He Was Selling Pens on the Street to Survive—Then a Man Snapped a Photo of His Daughter…

Abdul Halim al-Attar is a Syrian refugee who was selling pens in the streets of Beirut in order to make a living for his children

But once a photo of Abdul selling his pens while holding his daughter hit the Internet, it went big-time viral. The picture featured his daughter Reem sleeping on his shoulder as he tried to market his pens to passerbys in the scorching heat. It touched people’s hearts across the globe.

The heartbreaking picture of his little one slumbering on her struggling father was almost too much for people to bear.

Now, thanks to an online crowdfunding campaign set up for him, Abdul has amassed a fund of $191,000. It was an online journalist and web developer in Norway named Gissur Simonarso who saw this man’s plight and decided he wanted to help.

He had no idea that his simple campaign would bring in nearly $200,000.

And Abdul is certainly putting it to good use. The 33-year-old father has opened 3 businesses with the new financial blessing. He started with a bakery two months ago, and later he opened a kebab shop and a small restaurant.

He went from pen seller on the street to quite the business entrepreneur, and he now employs 16 other Syrian refugees. There are approximately 1.2 million refugees registered in Lebanon, and it’s been extremely difficult for them to find jobs, so his 16 employees feel very lucky.

“Not only did my life change, but also the lives of my children and the lives of people in Syria whom I helped,” he said. He gave away about $25,000 to friends and family members in Syria.

On top of the new business ventures, Abdul has been able to move his children into a two-bedroom apartment where his 4-year-old daughter Reem and his 9-year-old son Abdullelah can now enjoy a more comfortable life.

Reem gets to play with her new plastic kitchen set and swing, and Abdullelah is back in school after being out for 3 years.

And Abdul has a newfound respect in the community as well. “They just greet me better now when they see me. They respect me more,” he said smiling.

One act of kindness by one man ignited a viral act of kindness from thousands of strangers pouring in their contributions.

What a wonderful reminder that no act for good is too small. After all, you never know when it could change someone’s entire life.


Don’t Dismiss The EU Investigation Into Alleged Gold And Silver Price Fixing | Gold Eagle

Goldbugs are bemused by reports that the European Union competition watchdog is investigating alleged ‘anti-competitive behavior’ by participants in the precious metals market. But anybody who remembers how the EU broke up the cement cartel a couple of decades ago will know that this is a watchdog that has very powerful teeth. It’s fines can bankrupt even very large companies or banks.

Prior evidence

True the goldbugs have watched and waited in the past when various investigations into alleged precious metal price fixing have been launched in the US, UK and Germany. These investigations have quietly concluded that nothing was wrong, despite some very convincing evidence from market watchers and industry experts.

The general view in the gold community is that the central banks themselves manipulate the gold price to help dampen inflation expectations. And the central banks are above the law in such matters.

However, they may have met their match in the EU competition watchdog. According to the Treaty of Rome and its later additions, EU law is the supreme authority, and even central banks are subservient to its law.

The European Union is particularly strong on maintaining a level playing field in terms of business competition and market pricing. There was a time big cement firms thought they were above EU law, until one day investigators turned up first thing in the morning to seize documents and take away computers.

After rather a short period of time the huge fines were made, hundreds of millions of dollars that really hurt profits. The cement cartel collapsed and prices fell, and so did their share prices.

EU calling

Could the bullion banks be the next to get that knock on the door early one morning? The EU investigators could do worse than start by reading back pages of the zerohedge.com website which regularly documents the false trades used to depress gold prices that are so blatant a blind man in a coal cellar could see them.

Why are these trades initiated? Who does it? On whose orders are they operating? What is the benefit to them of these blatant price manipulations?

These are a few of the awkward questions the EU competition guys might like to put to those few players who count in the precious metals market. Could this be another cement cartel for them to bust? Why not? It is just as obvious


Source: Don’t Dismiss The EU Investigation Into Alleged Gold And Silver Price Fixing | Gold Eagle

How To Break Free From Materialism In 3 Distinct Ways

Our society is currently enslaved by a 9-5 alarm clock lifestyle. Pieces of paper control our every move. From the moment we are born, we are indoctrinated by our parents, our school system, the media to think that success is defined by material gain.

Happiness, contentment and relationships are secondary to income. Because our culture values material success the most, we currently live in a world that is enslaved to the dollar.

Slavery is when your work is no longer an opportunity for economic advancement but is instead an act of mere self-preservation.

Most people are owned by their material pursuits, and spend their entire lives trying to pay off debt they earned from purchases and bills that have piled up over the years.

If you are reading this, there is a good chance you work a 9-5 job and are sick of it. Maybe your are psychologically trapped in a world of numbers and material concerns and want to break free from mental slavery.

Whatever your specific situation is, the truth is that the vast majority of people who read this are fed up with debt, long work hours and being programmed by advertisements to buy things they don’t need.

The good news is, just because you live in a consumerist society doesn’t mean you have to live as a consumerist.

Here are 3 ways you can break free from materialism and reclaim your soul:

  1.  Leave The Rat Race
  • Who wrote the rule that said we have to work 9-5 Monday through Friday?
  • Who wrote the rule that we have to graduate school and hop right into a full time job?
  • Who wrote the rule that said we have spent 40 years of our life working full time and can only retire when we are 60 or 70?

You don’t have to do what society thinks you should do, and you don’t have to do what your parents think you should do. If you are sick of the rat race, then leave it.

Nobody is putting a gun to your head forcing you to work 40 hours a week at a job you don’t like. But the bills need to be paid, right? That brings us to the next point.

2)  Don’t Live To Impress

The only reason we need to work 40 hours a week is because we buy things we don’t need with money we don’t have to impress people around us. Because we are taught that success and value is defined in material terms, we figure we need to accumulate as much possessions as we can.

If you cut your expenses in half and lived for yourself, you would only have to work half of the hours you work now.

  • Do you really need to finance that new car? Or should you buy a used one?
  • Do you really need to live in a 2000 square foot house with all new appliances?
  • Do you really need that new television?
  • Or those designer clothes?
  • The newest iPhone?
  • That expensive laptop?

A lot of the times, we enslave ourselves because our egos want to be seen as successful in the eyes of other people. We define our sense of worth and value on how we measure up to other people.

In the same way kids on the playground used to say “My dad can beat up your dad”, adults say “My houses is nicer than your house.”

As you can see, some people don’t grow out of this playground mentality. And because of this, many people live paycheck to paycheck. This pursuit of egoic self-glorification is ultimately what enslaves us to the dollar and steals our happiness. This brings us to the next point.

3)  Transcend The Material

Don’t define yourself in relation to other people, the materials you own, or the lifestyle you live. Define yourself in relation to your relationship with yourself and with God.

  • Are you spiritually fulfilled?
  • Do you feel whole and peaceful inside?
  • If not, how can this be called success?

Once you experience the part of yourself that is deeper than the material, the material world is a joke to you. Once you tap into that infinite space of grace and peace during meditation or communion with nature, there is no longer a need to carry on with the endless pursuit of material gain.

How many Buddhist monks do you think are in debt up to their eyeballs?

The same culture that tells us success is measured by material success is also the most unhappy, overweight, stressed out and in debt culture in the world. Suicide is currently the 10th leading cause of death in America. I suspect a good percentage of depression comes from people being bright up in a dead-end society that is hollow, boring, consumer driven, spiritually void and enslaved to a piece of paper.

You don’t have to be a slave to capitalism, materialism, or consumerism. Be brave. Ditch the rat race, live within your means, know when it’s time to scale down and start practicing yoga or meditation, and you will open yourself up to a whole new world of possibilities you didn’t even know was there.

Scuba Divers Discover Buried Treasure


Amateur scuba divers have found an enormous cache of gold coins off the Israeli coast

It’s an age-old plot device from a scuba diving-related story: amateur divers accidentally stumble across treasure on the bottom of the ocean while out diving, and drama ensues. But of course, that sort of thing wouldn’t happen in real life — or would it?

Amateur divers discovered nearly 2,000 gold coins near Caesarea off of Israel’s Mediterranean coast

There may not be any dramatic boat chases or seedy black-market bosses, but life did imitate art this week when a group of amateur divers discovered nearly 2,000 gold coins near Caesarea off of Israel’s Mediterranean coast.

The coins are estimated to date back some 900 years, from the time of the Fatimid Caliphate. This dynasty ruled the North African coast from the Red Sea to the Atlantic, and had its central government in present-day Egypt. The coins are reported to be in surprisingly good condition; some of them even show teeth marks from where a previous owner tested them for authenticity.

The coins are of varying denominations, including dinars, half dinars and quarter dinars.

The amateur divers practically stumbled upon the treasure while out diving, and while they first believed the coins to be toys, they quickly realized that they were genuine. They immediately alerted the authorities, which then raised the coins, all 13 pounds of them.

That the coins were found quite close together, as well as the history of Caesarea as an important port during the time of the Fatimid Caliphate, leads archeologists to speculate that it’s very likely that there’s a wreck from the period still to be discovered, perhaps a tax-collection ship returning to Egypt or a wealthy merchant ship.

Despite their discovery, the lucky divers do not get to keep any part of it. The Israel Antiquities Authorities describe the find as “priceless,” and states, like many similar laws around the world, that any antique findings made on their lands or in their waters belongs to the state, and that keeping any part of it, or failing to report it to the proper authorities is illegal. In Israel, the maximum penalty for keeping antiquities found is up to five years imprisonment.

Impressively, even after over 1,000 years on the bottom of the sea, the coins require no restoration. Because gold is a noble metal, it, unlike silver, doesn’t react with the salt in the ocean water. The Israeli authorities will now investigate the area, hoping to find the remains of the suspected wreck, or to recover any other artifacts that may be nearby.

Speculation about the amount of lost gold in the world’s oceans varies wildly, and an exact amount is near impossible to calculate. But even the more cautious estimates climb well into billions of dollars. Three shipwrecks were reportedly located in 2012 alone, the combined cargo of which is speculated to be $4.5 billion dollars.

Mengapa Saudi Arabia Tidak Pakai Dinar Dirham


Sufyan al Jawi – Numismatik Indonesia

Banyak yang suka bertanya: mengapa Pemerintah Saudi Arabia memakai uang riyal kertas, dan bukan Dinar dan Dirham? Ini sebagian jawabannya.

Untuk menjawab pertanyaan mengapa Saudi Arabia memakai uang kertas riyal, dan bukan Dinar emas dan Dirham perak, kita perlu mengetahui posisi kerajaan ini. Pada mulanya wilayah Hijaz adalah bagian dari Daulah Utsmaniah yang, tentu saja, menggunakan Dinar emas dan Dirham perak sebagai mata uangnya. Pada pertengahan abad ke-18, sebuah amirat lokal, dipimpin oleh amirnya, Muhammad ibn Sa’ud (meninggal 1765), menguasai suatu desa yang kering dan miskin, Dariyah. Karena kegiatannya yang selalu membuat onar, dan mengganggu jamaah haji, kelompok Al Sa’ud terus-menerus dalam konflik dengan pemerintahan Utsmani.

Beberapa tahun kemudian, berkat bantuan seorang broker politik, Rashid Ridha namanya murid dari Muhammad Abduh, untuk memperkuat rong-rongan terhadap Istambul, anak cucu Ibn Sa’ud membangun aliansi dengan Pemerintah Kolonial Inggris. Aliansi ini terjadi pada masa Sa’ud bin Abdal Aziz, anak Abdal Aziz Ibn Sa’ud, cucu Muhammad ibn Sa’ud. Untuk perannya ini Ridha ‘menerima imbalan 1,000 pound Mesir untuk mengirimkan sejumlah utusan ke provinsi Arab di [wilayah] Utsmani untuk memicu pemberontakan,’ pada 1914.

Ketika itu Ridha juga telah mendirikan sebuah organisasi lain, Liga Arab (Al-jami’a al-arabiyya), dengan tujuan menciptakan ‘persatuan antara Semenanjung Arabia dan provinsi-provinsi Arab di Kekaisaran Utsmani’. Agenda organisasi ini adalah pendirian ‘Kekhalifahan (Konstitusional) Arab’, suatu rencana yang tidak pernah terwujudkan. Yang lahir kemudian adalah Kerajaan Saudi Arabia.

Berkat kolaborasi antara Sa’ud bin Abdal ‘Azziz – dengan legitimasi teologis dari Wahabbisme, atau ajaran Syekh Muhammad ibn Wahhab – dan pelindungnya Winston Churchil, PM Inggris ketika itu berdirilah kemudian sebuah kerajaan nasional di tanah Hijaz, pada 8 Januari 1926. Pada 1932 Tanah Hijaz, yang semula merupakan bagian dari Daulah Utsmani, oleh rezim yang baru ini secara resmi dinamai: Sa’udi Arabia! Inilah satu-satunya negara di dunia ini yang mendapat nama dari nama seseorang. Salah satu mata rantai awal pemberontakan ini sendiri, adalah Amir di Najd waktu itu, Abdullah Ibn Sa’ud, berhasil ditangkap dan akhirnya dipancung di depan istana Topkapi, di Istanbul, setelah diadili dan dinyatakan sebagai seorang zindiq, pada 1818.

Meninggalkan Muamalat

Sejak awal, Pemerintahan Saudi Arabia, merupakan sekutu kekuatan Kristen-Barat (semula Inggris, kemudian Amerika Serikat), dan menjadi semakin erat dengan ditemukannya minyak pada tahun 1950-an. Beroperasinya perusahaan minyak raksasa (Aramco = Arabian-American Oil Company) yang markas besarnya di Dahran, di tempat yang sama dengan Pangkalan Militer AS (berdiri 1946), di Hijaz, merupakan simbol dan sekaligus sumber kekuasaan Rezim Sa’ud sampai detik ini. Semakin hari kita ketahui Rezim Saud makin meninggalkan muamalat, dan mengislamisasi kapitalisme barat.

Raja Abdul Aziz bin Sa’ud, pendiri Saudi Arabia, berkuasa penuh mulai tahun 1926 sampai 1953. Pada mulanya, setelah memasuki Mekkah (8 Jumadil Ula 1343 H), beliau menolak berlakunya sistem uang kertas di wilayahnya, setelah memusnahkan uang kertas lira Turki sekuler yang beredar di Haramain. Pada masa dia memerintah jamaah haji dari penjuru dunia menggunakan belbagai jenis koin emas perak dari negerinya masing-masing. Namun koin dinar Hashimi dan real perak Austria – Maria Theresa, juga riyal perak Hijaz yang paling populer di sana.

Maka, pada tahun 1950-an, sempat populer di Amerika Serikat, anekdot kisah Raja Abdul Aziz yang selalu membawa harta kerajaan yang berupa koin emas-perak kemanapun dia pergi� bagaikan orang kolot dan primitif. Namun setelah dia wafat, penggantinya, Raja Sa’ud bin Abdul Aziz (1953-1964), bersikap lain. Sejak ia berkuasa, Pemerintah Kingdom of Saudi Arabian (KSA) mendirikan bank sentral yang bernama: Saudi Arabian Monetary Agency (SAMA) dan menerbitkan uang kertas riyal pada tahun 1961 melalui Dekrit Kerajaan 1.7. 1379 H, dalam pecahan 1 – 100 riyal.

Raja tergiur menerbitkan uang kertas karena lebih menguntungkan daripada mencetak koin-koin riyal perak. Ide uang kertas diambil dari keberhasilan SAMA atas penerbitan uang kertas receipt yang berlaku dalam uji coba pada musim haji sepanjang tahun 1953-1957. Dengan menerbitkan Haj Pilgrim Receipt dalam satuan riyal perak, SAMA mulai menarik semua jenis koin emas dan perak yang beredar di Haramain. Para jamaah haji dari luar negeri pun diwajibkan menukarkan koin emas perak yang mereka bawa. Setelah populer, kupon haji itu pun kemudian dinyatakan tidak berlaku lagi sejak Oktober 1963 dan finalnya tanggal 20 Maret 1964, diganti dengan uang kertas riyal.

Celakanya sejak saat itu, ONH atau BPIH (Biaya Perjalanan Ibadah Haji) wajib dibayar dalam uang kertas dolar AS, bukan dengan uang kertas riyal! Sebab Kerajaan Saudi Arabia telah menyepakati pula berlakunya perjanjian Bretton Wood (1944), yang menyatakan bahwa dolar AS adalah satu-satunya mata uang yang berlaku untuk transaksi internasional. Segala transaksi dengan koin dinar Hashimi dan riyal perak (1 riyal = 4 dirham), termasuk koin real Maria Theresa di batalkan oleh negara. Maka umat Islam sedunia berduka atas dibrangusnya mata uang syar’i: dinar dirham.

Genaplah sudah makna hadis dengan lafal berikut: “Tak seorang pun manusia yang tidak memakan riba” yang diriwayatkan oleh Abu Daud, semoga Allah merahmatinya. Dinar dan Dirham diberangus sampai dua kali, pertama 1914 oleh Sultan-sultan boneka sisa Daulah Utsmani (Turki), dan kedua 1964 oleh KSA tersebut di atas. Tapi para ulama belum dapat mengambil kesimpulan dari terbitnya uang kertas riyal ini, tentang status halal-haramnya uang kertas. Sampai, akhirnya, diterbitkan fatwa tentang uang kertas, pada tahun 1984, yang menyatakan bahwa uang kertas adalah halal.

Begitulah, sejauh sejarah Islam dapat kita ketahui, fatwa Saudi Arabia yang menghalalkan uang kertas, satu-satunya fatwa resmi dari suatu pemerintahan (“Islam”) di dunia ini. Tetapi, kisah ringkas sejarah ekonomi politik Saudi Arabia sebagaimana diuraikan di atas, kiranya cukup menjelaskan mengapa Saudi Arabia menggunakan riyal kertas, dan bukan Dinar emas dan Dirham perak.

Why Wall Street & Govts Hate Gold

Why Wall Street And Governments Hate Gold | Gold Eagle.

Michael Pento

December 8, 2014

Gold is hated more than ever by both governments and the financial services community. This is because it has now become imperative to keep the illusion of confidence in sovereign debt and paper currencies. To that end, a gentleman by the name of Willem Buiter, Citigroup’s chief economist, shot into the media spotlight by writing a note on the day before Thanksgiving stating his belief that gold is in a six thousand year-old bubble.

Citi’s chief economist penned this “brilliant” commentary in the days just prior to the Swiss referendum on increasing the percentage of gold reserves held by its central bank. In a clear attempt to influence the gold vote, Mr. Buiter also stated on November 26th that, “The Swiss vote is ridiculous and no self-respecting central bank should ever be putting a large chunk in a single commodity.”

This hatred for gold spurs from his belief that gold has no intrinsic value. But how can one individual have the hubris to believe he can erase thousands of years of human experience and knowledge that has maintained gold’s intrinsic value stems from the fact it is the perfect store of wealth?

Mr. Buiter went on to exclaim that, “Gold has become a fiat commodity or a fiat commodity currency, just as the U.S. dollar, the euro and the yen.” He continued, “The main differences between them [fiat currencies] are that gold is very costly to produce, while the production of additional paper money has an extremely low marginal cost.” So, here we have this paragon of the Wall Street and banking community saying that gold is no different from fiat currencies.

Since his body of work clearly shows he is aware of the definition of the word fiat, the only conclusion one can reach is that Mr. Buiter is being brazenly disingenuous. The word fiat means by decree or edict—from the Latin “let it be done.” In reference to currencies it means that governments and banks can create money at virtually no cost and at will. Gold is the exact opposite of a fiat currency. Mr. Buiter admits this in the very same commentary by stating gold is costly to produce.

Our collective human conscious has for millennia deemed gold to be valuable because it is; portable, divisible, beautiful, extremely rare and virtually indestructible. How many things on this planet fit those criteria? The answer is nothing else except precious metals; fiat currencies fail miserably when it comes to the rare and virtually indestructible part. This is what gives gold intrinsic value and what makes it so vastly different than fiat currencies.

In the near future, I believe Citi’s chief economist will be embarrassed by his remarks, especially when comparing gold to pet rocks. He also claims that gold, since it is just another fiat currency, can reach zero value just as paper money can lose all its worth.


But contrary to what this gentlemen thinks, the value of gold is about to soar because central banks and governments have become trapped. These market manipulators need to keep asset bubbles inflated in order to keep the wealth effect in place and sustain whatever anemic economic growth they have been able to achieve. Most importantly, they need to keep sovereign debt out of public hands in order to keep debt service payments remain low. This means governments have no escape from their massive and unprecedented money printing campaigns. Therefore, the value of fiat currencies is set to plummet when compared to precious metals

These haters of gold are becoming more bold and desperate in their attempt to maintain confidence in government issued debt and currencies as asset bubbles have reached dizzying heights and debt levels have exploded into record territory.

Inflation has become the goal of every central bank on earth. This makes the mean reversion of interest rates inevitable, which will lead to a global sovereign debt crisis. To illustrate this point, the U.S. national debt officially eclipsed $18 trillion this week! This equates to a trillion dollars + per year just on interest payments once the Treasury is forced to pay a more normal rate on all that debt. Economic chaos and soaring inflation will then follow, which should send U.S. Investors flocking to gold en masse.

Buiter’s concludes his inane commentary by stating that gold, “has had positive value for nigh-on 6,000 years.” “That must make it the longest-lasting bubble in human history.” But history has proven the real bubbles have manifested in sovereign-issued debt and currencies; never in gold. Since the rate of debt accumulation and government money creation is exponentially greater than at any other time in human history, I can state with confidence the “bubble” in gold has only just begun.

Why Gold Is Headed Much Higher

By Michael Pento
At Gold Eagle
November 24, 2014

gold price risingWhat really drives the price of gold? Some say it’s a fear gauge. Others prefer to look at the demand coming from the Indian wedding season. But the silliest of all conclusions to reach is that the dollar price of gold should be determined solely by its value vis-à-vis another fiat currency.

The truth is the primary driver of gold is the “intrinsic value” of the dollar itself, not its value on the Dollar Index (DXY). The “intrinsic value” of the dollar can be determined by the level of real interest rates. Real interest rates are calculated by subtracting the rate of inflation from a country’s “risk free” sovereign yield. Right now the level of real interest rates in the U.S. is a negative 1.55%.

A key factor is to then determine the future direction of real interest rates. The more positive real rates become, the less incentivized investors are to hold gold. And the opposite is also true. The more negative real rates become, the more necessary it is to own an asset that is proven to keep pace with inflation. The Fed has threatened to begin lift off from its zero interest rate policy in the middle of next year. However, the Fed has made it clear that it will only raise nominal yields if inflation is rising as well. Therefore, there is no reason to believe real interest rates will rise anytime in the near future.

The “intrinsic value” of the dollar is not rising; and most likely will not increase for the foreseeable future. The dollar is only rising against other currencies because the value of those currencies are being pummeled by their central banks to a greater extent than our Fed. The weightings in the DXY favor the performance of the dollar against the euro and the yen. Therefore, just because the nations of Europe and Japan are determined to completely wreck their currencies does not mean that the “intrinsic value” of the dollar is improving or that the dollar price of gold must go down. In fact, holders of the euro and yen should be more compelled to own gold than ever before.

The sophomoric view held on Wall Street is that gold must go down if the dollar is rising on the Dollar Index. Their specious argument is that it’s more expensive to buy gold because of the dollar’s strength, and therefore demand for the commodity must decrease. However, this argument completely overlooks the increased motivation to buy gold emanating from the continued attack on the yen’s “intrinsic value” by the bank of Japan. For example, real interest rates in Japan are a negative 3% and are promised by the Bank of Japan to keep falling. Japanese citizens should be scrambling to own gold in this scenario even if it will take more yen to buy an ounce of gold. And from all evidence available demand for the physical metal remains strong.

  • Supply demand metrics for gold are currently favorable.
  • Central bank demand increased to 335 tons so far this year, up from 324 tons in 2013.
  • Investment demand is up 6% YOY, while supply was down 7% YOY in Q3.
  • Nevertheless, gold is down about $100 an ounce YOY, and
  • Gold mining shares have plummeted by about 30% during the same time period.
  • This is due to short selling of gold futures by banks that wish to see the gold price lower.

In the short-term financial institutions may be able to manipulate gold prices lower, as they bring to fruition their self-fulfilling prophesies.

However, in the long run there exists three great risks to markets and the global economy in general that will be very supportive for gold:

  • A collapse of the yen that becomes intractable;
  • spiking interest rates in the United States due to the Fed’s unwillingness to get ahead of the inflation curve; or, more likely,
  • a significant weakening in U.S. economic data that puts serious doubt in the sustainability of the recovery and corporate earnings growth.

At least one of these events is guaranteed to occur because the free market price discovery mechanism has become completely abrogated and has been replaced by government manipulation of all asset prices. When these massive bubbles break it won’t be so easy to put them back together again because central banks and sovereign balance sheets are already at a breaking point. Therefore, the recovery won’t be as easy to engineer like it was back in 2009.

Equity prices have been propelled to record highs by the money-printing frenzy of central banks. And the Fed Funds Rate is near zero percent, instead of a more normal 5%. The total debt in the United States is near an all-time record 320% of GDP. U.S debt is up $7 trillion (14%) and global debt has increased over $30 trillion (40%) since 2008. Most importantly, the record amount of debt has been coupled with interest rates that have been artificially manipulated to record lows around the world for the past six years and counting.

This is why I know it will all end very badly once interest rates normalize. Regardless of bank manipulations and the BOJ’s kamikaze mission to commit Hara-kiri with its currency, gold will be an increasingly-necessary asset to own. Especially after this current illusion of prosperity comes crashing down.

You can learn more about the coming economic chaos by getting a free trial subscription to my Mid-week Reality Check podcast located at www.pentoport.com.

Michael Pento is the President and Founder of Pento Portfolio Strategies and Author of the book “The Coming Bond Market Collapse.”

How to spend our money?

Middle Class: 10 Years Ago And Now

By Fiona Ho 29 October 2014

Once upon a time, being middle class draws on the rosy notion of a family with a nice house, who drives a Volvo, goes on beach or skiing vacations once or twice in a year, sends their kids to college, and lives a generally carefree and comfortable life.

Unfortunately, as living costs continue to rise and salaries struggle to catch up, the term “middle class” seems to have taken on a new and greyer meaning in recent years.

In Malaysia, middle class is loosely defined by those who take home a monthly income of RM3,000 and above. Government data from the year 2012 showed that 27.8% of households in the population of 30 million earned between RM3,000 and RM4,999 a month.

BIG_House Price RM v GoldAbout 39% of households fall below that income bracket. Meanwhile, the upper middle class and highest income groups – households earning RM5,000 and above, account for 33.6% of households.

Although there has been a steady increase in income, the amount is hardly significant enough to match the country’s soaring inflation rates, driven by aspects such as rising electricity costs, and subsidy reduction in fuel and sugar prices.

Prices of consumer goods are also expected to increase when the Goods and Services Tax (GST) come into force in April 1, 2015.

Economists and academics reiterate what most of us already know: the term “middle class” no longer has the same connotation as having a comfortable life as compared to 10 years ago. In fact, with many in the income stratum now struggling to make ends meet, middle class may well have become the new poor.

Let us have a look at the prices of some of our daily essentials in 2004 and now.

1. Fuel prices


A leading indicator of inflation is the hike in fuel prices. In 2004, RON92, a lower-octane petrol was available at RM 1.38 per litre.

The fuel was later found to be not environmentally-friendly and RON95 was subsequently introduced to the Malaysian market in 2009 at RM1.75 per litre.

RON95 has seen substantial incremental rises over the years. Most recently in October, the price of RON95 was raised from RM2.10 to RM2.30 per litre. This came just a little after a year it was raised from RM1.90 to RM2.20 per litre in September 2013.

The Domestic Trade, Cooperatives and Consumerism Ministry said the reduction of fuel subsidy was necessary for the Government to keep to its subsidy rationalisation plan.

But this means that Malaysians are now paying an average of 60% more for fuel compared to 10 years ago. For example, in 2004, if you own a sedan with a fuel tank capacity of 50 litres, you will need to pay just RM69 for a full tank. Meanwhile, if you own a sedan of similar tank capacity in 2014, you will need to fork out RM115 for a full tank.

Urban dwellers have it worse as highways grow increasingly congested due to rapid urbanisation and infrastructure construction works, such as the Mass Rapid Transit (MRT) project. People are also living further away from the city centre due to lower property prices and are hence, required to clock in more mileage on the road.

High-income earners with monthly income of RM10,000 and above will also have to start paying for the market price for RON95 at RM2.58 per litre once the petrol subsidy rationalisation mechanism comes into force in June. Meanwhile, those earning between RM5,000 and RM10,000 per month will get a partial subsidy, and those earning below RM5,000 will receive full subsidy.

The mechanism might involve the use of MyKad or other formal documentation, and is still being refined by the Finance and the Domestic Trade, Co-operatives and Consumerism ministries. However, details such as full and partial subsidy rates have yet to be finalised.

2. Property prices


There is no denying that the prices of property have skyrocketed in recent years. Statistics show that property prices in the Klang Valley has been rising between 15% and 18% per annum.

These days, a 1,000-square-foot condominium unit in prime locations like Petaling Jaya or Kelana Jaya can easily command the starting price of RM550,000.

With soaring home prices, coupled with dwindling purchasing power, it is no wonder that many middle-income earners are now part of the “homeless generation” – middle-class young working adults who are unable to afford their first home.

Theoretically, with RM550,000 you will only be able to purchase a property of about 1,000 square feet today. But back in 2004, you will be able to fetch a cool 2,500 square feet double-storey terrace with the same amount.

Recent adjustments in interest rates and maximum loan tenures also mean that the homebuyer now has to pay a heftier monthly home instalment. In 2014, when you purchase a RM550,000 property, with 4.45% interest over a maximum 35-year loan tenure, you will need to fork out at least RM2,539 every month.

Back in 2004, a RM550,000 property will only cost RM2,104 a month, with 3.54% interest over a maximum 40-year tenure.

The bad news is, property prices are expected to go up even more once GST is implemented. Although housing is exempted from 6%, GST will still be imposed on various aspects of property building such as land, raw material and labour cost. The hike in material prices will no doubt manifest into higher property prices.

The Real Estate and Housing Developers’ Association Malaysia (Rehda) speculates that home prices will rise by about 2.6% margin of increase in a post-GST era.

Upcoming infrastructure projects such as the new Light Train Transit (LRT) and MRT lines is also expected to drive property prices.

3. Electricity tariffs


Power tariffs rose by an average of 15% effective January 1 this year, after Putrajaya announced in December 2013 that it had approved the increase by utility firm Tenaga Nasional Berhad (TNB).

The rates were purportedly raised as a measure to reduce Government subsidy and to boost development spending.

Consequently, the average electricity tariff in Peninsular Malaysia went up by 4.99% per kWh or 14.89% from the 2011 average rate of 33.54 sen/kwH.

According to the Energy, Green Technology and Water Minister Datuk Dr Maximus Johnity Ongkili, consumers do not have to worry as 70.67% will not be affected by the tariff hike. Only consumers who use electricity at a rate exceeding 300kWh a month will be subject to the hike.

However, statistics show that the average two-storey and air-conditioned household in the Klang Valley consumes up to 714 kWh every month.

With 60% increment in power tariffs over the last decade, an average household will now have to pay an estimated RM294.04 a month compared to just RM108.79 a month in 2004.

4. Food items


We, Malaysians love our sugar. We have it in our teh tarik, our tea-time snacks, and our sumptuous and diverse assortment of sweet and savoury desserts. So it is no wonder that Prime Minister Datuk Seri Najib Tun Razak drew some bitter reactions when he announced that the sugar subsidy of RM0.34 per kilo will be abolished during Budget 2014.

Sugar prices went up from RM2.50 to RM2.84 per kilo this year – that’s a 96% increase from sugar prices in 2004, which stood at only RM1.45 per kilo!

Besides increasing public coffers, Datuk Seri Najib said the removal of sugar subsidy would help tackle some prevalent health problems faced by many Malaysians, including diabetes and heart disease.

While sugar itself is not a food item, it is a kitchen staple and input in many food products. A hike in sugar prices has no doubt, created a multiplier effect on the cost of living, as evidenced by the price increments in food and drinks following the announcement.

With the huge quantum in sugar price hikes, it is hardly surprising that your cup teh tarik that used to cost RM0.80 some 10 years ago, now costs you RM1.20.

With many already struggling to cope with the high cost of living, the subsidy cut has forced many to further tighten their belts.

With the examples highlighted above, a middle-class family today may be spending well over RM3,065 a month just on these basic essential items — car repayment, contingency saving, retirement fund, insurance premium, and other living expenses not included.

These days, given the rising prices of everyday essentials and petrol hikes, the term middle class may simply mean owning a too-small condo you can barely afford, living from pay cheque-to-pay cheque, worrying sick about putting your children through school and surviving on RM8 “economy” rice.