If they’re watching the headlines, it’s no wonder, really. After all, they reason, if billionaires can’t make money in gold, how can anyone else?

Here’s the latest example. Just yesterday a prominent news service reported that John Paulson’s $700 million gold fund lost about 47% year-to-date, with almost half of that loss taking place in April after the yellow metal’s flash crash.

But for all the billions of dollars in bullion and paper gold coming onto the markets, there are plenty of buyers who aren’t complaining about new opportunities to pick up this “eternal metal” at prices we haven’t seen for a couple of years.

Whether you’re a gold bear or a bullion bull right now, or somewhere in between, have you ever stopped to wonder just how this metal became the world’s most-precious?

Read More at uncommonwisdomdaily.com . By Sean Broderick.

In an agency-wide memo sent to staff on his first day on the job, acting IRS Commissioner Danny Werfel acknowledged the turmoil that has enveloped the agency, while insisting the tax administrators play an “indispensable role” for the nation.

“It has obviously been a difficult last few days for all of you,” he wrote. “There is rightly concern among the public about the trust that they place in the IRS to administer the tax code fairly and help America’s taxpayers understand and meet their tax responsibilities. Working together, it is up to us to restore that trust and ensure that the IRS remains the exceptional, indispensable organization it has always been.”

Werfel came to the IRS after serving as a top official at the Office of Management and Budget. President Obama appointed him to take over the IRS following the resignation of Steven Miller, the previous acting commissioner, who stepped down after the IRS admitted to improperly targeting Tea Party groups.

Werfel told IRS employees that his first step as the new head will be to find out exactly how an IRS office in Cincinnati came to single out Tea Party groups for additional scrutiny in the processing of tax-exempt applications. He made clear that any hint of political bias at the agency is unacceptable, and vowed to cooperate with all investigators, including Congress, in figuring out what happened.

Read More at The Hill . By Peter Schroeder.

Washington began this year by definitively breaking with its recession mindset. Until then, the ostensible focus had been on protecting the economic recovery, regardless of budgetary impact. For this reason, the Bush tax cuts, which liberals had always vehemently opposed, had been extended and a 2% payroll tax break included.

The economy muddled along, with its strongest praise being that it didn’t reverse. However, the view of higher taxes as an economic deterrent evidently did – at least within the Administration.

On January 1, several large tax hikes (the largest being a return to Clinton-era top earner rates, an end to the 2% payroll tax break, and several Obamacare tax increases) went into effect. Unlike the Bush tax cuts, these increases are not temporary, but permanent.

Despite being now four months old and sizable, little mention has been made of them. Instead, all the attention has focused on the sequester’s $85 billion in spending cuts, mandated through this fiscal year (October 1). They amount to just 2.3% of what federal spending would have been and just 0.5% of projected GDP. Yet, to hear Washington tell it, you would think the entire economy rested on reversing them.

Read More at Forbes . By J.T. Young.

LONDON— Federal Reserve Chairman Ben Bernanke’s signal that monetary policy will remain loose gave stocks another lift Wednesday, paving the way for many indexes to advance to new record highs.

Following a run of upbeat U.S. economic news, largely related to housing and jobs, there had been talk in the markets that the Fed may soon put a brake on its super-easy monetary policy, which has boosted liquidity in financial markets over the past few years.

The Fed is currently making $85 billion in bond purchases every month to encourage lending and spur the U.S. economic recovery. Though a number of economic indicators have improved, the U.S. economy isn’t posting historically high growth rates and unemployment is relatively high above 7 percent despite consistent falls in recent months.

Though Bernanke said that keeping interest rates low for a long time can unbalance the financial system, he warned that a change in policy now would “carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.”

Following his comments to lawmakers in Congress, European and U.S. stock markets pushed sharply higher while the dollar lost some of its shine.

Read More at OfficialWire . By Pan Pylas.

The share of financial profits of total corporate profits – a direct result of the fractional reserve banking privilege and the central bank monopoly on money (via Ed Yardeni) – click to enlarge.

In other words, the banks have to protect a major franchise. It is a good bet that if gold had continued to rise in the face of money printing being accelerated all over the world, the inevitable loss of faith in central banks would have happened sooner rather than later. That it will eventually happen is unavoidable – the modern monetary system was fated to self-destruct the moment it was conceived. This is so because central planning and price controls cannot work in the long run, even though central banks are socialistic institutions adrift in a capitalist sea, so to speak. They can to some extent observe prices in the market, but the problem is that the market price most relevant to them – namely the ratio of future against present goods as expressed in interest rates on the credit markets – is not independent of their actions. There is therefore nothing that can tell them whether their administered interest rates are too high or too low. It is a system that is condemned to fail at some point (unfortunately with grave consequences for the economy at large).

The fact that a great many people ostensibly believe in its viability is not proof that it is viable; most of those who are most vocal about retaining the central bank money monopoly are directly profiting from its existence after all. That the commercial banks only want to protect a source of large profits and an invaluable backstop in case their speculations go wrong is clear, but the same is true of most academics in the economics profession. The great bulk of them derives its income from the State, and the central bank is at the forefront of supporting the livelihood of its apologists.

 Read More at Lew Rockwell . By Pater Tenebraum.

Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.

In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]

The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?

The misinformation that Soros had sold his gold holdings came from misinterpreting the reason Soros’ holdings in the GLD gold trust declined. Soros did not sell the shares; he redeemed the paper claims for physical gold. Watching the gold ETFs, such as GLD, being looted by banksters, Soros cashed in some of his own paper gold for the real stuff.

Read More at lewrockwell.com . By Paul Craig Roberts.

Today Egon von Greyerz told King World News that clients are having tremendous problems getting their physical gold out of Swiss banks as well as other major banks as the shortage intensifies. Greyerz also discussed the fact that refiners simply cannot keep up with demand, “no matter how much they produce.” Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this extraordinary interview.

Greyerz: “This week I want to talk about what we are seeing in the physical gold market, and why there is a disconnect in that market. We transfer a lot of gold from Swiss banks and other banks into private vaults for investors.

More often now, than ever, we are encountering incidents when the banks are putting up all kinds of obstacles for these transfers. The first sign of the potential shortage of physical gold started with ABN AMRO a few weeks (when they) declared that they would renege on their commitment to redeem gold accounts in physical gold….

Read More at kingworldnews.com .

Doug is a friend and mentor to Chris and I. For over 25 years I’ve read his monthly missives, devoured his books and attended his workshops. I credit Doug with leading me to my first big score, and imparting enough wisdom to make me see the sense of holding onto that winner as long as it made sense to. The value of that lesson was something that can never be repaid.

Doug was one of the key people, along with my friend “Dave” (“The Tao of Dave” – http://capitalistexploits.at/2011/02/the-tao-of-dave/) with whom I credit for arming me with the confidence to leave my comfortable life in the States, family, friends and business partners to experience the broader world and invest and speculate in the frontier markets.

Although he isn’t always right, and has been early on many of his calls, his viewpoints are always enlightening and entertaining!

Doug, Chris and I correspond fairly often. I rang him up a while back and asked if we could chat about my favorite subject, capitalism. I proposed that we discuss the virtues of capitalism, since these days capitalism is almost universally scorned and misunderstood. It is perceived as an evil system that creates greedy, uncaring and corrupt monsters. As part of the crowd that understands the folly in those perceptions, it’s our moral obligation to right this wrong!

Thankfully, Doug graciously agreed to a back and forth on the matter. Read on…

Read More at zerohedge.com .

Below is Fitzwilson’s exclusive piece for KWN:

Fitzwilson: “The term bucket shop is one that has been around for almost 200 years and its roots can be traced to England. Street urchins would gather kegs of beer that had been mostly tapped and discarded from pubs. The kegs would be taken to an abandoned building and the beer would be drunk.

In the financial markets, bucket shops arose at a time when exchanges dominated the majority of the transactions, certainly the larger and more profitable ones.

A bucket shop has been defined as:

“[a]n establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in.”….

Read More at King World News .

“We’ve made rich people richer…,” Dallas Fed President Richard Fisher said on CNBC television. “The question is what have we done for working men and women in America?” he asked.

“But has it worked in the economy? … We don’t know,” he said.

The central bank is buying $45 billion in Treasury bonds and $40 billion in mortgage bonds each month in an effort to encourage investment, hiring and economic growth in part because the unemployment rate remains high at 7.5 percent.

Fisher, who opposed the current program and doesn’t vote on monetary policy this year, has been among the Fed officials urging a slowing of asset purchases, or quantitative easing (QE). The benchmark S&P 500 stock index has risen some 16 percent since the so-called QE program was launched in September 2012.

Read More at Money News .