Change Management International - Robert Ian

Unemployment on 60 Minutes and the New Orleans Investment Conference

I'd like to comment on a recent 60 minutes story that discussed the human side of the real unemployment story. A story Goldseek Radio has been bringing our listeners for two years now, finally, a major media outlet has presented the story and gotten right. Namely, by pointing out without equivocation, that when you take into account the underemployed as well as the unemployed, the national rate hits 17%; and in California, where this story was based, it hits 22%. Beyond that, 1/3 of the unemployed have been out work for over a year and that hasn't happened since the great depression.

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What Happens When the Next Congressional, Fed and Treasury Induced Financial Crisis Slams the Economy?

On Monday this week there was a Reuters article that proclaimed: "US Treasury Secretary Timothy Geighner sought to ease fears the US was actively weakening the dollar to gain an export edge, saying no country could devalue its way to health".

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Why the Gold Bull Market Has a Long Way To Go

The bull market in gold has an incredibly long way to go. There are some analysts who have suggested we are beginning to enter phase three of this bull market, the mania stage, where the average person starts investing in gold. That may be true in a very minute way, but we still have a very long way to go. 

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Will A 911 Type Financial Event Push the Economy Over the Edge?

One week ago, major headlines were suggesting that "Gold Rush Gets Cut Short" as gold temporarily fell back from the $1310 price point. As I record this one week later, gold is knocking on $1350 and silver is flirting with $23. All of this is happening as the economic backdrop continues to worsen by the day.

Japan just announced their own version of a zero interest and quantitative easing policy in a last ditch attempt to stimulate their economy. They are hoping to drive the yen lower relative to the dollar to possibly stimulate exports. While that was happening, Chicago Fed President Charles Evans was telling the media that the Fed should be doing "much more" monetary easing to spur a sluggish economic recovery. When he talked about unemployment numbers not coming down he said: "This is a far grimmer forecast than we ought to have".

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Aging Puppet Masters of a Dying, Global Fiat Currency System

They say that attitude is everything. There are some pretty nasty attitudes going on in London at the behest of the Bank of England. An article this week in the London Telegraph quoted a senior Bank of England official who chastised savers and told them they should stop complaining about their poor returns and start spending to "help" the economy.

Charles Bean, the deputy governor, told savers to stop moaning and start spending. He said older households could afford to suffer because they had benefited from previous increases in property prices. He said: "They should 'not expect' to live off interest. He admitted that low returns were part of a the Bank of England's financial strategy.

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Is the Recession Really Over?

What I'm going to discuss this week you just can't make up. There was actually a report that was treated as if it were credible, stating that the recession ended in June of 2009. You read that correctly. The recession was supposed to have ended in June of 2009. 15 months ago. According to the National Bureau of Economic Research, whose credibility is now greatly in question, the recession officially began in December 2007 and ended in June 2009.

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Gold is a Simple Tool in a Complex Financial World

Major events are occurring across multiple fronts around the world. Gold has just shattered its all time high and is now in uncharted economic territory, and I expect that significantly higher numbers are in store before the end of the year. Local, state and national primaries are being held across the country in preparation for the November mid-term elections. Once again, the election mantra is change. We've been clamoring for change for decades.

Every 2 or 4 years its the same song, second verse. Real change seems to be an elusive target, while in the meantime we always seem to settle for more of the same. Big government politicians on both sides of the aisle. It's like we keep getting ready, to get ready. And in the process, we kick the can down the road, past the next election. There's a very real possibility the can won't make it past the November election. The can has been kicked too many times. It has too many dents, and is sharp along the edges. The next person who kicks it may very well cut their foot and start to bleed out, and then pass out.

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Did Alan Greenspan Set the Stage for a Real-Life Atlas Shrugged?

This week there was an interesting article in the Economic Policy Journal about former Fed Chairman Alan Greenspan who is now advising his hedge fund clients to bet against the Federal Reserve and invest in gold.

The article includes a quotation from John Paulson, who runs a multi-billion dollar hedge fund, part of which is invested in gold. In a letter to his investors, Mr. Paulson explains who has been advising his firm to purchase so much gold. He writes:

"Lastly, and perhaps most important, from a monetary policy perspective in developing an ability to forecast the timing and future price of gold we believe we have an unparalleled team. Former Federal Reserve Chairman Alan Greenspan has been extremely helpful to us in understanding the relationship between the monetary base, the money supply, inflation and gold prices."

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Fed Proposes "Unconventional Tools"

One of the major stories this week was the supposed disagreement, or stalemate, coming out of the Federal Reserve's annual policy retreat at Jackson Hole, WY. Very little substance was reported about this meeting. The only discussion that emerged was that the Fed had internal disagreements about whether they should provide more quantitative easing to help prevent deflation.

Significant attention was given to the "unconventional tools" Ben Bernanke is considering. The main tool under consideration is having the Fed buy more assets, like treasuries, to lower market interest rates and keep them low for an even greater period of time. This is direct monetization of the debt. This is something the Fed has hidden, obfuscated and outright denied when challenged about publicly in recent years. Those who suggested such things have not always been taken seriously. Now the Fed is announcing such measures as official policy with little or no fanfare, and definitely no outrage, in the media.

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Central Planning: More, More, More Gives Us Less, Less, Less - Freedom

From every corner of the news media and every corner of the internet we continually hear one story after another about the erosion of individual freedoms on multiple fronts throughout the country, and in large part, around the world. The enemy of these freedoms is centralized planning and authority. Whether it is healthcare, Wall Street, Fannie Mae and Freddie Mac, big banks, little banks and every other sector of the economy where the Fed, the Treasury, The Congress and the President continue to meddle, and think more market intervention, more government control and more centralized planning is the solution. Well, the solution to what? Problems caused by: more market intervention, more government control and more centralized planning, in the first place.

It's a vicious cycle and a common mistake. When you start essentially with a free market and individual freedoms, it's sometimes difficult to see the incremental restrictions that pile up after decades of legislation and political favors. Then all of a sudden it's plain as day, and the cumulative threat to personal freedom from decades of unnoticed legislation rears its ugly head, and freedom is suddenly staring into the abyss. The abyss is before us, and we are staring into it. The question is: who will blink first.

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How We Could Have Solved The Real Healthcare Crisis

One of the economic subjects we have not discussed at great length is healthcare. Or rather national healthcare as passed by Congress in March. Over 2000 pages of regulations were passed that, in many cases, have absolutely nothing to do with healthcare, and everything to with concentrating financial power in the hands of the few, at the expense of the many.

For years, national healthcare was sold as a solution to provide insurance for the estimated 40-50 million Americans who did not have health insurance or could not afford it. Many people have suffered without healthcare. Many people have been financially devastated because they could not afford to keep their health insurance after losing a job, especially when an individual, private health insurance plan, can cost as much, or more, than a typical monthly mortgage.

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Are You Better Off Than You Were 2, 6 or 10 Years Ago?

This week I have just one question to ask: What has changed? Have employment levels suddenly been restored to pre-credit crisis levels? No. Have the 8.5 million homes in some stage of default or foreclosure suddenly been sold or regained their value? No. Have the 40 million Americans receiving food stamps suddenly found additional resources? No. Have our elected officials suddenly started to read the legislation they pass? No. Has the government curtailed its orgy of runaway deficit spending programs? No. Are we better off financially today than we were 2 years ago, 6 years ago or 10 years ago? No. Is Ben Bernanke's assessment of the alleged recovery as "unusually uncertain" something to be optimistic about? No.

There are a hundred more questions I could ask you. Unfortunately, the answer to just about every one of them would be "no". Right now, we're living in a world where, at least financially, it's too easy to just say no. Opportunities and options seem to be few and far between. Some might accuse me of having a scarcity mindset in which this assessment is arguing for limitations; instead of an abundance mindset, in which we argue for possibilities.

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Gold Wildcard: University of Texas Investment Fund Buys Bullion to Protect Pensions

The stampede is about to unfold. This week I took great pleasure in reading an article in the Houston Chronicle that talked about how the investment management company for the University of Texas has bought more than $500 million dollars worth of gold. These fund managers are deeply concerned about the global financial future and the possibility of high inflation.

Even though this represents only 3% of their available funds, it is a monumental step in the right direction for those entities that are charged with managing, preserving and ultimately growing the pension funds they have been entrusted with. The fund's CEO, Bruce Zimmerman, said most of the gold purchases have been through futures trading (which isn't so good), but they may be taking physical possession of some of their gold (that's really good)! And it illustrates that the gold message is finally getting out to those who are ultimately responsible for making the right decisions.

It was just one short year ago that stories appeared about Northwestern Mutual, Greenlight Capital, Paulson & Company and other major investment firms buying gold. Now public institutions are beginning to do exactly the same thing. It is rare for investment managers to put such large sums of money into a commodity whose value often grows only through inflation. I believe this move by Texas' higher education investment managers is the wild card we have been waiting to see played.

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Economic Predictions and the Coming Gold Standard

At a recent forum, I was asked to give my assessment of where the economy is right now and what specific changes I see unfolding in the next several years. Here are several of my observations and conclusions based on what is happening at this moment in time. I am rounding these numbers to nearest trillion:

Currently the US takes in $2 trillion in tax revenue each year. Currently the US spends $4 trillion each year. The acknowledged federal debt is $14 trillion. The unfunded liabilities of the US are estimated between $100 and $120 trillion. Beyond that, there are $1.4 quadrillion of financial derivatives which represent 25 times the GDP of the entire planet. The bottom line is these numbers are unsustainable and these debts can never be repaid.

Once you understand the debts can never be repaid, and you also understand that this is a subject of collective denial for virtually all politicians and government leaders, you can then extrapolate a series of likely outcomes in the coming months and years. In their continual game to blame the other party and pretend there are political answers to unsolvable financial problems, the following will occur:

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Derivatives and Your Declining Standard of Living

A cornerstone of good marketing is to define a problem and offer a solution. In other words, if someone has a headache, you provide the aspirin. If that aspirin is the right prescription, the pain will eventually go away. There are many kinds of financial headaches: declining business, unemployment, foreclosure, decimated retirement accounts, insolvent pensions and dozens more. Each of these follows a different path to the same destination: A dramatic reduction in the living standard of every man, woman and child.

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Cliff Notes Version of What You Need To Know About Investing in Gold

At a speaking engagement this week, I had an opportunity to reconnect with a long time friend of mine, Dan Burrus, who also happens to be one of the world's leading science and technology forecasters. He was explaining how his company recently created a very popular iPhone App called Complete Foreclosures. In fact, he was well aware of the significant number of homes currently in foreclosure, and the looming shadow inventory of homes in some stage of default, that will no doubt help keep his iPhone App a popular download for years to come.

Dan's market research had revealed the foreclosure market as a high demand growth market for an iPhone App. When he learned about my work with Goldseek Radio and several resource companies, he wanted to know all about the gold market. We had just a few minutes to chat, so I shared with him the "cliff notes version" of what you need to know as you begin to look at the gold market.

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The President Missed the Memo: Economic Growth is Not Strong

Timing is everything. As the weeks go by, more and more financial experts are citing a window of time 3-5 months from now where we can expect the next major leg down in the market.

In an article by Greg Hunter, Gold Expert Jim Sinclair responds to the question of when will the dollar start plunging? He replies, "the time horizon, I think, is four months". Last week on Goldseek Radio, Robert Prechter said he believes the Dow is headed down soon, and will likely break its March 2009 lows and keep going. Possibly a lot lower. He mentioned 2000-3000 on the Dow as a possibility. On that same show, Harry S. Dent Jr. confirmed his analysis that the market would begin a sharp decline between August and November of this year. On previous broadcasts I have summarized similar reports by Richard Russell, Gerald Celente and there are many others. While these analysts and forecasters differ on how gold will perform in such a downturn, the consensus is clear: we ARE headed for a downturn. And a sharp downturn, at that.

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If You Think Oil Is Expensive Now, Wait Until Your Congresman Pumps Your Gas

The oil catastrophe in the Gulf of Mexico rages on. The details are spotty at best. In an interview on MSNBC, oil expert Matt Simmons pointed out that the YouTube video everyone has been fixated on with oil pumping out is not the source of the large second plume of oil that is the size of Maryland and Delaware. He said "we've been focusing on a leak the size of a mouse and behind that mouse is a leak the size of a tiger."

That tiger is getting hungry and is ready to wreak havoc on coastlines and ecosystems throughout the Gulf of Mexico and potentially the eastern seaboard of the United States. Possibly even further. Soon, we'll be approaching two months worth of oil gushing into the gulf. Tourism is being slaughtered. Economies are being destroyed. Jobs are being lost. Some reports are suggesting that the oil dispersant called Corexit is helping to keep much of the oil underwater, out of sight, and to a lesser degree, out of mind. Only time will tell.

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Financial Change: A Wolf in Wolf's Clothing

What's next? That's a question I am often asked by clients, audience members and teleseminar participants. The answer to that question is a moving target because there are so many things one needs to stay on top of in order to remain nimble enough to navigate rapid change. Here are several "What's next?" scenarios to keep in mind as we move through the summer:

Banks are scrambling. In conversations with several banking executives I have been told that banks are not loaning money. They are authorizing far fewer loans. An unspoken, behind the scenes trend, is that banks are attempting to cross collateralize every kind of loan on their books. Companies and small business people who, for years, have had lines of credit for payroll or seasonal expenses are now being told they must securitize those loans with any kind of asset they might possess. In other words, having even one loan at a bank can put all your other assets as risk. Customers that object are being told to take their business elsewhere. The squeeze is on. The solution is to opt out of using banks whenever, wherever and however you can.

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Bank Failures and Bailouts: How You Will Secretly Pay

Last Fall it was 416 distressed banks. Now, according to FDIC Chairman, Sheila Bair, the number has risen to 775 distressed banks. And according to Elizabeth Warren, Chair of the Congressional Oversight Panel, she has identified nearly 3000 community and regional banks that are classified as "risky" due to the coming collapse of the commercial real estate market. Regardless of whose numbers you look at, Sheila Bair's near term numbers, or Elizabeth Warren's longer term numbers, the number of at-risk banks is growing by leaps and bounds.

The conclusion is that for the foreseeable future, the trend that will be realized, is continuous bank consolidation. Is this necessarily a good thing? Well, if you're one of the banks who gets to do the consolidating, it's a great deal for you because a significant amount of the risk in terms of troubled assets is being subsidized by the FDIC. The FDIC is also entering into loss share agreements with the acquiring banks further increasing the potential losses for the FDIC as additional loans fail in the coming months and years.

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