Go West, Young Man (To North Dakota)

Are you unemployed and out of options?  Well, if you live in most areas of the country there is not much hope for you.  But there is one state where hiring is really hot right now.  If you are desperate for a job, you just might want to check out North Dakota.  Way back in the middle of the 19th centurty, author Horace Greeley gave young Americans the following advice: “Go West, young man, go West“.  Well, we have reached another moment in U.S. history when it may be wise for many Americans to pick up and move to another part of the country in search of opportunity.  Of course traveling to North Dakota is not “going west” for all Americans, but for the majority of the population it is.  In the 19th century, many Americans traveled west because they believed those that told them that there was “gold in them thar hills”, but today a different kind of “gold” is being found in North Dakota.  The state is currently enjoying a boom of “black gold”, and all of that oil is creating a huge number of jobs.  If you are unemployed and you are desperate, you might want to check out North Dakota.  Desperate times call for desperate measures.

As I write about so frequently, unemployment is an absolute nightmare in most areas of the country right now.  But in North Dakota there are plenty of jobs and they pay really well.  Just check out what a new CNN article is saying about what is going on in the state….

Believe it or not, a place exists where companies are hiring like crazy, and you can make $15 an hour serving tacos, $25 an hour waiting tables and $80,000 a year driving trucks.

You just have to move to North Dakota. Specifically, to one of the tiny towns surrounding the oil-rich Bakken formation, estimated to hold anywhere between 4 billion and 24 billion barrels of oil.

CNBC also recently ran an article about the jobs boom up in North Dakota.  According to CNBC, there are “help wanted” signs all over the place in little towns such as Williston….

Unemployment is a national problem in the U.S., but you wouldn’t know that if you travel through North Dakota.

The state’s unemployment rate hovers around 3 percent, and “Help Wanted” signs litter the landscape of cities such as Williston in the same way “For Sale” signs populate the streets of Las Vegas.

“It’s a zoo,” said Terry Ayers, who drove into town from Spokane, Wash., slept in his truck, and found a job within hours of arrival, tripling his salary. “It’s crazy what’s going on out here.”

If you are desperate for work and you are looking for a “reboot”, North Dakota may be an option for you.  According to CNN, there are a significant number of families that have already changed their lives by heading out to North Dakota….

McMullen now works as a nanny in exchange for housing. Her husband, who worked on behavior management programs for a school system in North Carolina where he took home about $1,600 a month, found a job working in the oilfields where he makes that same amount of money in one week — adding up to an annual salary of about $77,000.

“We want to be debt-free, so we came here to play catch-up,” said McMullen. “But when I came here, I thought I was on Mars. It’s just so crazy that the rest of the country has no jobs, and here’s this one place that doesn’t have enough people to fill all the jobs.”

So is North Dakota for everyone?

Of course not.

First of all, it gets bone-chilling cold in North Dakota in the winter.

If you cannot handle really cold weather then you should not go up there.

Secondly, there is not nearly enough housing in the boom towns and the housing that is available is really expensive.

So you may either have to commute a long way or deal with accommodations that are less than stellar.

North Dakota is very flat, the geography is not very pleasant, there is not much to do there, the “boom towns” are very far from major population centers and moving there would entail major sacrifices for most people.

But there are good jobs up there.

So if you are looking for some good news, you just got some.

Look, it is better to try to do something than to sit around waiting for Barack Obama to save you.  As I have written about previously, the Obama jobs plan is a bad joke and even if it got through Congress it would do very little to create jobs.

The truth is that Barack Obama simply does not know what he is doing when it comes to jobs.  He continues to push for even more job-killing “free trade” agreements that will result in millions more American jobs being shipped overseas.

Barack Obama continues to run around the country talking about “infrastructure jobs”, but according to ABC News, thousands upon thousands of those jobs are actually going to Chinese workers….

In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.

In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.

In Alaska, there is a proposal for a $190 million bridge project.

These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.

The sad truth is that the U.S. economy continues to slide even further down the tubes and the vast majority of our politicians have no idea how to fix things.

When Barack Obama first took office, the official U.S. unemployment rate was 7.6 percent.  Today it is 9.1 percent.

There are less jobs in the United States today than there were a decade ago, and the number of good paying jobs continues to shrink.

In 1980, 52 percent of all jobs in the United States were middle income jobs.  Today, only 42 percent of all jobs are middle income jobs.

So don’t sit around waiting for the economy to fix itself.  There is no reason to have blind faith in the system at this point.

We live during unconventional times, and many of us are going to have to find unconventional solutions to our problems.

There are lots of good jobs in the western part of North Dakota.

If you need a job, you might want to look into it.

Inflation Is Here – Just Open Up Your Eyes And Look At These 5 Financial Charts!

Despite what Federal Reserve Chairman Ben Bernanke says, rampant inflation is officially here.  The federal government is constantly monkeying with the numbers to keep the “official” rate of inflation below 2 percent, but it is becoming very difficult to deny that the cost of almost everything is really going up these days.  The American people are not stupid.  They notice the difference when they go to the grocery store or stop at the gas station.  The dollar is losing value rapidly now.  The price of gold set another new all-time record today and is currently hovering just above $1430 an ounce.  The price of West Texas crude has moved above 100 dollars several times recently and the price of Brent crude is currently above 116 dollars.  These higher oil prices are really starting to be felt in the United States.  The average price for a gallon of gasoline in the United States has now reached $3.38.  There are some gas stations in the U.S. where the price of a gallon of gas is already over 4 dollars.  But it is not just the American people that are feeling the pain.  The global price of food recently hit a new record high and almost every major agricultural commodity has absolutely skyrocketed in price over the past 12 months.  Meanwhile, Ben Bernanke just told the Senate Banking Committee that he really isn’t concerned about inflation at all.

When it comes to inflation, the key is not to look at the official U.S. government numbers (they are highly manipulated) or how the U.S. dollar is performing against other major currencies (because they are all being devalued as well).  Instead, you can get a truer sense of what is really happening to inflation by looking at what the U.S. dollar is doing against precious metals, commodities and other hard assets.

So are we experiencing rampant inflation right now?  Well, just open up your eyes and look at these 5 charts….

1 – The price of oil is racing back up to record levels.  The chart below from the Federal Reserve is a couple weeks out of date.  As noted above, the current price of West Texas crude is about $100 a barrel….

2 – The price of a gallon of gasoline in the United States seems destined to hit a brand new all-time record at some point this year.  Was it really just a few short years ago when the average price of gas in this country was about a dollar a gallon?….

3 – The value of most precious metals is very consistent over time.  So when you see precious metals go up dramatically in price, it means that the dollar is being devalued.  The price of gold just set another new all-time high and it seems destined to keep going even higher….

4 – The chart below from the Federal Reserve is a measure of the price of all commodities.  These price increases are inevitably going to be passed along to consumers in the United States….

5 – After a couple of years of stable food price, the price of food is starting to take off yet again….

In fact, many analysts are warning that we could experience a major food crisis over the next couple of years.  The global demand for food continues to grow at a very brisk pace, but all of the crazy weather we have been having around the world has caused some very bad harvests.

Unfortunately, the global price of food has gone up substantially in recent months and it is likely to keep going up very rapidly.  Just consider the following five facts….

#1 The United Nations says that the global price of food hit another new all-time high during the month of January.

#2 The price of corn has doubled in the past six months.

#3 The price of wheat has roughly doubled since the middle of 2010.

#4 According to Forbes, the price of soybeans is up about 50% since last June.

#5 The United Nations is projecting that the global price of food will increase by another 30 percent by the end of 2011.

Ouch.

But isn’t there some good economic news?

Yes, there is, but before we cover it, it is important to keep in mind that in an inflationary environment almost all economic numbers go up.

For example, during the recent hyperinflation in Zimbabwe stocks went up like crazy and “economic growth” statistics were very impressive.

Why?

Because those numbers were measured in currency units that were being devalued at a blinding pace.

So please keep that in mind when you hear “good economic statistics” on the evening news.

The truth is that in an inflationary environment such as we have now entered into almost all economic numbers should be going up.

So what is the good news?

Well, last month all three major U.S. car companies reported strong sales gains.  Sales of GM vehicles were up 49%, sales of Chrysler vehicles were up 13%, and sales of Ford vehicles were up 10%.

But just because a few pieces of good economic news come floating our way does not mean that we should forget all of the horrific long-term economic trends that are tearing this country apart.

The truth is that we are still a nation that is absolutely drowning in debt.

For example, it was just announced that China now owns 1.16 trillion dollars of U.S. government debt.

The borrower is the servant of the lender.  We should never forget that.

Also, the U.S. economy is slowly but surely becoming of less importance on the global stage.

In 1985, America’s share of global GDP was 33%.  Today, it is just 24%.

Our nation is rapidly being deindustrialized and we are becoming deeply dependent on industrial production from other nations.

Did you know that the new World Trade Center that is being constructed on the site of the September 11, 2001 attacks is going to be made from German steel and Chinese glass?

That says a lot about where we are at as a country.

We have allowed so much of our industrial infrastructure to be exported to China where workers slave away in almost unbelievable conditions.

A reader named Rish recently described what things are like over there….

As a product developer I went to china and saw the way the factory workers lived and worked in person. 50$ a month is about right, but if you are a skilled quality control expert you might make as much as 150$. at least this was true about 2 years ago the last time I went. The barracks were pretty meager, bunk beds with just plywood, no mattresses, if you wanted you could go to a store just outside the factory gate and buy a thick comforter that they sell as a “mattress” .

It will be interesting to see how the next few years changes the face of the USA. Who knows? if the unemployment rate and lack of jobs keeps going and enough people become homeless, we might become the next Bangladesh, and people will be lining up of the 30 cents an hour corporate factory jobs, and living in barracks just like those…

The only way the U.S. has been able to “thrive” during this deindustrialization is by borrowing gigantic amounts of money.  But all of this borrowing is slowly but surely destroying the U.S. dollar, and we are getting closer to the point of absolute catastrophe.

Peter Schiff recently shook folks up when he talked about these issues during a recent interview on CNBC….

But it is not just the United States that is printing tons and tons of money.  All of the major industrialized nations have been firing out gobs of currency.  That is a huge reason why so many investors have been racing to get into hard assets recently.

Now Ben Bernanke and other top Federal Reserve officials have been dropping hints that more quantitative easing may be necessary.

Unfortunately, just like with any other addiction, once you give in a few times it becomes easier and easier to engage in destructive behavior.  Now that the Fed has gotten a taste for quantitative easing it is going to be really hard to stop.

Nor can the Fed stop at this point.  If they did it would be disastrous for the U.S. economy.  But if the Fed continues on this reckless course it will make the eventual collapse of our economy even worse.

Under our current debt-based system there is no way out.  The Federal Reserve can attempt to put off the inevitable for a while by pumping up the debt bubble even more, but at some point it is going to burst.

When that happens we are going to be facing a financial crisis which will blow what happened in 2008 completely out of the water.

So enjoy these good economic times while you still can.  This is about as good as things are going to get from here on out.

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….

12 Ominous Signs For World Financial Markets

Can anyone explain the very strange behavior that we are seeing in world financial markets right now?  Corporate insiders are bailing out of the U.S. stock market at a very alarming rate.  Investors are moving mountains of money into gold and other commodities.  In fact, there is such a rush towards gold that shortages are starting to be reported in some areas.  Meanwhile, some very, very unusual option activity has started to show up.  In particular, someone is making some incredibly large bets that the S&P 500 is going to absolutely tank during the month of October.  Central banks around the world have caught a case of “loose money fever” and are apparently hoping that a new flood of paper money will shock the global economy back to life.  Meanwhile, the furor over the foreclosure procedure abuses of the major U.S mortgage companies threatens to bring even more turmoil to the U.S. housing industry.

There are some very ominous signs that something is just not right in world financial markets right now.  Some of the signs listed below may be related.  Others may not be.  That is for you to decide.

Often, just before something really bad happens, you can actually see the rats leaving a sinking ship if you know where to look.  The truth is that if things are going to go south it is the insiders who know before anyone else.

So are some of the signs below actually clues for what we should expect in the months ahead?

Maybe.

Maybe not.

You make your own call.

But it is becoming hard to deny that there are some serious danger signs out there at this point….    

#1 Corporate insiders are getting out of the U.S. stock market at an absolutely blinding pace.  It is being reported that the ratio of corporate insider selling to corporate insider buying last week was 1,411 to 1, and this week the ratio has soared even higher and is at 2,341 to 1.

#2 Many of the world’s wealthiest people are buying absolutely massive quantities of gold right now.

#3 It is being reported that J.P. Morgan is gobbling up the rights to as much physical gold as it possibly can.

#4 The United States Mint has announced that it has run out of 1-ounce, 24-karat American Buffalo gold bullion coins and that it will not be selling any more of them in 2010.

#5 It is becoming increasingly difficult to explain the unusually high option volume that we are witnessing right now.

#6 Some very large investors are making massive bets that the S&P 500 is going to take a serious tumble during the month of October.

#7 On Tuesday, the Bank of Japan shocked world financial markets by cutting interest rates even closer to zero and by setting up a 5 trillion yen quantitative easing fund.

#8 The president of the Federal Reserve Bank of New York and the president of the Federal Reserve Bank of Chicago are both publicly urging the Fed to do much more to stimulate the U.S. economy, including beginning a new round of quantitative easing, even if it means a significant rise in the U.S. inflation rate.

#9 Nobel Prize-winning economist Joseph Stiglitz told reporters on Tuesday that the loose monetary policies of the Federal Reserve and the European Central Bank are throwing the world into “chaos”.

#10 At the end of September, federal regulators announced a $30 billion bailout of the U.S. wholesale credit union system.

#11 Bank of America, JPMorgan Chase and GMAC Mortgage have all suspended foreclosures in many U.S. states due to serious concerns about foreclosure procedures.  Now, Texas Attorney General Greg Abbott is actually demanding that all mortgage servicing companies in the state of Texas immediately suspend all foreclosures, the selling of foreclosed properties and the eviction of people living in foreclosed properties until they have completed a review of their foreclosure procedures.

#12 Not only that, but Nancy Pelosi and 30 other members of Congress are requesting a federal investigation of the foreclosure practices of U.S. mortgage lenders.  Needless to say, this controversy has the potential to turn the entire U.S. mortgage industry into an absolute quagmire.

So are dark days ahead for world financial markets?

Well, yeah, but it is incredibly hard to predict exactly when things are going to fall apart.

The truth is that there are going to be a whole lot more “crashes” and “collapses” in the years ahead.

The important thing, as discussed yesterday, is to keep your eye on the long-term trends.

The U.S. economy is undeniably in decline.  The only thing keeping the economy going at this point is a rapidly growing sea of red ink.  Debt is literally everywhere.  It is what our entire financial system is based on in 2010. 

In the months and years to come, the major players are going to try very hard to keep all the balls in the air and to continue the massive shell game that is going on, but in the end the whole thing is going to collapse like a house of cards.

Unfortunately, we have been destroying the U.S. economy for decades and there is simply not going to be a happy ending to this story.

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….

BOMBSHELL – Whistle Blower Comes Forward With Solid Proof The Price Of Gold And Silver Is Being Manipulated By Major Financial Institutions

For a long time many of us have had very serious suspicions that the prices of gold and silver were being highly manipulated. But now, thanks to the mind blowing testimony of one very brave whistle blower, the blatant manipulation of the world gold and silver markets is being blown wide open.  What you are about to read below is absolutely staggering.  Once the American people learn how incredibly corrupt the world financial system is, it is going to change everything.  The government that we are all trusting to guard the integrity of the financial system is failing to do that job.  It turns out that the Commodities Futures Trading Commission has been sitting on solid evidence that the elite banking powers have been openly and blatantly manipulating the price of gold and silver.  Even though they were basically handed a “smoking gun”, they have done absolutely nothing with it.  But now the information has gone public and the CFTC is red-faced.

Back in November 2009, Andrew Maguire, a former Goldman Sachs silver trader in Goldman’s London office, contacted the CFTC’s Enforcement Division and reported the illegal manipulation of the silver market by traders at JPMorgan Chase.

Maguire told the CFTC how silver traders at JPMorgan Chase openly bragged about their exploits – including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes.

Traders would recognize these signals and would make money shorting precious metals alongside JPMorgan Chase.  Maguire explained to the CFTC how there would routinely be market manipulations at the time of option expiries, during non-farm payroll data releases, during commodities exchange contract rollovers, as well as at other times if it was deemed necessary.

On February 3rd, Maguire gave the CFTC a two day warning of a market manipulation event by email to Eliud Ramirez, who is a senior investigator for the CFTC’s Enforcement Division.

Maguire warned Ramirez that the price of precious metals would be suppressed upon the release of non-farm payroll data on February 5th.  As the manipulation of the precious metals markets was unfolding on February 5th, Maguire sent additional emails to Ramirez explaining exactly what was going on.

And it wasn’t just that Maguire predicted that the price would be forced down.  It was the level of precision that he was able to communicate to the CFTC that was the most stunning.  He warned the CFTC that the price of silver was to be taken down regardless of what happened to the employment numbers and that the price of silver would end up below $15 per ounce. Over the next couple of days, the price of silver was indeed taken down from $16.17 per ounce down to a low of $14.62 per ounce.

Because of Maguire’s warning, the CFTC was able to watch a crime unfold, right in front of their eyes, in real time.

So what did the CFTC do about it?

Nothing.

Absolutely nothing.

Which is extremely alarming, because the size of this fraud absolutely dwarfs the Madoff or Enron scandals.  In fact, this fraud is so gigantic that it is not even worth comparing to any of the other major financial scandals of recent times.

But Maguire did not give up.  He sent several more emails to the CFTC detailing the open manipulation of the gold and silver markets.

The CFTC did not reply.

Finally he sent them a final email: “I have honored my commitment to assist you and keep any information we discuss private, however if you are going to ignore my information I will deem that commitment to have expired.”

The reply by the CFTC?

“I have received and reviewed your email communications. Thank you so very much for your observations.”

No action.

No acknowledgement that anything was wrong.

No recognition that a massive crime had been committed.

Fortunately, that was not the end of it.

On March 25th, the CFTC held a hearing on alleged manipulation in the gold market by the major banking powers.

Maguire wanted to testify during that hearing but he was not invited.

But William Murphy, chairman of Gold Anti-Trust Action (GATA), was invited to testify.  GATA has been compiling data on the manipulation of the gold and silver markets for quite a long time now.

Murphy was only given five minutes to deliver his testimony.  He raced through his presentation so that he could get as much information on the record as possible.

Very curiously, the live television broadcast of the CFTC hearing suffered a technical failure the minute before Murphy began his testimony. The technical failure was corrected the minute after Murphy was finished.

Coincidence?

Well, it turns out that there were are lot of coincidences surrounding this hearing.

But we’ll get to that in a minute.

When Murphy finished his statement, the panel asked him for some hard proof of market manipulation.  Murphy shocked the panel by revealing the name of Maguire and explaining how Maguire had informed the CFTC Enforcement Division of the market manipulation that was taking place by JPMorgan Chase.  The CFTC panel seemed stunned by the revelation and seemed reluctant to learn any further and asked nothing else about it.

Video of Murphy’s revelation to the panel is posted below….

In another “coincidence”, Maguire and his wife were subsequently injured and hospitalized when their car was struck by a hit-and-run driver in the London suburbs.

When a bystander who saw the “accident” tried to block the other driver from getting away, the other driver accelerated directly towards the witness, forcing him to leap out of the way to avoid being hit.  The hit-and-run driver’s car then hit two additional cars as he left the area.

But Maguire and his wife were fortunate.

In the past, other would-be whistle blowers that had evidence regarding the manipulation in the gold and silver markets died in “unusual accidents” before they were able to bring their evidence to light.

But there were even more “coincidences” surrounding this hearing.

A week before the hearing, the CFTC announced that they had had a fire in the room where its gold and silver records are held.

Isn’t that convenient?

In addition, after the hearing was over, Murphy was contacted by a number of major media outlets for interviews.

Within 24 hours, every single interview was cancelled.

Every single one.

Is that a coincidence too?

It appears that some very powerful people do not want this information to get out.

It also shows how corrupt the mainstream media has become.

This is a story that is so much bigger than the Madoff scandal or the Enron scandal that it is not even funny.

And yet the mainstream media is avoiding it like the plague.

But there were additional bombshells that came out during the hearing as well.

During the hearing it was revealed that the gold manipulators have accumulated a huge short position in gold and that these huge short positions are “naked”, which means that these positions are not hedged.

These massive short positions have put some of the largest financial institutions in the world in an extremely vulnerable position.

In addition, it has now come out that most “gold” that is traded is not backed by the actual metal itself.  For years, most people have assumed that the London Bullion Market Association (LBMA), the world’s largest gold market, had actual gold to back up the massive “gold deposits” at the major LBMA banks.

But that is not the case.

People are now realizing that there is very little actual gold in the LBMA system.

When people think they are buying “gold”, they are actually just buying pieces of paper that say they own gold.

In fact, during the CFTC hearings, Jeffrey Christian of CPM Group confirmed that the LBMA banks actually have approximately a hundred times more gold deposits than actual gold bullion.

Uh oh.

So what happens if everyone decides that they want actual physical delivery of their gold?

It would be such a mess that it is painful even to think about it.

The truth is that right now most of the trading activities on the London exchange are just paper for paper.

But people get into gold because they want to be in a real commodity.

In fact, there are thousands of clients around the globe who think they own huge deposits of gold bullion, and are being charged large storage fees on that imaginary bullion, but what they really own are a bunch of pieces of paper.

If there comes a time when everyone starts asking for their gold it is going to create a squeeze of unimaginable proportions.

Maguire explains this situation this way: “for 100 customers who show up there is only one guy who is going to get his gold or silver and there’s 99 who will be disappointed, so without any new money coming into the market, just asking for that gold and silver will create a default.”

The truth is that it is absolutely impossible for the LBMA to ever deliver all the gold and silver owed to the owners of contracts.

Yes, it is a gigantic mess.

But this type of things is not entirely unprecedented.  For example, Morgan Stanley paid out several million dollars back in 2007 to settle claims that it had charged 22,000 clients storage fees on silver bullion that did not exist.

But the scale of the fraud going on now is absolutely mind blowing.  The following video contains footage from the hearing related to these issues….

So what is the bottom line?

The bottom line is that the precious metals markets are cesspools of fraud and manipulation.

The markets have been suppressed by the major financial institutions for years, and this has created the potential for a “squeeze” in the precious metals markets that could send the prices of gold and silver into the stratosphere.

You see, the reality is that there would be no gold left in the entire world if all the Gold ETFs (Exchange Traded Funds) asked for physical delivery.

Are you starting to get the picture?

In fact, Maguire claims that the naked short selling scam by the major financial institutions is well into the trillions of dollars, making it by far the biggest financial fraud in history.

Maguire calls what has been going on “financial terrorism”, and he accuses the financial institutions involved in this fraud of “treason” for putting national security at risk.

And national security is at risk.

Because if the true extent of this fraud comes out, it could collapse the entire financial system.

If you have never heard an interview with Andrew Maguire, we encourage you to listen to the audio interview posted below.  It will really open your eyes to what is going on in the precious metals markets….

The Century’s Biggest Fraud Revealed

This is one of the biggest financial stories of the decade.  Because it is complex, most Americans will not understand it.  But the fraud and manipulation in the gold and silver markets has the potential to cause a massive economic collapse even without all of the other factors talked about on this blog.

Some very powerful people have been doing some really, really bad things.  Once people understand the truth, they will never look at the financial markets the same way again.  Already, faith in the major financial institutions of this country has been shaken by revelations about what has been going on over at Goldman Sachs.  The American people have no more appetite for any more financial scandals or for any more Wall Street bailouts.  But if the fraud and manipulation taking place in the precious metal markets ever gets totally exposed it will change the U.S. financial system forever.

Please get this information out to as many people as you can.  There are a number of very powerful people who are not going to be pleased that sites like this are attempting to get the truth about this massive scandal out.

Safecastle

What Is He Up To Now? George Soros Declares That Gold Is Now “The Ultimate Bubble”

What in the world is George Soros up to now?  At the 2010 World Economic Forum in Davos, Switzerland Soros recently made the following statement: “When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”  So is Soros trying to scare people away from gold?  The truth is that the price of gold did rise about 40 percent last year.  In the current economic environment, there has been a flight to safety as nervous investors have flocked to precious metals such as gold, silver and platinum.  But are these bad investments that are overvalued right now?  Not at all.  The truth is that gold and silver are just about the only things that have held their value over the past 100 years.  An ounce of gold could buy you a really nice suit 100 years ago and an ounce of gold can buy you a really nice suit today.  But now that it is starting to come out that there could be massive reserves of gold and oil in Haiti, we should expect the ongoing manipulation of the precious metal markets only to intensify.  The truth is that the big dogs like Soros want everyone else to get out of gold and silver so that they can swoop in and get more for themselves.

If you are looking for a bubble, you don’t have to look any farther than the U.S. stock market.  Remember all of that “bailout” money and “stimulus” money that the U.S. government injected into the economy?  Well, it didn’t help you much, did it?  Nope.  So where did it go?  It went to pumping up Wall Street.  In a recent article, Bob Chapman did a great job of explaining what is happening….

Liquidity is not flowing into the economy it is pouring into Wall Street to aid and abet more speculation, which has sent the Dow from 6600 to 10,700.

That is why some analysts are calling this a “jobless” recovery.  They think that because the stock market has gone up we are having a recovery.  But it is a lie.  The reality is that the stock market is experiencing a “sucker’s rally” and all the insiders are busy selling their holdings off into that rally as Chapman explains further down in his article….

It should be noted that insiders are selling into the never-ending rally, and mutual funds have very little money flow coming into the funds. That, of course, is our government at work manipulating the market. Just last week insiders bought $18 million worth of shares and sold $419 million.

But let’s not just blame Wall Street.

They are not the only ones responsible for the mess that we are in.

The truth is that we have all made bad choices.  We have all bought stuff made in China for years and years just because it was a few cents cheaper.  We knew that it would put some of our neighbors out of work eventually but we didn’t care as long as we could save a buck or two. 

All we cared about was the lowest price.  In fact, for decades the U.S. government made obscenely lopsided trade deals with foreign nations (that were very much not in our favor) just so that we could get cheaper goods for the American consumer.  We were told that anything that was good for the “consumer” was good for the economy.  “Free trade” (or in other words, other countries getting to send us all the cheap stuff they wanted to) was going to be the solution to all of our problems.

But it wasn’t.

Instead, we found out that there was a very high cost to those low prices.

In his excellent article entitled “The Wal-Mart Model of Self-Destruction: Lowest Prices, Always”, Charles Hugh Smith captured the high cost of our obsession with low prices beautifully….

The propaganda of marketing has so hollowed out American culture that most citizens cannot recall a time that “Consumerism” wasn’t the unofficial religion of American society. And what is the First Commandment of “consumerist religion”? The lowest price is all that matters.

Quality doesn’t matter; we’re going to move/throw it away anyway.

Who made it doesn’t matter. The idea that you might pay more to keep your neighbor employed is akin to worshipping the Devil: all that matters is the lowest price.

The sad thing is that many of you who are reading this article will keep running out to bloated globalist retailers like Wal-Mart just to save a few pennies.  It doesn’t matter that their stores are filled with cheap garbage made in virtual sweat shops all over the globe and that Wal-Mart has probably decimated a large percentage of the local businesses in your area since they moved in.  But on the bright side, they do pay slightly over minimum wage and they do provide part-time employment for many of the people in your area.  Perhaps you can get a job with them when your job gets shipped overseas too.

The truth is that we all need to quit being “consumers” and we all need to start participating in our communities once again.  Instead of supporting a big global chain that takes all of the profits out of your local community, why don’t you go visit the struggling small business down the street instead?  Instead of pumping your cash into the giant shell game known as the stock market, why don’t you help a family member start a business or put it into something real like gold and silver instead?

We are all supporting the current globalist system by putting money into their banks, by investing in their stocks and by endlessly shopping in their stores. 

Imagine what would happen if we all suddenly decided to stop.

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