BIT Studio

December 5, 2014

All That Glitters

Filed under: BIT Financial — webmaster @ 4:07 pm

  Countries print unsubstantiated paper money to lower the value of their currency and stimulate exports. Other country’s currencies rise in relative value, which affects their own ability to export pushing them to print more of their own money. And so it goes with currency wars. Without the accountability of a quantifiable and measureable hard-asset base for valuation, the cycle continues unabated.

Stock market manipulation has diverted attention away from the world’s economic problems. When inflation is high, governments are obligated to raise interest rates, which then slows the economy, which can lead to recession if the economy is not healthy. Quantitative easing (QE) plus market manipulation hides the problem. Inflation, which is the inevitable result of race-to-the-bottom currency wars, has been redirected to create record-setting stock market valuations.

Historically, gold has been used by investors as a hedge against inflation. For the past three years, the price of gold has been manipulated. Bank stocks go up; gold goes down. Bank stocks go down; gold goes down. Oil stocks go up; gold goes down. Oil stocks go down; gold goes down. QE starts; gold goes down. QE stops; gold goes down. The contradictory explanations proffered by the financial services industry are ridiculous, yet confidently presented.

Aggressive gold purchases by China, Russia and India have outstripped the actual supply of gold being produced by 150% – that is, 400 tons per month of demand versus 260 tons per month of supply. This can only mean that world inventories of gold kept in ETF reserves, bank reserves and country vaults (in particular, the U.S.) must be in massive, and very illegitimate, decline.

Well over a year ago, Germany requested that their 300 tons of gold being held in U.S. Fed vaults in New York be repatriated. They have received only 5 tons to date. Switzerland recently voted against increasing their gold reserves to 20% from 7%, which would have required purchasing the equivalent of one half year of the entire world’s production of gold. The population was originally in favour of the proposal, but the Swiss National Bank mounted an aggressive campaign against it, which unbelievably included a ban on all Paypal donations directed toward causes aligned with the yes vote.

Conspiracy theories regarding the empty (gold-less) vaults at the Federal Reserve in New York are gaining momentum. Another conspiracy theory taking root is in regard to the datestamp reference on the gold bars themselves (each bar is numbered). Bars made in 1960 are showing up on the open market, indicating that old and dusty inventory, i.e. scrape-the-bottom-of-the-barrel reserves, are being tapped. The message here, of course, is that even though the well is running dry, the global economy cannot be given any reason to believe that demand is not being met.

As the hard-asset of gold moves from west to east, banks, governments and everyone in the financial services sector are well-motivated to tell the same rose-coloured story of all being well. Unfortunately, after three years of orchestrated deception, the western stock of gold is severely depleted. The Federal Reserve began this charade in the hope that the QE program would get the economy back on its feet before anyone noticed. But their double-down strategy took too long and failed to produce the robust economy needed to hide the carnage. Time is running out.

What will it take for a correction to happen?

A simple failure to meet delivery will disrupt the system. Germany is motivated to be content with a 5 ton delivery because, as Europe’s financial saviour, they need stability to reign. But Switzerland, France and others are queuing up to demand their gold back from the Fed as well. And please understand that this isn’t new gold; this is balance sheet gold that is supposedly being held for them in inventory in U.S. vaults. They will not be pleased if their gold has disappeared.

The government would like us to believe that inflation is stable and manageable at their target of 2% or so. This is impossible. A far more likely scenario is that the printing rampage has masked the deep state of deflation already upon us. The stock market manipulation has gone on for far too long and, inevitably, the landing will not be pretty.

March 12, 2014

China Gold

Filed under: BIT Financial — webmaster @ 5:38 pm

  The gold bubble burst last year but gold is back now and supported with some solid fundamentals for long term growth.

The Nixon shock measures of 1971 cancelled Bretton Woods and moved the world currency valuation standard away from gold to the U.S. Dollar. Without the underlying support of a measureable tangible asset, we were set on a path of spiralling, systemic inflation. The present calamity in global financial markets has been well-forecasted.

Countries all over the world continue to print unsubstantiated cash supplies. The M3 number, which ceased being publicly available in 2005, was the main component used in determining the true value of the US Dollar (i.e. all U.S. assets divided by all U.S. money-in-print). The only basis for currency valuation at this time is held by the U.S. government.

The existing fiat-currency cash bubble is both fascinating and disturbing. Considering the brain power and millions of man-hours thrown at managing the global financial industry, the elephant-in-the-room cash bubble is strangely silent and odour-free. One does not have to be a conspiracy theorist to appreciate the extent to which the value of gold has been self-servingly manipulated by the U.S. government; trillions of dollars per year created from thin air with no inflation. A return to a Bretton Woods model of asset-based valuation would expose the flaws and deception inherent in the existing system, and the U.S. government would never willingly return to this level of scrutiny or accountability. Likewise, economists and financial planners will never back a return to gold as a world currency; multi-million-dollar paychecks are tied to supporting the backroom machinations of bank bail-outs. But the inevitable transition is coming and all of these stakeholders have been relieved of the burden of making this decision for us.

China has spent the last five years amassing tons upon tons of gold. As the speculative market in ETFs diminished and the value of gold dropped, China was able to triple their stockpile and has become a major player in international gold holdings. An aggressive mining acquisition program combined with shrewd market-price negotiation (i.e. all gold mined by companies they partner with – inside and outside of China – must be delivered to and stay in China) ensured a constant and exponentially increasing inventory. Equally aggressive was a program to promote the purchase of gold to its own citizens through retail stores dedicated to the distribution of real gold assets, supplying an eager population with everything from jewellery to gold bars.

Why? China knows that the trillions of U.S. Dollars still held in their reserves are quickly becoming worthless. Their five-year mission to convert as much of their U.S. Dollar portfolio to hard-asset mining companies has been successful and they are ready to implement the next step.

China’s intention to have the Yuan/Renminbi become the world’s trade currency is no secret. Supported by gold reserves, it will be promoted as the safest and most stable choice for international business. The world’s fiat currencies will establish their market value through the trading of tangible hard-assets in established market systems, just like the good old days.

November 29, 2010

Gold Bubble Top Ten

Filed under: BIT Financial — webmaster @ 11:46 am

  Top Ten Reasons Why We Are In A Gold Bubble
Reason #10:
Gold has a limited use in jewellery and micro-circuitry with little intrinsic value in the manufacture of other finished goods.
Reason #9: Because of the recent exponential run-up in the value of gold, jewellers have cut back on its use thereby creating a significant decline in demand.
Reason #8: Exchange Traded Funds (ETFs) have simplified the process of gold ownership to a point where the general public can purchase it on a whim and, given the opportunity to make easy money, have created a pyramid scheme of epic proportions.
Reason #7: ETFs own thousands of tons of gold and are currently warehousing the inventory in banks and other high security facilities, an extremely expensive process for an asset whose primary value is based on fear and emotion.
Reason #6: Bond yields are on the rise as inflation and interest rates increase, and it has been suggested that a safe and secure 4% bond yield could lure the goldbugs back to fiscal reality.
Reason #5: The very same ETF-vehicle that made gold so easily accessible to the masses could work against it; in the case of a “run-on-the-goldbank”, ETFs will be forced to support the redemption rate and sell inventory quickly into a declining market.
Reason #4: Some say that gold is the only hedge against inflation. The 1971 Nixon-shock collapse of the 1944 Bretton Woods Agreements, which replaced gold with the U.S. dollar as the international value standard, created an environment where inflation is a fact of life, just one more measurement of many used in establishing rates of growth and prosperity.
Reason #3: Some say that all fiat currencies, especially the U.S. dollar, will collapse, but just as a rising tide lifts all boats, all countries will inevitably print more and more money and the monetary value of everything, including gold but not limited to just gold, will rise accordingly.
Reason #2: Some say that gold will become the international reserve currency, a new (old) standard for value, but how would this be accomplished? Countries such as England, France and Switzerland have steadily sold off reserves over the years; should they be penalized? The U.S. is currently the largest hoarder of gold reserves in the world; should they be rewarded? Private investors hold vast amounts of gold; will the U.S. government again make it illegal for individuals to own gold, as they did in 1933?
And the #1 Reason why Gold is in a Bubble:
Because everyone thinks it isn’t.

January 22, 2010

Traders Unlimited

Filed under: BIT Financial — webmaster @ 1:43 pm

  Buy-and-hold investing and day-trading are two of the most commonly used terms for describing stock market strategies. Using these as opposite extremes, the middle ground is populated by a huge spread of investment styles. At the conservative end of the spectrum (buy-and-hold), strategies include dividend, growth, ETF, international, value, and sector investing. Toward the more volatile end (day-trading), techniques include trend, position, momentum, swing, and candlestick.

It is extremely unlikely that an investor would utilize only one of these investment styles on its own. Every individual is unique and brings to the table a variety of interests, skills, and expectations that ultimately define their own strategy. This variety of creative possibilities (combined with gambling overtones and general discontent with professional money managers) has attracted unprecedented numbers of individuals to on-line portfolio management.

Traditionally limited to the realm of RSPs, investors are opening personal and corporate accounts to maximize their return on effort and time invested in market study. The new TFSA (Tax Free Savings Account) is a spectacular vehicle for stock investment as they are sheltered from capital gain taxes, which are in excess of 40% when applied personally.

Start slow, listen to experts, find an area of interest, create a plan. Regardless of your ultimate personal investment strategy, be it a sector focus on dividends or a two-minute candlestick flip, access to the stock market and investment advice has never been better and it behooves you to become educated about what is happening to your money.

December 19, 2009


Filed under: BIT Financial — webmaster @ 8:04 pm

  A Tax Free Savings Account can provide flexibility and benefits for lower-income individuals that a RSP account cannot. A TFSA offers the same tax-free status on income generated, but TFSA contributions are not deductible from income and, more importantly, withdrawals are not taxable as income.

For example, a lower-income individual deposits $5,000 into a RSP and ten years later withdraws it at a similar or greater marginal tax rate (i.e. the income at time of deposit is the same or less than the income at time of withdrawal). All funds, including the compounded return, are fully taxable as income at the marginal rate in the year of withdrawal. In a TFSA, the same $5,000, which would have provided little savings in the way of RSP tax relief in the year of deposit, would generate an identical compounded return and upon withdrawal, neither the principle nor earnings would be taxable.

The primary objective in managing a Registered Savings Plan is to put money in at a higher tax bracket than when taking it out. Banks and government neglect promoting this aspect because (surprise!) it ultimately lowers their profitability. They heavily plug the tax-free status of income generated within the plan, however the ability to withdraw funds prior to the mandatory collapse date is equally important.

For example, a RSP deposit is made at a high marginal tax rate (say, $10,000 deposit on $100,000 income) and withdrawn ten years later at a lower marginal rate (say, $10,000 withdrawal on $50,000 income). After a safe compounded return rate of 2.5% per year, the marginal tax rate savings are almost as much as the compounded interest earnings, thereby nearly doubling the tax-free benefit. Leaving funds in a maturing RSP is inefficient and depending on the balance at the age-71 mandatory rollover, taxes could erase all marginal rate benefits.

RSP contributions are not for the young, the old, or the poor; they are for upper income earners to reduce high marginal tax rate liability. Properly managing your money takes time and planning. Consult a professional.

November 1, 2008

BIT Intranet

Filed under: BIT Financial — webmaster @ 10:43 pm

  BIT Intranet is a shareware file management system that provides a controlled homepage framework to display documents, photos and reports via a pull-down menu located in a top-of-page BITBar. Designed for small businesses, BIT Intranet is a simple means of sharing documents, photos, audio, video, reports and information company-wide using only a web-browser and a Local Area Network.

The BIT Intranet© BITBar features a customized location bar, menu bar and page title for your intranet site as well as an automatically created pull-down menu of up to 200 documents.  Pre-formatted reports from any number of different applications can be written to the intranet in seconds. Updating intranet content is as simple as copying the new file into the intranet directory.

Unique in the market, BIT Intranet provides a low-tech, zero-maintenance solution that easily disseminates information company-wide without third party assistance or specialized web-authoring software. The program is simple, efficient and economical:
1)  No web server software or ‘back office’ controls
2)  No specialized web-authoring software
3)  No knowledge of HTML coding or protocols required

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