Sophomore setter Taylor Hughes hugs senior libero Valeria Leon during the Ohio State women’s volleyball Senior Night recognition after a victory over Indiana on Nov. 26 at St. John Arena. Credit: Jenna Leinasars | Assistant News DirectorThe Ohio State women’s volleyball team ended their regular season in an emotional fashion on Saturday night. After five sets of competitive play against Indiana, the Buckeyes pulled out a win for the upperclassmen on OSU’s Senior Night. Despite the occasion, the Hoosiers didn’t let the Buckeyes off the hook during the match. The teams pushed through five grueling sets before OSU secured the win (25-14, 21-25, 25-17, 16-25, 15-11) to close out its regular season play. The Buckeyes jump to 20-12 overall and an even 10-10 in the Big Ten conference.Indiana has given OSU trouble in the past when the when the team’s battled in Bloomington, Indiana, on Nov. 5. The Hoosiers completed a 3-1 upset over the Buckeyes that night. Saturday night’s win comes on the heels of an OSU five-set win over Purdue on Friday night. After the match, OSU seniors were recognized with their families in front of the crowd and were given framed jerseys. The group showed their emotions about playing in St. John Arena for the last time as many tears fell and many hugs were shared. Each senior was able to say a few words and give thanks to anyone who was a part of their journey as Buckeyes.“I’m really sad because this is going to be the last time I play at St. John. I’ve been here in this place for the last four years,” said senior libero Valeria León. “I can’t imagine not being here and not playing out here, but I’ve loved every part of it.” Senior middle blocker Kylie Randall was supported by her family, who made the journey from Tomball, Texas, to celebrate with her on Saturday night.“I’m really excited to see my family here and just enjoy the last ‘hoorah’ here in St. John,” she said. “It was good to be surrounded by my teammates and all of the fans.”It was senior middle blocker Taylor Sandbothe who kicked off the night with two opening kills in the first set to pace OSU, followed by an ace from senior setter Abby Fesl. Sandbothe would post three additional kills, aiding the Buckeye effort. OSU limited the Hoosiers to just a .077 attacking efficiency to close out the first set. Indiana battled back from a second-set hole to the tie the score at 16-16. OSU did not perform well under pressure and started to make unforced errors. The Hoosiers capitalized on the Buckeyes’ mistakes and took hold of the lead to finish off the second set, 25-21. OSU played stronger in the third set coming out of the intermission. The team maintained the lead nearly the entire set after a very brief Indiana advantage. Freshman Madison Smeathers swung away for five of her 13 match kills in the third set. The Hoosiers propelled ahead after falling behind early in the fourth set of the match, led by multiple-point runs from Indiana’s defensive specialists Meaghan Koors and Samantha Fogg. Attacking errors from nearly every OSU hitter only added to the Hoosier momentum, and the Buckeyes found themselves staring down a winner-take-all fifth set. Play was tight between the teams in the final set until OSU’s pair of sophomores, setter Taylor Hughes and outside hitter Audra Appold, put the Buckeyes ahead with three consecutive kills, 6-4. The Buckeyes nearly eliminated all unforced errors from their side of the net, which boosted them to a fifth-set victory, 15-11. León dug up a match-high 17 balls during competition and Sandbothe led the Buckeyes offensively with 22 kills and a .514 hitting percentage. Hughes contributed 35 assists and 3 aces. With two wins to close out their regular season, the Buckeyes are waiting anxiously for the NCAA Tournament Selection Show on Sunday night to find out their place in postseason play. The Buckeyes set a goal for themselves earlier in the year to play in the Final Four, which will be held at Nationwide Arena in Columbus. Randall said the team will be gathering at OSU coach Geoff Carlston’s house to watch the show. “Looking forward to the tournament, I think we put ourselves in a really good position going 2-0,” she said. León added that wherever the Buckeyes are headed, she has confidence in the experience her team has already gained during the season. “Wherever we end up going, I think the Big Ten prepares you to play against the best,” she said. “We’re not going to be afraid of wherever we’re playing. We’re just going to go out there and give our all.”The NCAA Tournament Selection Show will be aired at 9 p.m. on Sunday night on ESPNU. read more

The EPA has never really studied fracking – the current study, which won’t even release its preliminary findings until the end of next year, is the first real environmental assessment of the practice.EPA started a study on hydraulic fracturing in 1999 that focused on coalbed methane reservoirs and whether fracturing them impacted underground sources of drinking water. Published in 2004 after peer review, the study concluded that fracking posed little to no risk in terms of contaminating drinking water. An energy bill pushed through Congress by Dick Cheney in 2005 exempts the oil and gas industries from the Clean Water Act, the Clean Air Act, the Safe Drinking Water Act (SWDA), the Superfund Law, and about a dozen other regulations.The oil and gas industry is regulated by every single one of these laws except for the SDWA, which has never regulated oil and gas activities. If it seems these federal statutes do not sufficiently regulate fracking, that’s because the states do it instead. Drilling and fracking a well pollutes aquifers.The shales that contain natural gas are 5,000 to as much as 18,000 feet below ground. The aquifers we tap for drinking water are at about 500 feet. That means roughly 2 miles of rock lie between aquifer and frac. A 2010 report by Pennsylvania’s Department of Environmental Protection concluded “no groundwater pollution or disruption of underground sources of drinking water have been attributed to hydraulic fracturing of deep gas formations.” People who live near fracs have been found to have elevated levels of benzene in their blood.The only residents who had elevated benzene levels were those who smoked. Cigarettes contain benzene. Oil and gas drillers are allowed “to inject hazardous materials, unchecked, directly into or adjacent to underground water supplies.”Disposing of frac fluids is a challenge. One method does involve sending them down old natural gas wells, but the wells are always cased, cemented, and grouted where they pass through drinking water supplies to seal off contact with the surrounding rock and terminate in formations many thousands of feet below water reserves. Figure 1. Composition of typical gas shale frac fluid (modified from Bohm et al., All Consulting, 2008a). Drilling companies refuse to disclose just which deadly chemicals they use to create their frac fluids.Drilling companies must disclose the names of all chemicals stored and used at a drilling site. Anyone who knows how to read a Material Safety Data Sheet (MSDS) can find out what chemicals are present. Frac fluids are toxic mixtures of 596 deadly chemicals.Allowing for variance among companies and operations, fracking fluid is typically a bit under 91% water and 9% sand. Tiny amounts of added chemicals reduce friction, fight microbes, control pH, and prevent corrosion of equipment. Many are found around the house, including guar gum (in ice cream), borate salts (a fungicide), and mineral oil. And yes, there are 596 ingredients that have at some point been used to make frac fluids, but any single fracturing job uses only a few of the available options. Frac fluids that flow back out of a well are often stored in pits in the ground that aren’t even lined, where a lot of the fluid just seeps into the ground; even if they are lined, they often leak.Here Fox has finally hit upon some truth – that some pits have in the past leaked. That’s why they are being phased out in most states in favor of above-ground storage solutions that enable much better leak detection and repair capabilities. In fact, this month’s recommendation is a rapidly growing company with an innovative solution to storing frac fluids. Fox “Fact” Industry EffortsAs we alluded to earlier, fracking does has its drawbacks, two of which stand out in particular. The first is that hydraulic fracturing uses a fair chunk of water – an average multi-stage frac requires a total 5 million gallons of water. To put that number in context, electric generation uses nearly 150 million gallons per day in the Susquehanna River Basin of Pennsylvania.Nonetheless, industry engineers are working hard to reduce water usage. After all, they know as well as anyone else what their livelihood depends on.The most important shift here has been toward recycling frac fluids. In Pennsylvania, the fracking industry now reuses more than 60% of its water, for example. In addition, companies are exploring other, more creative water reduction strategies. In British Columbia, energy giant EnCana Corp (T.ECA) and its partner Apache Corp (NYSE.APA) spent nine months and C$10 million finding a deep, sour water aquifer and then figuring out how to make the super-salty, hydrogen sulfide-laced water usable for fracking. This novel technique could significantly reduce the need for fracking operations to use freshwater supplies.The second drawback is that the fluids that flow back to the surface after a fracturing are often stored in containment units that have been known to leak.As we pointed out, pits, lined or not, are being phased out in many jurisdictions, precisely because it’s truly difficult to tell whether a pit dug into the earth is leaking. This is where companies like  Poseidon Concepts (T.PSN) come in. Instead of lined pits and even the dozens of steel tanks that are the not-so-ideal alternative, PSN offers above-ground lined frames that are inexpensive and much more environmentally sound.Another way to ease the problem of frac fluids spills or leaks is to make frac fluids so benign that we could literally drink them. It sounds pie-in-the-sky, but the world’s second-largest oilfield services company is working hard on the idea. In fact, Halliburton (NYSE.HAL) has created a frac fluid called CleanStim, made from materials sourced from the food industry. A Halliburton executive showed the stuff at a recent conference – and then tossed it down his gullet.Where there’s a need, an innovator will rise to the challenge, and there are plenty of innovators in the world of oil and gas.Fracking Earthquakes: Hazard or… Preventative?A few weeks ago privately held Cuadrilla Resources, the first company to successfully frac natural gas shales in Europe and a Casey Energy team recommendation back in early 2008, announced that its fracking operations caused two small earthquakes in northwest England last April and May. After the earthquakes, Cuadrilla voluntarily suspended its fracking operations in the area while an independent group investigated the events.The earthquakes measured 2.3 and 1.5 on the Richter scale. Seismic events, to be sure, but so gentle they were barely felt. Indeed, the independent report found that Cuadrilla’s work had caused the tremors, but the earth moved so little that they posed no threat to anyone or anything.And what others may consider concern, we consider potential. As two plates of Earth’s crust naturally shift along their fault line, they can sometimes get hung up on rocky “hooks” called asperities. As the plates keep trying to move, stress builds and builds. The huge earthquakes we all fear occur when the stored energy has built enough to break through the asperity: the gradual slide becomes a destructive jerk.Small tremors, on the other hand, reduce the pressure one bit at a time. Whenever there is a major earthquake or a discussion of when California or Vancouver or Japan will get hit with the next Big One, someone often laments, “If only we had a way to release the pressure beforehand!”What if hydraulic fracturing could relieve the stress on the faults in earthquake-prone areas? Clearly the notion needs a battery of modeling and tests before it’s anything but a concept, but on a basic level the idea makes sense. Perhaps by releasing the accumulated stress at depth slowly with small tremors, we could mitigate the Big One enough that it might not be so big after all.If nothing else, the concept is a reminder not to fear serendipity. Finding something you didn’t expect when attempting something else is how the scientific world achieved many of its major breakthroughs.A Resource We Can’t IgnoreThe ability to produce clean-burning natural gas from the 48 shale basins in 32 countries around the world could transform the global energy economy and increase energy security, starting in the United States.Hydraulic fracturing has become a scapegoat, targeted by environmentalists as another attempt by the oil and gas industry to lock America into fossil fuel dependence. The thing is, America is already addicted to fossil fuels. Until that changes, even environmentalists will need to heat their homes, charge their cell phones, and purchase products made at gas-powered factories.We of the Casey Research energy team are always looking for alternative energy ideas that stand the test of economics, but to date only geothermal and run-of-river power have come close. In the case of geothermal power, the industry has gotten ahead of itself and for now, at least, has failed to come through on its promises. As for run-of-river, the projects often work, but they provide only a drop into the big bucket of power needs, and each project requires major negotiations from landowners afflicted with NIMBY (“not in my back yard”) syndrome.So next time someone says that America should put an end to fracking, ask them how they plan to ensure America’s energy security over the next 30 to 50 years. If the answer involves alternative or renewable energies, ask for some hard facts and numbers to support it. Like it or not, none of our alternative energies are as yet even close to stepping up as a major energy pillar for America.Natural gas is ready to step up. It’s not a perfect solution – it’s much better at providing peak demand than baseload power, still takes energy to produce, and still produces greenhouse gases – but it’s an important part of the solution for now. Not only does America have the reserves, the fracturing process that can unlock them has been demonstrated as safe – and equally important, not demonstrated as not safe. And the industry that uses it seeks and incorporates improvements along the way. Just the facts, ma’am.[Recent political events demonstrate that relying on Middle East oil is very unwise… and worse, OPEC has its own dirty little secret. Learn more about it – and more important, how you can profit from that knowledge.] Fracking makes people’s drinking water flammable.It’s possible for improperly cemented wells to leak, but one study after another has failed to find frac fluid chemicals in drinking water supplies. Flammable tap water is more likely related to dissolved methane, which is naturally found in well water. (No worries here either – the methane bubbles out quickly, and the US Environmental Protection Agency does not even regulate it.) Fracking Reality By Marin Katusa, Casey ResearchTo many walking the planet, fracking has a seriously bad reputation. Thanks to hyperbole and misinformation, fracking opponents have convinced a lot of people that the operators who drill and then hydraulically fracture underground rock layers thumb their noses at and even hate the environment.Anti-fracking claims may be twists on reality – for example, that a legislative loophole makes fracking exempt from the America’s Safe Drinking Water Act, when really this federal legislation never regulated fracking because it is a state concern. Then there’s the completely absurd, such as the idea that frac operators are allowed to and regularly do inject frac fluids directly into underground water supplies.We decided to set the record straight by using facts, not playing on emotion like many of the frac-tivists do. It’s important because unconventional oil and gas constitute an increasingly pivotal part of the world’s energy scene. In the United States, where shale gas abounds but imported energy rules the day, this is especially true.America’s shale deposits hold a heck of a lot of gas. According to the United States Geological Survey, the Marcellus Shale alone is home to 84 trillion cubic feet (TCF) of technically recoverable natural gas. Estimates of the amount of recoverable gas contained in all of America’s shale basins range as high as 3,000 TCF.To access this gas, fluids made of water, sand, and chemicals to increase lubrication, inhibit corrosion of equipment, and possessing other qualities are pumped into the shale formation. When the pressure from the fluids exceeds the strength of the rocks, the rock fractures, and in a demonstration of might by the mighty small, the granules of sand prop the fractures open. Once the fracturing is completed, the internal pressure from the formation pushes the injected fluids to the surface again.Frac wells are only open to the surrounding rock at the depth of the target formation. Starting at 250 feet (76 meters) or thereabouts above the producing interval – it varies a bit from state to state – the production casing must be cemented. This graphic, borrowed from the Texas Oil and Gas Association, shows what the procedure entails. Casings are the liners that isolate the inside of the well from the surrounding rock, and from anyCasings are the liners that isolate the inside of the well from the surrounding rock, and from any water that might be contained in that rock. The surface casing is the first line of defense, while the production casing provides a second layer of protection for the groundwater.Casings do require proper cementation to be effective: the cement seals the annular spaces between successive casing layers to provide a barrier to vertical and horizontal fluid movement. A poor cementation job was a significant factor in the Deepwater Horizon well blowout, and that transpired because deepwater regulations were insufficient. On land, however, cementation is highly regulated, and inspections of wells in progress, announced and unannounced, are common.Unlike deepwater drilling, fracking is not new. Nor is fracking specific to natural gas or to the United States. Drillers frac many thousands of oil and gas wells around the world every year. In America, oil and gas producers have been using hydraulic fracturing since at least the 1940s to enhance recoveries from older oil wells and to access the oil in tight reservoirs, such as the Bakken.Then there’s shale gas, a domestic source of energy for North America that’s much more reliable and secure than the millions of barrels of oil that come from places like Nigeria, Venezuela, Iraq, Angola, and Algeria every day. And as we’ve said, accessing that gas using hydraulic fracturing is much less dangerous and damaging than many people think.Gasland – More Drama Than DocumentaryFrac-bashing really took off last year, with the debut of the film Gasland. After receiving a letter offering his family US$100,000 for the right to drill frac wells on their land, a documentary film maker by the name of Josh Fox decided to investigate. Gasland is the product of that investigation, which took Fox to Pennsylvania, New York, Ohio, and West Virginia to interview other people living atop the newly discovered Marcellus Shale. Fox also visits Colorado, Wyoming, Utah, and Texas to talk to those who have been living alongside natural gas drilling for the last decade.The resulting film is well crafted, dramatic, and emotional. However, documentaries are also supposed to convey context and a fair representation of the facts. That’s where Fox failed.Let’s be clear: fracking is not without drawbacks (and more on that in a moment). What drives us Casey “Focused on Facts” Research types crazy is messing with the data. Some examples: Fracking is severely underregulated, and it’s because the industry has lobbied for and achieved so many regulatory exemptions.Fracking is very closely regulated, and reviews of fracking regulations regularly find them to be very rigorous. For example, the State Review of Oil and Natural Gas Environmental Regulations, an independent panel of environment, industry, and EPA personnel, found Pennsylvania’s fracking process was not only safe but “merits special recognition.” read more

Shocking Gas Price Prediction Released… At an industry meeting in Houston, a former Big Oil executive made a shocking prediction.  He told the assembly of insiders that gas prices could soon soar as high as “$7 to $8 a gallon.” Smart Americans are getting ready for a “double” in gas prices, and setting themselves up to get rich as gas prices rise.Click here to get the full details. Sponsor Advertisement On a weekly basis, we are nowhere near overbought in silver when you consider the big rally that began in August 2010After briefly touching the $1,740 spot market in mid-morning trading in Hong Kong on Monday, the gold price went into a very shallow decline that ended at $1,640 spot, just before the 8:20 a.m. Eastern Comex open in New York.  After that it basically traded sideways until 2:30 p.m. in electronic trading…and then got sold down another five bucks into the 5:15 p.m Eastern time close.Gold closed at $1,724.80 spot…down $10.50 from Friday’s close.  Despite the lack of any significant price action, volume was pretty decent at around 115,000 contracts…20,000 of which was transacted before London opened.  For that time of day, that’s a lot.Silver price action followed pretty much the same path as gold.  The New York low came about 9:10 a.m…and the subsequent rally got sold off the moment that London closed for the day at 4:00 p.m. BST…11:00 a.m. Eastern.  Neither the low nor high price tick reported by Kitco are believable.Silver closed at $33.34 spot…down 34 cents from Friday.  Net volume was huge at 48,500 contracts…of which 7,000+ came before the London open.  Like gold, I would consider a lot of that action to be of the high-frequency trading variety.The dollar index spent the entire Monday trading session working its way higher at glacial speed…and by the end of the day was up about 15 basis points.  Like gold and silver, the dollar index action was like watching paint dry.Not surprisingly, the gold stocks opened down a bit…and their highs of the day came shortly after the high in both gold and silver, which was just minutes after the 4:00 p.m. London close…11:00 a.m. in New York.  From there, the gold equities drifted lower…and ticked up a bit into the close…but the HUI finished down 1.73%, as there was some obvious profit-taking.The silver stocks didn’t do particularly well, either…and Nick Laird’s Silver Sentiment Index closed down 1.47%.(Click on image to enlarge)The CME’s Daily Delivery Report showed that only 23 silver contracts were posted for delivery tomorrow. ABN Amro was the short/issuer on all of those contracts…and JPMorgan was the long/stopper on 21 of them.  The link to that action is here.The GLD ETF showed no change on Monday…and there have been no additions since last Wednesday.  But over at SLV, they reported receiving another big shipment of silver…2,228,668 troy ounces to be exact.  Since Tuesday of last week, SLV has reported receiving 5.16 million ounces of silver…but is probably owed about double that amount…not including what is owed on their current outstanding short position.The U.S. Mint had a decent sales report yesterday.  They sold 9,500 ounces of gold eagles…1,000 one-ounce 24K gold buffaloes…and 310,000 silver eagles.Over at the Comex-approved depositories on Friday, they didn’t report receiving any silver, but shipped 706,515 troy ounces out the door.  The link to that activity is here.Nick Laird didn’t have a chart for me today, but instead sent me a photo of this butterfly he took in his back yard late last week…and I just didn’t have room for it in Saturday’s column, so here it is now.  It’s a monster and…with a wingspan as high as 150 mm [a bit under 6 inches]…the name implies that, as it goes by the handle of Cairns Birdwing.Since this is my Tuesday column, I have a lot of stories today…and I’m happily leaving the final edit up to you.I’ve known that the silver market has been manipulated by concentrated commercial shorting since 1985, when I started complaining to the CFTC and the silver exchanges (COMEX, and back then, the CBOT). I never imagined it could last this long. Then again, in 1985 I never imagined such a thing as the Internet, or that I would be disseminating information about the silver manipulation on such a thing. It was not remotely possible for me to imagine I would be writing to…and about…the single entity responsible for the manipulation. I never imagined that I would be saying essentially the same thing in 2012 that I said in 1985. – Silver analyst Ted Butler, September 8, 2012I certainly wouldn’t read too much into yesterday’s price action, although I was rather surprised at the large volume associated with what little price activity there was.Nothing much has changed, though.  Will we go higher from here, or be presented with an engineered price decline in the not-to-distant future?  The answer is unknowable.  The precious metals should be priced many orders of magnitude higher than they already are, so there should be nothing stopping prices from continuing to climb…unless JPMorgan et al can or will do something about it in the very short term.Today is the cut-off for Friday’s Commitment of Traders Report…and after last Friday’s big jump in price, I’m not really looking forward to the numbers, although part of Friday’s rally sure looked like short covering of some type, so I may be pleasantly surprised.  But that’s not the way I’d bet it, if forced to.Since silver is the most overbought of all four precious metals, I thought that looking at the weekly chart, rather than the daily chart, would put this current rally in more perspective…and it does.  As you can see, on a weekly basis, we are nowhere near overbought in silver when you consider the big rally that began in August 2010…and ended with the May 1, 2011 drive-by shooting.  Both the RSI and MACD lines are a long way from nosebleed territory.  As I keep saying, any sell off here should be considered a buying opportunity…and that’s what I’ll be using it as.(Click on image to enlarge)With all the talk last week about the Bank of India trying to discourage gold sales in that country…along with talk of another tax on gold…I posted the rupee/gold chart in this space a few days back.  Now here’s the silver equivalent of that chart…courtesy of Nick Laird, of course.(Click on image to enlarge)For the second day in a row, both silver and gold rallied in early morning trading in the Far East.  But, also for the second day in a row, a not-for-profit seller showed up shortly before 11:00 a.m. Hong Kong time…and that was that.  The prices of both metals have chopped more or less sideways since then…but both are now rallying now that London has been trading for a bit more than two hours.  Volumes in both metals are even higher than they were at this time yesterday.  The dollar index fell from 80.38 to 80.15 in a one hour time span starting around 3:20 p.m. Hong Kong time…and ending around 8:20 a.m. in London…and that small drop is evident in the price action during that time period.  And as I hit the ‘send’ button at 5:20 a.m. Eastern time, gold is up about nine bucks…and silver is up 35 cents.I haven’t the foggiest as to how today, or even the rest of the week is going to turn out.  The FOMC has their upcoming meeting, not that it matters in the grand scheme of things, so I’m ready for just about any eventuality…and will have a perfectly rational explanation if we blast higher from here, or get creamed in the short term.That’s more than enough for today.  I hope your Tuesday/Wednesday goes well…and I’ll see you here tomorrow. read more

Dear Reader,Vedran Vuk here, filling in for David Galland. David’s schedule is packed with events down in Argentina including the Harvest Celebration at La Estancia de Cafayate, so I’ll be steering the ship for the next few weeks. First today, we’ll have an article from Dennis Miller on when to trust your instincts on your gold holdings. Then, I’ll address the age-old question, “How come you could raise a family on a single paycheck back in the day and now you can’t?” I’ll give you one big reason why, as well as a way to make that old standard a reality again.Also, make sure to check out Dennis’ recent interview on Real Money Radio with David Holland (to get right into the part with Dennis, skip about the first five minutes of the program). Dennis really knocked this interview out of the park. He tells his retirement story of having a secure nest egg of CDs ripped out from under him, thanks to the 2008 crisis.Not only does Dennis often talk about his experience in retirement, we’ve also been doing really well in the Money Forever portfolio. In Dennis’ article titled Twelve Tips for Buying Dividend-Paying Stocks, item number ten was choosing stocks with a history of increasing dividends. Looking at our current portfolio, five out of six dividend-paying stocks have increased their dividend since becoming a part of our portfolio. The CFO of the sixth company has said a dividend increase is planned for this year, but hasn’t set a specific date and amount.These dividend increases ranged from an incremental hike of 2% to one company raising its dividend by 150%. To be fair, that company had the lowest dividend yield – 0.8% – of the six. We primarily recommended it for reasons other than its yield, but we’re more than happy to be now collecting 2% on it. If you want to check out our portfolio as well as advice on planning for retirement, try out a trial subscription of Money Forever.Before we get started today, I also want to mention the upcoming Liberty Forum at St. Kitts in the West Indies, May 15-18.  Doug Casey will be the feature speaker at the forum and will be joined by Jeff Clark, Bud Conrad, and Terry Coxon as well. Many Casey Research friends will also be attending, including Jeff Berwick, Rick Rule, and my good friend Doug French. The West Indies and a panel full of excellent speakers – sounds like a great time to me. Now, let’s get to Dennis’ take on trusting your instincts when it comes to gold.Trust Your Instincts on GoldBy Dennis Miller, Editor of Money ForeverI recall a terrifying experience years ago. It was my last flight of the year, and I was headed home for Christmas. The plane was speeding down the runway to take off, when the pilot suddenly reversed thrust and slammed on the brakes; the plane shook like I have never experienced before as the pilot aborted the takeoff. As we stopped mere feet from the end of the runway and caught our breath, the pilot came on the intercom and announced, “I’m sorry to frighten you, ladies and gentlemen. I have been flying for many years. There was nothing on our instrument panel that says we have any kind of problem. It just did not feel right, and I want to have some things checked out before we go vaulting into the air.”We taxied back to the gate and several mechanics descended on the plane. Within ten minutes they made the announcement that the flight had been canceled due to mechanical difficulties. As I exited, I stuck my head in the cockpit door and exclaimed, “Captain, I will fly with you any time – thank you! I hope you have a wonderful Christmas season.” As a seasoned traveler, it was probably the only time in my life that I was happy about having a flight canceled.It just doesn’t feel rightAs of this moment, the business columns are blaring headlines about the Dow hitting a record high. At the same time, gold and gold stocks have been taking a beating. If you are like a lot of us at Casey Research and have sizeable positions in gold and silver, it can certainly be a test of courage and patience.At times like this, it seems appropriate to review why we made certain decisions in light of new facts. Have things changed? Is it time to adjust our holdings?As luck would have it, Federal Reserve Vice Chairman Janet Yellen sheds some light on the subject. Bloomberg’s recent headline, Yellen Says Fed Should Press on With QE Amid Limited Risk, sums it up well. Basically she reiterated that the Federal Reserve will keep on purchasing $85 billion in government debt for the foreseeable future. OK, no changes here, folks; we will continue to spend money we don’t have, and the Fed will cover us.The same day I read about Ms. Yellen, the March issue of BIG GOLD hit my inbox. In the introduction, our own Jeff Clark has this to say about the situation (italics his):“[T]he fundamental drivers for investing in gold have not changed. If they had, then we should sell, but clearly they have not. This is a short-term correction within a secular trend, despite what some may proclaim.The primary impetus for a sustained gold bull market is that government debt is a structural problem, in the US and across the globe. Most of it will never be paid – and more piles up every day, to the tune of tens of billions of dollars. The economies of the world’s indebted nations are not and cannot grow fast enough to pay off the debt (GDP shrunk [sic] last quarter in the US, the Eurozone, and Japan), and outright default or restructuring (i.e., a “soft default”) isn’t an option. The only politically acceptable way out is for government to create the money to service the debt and pay its bills, inflation be damned.This default-by-inflation has been repeatedly employed by governments throughout history. We don’t see a different outcome this time.The Fed has said it wants inflation – and we’re sure it’ll get what it wants. No forecast comes with a guarantee, but it seems virtually certain that central banks will continue to print money. Since those currencies can’t get “unprinted,” they’ll eventually enter the system and fuel double-digit rates of price inflation. When that process starts to unfold, gold and silver will respond, as they dependably have throughout history.”And of course I catch a quick glimpse of talking heads on CNBC enthusiastically discussing the Dow. One of the experts makes the snide remark that all the gold nuts talking about Zimbabwe need to step aside, because they just want to make some money.Much like the pilot, my intuition is sending me a message – I am trying to figure out my emotional conflict at the moment. I know I’m heavily in the market with my share of metal and stocks, because I have no choice. They took away our interest income. Most all of my peers feel the same way. We are not heavily in the market because we want to be; we really have little other choice.Maybe the Dow did hit a high, but it feels more like the Great Depression than the roaring ’20s. Unemployment is through the roof, record numbers of people are on food stamps, and we see study after study about our net worth decreasing rapidly.So here is my current thinkingLet the talking heads at CNBC continue to make fun of me. I think we can do two things at once: make some money and do everything we can to protect ourselves against a possible Zimbabwe moment.There are certain potential catastrophes that can be so threatening we must take steps to insure ourselves even though the probability of one actually occurring is slim. I cannot put my life savings and my family at risk by trivializing the dangers which are potentially on the horizon.While CNBC may want to pooh-pooh the probability of something similar happening in our country, we all know that creating massive amounts of currency out of thin air always results in the currency collapsing or being revalued. A prudent investor (particularly one on either side of the cusp of retirement) would do well to take out some insurance. That is generally done by investing in metal, farmland, and other forms of hard assets.In the same Bloomberg article quoting Ms. Yellen, there is another clue for us: “Kansas City Fed President Esther George has warned that prices of some farm land have hit ‘historically high levels.’” I wonder if the CNBC folks feel that is a mere coincidence.In the fall of 2011, I attended the Casey Summit, which featured three speakers who had lived through hyperinflation in their home countries. They shared their personal experiences with us.All three speakers went through very similar cycles. All said inflation was rising and then it spiked to astronomical proportions.The following are a couple of slides used by the speaker from Yugoslavia. Note the last line that indicated that during its hyperinflation, on average every 1.4 days prices doubled. The presenter showed a 500-billion denominated bill, which had the same purchasing power as a 500 bill was worth just 24 months earlier. His slides documented the hyperinflation, starting at 5.00 and building up to 500 billion.Can this happen in the United States? Are we immune from the natural laws of economics?We see inflation on the rise in the US and know our government is not telling us the truth about it. We have discussed the record debt and Federal Reserve spending until we are blue in the face.Here is my personal bottom lineI have yet to see anyone present any logical economic premise that concludes that our country will not eventually see a currency collapse. Many have put us down, called us “gold nuts” and the like, and trivialized our concerns. Just show me the facts.I see several other clues that reinforce my concerns. Throughout history thousands of currencies have collapsed, but precious metals hold their value. It should come as no surprise to learn that over the last few years China, Russia, and many central banks are stockpiling gold. Germany and Venezuela just announced they are bringing their gold back to their shores. Not wanting to start a panic or gold rush, they played it down by saying they just feel it is easier having their metal inside their own borders. It sits in a lump and earns no interest, so there must be a good reason why they are going through all that effort and expense.At Casey Research, we have regular editors’ conferences. The subject of the last two was precious metals and the direction of the market. If I may summarize, we came to several conclusions. We may be in for a rough ride in the short term; however, the fundamental reasons for owing gold and silver have not changed. If anything, the reasons to own gold and silver are more evident than ever before. At the end of the day, none of us is selling, and we are going to be ever alert for some terrific buying opportunities.Sure, all the contraptions on the airplane might be telling us everything is just fine: the Dow reaches new highs; unemployment slowly drops; and cheap credit is endless. But as experienced pilots, we’re reading into the market beyond what the gauges are saying. That’s the sort of insight that can mean the difference between and a crash landing and a takeoff for the value of your portfolio.Living on Two Paychecks or on Too Many Expectations?By Vedran Vuk, Senior Research AnalystIn a discussion with a good friend, he asked me, “How come in the 1950s, you could support a family on a single paycheck, but my wife and I both have to work to make ends meet?” I’ve heard this question so many times, and people give innumerable reasons, from the Fed’s inflationary policies to the lack of decent-paying manufacturing jobs. Usually, the explanations suggest macroeconomic shifts and major policy changes. And sure, some of those explanations are a part of it, but what’s often not considered is the expense side of the equation.If we’re going to compare ourselves to a 1950s standard, we have to ask whether our spending is similar to the 1950s. If we strip out all of our unnecessary modern expenditures and make an apples-to-apples comparison, most of us probably could live on a single paycheck. The problem is not that our standard of living has gotten worse – it’s that our expectations have far outgrown the reality of most paychecks.Let’s first start with some modern inventions which are ultimately conveniences. For example, there’s your cellphone bill and monthly high-speed Internet connection. These are important tools in the modern age, but you could live without them. Then, think of the innumerable gadgets which occupy most of our homes, from iPads and iPods to laptops to flat-screen TVs to Xbox game consoles, and so on. Unless you really need these devices for your work, it’s hard to argue that one couldn’t live without them. People in the 1950s survived without them – and so could you.Let’s move it up a step to some bigger expenditures. According to the Department of Energy, in 1950 there were 323 vehicles per thousand people in the US. In 2010, there were 811 vehicles per thousand people. Today, every member of the family has a car, if not one to spare – and we’re not talking old junkers, but pretty nice cars. I often ask myself, “How come I earn more than the US median, yet it seems like 75% of people around me are driving nicer cars?”Now let’s take it one step further to the really big expenses. Take a drive down to a middle-class neighborhood built in the 1940s and ’50s. What you’ll see are very modest homes – one-story buildings with a small bedroom for the parents and two to three closet-sized bedrooms for the kids, a living room, a kitchen, and a dining room. Depending on how lucky you were, there may have been two bathrooms instead of one. This cookie-cutter formula spanned the country. The houses weren’t that pretty or incredible, but they got the job of raising a family done.After your drive to that part of town, cruise into a middle-class subdivision built in the last ten or twenty years – it’s a completely different picture. Every house is either a McMansion or made to resemble a smaller version of a McMansion. The kids’ bedrooms in these things are bigger than my whole first apartment. Let’s not even mention the size of the master bedroom; and of course nearly every bedroom has its own bath. Don’t forget the additional rooms, such as “the playroom.”What’s considered a middle-class lifestyle today isn’t even close to the middle class of the 1950s. Add up all of these things: the gadgets, the cellphone and Internet bills, the brand-new cars for the whole family, and the mini-mansions – it’s a ton of money that the last generation wasn’t spending. When someone lives this sort of lifestyle and wonders, “Jeez, why do my wife and I both have to work?,” my answer is, “Well duh, genius. Of course both of you have to work. Look at your lifestyle.” If you lived more modestly and within your means, the necessity of two paychecks will not seem so set in stone.Now, I’m not suggesting that everyone should live a miserly, monastic life. I’m sure that if we could send cellphones back into the past, people in the 1950s would buy them too. What I’m suggesting is simply to take a second and reconsider what really makes us happy and fulfills our needs. Did people in the 1950s live unfulfilled lives without three iPads and a McMansion?This reevaluation of our spending priorities is especially important for retirement planning. Recently, I helped my dad crunch the numbers for his retirement plan. I have to commend him for working extra hard lately to play catch-up with his retirement. After crunching the numbers, I told my dad, “I have some really good news. If you were willing to live modestly, you could retire next year. If you moved back to Croatia, you could even live very well over there. But to reach the sort of retirement income that you have in mind, you’ll have to work at least ten more years.” He said, “Well, I guess I’ll have to work ten more years.”There’s nothing truly wrong with his answer. If he wants to work longer to earn more, that’s up to him. However, at some point this sort of perspective makes you a prisoner of your own expectations. With an investment-newsletter subscription, we can recommend investments to strengthen your portfolio. While managing your investments is important, what doesn’t cost a penny is adjusting expectations. It’s a lot harder to earn 30% returns than to downsize to a lifestyle that might require only 8% returns. However, if your expectations are through the roof, then 40% returns and another 20 working years won’t be enough to satisfy your desires.When it comes to retirement, if you don’t limit your expectations and put them into check, one of two things will happen. Either you will have to keep slaving away to bring in more income to fulfill your desires, or you’ll fail to earn enough, and you’ll always feel jilted and empty. Even if the first option works out, someone will always have a bigger yacht or house. At retirement, it’s time to stop keeping up with Joneses (and stopping well before then can help you hold on to more of your hard-earned money). The combination of a fixed income and endless desires is a guaranteed route to misery and unhappiness.Maybe you don’t need to retire in a McMansion or have three houses in retirement or drive the newest Corvette. People have lived very well on more modest incomes long before the current era of unlimited spending and endless expectations. Maybe – just maybe – the problem in our modern society is not a paycheck which is too small, but rather expectations which are too big.Friday FunniesHere’s a very funny spoof of the Pentagon’s worries about the sequester cuts from The New Yorker:Pentagon: Cuts Could Hamper Ability To Invade Countries For No ReasonPosted by Andy BorowitzWASHINGTON (The Borowitz Report) – The spending cuts mandated by the sequester may hamper the United States’s ability to invade countries for absolutely no reason, a Pentagon spokesman warned today.The Pentagon made this gloomy assessment amid widespread fears that the nation’s ability to wage totally optional wars based on bogus pretexts may be in peril.“Historically, the United States has stood ready and able to throw billions of dollars at a military campaign with no clear rationale or well-defined objective,” said spokesman Harland Dorrinson. “Our capacity to wage war willy-nilly is now in jeopardy.”In the past, Mr. Dorrinson said, the Pentagon has had the resources to fight three meaningless and completely random wars at any given time, “but now in our planning meetings we are cutting that number back to two.”Sen. Lindsey Graham (R S.C.) agreed about the catastrophic effects of the Pentagon cuts, telling reporters, “The ability of the United States to project its military power in an arbitrary and totally capricious way must never be compromised.”The cuts are already being felt in a tangible way at the Pentagon, which today cancelled an order for a nine-thousand-dollar pen.Here’s some more spoof news, but from the almost-too-funny spoof site The Onion. These stories are just overflowing with sarcasm. First, on the topic of the American Airlines and US Airways merger:American Airlines, US Airways Merge To Form World’s Largest InconvenienceFORT WORTH, TX – American Airlines and US Airways stunned the aviation industry Thursday upon announcing the two air travel titans have combined in an $11 billion merger that sources say will unite the industry powerhouses into the world’s largest and most complete pain in the ass. “Today we embark upon a bold and unprecedented new venture into customer frustration,” American CEO Tom Horton said of the historic alliance, which analysts predict will pose an immediate threat to rivals United and Delta in the air travel industry’s key areas of flight delays, lost luggage, and useless customer service. “When you take our general administrative incompetence and integrate it with our new partner’s long-proven inability to meet flyers’ needs in any capacity, you’ve got a brilliant new model in passenger aggravation and travel plan disruption. This truly will be the leading entity in the hassle industry.” Horton also confirmed the new multi-billion-dollar headache hopes to f*** up more than 4,000 flights a day.Here’s one on AIG:AIG Nearly Blows All The Goodwill Built Up By Wall Street In Recent YearsNEW YORK – Wall Street narrowly dodged a devastating blow to its reputation Wednesday as insurance giant American International Group seriously considered suing the federal government over the terms of its 2008 bailout, a move that experts agreed would have destroyed the tremendous amount of trust and affection the U.S. populace currently feels toward big banks.Sources said if AIG had decided to join a $25 billion lawsuit over the assistance it received from from [sic] taxpayers following a devastating economic crisis for which no one has been held accountable, then citizens who now feel a deep fondness for the nation’s financial institutions may have become outright angry with them instead.“Wall Street really won me over in 2008 when it veered toward total collapse after years of predatory lending practices,” said Jessica Woodward, 37, a Cincinnati-based software engineer. “And the banks definitely had a special place in my heart after they continued foreclosing on homeowners they shouldn’t have loaned money to in the first place.”“But if AIG had gone ahead with this lawsuit – well, I’m not sure that’s something I could have turned a blind eye to,” she added.Many Americans echoed Woodward’s disapproval, saying it would have been “terribly unfortunate” if the company had gone ahead with its plan to sue the government just a few years after receiving a $182 billion bailout package, considering all the work Wall Street had done to rebuild its good name by granting top-ranking officials obscene bonuses, systematically lying to investors, and failing to reform its practices.“Thankfully, AIG has avoided any action that might have sullied the public’s view of the financial industry as a whole,” said Sam Kerr, a father of three in Boise, ID. “Their decision today showed a tremendous amount of respect for the American taxpayer.”“Honestly, they deserve a round of applause for this,” he added.This last one on the sequestration is a little longer; so I’ll just post an excerpt. Click on the title for the whole thing:Obama, Congress Must Reach Deal On Budget By March 1, And Then April 1, And Then April 20, And Then April 28, And Then May 1“Experts say that without reaching a deal this Friday, the automatic $85 billion reduction in government spending will immediately slow the U.S. economy and impact thousands of middle-class citizens. Officials said the same exact thing will happen next month, the month after that, and the month after that if Obama and Congress fail to meet deadlines created by the preceding, incomplete deals.“If the president and Congress are unable to reach a grand bargain by Mar. 1, what they will likely do is reach a set of 100 or so smaller bargains, all with their own deadlines, and all of which could potentially plunge the U.S. economy into a recession,” said Princeton economics professor Marshall Kahn. “So, the Mar. 1 deadline is absolutely crucial. Just like the one next month will be. And the 12 deadlines in May. And the bi-daily deadlines that will kick in during the summer.”“Based on the way the president and Congress deal with one another,” Kahn added, “in 2014, there will need to be 4,562 budget deals.”That’s it for today. Thank you for reading and subscribing to the Casey Daily Dispatch. See you next week.Vedran VukCasey Senior Analyst read more

I woke up today to this video—a Taco Bell ad, if you can believe it—that I found posted on one of my regular sites. Please watch it. I think there is a reason why images of this kind are resonating with more and more people. When I was a boy, we would look at something like this and think “Soviet Russia.” Not so much anymore… aside, perhaps, from the film’s background setting. Just a few minutes later, I opened an email from a friend, linking to a speech delivered a few days ago in Toronto. It was delivered by a young author named Sofi Oksanen (I’m told she’s terrific), commemorating the 1949 Baltic Deportations. As I went through the speech, I was struck by the fact that dominated people, irrespective of where and when, go through the same things. We tend to think of domination in very large, overt terms, but the truth is that domination rests on a foundation of attitudes and expectations. External domination requires the support of internal domination. Hard, soft, or otherwise, domination involves the same themes, over and over. So, here are some passages from Ms. Oksanen’s speech, and the thoughts that they spawned in me: The Soviet system depended on the fact that people had learned not to give voice publicly to things that were unfavorable to the system. Have you ever noticed that when people speak badly of the IRS or the NSA, they lower their voices? That is precisely the same thing that happened under the USSR. There is zero difference. Did this happen more commonly under Stalin? Perhaps, but, more often than not, that’s just an excuse to ignore the subject. We may as well say, If it was worse under Stalin, then we’re free. And if that’s a valid statement, the tortured victims of the Soviet gulags should have been saying, It’s worse in Cambodia under Pol Pot. So, we’re free. And perhaps they were. Domination rests on statements such as these. And every time we lower our voices, we affirm the fact that our culture is dominated by brutes. Those who expressed improper opinions risked being denied entry to the Soviet Union where our relatives were still living… We were under constant threat that we would never again be allowed to step inside the borders of the Soviet Union, never again see our relatives. Have you noticed all the exit-tax laws that have passed in recent years? I can tell you that the people who’ve thought about running away have noticed them. You can now be denied reentry to the United States for any number of reasons. There are tax reasons, of course, but there is also a universal reason—the No Fly List. Piss off the dominators and you won’t be allowed to see your relatives ever again. And how, precisely, does one get on or off the No Fly List? Shall we say, Well, it isn’t being used very much like that? First of all, how would you know? Because you didn’t hear it on CBS News? And shall we really fall back on If it’s worse somewhere else, we’re free? Censorship… did not exist officially in the Soviet Union, but was masked as editorial recommendations. Think that isn’t the case here? Then start talking about 9/11 being an inside job, and see what happens to you. Now, I’m not sure that the “inside job” folks are right, but shouldn’t they be able to voice their opinions without being publicly shamed? “Conspiracy theory” is a term that is used to dominate thinking. And, sadly, it’s used mostly by the dominated, upon the dominated. “Free speech” sometimes protects individuals from hard domination. Soft domination, however, represses speech just as well. Again: Try playing “9/11 Truther” at a cocktail party some time. See what happens. The disconnect between the personal and the official was quite wearing, and it forced people to develop layered personalities, double-identities. I hear this all the time. People play “good, obedient boys and girls” when dealing with dominators, then do their best to avoid their predations. One of my friends dubbed this “the bifurcated life,” and he’s right. And it’s not especially good for us… not that we’re left many good choices. Finland, whose school textbooks had to have Moscow’s approval. This is standard these days, and has been for a long time. Textbooks are paid for by governments; therefore, they will never make governments look bad. Whether those government offices are near or far (more and more, the far ones dictate the content of textbooks) really doesn’t matter: Whoever pays will be supported. Memory also had to be rebuilt, biographies had to be collected and archived, a foundation for new research and history writing had to be created. I’m half tempted to use that as a catch phrase for my newsletter. Citizens of such nations… hold in their minds iconic images of their history and their tragedies. They find it difficult to grasp or imagine what kind of people they would be if they had grown up in another kind of reality. This is a serious problem for those who haven’t lived abroad. Trust that revealing private experiences or opinions does not get you in trouble. Trust that it does not lead to a psychiatric ward, where people holding opinions inconvenient to the state would be sent in a country in which anti-Soviet thoughts were literally a sign of mental disorder. I suspect that most people still don’t know the story of Brandon Raub. If you don’t, please read about it. These things are happening, in America… and they don’t make the evening news. It’s true, however, that such evils aren’t universal: this type of hard domination isn’t everywhere. For example, a few months ago, I attended a show trial in New York. The same actions, in a less rich, polished setting, would very nicely have fit the model of the 1930s Soviet Show Trial. But a couple of months before that, I was testifying in a fair trial in the Midwest, conducted by a sincere, honest judge. The difference between the two trials was political importance. And that brings to mind a Saul Bellow quote from several decades ago: For the first time in history, the human species as a whole has gone into politics. Everyone is in the act, and there is no telling what may come of it. Having the benefit of time that Mr. Bellow didn’t, I’ll tell you what comes out of it: rigged textbooks, political show trials, and censorship enforced by the censored. Ms. Oksanen continues: Countries who after getting out from under their occupiers have managed to create a free press. These days, we call the free press “Alternative Media.” But Alternative Media is under attack already. The dominators don’t like it, and they’ve been quite unrestrained for more than a decade. A large portion of the populace all but worships their violence. What reason would they have to pull back? Finally, here’s a quote that Ms. Oksanen included in her speech, originally from Tzvetan Todorov: The enemy is the great justifier of terror and a totalitarian state cannot live without enemies. If there aren’t any enemies, they must be invented. Something to think about, in my opinion. In The End… In the end, whether hard, soft, or otherwise, the evils of oppression in this world can always be traced back to domination. We must remember that the most dangerous of all dominations are not the ugliest and scariest; they’re the ones that seem normal to us… that can even seem essential to us. A Free-Man’s Take is written by lifestyle capitalist, author, and freedom advocate Paul Rosenberg. You can get much more from Paul in his unique monthly newsletter, Free-Man’s Perspective. read more