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This past week we saw a great deal of bad economic news
come out. The housing market as we've predicted for awhile now is really
starting to go down the toilet which needless to say will be a huge negative
for the U.S. economy. The USD index has also fallen despite what I'm sure was
a good effort from the Plunge Protection Team. They were however successful
in keeping the gold price in check despite all of the bad mortgage news. One
thing is for sure, the price of gold and silver cannot be contained much longer
considering all of the fundamentals at play. Paper money is worth nothing,
gold and silver stores value. Therefore the value of paper money like the USD
will move closer to zero where as the value of gold and silver will always
maintain its value. The recent price drop in gold from $680 to $640 was
obvious manipulation on the part of the central bankers and they are
continuing to fight a losing battle.
Let's first look at the housing market debacle. According to an article
from Reuters, Jim Rogers one of the more well known commodity gurus on the
planet has gone on record saying that we could see 40 to 50% drops in the
value of particular U.S. real estate assets and many defaulted loans. He was
quoted as saying "It's going to be a real mess." Although the value
of the price drop could be debated, I couldn't agree more with Jim. The
writing has been on the wall for many years now and it is going to get ugly.
This is all the fault of Alan Greenspan. Greenspan reduced interest rates to
the point where almost anyone could get a home loan even if they weren't
qualified for it. Now, all of those adjustable rate mortgages, interest only
loans and other creative financing packages are putting the screws to many
home owners. Unfortunately we have only seen the start of this. What really
makes me mad is the fact that Greenspan is coming out and predicting future
problems in the housing market when he was the person responsible for
creating this mess in the first place. He even had the nerve to blame home
buyers for the problem even though it was his plan to make all of this excess
money available. It is ridiculous that the mainstream media treats him like
he is some wise financial prophet when he is nothing of the sort.
Greenspan
Cautions About Subprime Loans
Let's now look at the USD. The USD index has now fallen under the 83 mark
and will undoubtedly continue its long term trend downward. I'm still amazed
at the propaganda the mainstream media puts out about the falling USD and
inflation. The bottom line is that the Federal Reserve causes inflation
because they have created and continue to create an excess amount of money.
It is that simple. Why nobody in the mainstream media can come right out and
say this is pure insanity. They always try to explain inflation as some sort
of market phenomenon that the Federal Reserve is heroically trying to
control. If that's the case how come there was very little inflation in the
19th century prior to the Federal Reserve? Why is it that following the
implementation of the Federal Reserve we have seen rampant inflation with our
currency devalued over 95%?
The long term trend of the value of Federal Reserve Notes has gone down
ever since the founding of the Federal Reserve. Is there any sign of that
reversing? No, because this long term trend would only reverse if they
decided to back their worthless paper with something of tangible value like
gold or silver.
What really concerns me is the fact that we have a massive credit bubble
accelerating due to increases in technology. People are taking on a greater
amount of debt than ever before and can no longer save for the future.
Technology has made the use of credit cards far more widespread than ever
before. It has gotten so ridiculous that you can even buy cans of soda using
a credit card. I couldn't believe it when I actually saw a vending machine
that accepted credit cards. A big wig at Visa has even said that by 2012 we
could achieve a cashless society. The combination of rampant inflation and
digital transaction technology is brewing what could be a severe financial
correction.
At this point in time, protection is the key. I continue to advocate that
everyone puts at least a portion of their savings into precious metals.
Despite the recent price reduction, I still see gold hitting $700 an ounce
and silver hitting $15 an ounce in the very near future.
Paper notes and digits on a hard drive have no value and represent a
pyramid scheme facilitated by the world's central banks. They have designed a
financial enslavement system and are working to take it to another level.
There is a company called Verichip that has developed RFID chips for humans
and as they advance this technology they will undoubtedly market these chips
as an easy way for people to buy and sell. This is nothing short of a satanic
control grid that these people are trying to put into place. Fortunately,
with gold and silver you'll still be able to barter even if the bankers are
successful in implementing this satanic financial system.
I will end this article with this quote taken from the U.S. Treasury's own
web site in which they bluntly state that Federal Reserve Notes are backed by
nothing.
U.S.
Treasury Currency FAQ
Federal Reserve notes are not redeemable in gold, silver or any
other commodity, and receive no backing by anything. This has been the case
since 1933. The notes have no value for themselves, but for what they will
buy. In another sense, because they are legal tender, Federal Reserve notes
are "backed" by all the goods and services in the economy.
19 March 2007
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