Why Gold Buyers Are So Attracted To Buying Gold?

While scanning for new gold articles and gold blogs, I came across this. It was such a good artcle I decided to add it to our D.R.E.A.M. System gold blog. Makin Bacon is the author and did an excellent job writting it.

Our fascination with gold
Gold as a metal has always fascinated people as it has represented wealth, success, and in some cases deities throughout the ages.
In our modern age, as far as it relates to an investment, gold is a somewhat odd metal and vehicle if you want to use it to build wealth.
The reason is is its uses aren't nowhere near in volume as its cousin silver, which has an enormous number of uses, and can be measured in that way when you look to invest in it.
Gold on the other hand, has really only several major uses, and that isn't enough to create the type of demand commodity investors look for.

Gold the political metal
In essence, gold has become a political metal, because it represented in times past a standard and check and balance for those creating paper money. Now that the gold standard has been dropped, it removes the discipline it forced on governments, and so now fiat money is created, and is the cause behind the endless booms and busts we experience in our economies.
Anyway, now gold is primarily looked upon by most investors as a major hedge against inflation and uncertainty; the reason it moves up in price in difficult times, as it has over the last couple years.

Gold Uses
As far as practical uses that create some demand for gold, the major ones are in electronics, dentistry, and Indian weddings. And it may surprise you to know that by far the greatest demand for gold is in connection with Indian weddings.
There are many other uses for gold, but its in small amounts across a variety of industries and in specific situations, which don't produce much demand.
So what does that make gold as an investment? Like I said - unique. For a small but growing number of people, it is being acquired for protection against economic collapse and social unrest.
Indian wedding major source of gold demand

Present Gold Demand
There has been a huge demand for physical gold since the global economic went into the deep recession, and many continue to invest in gold coins and bars as a protection against anything happening.
The reason this is done is because gold is the ultimate currency, and no matter how difficult times get, can be used for trade. You can't say that about paper money which isn't backed by anything any longer, except the 'good will' of the government having the paper money printed out.

Can gold build wealth?
Investing in gold, for the reasons stated above, is difficult to make people rich, as far as gold in and of itself. You can invest in gold coins from a numismatic perspective, but that's different than investing in gold as a commodity.
What has been keeping gold prices from really surging has been a period of forced liquidation, where funds had to sell off their gold because they weren't able to get access to money.
That means that they not only weren't holding on to gold, which they really wanted to, but also weren't investing in it at a time when it usually warrants it.
The attempt to artificially prop up the U.S. dollar has also resulted in gold prices moving up far beyond their current prices, which are still at historic highs, although not when adjusted for inflation.
So at this time, investing in or buying gold in primarily being done for safety reasons, and as a hedge against inflation.

Inflation should push gold prices up for years ahead
With the unbelievable deficit spending by the U.S. government, inflation is going to be a huge factor in the years ahead, as printing of money, by definition, is inflation. And the amount being printed boggles the mind, and will result in the price of gold skyrocketing to protect against the inflation pressures, which will no doubt come upon us.
The unprecedented bailouts by the U.S. government makes this only a matter of when, not if.
So those investing in gold will find themselves possibly enjoying one of the greatest upward gold price movements in history, and will build wealth in a way gold has never been able to do in the past.

Physical gold in big demand- Invest in gold with the long term in mind
There are a number of ways to invest in gold, but I would only focus on the long term trend, and forget about attempting to make a quick killing by trying to predict short term movements, which even the best of day traders aren't able to do very well.
Long term investing in gold is the only way to approach it, and those that do will find themselves in a good position when gold prices start to go up.

Best ways to invest in gold now
So to recap, gold is different that any other commodity because it's the only one that isn't measured by supply and demand, as the amount of demand just isn't enough to move the price of gold.
Gold is valued mostly as a hedge against inflation and safety in times of turmoil. That's where the price point is fixated on, and that's what will drive up the price of gold.
The key indicators are already in place which meets the above two criteria, with economic turmoil raging and inflation about to go out of this world, as the U.S. government just keeps the printing presses going to print out their funny money.
With that in mind, gold may possibly enter an enormous bull run in response to inflationary pressures that could be unprecedented in history, because of the debt being incurred from government intervention into the free markets. Those investing in gold should enjoy great success in response to these realities.

BUY GOLD DIRECT FROM THE MINE!

The mine offering to sell their gold is in Guyana, South America. D.R.E.A.M. System, LLC is a US Corporation based in Florida. You buy the gold, let’s say 10 ounces ($9,070), then in 18 months they sell your 10 ounces direct to the Government of Guyana for SPOT rate and wire you the proceeds. It’s just that simple. In the above mentioned scenario you purchased $9,070 worth and received in return $15,000 in a half a year.
So Where in the Heck is Guyana….and Why Should I Invest There?Guyana (formerly British Guiana) is located on the north east-coast of South America between Venezuela and Suriname, and completely bordered to its south by Brazil. Historic records show that mining for gold from surface deposits began in the Amazon region as early as the 16th century. Since that time, it’s estimated that over 50 million ounces of gold have been extracted from the Amazon as opposed to only 12 million ounces removed from California during the Gold Rush. In the late 1970s, Brazil’s government conducted a sweeping aerial survey of the region. As a result, they helped to confirm the presence of the “Guiana Shield”, an ancient belt of gold-bearing rock extending eastward from Venezuela through Guyana, Suriname and French Guiana and southward into Brazil’s Amazon Basin, and it is historically known to contain prolific Gold resources. The Amazonian Guiana Shield is actually the other half of Africa’s Guiana Shield, which is responsible for the abounding gold and platinum wealth of South Africa and other countries in sub-Saharan Africa. Sometime during the Jurassic period—about 135 million years ago—the once whole Guiana Shield was split into two as plate tectonics tore one large land mass into two. Today we call these two parts South America and Africa. The best part is there are no environmentalists wackos, no EPA, ample water supply, good roads, and gold processed by sluice, water cannons and vacuum pipes. Guyanese Gold Board Wardens certify production and guard shipments. The Guyana Gold Board blesses this type of mining because the jungle will grow back within 6 months.
So in closing, if you are curious about buying gold direct from this mine instead of the “traditional” way then visit my website at http://www.alluvialgoldconsultants.com/ and fill out the contact page.

BUY GOLD 10% BELOW TODAYS SPOT PRICE!!!

I have a futures contract for a producing gold mine that I am working with in Guyana (South America). I can lock you, the Buyer, in at 10% below today's spot price, but I only have 5 kilos of 99% purity or 24 KT gold left. The Buyer will pay now, but will recieve the gold in 18 months. There is also a "NO LOSS" guaranty that if gold drops below todays spot price in 18 months, WE WILL PAY YOU WHAT YOU INVESTED! If gold goes up lets say 10%, then you will have made a 20% profit on your investment and best of all it's physical GOLD!

Ten Rules For Gold Dust Buyers & Gold Dust Sellers

DREAM System, LLC - For Gold Dust or Dore Buyers and Sellers
http://www.alluvialgoldconsultants.com/ or http://www.24kt.cc/
Your Consulting & Vetting Gold Experts

Everyday that goes by, the gold industry intrigues me more and more. Not only is this the hardest industry to be successful in, it is the most complex. Take it from an individual that has been working for himself for fourteen years. Gold Buyers and gold Sellers have so much to worry about and not enough teachers and mentors to learn from. So let's get started!

I often compare the gold dust industry to being a gambler in Las Vegas. You can sit down at the black jack table and think your the "Big Dog" at the table because your gambling a couple of hundred dollars a hand. Then a total stranger sits down next to you and starts gambling a couple of thousand dollars a hand. Before you know it, there is someone that jumps in for one hand and places a $20,000 bet on one hand! You ask, "What does this have to do with gold?" You're never the "Big Dog" in the gold industry. Someone is always bigger and been around longer than you. Even more importantly, they seem more successful than you(emphasis on "seem"). Don't let this distract you from your goals or morals.

"Life is short, but envy and greed will make your career life even shorter in the gold industry." - Roger Singh

I always tell all of my Registered Brokers and Intermediaries that there is so much money to go around that everyone will get their fair cut. I have seen friends stop talking to each other, families that break apart, businesses get dissolved, and lawyers get rich (the last one is a bad joke). All of this sometimes because of a miscommunication. Many times because of jealousy that someone is going to make money. Think about it. It hasn't even been made yet! In this industry, it most likely won't be made either.

That leads me to why I wrote this article about the "Ten Rules For Gold Dust Buyers & Gold Dust Sellers". Hopefully, those of you that have not gotten tempted by the envy and greed will understand and preach these rules. For those of you that are already tainted, maybe it's not too late. I can tell you this.....

"You don't always get a second chance in the alluvial gold dust industry, so savor the first chance."

Ten Rules For Gold Dust Buyers and Gold Dust Sellers

1. Work with a mentor or consultant

You will achieve success faster if you can have someone or better still a team who knows the gold industry, guiding you along the way. This is obvious, as you do not want to waste your precious time and effort repeating the mistakes others have already made in the gold industry.

2. Acquire necessary skills

People who are successful in the gold industry become so by being prepared to invest in themselves and to acquire new skills and thinking. You need to learn to think differently and think differently than the people you may currently associate with through your social life. Why? Buyers and Sellers in the gold industry come from all walks of life and from all over the world.

3. Focus your efforts

Once you have decided that you want to be part of the alluvial gold dust industry, you must focus and apply the right amount of efforts required to become successful. Many people fail because they are distracted by many other things in life.

4. Know who you are dealing with

I can not tell you how important this is. Like all other business dealings, good referrals are the way to go. You should feel comfortable when dealing with new Buyers/Sellers/ and Intermediaries. This also is true for when you begin hiring transporters, security, and other services that are needed in the gold industry. If you feel comfortable with that entity, then ask if they can refer someone (you should still conduct your due diligence though).

5. Document all details

Get passports, government id's, telephone numbers, and emails of EVERYONE you are dealing with. Or you can become a member of DREAM System, LLC which does this for you ( a shameless plug). Also, it might be wise to begin a journal to record times, dates, and events for a specific gold transaction. This can help keep your thoughts straight and aid in future gold transaction decisions. It may also serve as a training tool if you decide to build a team.

6. Due diligence is a must

All I need to tell you on this is that I built a whole company on this rule. If that does not tell you how important it is, nothing will.

7. Be patient - it will be worth it

I do not know why every new comer to this industry rushes to close a deal. There are no standards in this industry. It might take weeks to close a deal, in some cases it might take a year. As I already stated, you might only get one chance at this.

8. Build a foundation that will last forever

Your contact list is very important. It will become your holy grail in this industry. Do not add people that claim to be Buyers or Sellers...make sure they are. This will put yourself in the best possible situation when a trusted mentor or affiliate is looking to close that alluvial gold transaction and you can bring the other end to the table. Remember, an investor is just another name if they don't invest. I know it might make you feel good that you have a large list of contacts, but the larger the list the greater the chance of failure. Ten good contacts is all you need to be successful. Try to keep this list equal between Buyers, Sellers, and Intermediaries.

9. Treat others like you would like to be treated

I know it sounds very cliche-ish. An industry where sometimes it seems like you are going nowhere can be frustrating. Do not release that frustration on your affiliates or partners. I personally believe in karma. So I believe that if you can put some good into the gold dust industry, the Alluvial Gold Dust Gods will reward you. Saying that, my job is to find the the frauds and scammers and they don't seem to get far at all.

10. GIVE BACK!!!!

I just don't mean when you close a deal too. The gold industry is suffering because of lack of cooperation between its peers. Don't be scared to call leaders in the industry and ask their opinion. Try to be part of their team and gain experience. Also, you should try to teach others what you have already learned. Notice, I did not say give away your contacts.

There is plenty to learn in the gold industry. Every day I am amazed with the people I meet from all around the world and the knowledge I gain. This industry might be one of the most difficult, but the benefits are well worth it.

Your truly,
Roger Singh
President of DREAM System, LLC

NEW PROCEDURES TO BUY GOLD DUST AND GOLD DORE

Receive more info from DREAM System, LLC - Your Consulting & Vetting Gold Experts by contacting us at http://www.24kt.cc/



For years now D.R.E.A.M. System, LLC has worked with government officials throughout the world to stop the spread of fraud and crime in the alluvial gold dust industry. DREAMS only deals with registered Buyers, Sellers, and Intermediaries/Brokers. Their vetting system has helped to prevent DREAMS affiliates and intermediaries stay clear of fraud and scams. Roger Singh is the brain child behind D.R.E.A.M. System's revolutionary registered and vetting process. After working with some of the largest private alluvial gold buyers in the United States, Roger went on to create DREAM System, LLC.

Roger told me, "After seeing so many grown men breakdown and start crying on the floor of American refineries after receiving copper dust instead of gold dust, it was hard NOT to do something about it."

"My heart goes out to all those that have lost money in the gold industry, but there is change right around the corner", says Roger. DREAMS has just released a new procedure system to purchase alluvial gold dust and gold dore. "Just like what DREAMS has done to prevent alluvial gold fraud, DREAMS has now moved into placing gold dust buyers and gold dust sellers in an almost risk free environment", says Roger. DREAMS has been working on this system for over a year now. It is now open to private investors, gold dust and dore buyers, and gold dust and dore sellers. You still must be registered and vetted to become part of this service. Their registration fee is $300 and an additional vetting fee may be charged depending on background, location, and amount of information provided.

"I know this program will be even more successful than the DREAMS vetting process", Roger said.

Roger believes the time is here and finally the appropriate affiliates have united. All that is left is to keep growing and expanding the Consortium with new truthful, honest, and most importantly VETTED gold industry businesses and services.

More information about their products will becoming within weeks along with new websites.

- Vivian Pace from the Office of DREAM System, LLC

Gold Price is Falling as Stock Rise???

Something's wrong with this picture: the Gold Price is falling as stocks rise...The GOLD PRICE has fallen $150 an ounce from its top of early December, closing on Tuesday and Wednesday of Christmas below $1100, writes Bill Bonner in his Daily Reckoning.We expected a correction in the Gold Price. But we thought it would come along with a correction in the stock market. And stocks are rising.We take this as a warning: something is going on that we don't understand. That said, there's a lot going on that we don't understand. But the broad patterns generally make sense.Boom was followed by bust. As dear readers know, the force of a correction is equal and opposite to the deception that preceded it. The deception of the Bubble Era being exceptional, the correction would be exceptional too - even under the best of circumstances.But these are not the best of circumstances. Because several other things are happening...things that need to be reckoned with, too.The United States is losing its privileged place in the world. Americans now compete with many other people in many other places for the world's resources – including its savings.The international monetary system, an experimental system built of paper Dollars, may be falling apart. The days of cheap and bountiful energy are over.Governments are going broke. State governments. National governments. In Europe. In the Middle East. And in America.The engine of economic growth – Americans' willingness to go into debt in order to consume more and more of the world's output – has gone into reverse. And governments are meddling on an unprecedented scale...delaying and avoiding necessary adjustments, possibly turning an ordinary depression into a Great Depression...or even a Much Greater Depression.These are not small challenges. Any one of them would be a worthy crisis on its own. Put them together and you have the makings of a catastrophe.What will happen? Don't know. Wish we did.A series of mini-disasters? Or one big planet-wide blow-up? Or, are the authorities so smart that they can engineer trouble-free solutions to these challenges?If you have confidence in Obama...Bernanke...Geithner...Congress...the European Central Bank...the Bank of China...and so forth...well, you have no business reading The Daily Reckoning! Heck...let them figure it out. Everything will be fine. Go back to the TV.If, on the other hand, you have a sly suspicion that the authorities are headed for the rocks...you should own some gold. Traditionally, people Buy Gold when they are afraid things might not work out as planned.As near as we can tell, gold is fairly priced. It will buy about as much as it would have bought 500 years ago...or 2,000 years ago, for that matter. That's what's nice about it. It doesn't make you any money, but it doesn't lose you any money either.Of course, the Gold Price can still vary substantially. In the last bull market in gold – from the trough in 1967 to the peak in 1980 – gold rose 1550%. That was a good time sell. The next two decades saw the price sawed in half...and then sawed in half again.Now it has been going up again. Most likely, it is merely adjusting to the inflation of the previous three decades. Or perhaps it is anticipating more inflation ahead. As to that, we're not so sure. There's probably a long, dark, cold period of depression to go through before we get to the heat of hyperinflation. But then...who knows? As those challenges listed above hint, anything could happen.Here at The Daily Reckoning we are neither bullish nor bearish on Gold Investment. We don't know whether it will go up or down. But as to our confidence in human beings, we have no doubt. In our opinion, the world's most popular economists – notably Ben Bernanke and Paul Krugman – would probably make fine bartenders. They are good at providing "liquidity" but and not much more. They have no idea what is happening in the world of finance...and their idea of what to do about it will almost surely make things worse.Meanwhile, we feel we can count on Congress and the president too. The nation may already have a net worth of minus $70 trillion (according to John Williams of ShadowStats)...but they will surely keep spending until the nation goes broke.Typically, power begets gold...then gold begets power...and then both gold and power are begotten by someone else. The world never stands still, even for someone with a million Dollars' worth of Krugerrands in his home safe.The BRICs – Brazil, Russia, India and China – are begetting power. Their economies are growing much faster than the developed, mature economies of the west. They grew by selling products – often in Dollars. This left them with Dollars as financial reserves. They have little gold.For a very long time, Dollars were "as good as gold". Or almost. But now the power equations need to be reworked. The BRICs are gaining power...but find themselves still hostage to America's paper money. Inevitably, they're going to follow India's recent example...as well as the example of practically every nation to gain power throughout history; they're going to add to their supplies of gold.A rising power acquires gold. A fading gives it up. The US has more than 8,000 tonnes of gold...nearly 80% of its reserves. Meanwhile, China – America's most likely rival for superpower status – has only 1000 tonnes of gold. It keeps less than 1% of its reserves in the yellow metal. Put all the BRICs together and you get 1,500 tonnes, less than a quarter of the US hoard. And the BRICs have 10 times as many people.Official purchases of gold by central banks have been negative for many years. They still are. In the 2nd and 3rd quarters central banks sold more than they bought. Imagine if they suddenly went positive! If the BRICs wanted to bring their reserves up to just half the level of the US, they'd have to buy 2,500 tonnes.Looking to Buy Gold for your own personal reserves today? Make it simple, secure, instantly tradable and cost-effective at BullionVault...

Bill Bonner, 24 Dec '09 Read more at http://goldnews.bullionvault.com/gold_stocks_122420091

GET VETTED OR GET LOST!!!

Silence is fraud's best friend. Word of mouth is fraud's worst enemy. Pass the word!

Precious metals should never be purchased from or sold to anyone other than a precious metals broker or seller of good repute. Good repute can only be established by independent research performed by the buyer or seller before getting involved in any transaction.
There are many sites on the Internet that provide an excellent education about various precious metals such as gold and platinum, and one should never consider getting into the precious metals market without a thorough understanding of every aspect of the metal of interest, including its mining history, differences in value, history of values, market routes, all uses, best known dealers, political impact on the value, pitfalls, risks, what is possible and what is not possible, and much more.
Buying and selling gold can be as simple a transaction as working with a local coin dealer or jeweler for small amounts such as heirloom jewelry or a few coins. When the amounts are significant, transactions are much, much more complicated and should not be handled without experienced and specialized advice, again - from a reputable precious metals expert.
Scam:
Gold scams are among the most popular of the precious metals scams. Gold scams have been a traditional scams among the Nigerian fraudster families for generations.
Gold scams come in many forms, from buying phony gold mines to buying non-existent gold bullion. Many gold scam deals involve gold supposedly stashed in the Philippines, in Swiss vaults; left over from the Marcos regime, from World War II Nazis, straight from mines located in Nigeria or other African nations; in 99.9 gold bars, powder, refined, unrefined, and on and on.
Scam artists often want the victim to show up at some bank with a suitcase full of money. The money isn't going into the bank, the suitcase is merely being "exchanged for pure gold". Whatever the means of money exchange, it is always "in advance" of the release of [fake] documents or the non-existent gold or coated ingots. That is why these scams are generically known as Advance Fee Fraud.
Sometimes the scams are simple, sometimes complex involving securities, BLOCKED FUNDS, insurances, special transportation arrangements, PARALLEL ACCOUNTS, banks in several countries, the Federal Reserve, HISTORICAL GOLD BONDS, and whatever combination needs to be assembled to part the unwary from their money. Some of the more popular scenarios involve Arab princes or emirs (usually princes) and royal family names are bandied about with abandon. Regardless of the claimed title or affiliation, it is always a name or title that is meant to inspire a feeling of privilege in the target: Rubbing elbows with the rich and famous.
All documents are fake. Some were the genuine article once upon a time, but those shown to buyers or sellers caught up in these scams have been greatly altered to fit the occasion. This includes documents of authenticity, assayers' reports, customs documents, insurance documents, shipping documents, sales documents, provenance reports, ownership transfer documents, bank documents, storage documents, mine reports, etc., etc.
One must also watch for attempts at incriminating the targeted victim by way of persuading the target to lie about the source of the gold, supposedly in order to slip the shipment past local or international restrictions. This gives the fraudster leverage over the target to use at a later date to manipulate the target into obtaining more funds. The leverage is entirely fake, but the target doesn't know this and believes he or she has broken the law and may rot away in a foreign jail for the rest of his life.

"I NEED GOLD DUST BUYERS!"- GOLD DUST SELLERS BEWARE!!!

"I NEED GOLD DUST BUYERS!"- are the postings that I read all over the internet from business to business websites (b2b). What most alluvial gold dust intermediaries do not realize is that this can be an attractive catch line, but it is the one that can get you into the most trouble. The next following steps will usually consist of sending a SPA, FCO, or even worse...banking information including but not limited to MT103/23, MT760, MT799. DON'T DO IT!!!

Gold dust Sellers beware! My company, DREAM System, LLC has started a campaign to stop the massive frauds and scammers that take advantage of innocent gold dust investors. We have started informing ALL gold dust Buyers NOT to purchase until the gold dust Seller has been vetted (verified that they are real).

Not to worry gold dust Sellers! Since the gold dust Buyers are vetted too, you should have no reason to be paranoid with your alluvial gold dust transactions unless you're a fraud. Isn't it time you all found real jobs or work for a real gold dust Seller? It always amazes me the amount of energy, resources, and conning that goes into these fake gold dust transactions. Why not apply it to the real deal? DREAMS is changing the gold dust industry, so it's time you fraudulent gold dust Sellers move on!

Written by Roger Singh of D.R.E.A.M. System, LLC at www.24KT.cc or www.alluvialgoldconsultants.com

Alluvial Gold Dust Industry- The Ultimate Scam?

Written by Roger Singh of D.R.E.A.M. System, LLC at http://www.alluvialgoldconsultants.com/

The alluvial gold dust industry is a breeding ground for fraud and scams. This unregulated, never closely watched, internet based industry is plagued with scams. Many of the world governments try to prevent this, but they under estimate one very important component, the component of "greed".

Greed is why I see so many grown men cry in the last five years of being in the alluvial gold dust industry. These gold Buyers and gold Sellers let their guards down in hope of prosperity. The gold Buyers send their life savings to a stranger that they never met, that pretends that fiat money is someway better than gold, half way around the world. The gold Sellers send gold dust to burnt, unremorseful, revengeful gold Buyers that will do anything to get out of the position that they were put into by a fraudulent alluvial gold transaction. What a vicious cycle!

The answer to the problem is quite simple. First, put a set of procedures that EVERYONE must follow. That includes gold Buyers, gold Sellers, and gold Intermediaries. Second, have the person or company that you are dealing with be vetted by a neutral third party. They will have no reason to lie to you. Lastly, always utilize local resources that you can trust. An example is your banker, lawyer, consultants, etc. Build on people you can trust and go from there. If you do it backwards, you might be the next grown man or woman crying in front of me. How much longer can we be oblivious to this corrupted system? Let's all start by educating ourselves.

India Buys 200 Tons of Gold- Move shows little confidence in the dollar

Posted by 247 wallst on Tuesday, November 3, 2009 12:17 PM

The dollar is still losing its luster as the foreign reserve currency of choice.
India has bought 200 tons of gold from the International Monetary Fund at $1,045 an ounce, which is close to a recent record high of $1,070. The entire transaction is worth almost $7 billion.
The move is seen as a way for India’s central bank to move some of its capital away from investments in the dollar.

The IMF may sell another 200 tons of gold in the relatively near future and most experts expect that the buyer will be China, which has foreign currency reserves of $2 trillion and might like to have its own hedge against the value of the American buck.

India is being explicit in its concern about the long-term value of the dollar. One senior official of the central bank there told The Wall Street Journal, “It makes sense to buy gold as it will appreciate more than the U.S. dollar.”

The equity markets may stay volatile as the global economic recovery stays uncertain, giving central banks and investors another reason to move to gold as a “safe haven”.
The transition to the commodity may drive down the dollar’s value even further, which could help U.S. exporters, but that is bound to increase the concern that the dollar is no longer the most important exchange currency.

Top Stocks writer Douglas A. McIntyre is an editor at 24/7 Wall St.

To read more about this article, please click here http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post=1351070&_blg=1,1351070

Death of Petro-Dollar

The story hit like a thief in the night, even bearing Biblical proportions. The end of the exlusive sale of MidEast oil in USDollars, the rise of Russian and Chinese influence in the Persian Gulf, the rise in importance for the Intl Monetary Fund basket of currencies, the final clarion call for the free ride by Americans on the Dollar Credit Card, and hidden implications that the Saudis must shop for a new security lord in the region with broad military might, these are revolutionary steps with profound geopolitical implications. The back-to-back stories in the UK Independent struck like powerful bolts of lightning in the middle of the night from a North American perspective. These articles by a highly respected journalist will be posted on the Banker Church Doors just like Martin Luther’s demands for change in the Protestant Reformation that smashed the monopolistic power of the Catholic Church centuries ago. Enough of the mixed metaphors. This is truly incredible news. The US will soon no longer be permitted to sell its indulgences. This is major Paradigm Shift material.
To say the Jackass was excited in the last few days would be a gross understatement. This is a lock for gold to hit $1500 within months, and $2000 within a year. This is a lock for silver to hit $30 within months, and some screaming figure within a year that cannot be fathomed right now, like $50. Be sure to see almost zero follow-up for this story in the crumbling US press networks, widely compromised, distrusted, and even mocked in recent months.
A quick read is required of two articles by Robert Fisk. He touches at the surface on a great many relevant and salient points. This story and its vast consequences will be discussed and analyzed for a full year. This is the biggest story on the USDollar in decades, sure to further develop. This is the biggest financial story since Lehman Brothers was eliminated, since AIG was hidden under the USGovt roof, and since Fannie Mae fraud was shoved in the USGovt basement, one year ago. To say this is not orchestrated by China is professed ignorance. They warned the US not to monetize the federal debt. We did. They warned the US not to reappoint Bernanke as USFed Chairman. We did. Next is transformation with consequences. A new important alliance has formed, which does not involve the United States and Great Britain in decisions. Their nations will drift in isolation. The great majority cannot comprehend or envision such change. Give them time. The most visible changes will come with the value of Gold & Silver, and the demoted USDollar exchange rate. Foreigners were welcomed for their purchase of our vast rafts of debt, but next comes impact from debt failure.
FINANCIAL SYSTEM IMPLICATIONS
When one combines the 0% US interest rate feeder system that shreds the USDollar with leveraged machinery designed by Wall Street itself, with the US$ rejection heralded by the Saudis side by side with their numerous global customers, the conclusion is easy. That is, easy except to the biased bankers who continue to occupy the corridors of finance on Wall Street. The conclusion is the death of the USDollar is written in stone, and a USTreasury default lies down the road. If you believe the 8-9 year timeframe cited by Fisk and denied by the Saudis, then you believe in fairy tales. This timetable is much more palatable to sell to the US/UK maestros, much less threatening in words for a total disruption with overturned tables. The timing of the transition away from the Petro-Dollar will not be 8-9 years, not in this world. The rapidly decaying financial platforms and structures will dictate a much more rapid timetable. Within a year, the Saudis with Russians and Chinese on each arm, will announce the further degradation and deterioration of the US and UK banks, if not entire financial system, dictate an accelerated timetable, more like 2-3 years. It will still seem like Chinese Water Torture into a golden barrel with silver lining, as the dollar typed water turns acidic.
By the way, the World Economic Forum Report just released their list of the most stable nations financially. They ranked the US & UK at #37 and #38. They give the maestros who manage their colossal busts far too much credit. A first hand inspection would reveal far more prevalent devastation and ruin.
THREAT FROM END OF PETRO-DOLLAR
The end of the de-facto standard carries enormous consequences. Two structural pillars have kept the USDollar in its primal position. Banking sysetms across the world are built around the USTreasury Bond reserves storage and management. Purchase & Sale of petroleum is conducted in US$ terms for almost all transactions globally. The former has been under attack for several months, as diversification of reserves is the theme. The latter will next be under attack for a couple years, as abandonment is the theme. Few seem to acknowledge the ‘Other Side’ to the Petro-Dollar de-facto standard. Sure, Saudis led the entire OPEC to price and sell crude oil in US$ terms. But the other side to the deal has been military protection for the Saudis, but also the Persian Gulf nations generally. The ravaging of Iraq can be seen as example of such protection. The Saudis must soft soap and tap dance in denials, so as to avoid a sinister attack of their nation. A Chinese banker has a great quote cited by Fisk in his article. He said, “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.” Or possibly the shattering noise from its total avoidance!!
GEOPOLITICAL IMPLICATIONS
Russia is the quiet new player. They are often dismissed by the unaware US legions as a broken nation, as they cite autocrat leaders, with great resources to be sure, but with such frequent breach of contract in Western property confiscation (see Royal Dutch Shell, British Petroleum) that partnership seems unlikely for development with the vast engineering expertise offered by Western firms. When the dust clears in the next couple years, Russia will emerge in three key respects. 1) Russia will be the military protector to both sides in the Persian Gulf, both Arab and Iranian. 2) Russia will be the major commodity super market supplier to Europe, both energy and metals. 3) Russia will surprisingly present new financial systems to shock the West, in the form of barter systems, in the form of reliable commodity contract systems, in the form of precious metal vault facilities.
If there is one quintessential error made by the West generally and uniformly in the geopolitical shakeup extending from the Paradigm Shift away from the USDollar, it is the perception of Russia in the next chapter. They will provide tremendous follow-through for the Chinese spearhead to unseat and de-throne the USDollar. With Chinese shiny new industry, Chinese emerging consumer class, Russian commodity supermarkets, and Russian military presence, the face of the globe will change significantly, to the surprise of the compromised and failing US/UK former titans. The main question is how peacefully the fascists pass the baton of power to the East. Watch the hidden murder of bankers for clues.
MISCELLANEOUS IMPORTANT POINTS
Many other implications will be analyzed in the October Hat Trick Letter. They are numerous. Americans have blinders to the fact that since the Persian Gulf nations have been tied to the USDollar, their property market bubble & bust coincide with that of the United States. Many of their projects and banks are in ruins. See Dubai. A string of bank failures in that region comes very soon, whose ripples will extend to London and New York, maybe even Germany and Switzerland.
The falling USDollar that comes in the next several months will lift the entire cost structure to the USEconomy, further hampering the mythical recovery. Talk of export trade vitalization is just that, all talk. Domestic producers and banks are being squeezed, as the production supply capacity will shrink, economists all the while oblivious. See the fateful car industry and its supply chain. See the technology industry and its further shift to Asia. See the tragic collapse of California. See the inevitable liquidation of commercial property, from foreclosure and impossible mortgage refinance in rollover. See the unwise USCongress tax hikes to small business. See the cowardly FDIC fee hike (14-fold in two years) to banks. On the other side of oceans, foreign customers are hurting. The big story from the USDollar impact will be rising higher costs throughout the US lands, where incomes will continue to fall. It is called a cost squeeze.
The broad list of nations involved in the secret talks testifies to two important factors. They do not wish to include the US/UK. The list of Russia, China, Japan, and France pretty much covers the important regions of the world. These factors testify to the further isolation of the US/UK, which bear rising risk of entry into the Third World in a forced march. The British will be forced eventually to abandon the British Pound and join the Euro, according to Fisk.
News flash! Robert Fisk gives a very credible interview regarding the background leading up to his story about the Arabs, Russians, and Chinese decision to reprice crude oil in a basket of currencies other than the USDollar. He also mentions Germany as being one of the participants. The Germans are the important transition design brain trust in the backgroud, like with their counsel for Dubai to demand gold bullion from corrupt London custodians, after Germany did the same to corrupt New York custodians. The financial trade war forecasted by the Jackass in 2005 and 2006 between the United States and China is finally here in fever pitch. The departure and dismantle of the Petro-Dollar standard will usher in a more dangerous phase of that trade war, one to include a battle of the crude oil in the Middle East region. The US leaders have been so pre-occupied with adventures in foreign lands, that they have lost sight of the US isolation in its own hemisphere. See the missing $50 billion from the Iraqi Reconstruction Fund that nobody is even searching for. See the Chinese deals to capture new Athabasca oil sand output from Western Canada. See the upcoming halt of Venezuelan oil shipped to the US. See the new Chinese protectors of the Panama Canal. See the depletion of Mexican oil deposits and rapid deterioration into a failed state. By the way, another motive for the Iraq War liberation was to disconnect (illegally of course) China from its oil product concessions with Saddam, that are in the process of reversal and remedy. The USGovt foreign policy does not remotely have citizen interests in mind.
The emergence of the Intl Monetary Fund is a strange story, one that seemed unlikely a year ago. But the big push by Russia, China, India, Brazil (the BRIC nations), and others has resulted in more credibility for the IMF basket of currencies. The big wrinkle for the IMF currency basket is that it will include a gold component. Some clarification. The IMF ‘gold sales’ in recent years have been actually closure of past short gold transactions between nations, usually the US as borrower. Their short covers have been described erroneously as new sales, when they are actually purchase buybacks to end the short position. The next chapter for IMF in the Gold Halls could easily be large scale gold bullion purchases
The byline of the past year could be written as the ‘End of US Lackeys’ quite accurately. The Japanese have a new #1 trade partner in China. After the surprise election of Hatoyama in Tokyo, his first state visit as Prime Minister was with Beijing. Take that as a hint that Japan will no longer act as US Lackey. Watch the Bank of Japan and Yen currency management. The Japanese Yen is a key signal to the transition of the US$ to the trash heap. The other nation soon to shed its lackey role is Saudi Arabia. They have crawled into bed with the Kremlin, in a necessary step to maintain military protection. They need it in order to continue their control of the last resource wealth the nation offers. The Saudi Royals are setting up shop in the south of Spain for retirement homes. The Saudis might open the first big new foreign bank accounts in Russia’s emerging financial system that Western analysts are blind to. Talk about a tall breeze from a mammoth shift of funds! The deal between Saudis and Russians is certain to have many sides.
The deal to support the shutdown of the Petro-Dollar contract between the US and Saudis represents the latest big piece to the Comprehensive Chinese Plan. Note the Yuan Swap facility to aid global trade (check Brazil). Note the transition to the Yuan in the Chinese banking deposits. Note the ASEAN emergency fund in Yuan accounts. Note the announced dishonor of OTC derivative contracts with a declared Stop Loss. Note the accumulation of gold by the Chinese central bank and permission for citizens to save in gold also. The Chinese have embarked on a comprehensive plan that escapes Western financial media analysts. This latest development is a climax step that changes gears of the transition.
GOLD BREAKOUT COMES IN SLOW MOTION
The biggest object investments to the newly hatched Dollar Carry Trade are gold, crude oil, and perhaps the long-term German Bund. Gold has a share of the investment using free US$ money borrowed at near 0%. The US$ inherent risk is minimal, since carry trade players will ensure the US$ decline, even strong-arm policy makers. The USFed will thereby fund the demise of the USDollar with free money, as Saudis, Russians, and Chinese manage the global abandonment project. Gold is breaking out. It is doing so at the slowest possible pace in order to minimize the passengers aboard the train, in order to maximize the acquisition of physical gold by China. They do NOT want a rapid rise during their powerful and very hidden accumulation. Recall that China is in control of the gold price nowadays, since the US-China trade war has its central feature the battle over Gold and the USDollar in global banking supremacy.
Gold is working toward the initial 1130 target. The next important target remains 1300 on the horizon. Then comes the moon shot! They will both come as sure as the sun rises. The USTreasury bubble is finally being recognized as the biggest bubble since US housing. It has no future upside, only downside. The USTreasury bubble constitutes a feeder system for Gold & Silver, alongside the Dollar Carry Trade. The financial networks offer humorous downplay of gold, as they continue in their failure to recognize the broken USDollar, the bubble in USTreasurys, the broken US banks, the broken USGovt finances, and the broken US homeowner, and probably the broken US industry.
In recent days, talk on the financial networks is heard of the Gold price still down from the 1980 peak in inflation adjusted terms. Focus on peak ignores the twenty more recent years. How shallow! They ignore the historical developments underway. Gold will be taking a role in the new IMF basket, a requirement for crude oil purchase in the global marketplace. The unavoidable truth is that the major global currencies are in a long process of destruction, as central banks continue their debauchery with ultra-low interest rates to salvage their insolvent banks and provide constant stimulus for moribund economies. The global monetary system is in a long process of crumbling, as the USDollar undergoes a long process of abandonment. The urgent message is clear. The first nations to discard the USDollar and embrace even an IMF global currency basket, will emerge as the next leaders. The basket is a Straw Man transition device toward global gold-backed currencies, of which there will be at least three eventually.
The gold breakout will receive an extra powerful jet assist when the USDollar descends into the depths, like below 72. It is written in stone. It will come. BUT GOLD LEADS THE CURRENCY PARADE, as the Competing Currency War joins many currencies in the downward march. The ultimate long-term goal for the DX index is 53, with a pit stop at 67. The wretched USGovt finances and worsening insolvency of US banks will guarantee it. The only favorable factor working on behalf of US$ support is the almost equally horrendous condition of foreign currencies. The Dollar Carry Trade will ensure the US$ will decline without mercy, via leverage, those wondrous devices that have turned against their masters in the financial engineering laboratories. The Dollar Carry Trade assures both the end of the US$ as Global Reserve Currency, and the relentless decline in its value.
Capital controls might eventually be attempted on US shores, but a tragic practical fact of life will be clear. The USGovt will experience great difficulty to execute a single national program ever again. Credibility is on the wane. Watch various publicized initiatives and other hidden programs. Further games and gimmicks played with gold will be obstructed by the same team that sponsored the Saudi Petro-Dollar story. In fact, gold is about to go to FRONT ROW.
JACKASS SKEIN OF FORECASTS
The only way out, but kicking and screaming, is a return of real money and real notes used as legal tender. It will probably occur in the distant future, but against a backdrop of probable USTreasury default and a reconstruction of America. If you doubt such an outrageous forecast, just wait. Debt collapse does strange things. Credit supply cutoff does strange things. End to US$ free credit card does strange things.
Past important Jackass forecasts, entered years before they occurred, include the following. In 2004, called for rising US trade gap even despite falling USDollar. In 2005, called for endless housing bear market. In 2006, called for heated trade war with China. In 2006, called for a broken insolvent US banking system. In 2007, called for absolute bond crisis in the United States if not the world. In 2007, called for rejection and end of the de-factor Petro-Dollar standard (sale of Saudi oil exclusively in US$). In 2008, called for lost USDollar global reserve currency status, and eventual USTreasury default. Get ready for change. This is Grand Paradigm Shift on a global scale. Prepare for it or be ruined by it!! Ride the TSUNAMI of change or be drowned and crushed by it!!
See the King World News series on ‘Systemic Failure’ in its four parts where the Jackass is interviewed in a logical comprehensive argument. The third segment is to be posted before this weekend of October 10th. One final segment will be added next week, the conclusion. The King World News has had a stream of stellar guests from the highest tiers, that recently included Jim Sinclair, Gerald Celente, and Chris Whalen. See their front page for numerous interviews They slipped in the Jackass to kick up some sand, and to add spice.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
Jim Willie CBEditor of the "HAT TRICK LETTER"Hat Trick LetterOctober 8, 2009

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Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 24 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com

The Demise Of The Dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."
This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.
The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.
Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.
China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.
Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.
Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.
The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."
Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.
The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.
"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."
Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

By Robert Fisk. Click to link to this article http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Russian President Dmitry Medvedev Unveiled “United Future World Currency”

Well Friends,
I'm really speechless on this one. I'm sure like the rest of you I can't say, "I didn't see it coming." Believing though, might be a different story. Like always you should view the information and draw your own conclusion. -Roger Singh
http://www.youtube.com/watch?v=X6dieHDbwTU&feature=related - The Actual Video
http://www.prisonplanet.com/medvedev-unveils-world-currency-coin-at-g8.html - Newspaper Article
http://www.infowars.com/medvedev-shows-off-sample-coin-of-new-world-currency-at-g-8/ - Something to think About (read the responses)

D.R.E.A.M. SYSTEM, LLC - REVOLUTIONIZING THE GOLD INDUSTRY

Please take five minutes and view our video presentation. I am pleading for all American Investors who are entering the gold industry to contact us before you make a detrimental attempt of sending money to African gold Sellers. You must master the art of vetting first. There can be much more harm than just losing money (WATCH THE PRESENTATION)!

SOFT LETTER OF INTENT (LOI) FOR GOLD

I get so many inquires from new comers and season veterans that want to get into buying and selling gold that I decided to put my companies Soft Letter Of Intent (LOI) up on a blog! Let me start out by saying that it is the norm to be in this business for two years and not make a penny. Just be lucky that you have not lost any! Yes, it is true that when you close a deal it is of "lottery" proportions. That is of course the reason why most people put up with the time and frustration of completing a gold deal.

These deals come in all shapes, sizes, and places. From large (10,000 MT) to small (10 KG) amounts of gold. From gold dust to gold GLD bars. I have seen contracts from every part of the world even Vatican City. Every deal is different. That is one reason why it is hard to put a gold deal together. There is no stadard.

You hear of Swiss Procedure, World Gold Council Procedures, New Fed, etc. The list goes on and on. The Buyer is telling you the way they want it done, while the Seller is saying the complete opposite. It is enough to drive you crazy.

The question that plagues most intermediaries, brokers, and mandates is, "When do I quit?". We all have felt "it". "It" being like you are going in a big circle. It is your job to figure how to bring each side closer to each other. That is what the Buyer and Seller are paying you for. There is no doubt that you might want to give up. This is why I have enclosed my LOI so you and your potential sellers may view it. If you can convienve your Sellers to follow my procedures, your on your way to a "lottery" fortune.

Hear is some useful advice before I go. Based on my system, you don't have to sign NCND's, IMFPA's, S&P's, etc. It is all a waste of time. I'm sure most of you have dozens of them stacked up on your desk collecting dust. The paper is worth more than the deal. Just call me or email and let me know that your Seller is ready to move and I'll take care of the rest. I know, why didn't someone tell you this before?

APRIL '09 GOLD NEWS- WHAT TO MAKE OF THE GOLD MARKET

YOU CAN FOOL ALL of the people some of the time, and some of the people all of the time, notes Julian Phillips of the Gold Forecaster.

But as you can't fool all of the people all of the time, you can at least discredit the rest who won't be fooled, correct?

Many commentators and analysts are still digesting the outcome of the G-20 meeting in London. Yet if I went to my bank and asked, "May I have another loan? Oh, I know I am terribly over-borrowed already, but could you lend me my entire year's income on top of my present loans?", then they would ask me, "Against what collateral?"

Imagine I then reply "None!"...and try to guess the bank's response. But to top it all I add that "I am your only client and saying no means you'll go bust along with me."

Finally, the banker might crack a smile. But will he hail me as his financial savior, too?

This is what the issue of $1 trillion in US government debt on top of the $12 trillion already issued as guarantees, 'quantitative easing' and the like – already equivalent to the entire production of the US in one year – really represents. Just think of it: Where is the money coming from? What collateral is being given, and on what repayment terms? Isn't the latest round of G-20 stimulus simply another tranche of I.O.U.'s, but this time offered to lift less-developed nations out of a potential depression.

Let's face it, the financial system has broken down and still has not been repaired. Yes, steps are underway to try and restore the system. Yes, the banking system is also being checked to ensure it will be healthy, but something else has not been repaired and remains structurally damaged.

Confidence!

Without this, no matter what mechanics are applied, the repairs won't work. And we are not talking about professionals in finance becoming confident; we are talking about the drivers of the global economies, the consumers. Unless they are confident going forward, they will not spend freely again, but rather save, reduce debt, and remove their vulnerability to suffering a diminished lifestyle from here.

At the moment, repairs to the system are starting at the top not at the bottom. You may reply but homeowners are receiving assistance and seeing a reduction in the threat to their homes. But while this may be true, what we are talking about here is the full restoration of confidence so that the consumer will buy houses again, he will go out and finance cars again, without that sneaky feeling that he could see them foreclosed on or repossessed.

Until that happens don't expect much improvement in the overall national or international economies.

Will the present issues of mountains of money restore confidence? Only with caution, and a retreat into fear can be sparked in just a day or a week. After all, confidence in the banking system has been badly mauled in the last 18 months and presently still stands on the edge of a precipice.

How can the system speed up the process? Through a different kind of fear! With very few choices in the hands of governments and central banks the most obvious way forward is an unpleasant one. But if the consumer is made to believe that his income will rise because of inflation – and that his savings will be further decimated by inflation, too – then he will stop saving and start spending, if only to gain value through the rising prices that his house and perhaps his car will enjoy through inflation. That would be a quicker process, moving at the same speed as inflation.

We don't advocate this path at all, but there has to be a policy of saving what can be saved and letting go of that which cannot be saved, and savers will be the victims as their wealth is erased. (That is unless they switch to precious metal now, Buying Gold or silver to shield themselves from inflation. We do expect to see this happen, but sad to say, most investors just don't know gold and silver.) Until the powers that be accept that the system is structurally faulty and rectify this, the path ahead will not be clear.

Such a course will produce convincing benefits. The consumer would see the burden of debt drop as inflation pushed his income up and that sufficient for him to repay debt quicker. Institutional debt would face the same outcome enabling the system to produce a larger after-tax, cash flow and lowering of debt ratios. Yes, it would be tough on those who live on past savings, unless they hold these in the unprintable precious metals. Unfortunately the dangers are so vivid that this may well be taken as collateral damage, as was the case in the past.

In the Sixties through the Eighties, debt re-scheduling was used in the same way to the point where such bad debt was written off and ceased to be a threat to the banks. A similar path can be followed speeded up by inflation. Toxic assets will have to be "contained" until that process is well underway, emasculating such toxicity. As inflation scythes it way through debt (and the mountains of debt we now see with the lenders of last resort have never been seen before) so confidence, most likely misplaced, will be restored as the threats hanging over the consumer diminish.

Thus the printing of money serves a dual role:
1.)Restore the system, if only in the short-term;
2.)Pressure the consumer into spending again.

Remember the target remains the consumer, so that inflation must encourage spending out of both fear and the preservation of value.

However, the entire experience of the last two years will not be erased. The system has broken down and can't be fixed in this way. All the moves to date simply restore the system to a workable one. Genuine confidence, the sort that inspires hope in the future, has gone.

What is most concerning is the way the market is receiving bad news in dribs and drabs. We are aware that another $500 billion in write-downs is on the way and that the process of new liquidity flowing to trouble spots is usually inefficient, so we must expect more shocks to the system. But that takes away a bit more confidence each time and belittles any efforts made to repair the system. Can a resuscitation of confidence take place in this environment?

The consumer driven growth has been found to be wanting. It engendered a "Live now, Pay later" attitude, which has now become "lived once, now paying". And in the current environment the consumer doesn't harbor dreams of wealth beyond his means, he is in survival mode.

How can one get the system right without the traumas that usually attend system reformation? Only if the short-term answers have produced an environment that takes away the traumas at the lowest common denominator of consumer, the blue collar worker level.

In the Great Depression of the 1930s the consumer was revived through infrastructural spending, where he would simply be paid to work, even if that work produced few goods. In China today the government has instituted massive infrastructural projects to keep workers busy and paid. This process must be on-going until confidence is restored, but across the entire world!

One economy from history, millenniums ago, had laws that had debt written off every seven years, with property being returned to it original owners every fifty years. This prevented the building of banking and property empires and spread wealth more evenly through the nation, bringing integration to that society that made it survive and prosper on a broad front. In that economic system there was no mass production, no mass distribution system and no unemployment because of that.

But there is little will to change the current system into anything that produces that sort of result. The focus is now on to get our consumer driven system with its financial empires, restored to what it was. This implies it will remain vulnerable to what it has already experienced.

Consequently, wise investors have to take precautions against the potential damage they may suffer. Leveraged investing with time limits will be seen as what it is, gambling! More and more, investments will be fully paid for up-front and short-term investments relying on short-term results will be seen as unacceptably risky. The prudence of investments in assets that are at the same time assets and cash, such as gold and silver, will come firmly back into fashion and institutional portfolios.

We here at Gold Forecaster cannot emphasize enough the dangers of the inflation that lies ahead. Gold Investment has yet to have its day.

Julian D.W. Phillips, 20 Apr '09

Russia Backs Return to Gold Standard to Solve Financial Crisis

Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.

Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.

Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.
It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.

Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc.

China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.

By Ambrose Evans-Pritchard
Read more about this article at
http://www.telegraph.co.uk/finance/financetopics/g20-summit/5072484/Russia-backs-return-to-Gold-Standard-to-solve-financial-crisis.html

US Mint Suspends Production of More Gold and Silver Coins

The United States Mint has officially announced the suspension of another slate of gold and silver products. The affected products are 2009 dated American Gold and Silver Eagle coins produced for collectors. These coins are considered collectible versions of the bullion coins.
Although these are collectible coins, they represent a sizable amount of precious metals sales and represent a method of gold and silver investment for many individuals. Last year, the US Mint sold 1,157,911 ounces of silver in the form of Silver Eagle coins minted for collectors. They also sold 155,740 ounces of gold in the form of Gold Eagle and Gold Buffalo coins minted for collectors.
The following message was posted on the US Mint's website in the space where the collectible Gold Eagle coins typically appear. The proof coins has been offered uninterrupted since 1986. The uncirculated version has been offered since 2006.
Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .”
The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.
A similar message is posted in the section where collectible American Silver Eagle coins would typically appear. The proof coins have also been offered uninterrupted since 1986 and the uncirculated coins since 2006.
Production of United States Mint American Eagle Silver Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Currently, all available silver bullion blanks are being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”
The United States Mint will resume the American Eagle Silver Proof and Uncirculated Coin Programs once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.
This adds to the lengthy list of 2009 dated precious metals products that have been "temporarily delayed" or suspended by the US Mint. In my previous post Actions of the US Mint Discourage Gold Ownership, I mentioned the delayed release of 2009 Gold Eagle fractional coins, 2009 Gold Buffalo coins, and all 2009 Platinum Eagle coins. The delay, which was first announced in November 2008, continues with no further explanation provided.
For those keeping track, here is a list of the US Mint's 2009 precious metals products that have been "temporarily delayed" or suspended:
2009 American Gold Eagle 1/2 oz. (bullion)
2009 American Gold Eagle 1/4 oz. (bullion)
2009 American Gold Eagle 1/10 oz. (bullion)
2009 American Platinum Eagle 1 oz. (bullion)
2009 American Platinum Eagle 1/2 oz. (bullion)
2009 American Platinum Eagle 1/4 oz. (bullion)
2009 American Platinum Eagle 1/10 oz. (bullion)
2009 American Gold Buffalo 1 oz. (bullion)
2009-W Proof American Gold Eagle 1 oz. (collector)
2009-W Proof American Gold Eagle 1/2 oz. (collector)
2009-W Proof American Gold Eagle 1/4 oz. (collector)
2009-W Proof American Gold Eagle 1/10 oz. (collector)
2009-W Proof American Gold Eagle 4 Coin Set (collector)
2009-W Uncirculated American Gold Eagle 1 oz. (collector)
2009-W Proof American Silver Eagle (collector)
2009-W Uncirculated American Silver Eagle (collector)
In addition, the following precious metals related products were discontinued by the US Mint for 2009. These discontinuations were announced in November 2008. Amidst the environment of unprecedented demand for precious metals, the US Mint determined that these products were "unpopular."
Uncirculated American Gold Eagle 1/2 oz. (collector)
Uncirculated American Gold Eagle 1/4 oz. (collector)
Uncirculated American Gold Eagle 1/10 oz. (collector)
Unriculated American Gold Eagle 4 Coin Set (collector)
Uncirculated American Gold Buffalo 1 oz. (collector)
Uncirculated American Gold Buffalo 1/2 oz. (collector)
Uncirculated American Gold Buffalo 1/4 oz. (collector)
Uncirculated American Gold Buffalo 1/10 oz. (collector)
Unriculated American Gold Buffalo 4 Coin Set (collector)
Proof American Gold Buffalo 1/2 oz. (collector)
Proof American Gold Buffalo 1/4 oz. (collector)
Proof American Gold Buffalo 1/10 oz. (collector)
Proof American Gold Buffalo 4 Coin Set (collector)
Uncircualted American Platinum Eagle 1 oz. (collector)
Uncircualted American Platinum Eagle 1/2 oz. (collector)
Uncircualted American Platinum Eagle 1/4 oz. (collector)
Uncircualted American Platinum Eagle 1/10 oz. (collector)
Uncircualted American Platinum Eagle 4 Coin Set (collector)
Proof American Platinum Eagle 1/2 oz. (collector)
Proof American Platinum Eagle 1/4 oz. (collector)
Proof American Platinum Eagle 1/10 oz. (collector)
Proof American Platinum Eagle 4 Coin Set (collector)
That makes a total of 38 precious metals products which have been delayed, suspended, or discontinued by the US Mint.

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More about this article can be found at http://goldandsilverblog.com/us-mint-suspends-production-of-more-gold-and-silver-coins/

GOLD IS BETTER THAN MONEY IN THE BANK

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Glenn Beck - "An Inconvenient Debt"

To all our readers, you must take the time to read this blog and all of its links. If you don't though, at least look at the Glenn Beck link. Yesterday, the House of Representatives passed a massive lobbyist-written government expansion and enitlement bill that will worsen our economy in the long term. (Fortunately, the Senate can still stop it). The $825 billion economic stimulus program will create a terrible tax burden on Americans, our children and grandchildren. It will create new government programs that will not help our economic situation since it is these very types of programs that have gotten us into this mess. Like giving drugs to an addict, it will give more money to state and local government so they can continue to waste local tax dollars to sustain projects built by the Feds! See a list of the wasteful spending at: Read The Stimulus.ORG. Even the Congressional Budget Office points out major problems of these porkbarrel and political projects masquerading as "stimulus".Together with uncontrollable printing of money by the Federal Reserve, massive and irresponsbile govenment spending is crippling our country. Consider the amount of money printed by the Federal Reserve in the last year to cover these spending programs and other "bailouts" (as popularized on Glen Beck Show this week: "An Inconvenient Debt"). This uncontrollable printing of money is destroying the value of the dollar and risking massive inflation - a hidden tax. This massive inflation can destroy economies and countries (see the recent unrest in Iceland where the government is crumbling due to a financial crisis). A good case for abolishing our Federal Reserve and restoring the Gold Standard ended in 1971 by Richard Nixon.The House of Representatives passed this in a one sided vote favored only by those who like big government. Please pass this on!