to increase our understanding of the natural variations is very limited[...]. Therefore, in addition to implementing the recommendations of Klima21, this committee recommends an increased effort in research on the natural causes of climate change, in particular the activity variations of the sun, the mechanism of cloud formation, and the multi-decadal variations in ocean current systems.

That's what real scientists are saying versus Obama, the non-scientist who is telling us research is complete.

Note: Norwegian climate scientists are the world’s most prolific in terms of publications per capita. In Norway, the number of research articles on climate research being published is climbing faster than in any other research field. They are world leaders in many as aspects of climate research.

At the same time scientists tell us more research needs to be done, the whiff of an anti-business perspective will be in the hot air, promoted by the climate scammers, as bizarre as this may logically sound. Businesses, free market businesses, that is, that respect property rights, are all about solving consumer problems. When I hear about record high temperatures, especially in the very hot areas of Phoenix and Las Vegas, I think about, water supplies, the electric power, refrigeration and air conditioning created by businesses that make these places inhabitable during the current heat wave---something that wouldn't haven been possible years ago, before modern day conveniences were invented. Yes, while this heat wave goes on, in Las Vegas, conventions and meetings are being held, gamblers are gambling and performers are performing for audiences and diners are dining----all in the comfort of air conditioning brought to visitors and employees by businesses.

That's what we know as a fact, businesses are making Las Vegas and Phoenix inhabitable.

As for macro-climate change, much more work needs to be done on the subject and I will be very surprised that any work done in that direction will in future years show that Obama's crony climatology projects will have anything to do with changing climate in any significant degree, if change is needed at all. Is this why the President wants to stop the research now?  

BREAKING Putin Says Snowden Can Stay in Russia

The Russian television network RT is reporting that Russian President Vladimir Putin says NSA leaker Edward Snowden can stay in Russia, if he wants to, but only if he stops activities aimed against the United States.

UPDATE

Reuters reports:

President Vladimir Putin said on Monday that Russia would not hand former U.S. spy agency contractor Edward Snowden over to the United States but that if Snowden wants to stay in Russia he "must stop his work aimed at harming our American partners".[...]He said Snowden should choose his final destination and go there.

Since all indications are that Glenn Greenwald already has the raw data from Snowden that he needs to publish further disclosures, it is not clear what Putin is doing here. It is not going to stop Greenwald.

'Desperate Move': Snowden Has Met With Russian Diplomatic Officials

Edward Snowden, the former National Security Agency contractor who leaked U.S. security secrets and is now a fugitive, met Monday morning with Russian diplomatic officials and handed them an appeal to 15 countries for political asylum, a Russian Foreign Ministry official told The Los Angeles Times.

LaTi continues:

“It was a desperate measure on his part after Ecuador disavowed his political protection credentials,” said the official, speaking on condition of anonymity. ”In the document Snowden reiterated once again that he is not a traitor and explained his actions only by a desire to open the world’s eyes on the flagrant violations by U.S. special services not only of American citizens but also citizens of European Union including their NATO allies.”

The official didn’t disclose the countries that were on the list. The meeting took place at Moscow's Sheremetyevo International Airport, where Snowden has apparently holed up in a transit lounge since fleeing from Hong Kong while seeking a route to Ecuador or somewhere else that might grant him asylum.

Kirill Kabanov, a member of the Presidential Council on Human Rights, a Kremlin advisory body, said he believes that Russia is on the list.

“In the given circumstances, Russia has two workable options: Firstly is to provide Snowden with some refugee-status papers so that he could buy a ticket and leave for some other country, or secondly to grant him political asylum,” Kabanov said in an interview with The Times.

“Snowden's actions were motivated by a desire to protect human rights and freedoms and now many rights activists in Russia are talking about him as a human rights advocate who deserves to be granted asylum, although this measure is fraught with some political inconveniences for Russia,”  he said.

MUST READ: Peter Schiff on the Gold Crash

The Golden Cycle
By Peter Schiff

The New York Times had the definitive take on the vicious sell off in gold. To summarize one of their articles:

Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight.  The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.

The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.

Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course. The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare.

This analysis provides a good representation of the current conventional wisdom. The only twist here is that the article from which this summary is derived appeared in the August 29, 1976 edition of The New York Times. At that time gold was preparing to embark on an historic rally that would push it up more than 700% a little over three years later. Is it possible that the history is about to repeat itself?

At the time The Times article was written gold had fallen to $103 per ounce, a decline of nearly 50% from the roughly $200 it had sold for in the closing days of 1974. The $200 price had capped a furious three-year rally that began in August of 1971 when President Nixon "temporarily" closed the gold window and allowed gold to float freely. Prior to that decision gold had been fixed at $35 per ounce for nearly two generations. That initial three year 450% rally had validated the forecasts of the "gold bugs" who had predicted a rapid rise in gold prices should the dollar's link to gold be severed. The accuracy of these formerly marginalized analysts proved to be a bitter pill for the mainstream voices in Washington and Wall Street who, for reasons of power, politics and profit, were anxious to confine the "barbarous relic" to the dustbin of history. Incredulous as it may seem now, with gold still priced at $35 per ounce, official forecasts of both the Secretary of the Treasury and the Chairman of the Federal Reserve were that demonetizing gold would undermine its value, and that its price would actually fall as a result.

Of course government experts could not have been more wrong. Once uncoupled from the dollar, gold's initial ascent in the early 1970's was fueled by the highest inflation in generations and the deteriorating health of the U.S. economy that had been ravaged by the "guns and butter" policies of the 1960's. But the American economy stabilized during the mid-years of the 1970's and both inflation and unemployment fell. When gold reversed course in 1975 the voices of traditional power elite could not contain their glee. When the gold price approached $100 per ounce, a nearly 50% decline, the obituaries came fast and furious. Everyone assumed that the gold mania would never return.

Although the writer of The Times piece did not yet know it, the bottom for gold had been established four days before his article was published. Few realized at the time that the real economic pain of the 1970's had (to paraphrase The Carpenters 1970's hit) "Only Just Begun". When inflation and recession came back with a vengeance in the late 1970's, gold took off (to quote another 1970's gem), like a skyrocket in flight. By January 1980, gold topped out at $850 an ounce. The second leg of the rally proved to be bigger than the first.

The parallel between the 1970s and the current period are even more striking when you look closely at the numbers. For example, from 1971 to 1974 gold prices rose by 458% from $35 to $195.25, which was then followed by a two-year correction of nearly 50%. This reduced total gains to just under 200%. The current bull market that began back in 2000 took a bit longer to evolve, but the percentage gains are very similar. (We should allow for a more compressed time frame in the 1970s because of the sudden untethering of gold after decades of restraint.) From its 1999 low to its 2011 peak, gold rose by about 650% from $253 to $1895 per ounce, followed by a two year correction of approximately 37%, down to around $1190 per ounce. The pullback has reduced the total rally to about 370%. The mainstream is saying now, as they did then, that the pullback has invalidated fears that rising U. S. budget deficits, overly accommodative monetary policy, and a weakening economy will combine to bring down the dollar and ignite inflation. But 1976 was not the end of the game. In all likelihood, 2013 will not be either.

The biggest difference between then and now is that until 1975 ordinary Americans were barred by law from buying and owning gold. About the only route available to participate in the earlier stage of the precious metal rally was by hording silver dimes, quarters and half dollars minted prior to 1965. My father indulged in this process himself by sifting through his change, the cash registers of any merchant who would allow him (exchanging new non-silver coins and bills for silver), and by sifting out silver coins from rolls he bought from banks. It was a time-consuming process, and most of his friends and family members thought he was crazy. After all, he had $10,000 worth of pocket change earning no interest.But the $10,000 face value worth of those coins he collected had a melt value of over $350,000 when silver hit its peak.

By the mid 1970's none of the problems that initially led to the recession in the early years of the decade had been solved. Contrary to the claims of the "experts" things got much worse in the years ahead. It took the much deeper recession of the late 1970's and early 1980's, which at the time was the worst economic down-turn since the great Depression, to finally purge the economy of all the excesses. The lower marginal tax rates and cuts in regulation implemented by President Reagan and tight money under Volcker helped get the economy back on track and create investment opportunities that drew money away from gold. As a result gold fell hard during the early 1980's. But even after the declines, gold maintained levels for the next 20 years that were three to four times as high as the 1976 lows.

Although the economy improved in the 1980's, the cure was not complete. Government spending, budget and trade deficits continued to take a heavy toll. The U.S. was transformed from the world's largest creditor to its largest debtor. When the time came to face the music in 2001, the Fed kept the party going by opening the monetary spigots. Then when decades of monetary excess finally came to a head in 2008, the Fed open up its monetary spigots even wider, flooding the economy with even more cheap money.

Unfortunately just like 1976, a true economic recovery is not just around the corner. More likely we are in the eye of an economic storm that will blow much harder than the stagflation winds of the Jimmy Carter years. And once again the establishment is using the decline it the price of gold to validate its misguided policies and discredit its critics. But none of the problems that led me and other modern day gold bugs to buy gold ten years ago have been solved. In fact, monetary and fiscal policies have actually made them much worse. The sad truth is that as bad as things were back in 1976, they are much worse now. Whether as a nation we will be able to rise to the occasion, and actually finish the job that Ronald Reagan and Paul Volcker started remains to be seen. But I am confident that the price of gold will rise much higher, and that its final ascent will be that much more spectacular the longer we continue on our current policy path. Don't believe the mainstream. Just as before, they will likely be wrong again. 

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.

Bitcoin Dealer Mt. Gox Files with US Treasury

The largest Bitcoin exchange has filed key paperwork with the US Treasury's anti-money laundering agency, but it may have come too late, reports PC World.

Mt. Gox's registration may have come too late. According to FinCEN's website, those running money services businesses are required to register with the agency within 180 days of when the business was established.

The seizure order from the federal court stated that Mt. Gox has used its U.S. account to distribute funds to Dwolla since at least December 2011.

Ann Coulter: Rand Paul Is Too Short to be President

Ann Coulter is so out of it that the establishment hasn't even bothered sending her the go soft on Rand (but not his father) memo.