The Beginning Of The End Ad
Gold Buying Guide: Golden Eagle Coins
Lear Capital: The Best Source for Buying Gold & Precious Metal Investing

Recent Posts

The Preppers Blueprint Economic Collapse Blog Get Prepared Now Ad

Enter your email to subscribe to The Economic Collapse Blog:

Delivered by FeedBurner

It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores

retail-apocalypse-public-domainIt has only been two weeks since Christmas, and already we are witnessing a stunning bloodbath of store closings.  Macy’s shocked the retail industry by announcing that they will be closing about 100 stores.  The downward spiral of Sears hit another landmark when it was announced that another 150 Sears and Kmart stores would be shutting down.  And we have just learned that The Limited is immediately closing all stores nationwide.  If the U.S. economy is doing just fine, then why are we experiencing such a retail apocalypse?  All over America, vast shopping malls that were once buzzing with eager consumers now resemble mausoleums.  We have never seen anything quite like this in our entire history, and nobody is quite sure what is going to happen next.

Not too long ago I walked into a Macy’s, and it was eerily quiet.  I stumbled around the men’s department looking for something to buy, but I was deeply disappointed in what was being offered.  After some time had passed, an employee finally noticed me and came over to help, but they didn’t have anything that I was looking for.

And it is a sad thing, because over the past several years when I have gone into Macy’s looking to spend money, most of the time I have come out of there without spending a penny.  Macy’s has made some very bad decisions recently, and I am hoping that they can still turn things around.  But for the moment, they are closing stores and cutting jobs.  The following comes from the New York Times

Struggling with sagging sales over another crucial holiday shopping season, Macy’s announced on Wednesday that it was eliminating more than 10,000 jobs as part of a continuing plan to cut costs and close 100 stores.

Macy’s, the country’s largest department store chain, said sales at its stores had fallen 2.1 percent in November and December compared with the same period in 2015. Terry J. Lundgren, the company’s chairman and chief executive, said in a statement that while the trend was “consistent with the lower end of our guidance, we had anticipated sales would be stronger.”

Another legendary retailer that really does not have any hope left is Sears.  Every year they just keep closing even more stores, and because they are losing so much money they don’t have anything to invest in the stores that remain.  As a result, the state of many Sears locations is downright embarrassing at this point

But the retailer, famous for selling everything from shoes to vacuum cleaners to whole houses, is facing its biggest crisis ever. It’s closing hundreds of stores. Others are in shambles, with leaking ceilings and broken escalators. In some, employees hang bedsheets to shield shoppers from sections that stand empty.

Since the early portion of 2013, sales are down an astounding 37 percent for the company.  Sears is currently more than 1.6 billion dollars in debt, and they are losing more than a billion dollars a year.

They keep closing stores in a desperate attempt to stop the bleeding, but it hasn’t worked.

In 2010, Sears had 3,555 stores.

Last year, Sears had 1,503 stores, and now a whole bunch more are being shut down.

But everyone can see where this is going.  As I have stated repeatedly, Sears is going to zero, and many of the experts completely agree with me

“They are going out of business,” said Van Conway, an expert in bankruptcy and debt restructuring and CEO of Van Conway & Partners. “This snowball is 90% of the way to the bottom of the hill.”

Of course Sears is still surviving for the moment, and that is more than can be said for The Limited.

Back in the old days, it seemed like every mall had one of their stores.  I remember passing it on my way to Orange Julius and Herman’s World of Sporting Goods.

But now they are shutting down every single location and will be online only

American malls just got emptier.

The Limited, a once-popular women’s clothing brand that offers casual attire and workwear, no longer has any storefronts.

On Saturday, a message on the store’s website read, “We’re sad to say that all The Limited stores nationwide have officially closed their doors. But this isn’t goodbye.” The website will still be up and running and will continue to ship nationwide, the company said.

In addition to Macy’s, Sears and The Limited, other huge names in the retail industry have also fallen on hard times and have had to shut stores over the past 12 months.  The following comes from the Washington Post

The retail environment has proved challenging for a variety of stores: Sports Authority went out of business in 2016, shuttering more than 460 locations in U.S. malls and strip malls. PacSun, Aeropostale and American Apparel each have filed for bankruptcy protection in the past year and are aiming to reorganize and revive their businesses.

So why is this happening?

Without a doubt, our shopping habits have changed.  And in the online world, many of these retailers are being absolutely crushed by competition from Amazon and other tech companies that developed online infrastructure before they did.  I know that my wife and I actually prefer to shop online for many things when possible, and I anticipate that the share of retailing done online will only continue to grow in this country.

But let us also not underestimate the impact that the stagnating economy is having on ordinary consumers.  Thanks to the last eight years, approximately two-thirds of all Americans are living paycheck to paycheck.  More than a third of all Americans have a debt that is at least 180 days past due, and the rate of homeownership has been hovering near the lowest level that we have seen in about 50 years.  As you read this article, more than 95 million Americans are not in the labor force, and that number has grown by 18 percent under Barack Obama.  Homelessness in New York City and other major cities is at a record high, and as a nation we have accumulated the largest mountain of debt in the history of the world.

Let us hope that things can be turned around, but if current trends continue the retail apocalypse is just going to go from bad to worse, and we will continue to see lots of headlines about more stores closing down.

Economic Activity Is Slowing Down Much Faster Than The Experts Anticipated

Locomotive - Public DomainWe have not seen global economic activity fall off this rapidly since the great recession of 2008.  Manufacturing activity is imploding all over the planet, global trade is slowing down at a pace that is extremely alarming, and the Baltic Dry Index just hit another brand new all-time record low.  If the “real economy” consists of people making, selling and shipping stuff, then it is in incredibly bad shape.  Here in the United States, the dismal economic numbers continue to stun all of the experts.  For example, on Monday we learned that the Texas general business activity index just hit a six year low

Economic activity in Texas keeps getting worse.

The general business activity index out Monday from the Dallas Federal Reserve for January was -34.6, a six-year low and much worse than economists had expected.

The forecast for the monthly index was -14, following a December reading of -21.6 (revised from -20.1) that was also worse than expected.

One could perhaps argue that this is to be expected in Texas because of the collapse in the price of oil.

But what about the very unusual things that we are seeing in other areas of the country?  In Erwin, Tennessee, a rail terminal that had been continuously operating for 135 years was just permanently shut down, and hundreds of workers now find themselves without a job

The last coal train to leave Erwin rolled slowly out of town just after at 3 p.m. Thursday, less than eight hours after CSX Transportation employees heard the news that rocked all of Unicoi County.

“Its a hard pill to swallow,”  county Mayor Greg Lynch said. “Of course, we heard rumors that something was coming down. But never in my wildest dreams did I imagine they would just shut down and leave town.”

CSX delivered the news of its decision to immediately close Erwin’s 175-acre rail yard and abruptly end the employment of the facility’s 300 workers in a series of meetings with employees conducted at the start of their morning shifts.

It has been said that if you want to know what is really happening with the U.S. economy, just watch the railroads.

And right now, rail traffic all over the nation is falling to depressingly low levels.

One of Steve Quayle’s readers says that rail traffic in Colorado has slowed down so much that hundreds of engines are just sitting there on the tracks

With regard to the train freight article this morning, we have in Grand Junction, CO., literally hundreds of engines sidelined on the tracks. They are three deep on some tracks and easily number over 250. I have never seen this many engines on the tracks before and I feel this is just another indicator of the slowdown in shipping.

In case you are tempted to think that this is just anecdotal evidence, I want you to consider what is happening to the largest railroad company in the United States.

According to Wolf Richter, operating revenues for Union Pacific were down 15 percent last year…

Union Pacific, the largest US railroad, reported awful fourth-quarter earnings Thursday evening. Operating revenues plummeted 15% year over year, and net income dropped 22%.

It was broad-based: The only category where revenues rose was automotive (+1%). Otherwise, revenues fell: Chemicals (-7%), Agricultural Products (-12%), Intermodal containers (-14%), Industrial Products (-23%), and Coal (-31%). Shipment of crude plunged 42%.

So Union Pacific did what American companies do best: it laid off 3,900 people last year.

And of course we can see evidence of the emerging economic slowdown all around us pretty much wherever we look.  Sprint just laid off 8 percent of its workforce, GoPro is letting go 7 percent of its workers,  and Wal-Mart just announced the closure of 269 stores.

But instead of dealing with reality, there are a lot of irrational optimists that insist that things will start bouncing back any day now.  For instance, CNBC is reporting that Goldman Sachs is forecasting that the S&P 500 will end up finishing the year back at 2,100…

Goldman, though, is sticking with its forecast that the S&P 500 will rebound and finish the year at 2,100, a rise of about 11 percent from current levels but basically no net gain for the full year.

It is easy to say something like that, but the actions of the big banks speak louder than words.

Most people don’t realize this, but several of the “too big to fail” banks laid off thousands of workers in 2015

Bank of America and Citigroup reduced headcount the most, eliminating about 20,000 staffers between them, according to fourth-quarter earnings reports from each bank. The respective moves amount to 4.6 percent and 4 percent fewer workers at the banks. JPMorgan Chase reported in its earnings that it employs 6,700 fewer workers than a year ago.

And guess what?

The “too big to fail” banks did the exact same thing just before the great stock market crash of 2008.

When are people going to finally start understanding that we have a major league crisis on our hands?

Since June 2015, approximately 15 trillion dollars of global stock market wealth has been wiped out.  After a brief respite at the end of last week, it appears that the global financial crisis is getting ready to accelerate once again.

On Monday, the price of oil dipped back under 30 dollars, the Dow was down another 208 points, and the Nikkei is currently down another 389 points in early trading.

Somewhere close to one-fifth of all global stock market wealth has already been wiped out.

We only have about four-fifths left.

But in the end, I can talk about these numbers until I am blue in the face and some people will still not get prepared.

Some people have so much faith in Barack Obama, the Federal Reserve and the mainstream media that they would literally follow them off a cliff.

By now, most of the people that believe that they should prepare for the coming crisis have already gotten prepared, and most of those that want to believe that everything is going to work out just fine somehow are never going to get prepared anyway.

What is going to happen is going to happen, and tens of millions of people are going to end up bitterly regretting not listening to the warnings when they still had the chance.

27 Facts That Show How The Middle Class Has Fared Under 6 Years Of Barack Obama

27 Facts That Show How The Middle Class Has Fared Under Barack ObamaDuring his State of the Union speech on Tuesday evening, Barack Obama is going to promise to make life better for middle class families.  Of course he has also promised to do this during all of his other State of the Union addresses, but apparently he still believes that there are people out there that are buying what he is selling.  Each January, he gets up there and tells us how the economy is “turning around” and to believe that much brighter days are right around the corner.  And yet things just continue to get even worse for the middle class.  The numbers that you are about to see will not be included in Obama’s State of the Union speech.  They don’t fit the “narrative” that Obama is trying to sell to the American people.  But all of these statistics are accurate.  They paint a picture of a middle class that is dying.  Yes, the decline of the U.S. middle class is a phenomenon that has been playing out for decades.  But without a doubt, our troubles have accelerated during the Obama years.  When it comes to economics, he is completely and utterly clueless, and the policies that he has implemented are eating away at the foundations of our economy like a cancer.  The following are 27 facts that show how the middle class has fared under 6 years of Barack Obama…

#1 American families in the middle 20 percent of the income scale now earn less money than they did on the day when Barack Obama first entered the White House.

#2 American families in the middle 20 percent of the income scale have a lower net worth than they did on the day when Barack Obama first entered the White House.

#3 According to a Washington Post article published just a few days ago, more than 50 percent of the children in U.S. public schools now come from low income homes.  This is the first time that this has happened in at least 50 years.

#4 According to a Census Bureau report that was recently released, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#5 In 2008, the total number of business closures exceeded the total number of businesses being created for the first time ever, and that has continued to happen every single year since then.

#6 In 2008, 53 percent of all Americans considered themselves to be “middle class”.  But by 2014, only 44 percent of all Americans still considered themselves to be “middle class”.

#7 In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”.  But in 2014, an astounding 49 percent of all Americans in that age range considered themselves to be “lower class”.

#8 Traditionally, owning a home has been one of the key indicators that you belong to the middle class.  So what does the fact that the rate of homeownership in America has been falling for seven years in a row say about the Obama years?

#9 According to a survey that was conducted last year, 52 percent of all Americans cannot even afford the house that they are living in right now.

#10 After accounting for inflation, median household income in the United States is 8 percent lower than it was when the last recession started in 2007.

#11 According to one recent survey, 62 percent of all Americans are currently living paycheck to paycheck.

#12 At this point, one out of every three adults in the United States has an unpaid debt that is “in collections“.

#13 When Barack Obama first set foot in the Oval Office, 60.6 percent of all working age Americans had a job.  Today, that number is sitting at only 59.2 percent…

Employment Population Ratio 2015

#14 While Barack Obama has been in the White House, the average duration of unemployment in the United States has risen from 19.8 weeks to 32.8 weeks.

#15 It is hard to believe, but an astounding 53 percent of all American workers make less than $30,000 a year.

#16 At the end of Barack Obama’s first year in office, our yearly trade deficit with China was 226 billion dollars.  Last year, it was more than 314 billion dollars.

#17 When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent.  Today, it is over 101 percent.

#18 The U.S. national debt is on pace to approximately double during the eight years of the Obama administration.  In other words, under Barack Obama the U.S. government will accumulate about as much debt as it did under all of the other presidents in U.S. history combined.

#19 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#20 The poverty rate in the United States has been at 15 percent or above for 3 consecutive years.  This is the first time that has happened since 1965.

#21 From 2009 through 2013, the U.S. government spent a whopping 3.7 trillion dollars on welfare programs.

#22 While Barack Obama has been in the White House, the number of Americans on food stamps has gone from 32 million to 46 million.

#23 Ten years ago, the number of women in the U.S. that had full-time jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have full-time jobs.

#24 One recent survey discovered that about 22 percent of all Americans have had to turn to a church food panty for assistance.

#25 An astounding 45 percent of all African-American children in the United States live in areas of “concentrated poverty”.

#26 40.9 percent of all children in the United States that are living with only one parent are living in poverty.

#27 According to a report that was released late last year by the National Center on Family Homelessness, the number of homeless children in the United States has reached a new all-time record high of 2.5 million.

Unfortunately, this is just the beginning.

The incredibly foolish decisions that have been made by Obama, Congress and the Federal Reserve have brought us right to the precipice of another major financial crisis and another crippling economic downturn.

So as bad as the numbers that I just shared with you above are, the truth is that they are nothing compared to what is coming.

We are heading into the greatest economic crisis that any of us have ever seen, and it is going to shock the world.

I hope that you are getting ready.

The Velocity Of Money In The U.S. Falls To An All-Time Record Low

Velocity Of Money M2When an economy is healthy, there is lots of buying and selling and money tends to move around quite rapidly.  Unfortunately, the U.S. economy is the exact opposite of that right now.  In fact, as I will document below, the velocity of M2 has fallen to an all-time record low.  This is a very powerful indicator that we have entered a deflationary era, and the Federal Reserve has been attempting to combat this by absolutely flooding the financial system with more money.  This has created some absolutely massive financial bubbles, but it has not fixed what is fundamentally wrong with our economy.  On a very basic level, the amount of economic activity that we are witnessing is not anywhere near where it should be and the flow of money through our economy is very stagnant.  They can try to mask our problems with happy talk for as long as they want, but in the end it will be clearly evident that none of the long-term trends that are destroying our economy have been addressed.

Discussions about the money supply can get very complicated, and that can cause people to tune out, but it doesn’t have to be that way.

To put it very basically, when there is lots of economic activity, there is lots of money changing hands.

When there is not very much economic activity, the pace at which money circulates through our system slows down.

That is why what is happening in the U.S. right now is so troubling.

First, let’s look at M1, which is a fairly narrow definition of the money supply.  The following is how Investopedia defines M1…

A measure of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts and Negotiable Order of Withdrawal (NOW) accounts. M1 measures the most liquid components of the money supply, as it contains cash and assets that can quickly be converted to currency. It does not contain “near money” or “near, near money” as M2 and M3 do.

As you can see from the chart posted below, the velocity of M1 normally declines during a recession.  Just look at the shaded areas in the chart.  But a funny thing has happened since the end of the last recession.  The velocity of M1 has just kept falling and it is now at a nearly 20 year low…

Velocity Of Money M1

Next, let’s take a look at M2.  It includes more things in the money supply.  The following is how Investopedia defines M2…

A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money” in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.

In the chart posted below, we can once again see that the velocity of M2 normally slows down during a recession.  And we can also see that the velocity of M2 has continued to slow down in the “post-recession era” and has now dropped to the lowest level ever recorded

Velocity Of Money M2

This is a highly deflationary chart.

It clearly indicates that economic activity in the U.S. has been steadily slowing down.

And if we are honest, we have to admit that we are seeing signs of this all around us.  Major retailers are closing down stores at the fastest pace since the collapse of Lehman Brothers, consumer confidence is down, trading revenues at the big Wall Street banks are way down, and the steady decline in home sales is more than just a little bit alarming.

In addition, the employment situation in this country is much less promising than we have been led to believe.  According to a report put out by the Republicans on the Senate Budget Committee, an all-time record one out of every eight men in their prime working years are not in the labor force

“There are currently 61.1 million American men in their prime working years, age 25–54. A staggering 1 in 8 such men are not in the labor force at all, meaning they are neither working nor looking for work. This is an all-time high dating back to when records were first kept in 1955. An additional 2.9 million men are in the labor force but not employed (i.e., they would work if they could find a job). A total of 10.2 million individuals in this cohort, therefore, are not holding jobs in the U.S. economy today. There are also nearly 3 million more men in this age group not working today than there were before the recession began.”

Never before has such a high percentage of men in their prime years been so idle.

But since they are not counted as part of “the labor force”, the government bureaucrats can keep the “unemployment rate” looking nice and pretty.

Of course if we were actually using honest numbers, the unemployment rate would be in the double digits, our economy would be considered to have been in a recession since about 2005, and everyone would be crying out for an end to “the depression”.

And now we are rapidly approaching another downturn.  In my recent articles entitled “Has The Next Recession Already Begun For America’s Middle Class?” and “27 Huge Red Flags For The U.S. Economy“, I detailed much of the evidence for why this is true.

And those that run the Federal Reserve know all of this.

That is one of the reasons for all of the “quantitative easing” that they have been doing.  The folks at the Fed know that the U.S. economy would probably drift into a deflationary depression if they just sat back and did nothing.  So they flooded the system with money in a desperate attempt to revive economic activity.  But instead, most of the new money just ended up in the pockets of the very wealthy and further increased the divide between those at the top and those at the bottom in this country.

And now Fed officials are slowly scaling back quantitative easing because they apparently believe that the economy is getting “back to normal”.

We shall see.

Many are not quite so optimistic.

For example, the chief market analyst at the Lindsey Group, Peter Boockvar, believes that the S&P 500 could plummet 15 to 20 percent when quantitative easing finally ends.

Others believe that it will be much worse than that.

Since 2008, the size of the Fed balance sheet has grown from less than a trillion dollars to more than four trillion dollars.  This unprecedented intervention was able to successfully delay the coming deflationary depression, but it has also made our long-term problems far worse.

So when the inevitable crash does arrive, it will be much, much worse than it could have been.

Sadly, most Americans do not understand these things.  Most Americans simply trust that our “leaders” know what they are doing.  And so in the end, most Americans will be completely blindsided by what is coming.

China And Russia Are Ruthlessly Cutting The Legs Out From Under The U.S. Dollar

The mainstream media in the United States is almost totally ignoring one of the most important trends in global economics.  This trend is going to cause the value of the U.S. dollar to fall dramatically and it is going to cause the cost of living in the United States to go way up.  Right now, the U.S. dollar is the primary reserve currency of the world.  Even though that status has been chipped away at in recent years, U.S. dollars still make up more than 60 percent of all foreign currency reserves in the world.  Most international trade (including the buying and selling of oil) is conducted in U.S. dollars, and this gives the United States a tremendous economic advantage.  Since so much trade is done in dollars, there is a constant demand for more dollars all over the globe from countries that need them for trading purposes.  So the Federal Reserve is able to flood our financial system with dollars without it causing a tremendous amount of inflation because the rest of the world ends up soaking up a lot of those dollars.  But now that is changing.  China and Russia have been spearheading a movement to shift away from using the U.S. dollar in international trade.  At the moment, the shift is happening gradually, but at some point a tipping point will come (for example if Saudi Arabia were to declare that it will no longer take U.S. dollars for oil) and the entire global financial system is going to change.  When that tipping point comes the global demand for U.S. dollars is going to absolutely plummet and nightmarish inflation will come to the United States.  If such a scenario sounds far out to you, then you have not been paying attention.  In fact, China and Russia have been working very hard to move us toward exactly such a scenario.

China and Russia are not the “buddies” of the United States.  The truth is that they are both ruthless competitors of the United States and leaders from both nations have been calling for a new global currency for years.

They don’t like that the United States has a built-in advantage of having the reserve currency of the world, and over the past several years both countries have been busy making international agreements that seek to chip away at that advantage.

Just the other day, China and Germany agreed to start conducting an increasing amount of trade with each other in their own currencies.

You would think that a major currency agreement between the 2nd and 4th largest economies on the face of the planet would make headlines all over the United States.

Instead, the silence in the U.S. media was deafening.

At least there were some reports in the international media about this.  The following is from a Reuters article about this very important deal….

Germany and China plan to conduct an increasing amount of their trade in euros and yuan, the two nations said in a joint statement after talks between Chancellor Angela Merkel and Chinese Premier Wen Jiabao in Beijing on Thursday.

“Both sides intend to support financial institutions and companies of both countries in the use of the renminbi and euro in bilateral trade and investments,” said the text of the statement.

By itself, this deal would not be that alarming.

However, the truth is that both Russia and China have been making deals like this all over the globe in recent years.  I detailed 11 more major agreements like the one that China and Germany just made in this article: “11 International Agreements That Are Nails In The Coffin Of The Petrodollar“.

In that article I listed a few of the things that will likely happen when the petrodollar dies….

-Oil will cost a lot more.

-Everything will cost a lot more.

-There will be a lot less foreign demand for U.S. government debt.

-Interest rates on U.S. government debt will rise.

-Interest rates on just about everything in the U.S. economy will rise.

So enjoy going to “the dollar store” while you can.

It will turn into the “five and ten dollar store” soon enough.

Okay, so if you are China and Russia and you are working hard to undermine the dollar, how do you get prepared for the fiat currency crisis that your hard work will eventually create?

You guessed it.  You hoard gold and other precious metals.

And that is exactly what China and Russia has been doing.

A recent MarketWatch article detailed the massive hoarding of gold that Russia has been doing….

I can’t imagine it means anything cheerful that Vladimir Putin, the Russian czar, is stockpiling gold as fast as he can get his hands on it.

According to the World Gold Council, Russia has more than doubled its gold reserves in the past five years. Putin has taken advantage of the financial crisis to build the world’s fifth-biggest gold pile in a handful of years, and is buying about half a billion dollars’ worth every month.

Of course Russia is not alone in hoarding gold.  According to Zero Hedge, China has quietly been importing gigantic mountains of gold….

In July, Chinese gold imports from HK, after two months of declines, have picked up once more and hit a 3-month high of 75.8 tons. While it is notable that this number is double the 38.1 tons imported a year prior, and that year-to-date imports are now a record 458.6 tons, well over four times greater than the seven month total in 2011 which was 103.9 tons, what is far more important is that in the first seven months of 2012 alone China has imported nearly as much gold as the total holdings of the hedge fund at the heart of the Eurozone, elsewhere known simply as the European Central Bank, and just as importantly considering the import run-rate has hardly slowed down in August, which data we will have in a few weeks, it is now safe to say that in 2012 alone China has imported more gold than the ECB’s entire official 502.1 tons of holdings.

And all over the world Chinese companies are buying up gold producers.  China National Gold Group Corporation has put in a $3.9 billion bid to buy African Barrick Gold PLC, but that is only one example.

A recent Fox Business article listed a bunch of other similar transactions that have taken place recently….

Zijin Mining Group Co. (2899.HK), China’s second-largest gold producer by output, said last week that its subsidiary has acquired more than 50% of Kalgoorlie’s Norton Gold Fields (NGF.AU).

That deal gives it a foothold in the Australian market, the world’s second-largest source of gold output after China itself. In 2011, Zijin bought 60% of Kazakhstan-based miner Altynken, which has access to a gold mine in Kyrgyzstan.

Since 2008, Chinese companies have completed 10 US$20-million-plus acquisitions of Australian gold assets, worth a combined $1.6 billion, according to Dealogic. Half were initiated since last year.

In November, Shandong Gold-Mining Co. (600547.SH) launched a bid to acquire Brazilian gold miner Jaguar Mining Inc. (JAG.T) for $1 billion.

You would have to be blind to not see what is happening.

Other big names have been hoarding gold as well.  In a previous article I detailed how George Soros, John Paulson and central banks all over the planet have been hungrily accumulating gold.

So what does all of this mean for the price of gold?

That’s right – it is likely to keep heading up.

In fact, Citi analyst Tom Fitzpatrick believes that the price of gold will likely hit $2500 within 6 months.

Personally, I believe that there will be times when precious metals both fall and rise in price dramatically.  It is going to be a wild ride.  But in the long-term I believe that all precious metals will be going up as fiat currencies such as the U.S. dollar fail.

Sadly, most Americans have no idea just how incredibly vulnerable the U.S. dollar really is.

The following is an excerpt from a recent piece by investigative journalist Bob Woodward.  It shows just how worried our leaders are about a crash of U.S. Treasuries….

Another possible outcome, Geithner said, was perhaps worse. “Suppose we have an auction and no one shows up?”

The cascading impact would be unknowable. The world could decide to dump U.S. Treasuries. Prices would plummet, interest rates would skyrocket. The one pillar of stability, the United States, the rock in the global economy, could collapse.

What happens someday if the rest of the world decides to reject our currency and our debt?

Right now we are able to trade our dollars for the things that we “need” such as oil from the Middle East and cheap plastic consumer products from China.

But what happens if the Federal Reserve keeps printing and printing and printing and the rest of the world eventually decides that the U.S. dollar is not even worth the paper it is printed on?

The truth is that the amount of printing the Federal Reserve has been doing and the amount of borrowing the federal government has been doing are both completely and totally unsustainable.

At this point, Moody’s is threatening to cut the credit rating of the federal government if a deal is not reached soon to reduce our debt to GDP ratio.

And Moody’s is not the only one concerned about our exploding debt.

German Finance Minister Wolfgang Schaeuble recently stated that he believes that “there is great uncertainty about the course American politics will take in dealing the U.S. government’s debts, which are much too high”.

Just because the economy is relatively stable right now does not mean that it is always going to be that way.

If we keep debasing our currency like this, at some point the rest of the world is going to decide that China and Russia have been right all along and that we need a new global reserve currency.

That day is coming.  It might not come tomorrow or next week or next month but it is definitely coming.

Once the U.S. dollar loses reserve currency status, that will be a major turning point in the history of our country.  We will never fully recover from that, and we will never get back to the same level of prosperity that we are enjoying today.

So enjoy spending those dollars while you can.  The party is almost over.

Ready Made Resources 2015
Finca Bayano
Panama Relocation Tours
The 1 Must Own Gold Stock
180x350




 

Credible Warning
ProphecyHour
Facebook Twitter More...