Financial Resource

powerful and important near term breakdown, they will try to manufacture at least one more rally attempt (probably coinciding with the G & summit). It is in progress and will push the dollar ultimately down to 70. That is for starters. The analysts will then cry global currency crisis. It is something that I have been looking for, for a long time. What follows will not be a recovery for the U.S. dollar at all, but a slow death process, destroyed by monetary debauchery, failed U.S. economic recovery policies, bankrupt U.S. banks, and lost global confidence.

THREE STAGES (A fast approaching dollar crisis)

The competing currency wars are soon to reach a fever pitch. The U.S. dollar weakness will force other countries to wreck their own currencies in response, so as to avoid further damage to their foreign trade.  I am looking for this currency destruction to happen in three stages, the first of which is already apparent.  In stage 1, the US dollar will falter and the Euro will rise. In stage 2, the Euro is going to falter, but the dollar will not benefit or recover. Other currencies such as the Canadian, New Zealand, Australian and Norway dollars will go up instead. Gold and silver will be big beneficiaries. In stage 3, perhaps two years from now, all the commodity currencies will falter and all hard assets will suffer except gold and silver. All the funds world wide will chase real money, namely Gold and Silver, since I believe the currency system will be shattered.

The Chinese government has announced many times that it wants to unload US Treasuries and U.S. Agency Mortgage Bonds. They also want to increase their gold holdings from 2% to 5%. In order to do that, they would have to buy up all the world’s gold production for one year or 2500 tons of gold. That is unlikely. So they buy up any sizable gold that comes on the market, effectively putting a floor on the gold price. I should put after every paragraph–add to your gold holdings. But few will do this. I was recently asked,” Now that gold has passed 00, should I sell and take profits?” It has been my feeling that gold will rise to about 00 by the end of the year and 00 sometime in 2010. After that, let’s see.

Will the coming IMF Gold sales lower the price of Gold. Maybe, but just to accommodate China and not for very long as China will be buying it all. 

Is there a CRISIS Coming?

I am looking for one within three months or sooner. Our debt situation will force another crisis. The U.S. itself is on the horns of a dilemma. If it tries to balance its fiscal budget with spending cuts, it sends the U.S. economy into a depression. If it does not, then the U.S. Treasury has to keep borrowing to FUND (pay for) the budget deficits to the point where all lenders simply give up. When this happens, the US Treasury will have to go over to the Fed’s printer. And I think the Chinese know all of this. That is why they say they will offer the U.S. the option of Yuan bonds. That is printing Treasuries denominated in the Yuan, which would at least eliminate the currency risk of the dollar falling for the Chinese. The dollar can fall without affecting China, since it would be paid in Yuan.

However, any move in that direction would prompt MANY other nations that their loans to the US be made in their own national currencies. This would then destroy the U.S. dollar as a reserve currency. Thus I say to the reader that the prolific printing of US money puts the Dollar at grave risk on many fronts. There is going to be a fast approaching U.S. dollar crisis. Your BEST defense is mainly gold, as other currencies will be devalued also. Right now the U.S. Treasury demand is aided by HIDDEN monetization of a very large scale, both on the domestic front with primary bond dealers and the foreign front with collusion among central banks,

Your owning gold offers the individual protection at the institutional level, the corporate level, and the personal level in a unique, stable, and subtle way. It is the only real money and I sleep well at night, no matter what the world of finance does. Frankly, it is still cheap given the insane multiples in increased money supply both inside the U.S. and globally in the last 3-5 years. If one factors in the derivatives, the multiples of money growth are even higher. I thus say that the price of gold should be at least 00 per ounce right now and even approach 00, but it is held down with brute force in a clear criminal fashion by the GOLD BANKS, which will not be possible to continue much longer.

Ben Bernanke and his Crowd does not realize that he and the rest of his cronies have painted themselves into a dire corner. And just by way of comment, the U.S. Fed Chairman did not foresee any bank crisis or mortgage bond problem before it occurred, not even a housing bubble. He also did not recognize the bank credit crisis until long after incorrectly labeling it a “Sub prime” Crisis when he then estimated the total bank losses to be only 0 billion. Then Mr. Bernanke expected the banking system would not extend to the tangible economy, as if there was no recession. He was wrong. He forecasted a U.S. economic recovery in the second half of 2009. He was wrong. He has never been correct yet, but the president praises him and then re-appoints him.  In my opinion, either he is in deep denial or utterly incompetent. He then admits that the banking system has not returned to normal as many still cannot get loans. He acknowledges no errors, no missteps, no late awareness, no favored treatment to Wall Street firms, no irresponsible lack of transparency for TARP funds, no erroneous estimates on nationalization costs of many entities, no recognition of the ongoing ” Black Hole credit derivatives are”, yet resists Independent Audit of the FED and practices an avoidance of reality.

Bernanke has called for tighter controls in the governance of insurance conglomerate AIG, which is an impossibility. He also urges the winding down of globally interconnected U.S. companies– impossibility.  In actuality, Bernanke is stuck in the mud. The U.S. Fed has no exit strategy, since none is even remotely possible given the incredibly disastrous corner that the U.S. Fed has painted itself into. He does not have the brains to change course, since he cannot figure one out.

 Buying Gold

 My conclusion is that if you hold stocks denominated in a fading currency you are going to lose out when you compare your results against true intrinsic money such as gold. That is what you buy. You also buy silver because that is cheaper, has more leverage and at this stage is used as both an industrial and monetary metal. I am looking for 20-23 by the end of the year,  by next year. The one ounce silver eagle now has a premium, but I would buy some anyway. I would sell ABX; they are part of the Bullion Bank’s conspiracy and have destroyed their balance sheet with their Hedge Books.

Some Last Words: A new Paradigm is upon us. That word means CHANGE, a major change. And the majority voted for Change but they had no Idea what Change really meant. But still you have to see it and protect yourself. It is like moving through a veil to a place never seen before. And this place will soon become very dangerous with very bad forces unleashed. The U.S. social fabric has been torn asunder, and this situation is going to worsen. The system that we have been used to will break; platforms are going to collapse, causing massive global ripples that cause much destruction. Breakdowns are occurring now, but are going to become much more visible. Gold is the most important item to watch now and the Bullion cartels are losing control of its price. While there are many shorts in gold, China buys on all dips. The syndicate cartel and elite are now losing control in visible fashion. 

I really do not care what most analysts and economists are saying about an end to this recession. The numbers put forward by CNBC and other government agencies have not added up for literally years. We are now moving into the next leg down into the abyss of what will be the greatest depression in history.

The people in Congress are the parasites who feed on the private sector and will eventually kill it. The parasite will destroy its host. The G-7 countries and the United States, which have all become welfare states, are headed towards an immense collapse because the debts being accumulated are un-payable and cannot be extinguished.  In my opinion, there is no escape from the final debacle. 

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