Cash gold has a higher yield than the 10 year Treasury Note....

Whoa - that doesn't make any sense, right ? Holding gold only causes you to pay for storage and insurance, right ?

Here's the comparison: If you currently buy a 10 year Treasury note, you'll receive about 2.5% annually in interest. When you buy gold you get no interest at all. Here my good friend Ben comes to the rescue: he aims for 2% inflation per year and he's not shy about printing Dollars if that goal should be in jeopardy.

But wait ! There's more : the way he calculates inflation, it understates it by about another 1% (quite conservatively).

Put another way, paper Dollars depreciate by at least 3% per year against gold.

If you think you've heard all the arguments to abolish the IRS .....

 bet you haven't heard of this one : tax patents ! Oh yeah, if you finally get around to untangling the tax code, you can get a patent on your work. However disgusting this may sound, you'd have to admit that whoever is able to accomplish this has most certainly done more work than, say, the "inventor" of the "one click purchase" (held by Amazon (http://en.wikipedia.org/wiki/1-Click), or "buy it now" patents (http://news.cnet.com/8301-10784_3-9882151-7.html).

Here are some links on the subject of tax patents:
http://en.wikipedia.org/wiki/Tax_patent
http://www.nytimes.com/2006/10/19/business/worldbusiness/19iht-norris20.3214232.html

A trillion here, a trillion there, pretty soon etc, etc

Some people still have trouble getting their hands around the meaning of a trillion. That is why I want to share this handy example :
If my friend Ben would distribute all that cash that he is creating amongst all of the 300 million residents of the USA evenly, everyone (men, women, child) would receive about $12,300 Dollars.
This number is arrived at by adding the amount he has made up last year (1.7 trillion) and adding the 2 trillion that he has hinted he wants to create next year. Total : 3.7 trillion Dollars.
Dividing that by 300 million actually yields 12,333 Dollars and 33 Cents. A family of 4 therefore would receive $49,333 Dollars.
May I ask you how much cash you have lying around ? Would you think that such an infusion of cash might change your balance sheet ? (or your investing and spending ?)

Time to sell all Treasury securities !

My friend Ben has strongly hinted that he's ready to purchase another 1 to 2 trillion worth of government obligations. This has brought yields on the 2 year to record lows of about 0.4% and the 10 year maturity to 2.5%.
Needless to say, he will pay for his purchases with nothing more than a bookkeeping entry. To put it another way: after creating 1.7 trillion Dollars last year, he wants to print another 2 trillion next year.
He thinks that inflation is too low and that printing money creates jobs.
I happen to not believe either. So be nice and sell him what he wants to buy !

Gold at $1300 an ounce...

There are no good investment alternatives at this time. The central banks of the world seem to be determined to make their respective currencies worth less and less. Investors are not paid for that risk.

Gold just keeps going up and there is no speculative fervor evident in that move.

Stocks of gold miners have a tendency to move up before the price of the metal itself does. That usual observation is likely caused by investors who go for the leverage in the miners, before pushing the price of gold itself.

This time though, gold has just been quietly pushing higher and higher while the miners have not gained since 2004, when gold was trading at $400 an ounce.

It appears that the cost of mining the metal kept well pace with the price of gold itself. As a result, gold production has dropped from 2620 tons in 2001 to only 2480 tons in 2009. This is worth repeating: As the price of gold rose from $300 in 2001 to $1300 now, the production has actually declined.

Gold remains in a very solid, long term uptrend. A trend like this is very difficult to reverse and it usually only happens after the price goes parabolic.

Ben's messsage

If you hold Dollars we will give you these choices:
1. Buy overpriced stocks
2. Buy Treasury securities that will yield you nothing
3. Buy real estate that's falling in value

If you should not agree to accept either one of those choices, I will print money. I will print whatever amount it takes so that you WILL accept the choices that I outlined for you above.

Best regards,
Ben Bernanke
Chairman of the Federal Reserve

Whats with the name ?

Helicopter Ben: the name stuck after the current chairman of the FED suggested that in times of economic depression, money should be thrown from the sky to alleviate it.
Now we have the depression, the man is in charge, and I'm waiting for the rain !
Can someone please explain why the rain of cash is only falling on the likes of Goldman Sachs ?
Well, I for one will not believe that Ben has forgotten the common man and so I continue to scan the skies.

Income Tax

No-one questions that the US income tax is destructive and inefficient. It does not tax the "rich" but instead it taxes those who want to improve their lot. Those who already have, can afford the accountants and lawyers it takes to navigate the system that the IRS itself does not understand.
On the other hand, people who have new ideas and the potential to shake up the status quo are easily entangled by the tax system and often smashed by it.
The wealthy certainly realize, that this system helps them to keep their power and perhaps that is why you see so few of them opposing it.