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Wow! What can you say about
gold?!
It’s amazing how quickly
now things are developing. The dollar is falling faster than anyone guessed
and the rise of inflation will be just around the corner.What
we are entering now is equivalent to falling into a black hole. We have gone
too far with the mindless money creation. Now the rest of the world realizes
that any investment in the dollar is guaranteed simply to depreciate. Even
light does not escape from the depths of a black hole. The US dollar
sure isn’t going to do any better.
And now the US dollar has
begun its voyage down its own black hole. We are entering an era that
will in the future be referred to as “the death spiral of the US
dollar.” I suppose the blind and stupid are not noticing any of these
present events occurring with the dollar. And why should any
one really care. The United States is invulnerable, right? Well, the
country is convinced the “recession” is over because the Dow went
above 10,000. The last three months have shown the greatest number of
foreclosures so far. And did you know it is now against the law in
California to purchase a flat screen TV if the government has determined it
uses too much energy?
What happens when the
world’s central banks and foreign investors quit buying the US dollar?
To sum up… the interest rates will have to change direction. Not a real
good thing. Do not pay attention to the day to day changes in the price
of precious metals. Keep your eyes on the long term.
According to the highly
acclaimed “The
Economist” “a fundamental change is coming.” And
it is happening now right before our eyes. When something begins to fall
it is generally gradual, but over time the fall builds up steam and the slow
fall becomes a rush. As the US dollar is little by little abandoned
where will the investment currency go? Hard assets that are worth
something. We continue to forget that Japan is still fighting deflation for
about 20 years now. What has kept Japans head above water all these years is
the fact that the Japanese had low debt.
And now we see gold soaring.
Did you hear? Gold is soaring. Did you catch that? Maybe not. You
were busy spellbound watching “Dr. House.” Well, I’ll
repeat it again for those not paying attention. Gold is rising in value.
Gold's duel role as both a currency and an asset grow as financial risk
increases.
Frank
McGhee, Precious Metals Trader Integrated Brokerage Services –
“[Gold] turned higher predominantly on the perception of a weakening
dollar…” “Gold's upswing was also due to the
potential for increased inflation…”
And why is it soaring
so? Because the United States dollar is crumbling under its own weight.
George Soros, said the American recovery would be "very slow"
because consumers were "overdebted" and the banks were "basically
bankrupt”.
China is holding on to their
mined gold and selling to no one outside China. The Chinese government is
also stressing to their citizens that they should be buying gold. The Chinese
government is well aware of further economic madness and they want their
citizens to be prepared. Asians generally do not trust paper money. Even the
Chinese banks are gold buyers. 1.3 billion people in
China being told by their government to buy gold.
What keeps the US working
class so busy it does not recognize the dollar slipping down the golf hole? Lotteries,
cheap beer, television, computer games. It seems that the general population
no longer thinks, except when thinking about the weekend or Dr. Cuddy. Will
the world end when the dollar crashes? I don’t think so. Will
things change and be different? Yes.
The American consumer still
is totally in the dark concerning the coming dollar fender-bender. Inflation
is here now no matter what our government tells us. The 2009 deficit will run
to 1.5 trillion. About 3 times what it was in 2008. Unemployment is
estimated around 10%. Its amazing how so many other
countries are very aware of a continuing financial catastrophe, but not the
US. Can we imagine what the 2010 deficit will be? If we are even still
here.
“…investors
remain concerned that a bout of inflation is on the horizon.”
“Analysts expect the streak to continue…” “Gold is
also being supported by persistent concerns that government efforts to
stimulate the economy will cause inflation to rise in the future. Precious
metals are seen as a hedge against rising prices because they store value
better than other types assets.” "Though
inflation is not an issue now, it's going to come back with force," said
Kathy Lien, director of currency research at Global Forex
Trading. " “The things that the Treasury and the Fed are doing to
the U.S. financial system are setting gold up to be supported for some
time…”
money.cnn.com/2009/10/08/markets/gold/index.htm
How can we prepare ourselves
in these deteriorating times? Acquire hard assets, prepare for volatility and
it is very possible that your rewards will be worth your while (seriously)
over the next few years. Prepare for the coming crisis by purchasing physical
gold and physical silver. Buy the real stuff…. buy solid silver and
gold in the flesh and look at mining stocks as secondary speculative
investments. The paper traded ETF’s many have never totally trusted.
Own the real thing and bury it in your back yard. Do NOT put any of your
holdings in your deposit box at the bank. Below from an email reader.
Prosper from the coming
devaluation of the dollar…own gold and silver. We are moving very
quickly to a calculated devaluation in the dollar. We live in historical and
interesting times. Jim Sinclair, gold guru, is offering a 1 million dollar
bet that gold will reach $1,650 by the first month of 2011.
“The
US is too dependent on Japan and China buying up the country's debt and could
face severe economic problems if that stops, Tiger Management founder and
chairman Julian Robertson told CNBC.” “If the Chinese and Japanese
stop buying our bonds, we could easily see inflation go to 15 to 20
percent…” he said. “We're in for some real rough
sledding…”
Julian
Robertson
Hold your physical gold and
physical silver and do not place any thing of value
in your bank deposit box. Already across the nation deposit boxes are being
opened and the contents auctioned off by the banks to raise money. Bank of
America being one of these banks. Again, do not place any
thing of value in your bank deposit box.
And where will investors put
their money when the dollar is crashed? Gold and silver will be the
only viable options as a safe haven. Peter Schiff believes we will yet see
gold at $5,000 an ounce. Foreign creditors need ever more assurances that the
U.S. will be able to address its substantial deficit, Roubini
has stated. Is gold becoming scarcer?
“The
increasing scarcity of gold deposits is forcing mining companies to search in
more politically risky countries…” “There were only two
gold discoveries in 2008 of more than two million ounces each, compared to
four in 2007 and about 20 in 1999…” "Printing money will
clearly lead to inflation, it is just when…”
- XAVIER
LA CANNA
Get your savings out of
banks, US government debt and anything connected with US stock or bond
markets. Most American banks today are already broke. And of course the FDIC
is broke. Maybe you will be able to get 30 cents on the dollar when the
entire system collapses. Even simple money market funds are not safe. Only
gold or silver related assets offer real security. And as the dollar crashes
and the middle class is wiped out who will be left holding the reigns of power?
"The
lands of Italy, which had been originally divided among the families of free
and indigent proprietors, were purchased or usurped by the avarice of the
nobles; and in the age which proceeded the fall of the republic, it was
computed only two thousand citizens were possessed of any independent
substance."
Edward
Gibbon, Decline…
There is no question that the
powers that be are now sacrificing the US dollar. There is no reasonable way
that the federal debt will ever be paid down for real. What is
it? Around 100 trillion total? That’s a lot of debt. At
least over 13 trillion bucks have been thrown at the financial crises.
How much more yet is to be spent? Oh, I forgot. We are spending
our way into prosperity.
Yes, with simple paper
certificates backed by nothing we are going to bring wealth back into the
economy of the United States. My head is spinning. Don’t know about
yours. Doomsday is not quite here but the constant new debt to consider is
horrifying to think about.
The US made massive
guarantees to US banks and foreign banks to hold this financial mess together
these past couple of years. And with all this looming new massive debt over
our heads we want to create a government financed health care system for all?
Could be they are right. Maybe money does grow on trees.
”But
one thing is for certain: With the price of gold jumping to $1,048.20 per
ounce, traders who moved early enough stood to make millions.”
“And over the past several months there has been a steady drumbeat of
Chinese, Russian and other officials who have talked openly about finding a
replacement for the dollar as the global economy’s default currency.”
Eamon
Javers, opbriefingroom.com/index.php?action=printpage
Lenin once said so many years
ago, “The
best way to destroy the capitalist system is to debase the currency.”
As the time passes our nation is beginning to look like a banana republic
third world county. The number of foreclosures is growing. Just the
past 3 months have broken a record for homes foreclosed. And the Feds only
response and silver bullet is to print more and more paper money.
Never before has the United
States been so divided. In every way. Are we one nation and one people any more? A nation exists only when there is a
commonality that binds the people together. Where is that cohesion
today? The division of class is widening more than ever. Today, we are
divided by classes, culture, those with money and those who are struggling
from week to week. There is nothing really that holds us together as a nation
apart from a shared desire to go into debt over and over again. Diversity is
fine, but shouldn’t we also see harmony as a unified US?
Will a dollar flop drive our
nation closer together or will we continue down the path to a country that is
at odds with one another? Maybe a great depression will bind us
together again as all of us find ourselves sharing the same box to live in.
In time sharing the same government provided dirty blanket may bind us
together. A national emergency often pulls a nation together as did World War
2.
"I
think the moves to the upside will be far quicker in their velocity, hitting
$1,100 very shortly and then far higher over the next few
years…"
Peter
McGuire, Commodity Warrants, Australia.
Click here to order Gold Letter
“I
know not what course others may take, but as for me, give me liberty or give
me death.”
Mr. Henry
David Vaughn
Editor, Gold Letter, Inc.
www.goldletterdv.com
All
articles by David Vaughn
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