With the Federal Reserve printing trillions upon trillions of dollars to
keep the economic system afloat, many investors and financial pundits have
surmised that the fundamental economic problems facing the United States
during the crash of 2008 have been resolved. Stocks are, after all, at
historic highs.
But the insiders know different. And if there’s any single person out
there who understands U.S. monetary policy and its long-term effects on
domestic and global affairs it’s former Federal Reserve chairman Alan
Greenspan. As the head of the world’s most powerful central bank for nearly
two decades he’s privy to the insider conversations and government
machinations that have brought us to where we are today.
Greenspan recently joined veteran resource analyst Brien
Lundin at the New Orleans Investment Conference to share some
of his thoughts. According to Lundin, the former Fed chairman made it clear
that the central bank is facing a serious problem and one that will have
significant ramifications in the future.
We asked him where he thought the gold price will be in five years and he
said “measurably higher.”
In private conversation I asked him about the outstanding debts… and that
the debt load in the U.S. had gotten so great that there has to be some
monetary depreciation. Specially he said that the era of quantitative
easing and zero-interest rate policies by the Fed… we really cannot exit this
without some significant market event… By that I interpret it being either a
stock market crash or a prolonged recession, which would then engender
another round of monetary reflation by the Fed.
He thinks something big is going to happen that we can’t get out
of this era of money printing without some repercussions – and pretty severe
ones – that gold will benefit from.
Watch the full interview:
(Watch at Future Money Trends)
If we are in fact staring a major market event in the face as Alan
Greenspan proposes then wealth preservation should be a key tenet of any
preparedness strategy going forward. Greenspan himself, somewhat ironically,
was a gold bug and proponent of sound money prior to his appointment as
the chairman of the Fed. And though he didn’t discuss it much during his
tenure, he is now actively saying that we can expect to see gold markedly
higher within the next five years.
His assessment is likely based on concerns over the U.S. dollar which
will, as Lundin notes, more than likely suffer a currency devaluation at some
point in the future.
The end has to come at some point… If you look at a chart of the U.S.
dollar index it has gone nearly parabolic in the last few months… In any
market that is so one sided, that is accelerating so rapidly, that trend will
end… it will most likely end in a fairly violent fashion.
And if gold rises as a result, so too will other resource assets in the
energy and mining sectors. What it boils down to is that the assets that
are necessary to keep our system operating will always have value, and
that is especially true in a situation where the U.S. dollar happens to be
crashing. Uranium , for example, powers one in five American homes, which
means that it will always be a necessary resource, regardless of what the
dollar does or doesn’t do. Lundin’s assessment is echoed by Uranium Energy Corp CEO
Amir Adnani, who recently said we may well see a “resurgence” in the
price of this and natural resources like gold.
The same can be said for oil and agriculture resources.
They will always have value, regardless of whether the dollar is strong or
violently collapses under its own weight.
Thus, when we consider ways to preserve wealth and insulate ourselves from
the coming destruction of our currency one must consider holding
physical assets. For some that means stockpiling food and other supplies in
anticipation of Greenspan’s market event that could adversely affect credit
flows and delivery of essential goods. For others who may currently hold
stocks, U.S. Treasurys, or cash, diversifying your portfolio with well
managed resource-based companies will not only preserve wealth during
currency volatility, but build it as the value of real, physical assets
rises.
The man who is essentially the architect responsible for domestic monetary
policy under four U.S. Presidents has now said that a significant
market event will take place when the Fed is eventually forced to exit their
monetary easing and zero-interest rate policies.
Are you prepared for that day?
