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GOLD AT NEW HIGHS, AND MOVING FURTHER...
Monetary and policital scientists continue to expound the theoretical merits of the Federal Reserve System. It has become a modern act of faith that economic life simply could not go on without it. But the time for theory has past. The Creature moved into his final lair in 1913 and has snorted and thrashed about the landscape ever since. If we wish to know if it is a creature of service or a beast of prey, we merely have to look at what it has done. And, after the test of all those years, we can be sure that what it has done, it will continue to do. Or, to use the Biblical axiom, a tree shall be known by the fruit it bears. Let us now examine the harvest.
~ G. Edward Griffin, The Creature From Jekyll Island
Dear Mountaineers,
As I write to you today, the Swiss franc to US dollars exchange rate stands at 0.9996, below parity. In other words, one US dollar now buys less than one Swiss franc. When I was a young boy, I visited America during a summer holiday. It was in the early 70´s. I remember the exchange rate back then: one Dollar was worth more than four Swiss francs! Much has changed about America and its currency since then.
In the context of Mr. Griffin´s quote above, the ‘harvest´ appears to be in the making. Look at what the Federal Reserve has done to the Greenback. The US dollar Index is headed for new lows, while versus the Swiss franc it has already arrived at its all-time low.
As I write, gold currently stands at US$ 1,194.82 per troy ounce. And, against all odds, it continues moving ahead. It is truly quite impressive. Meanwhile, silver stands at US$ 18.70 per troy ounce.
More and more doubt exists as to the Dollar´s role as the world´s number one reserve currency and currency of trade. What is the alternative? It appears that gold is the choice of investors around the globe. Gold is surging because investors worldwide see that Mr. Geithner and his Federal Reserve - more concerned with deflation and unemployment than sound money - may be trapped in a never-ending cycle of monetary accommodation.
The past few days have been interesting, not just because of precious metals, but because of the Dubai default prospects scaring the financial world - for a little while, anyhow. We were painfully reminded of the possibility of sovereign default. It appears that, fortunately, Dubai, possibly the pinnacle of artificial economic dreamworks, will party just a little longer.
The sheikhs from Abu Dhabi appear to be lending a helping hand. And they, you have to admit, are not merely taking it from tax payers. This bailout comes from their proprietary deep pockets. The stock markets have thanked them with a positive move.
It looks like we might get another move up. But you can´t deny the fact that the air at these altitudes is starting to feel awfully thin...
Sincerely,
Your "Swiss Mountain Guide"
Frank R. Suess |
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NO MORE MINARETS IN SWITZERLAND!
In a national initiative that was voted on last Sunday, Swiss voting citizens banned any new minarets from being built in Switzerland. The international media´s outcry has been prompt and loud. And, a lot of Muslims in Switzerland and abroad are upset. They are all quick to brand the acceptance of this initiative as rascist, discriminatory and, above all, against human rights. They don´t care that this decision is based on the Swiss constitutional rights and on a time-tested system of direct democracy.
Now, clearly, a few minarets here and there are, per se, nothing worth mentioning, or even banning. That is not the concern expressed in last Sunday´s vote. So far, in Switzerland, there are only 4 minarets. So, it´s not like Swizerland´s horizon is plastered with these tall, slender towers of Islam, nor is there a plague of muezzins waking up the Swiss when announcing the hour of daily prayers.
Switzerland, today, does not have a problem with Muslims; some 300,000 Muslims live in Switzerland. Most of them are peaceful and law-abiding - in other words, most of them respect OUR Swiss constitution and laws. There is, however, a minority of Muslims in Switzerland, as in other parts of Europe and the world, that adhere and feel obliged only to one law, that of Sharia. This minority amongst Muslims represents a problem, and not just in Switzerland.
Certain Sharia laws are regarded as divinely ordained, concrete, and timeless for all relevant situations. A common definition of Sharia is as follows: "Muslim or Islamic law, both civil and criminal justice as well as regulating individual conduct both personal and moral. The custom-based body of law based on the Koran and the religion of Islam. Because, by definition, Muslim states are theocracies, religious texts are law, the latter distinguished by Islam and Muslims in their application, as Sharia or Sharia law."
Sharia law, in some areas - for example women´s rights - is NOT compatible with the legal system of Switzerland, or with the laws and values of most non-Muslim secular states today. Fundamentalist Muslims do not accept Western rule of law.
In the interest of long-term peace and order, it is critical that these incompatibilities are discussed openly. Tolerance can never be a one-way street, as it takes two for tolerance to be viable and meaningful. It is never an end in and of itself. You can not afford tolerance to someone or something that itself has no tolerance for you and might be antagonistic. You can only be tolerant with someone or something that returns that tolerance somewhat equally. Fundamentalist Islam is not tolerant.
Speaking about this problem openly in public, at least in our view, represents the pinnacle of true democracy and freedom. Furthermore, it allows for the possibility of continuing a peaceful and constructive existence, side by side, in sync with the tradition of diversity that has been one of Switzerland´s unique strengths.
The Swiss voters are aware of Muslim demographic and social developments around them in the rest of Europe. And, they are concerned that if Muslims get their mosques, minarets and their burkas in school, it will follow on that they will want more, perhaps separate schooling or, why not even introduce a parallel system of Sharia law.
The rest of Europe has gone far on their path of ‘tolerance´ and they are paying dearly for it. England is currently battling harsh demands for Sharia law. Holland, another highly ‘tolerant´ nation, is far down the road of accepting and accommodating Muslim demands. They are now finding it difficult to turn the wheel back.
In some parts of Amsterdam, where minarets were built and Muslim muezzins started calling loudly for prayer, generally via remote loudspeakers, neighbors of other religious backgrounds started moving out, disturbed by the noise. The real estate prices in those neighborhoods fell. Muslims moved in. And, the neighborhoods which were once mixed and ‘tolerant´ have now become much less tolerant and purely Muslim ‘enclaves´. Not a recipe for peace and integration!
In Germany and France, as demographic trends start becoming very visible in daily life, the tensions between Muslims and Christians are growing rapidly. Regularly, one hears news of Sharia ‘incidents´, such as forced marriages, female circumcision, and violent punishments for adultery, even stoning. These incidents foster fear and tension. They are NOT ACCEPTABLE HERE.
Tolerance in the aforementioned countries has not stopped these practices effectively. And, in fact, it has avoided true integration of Muslims.
Contrary to the rest of Europe, where the majority of the people would love to, but CANNOT, openly discuss and stop the increasing and incompatible demands of Islam, the discussion has been initiated openly in Switzerland.
It is the democratic practice in Switzerland that, via initiatives and referendums, the people can launch, approve or disapprove legislation by direct voting. Every 3 months or so, we have the right as Swiss citizens to place our vote and influence the policies and history of our country. This is what you call a true and direct democracy.
The issues that exist with Islam in Europe and Switzerland are real. They are spreading and need to be addressed NOW. The Swiss people have spoken and have said ‘enough is enough´. The ban of minarets is merely a sign. It has launched a very active and emotional discussion on Islam in Switzerland, and hopefully in Europe in general. Democracy in Switzerland works. It has now become the catalyst for a discourse long overdue. That´s good for everyone, for Muslims in Switzerland too.
Muslims can continue to practice their religion in peace as long as their practices are compatible with our Swiss fundamental rights, our laws and, most of all, our constitution. Those Muslims who cannot accept that and who want to live in accordance with Sharia, a position we can fully respect and honor, should simply go and live elsewhere.
Most Muslims in Switzerland have not been discriminated. Fundamental Muslims have been. They don´t belong here. All Muslims continue to enjoy the full rights afforded to any resident of Switzerland, including the right to leave.
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NEWS BRIEFS
Sakakibara Easing Yet a Little More...Against His Own Beliefs
Eisuke Sakakibara, formerly Japan´s top currency official, in the last few days, stated clearly that quantitative easing policies implemented by the Bank of Japan would have "very limited" (if any) effect on the economy, because there are no borrowers.
Nevertheless, as discussed in the link below, BoJ is ready to pump another 10 Trillion Yen (approximately US$ or CHF 115 Billiion) of ‘Emergency Credit´ into the system to help an economy battered by falling prices (yet more DEFLATION for Japan -- despite all the pumping) and the Yen´s surge to a 14-year high.
It is certainly worthwhile studying the development of Japan´s deflationary depression to better understand what might be on the horizon for America and the West as we happily copy the Japanese ‘model of success´.
Go to Story
The "All-Clear" Siren Sounded Across Global Markets Today
As we prepare this week´s Update, on Tuesday December 1st, gold hit a fresh high, equities powered ahead and industrial commodities found favor as the risk ‘On´ switch was flicked.
After the initial scare over the potential credit default of Dubai, markets presented themselves as being relatively sturdy. Abu Dhabi will come to the rescue if needed. Dubai too, like a few other potential defaulters, is "too big to fail".
Go to Story
In-Geithner-We-Trust Bond Markets Get Lowest Yield
How do you ensure that investors buy government bonds when the fiscal situation is deteriorating? Make sure that the central bank keeps interest rates at their lowest levels ever as it pushes all investors into the bond market.
This is the trend we have observed over the past 12 months and it is expected to persist as long as the economic cycle does not improve. It is difficult to predict when this situation will change, as monetary authorities are doing their best to keep rates low while allowing banks to generate huge gains on their bond operations.
Less than a week after deflecting calls for his resignation, Timothy Geithner sold bonds on behalf of U.S. taxpayers at the lowest yields on record as a show of confidence in the Treasury Secretary´s policies.
Go to Story
With T-Bill Yields at Zero, It´s Time to Beware of the "Bond Bears"
There is some interesting action unfolding in the dark corners of the credit market.
Although this exploratory sojourn takes us fairly far afield from our regular stomping grounds in the equity markets, it could have important implications for our investments. So grab your thinking cap and let´s go exploring.
Go to Story
Climate Change ‘Scientists´: "Oops. That´s really bad timing!? Let´s make sure we keep our e-mails an even better secret from now on..."
A few weeks ago we shared a link with our Mountaineers which provided an excellent and intriguing speech by Lord Monckton. It is best titled THE BIG CLIMATE SCAM. That speech went around the world on internet and put a dent in the prospects for a climate change agreement. Now, a few hackers may have just about sunk the ship, or at least delivered it to the wharf for repair.
Hundreds of private e-mail messages and documents hacked from a computer server at a British university are causing a stir among global warming sceptics, and a bit of a panic amongst those who thought, or at least pretended, they had an air-proof case for man-made climate change and the counter-policies to go along with it.
Go to Story
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| © Copyright 2009, by BFI Capital Group AG, Bahnhofstrasse 29, 6300 Zug, Switzerland, website: www.bficapital.com. The MOUNTAIN VISION UPDATE is published by BFI Capital Group (‘BFI’). Quotation is allowed if credit is given. Although every care has been taken in the preparation of Mountain Vision, BFI does not guarantee and cannot be held responsible for the accuracy of any statistic, statement or representation made. We recommend that you consult qualified professional advisors to determine the applicability of this information and opinion. The publisher is not a registered investment advisor. Readers should not view MOUNTAIN VISION as offering personalized legal or investment advice. |
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