Friday, December 21, 2007

Should We Be Investing in Gold

For the last 30 years or so, it’s a well-known fact that as the value of the US dollar decreases, the price of gold increases. In today’s post-US sub-prime mortgage economic climate, does it still make good fiscal sense to invest in gold?

By: Ringo Bones and Vanessa Uy

As the price of oil draws ever closer to the 100 US dollar-per-barrel mark, is our present (fiscal year 2007) global economy fast becoming into the economic climate that existed in 1980? Even though there are similarities like the Federal Reserve reigning in on credit and interest rates, the tumultuous political situations in the Middle East. The US$100 in 1980 is still higher in value after FTC algorithm-inflation-adjustments compared to US$100 circa-2007. Armed with this data, will the price of gold do a 1980 era repeat of reaching over the US$800 per-ounce price range?

With an aspect of Sharia Banking Laws fast becoming into vogue in Western financial sectors like the idea of financial institutions should only honor “concrete” or “tangible” forms of collateral, the lure of investing into precious metals –like gold- had recently become the hottest trend in high-yield investments. But the precious metals market is by no means strictly infallible and not immune from unlawful market manipulation. If anyone still remembers-or cares- about the “Hunt-silver debacle” will surely attest to this. At the beginning of the 1970’s the Hunt brothers – heir to the multi-billion dollar fortune of Texas oil/petroleum tycoon H.L. Hunt used their billions to purchase and hoard silver in an attempt to increase the price of silver to be comparable to that of gold. But near the end of March 1980, the Hunt brothers, along with a major Wall Street firm and U.S. securities and commodities markets came almost to the brink of financial disaster. Even though those were different times back then, if most of today’s current billionaires will do a “stunt” similar to what the Hunt brothers did -but to gold- the price of gold could reach US$10,000 per-ounce.

Our current allure of gold and its related retinue of precious metals, stemmed from the US sub-prime mortgage crisis that became news by the end of July 2007. During the succeeding months, the fallout of the US sub-prime mortgage crisis affected the global currency market – with their anchor – the US dollar weakened by inflation due to the Bush administrations current quagmire in Iraq. (At an average cost of US$1billion-per-week, it does seem like Uncle Sam is setting up a colony on a distant earth-like planet orbiting the star Alpha Centauri). Bonds and conventional bank savings accounts quickly lost their appeal as inflation drained their purchasing power. So investors and their dogs everywhere quickly began to turn to the oldest stores of value they can find – gold and related precious metals.

The novice investor may ask: “Why invest in gold?” Well, since the time paper money gained widespread appeal. These “paper money” –by common sense- should be worth just about or lesser than the paper on which it is printed on, unless the paper money’s value is backed-up by “tangible” or “concrete” assets namely gold, silver or the other related precious metals. But it is mainly the “gold standard” i.e. a monetary standard under which the basic unit of currency is defined via a stated quantity of gold circulating freely into the international financial system, hence the term “bank notes”. The reason we expend an almost excessive amounts of our mining expertise in obtaining this rare but almost useless metal, which even in “gold rush” days involves the “processing” of a ton of ore just to get 17 grams of gold. At present, even “processing” a ton of ore just to get 3 grams of gold is considered very economically viable. And also, it is because gold is what makes our paper money able to buy things i.e. purchasing power. The other uses of gold is in the jewelry industry, dental “bridgework” and electroplating electrical / electronic components to make them corrosion resistant.

While platinum is far more useful than gold and the gyroscopes of modern bombsights are made from it. Unlike gold or silver, platinum doesn’t occur in its native state in nature i.e. free elemental form. Platinum, and its related metal siblings on the Periodic Table namely rhodium, iridium and palladium are usually refined via proprietary chemical process that is a highly guarded trade secret. Usually a batch of beige - colored mud (ore concentrate) is added with a “secret” chemical mixture to obtain the pure metallic platinum and its metal siblings.

A lesser known metal that is more useful expensive, and rarer than gold is gallium. The main user of gallium is the electronics industry where it is used in making semiconductors with high switching speeds and “solid state” night-vision goggles. Without gallium, the green-tinged Paris Hilton Sex Video would not have been possible. Yet gallium plays no part in backing the value of our paper currency.

So what does this all mean? Being closeted –but fiscally challenged – philanthropists that we are. We do believe in charity –only during those times that we are practically overflowing with money. We’ve read “The Politically Incorrect Guide to American History” by Thomas E. Woods, Jr., Ph.D.. And the part of that book that really speaks to us is about how charitable giving grew at a faster rate during the 1980’s, described as “the decade of greed” (after the movie “Wall Street”?). Statistics had shown that charitable giving during the 1980”s really grew at a faster rate than it had during the previous 25 years. A really “scary” proof to the saying that: “greed is good”. Because of this, its now in the best interest of major charitable organizations like Oxfam and the UN Food Programme for us to “become rich”. With skyrocketing grain / staple crop prices due to the hastily set-up biofuel industry, the United Nations Food Programme's food / grain purchasing power has been drastically reduced. So they need more money just to maintain their existing / basic programs.

Paramore: Getting to the Top the Old Fashion Way?

Ever since the “unforeseen” success of their headlining single “Misery Business” from their album “Riot!”. Is Paramore here to remind us the “good old days” of punk rock and getting famous the old fashion way?

By: Vanessa Uy

Ever since their MTV debut via the single “Misery Business” aired on our local MTV affiliate, I thought that our local MTV Asia affiliate had mistakenly aired a circa 1989 power pop / punk video of a talented young band. I thought good bands like Paramore only exists15 to 20 years ago. Maybe I’m listening to 24 bit 192 KHz sampled Punk Rock reissues for far too long. Now that almost all of the under 25 “punk rockers” already knew them (I just turned 11 and I only discovered Paramore back in August 2007), here’s a much needed refresher course for the uninitiated. Named after a friend of the band mother’s maiden name Paramore is a Pop Punk (Power Pop?) band which hails from Franklin, Tennessee. Also after finding out that Paramore means “secret lover”, the band chose it. The band’s vocalist and primary center of attention is Haley Williams. Their current line-up by this time of writing includes lead guitarist Josh Farro and his brother Zac Farro on drums and bassist Jeremy Davis. Since today’s MTV – based music is primarily a visual medium the other members of Paramore can only be appreciated by ear because of the band’s “hot” vocalist.

Paramore was already busy “paying their dues” in the touring circuit since 2005. By April 2005, the band already signed to a record label. Then Paramore released their debut “All We Know Is Falling” in July 24, 2005 reaching #30 on Billboard’s Heatseekers Chart. Later in that year, Paramore was featured on the Shira Girl Stage of the 2005 Warped Tour. In 2006, Paramore released an EP titled “The Summer Tick”. Their first night on the Main Stage was at their hometown show of Nashville. Paramore’s first US headlining tour began on August 2, 2006 to a sold-out audience with support from This Providence. With this under their belts, Paramore was voted “Best New Band” by the readers’ poll of “Kerrang!” magazine.

By the start of 2007, Paramore was named by NME (is this the same NME circa-1980?) as one of ten bands to watch out for in the magazine’s “New Noise 2007” feature (the band Girlschool used to be on that list back in 1980!). In addition to this accolade, the band played an acoustic set for the grand opening of a “Warped Tour” exhibit at the Rock n’ Roll Hall of Fame that opened in January. The dress worn by Paramore’s vocalist Haley Williams for the “Emergency” music video was also put into the exhibit (Queer Eye alert!). And by the recording and release of “Riot!” around June 2007, Paramore already mastered the ropes of studio and live- gigs. By December 7, 2007 CNN ran a news feature about next years Grammy nominees lists Paramore as one of the Best New Artists.

To me, it seems like new bands that seek fame and recognition via the old fashion way i.e. “paying their dues” on the touring circuit and in the studio seems to scare the hell out of MTV’s current incarnation – or is this just endemic in MTV’s ASEAN franchise? Aspiring bands should be exposed to young and gifted talents like the band Paramore in order to end this endemic batch of major label crap (and surprisingly young “talent”) that only current “Media Pirates” seem to cherish because they can earn money from it.