Gold benefits whether we have inflation or deflation. Once the real estate bubble is broken, following the just broken bond market bubble, all the markets will go down except gold and silver. Gold and silver will launch to a five-year bull market that is already underway and other markets will be the captives of the bear for an equal amount of time. Nothing is going to undo the damage of all the excesses you are all aware of except a major purge of the world economy and believe it or not that is economically and financially healthy. Although it won’t be healthy for elitists who caused all these problems with their greed and superior ideas of world domination. This is why we have told you to be out of all markets except for gold and silver coins and shares and some form of Treasury paper. Low interest rates won’t work and neither will flooding the markets with money and credit. Eventually earnings will universally fall, unemployment will climb higher and pricing power will be non-existent. Government debt will go stratospheric. That means a short duration of inflation and then an ultimate plunge. What this all conclusively proves is that you cannot manipulate an economy using the levers as they have been used since the end of WWII. Nations will have to go back to a gold exchange standard or nothing is going to work and believe us, they know that. The experiment of a strong dollar and gold suppression didn’t work because the financial disaster it will cause will be unprecedented. Under normal circumstances a purging would take 10 to 15 years although historically inevitable, they have been accompanied by preplanned wars or spontaneous revolutions. In our case we expect revolution after government as destroyed the patience of the American people. This is why under no circumstances do you give up your weapons to government collectors. Currency instability is usually what gets the deflationary ball rolling and that is what we’ve recently experienced in a beginning 20% decline in the value of the dollar. That accompanied by negative real interest rates is devastating for savers. This kind of financial environment forces some savers to assume financial risks in equities such as junk bonds. Negative interest rates and a descending currency lead to competitive devaluations that simply beggar thy neighbor and everyone end up with the short end of the stick. The FED and other central banks are just fighting a delaying action. They know the game is over. If not, why would Fed. Governor Bernanke says we’ll simply debase the currency by printing dollars. That was arrogant and flip but what else would you expect from one of the masters of the universe. Their counterparts in the While House drop money out of helicopters. There is little difference in the approach. Desperate people do desperate things. The benefits accruing to the dollar after a 60-70% decline, and that is what it’s going to do, are transitory at best. That means the dollar and other currencies will all devalue against tangible assets, but in a depression who will want real estate, commodities and plant and equipment? They’ll want the only real money and that’s gold. That is why $1,500 to $3,000 an ounce is not at all far fetched. That doesn’t consider revolution. Then the numbers get much higher. No one wanted to listen to us in 1960-1966-1976-1983 or 1985 and a few want to listen now. The people are always in denial. The world can’t recover with the US buried in debt. The American continental is finished; all we have to do is shovel the dirt into the coffin. Asia is now supporting the dollar in a big way so their currencies won’t appreciate. That’s like shoveling sand against the tide. This is just part of the holding action. Any central bank that’s not on life support should be selling dollars for gold. It won’t be long before the US government will have significant funding issues. When that happens interest rates will have to move higher. That is what we predicted last November for this December thru March and that is exactly what is going to happen. The public is in denial and the media, Wall Street and government have dementia. The FED has stepped on its own tongue with it open mouth policy. All concerned have gone back to the well too many times. They can no longer go back and stoke consumer and investor expectations. The FED’s record since 1913 has been abysmal and they are desperately trying to defy history. Egotism and arrogance have a way of catching up with greedy megalomaniacs. Reinflation, and that is what they are up to, is a foolish high risk gamble and the result of its guaranteed failure will be the downfall and end of the privately owned Federal Reserve System. Treasuries, other bonds, real estate and foreign currencies once safe havens are now only way stations. The only real safety is gold coins and gold shares. Markets will overcome all the other investments as people flee to the only real money.
Comex silver stocks are equal to only 2.7 weeks of world demand. Thus, the next several weeks could produce some pretty wild action. There were 79,441 open contracts equivalent to about 397 million ounces or about 50% of all annually available silver supplies. We are also sure China, with its Shanghai market opening, will have a profound affect on the market. It could be payback time for the market manipulators and finally silver may fly.
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