Saturday, March 6, 2010

Now is the Time to Preserve Your Capital

In July of  2008, I was warning about the coming financial crisis. I linked to plenty of reasons why a "financial tsunami" was near, and how to protect oneself. I also told friends and family. As best I can tell, no one listened, nor did they give me any credit for making what was really an easy call. Since then, my forecast has been for more financial crisis, deepening depression and the ultimate collapse of the dollar.

As far as I know, none of my friends or family have made a purchase of physical gold. Some have played with ETFs and futures, but none has taken the step to move out of the risky structure of dollar-based investments into holding physical gold or silver.

I'm astounded at the blind faith Americans put in the ability of America to come through this crisis relatively unscathed, and particularly in the dogma that the US dollar is a safe place to park their life savings. While their view may be attributed to historical American optimism, I think it has more to do with intellectual laziness, fear of stepping out from the mainstream, and the massive mind control that few of them can begin to comprehend.

Nevertheless, more people are waking up as the "greatest financial crisis since the Great Depression" will soon become the greatest financial crisis in history." It will be world-wide.

The good news is that even for those who have put off protecting themselves, there is still have time to act. You can still protect what's left of your capital. All it takes is a little bit of courage to look reality square in the face and take actions that most of your friends have not. For most people of modest means that means buying and taking delivery of gold and silver coins.

"Paper gold", i.e,. ETF's (exchange traded funds) should never be considered a substitute for holding real, physical gold and silver. There is much speculation not only about the gold supposedly backing them up, but about possible counterfeit gold bars being held as security.

The reasoning is quite simple. As Voltaire said almost 250 years ago, paper (fiat) currencies always revert to their intrinsic value -- nothing. Not one paper currency has survived intact, without massive devaluation or hyperinflation. The US dollar has lost almost 96% of its purchasing power since the Federal Reserve was founded in 1914. The exponential increase of the money supply of the last 18 months sealed the dollar's fate.
The massive deficits incurred during the Bush and Obama administrations are escalating and will never be repaid. The unfunded liabilities for Social Security, Medicare and most pensions are even worse. The only way they will be paid off will be with nominal dollars created out of nothing.

Moreover, Congress is lustfully eying that last pool of untapped capital in the country: the private pension plans, 401-Ks and IRAs. All indications are that after an appropriate crisis or scandal, they will be nationalized and replaced with some kind of government annuity similar to Social Security. The government will spend the capital for current needs, replacing it with non-marketable IOUs while they "guarantee" our retirement. Guaranteed impoverishment is more like it. (I just recently cashed in over half my IRA's with the rest coming shortly.)

But don't take my word for it. Check out the vast collection of analysis provided below. Study, decide, and then act. Don't wait for the rest of the herd to wake up and tell you it is okay. And certainly don't wait for your financial adviser to tell you. Think about it. Once you take your money away from your adviser and buy precious metals for delivery, he won't make another nickel on you. So what is his incentive (besides integrity) to tell you leave conventional investments?

I've just posted an extensive list of articles designed to help you and your loved ones protect your capital from the coming devaluation and/or inflation of the US Dollar. All international currencies are depreciating in value against gold and silver.

You still have time to protect yourself. The prices of gold and silver won't go much lower in these currencies and has a virtual unlimited upside potential.

Gold was by far the best investment class of the first decade of new century, with the price going from around $300 to close to $1200. Gold is regaining its historical role as the international currency. If you had bought 4 of those coins you'd have $4800 worth today!

A 1 oz. gold coin you buy today will still contain 1 oz. of gold in 10, 20 or even 100 years. What do you think will be the purchasing power of the $1200 required to buy it in that same time period? Remember: it took $20 to buy that coin almost a hundred years ago. If your grandfather had spent $1200 on gold coins back then and stuck them in a safe, you'd have 60 of those coins today! That would be worth $72,000 in today's purchasing power (and that's not allowing anything for numismatic value!)

My two preferred vendors are Goldmasters and Franklin Sanders. There are many others out there. I don't recommend buying from anyone that spends a lot of money on television advertising. They have to build it into the price.

There's not a lot of commentary below. The articles speak for themselves.

Have courage!

The Road to Armageddon - Paul Craig Roberts

2010 - Preservation of Capital is the Highest Imperative - Marc Faber

The British Pound Could Collapse in Weeks - Jim Rogers

Massive Bank Failures are Coming - Banking Commission

Bonds, the Next Financial Slaughterhouse - John Galt

Gold Will Soon Be Restored as World's Currency - Jim Willie

China's Purchase of IMF Gold Begins Next Leg Up on Precious Metals Boom

Sky Rocketing Global Debt Makes Hard Assets a Safe Haven

Debt Dynamite Dominoes: The Coming Financial Catastrophe

The "Fourth Turning" Will Bring 21st Century Crisis

Liquidating the Empire - Pat Buchanan

Coup by Economic Elite Threatens Existence of Middle Class

How to Prepare for Global Debt Bomb Explosion

The Demise of the US, an American Tragedy

Fear DAVOS 2010 -- Into the Bomb Shelter

Higher Highs Coming in Gold

Silver's Most Important Price Point

Gold Analysis and Price Trends for 2010

Gold and the China Commodities Game-Changing Action

Gold, Pension Plans and IRA's

Connections Video

Bankruptcy of the US is Now Certain

Why Gold and Silver Are Important, and Often Manipulated

Gold: China's End Game?

Why Inflation Will Come

Why Gold Will Keep Going Up for Years

Gold's Price is Appreciating Against All Major Currencies - Barron's
"Gold isn't going up, currencies are going down," says James Turk. "The purchasing power of gold remains basically unchanged against commodities. In contrast, the purchasing power of national currencies is being constantly eroded."

The Coming Gold Shortage

More on the Coming Gold Shortage
Drawdowns of the metals from the exchanges is outpacing deposits. "
"Investors should make sure they own physical bullion and not a paper substitute. When the music stops, and it looks like it could be soon, paper promises will not be honored with bullion. When a shortage becomes obvious to investors the price of bullion will be multiples of its current price. But those holding paper promises will not benefit. At best they will be paid in fiat currency and probably after months or years of legal wrangles, and most likely at the price on the day of default, not at the price on the day of settlement. Why accept anything but physical bullion?"

The Mogambo Guru writes on the implications of the gold shortage - (Buy gold, silver and oil -- now!)

The Coming Obama Retirement Trap

401K/IRA Screw Job Coming?

America's Hidden Debt Bombs -- CNN Money

Gold: Greatest Currency Trade of the Millennium?

A Larger Financial Crisis is Inevitable -Non-partisan economists group

Panic at the Fed? Or Back to Normalcy? - Apparently the Fed is panicking to try to prop up the US bond market.

Veteran Investor Richard Russell Prefers Gold to Cash and Bonds

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