A Melman Minute By: Leonard Melman   NOTE: In order to complete Mr. Melman's forthcoming book on the essential fundamentals of the developing international financial crisis and its relationship to gold and silver, new "Melman Minutes" will be posted only three times per week, each Monday, Wednesday and Friday. The working title of the book will be 'Just a Melman Minute!"   November 30, 2009   For the first time in many moons, the world appears to be at relative rest in terms of dynamic news-of-the-moment.  So, rather than try to cobble together a commentary on minor morning changes, we want to focus on a much more dynamic problem and one which, in our opinion, threatens the well-being of the planet, but also provides opportunity for precious metals investors.  We are referring to the broadly-accepted concept that government action is the proper, and perhaps only, avenue for the solution of societal problems - and that government is fully capable of accomplishing all the miracles which people expect. This acceptance not only affects (infects?) the public at large, but on occasion, even influences those persons who are in a position of great authority and are generally highly esteemed by the public.  One such person is Elizabeth II, Queen of England and the British Commonwealth.  When she speaks, people generally listen, and she made one of her most important annual addresses to the British parliament, this past November 18.  The address is known as the "Queen's Speech" and outlines the government's plans for the coming year. From our point of view, an examination of her address contains frightening implications, for she enumerates a host of problems which the government will simply resolve, without one single reference regarding how the necessary revenues are to be raised.  It is as if the Queen was declaring that government can solve everything without incurring expenditures of any consequence. Lest anyone think we are exaggerating, here is a list of problems which she confidently expects "her" government to solve. * - To ensure sustained growth and deliver a fair and prosperous economy for families and businesses, * - To provide employment and training programs and strengthen the national infrastructure, * - To combat climate change, including attendance at the Copenhagen summit next month, * - To enhance the governance of the financial sector and to control the system of rewards, * - To reduce the budget deficit...legislation will be brought forward to halve the deficit, * - To enable the wider provision of free personal care to those in highest need, * - To introduce guarantees for pupils and parents to raise educational standards, * - To protect communities...and tackle youth gang crime, * - To introduce a bill to ensure communications infrastructure is fit for the digital age, supports future growth, delivers competitive communications and enhances public service broadcasting, * - To support carbon capture and storage, * - To provide high speed rail services between London and Scotland, * - To protect communities against flooding and improve the management of water supplies, * - To ensure everyone has a fair chance in life and will forward legislation to narrow the gap between rich and poor and tackle discrimination...and introduce transparency in the workplace, * - To address the differences in pay between men and women, and will continue to enshrine in law its commitment to abolish child poverty by 2020, * - To ensure that agency (temporary) workers have a right to equal treatment with permanent staff on pay, holidays and other basic conditions. Unfortunately, there were two segments of her speech that were entirely missing.  In the first place, no mention was ever made regarding the cost of all these services which "her government" was to provide.  Perhaps manna will descend from heaven. In the second place, there was not any mention of exactly how the deficit was to be halved; everyone was to be provided with a 'fair chance in life'; the 'gap between rich and poor' was to be reduced or eliminated; or how child poverty was to be abolished.  Perhaps she will simply issue a series of divine edicts. During her address, the Members of the British Parliament, particularly those among the ruling Laborites, applauded with great frequency as she made each rosy proposal, thereby signaling that they actually believed such warm-hearted, well-intended ideas could come true without any serious analysis or expense planning.  And, therein, lays the crux of our discussion. Britain is not alone in making such pledges to their general population.  Virtually every European and North American government continually - particularly during election campaigns - restates their belief in the government's ability to resolve such problems.  However, they soon find that sufficient money is seldom available to solve more physical problems and that insufficient studies have been made to resolve social problems. That leaves two apparent choices.  Either abandon the promises as they are found to be unworkable - or somehow push forward with rising taxes and huge deficits to raise funds as well as advancing a series of complex, expensive and even debilitating new laws and regulations to resolve social issues. Across the world, we are seeing the latter two solutions and it is our opinion that (a) they are unsustainable over time and, (b) they are the underlying, powerful forces which could drive the precious metals bull market to significantly higher levels over time as, in combination, they tend to lead to higher deficits, excessive money creation and the promulgation of laws which inflict great difficulties for the otherwise efficient providers of society's goods and services. This morning's market activities continue to reflect relatively small changes in several categories.  As of 8:00 AM, financial markets are slightly higher, precious and base metals are close to unchanged on balance, both major mining share indexes are up by about one percent, crude oil is up a bit and the U.S. Dollar is down slightly. - - - - - All quotes US Dollars unless otherwise noted. Next "Melman Minute" scheduled for Wednesday, December 2, 2009 ◄  Previous Minute                                                                                                        Next Minute  ►
		DISCLAIMER The information presented above is based on data which we believe to be from reliable sources, but the accuracy of which cannot be guaranteed.  Any opinions or predictions contained herein are those of the editor and are likewise offered also for information purposes only. Any investment decisions should be made only following consultation with registered investment professionals.