I hope this is wrong, but...

[Jonas Parker]

here's an article by Franklin Sanders which isn't exactly encouraging...

Friday, August 24, 2007

<!-- Begin .post --> 24 August 2007 Began the Hyperinflation That Finally Destroyed the American Dollar

Gold Price Close Last Week : 656.90
Gold Price Close This Week: 668.00
Change: 11.10 or 1.7%

Silver Price Close Last Week : 1177.2
Silver Price Close This Week: 1192.5
Change: 15.30 cents or 1.3%

On this day in history, 24 August 2007 began the hyperinflation that finally destroyed the American dollar. Oh, that destruction had been underway since the Federal Reserve was created in 1913, and the stage had been set in the crisis leading up to 1980. That crisis scared the Fed & Treasury so badly that they wrung out of congress the Monetary Control Act which allowed them to buy or discount any sort of commercial paper, domestic or foreign. That was a power they were reluctant to use, however, until last week when they did repos for some $36 billion, & who knows how much since. Today the Fed announced it will accept asset-backed commercial paper as collateral. Now that comes backed by various assets, car loans, credit card debt, and of course, mortgages, but it's only mortgage backed securities that are in trouble.

In effect, today the Fed announced it will accept even worthless paper as collateral. That's not exactly buying it, but it's close enough.

What meaneth this portent? That the Fed will shoot their mothers in front of a cop, if necessary, to bail out the banking system & Wall Street. It is the signal that they will unhesitatingly destroy the dollar to "save the system." Of course, that will destroy your savings, pension, & investments, but, Hey! Ya can't make an omelette without breaking eggs, right? As long as you hold dollars, you are making yourself the willing victim of this fraud.

If you are waiting for stocks to recover, you will wait in vain. Bottom hasn't been seen yet. Today marks near completion of 50% recovery (13,423.10 would be 50% of fall from 14,000.41), about time for stocks to fall again. Use any rally to get out of stocks. Put the proceeds into silver & gold.

On the Fed's announcement it was banishing common sense from its operations the US dollar index fell nearly 50 basis points. Clearly, I am not the only dolt who interpreted the Fed's announcement as inflationary. Dollar rally aborted, probably will resume.

Silver & Gold both jumped at the Fed's babblings, up 30.2 cents & $9.10. Unfortunately, another crash in stocks may take them down once more. If gold climbs above 670.50 on Monday, it would signal a rise to 688 & big trouble for the Fed. However, also likely is that both silver & gold will trade sideways to lower into the seasonal turnaround time, October-November. If you see gold over 688, just buy all gold you can get and pull your hat around your ears.

Don't be confused: silver & gold remain in a long term bull market, & y'all should buy on every decline. Sell all dollar denominated investments, especially those that entitle you to receive future dollars.

The GOLD/SILVER RATIO may rise as high as 60 while financial panic sends relatively more people scurrying to gold for shelter. Swap gold for silver at any ratio of 59 or more. And yes, swaps even at 57 are a good idea.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger (http://the-moneychanger.com/)
:(

[tedbo]

Thanks for the info,Jonas!

I guess I will be relying heavily on barter as I certainly don't have any gold or silver.

:o

[funfaler]

One of the biggest problems with stories, such as the above, is that the "real" situation is not something that the writer or ourselves will ever know.

There is manipulation of the stock markets, metals market and the money markets that influence what economics say should be happening with these markets.

There is no doubt that the paper dollar is no longer a real money and is more than likely non-permanent. The question is when will it collapse, and what will be the form that it takes and what will be the reactions of governments and people?

Reality also dictates that tangible assets have more "value" than paper assets. Example, a hammer is always going to be worth a hammer, the amount of paper it takes to buy a hammer will change. The same can be said for food, gold, firearms, ammo, etc. This means that if you are not confident in the purchasing power of money in the future, you are better off converting today's paper money into tangible assets. Get your tools, your guns, your ammo, your food, your gold/silver, with the money you have today, to preserve your "wealth" of today.

Having a bunch of paper money, in the form of savings, stock market, etc. is saying that you trust that all the above influences upon the paper money, will not result in a negative impact on the value of the paper money.

I have not given up totally on the future value of paper money, but I am not wholly vested in it either. I see this as diversification.

good luck

[Arizona Highlander]

An okay article on the future of precious metals:

http://www.marketwatch.com/news/story/then-now-gold/story.aspx?guid=%7BED1FFDCE%2D31CB%2D4A8F%2DB37B%2 DA45623F09DBE%7D

The author seems to really hedge her bets, but essentially she thinks that if if you own precious metals and there's inflation, you'll be in Hog Heaven. And, if you own PMs and there's deflation, you'll lose money - but not too badly.

Another observation: the price of gold hasn't moved much lately, despite the falling dollar. Seems illogical, but the author suggests that the big run-up in gold two years ago was probably the result of people anticipating today's current problems.

[Beprepared]

I will agree with funfaler, this story of the stock market dropping is alarmist. Not to slam Jonas, he is a poster of good info, but since I have nothing in the market (other than a 401k that I'm not counting as real money or ever available to me) I could care less. Loose my 401K, I don't care, I'm stocked in other valuable comodities, not precious metals either. I'm not looking to solder my radios with gold, so I'd have no use for it since I can't shoot it, plant it, eat it, or get healed by it.

I once tried to explain making money on the stock market to an unknowing friend, and they described the process as "madness", I tend to agree.

I have no credit cards. I pay cash, I own my properties, and when I buy property, I pay in cash.

If you've been to an EU nation, you will notice the euro as a strip of gold in the note. Most all nations now do this... except America, the strongest economy on earth.

Even tho over 50% of the gold in the world is owned by America (in Ft Knox and the Federal Reserve of New York), America still refuses to use the gold standard in the dollar.

The stock market dropping? Not a Mark of concern for me, other than to look for other hard times. Gold and silver investment? I'd rather have that money in ammo or medical supplies.

But that just my opinion.