Precious Metals

15 Signs That You Better Get Prepared For The Obama Recession Of 2013

15 Signs That You Better Get Prepared For The Obama Recession Of 2013 - Photo by DjembayzYou better get ready, because there are a whole host of signs that economic trouble is on the horizon.  U.S. economic growth slipped into negative territory during the fourth quarter of 2012.  That was the first time that has happened in more than three years.  Several important measures of manufacturing activity have also contracted in recent weeks, and consumer confidence is way down.  There is a tremendous amount of economic pessimism in the air right now, and Americans are pulling enormous amounts of money out of our banks and they are buying up precious metals at unprecedented rates.  Meanwhile, our “leaders” seem very confused about what is happening.  For example, Senate Majority Leader Harry Reid continues to insist that we are “in a recovery“, and some other Democrats are calling the latest GDP numbers “the best-looking contraction in U.S. GDP you’ll ever see“.  On the other hand, the Federal Reserve says that economic growth has “paused” in recent months, and therefore a continuation of their latest quantitative easing scheme is necessary.  Well, no matter how hard any of them try to spin the numbers, there is no way that they are going to get them to look good.  Despite four years of outrageous “stimulus” spending by the federal government, despite four years of record low interest rates, and despite four years of unprecedented money printing by the Federal Reserve, the U.S. economy continues to perform miserably.  Later this year the federal government will probably finally acknowledge that we have entered another recession, even though the truth is that if the federal government used honest numbers they would indicate that we are already in one.  In any event, nobody should have ever expected that our debt-fueled prosperity would last forever.  When the debt bubble that we have been living in completely bursts, a “recession” will be the least of our worries.

Hopefully this little stretch of false economic hope that we have been living in will last for a little while longer.  I don’t think that too many people are very eager to repeat the horrible economic pain that we experienced back in 2008 and 2009.  Unfortunately, we never fully recovered from that last downturn and now the incredibly foolish decisions that our “leaders” continue to make have made another major economic downturn inevitable.

Personally, I would very much prefer for 2013 to be a year of peace and prosperity for America.  But at this point there appears to be a great deal of downward momentum for the economy.

The following are 15 signs that you better get prepared for the Obama recession of 2013…

#1 The mainstream media was absolutely shocked when it was announced that U.S. GDP actually contracted at an annual rate of 0.1 percent during the fourth quarter of 2012.  This was the first contraction that the official numbers have shown in more than three years.  But of course the truth is that the official numbers always make things appear better than they really are.  According to John Williams of shadowstats.com, U.S. GDP growth has actually been continuously negative all the way back to 2005 once you account “for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting.”

#2 For the entire year of 2012, official U.S. GDP growth was only about 1.5%.  According to Art Cashin, every time economic growth has fallen that low (below 2 percent annually) the U.S. economy has always ended up going into a recession.

#3 According to the Conference Board, consumer confidence in the United States has hit its lowest level in more than a year.

#4 For the week ending January 26th, initial claims for unemployment rose to 368,000.  In future weeks, watch to see if it goes above 400,000.  If we hit that level, that will be a sign of real trouble for the economy.

#5 During the first full week of January, an astounding $114 billion was pulled out of U.S. banks.  That is the largest amount that we have seen moved out of U.S. banks in one week since 2001.

#6 The U.S. Mint was on pace to sell more silver eagles during the first month of 2013 than it did during the entire year of 2007.  Why is so much silver being sold all of a sudden?

#7 The payroll tax hike that went into effect in January has reduced the paychecks of average American workers by about $100 a month.

#8 Several important measures of manufacturing activity along the east coast missed expectations by a huge margin in January.  The following summary is from a recent Zero Hedge article…

So much for the latest “recovery.” While everyone continued to forget that in the New Normal markets do not reflect the underlying economy in the least, and that the all time highs in the Russell 2000 should indicate that the US economy has never been better, things in reality took a deep dive for the worse, at least according to the Empire State Fed, the Philly Fed, and now the Richmond Fed, all of which missed expectations by a huge margin, and are now deep in contraction territory. Moments ago, the Richmond Fed reported that the Manufacturing Index imploded from a 9 in November, 5 in December and missed expectations of a 5 print at -12: this was the biggest miss to expectations since September 2009.

#9 An astounding 33 percent of all “subprime student loans” are at least 90 days past due.  Back in 2007, that number was only at 24 percent.  Could this be evidence that the student loan debt bubble is beginning to burst?

#10 Time Inc. has just announced that it will be eliminating hundreds of jobs.

#11 Blockbuster recently announced that they are closing hundreds of stores and eliminating about 3,000 jobs.

#12 Toy maker Hasbro has announced that the size of their workforce will be reduced by about 10 percent.

#13 According to a new Pew Research study that was just released, one out of every seven adults in the United States is financially supporting their kids and their parents at the same time.  Pew Research is calling it “the Sandwich Generation”.

#14 According to one recent Gallup poll, 65 percent of all Americans believe that 2013 will be a year of “economic difficulty“, and 50 percent of all Americans believe that the “best days” of America are now behind us.

#15 According to a different Gallup poll, Americans are now more pessimistic about where the U.S. economy will be five years from now than Gallup has ever recorded before.

So what is Barack Obama doing about all of this?

Not much.

Actually, he is shutting down his much ballyhooed “Council on Jobs and Competitiveness”.  It last convened more than a year ago on Jan. 17th, 2012, and apparently Obama does not feel that it is needed any longer.

Of course we all know that it was just a political stunt to begin with.

Sadly, the truth is that both parties have been leading us down a road toward economic oblivion.  The past four years under Obama have been absolutely nightmarish, and even though the Republicans have been in control of the House for the last couple of years they have done very little to even slow him down.

For much more on the decline of the economy over the past four years, please see this article: “37 Statistics Which Show How Four Years Of Obama Have Wrecked The U.S. Economy“.

Yes, I tend to criticize Obama’s economic policies a lot, and rightfully so, but neither political party is willing to tell the American people the truth.

40 years ago, the total amount of debt in the U.S. economic system was less than 2 trillion dollars.

Today, the total amount of debt in the U.S. economic system has grown to more than 55 trillion dollars.

It hasn’t mattered which party has occupied the White House or which party has been in control of Congress.  The debt bubble that we have been living in has just continued to grow.

And all bubbles eventually pop.

The mainstream media is endlessly obsessed with the little fights that the Republicans and the Democrats are having, but they never talk about the bigger picture.

The prosperity that we are enjoying today is the result of the biggest debt binge in the history of the world.

We have stolen a giant mountain of money from our children and our grandchildren and we have destroyed their futures.

People can debate about whether the next “recession” has already started or not, but the truth is that what we are experiencing now is nothing compared to what is coming.

In the end, we will pay a great price for our decades of foolishness.

The U.S. economy is going to completely collapse, and the last few years have only been the very beginning of that process.

United States Supreme Court Chief Justice John Roberts administers the oath of office to President Barack Obama in the Blue Room of the White House on Inauguration Day

Rich Dad, Poor Dad, Prepper Dad? Even Robert Kiyosaki Is Warning That An Economic Collapse Is Coming

Are you familiar with Robert Kiyosaki? He is best known for the “Rich Dad, Poor Dad” series of books.  Over 26 million books authored by Kiyosaki have been sold and he is recognized as a financial expert by millions of people across the globe.  Well, guess what?  Even Robert Kiyosaki is warning that an economic collapse is coming.  In fact, Kiyosaki and his team of financial experts are encouraging Americans to stock up on food, guns and precious metals.  This is yet another sign of just how close we are to the total collapse of the U.S. Economy.  Kiyosaki, who once co-authored a book with Donald Trump entitled “Why We Want You To Be Rich” is now a full-fledged prepper.  As even more prominent Americans start warning that an “economic collapse” is coming do you think that the American people will finally wake up and start paying attention?

The statements that Robert Kiyosaki makes in the video posted below are absolutely jaw-dropping.  Once upon a time he was all about teaching people how they could get rich, but now he is talking about storing food, buying guns, investing in precious metals and preparing for the coming crash.

The following are 11 of the best Kiyosaki “sound bites” from the video below….

#1 “when the economy crashes as we predict”

#2 “the crowds come rushing in to buy gold and silver”

#3 “we could either go into a depression or we go to hyperinflation”

#4 “or we could also go to war”

#5 “buy a gun”

#6 “I’m preparing”

#7 “I’m prepared for the worst”

#8 “so come to my house and I’m armed and dangerous and I’ll welcome you”

#9 “we have food, we have water, we have guns, gold and silver, and cash”

#10 “the credit card system shuts down, the world shuts down”

#11 “the supermarkets have less than 3 days supply”

If you have not seen this video yet, it is definitely worth the 8 minutes that it takes to watch it.  Robert Kiyosaki seems to be extremely alarmed about the future of the U.S. economy….

It certainly seems as though the entire financial culture in America is changing.

Once upon a time everyone wanted to know how to get rich.

Now everyone wants to know how to survive the collapse that is coming.

As I have written about previously, even people like Tony Robbins and Donald Trump are warning that an economic collapse is coming.

Economic pessimism is seemingly everywhere and almost every recent survey indicates that the American people are losing faith in the U.S. economy.

For example, in a recent article I noted that 48 percent of Americans believe that it is likely that another great Depression will begin within the next 12 months.

According to Gallup, the percentage of Americans that lack confidence in U.S. banks is now at an all-time high of 36%.  Back in 2007, just 14% of Americans lacked confidence in U.S. banks.

In order for society to function correctly, people need to be able to trust each other and they need to be able to trust the major institutions that hold society together.

Once confidence in our major societal institutions is gone, it is going to be incredibly difficult to get it back.

Sadly, the reality is that many of our major financial institutions have been untrustworthy for a very long time.  It is just that the American people are only just now starting to wake up to that fact.

For example, the Federal Reserve has been at the heart of our economic problems for decades but most Americans have not realized it.

But now that is starting to change.  According to one recent poll, only 30% of Americans currently view Federal Reserve Chairman Ben Bernanke favorably.

The American people are becoming increasingly dissatisfied with an economic system where the vast majority of the rewards flow to Wall Street, the big banks, the biggest corporations and the ultra-wealthy.

According to the Washington Post, the top 0.1% of all income earners in the United States took home 2.6% of the nation’s earnings in 1975.  By 2008, the top 0.1% were taking home 10.4% of the nation’s earnings.

The Washington Post also says that after adjusting for inflation, the average income of the top 0.1% of all Americans jumped by 385 percent between 1970 and 2008 while the average income for the bottom 90 percent of all Americans actually fell by one percent.

The sad truth is that income inequality in the United States has become a major problem.  A very small sliver of the population is reaping almost all of the rewards and the middle class is being ripped to shreds.  Conservatives, liberals, Democrats, Republicans and libertarians should all be alarmed by this.

Meanwhile, the national debt continues to explode.  Right now, U.S. government debt is expanding at a rate of $40,000 per second.

Every single minute we steal another 2 million dollars away from our children and our grandchildren.

But if we stop this theft it would throw the U.S. economy into a horrible economic crisis that would be far worse than what we are experiencing right now.

That is why the vast majority of our politicians do not have the guts to do it.

We truly are caught between a rock and a hard place.

But people like Robert Kiyosaki can see what is coming, and they are getting prepared.

Are you prepared?

Many of our young people have come up with their own versions of an “economic stimulus plan”.  In past articles I have documented many of the signs that society is collapsing, including the disturbing rise of the “mob robbery” phenomenon.

Well, just the other day there was another very shocking mob robbery in the city of Philadelphia.

On Thursday, a mob of 40 teens and young adults invaded a Sears department store on 69th Street, grabbed all of the merchandise that they could carry, and stormed right back out again.

We are starting to see these kinds of large scale crimes happen from coast to coast.

So what is going to happen to America if the economy experiences the kind of full out collapse that Robert Kiyosaki is talking about?

We live in very interesting times.

I hope that you are getting prepared.

Wars, Rumors Of Wars, Skyrocketing Oil Prices And Global Economic Chaos – Why Is All Of This Happening?

Did anyone out there anticipate that 2011 would be such a wild year?  The year is barely over two months old and we have already seen multiple civil wars erupt, rumors of more wars all over the mainstream media (potentially even including the United States), riots and revolutions breaking out all over the globe, oil prices soaring into the stratosphere and chaos on global financial markets.  So why is all of this happening?  Is all of this one big coincidence or is there a reason why we are witnessing such global chaos right now?  Is it just coincidence that revolutions have broken out in over a dozen countries in the Middle East all at the same time?  Is it just a coincidence that global prices for oil, food and precious metals are all skyrocketing?  Is it just a coincidence that world financial markets suddenly seem more vulnerable than at any time since 2008?  Looking at what is going on in the world right now, it is very tempting to use the phrase “a perfect storm” to describe it.  Unfortunately, this “perfect storm” is very likely to plunge the global economy into yet another financial collapse if it continues to get even worse.

After decades of relative stability, the Middle East has erupted in chaos in 2011.  In the post-World War 2 era, we have never seen a time when there have been so many major internal revolutions all at once.  All of these simultaneous revolutions are driving the price of oil rapidly upwards.

The price of West Texas crude is now over $102 a barrel and the price of Brent crude is now over $116 a barrel and if the chaos in the Middle East continues those numbers are likely to go a lot higher.

Meanwhile, gold has set a new all-time record this week and the price of silver is absolutely exploding.

In fact, just about every kind of “hard asset” that you can possibly name is going up in price.  Investors don’t like all of this instability and they are looking for safe places to put their money.

Unfortunately, the global situation looks like it may become even more heated.

The calls for military action against Libya are rapidly reaching a crescendo.

The U.S. Senate has unanimously passed a resolution calling for the UN Security Council to impose a no-fly zone over Libya, and many members of Congress are openly declaring that the U.S. and NATO should take unilateral action no matter what the UN ultimately decides.

But implementing a no-fly zone is not a simple thing.  It is not just a matter of telling Libya not to fly their planes.  Rather, imposing a no-fly zone over Libya would constitute a major military operation.

U.S. Secretary of Defense Robert Gates is even admitting that enforcing a no-fly zone over Libya would begin with a huge military strike…..

“Let’s just call a spade a spade. A no-fly zone begins with an attack on Libya to destroy the air defenses … and then you can fly planes around the country and not worry about our guys being shot down.”

U.S. commander General James Mattis made a similar comment on Tuesday….

You would have to remove the air defense capability in order to establish the no-fly zone so it – no illusions here, it would be a military operation.

Essentially, imposing a no-fly zone over Libya would be an act of war.

Most of our representatives in Washington D.C. seem to be quite ready to go to war in Libya, but it is another story entirely when it comes to the American people.  A recent Rasmussen poll found that a whopping 67 percent of Americans do not want the U.S. to get more involved in the unrest going on in Arab countries and only 17 percent of Americans do want the U.S. to get more directly involved.

But the American people don’t get to decide whether we go to war or not.  Our leaders in Washington D.C. do.  The USS Enterprise and other major warships are on their way to Libya, and U.S. forces throughout the Mediterranean are on high alert.

So could the U.S. really get involved in another war in the Middle East?

Well, if the U.S. and NATO choose to get involved they will do it without the approval of the rest of the world.

On Wednesday, the Arab League issued a statement which specifically rejected “any foreign interference within Libya on behalf of the opposition”.

Not only that, but any military action by the UN will most likely be blocked by both China and Russia.

Russia’s ambassador to NATO, Dmitry Rogozin, says that any military action against Libya without UN approval would be a violation of international law….

“If someone in Washington is seeking a blitzkrieg in Libya, it is a serious mistake because any use of military force outside the NATO responsibility zone will be considered a violation of international law.”

But Libya is far from the only crisis point in the Middle East.

In fact, a much larger problem may be brewing in Saudi Arabia.

On Facebook, a “Day of Rage” is being hyped for March 11th.  Other dates being promoted for “revolution” in Saudi Arabia include March 20th and March 21st.

But if Saudi Arabia sees the same kind of chaos that we have seen in other countries in the Middle East there is no telling how high the price of oil could go.

Could we see $125 oil?

Could we see $150 oil?

Could we see $200 oil?

Saudi Arabia exports more oil than anyone else in the world, so if their oil production gets interrupted it is going to have a dramatic impact on the global economy.

For example, are you ready to pay 5 dollars for a gallon of gasoline in the United States?

For decades, the entire globe has been blessed with very cheap oil and this has resulted in a massive economic boom.

But times are changing.

The economic situation over in Europe is already deteriorating and any additional bad news could plunge that entire continent into a major crisis.  A recently released report from Ernst & Young is warning that if oil goes up to 150 dollars a barrel and it stays there, “at least” one eurozone country will default and the entire eurozone will be plunged back into recession.

A much higher price for oil would obviously not be good for the U.S. economy either.  Do you remember what happened back in 2008?  The price of oil hit a record high in June and then the entire financial system came unglued just a few months later.

But if we see a repeat of 2008 it may be a lot worse this time because the global financial system is now more unstable than ever.

The truth is that the entire world is still trying to recover from the last financial crisis.  The Federal Reserve is pumping massive quantities of dollars into the U.S. economy in an attempt to stimulate it back to life, but so far it is not working too well.

The rest of the world does not appreciate all of this “money printing” and the inflation that this is causing is beginning to create massive imbalances on global financial markets.

The world is starting to lose faith in the U.S. dollar.  Right now, approximately 85% of all foreign-exchange transactions in the world involve the U.S. dollar.  Not only that, 60% of all the currency reserves in the world are in U.S. dollars.  With the U.S. dollar rapidly becoming less stable, many are now wondering if it should continue to be used as the reserve currency of the world.

The truth is that if the U.S. dollar falls, it is going to create a tremendous amount of financial chaos in almost every nation on the globe.

Unfortunately, as I have written about so many times previously, the U.S. economy is dying.  The U.S. government is absolutely drowning in debt, and leaders all over the planet are calling for the establishment of a new global reserve currency.

The days of the United States being the “economic engine of the planet” are rapidly coming to an end.

The U.S. economy is not ever going to fully “recover”.  In fact, the U.S. economy is basically “running on empty” at this point as Gerald Celente recently noted during an interview on RT television….

The entire U.S. economy was designed to operate on massive amounts of very cheap oil.  Americans do more driving than anyone else in the world.  Many of us are so lazy that we won’t even walk to a store if it is on the other side of the parking lot.

If oil hits record levels in 2011, it is going to be a massive shock to the U.S. economic system.  Any hopes for an “economic recovery” will be completely dashed.

In fact, if one wanted to “take down” the U.S. economy, driving up the price of oil would be a perfect way to do it.

And if one wanted to drive up the price of oil, a perfect way to do that would be to create all kinds of chaos in the Middle East.

So is all of this craziness that we are seeing in 2011 just a big coincidence or is there a reason why all of this is happening?

Please feel free to leave a comment with your opinion on the matter below….

Warning Signs

Do you see all of the warning signs that are flashing all around you?  These days it seems like there is more bad economic news in a single week than there used to be in an entire month.  2011 is already shaping up to be a very dark year for the world economy.  The price of food is shooting through the roof and we have already seen violent food riots in countries like Egypt, Algeria and Tunisia.  World financial markets are becoming increasingly unstable as the sovereign debt crisis continues to get worse.  Meanwhile, the number of Americans applying for unemployment benefits is up, foreclosures are up and poverty continues to spread like a plague throughout the United States.  What we are starting to see around the globe is a lot like the “stagflation” of the 1970s.  All of the crazy money printing that has been going on is overheating prices for agricultural commodities and precious metals, but all of this new money is not doing much to help the average man or woman on the street.

Do you remember what the economy was like in America during the 70s?  We had high unemployment and high inflation at the same time.  It was horrible.  Well, all the warning signs are there for a stagflation repeat.  Unemployment is at epidemic levels and it isn’t showing any signs of decreasing much any time soon.  Meanwhile, the crazy money printing that the Federal Reserve and other central banks have been doing is starting to cause significant inflation.  The price of oil is about to cross the 100 dollar a barrel mark and the UN is forecasting that the global price of food is going to increase by 30 percent by the end of the year.

So, yes, there are some really, really good reasons to be incredibly concerned about the global economy in 2011.

Meanwhile, the only solutions that our global leaders seem to be offering are more money printing, more government debt and more financial control by international organizations.

The truth is that we have a real mess on our hands.  The following are 20 economic warning signs that should be of great concern to all of us….

#1 Over the past seven days, the price of wheat has risen by 11 percent as concerns about food shortages continue to grow around the world.

#2 The price of corn is up a staggering 94 percent since last June.

#3 The United Nations is projecting that the global price of food will increase by 30 percent in 2011.

#4 According to the U.S. Department of Labor, the number of Americans applying for unemployment benefits rose last week to the highest level since last October.

#5 According to the Pew Charitable Trusts, of the 14 million Americans “officially” unemployed in December, 30% of them had been unemployed for one year or longer.

#6 Beginning in the month of March, the U.S. Postal Service will begin shutting down up to 2,000 post offices across the United States.

#7 In an absolutely stunning move, Standard & Poor’s has downgraded Japanese government debt from AA to AA-.

#8 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.

#9 Approximately 5 million homeowners in the United States are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.

#10 According to the Congressional Budget Office, the Social Security system will run a deficit of 45 billion dollars this year.  When the new payroll tax breaks are factored in, the projected “Social Security deficit” for this year swells to 130 billion dollars.

#11 The U.S. money supply has been rising at a pace that is absolutely unprecedented.

#12 Right now, money is flowing out of bonds at an absolutely staggering pace.

#13 The U.S. Bureau of Labor Statistics says that the price of food increased 50 percent faster than the overall rate of inflation during 2010.

#14 According to the U.S. Conference of Mayors, visits to soup kitchens are up 24 percent over the past year.

#15 During the last school year, almost half of all school children in the state of Illinois came from families that were considered to be “low-income”.

#16 Those living in the town of Discovery Bay, California will soon not be permitted to use cash to pay for any public services.  Could this be another disturbing step in the direction of a cashless society?

#17 French President Nicolas Sarkozy says that the IMF should be given the power to enforce new rules that would be designed to prevent “global economic imbalances” from happening.

#18 The U.S. government is currently borrowing about 40 cents of every single dollar that it spends.

#19 According to the Congressional Budget Office, the U.S. government will have the biggest budget deficit ever recorded (approximately 1.5 trillion dollars) this year.

#20 It is being projected that the U.S. national debt will increase by $150,000 per U.S. household between 2009 and 2021.

So is there any good news?

Well, yes there is.

U.S. Representative Ron Paul has introduced a new bill to audit the Federal Reserve.  Let us hope that the move to audit the Fed fares better in the 112th Congress than it did in the 111th Congress.  It would be wonderful if the American people could actually learn what has been going on inside the Fed all this time.

But mostly the news about the global economy is really bad.  There have been some people that have been warning for decades that all of this money printing and all of this government debt would eventually catch up with us.  Now we have almost reached the moment of reckoning that the doomsayers have been warning about for so long, and it is going to be really painful to go through it.

Thanks to the greatest debt bubble in the history of the world, we have been living beyond our means for decades.  When “times were good” it was not because either the Republicans or the Democrats were doing something right.  The truth is that both political parties have been horribly addicted to government debt.  The debt-fueled prosperity that our politicians purchased for us is starting to come to an end, and an economic implosion is coming that most Americans will never see coming.

But hopefully most of the readers of this article are much wiser than the average American.  The warning signs are there.  Now is the time to take action and get prepared.

Precious Metals: 10 Things To Know Before Jumping Into Gold And Silver

As the global economy became increasingly unstable during 2010, investors all over the world flocked to precious metals such as gold, silver, copper and platinum.  The price of gold set an all-time record high last year, and gold investors were euphoric.  Many analysts are projecting that prices for gold, silver and other precious metals will continue to soar throughout 2011.  But does that mean that everyone should just suddenly jump into gold and silver?  No, it does not.  Precious metals are not for everyone.  Just like any other kind of investing, it is absolutely crucial that you get educated before you get involved.  Investing in precious metals is very different from other kinds of investments.  There are significant hazards and pitfalls to watch out for.  But if you take the time to do it right, investing in precious metals can be very rewarding, and it can potentially be a great way to protect your wealth against the tremendous inflation that is coming in the years ahead.

The following are ten key things that you should know before jumping into gold and silver….

#1 Precious Metals Markets Are Highly Manipulated

Big financial institutions, and even governments, openly manipulate the precious metals markets.  This is an open secret that you should know if you plant to invest in precious metals.  Those who think that they can jump in and out of gold or silver and make a killing usually end up learning a very painful lesson.  Investing in precious metals should be done for the long-term unless you really, really know what you are doing.

So why is long-term investing safer?  Well, as we have seen over the past few years, the short-term manipulation of gold and silver prices usually gets trumped by the long-term trends in the end.

But that doesn’t mean that gold, silver and other precious metals won’t take some very significant short-term tumbles.

The following “mini-documentary” does an excellent job of examining some of the strange things that we have seen in the precious metals markets recently….

#2 The Long-Term Trends Are Very Favorable For Precious Metals

As the U.S. dollar has declined, gold, silver and other precious metals have been going up, up, up over the past decade.  Investors all over the globe have been flocking to the safety and stability that they provide.

Just check out the following chart which shows how the price of gold has risen dramatically over the past decade.  In fact, this chart is a little out of date.  At one point during 2010, the price of gold exceeded $1400 an ounce.  As you can see, those who have been investing in gold for the long-term have been doing very, very well….

Many analysts are extremely bullish on gold right now.  For example, Peter Schiff believes that the price of gold is going to eventually hit $5000.

So does that mean that what Schiff is saying is actually going to happen?

Nobody can tell you for sure what is going to happen.

But one thing is for sure – we are entering uncharted territory in world financial markets.  At this point, just about anything is possible.

#3 Gold Holds Value Over Long Periods Of Time

In ancient Rome, an ounce of gold would buy you a nice suit.  A hundred years ago, an ounce of gold would buy you a nice suit.  Today, an ounce of gold will buy you a nice suit.

Meanwhile, the U.S. dollar has lost well over 95 percent of its value over the last 100 years.

So which is better to hold on to for the long-term – U.S. dollars or gold?

#4 The Value Of The Dollar Is Going Down

Usually (but not always) when the value of the dollar goes down, the value of gold goes up.  As the U.S. government and the Federal Reserve have been flooding the system with new dollars, investors across the globe have been flocking to precious metals.

At some point in the years ahead we are going to be facing some very, very serious inflation.  When that time arrives, U.S. dollars are not going to be worth a whole lot.  But all of that gold and silver you have stored up still will be.

#5 Physical Gold Is Preferable To Paper Gold

When investing in gold, it is much more preferable to actually take possession of the physical gold than it is to have a piece of paper that says that you have invested in gold.  Someday when the financial system crashes, you may find that your “piece of paper” is not going to do you much good.

#6 Diversification Is Key

When investing in precious metals, it is important to diversify.  This spreads out your risk.  Some investors accumulate as many different precious metals as they can.  Others diversify by getting precious metals from a variety of dealers or by accumulating it in different forms – coins, bars, jewelry, etc.

It is always wise not to put all of your “eggs” in one basket.

#7 Accumulate Different Denominations If You Can

In the future, if you actually need to spend your precious metals you don’t want them all to be of the same denomination if possible.  For example, if you need to buy a little bit of food, you don’t want to only have high value coins.  Variety is a good thing, and accumulating different coin denominations is another way that you can diversify.

#8 You Cannot Eat Precious Metals

Investing in precious metals should be done only after you have gathered together an adequate emergency food supply.  If the global economy completely shatters, having gold and silver is not going to be good enough.  You are going to need lots of food for you and your family.  So be sure to take care of the necessities before you invest in precious metals.

#9 Do Not Advertise That You Are Accumulating Precious Metals

Don’t go around telling everyone that you are storing up precious metals.  That is just going to make you a target.  Investing in precious metals is something to be done quietly.

#10 Get Educated

I cannot stress this point enough.  If you want to invest in precious metals, you need to get educated.  People that do not know what they are doing are at much greater risk of getting burned.  Be smart enough to realize what you do not know.  Don’t be too proud to ask for advice.  Seek out reputable dealers.  If you take the time to do things right, then you will have the best chance for success.

The following video contains some more facts and figures about investing in gold.  I do not know anything about the organization that put this video together, but this video is well produced and it presents a lot of important information about gold in an entertaining manner….

It Is A Race To The Bottom For Global Currencies And The Winner Will Be Gold

In 2010, any nation that has a weak currency has a very significant competitive advantage in global trade.  A weak currency means that the products and services produced by that nation will be less expensive for other nations.  Therefore other nations will buy more of those products and services.  When exports go up, employment goes up and more wealth flows into the country.  Alternatively, when the value of a national currency declines, exports do down, unemployment increases and less wealth flows into the country.  Therefore, dozens of exporting nations around the globe have become increasingly determined to keep their national currencies very weak in an attempt to maintain a competitive advantage in the global marketplace.  Essentially what we have is a race to the bottom among global currencies.  Whenever any nation wants to gain a little bit more of an edge in global trade they push the value of their currency down just a little bit more.  So who is the winner in all of this?  Well, that is easy.  Gold, silver and other precious metals will continue to be the winners as fiat currencies all over the globe continue to decline in value. 

Quite a few nations have been openly manipulating their national currencies for many years, but now currency issues are starting to make front page news.  Things are starting to get quite tense out there.  Major importing nations are starting to resent the fact that they have been burned by all of this currency manipulation and major exporting nations are absolutely determined not to lose the economic gains that they have achieved as a result of their currency manipulation.   

In recent months, nation after nation has been taking steps to weaken their national currencies.  Every time another currency gets devalued the hostility in the global marketplace just seems to grow.  In fact, Brazil’s finance minister recently was very honest about the fact that the nations of the world are now engaged in a very open “international currency war”….

“We’re in the midst of an international currency war, a general weakening of currency.”

So where does all of this end?

Well, to some the answer is to adopt a global currency.  But let us hope that never, ever happens because it would be the end of economic sovereignty for every nation on the face of the earth.

To others, the answer is for the nations that are being taken advantage of to stand up and to declare that they are not going to take it anymore.

Perhaps the most glaring example of one nation taking example of another is what China is doing to the United States.

In my recent article entitled “Currency War” I described the effect that currency manipulation by the Chinese government is having on trade between the U.S. and China….

For years, China has kept the value of their currency artificially low.  Even though China has made a few small moves toward a more free-floating currency policy, at this point China’s currency is still pretty much pegged to the U.S. dollar.  It is estimated that the Chinese government is keeping China’s currency at a value about 40 percent lower than what it should be.  This is essentially a de facto subsidy to China’s exporters.

By keeping their currency essentially pegged to the U.S. dollar at such a low value, China is able to flood the U.S. market with incredibly cheap goods and services.  But this has created an absolutely massive trade imbalance.  Today, the United States spends $3.90 on Chinese goods for every $1.00 that the Chinese spend on American goods.  Jobs and wealth are flowing out of the United States and into China at a pace that is almost unimaginable.

The Chinese know that if they let the value of their currency rise substantially it would have a devastating impact on their economy.  Chinese Premier Wen Jiabao was recently quoted in The Telegraph as saying the following about what would happen if the value of Chinese currency was to rise substantially….

“I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs.”

So instead American factories get to go bankrupt and millions of American workers get to lose their jobs.

Is that fair?

Meanwhile, other nations around the world are busy debasing their currencies.  For example, Japan recently made a 12 billion dollar move in world currency markets to debase the value of the yen.

Earlier this year, the Swiss National Bank experienced losses equivalent to about 15 billion dollars trying to stop the rapid rise of the Swiss franc.

It truly is a race to the bottom.

So who benefits?

Gold, silver and other precious metals of course.

Gold recently topped $1,300 an ounce. 

Silver has been absolutely soaring.

Exporting nations such as China and India have been gobbling up gold and other precious metals every time there is a little bit of a dip.  They are tired of piling up endless amounts of U.S. dollars and they are seeking to diversify into something more solid.

The trend toward gold and precious metals is so hot that one German firm that installs gold vending machines now has plans to introduce them into the United States later this year.

It seems like everyone wants gold right now.

Not that gold is any more valuable than it ever has been.

It is just that it is not going down in value like all of the fiat paper currencies around the world are.

This is not a good time to have faith in paper currencies – particularly the U.S. dollar.

Already the dollar has been slipping substantially and the Federal Reserve has not really even cranked up the next round of quantitative easing yet.

One of the easiest things to do when there are economic problems in a nation is to pump more paper money into the economy.  More paper money gives people something to spend, it spurs economic activity, it helps exports (as described above), and it helps put people back to work. 

Of course it also destroys the value of the currency, but we will get to that in a minute.

With millions upon millions of Americans out of work, and with millions of homes being foreclosed, and with poverty statistics soaring into uncharted territory, it is very tempting for our politicians in Washington to borrow even more paper money and to pump it into the economy in an attempt to get things going again.  But right now an election is coming up and the Tea Party has raised such a ruckus about government debt that there isn’t much appetite for more “stimulus packages” right now.

Of course the truth is that “stimulus packages” never solve any of our long-term problems anyway.  The reality is that they just give our economy a short-term “high” and make our long-term debt problems even worse.

Not that the U.S. government is not quietly up to some monkey business.  On Friday, federal regulators announced a 30 billion dollar bailout of the nation’s wholesale credit union system.

Another bailout?

Just what we need, eh?

But in general, the U.S. government is not doing a whole lot more reckless spending right now.

However, the Federal Reserve can inject more paper money into the economy without the help of Congress.  Under the guise of “quantitative easing”, the Federal Reserve makes up money out of thin air and pumps it into the economy by buying up U.S. Treasuries, mortgage-backed securities or anything else that they feel like buying.

So is this going to happen again any time soon?

There are all kinds of whispers on Wall Street that this is exactly what the Fed is going to do and that it is going to be massive.

And quantitative easing would probably stimulate the U.S. economy in the short-term.

However, it would also seriously damage the value of the U.S. dollar.

You see, the truth is that when more dollars are introduced into the system, the value of each existing dollar goes down.

It is called inflation, and it is a hidden tax on all of us. 

Think of it this way.  If you put five dollars away today and you anticipate that you will be able to buy two loaves of bread with it three years from now, you will be greatly disappointed if when that day arrives a loaf of bread now costs five dollars and you can only purchase one loaf.

When the purchasing power of the dollar declines, it is a tax on every single dollar in every single wallet and bank account in the United States.

Since 1913, the U.S. dollar has lost over 96 percent of its value.  Unfortunately, as ever increasing mountains of paper money continue to be required to keep our financial system solvent, the rate of decline of the value of the dollar is only going to increase in the years ahead.

So when you are watching the news and you hear that the Federal Reserve has announced some more “quantitative easing”, you might want to watch your wallet because you are about to be taxed.  Your dollars will still be there – they just won’t go as far as they used to.

But in the twisted global economic system that our politicians have created, if the U.S. does not devalue the dollar we will lose factories, jobs and wealth at an even faster pace. 

How sick is that?

So do not put your trust in the U.S. dollar.  In the end, it will fail.

So what do all of you think?  Feel free to leave a comment with your opinion (sane of otherwise) below….

The Unbelievably Rampant Corruption On Wall Street

In order for a financial system to be able to function properly, it is absolutely essential that the general population has faith in it.  After all, who is going to want to invest in the stock market or entrust their money to big financial institutions if there is not at least the perception of honesty and fairness in the financial marketplace?  For decades, the American people did have faith in Wall Street.  But now that faith is being shattered by a string of recent revelations.  It seems as though the rampant corruption on Wall Street is seeping up almost everywhere now.  In fact, some of the things that have come out recently have been absolutely jaw-dropping.  The truth is that the corruption on Wall Street is much deeper and much more systemic than most of us ever dared to imagine.  As the general public digests these recent scandals, it is going to result in a tremendous loss of faith in the U.S. financial system.  Once faith in a financial system is lost, it can take years or even decades to get back.  So how is the U.S. financial system supposed to work properly when large numbers of people simply do not believe in it anymore?

Just consider some of the recent revelations of Wall Street corruption that have come out recently….

*Bloomberg is reporting that a massive network of big banks and financial institutions have been involved in blatant bid-rigging fraud that cost taxpayers across the U.S. billions of dollars.  The U.S. Justice Department is charging that financial advisers to municipalities colluded with Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Wachovia and 11 other banks in a conspiracy to rig bids on municipal financial instruments.  Apparently what was going on was that it was decided in advance who would win the auctions of guaranteed investment contracts, which public entities purchase with the proceeds from municipal bond sales, and then other intentionally losing bids were submitted in order to make the process look competitive.  The U.S. Justice Department claims that this fraud has been industry-wide and has been going on for years.  In fact, at least four financial professionals have already pleaded guilty in this case.

*An industry insider has come forward with “smoking gun” evidence that some of the biggest banks have been openly and blatantly manipulating the price of gold and silver.  For a time it looked like the federal government was just going to ignore all of this fraud, but after substantial public uproar some action is indeed being taken.  In fact, it has been reported that federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals markets.

*Goldman Sachs is getting most of the press about fraud in the mortgage-backed securities market these days.  Of course Goldman is strenuously denying that it “bet against its clients” when it changed its position in the housing market in 2007.  But we all know the truth at this point.  The truth is that Goldman Sachs clearly bet against its clients and was involved in a whole lot of things that were even worse than that.  Many did not think the U.S. government would dare go after Goldman, but that is what we are starting to see.  U.S. federal prosecutors have opened a criminal investigation into whether Goldman Sachs or its employees committed securities fraud in connection with its trading of mortgage-backed securities, and it will be very interesting to see if anything comes of that investigation.

*But not everyone is being held accountable for their actions.  The guy who helped bring down AIG is going to get off scott-free and is going to be able to keep the millions in profits that he made in the process.

*Entire U.S. cities have been victims of this rampant Wall Street fraud.  In fact, it is now being alleged that the biggest banks on Wall Street are ripping off some of the largest American cities with the same kind of predatory deals that brought down the financial system in Greece.

*The really sad thing is that fraud is very, very lucrative.  Executives at many of the big banks that received large amounts of money during the Wall Street bailouts are being lavished with record bonuses as millions of other average Americans continue to suffer economically.  Even the CEOs of bailed-out regional banks are getting big raises.  It must be really nice to be them.

So does all of this make you more likely or less likely to invest in the stock market?

Do you think that the American people can see all of this and still believe that the financial system is “fair” and “honest”?

The truth is that Wall Street is full of rip-off artists and fraudsters who don’t even try to hide their greed anymore.

It is as if a thousand junior Gordon Gekkos have been unleashed and they are all trying to be masters of the universe at any cost.

But what they are doing is ripping the heart out of the U.S. financial system.

If people lose faith in the system the system will ultimately fail.

A financial system that allows open fraud and manipulation is operating on borrowed time.

So will the rampant corruption on Wall Street now be cleaned up?

Only time will tell.

But one thing is for certain.

The American people will be watching.

SILVER MART

 

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