ARE GOLDRUSH PRICES MAKING SENSE ?

$2000 dollar gold?

The conclusion that gold in the range of $1000 to  $1100 makes sense is well supported by: 

 1: Renewed central bank interest evidenced by The Central Bank of India’s  $6.7 billion purchase of 200 tons of gold from the IMF at $1045 per ounce  announced two days ago ; and

2: Background analysis in The Goldwatcher on when gold prices make sense and when they don’t . 

Pundits are now beating the goldrush drum with talk of prices on course to $2000, $3000 and even $5000. At present, in my opinion, these predictions don’t make sense.  Conditions will change as will expectations for gold and other currency prices.  But, while the world still faces deflation,  further dramatic price rises can’t be expected  without a catalyst for change,    

The recovering world economy:

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I advanced the case in The Goldwatcher for drawing a line between the pre 9/11 and post 9/11 worlds. Now we have to draw another line between the world as it was in September 2008 when the global economy was about to plunge into the depths, as illustrated in the above Time cover,  and the world as it is now with clear signs of  recovery in some important economies.  However,  though generally showing signs of growth,  many economies are still in emergency care and won’t survive without financial life support.  In this delicate state investors need continuous advice on currencies and I don’t give investment advice. Further investors in different parts of the world will also need advice specific to their needs.   Here are some accessible information sources I rely on:

1: Kitco for live reports with charts on gold prices and analysis differentiating the extent to which price movements are attributable to $ movements and investor activity;

 2: Dr Marc Faber’s Gloom Doom and Boom report with astute comment from the perspective of a gold expert and icon contrarian investor; 

3: Sharefin’s extraordinary chart resource and regular news postings;

4:  Link deleted 10th August 2010

 5: The Bullion Buzz for well selected contributions supporting the case for gold;

6: IHS Global Insight’s Economic Outlook -  a superb resource that takes the pulse of the most important factor in the global economic equation - the US economy. Working outside the investing bank community Global Insight are free of hype.  As independent economists they are consistently rated among the world’s most prescient forecasters across the spectrum of key economies and industries;

7: Nouriel Roubini’s RGE Monitor . The gold standard macro economic commentary for those who can afford the price;

8:  Kitco Casey : the immaginative and sound resource for speculative investors focusing on the big picture and rewarding opportunities; and

9: The Goldwatcher Webliography  listing of publications contributing essential regular information and analysis.(Page 322) 

Goldwatcher commentary:

I will comment on catalysts for change and key developments affecting gold from time to time. To be kept advised on future postings to this blog,  or other contributions I make,  e-mail me:  johnnkatz@gmail.com

Note added 16th December : There appears to be a glitch with the forwarding of e-mails addressed to me at The Goldwatcher. Any message not acknowledged has not been received. I apologise for this and will respond to any messages not acknowledged if they are re-sent to me at the above address. Thank you for reading The Goldwatcher and good luck with your investments.

* Added 9th November 2009 : Video interview with Jon Nadler, Kitco, on bear market in the $ rather than bull market in gold>

* Added 11th November : Street.com interview with Jon Nadler, Kitco 

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CLICK HERE FOR KITCO PRICES AND ANALYSIS

CLICK HERE FOR REALTIME MULTICURRENCY GOLD PRICES  

TO BUY THE GOLDWATCHER CLICK HERE:

THE G20, GOLD & THE CASINO CAPITALISM HOUSE OF CARDS

CLICK HERE FOR REALTIME MULTICURRENCY GOLD PRICES  

 TO BUY THE GOLDWATCHER CLICK HERE: 

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 Can the G20 save the world from global financial meltdown?

The question Can the IMF save the world from global financial meltdown? is raised in The Goldwatcher Chapter on Globalisation and Global Economic Re-balancing. After reviewing initiatives on adjusting global  imbalances I concluded all the IMF really achieved was to ‘convince China and America’s other creditors that the worst thing they could do with their money would be to leave it in low interest rate US Treasury Securities - ‘knowing that the dollar will continue falling.’  I was dead wrong on that call for a while. The dollar strengthened by the time the book was published. 

But the IMF appeared impotent when the casino capitalism house of cards was collapsing last November.  It was The G20 that met urgently in Washington and secured a consensus on joint emergency actions ‘to restore global growth and achieve needed reforms in the world’s financial systems.’ 

The April 2nd G20 Summit in London has recorded  wide ranging  understandings on the spectrum of  economic and financial challenges menacing the world, including beefing up the IMF financially and operationally.

If we read the official hype in the G20 communiques we get the impression that not only can they save the world but they have. If we read the views of the commentariat we find serious challenges to these claims.

The Goldwatcher approaches the G20 initiatives as both  essential and generally positive - but by no means enough to assure that global financial  crises are resolved. Ian Campbell, the founder of the indispensable web resource Stock Research Portal.com will be publishing  a Newsletter series on gold, currencies and associated economic issues. He has invited me to write the first contribution, a two part article on:

1) Gold and the Casino Capitalism House of Cards; and

2) Whether the G20 and the IMF can save the world from global financial meltdown.

This is the link to the articles on the Stock Research Portal website. Part One and Part Two are now also posted on this website.

FRANK HOLMES, GOLDWATCHER CO AUTHOR, COMMENTS ON CNBC

 

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CNBC’S interview with Frank Holmes, Goldwatcher co-author yesterday: 

Following dramatic rises in the gold price yesterday - and even more dramatic falls  in equity and commodity markets world wide -  CNBC interviewed Goldwatcher co-author Frank Holmes,  one of the world’s most authoritative and respected voices on gold.  

The CNBC interview covers key issues investors must keep in mind and is supported by comments from CNBC analysts. Frank Holmes’s headline advice is straightforward  ’Don’t buy gold to get rich - buy gold for protection.’

 You can  Access the CNBC interview through this link.

The Goldwatcher and this blog contributed by co-author John Katz:

My content in the Goldwatcher is unbiased. I am an independent analyst and neither a gold bull or bear. In a nutshell my contributions point to when owning gold makes sense and when it doesn’t and when gold prices make sense and when they don’t. The Chapters I contribute address the questions investors interested in gold must ask,  starting with their motivation, timing and strategy for making and managing their investments.  

The most recent update on gold price prospects in this blog was posted on 22nd January

The Goldwatcher book and the blog address the issues of the day affecting demand for gold,  other currencies and other assets. They include subjects ranging from  the wars in Iraq and Afghanistan to our once rock solid British Banks now going bust.

The Goldwatcher Book Chapters follow this sequence

 Foreward by Dr. Marc Faber - starting with this comment:

‘Years from now, the events of late 2007 and early 2008 will be remembered as a classic case of the flawed thinking by Governments that choose to use monetary policy to try and sustain an unsustainable economic bubble, and how that action broadens and deepens the pain when the bubble inevitably busts.’

Part 1 : Written byJohn Katz  ‘The Goldwatcher’ in this blog -  e-mail address : john@thegoldwatcher.com

1:  Introduction : Why Gold?

2: The Gold Mining Industry : What price gives producers a worthwhile profit?

3: Gold Supply and Demand : Do Central Banks still need gold, and does gold still need Central Banks?

4: The Rise and Fall of the Gold Standard : Did Gold Cause the Great Depression?

5: The Dollar Standard and the ‘Deficit without Tears’ : Is the dollar again America’s currency and everyone else’s problem?

6: The Economic Consequences of 9/11 and George W. Bush : For how long will Asians go on lending for Americans to go on spending?

7: The End of Cheap Oil, Chindia and other Tipping Points to Instability 

 Will alternative energy come to the rescue?

(The causes and evolution  of the present economic crisis including the housing boom and bust, the CDO racket, Alan Greenspan’s misguided views on regulation  etc are all covered in the above Chapter)

8: Globalisation and Global Economic Rebalancing

Can the IMF avoid global financial meltdown?

9: Gold Prices : Inflation,Deflation, Booms and Busts

Do trees grow to heaven?

10: Investing Choices . What Gold?

Part Two : Written by Frank Holmes:

11: Inside US Global Investors

12: Investing in Gold Equities

13: Gold Mining Opportunities and Threats.

PART THREE : THE FACT BOOK APPENDIX - includes detailed analysis of global gold mining production, fabrication, scrap recovery and central bank holdings, sales and intended sales;  a Chart Book, Chronology and Webliography.

The Goldwatcher is available from Amazon and all leading booksellers

STEALTH SOCIALISM : ALISTAIR DARLING, LLOYDS & HBOS

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Alistair Darling

Stealth socialism:

Following a further shock loss of 11 billion pounds announced by the Lloyds TSB Group Britain’s star crossed Chancellor Alistair Darling was reported by the BBC today revealing his latest visionary discovery. The key to sorting out the Lloyds TSB - Halifax Bank of Scotland (HBOS) fiasco, Mr. Darling says,  is ’getting banks to identify their bad assets so they could be removed from the system.’  Yes Virginia. This  statement was made today by the same Chancellor who was associated last autumn with orchestrating, sponsoring and, according to some reports even forcing the merger of solvent Lloyds TSB Bank with the insolvent Halifax Bank of Scotland Group (HBOS).

When the deal was done HBOS was bust and facing liquidation. But,  if shareholders in solvent Lloyds TSB  could be persuaded to throw their capital in to support HBOS, the bothersome HBOS liquidation could be avoided.  Now, in the comment quoted above, Mr. Darling implicitly acknowledges he allowed Lloyds Bank to do the deal before he knew, with absolute certainty,  that HBOS had come clean and identified to the last penny their bad assets and removed them from the system.  And, adding insult to injury, he has since staked billions of pounds of taxpayer’s money in the merged bank, again without adequate due diligence to confirm that all bad assets are out of the books.

Plundering Lloyds TSB Shareholders.

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One year chart Lloyds TSB source Wall Street Journal

The BBC also report today  the blunt comments from  Conservative Front Bencher and former Chancellor Kenneth Clark on the Lloyds TSB - HBOS merger.  It was a disaster for Lloyds TSB shareholders that ’should never have been allowed to happen….  Lloyds TSB was a boring bank, it was a steady bank, it hadn’t done silly things.’  So, we can conclude, shareholders with their savings in Lloyds shares had also ‘not done silly things.’ Where does Mr. Darling go from here?

 Will he  call in the serious fraud office to investigate the circumstances that led to  Lloyds TSB shareholders being fleeced? Will he admit, as President Obama has following a misjudgement,  that ‘he screwed up?’ Perish the thought.

Britain at the cross road of credibility: Gold stays on the agenda

Britain’s political stability, effective legal system and traditions of fair play have, by and large, supported universal trust in her financial institutions. If this trust is lost  creditors will no longer  support  borrowings and investors won’t buy British shares.

Owning gold over  the last year protected investors from the sterling and London Stock Exchange crashes and returned a handsome profit.  Each of us have to decide for ourselves now whether prospects for  investors in British financial assets are better or worse than they were a year ago.  Present revelations tend to remove  doubts about the answer.

Gold remains on the agenda.

* Note added 15.02.09 :  Speaking at the G7 summit in Rome yesterday afternoon Chancellor Alistair Darling tried to quell speculation that the Lloyds Banking Group could be nationalised. He said banks are “best run in the commercial sector and privately owned.’

* Note added 16.02.09 : Accepting that the report read yesterday on nationalising the Llloyds TSB Group was not accurate the above blog has been modified.

Iran : 30 years after the return of Ayatollah Khomeini

 

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De ja vu  ……  again?

It will be 30 years tomorrow since  Ayatollah Khomeini returned to Iran to launch the Islamic Revolution.

A Goldwatcher posting on 27th March 2007  commented on Harvard historian Niall Ferguson’s view  that we may have been misguided taking the fall of the Berlin Wall in 1989 as the seminal economic event of recent times. He suggested  ‘With the benefit of hindsight, 1989 was not the decisive turning point of the late 20th century. That came ten years earlier in 1979 - the year of the Iranian Revolution.’ 

This was the gist of the Goldwatcher posting :  as investors, we ignore Iran and  Middle East crises and associated risks at our peril.  Khomeini went on to back the Islamist students who stormed the U.S. embassy in Tehran in November 1979, took its personnel hostage for 444 days and prompted Washington to sever ties with the Islamic republic. 

Iran’s nuclear ambitions:

Khomeini branded the United States the ‘Great Satan.’  Former President George W. Bush lumped Iran in the ‘axis of evil.”  Now President Barack Obama wants to extend a diplomatic hand to Tehran if it is ready to “unclench its fist”. But Ahmadinejad has no plans to unclench his fist. Instead he insists the United States must apologize for its ‘crimes’ against Iran and make  ’deep and fundamental changes’ before he gives any ground. Do you feel you have heard this all before?  Indeed you have.

Gold 30 years ago and again now:

Angst with Iran and a strong gold price went hand in hand in 1979. After the return of Ayatollah Khomeini in February gold  climbed from $225 to a high of $512 in December.

Calculations by Measuring Worth estimate the value of $225 in 1979 as $640 in 2007.  $512  in 1979 relates to $1400 in 2007. While Ahmadinejad  declaims ‘We are still at the beginning of the path…although the Islamic revolution happened in Iran it is not limited to Iranian borders, ‘ the strong case for owning gold as a safe haven in times of economic distress is further underpinned by global geopolitical instability.

GOLD WINS GOLD ON 2008 PERFORMANCE

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 Gold outperformed world stockmarket indices  in 2008.

Gold outperformed the UK stockmarket index by some 75% in 2008. The above chart courtesy Bullion Marketing Services illustrates the gold medal winning performance in 2008. 

Investors and commentators get fixated on the $1000 threshold as the litmus test for gold’s value. As the above chart illustrates it makes more sense to look at gold as an asset with a different risk reward profile to other financial assets.

Bullion marketing servicespoint out that in 2008,  in local currencies,  ’gold outperformed all equity markets by a wide margin and generated positive returns in all currencies but the Chinese Renminbi and the Japanese Yen. In Canada, gold outperformed the TSX by a total of 64%. Their January Bullion Buzz includes a link to a revealing Financial Sense interview     introduced with the following note :

Here is the author’s detailed summary of 2008: “Precious metals and energy prices rose strongly, and the price of gold exceeded $1,000 for the first time ever, in March 2008. Then the price of everything (except US Treasuries) plummeted to unbelievable lows. There was also some political stuff in 2008, and some credit problems, and a few job losses, and continuing criminal activity, and the four horsemen of the Apocalypse galloped around the globe. 2008 was just like every other year, but with higher peaks and lower valleys and amplified systemic noise.” As for gold, its value actually rose to new all-time highs on the final trading day of 2008. This may come as a surprise to some, but gold’s value is independent of the currency fluctuations of the US dollar or any other currency. To show value, underlying currency variations must be filtered out. Otis provides a chart generated by the MoreAu Index that uses such a process, and illustrates the true value of gold independent of currency exchange rates.

11 days to President Elect Obama’s inauguration:

The inauguration takes place soon.  Readers of the Goldwatcher will find extensive content that throws light on policy that will be outlined in the inaugural address. Pages 62 to 75 outline President Franklin D. Roosevelt’s inaugural address and later policy statements and subsequent Chapters spell out the macroeconomic  challenges Obama faces.

A  Goldwatcher posting will follow the inaugural address. 

DESTINATION INFLATION : HELICOPTER BEN’S FLIGHT PLAN

Martin Wolf tracks the course to inflation:

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Starting with a cartoon of Ben Bernanke piloting the money drop helicopter, similar to the cartoon you will see all over this blog, and commenting on the cut in the Fed’s target interest rate yesterday down to between 0% to 0.25%, the Financial Times’s authoritative Martin Wolf has this to say:

‘Central banks may soon resort to their most powerful weapons against deflation: the printing press and the “helicopter drop” of money. It is a time for which Ben Bernanke, chairman of the Federal Reserve, has long prepared. Will this weaponry work? Unquestionably, yes: used ruthlessly, it will eliminate deflation. But returning to normality thereafter will prove far more elusive….  .

A leaf out of Mr. Mugabe’s book: (see The Goldwatcher blog on The New Bretton Woodsand Dr. Marc Faber’s forward to The Goldwatcher.)

Martin Wolf’s comment continues: ‘As Robert Mugabe has shown, anybody can run a printing press successfully. Once the interest rate hits zero, the Fed can perform much further easing. Indeed, it can create money without limit…. Curing deflation is child’s play in a “fiat money” – a man-made money – system….Similar dangers now arise with the drastic measures that look ever more likely. This time, I suspect, the result will ultimately not be deflation but unexpectedly high inflation, though probably many years hence.

The Goldwatcher book and blog:

A reader interested in tracking the flight path of Helicopter Ben will find several references by searching for Bernanke on this blog. For a better understanding of the similarities between the conditions President elect Bernanke is facing and the conditions Franklin D. Roosevelt faced, and why the course embraces inflation, read The Goldwatcher:

Chapter 4 : The Rise and Fall of the Gold Standard : Did gold cause the Great Depression? 

Chapter 5: The Dollar Standard & the Deficit Without Tears : ‘Is the dollar again America’s currency and everyone else’s problem?’

Chapter 6: The Economic Consequences of 9/11 and George W. Bush : For how long will Asians go on lending for Americans to go on spending?

The Goldwatcher’s ideas on gold prices - and the dollar:

Chapter 9 : Gold Prices : Inflation, Deflation, Booms and Busts: Do Trees grow to Heaven?  And the Goldwatcher 15th December posting on Mattress Stuffers: The case for mattress stuffing never looked better -  particularly as the $ surge could be coming to an end.

Why gold will remain strong:

After the outcome of the proposed bail out of  Chrysler, General Motors and Ford - the CGF Group - the desperate automakers who CAN’T GET FINANCED - it will take a few days to draw the threads together for a year end Goldwatcher  conclusion. Indications are they may get some relief.  For now - back to Helicopter Ben’s epic flight:

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MATTRESS STUFFERS, SUCKERS, GENIUSES & ANOTHER PONZI SCAM

 

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Charles Ponzi

The New Mattress Stuffers:

An article in Friday’s Wall Street Journal comments that with the financial crisis sweeping across the nation ’one of the first micro-trend groups to emerge is the New Mattress Stuffers — people who have lost their trust in the financial world, and are preparing for the next meltdown.’ By Monday the stuffers with gold under the mattress looked smarter than many other investors. With the disclosure of Mr. Matoff’s $50 billion Ponzi Scheme another gaping breach in trust was revealed. And, with it, another good reason for investors to own gold as insurance against vulnerable financial assets.

Suckers, Geniuses and Comatose Regulators:

Suckers taken in by the 1920’s fraudster Charles Ponzi were greedy retail investors chasing unrealistically high returns.  But the investors taken in by Bernard Madoff  were greedy banks and institutions with managers,  disdainful of  basic due diligence.  chasing unealistically high retirns.  Making investments yielding over 10% at a time when blue chip  returns were negligible they must have been alert to high risk exposure.  How come  they committed  millions, tens of millions and in some cases billions to investments without abundant due diligence?

The answer appears to be that our genius million £/$ salary stars  were deficient in their performance. An article in today’s International Herald Tribune todayreveals investors failed  to ensure their  investments were safe. And they must have been blind. Madoff never accounted for investmnents with acceptable transparency.

What about the suckers? You,  me and everyone else supporting banks and other institutions.  And, of course, our comatose regulators asleep at the wheel again.

After the financial debacle experienced over the last few years what scope is there left for trust in a financial system still without adequate regulation?   This Bloomberg video includes commentary on the regulatory failure.

Why gold is so strong:

The case for mattress stuffing never looked better -  particualrly as the $ surge could be coming to an end.  Trust in financial institutions and regulators  is being breached without respite making the case for owning gold more and more compelling. It’s not surprising that,  priced in British pounds,  gold is now at or near an all time high.

#  Note added 16th December :

Descriptions of Madoff’s operation read like a cheat sheet out of Investment Fund Due Diligence for Dummies

# Note added 22nd December 2008: Barrons 2001 warning on Madoff

CONTRARIAN INVESTING, THE G20 AND THE DETROIT 3: IS THERE A LINK?

 Chevrolet Malibu Hybrid. For the scrap heap? 

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The G20 and the Detroit 3:

The Goldwatcher posting on the G20 get together last weekend  was held back while the Chief Executives of the Detroit 3 - GM, Ford and Chrysler - made their plea to Congress for ‘bridge’ financing. The G20 event was a blogger’s treat.  A wedding without the bride unaffeced by the Obasm that overcame the world.  But The Detroit 3’s crisis is another story.  Another consequence of the systemic financial and globalisation crises roiling financial markets. But in this case it’s nobody’s treat. The Detroit 3 are visibly close to ruin.  Decisions taken by Congress over the next few days or weeks will have dramatic effects on the US economy and the dollar currency.  Comment will follow the decisions when the issue returns to Congress on December 2nd.

Contrarian investors and Gold Mining Shares:

The Goldwatcher book and this blog follow the line that excessive money creation, whether through debt expansion, money printing,  or any other devious means will lead to  erosion of the purchasing power of fiat paper money currencies.  Milton Friedman famously observed inflation is always a monetary phenomena.  Prospects for the dollar in a context absolutely relevant to current developments are addressed in The Goldwatcher Chapter 5.

Contrarian investors have the best track record with gold. Many among them currently see opportunities with shares in gold mining companies. Gold has performed well compared to other financial assets. Particualrly  well in currencies like the British £ that have fallen in relation to the dollar. Gold coins and other items of physical gold  are in short supply and are selling at premiums to the gold price. But the prices of all gold mining shares have been trashed. This, as we all all know, follows forced redemptions by fund managers, margin calls and other adverse factors forcing equity prices down. 

We also know that at times like this the baby often gets thrown out with the bathwater. Gold mining shares on the cheap aren’t  the sort of opportunity that will excite a day trader. Contrarian investors take a more fundamental approach and have longer investing horizons.

In an article today on a visit to the Agnico Eagle Mine Mineweb include a useful table on prices and recent price movements of Gold Mining Shares

OBAMA FOLLOWS IN THE FOOTSTEPS OF ROOSEVELT

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# Note added December 1st 2008: Video of announcement of cabinet appointments:

 In the footsteps of  Franklin D. Roosevelt (The Goldwatcher pages 62/66)

President elect Barack Obama’s victory speech: 

Chicago, Illinois Tuesday,  4th November, 2008 (4/11)

If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.
It’s the answer told by lines that stretched around schools and churches in numbers this nation has never seen; by people who waited three hours and four hours, many for the very first time in their lives, because they believed that this time must be different; that their voice could be that difference.
It’s the answer spoken by young and old, rich and poor, Democrat and Republican, black, white, Latino, Asian, Native American, gay, straight, disabled and not disabled - Americans who sent a message to the world that we have never been a collection of Red States and Blue States: we are, and always will be, the United States of America.
It’s the answer that led those who have been told for so long by so many to be cynical, and fearful, and doubtful of what we can achieve to put their hands on the arc of history and bend it once more toward the hope of a better day.
It’s been a long time coming, but tonight, because of what we did on this day, in this election, at this defining moment, change has come to America.
I just received a very gracious call from Senator McCain. He fought long and hard in this campaign, and he’s fought even longer and harder for the country he loves. He has endured sacrifices for America that most of us cannot begin to imagine, and we are better off for the service rendered by this brave and selfless leader. I congratulate him and Governor Palin for all they have achieved, and I look forward to working with them to renew this nation’s promise in the months ahead.
I want to thank my partner in this journey, a man who campaigned from his heart and spoke for the men and women he grew up with on the streets of Scranton and rode with on that train home to Delaware, the Vice President-elect of the United States, Joe Biden.
I would not be standing here tonight without the unyielding support of my best friend for the last sixteen years, the rock of our family and the love of my life, our nation’s next First Lady, Michelle Obama. Sasha and Malia, I love you both so much, and you have earned the new puppy that’s coming with us to the White House. And while she’s no longer with us, I know my grandmother is watching, along with the family that made me who I am. I miss them tonight, and know that my debt to them is beyond measure.
To my campaign manager David Plouffe, my chief strategist David Axelrod, and the best campaign team ever assembled in the history of politics - you made this happen, and I am forever grateful for what you’ve sacrificed to get it done.
But above all, I will never forget who this victory truly belongs to - it belongs to you.
I was never the likeliest candidate for this office. We didn’t start with much money or many endorsements. Our campaign was not hatched in the halls of Washington - it began in the backyards of Des Moines and the living rooms of Concord and the front porches of Charleston.
It was built by working men and women who dug into what little savings they had to give five dollars and ten dollars and twenty dollars to this cause. It grew strength from the young people who rejected the myth of their generation’s apathy; who left their homes and their families for jobs that offered little pay and less sleep; from the not-so-young people who braved the bitter cold and scorching heat to knock on the doors of perfect strangers; from the millions of Americans who volunteered, and organized, and proved that more than two centuries later, a government of the people, by the people and for the people has not perished from this Earth. This is your victory.
I know you didn’t do this just to win an election and I know you didn’t do it for me. You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime - two wars, a planet in peril, the worst financial crisis in a century. Even as we stand here tonight, we know there are brave Americans waking up in the deserts of Iraq and the mountains of Afghanistan to risk their lives for us. There are mothers and fathers who will lie awake after their children fall asleep and wonder how they’ll make the mortgage, or pay their doctor’s bills, or save enough for college. There is new energy to harness and new jobs to be created; new schools to build and threats to meet and alliances to repair.
The road ahead will be long. Our climb will be steep. We may not get there in one year or even one term, but America - I have never been more hopeful than I am tonight that we will get there. I promise you - we as a people will get there.
There will be setbacks and false starts. There are many who won’t agree with every decision or policy I make as President, and we know that government can’t solve every problem. But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And above all, I will ask you join in the work of remaking this nation the only way it’s been done in America for two-hundred and twenty-one years - block by block, brick by brick, calloused hand by calloused hand.
What began twenty-one months ago in the depths of winter must not end on this autumn night. This victory alone is not the change we seek - it is only the chance for us to make that change. And that cannot happen if we go back to the way things were. It cannot happen without you.
So let us summon a new spirit of patriotism; of service and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other. Let us remember that if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers - in this country, we rise or fall as one nation; as one people. 
Let us resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long. Let us remember that it was a man from this state who first carried the banner of the Republican Party to the White House - a party founded on the values of self-reliance, individual liberty, and national unity. Those are values we all share, and while the Democratic Party has won a great victory tonight, we do so with a measure of humility and determination to heal the divides that have held back our progress. As Lincoln said to a nation far more divided than ours, “We are not enemies, but friends…though passion may have strained it must not break our bonds of affection.” And to those Americans whose support I have yet to earn - I may not have won your vote, but I hear your voices, I need your help, and I will be your President too.
And to all those watching tonight from beyond our shores, from parliaments and palaces to those who are huddled around radios in the forgotten corners of our world - our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand. To those who would tear this world down - we will defeat you. To those who seek peace and security - we support you. And to all those who have wondered if America’s beacon still burns as bright - tonight we proved once more that the true strength of our nation comes not from our the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity, and unyielding hope.
For that is the true genius of America - that America can change. Our union can be perfected. And what we have already achieved gives us hope for what we can and must achieve tomorrow.
This election had many firsts and many stories that will be told for generations. But one that’s on my mind tonight is about a woman who cast her ballot in Atlanta. She’s a lot like the millions of others who stood in line to make their voice heard in this election except for one thing - Ann Nixon Cooper is 106 years old.
She was born just a generation past slavery; a time when there were no cars on the road or planes in the sky; when someone like her couldn’t vote for two reasons - because she was a woman and because of the color of her skin.
And tonight, I think about all that she’s seen throughout her century in America - the heartache and the hope; the struggle and the progress; the times we were told that we can’t, and the people who pressed on with that American creed: Yes we can.
At a time when women’s voices were silenced and their hopes dismissed, she lived to see them stand up and speak out and reach for the ballot. Yes we can.
When there was despair in the dust bowl and depression across the land, she saw a nation conquer fear itself with a New Deal, new jobs and a new sense of common purpose. Yes we can.
When the bombs fell on our harbor and tyranny threatened the world, she was there to witness a generation rise to greatness and a democracy was saved. Yes we can.
She was there for the buses in Montgomery, the hoses in Birmingham, a bridge in Selma, and a preacher from Atlanta who told a people that “We Shall Overcome.” Yes we can.
A man touched down on the moon, a wall came down in Berlin, a world was connected by our own science and imagination. And this year, in this election, she touched her finger to a screen, and cast her vote, because after 106 years in America, through the best of times and the darkest of hours, she knows how America can change. Yes we can.
America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves - if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?
This is our chance to answer that call. This is our moment. This is our time - to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American Dream and reaffirm that fundamental truth - that out of many, we are one; that while we breathe, we hope, and where we are met with cynicism, and doubt, and those who tell us that we can’t, we will respond with that timeless creed that sums up the spirit of a people:
Yes We Can. Thank you, God bless you, and may God Bless the United States of America. 

 Video link to speech

# Audio & Text of President Franklin D. Roosevelt’s Inaugural Address 4th March 1933

# Added 15.11.08:  Time Magazine November 24th cover with above ‘picture’ of Obama wearing FDR’s hat, glasses and even his cigarette holder behind the wheel of a 1930s Ford V8 :