Political Metals

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It scares me!

Gold punched through $1,900 today. If the current financial system can withstand the stress and remained intact till the day gold trades at $20,000 an ounce, what will life be like then?

If we’re holding gold at that time, we may be doing fine but we are not likely to be 10 times richer. That’s because nothing much has happened to our gold. Rather, paper currencies would have lost so much purchasing power that it would take 10 times more of the same to buy what we could buy today. A Big Mac will most likely cost around $43 in the US. In Malaysia, NZ and Britain, it’ll like be  around RM76, NZ$54 and £25 respectively (estimates based on Big Mac Index). When a basic meal costs that much, life can be very tough for savers who continued holding on to their paper currencies or other paper assets.

Many of my friends and relatives, from retired professionals to missionaries have been ill advised to rely on supposedly safe or high yielding investments like mutual funds, government managed pension schemes, term deposits or hot stocks to generate passive income or preserve the value of their retirement funds. Despite being presented with information from this website and elsewhere, there’s little affinity shown towards gold or silver. This scares me and for their sake, I hope gold does not get anywhere close to $20,000 before they get on board.

What’s even scarier is the fact that an enormously huge segment of society do not have the means to get on board, even if they wanted to. We’re looking at the 1.4 billion people living on less than NZ$2.25 a day. That’s less than 0.05 ounces of silver! They worry not about the Fed nor the Cartel but about how to provide food, clothing, housing and healthcare with that amount each day. It’s about survival, not savings. Pause for a moment to imagine their plight when gold hits $20,000.  Spare them a thought today, and check out their appeal for assistance.

Why $20,000 gold?

In this recently released documentary, Mike Maloney presents the case for $20,000 gold by stepping back and looking at the big picture. He takes us back, very far back, and paints us a very big picture. This excellent educational video is a must watch, especially if you’re new to the Political Metals space. It’ll be your 90 minutes well spent.

But if you can’t spare the time, I’ve highlighted some of his key points with some new charts below for a quick read.

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Dow/Gold Ratio Chart: Where are we in the Wealth Cycle? 

Using the Dow Jones Industrial Average (Dow) as a measure of performance of the equities market in general, the ratio of the Dow to the price of gold indicates the performance of equities market relative to gold. Currently each point of the Dow is worth about 6oz of gold. During the process of correction after the biggest stock market bubble in history, the ratio is expected to head towards the historical mean (4oz) and overshoot it before finding its fair value again.

The bigger the bubble (deviation from mean), the larger the overshoot. During the present cycle, Mike expects the overshoot to touch 0.5:1 (1 oz of gold worth 2 points of Dow). In its extreme, the Dow would have to collapse from 11,000 to 950 if the price of gold remains at current level of $1,900. Conversely, gold will increase to $22,000 if the Dow remains at current levels.

Relative performance of Dow Vs Gold & Silver since Jan 2000
(Worst reference point, at peak of stock market bubble)

Relative performance of Dow Vs Gold & Silver since March 2009
(Best reference point, at the start of QE1)

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Currency Supply Chart: Where are we in the Inflation/Deflation Cycle?

For simplicity, “money” & “currency” are used interchangeably here. Watch the video to see the difference.

Monetary inflation is the increase in money supply resulting in price inflation (rising prices of goods & services), with a time lag between the former and the latter. The reverse applies to monetary deflation and price deflation. Studying the trend in money supply or the total amount of currency in circulation (CinC) over a period of time gives us an idea of where we are and where we’re heading in terms of inflation and deflation.

Money is created in two stages. The initial Base Money is created by the Fed (or other central banks). More new money is then created (up to 9 times the initial Base Money) within the private banking system through credit. It is loaned into existence. Watch the video to learn more about the money creation process.

The chart above  represents the amount of CinC that’s exclusively created by the private banking system. The highlighted area indicates that this component of the overall money supply has dropped by $1.7T since the 2008 crisis. This is the Debt Collapse or Credit Contraction. Less lending by banks results in less money chasing goods and services, leading to price & asset deflation. It is evident from the chart that a contraction of this magnitude has never happened since 1960. The last time it happened was just before the Great Depression of the 1930s.

In response to this credit contraction, and in an attempt to prevent another Great Depression, the Fed has been rapidly increasing the Base Money supply by creating new money. The recent rate of increase is unprecedented. The first trillion dollars was created over a period of about 90 years. The next $1.4T came into existence over the last 2 years!

This rapid increase in Base Money (red chart) was an attempt to offset the decrease in the credit money (blue chart). When we add these two components of money supply together, we obtain the total CinC (Base Money plus Credit Money) as shown in the chart below.

Notice the contraction at the top of the chart, albeit a smaller one. It is evident that despite the frantic pace of money printing by the Fed, it has not succeeded in offsetting the reduction in money supply due to credit contraction.

The Fed has little choice but to continue creating money.  With such a large perturbation in total currency supply and due to the complexity and size of the monetary system, it is not possible for the Fed or anyone else to create just sufficient money at just the right rate such that the total CinC won’t overshoot its long term trend. The principle that the larger the deviation from the mean, the larger will be the overshoot during the correction applies here as in the stock market above. The fact that there’s an undetermined time lag, between monetary inflation and price inflation further adds to the likelihood that the next round of money printing will result in a massive overshoot. Coupled with other factors, hyperinflation could be just round the corner.

In his book, Rich Dad’s Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future, and again in his presentation, Mike predicted the following sequence of events:-

1. Threat of deflation - At the onset of the 2008 crisis (Past)
2. Money printing - TARP, QE1, QE2 (Past & more to come)
3. Big inflation - Here and now (anyone disagree?)
4. Real deflation - Asset deflation in real estate & stock market (The severe but short deflation  is ahead)
5. Hyperinflation - Just round the corner?

How does gold perform under inflation and deflation environment? Check out the study by Oxford Economics: “Impact of inflation and deflation on the case for gold”.

Related Resources:

• Fractional Reserve Banking - Two short video clips on money creation
• Crash Course on Banking, Finance & Economy. By Chris Martenson
• Central Banking and the Federal Reserve System (Fed)

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This enlightening discussion between James Turk (GoldMoney) and John Embry (Sprott Asset Management) touches on various significant developments in the gold market in recent past. They talked about the S&P downgrade, QE to infinity, hyperinflation, Jim Sinclair’s $1764 inflection point and looking at the value of gold rather than its price.

They concluded that by looking at the past & present central banks’ role and dynamics of Asian demand, physical gold is now taking the lead in price discovery instead of paper gold.

The Gold cartel is losing control and the era of the tail wagging the dog may soon be over!

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Updated Monday, Aug 8. Go directly to updates
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After the markets closed Friday, S&P downgraded US credit rating from AAA to AA+ with a negative watch.  Although there have been warnings as far back as April, this is significant because it is the first time the US actually lost its sterling AAA rating since it was granted in 1917. S&P’s full report in pdf. Dagong, the Chinese Credit Rating Company lowered the United States to A+ last November after the U.S. Federal Reserve decided to continue loosening its monetary policy and announced a further downgrade to A earlier in the week.

With this historic downgrade the US credit rating is at par with New Zealand and the bonds of Germany, France, Canada and the UK now have a higher rating.

Initial reactions to the downgrade

Buffet, whose Berkshire Hathaway was downgraded from AAA to AA+ by S&P in February, told FBN late Friday that the downgrade of the United States’ triple-A credit rating “doesn’t make sense.” He further went on to say

If nothing else takes place, meaning, if all other variables hold and there isn’t say, a new problem in Europe, it won’t make any difference. “Think about it. The U.S., to my knowledge owes no money in currency other than the U.S. dollar, which it can print at will. Now if you’re talking about inflation, that’s a different question.”

Peter Schiff, on the other hand, thinks that the downgrade was not low enough! Claiming that he has a higher credibility than S&P for giving the sub prime mortgage related bonds junk status way back in 2006 while S&P continued rating them at triple A, he thinks this downgrade is going to accelerate the flight from the US$ and kick off a self-perpectuating loop of Downgrades > Higher Interest Rates > Weaker Economy > Increased Deficit > More Downgrades.

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Some seem to think that Wall Street insiders knew of the impending downgrade and have already started to sell down stocks the whole of last week. While the global stock markets lost about 10% last week in the midst of worsening Euro zone crisis, the US$ did not experience the “flight to safety” effect as it did in 2008, despite the fact that Switzerland and Japan intervened aggressively in the market to prop up the dollar. On the other hand, gold hit another weekly all time high despite a slightly stronger dollar.

Gold bugs and holders of hard currencies are eagerly looking forward to an exciting week to see how the big boys move their paper assets around. Would they be chasing perceived relatively stronger fiat currencies like the Euro or still-standing triple A paper assets or would there be a frantic flight to gold (& silver).

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Any clue from BullionVault’s Round-the-Clock trading physical gold platform?

While all markets are closed for the weekend, BullionVault’s 24×7 physical gold & silver trading platform may give a clue of what’s ahead Sunday night when Asian markets open Monday morning.

Clients at BullionVault are able to trade physical gold & silver with each other (with BullionVault as a dealer) or directly with BullionVault as principal. A recent check online shows that offers have dried up for gold at their New York and London vaults.

Normally, even during weekends, there are active bids and offers at reasonable market depths. See typical screenshots here. At time of writing, there’s only 3.236kg (104oz) on offer at the London vault while the New York vault has only ONE oz (0.031kg) on offer at whopping $1804/oz ($58,000/kg). The markets at Zurich vault looks more normal, albeit at a much higher spread of 0.93%.

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Finally, Dan Norcini has this to say about in his KWN interview on Aug 6, 2011. Read the interview here.

“I would expect the immediate reaction to the news in Asian trade Sunday evening will be to see the US Treasury markets open lower in a knee jerk reaction with gold opening higher from the get go. Whether or not the bond markets recover is unclear at this time since some of this might have been reflected in the move lower in the bonds just before the close of Friday trading late in the afternoon yesterday.

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Updated 8 Aug (Monday Morning in Asia)

Gold up $25, Dow futures down 276 points when market opens in Asia. Buffet is wrong, Schiff is right!

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By noon, Asian market.

Back to Top

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It’s a given. The debt ceiling will be raised - again. It has been raised 68 times since 1960. Why should this time be different? Maybe what’s different is the intensity of the theatrics.

As Chris Duane puts it, ”All that is going on right now is political posturing for the election. Nothing of any real importance is being fought for. It is a carefully choreographed fight not unlike professional wrestling. The balanced budget amendment will never happen.”

So, while all this “white stuff” is being passed down from the very top to the bottom, we the people at the bottom of the financial food chain should take note of several key points raised by the Paul² team in their recent interview with Neil Cavuto - and prepare ourselves.

Cutting the Rate of Increase in Spending is not the same as cutting spending

It’s not a budgetary problem per se, it’s a government philosophy problem.

What they don’t realise and don’t admit is that the country is bankrupt.. there will be a default. The default is occurring. The people are getting less for their money and that’s how big governments and big countries default. 

All this debt has to be liquidated for us to get growth again. They don’t want to liquidate debt by declaring bankruptcy… You liquidate debt by paying it off by junk money. You just print the money. And you have run away inflation. That’s an indirect tax on the people. By next summer there’ll be big talk on price inflation.

Monetary reform has to come for the resolution of this crisis we’re facing.

and cryptically “He wouldn’t pay his rent in silver”

[I don't live in the US. You may not too. So why bother? This will be a non-issue for many of us if not for the fact that the US$ is the world's reserve currency, the US is the largest debtor in humanity's history, the largest US banks are holding hundreds of trillions in derivatives and when the US$ goes down, it pulls the rest of us down, like it or not]

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In the very short term, especially immediately after announcement of any debt ceiling deal, and bearing in mind that there are no markets anymore - just interventions, it’ll be prudent to exercise some caution. In his latest Got Gold Report, Gene Arensberg finds market signals turning against gold.

In the mid to long term, if the Bullish Gold Case #2 plays out, consider converting your savings into hard currencies like gold & silver as part of the preparations for what’s to come.

Here’s a great summary of some recent positive outlook on gold by Jeff Clark

SICA Wealth Management’s Jeffrey Sica: “Right now, I think gold looks better than ever.” He sees a “painfully high probability” of troubling events occurring in the months ahead. “There has been a general loss of confidence in the ability of central banks and governments to manage the economy. That will continue to give gold and other precious metals a boost.”

Empire Economics chief economist Clifford Bennett expects gold to come close to $2,000 an ounce this year and $2,200 an ounce within 18 months. “There is risk in the second half of the year of a bit of a ‘panic spike,’ if you like, as everyone thinks there isn’t enough to go around and starts to hoard. That’s when you’ll really see gold take off towards $2,000 an ounce.”

Franco-Nevada Chairman Pierre Lassonde said the coming mania in gold will make the 1970s run look like child’s play. “In 1980, the only players, or the dominant players, were the Americans. Today the dominant players are China and India; 58% of all the gold sold this year will be sold in these two countries. When we reach that mania phase… watch out, because it will truly make your head spin.”

Antaike analyst Shi Heqing had this to say about Chinese investors: “Record high prices won’t scare away investors… they are likely to chase the rally and continue to buy gold because paper money feels increasingly worthless and they are worried about inflation.” Shi expects China’s gold demand to rise about 20%, due in no small part to the country’s 6.4% inflation rate.

Reuters: ”The case for gold in the longer term is still very strong,” said a Singapore-based trader. “Gold may appeal to new classes of investors who previously avoided the market in favor of more mainstream investments like bank deposits, bonds, and equities. Potentially there’s a whole new market for small-sized gold bars if these investors lose faith in paper.”

Newedge USA predicted gold will hit $1,800 and silver $70 by year-end due to investors seeking a haven asset and physical demand from Asia. “Gold is an excellent hedge in troubled times” said Mike Frawley. “Demand will be very strong long-term from Asia, and the economic trend in the West is improving.”

FX Concepts founder John Taylor: “Gold will climb to $1,900 by October.”

SMC Global: “Evidence of sluggish U.S. growth has shaken investor confidence. Concerns about rising inflation here have also boosted appetite for gold ETFs. Demand is high from small players.”

Minerals and Metals Trading Corp’s Ved Kumar Prakash reported “skyrocketing” demand for gold in India. He predicted that given the company’s brisk sales, gold imports would jump by more than 40% this fiscal year.

The Swiss Parliament is expected later this year to discuss the creation of a gold franc. “I want Swiss people to have the freedom to choose a completely different currency,” said Thomas Jacob, the man behind the gold franc concept. “Today’s monetary system is all backed by debt - all backed by nothing - and I want people to realize this.”

The Utah Legal Tender Act was signed into law by Governor Herbert last month. “Good monetary policy is an important part of a healthy and prosperous economy,” said Senator Mike Lee. He and other Republicans also introduced legislation to eliminate federal capital gains taxes on gold and silver coins. “Since the Federal Reserve Act of 1913, the dollar has lost approximately 98% of its value. This bill is an important step towards a stable and sound currency whose value is protected from the Fed’s printing press.”An “Iranian gold rush” is under way, according to an article by Reuters. “Usually as the price of an item increases, demand will decrease - but in the case of gold, it seems that higher prices are creating more demand,” said an unnamed Tehran gold retailer. “The reasons that people are drawn to these safe assets - gold coins and hard currency - are firstly a limited choice of investment opportunities, and secondly a fear from the weakness of the national currency,” said an economist who asked not to be named.

CIBC World Markets’ Peter Buchanan remains bullish even if the debt ceiling talks resolve. “Even in the likely event Congress agrees to a debt ceiling rise, recent uncertainties are likely to reinforce central banks’ ongoing efforts to diversify from the dollar into gold and other assets.”

Citigroup Global Markets reported that silver may more than double to $100 an ounce if the current bull market follows similar patterns seen between 1971 and 1980. “If the final rally in the last bull market repeated, then we can expect $100 over the long term… While the high so far this year was at the same level as the peak in January 1980, we are not convinced that the long-term trend is over yet.”

Gold Forecaster analyst Julian Phillips: “This is not typical of a ‘bull’ market that will eventually fall back from whence it came. We believe gold is not in a ‘bull’ market, because it is changing its shape and nature permanently. Our reasoning is not academic posturing, but a reflection of the realities that have taken place over time and those that confront us now. Because it is perceived to be an alternative wealth-preserving asset, a counter to a failing monetary system, it is not a simple commodity moving up and down with the flows and ebbs of economic cycles; it is a valid measure of monetary values.”

American Precious Metals Advisors Managing Director Jeffrey Nichols: “A recent survey of 80 central bank reserve managers predicted that the most significant change in their official reserve holdings in the next 10 years will be their intentional build up in gold reserves. They also predicted that gold will be their best performing asset class over the next year, and sovereign debt defaults will be their principal risk.”

Gloom Boom and Doom editor Marc Faber: “I just calculated that if we take an average gold price of say around $350 in the 1980s and compare that to the average monetary base and the average U.S. government debt in the 1980s…and then if I compare this to the price of gold to today’s government debts and monetary base, gold hasn’t gone up at all. It’s actually gone against these monetary aggregates, and against debt it’s actually gone down. So I could make the case that gold is today probably very inexpensive.”

GoldMoney founder James Turk: “In reality there are very few participants currently in the gold market… when I look at the price action, it suggests to me that a lot of this big money on the sidelines wants to be in. Therefore we are seeing some aggressive bidding on any pullbacks.”

Reuters Money reports that eBay’s “gold and silver outpost” has seen gold bullion sales jump more than 60% from 2007 through 2010. More significantly, “almost half of the silver and gold buyers in the first quarter of 2011 never purchased these items on eBay before.”

Sprott Asset Management chief investment strategist John Embry: “I think it will be really exciting when silver clears $50, because then it will be in absolutely new ground. There is, without question, major physical shortages of physical silver, and demand is robust. Once silver gets rolling, it’s going to levels people cannot imagine.”

It’s hard to go one day without seeing comments like these. The chorus is growing, and as these bullish views spread further and further into the mainstream, the number of investors attracted to precious metals will swell and continue to drive prices higher.

Is this growing consensus the sign of a top? As I said about gold stocks, taking the contrarian view in response to this information would be the wrong move. Fiscal and monetary issues are getting worse, not better, and I think we’re simply seeing more investors recognize the inevitable. We’ll worry about exiting this sector when real interest rates are positive and the dollar is once again a revered currency. Until then, it’s hard to imagine a scenario that isn’t bullish for gold. Any pullback should thus be viewed as a sale price.

Is the impetus for a mania building? I don’t know if we’re on the doorstep of that phase or not, but the fundamental reasons to hold gold are as strong as they’ve ever been. Indeed, it’s getting more critical to have meaningful exposure to precious metals. Keep in mind that when the debt ceiling talks reach a resolution - whatever it may be - the fundamental problems of excessive debt and further deficits will still be unresolved.

Will gold correct if agreements are reached on the debt talks? Probably, but I think the more appropriate question to ask is this: If these analysts are correct, do I own enough ounces?

Just before I hit the “Publish” button, gold takes a hit.

When I first looked into the HKMEx I was mainly looking to see if silver manipulators JP Morgan, Goldman or HSBC were involved. The good news, I did not see that they had any controlling or operational influence in the HKMEx. The worst thing I guess I found out of the list of board members was President Albert Helmig was a former VP of the NYMEX. The amount of information on the rest of the board is limited most likely because they are Chinese and English Google is limited. I then looked a little further to see who was paying the board.

Republished with permission of Chris Duane.

By Silver Shield, on July 26th, 2011

I have been watching the emergence of the Hong Kong Mercantile Exchange with great interest. I recognize the importance of China establishing this new market that now not only trades Gold and Silver, but eventually Food and Oil. The ability to trade these commodities in both Dollars and Renminbi is a huge step in creating a regional, if not global, reserve currency. The historical significance of this new exchange in the sea change in wealth and power from the Anglo American empire to Asia, is completely missing in today’s media.

By Ron Paul, op-ed first posted in Bloomberg

Default Now, Or Suffer A More Expensive Crisis Later

Debate over the debt ceiling has reached a fever pitch in recent weeks, with each side trying to outdo the other in a game of political chicken. If you believe some of the things that are being written, the world will come to an end if the U.S. defaults on even the tiniest portion of its debt.

In strict terms, the default being discussed will occur if the U.S. fails to meet its debt obligations, through failure to pay either interest or principal due a bondholder. Proponents of raising the debt ceiling claim that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). My expectations of such a scenario are more sanguine.

The U.S. government defaulted at least three times on its obligations during the 20th century.

- In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent.

- From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too.

- From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government.

Unlimited Spending

No longer constrained by any sort of commodity backing, the federal government was now free to engage in almost unlimited fiscal profligacy, the only check on its spending being the market’s appetite for Treasury debt. Despite the defaults in 1934, 1968 and 1971, world markets have been only too willing to purchase Treasury debt and thereby fund the government’s deficit spending. If these major defaults didn’t result in decreased investor appetite for U.S. obligations, I see no reason why defaulting on a small amount of debt this August would cause any major changes.

The national debt now stands at just over $14 trillion, while net total liabilities are estimated at over $200 trillion. The government is insolvent, as there is no way that this massive sum of liabilities can ever be paid off. Successive Congresses and administrations have shown absolutely no restraint when it comes to the budget process, and the idea that either of the two parties is serious about getting our fiscal house in order is laughable.

Boom and Bust

The Austrian School’s theory of the business cycle describes how loose central bank monetary policy causes booms and busts: It drives down interest rates below the market rate, lowering the cost of borrowing; encourages malinvestment; and causes economic miscalculation as resources are diverted from the highest value use as reflected in true consumer preferences. Loose monetary policy caused the dot-com bubble and the housing bubble, and now is causing the government debt bubble.

For far too long, the Federal Reserve’s monetary policy and quantitative easing have kept interest rates artificially low, enabling the government to drastically increase its spending by funding its profligacy through new debt whose service costs were lower than they otherwise would have been.

Neither Republicans nor Democrats sought to end this gravy train, with one party prioritizing war spending and the other prioritizing welfare spending, and with both supporting both types of spending. But now, with the end of the second round of quantitative easing, the federal funds rate at the zero bound, and the debt limit maxed out, Congress finds itself in a real quandary.

Hard Decisions

It isn’t too late to return to fiscal sanity. We could start by canceling out the debt held by the Federal Reserve, which would clear $1.6 trillion under the debt ceiling. Or we could cut trillions of dollars in spending by bringing our troops home from overseas, making gradual reforms to Social Security and Medicare, and bringing the federal government back within the limits envisioned by the Constitution. Yet no one is willing to step up to the plate and make the hard decisions that are necessary. Everyone wants to kick the can down the road and believe that deficit spending can continue unabated.

Unless major changes are made today, the U.S. will default on its debt sooner or later, and it is certainly preferable that it be sooner rather than later.

If the government defaults on its debt now, the consequences undoubtedly will be painful in the short term. The loss of its AAA rating will raise the cost of issuing new debt, but this is not altogether a bad thing. Higher borrowing costs will ensure that the government cannot continue the same old spending policies. Budgets will have to be brought into balance (as the cost of servicing debt will be so expensive as to preclude future debt financing of government operations), so hopefully, in the long term, the government will return to sound financial footing.

Raising the Ceiling

The alternative to defaulting now is to keep increasing the debt ceiling, keep spending like a drunken sailor, and hope that the default comes after we die. A future default won’t take the form of a missed payment, but rather will come through hyperinflation. The already incestuous relationship between the Federal Reserve and the Treasury will grow even closer as the Fed begins to purchase debt directly from the Treasury and monetizes debt on a scale that makes QE2 look like a drop in the bucket. Imagine the societal breakdown of Weimar Germany, but in a country five times as large. That is what we face if we do not come to terms with our debt problem immediately.

Default will be painful, but it is all but inevitable for a country as heavily indebted as the U.S. Just as pumping money into the system to combat a recession only ensures an unsustainable economic boom and a future recession worse than the first, so too does continuously raising the debt ceiling only forestall the day of reckoning and ensure that, when it comes, it will be cataclysmic.

We have a choice: default now and take our medicine, or put it off as long as possible, when the effects will be much worse.

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Ron Paul is a Republican representative from Texas and a candidate for the 2012 Republican presidential nomination. The opinions expressed are his own.