What will happen to gold if the paper contracts begin to default?
Jurg Kiener explains.

Actually, Mr. Kiener is understating what will happen. We now have the Feds Magic Money Machine throwing hundreds of billions into the system everyday. We just had a 50 point rate cut. We have the $850 trillion treasury bill. The dollar is going the way of all Ponzi schemes.

Get gold (and silver) now. Get physical gold and take possession. But do this only after you have food and cash on hand.

I’m not MRB or TJH, nor their offspring, but if I may,

Many in the deflation camp(e.g. Mike Shedlock, Rick Ackerman) believe gold will do well in that environment as well. And as Voltaire pointed out, all paper money eventually returns to its true worth…zero. The road there may be full of detours but they all lead to the same destination. Even the noted Fabian George Bernard Shaw had enough sense to see through the lies of the government:

“You have a choice between trusting to the natural stability of gold and the honesty and intelligence of the members of government. And, with all due respect for these gentlemen, I advise you, as long as the capitalist system lasts, vote for gold.”

If you like your financial newsletters with a whiff of conspiracy, I recommend Bob Chapman and Bob Moriarty:

http://news.goldseek.com/InternationalForecaster/1205689845.php

http://www.321gold.com/editorials/moriarty/moriarty031708.html

Also Paul Craig Roberts’ most recent column has this:

“The resignation of Admiral William Fallon as US military commander in the Middle East probably signals a Bush Regime attack on Iran. Fallon said that there would be no US attack on Iran on his watch. As there was no reason for Fallon to resign, it is not farfetched to conclude that Bush has removed an obstacle to war with Iran.”

Finally, I agree with MRB about reading Jim Sinclair daily. He has steadied my rudder through many a disappointing dip. He has gravitas.

Got Gold?

Well, I don’t pretend to have a tithe of North’s knowledge of economics. However . . .

(1) The investment banks are in trouble. Just ask Bear Stearns. Oh, wait. Bear is gone. (Pity the suckers who held shares in Bear. It went from $61.58 on Wednesday to $2.00 on Sunday.)

(2) The Fed will infuse as much liquidity into the system as necessary to keep the remaining big four banks in business. Their capacity to do this is infinite. If you can create “money” out of the air, there is no limit on how much you can print.  Inflation is bad now and will only get worse.

(3) The rest of the central banks will be forced to follow the Fed’s lead. Failure to act will not only put their dollar holdings at even greater risk, but will suppress their nation’s/zone’s trade.

(4) With all or most currencies inflating, investors are going to move into gold and silver.

(5) There is no doubt that gold is going to experience gyrations, put the trend is up - short, middle and long term.

(6) I’m not a trader so I don’t worry about daily or weekly ups and downs. In fact, I am hoping that precious metals go down so that those and provide us with buying opportunities.

(7) The number one law in money is honesty. The dollar and all other currencies are based on fraud. From a principled point of view, I choose honest money.

(8) The number one law of investing is don’t buck the trend lines. Gold and silver are both fundamentally and technically in place to go much higher. How high? As the man of Steele says, “to the moon.”

(9) One qualification. If finances are tight, stock up on food and ammo. These are both more valuable than metals in a crisis. And I am firmly convinced we are headed into one greater that than which no one has experienced in many generations.

(10) I do not like to comment too much on economic matters. It is far outside my field of expertise. But when the tea leafs are so easy to read and nobody in the Reformed world is sounding the alarm, I feel duty bound to do so.

Please prepare for the worst. You can hold out hope that things will get better (I have no such hope), but prepare for tough times ahead.

Americans in general and evangelical Americans in particular believe they are immune to economic, political, and domestic crises, but we are not. And the stronger the denial, the harder the fall.

When a reporter asked Clubber Lang to predict the outcome of his upcoming fight with Rocky Balboa, he looks into the camera and says, “Pain!” That is my prediction for American in the next few years.

Do your own research on USERX. It had excellent returns; the only drawback is that it requires a minimum of $5,000 to invest. I found it as an excellent alternative to US stocks and also as a protection against the falling dollar. The recommendation is to hold the fund for 2 years, in which case it might double, triple, or even quadruple in price. Just in 2008 it already gave a return of almost 20%. Again, do your own research.

This tip is just a freebie from the newsletter I subscribe and at least you get to look at something for free. I wish my 401K plan would offer such fund as an investment option.

And it is going to get worse. With the collapse of the dollar, gold and silver are going higher; much higher.

Roger is right about gold production, but that is not what is driving the price of gold.  Gold is money and gold and the dollar work inversely.  When the the dollar goes up, gold goes down.  And as we have seen these past few years, when the dollar goes down, gold rises.

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Economists see US avoiding recession

By ALEX VEIGA, AP Business Writer 2 hours, 24 minutes ago

LOS ANGELES - The U.S. economy will suffer as the slumping housing market eats away at job creation and consumer spending, but the nation should avoid slipping into a recession this year, according to a new economic report.
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And the stock market just went up a bit. So, there. You guys like to over-exaggerate everything and worry for nothing. What’s wrong with you people??

Hmmm I think I’m going to try to get approved for a new car just to celebrate such good news! And I’ll bring a print-out of these news to attach to my credit application as evidence.

He might be right sometimes, but not for the right reasons. Let me explain: Gary North looks for the end of the world as we know (end) AND then he fills the middle with current economic reasons (the means) to map the trail to his supposed end. So his logic is reversed, as he puts the “end” before the “meaans”. I prefer to have someone look at the “means” and then predict the “end” as best as one can.

Have you been around long enough to have witnessed Gary North’s fiasco on the Y2K issue? Or even his doomsday predictions through the 70’s and 80’s? I really don’t even want to waste my time talking about Mr. North’s take on the whole economy or anything else for that matter. I’d almost rather listen to Ben Bernanke.

Note: Oil is hit $107 a barrel, another historic high.

This is the information I want to share with you. If there’s interest, I can reveal the source and discuss more about it. PLEASE READ!

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Miners Gasp to Keep up the Pace
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Across the globe, precious and industrial metals can’t be pulled out of the ground fast enough. Worldwide, mines are starting to show their age. The pace of production lags significantly behind demand. For instance …

Oil: It seems the more the giants grow and the greater their appetite for energy … the more threats we see to the available supplies — in the Persian Gulf, in Nigeria, Venezuela and elsewhere. Oil is on a collision course. And nothing can seem to avert it.

Gold: Production in South Africa, the world’s premier gold producer, recently hit its lowest level since 1923 (296.3 tons). Demand — both from industry and investors — is surging.

Silver: Above-ground stockpiles are dwindling, from over 220 billion ounces several years ago to probably less than 300 million ounces today. Mining cannot keep up with demand.

Copper: Despite soaring prices, many mines in South America are closing down. This means they are simply worked out.

Lead: Chinese demand has been surging. Meanwhile, global mine output only meets half of demand.

Uranium: And perhaps most pressing of all, there’s a chronic and acute shortage of uranium. Within the next decade, that supply-demand gap could widen to 20 million pounds!

Got A Spare Planet (or Two or Three), Anyone?
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According to The Worldwatch Institute, if China and India were to consume resources at the current U.S. per capita level, it would require two planet Earths just to sustain their economies.

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By no means I predict doomsday, all I see is supply > demand. Which equals to higher prices, which equals to inflation, which equals to YOU losing money.

As I’ve said, I stand corrected. I can no longer comment on the fact that GOLD is expensive or cheap.

I just sold all my mutual funds and stocks and it’s all in the money market now. Soon I need to make a decision. Also, my whole 401k is in a bank check right now. I just changed jobs and I had to transfer the funds from my old company to my new 401K provider, Fidelity. I have 60 days to mail in the check, but I already decided that I don’t want my 401K reinvested in US stocks. Any advices?

Roger