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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Paul Revere and Gold

Commodities / Gold & Silver 2009 Mar 29, 2009 - 08:34 PM GMT

By: David_Vaughn

Commodities

Best Financial Markets Analysis ArticleRemember the story of Paul Revere?

He rode his horse through town shouting that the British were coming? That is basically what the web sites have been doing for about 20 years. But what did Paul do when the British eventually arrived in the street? At that point there was no use shouting any longer from his horse that the British were coming. Because at that point they had arrived.


“…I alarmed almost every House, till I got to Lexington.” …if a Man will risque his life in a Cause, he must be a Friend to that cause…”

masshist.org/cabinet/april2002/reveretranscription.htm

So we too have been shouting that the day of economic reckoning was on its way. Do we continue to shout that it is on its way? It has already arrived.

Bill Buckler, March 12, 2009 - “ZERO INTEREST - INFINITE DEBT” “The economically imploding world is entering into the land of the surreal.” “The World's Factories Are Falling Silent…” “Former US Fed Chairman Paul Volcker has called attention to the unprecedented slowdown in the world's factories. He stated that the present slowdown in world factory production was happening faster than in 1930!” “Factory output is collapsing at the fastest pace ever.” Bill Buckler, March 12, 2009, investmentrarities.com/thebestofbb

And how has world production decreased this past year or so as this financial crisis gathers steam? Bill Buckler has done a great deal of research looking up the statistical numbers. And if you are not familiar with Bill Buckler order his newsletter, the Privateer. The best newsletters are those that provide real and researched statistical data confirming and backing up personal opinions. Anyway, let's continue reading below and observe how the world continues to raise to its economic destiny.

Bill Buckler, March 12, 2009 - March 12, 2009 “Here is the global roundup. The annualized figures for February are as follows: Taiwan - 43 percent, Ukraine - 34 percent, Japan - 30 percent, Singapore - 29 percent, Hungary - 23 percent, Sweden - 20 percent, Korea - 19 percent, Turkey - 18 percent, Russia - 16 percent, Spain - 15 percent, Poland - 15 percent, Brazil - 15 percent, Italy - 14 percent, China - 12 percent, Germany - 12 percent, France - 11 percent, US - 10 percent and Britain - 9 percent. This is a catastrophe.” “This is why the global credit crunch is so dangerous for business. It has progressed from a credit slowdown - to a credit contraction - to a global credit money” “The global factory slowdown already reported here will have real and physical consequences - soon. There will suddenly be gaps on the shelves of stores which were normally filled with retail goods of certain kinds.” “The proposed Obama federal budget is so extreme in its financial structure as to defy description.” “Revenues for 2009 are projected at $US 2.19 TRILLION, down 13 percent from a year ago due to the recession. With the bank bailouts and the $ US 787 Billion economic recovery program, 2009 expenditures are estimated at $US 3.94 TRILLION - up 33 percent over 2008.” Bill Buckler, March 12, 2009, investmentrarities.com/thebestofbb

So what is our next responsible task? Where's the bottom and where is the top? Seems to be what everyone is wondering. Again, is this a recession or a depression? Who knows? Recessions are bad and depressions are worse. Good as any answer. And where does gold fit now into the picture?

“Our objective now: To chart the expected path of gold prices in the New Year. This report also reveals another wild card inflationary indicator that Hutchinson believes will carry gold prices to $1,500 an ounce by the end of 2009.” “But Hutchinson – who correctly predicted this last run-up in gold prices – says there's another catalyst that's right now inherent in the U.S. economy that could help vault gold prices to $1,500 an ounce by the end of 2009. And it has to do with the much-ballyhooed $700 billion rescue plan.” moneymorning.com/2008/12/24/gold-2009/

Why has the economy collapsed so quickly? Good question. Deserves an answer. Trillions of dollars of credit have disappeared out of the financial mark ets just in the past twelve months alone. But do not worry about anarchy or civil unrest. Fortunately, we have a new militia planned to keep public discord under control.

Administration - “We cannot continue to rely only on our military in order to achieve the national security objectives that we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded.” “What job will they do that the National Guard cannot? Who will they answer to?” ”As Larry Correia says, "the very first thing that popped into my head when he said that was the Brownshirts.”

crypticsubterranean.blogspot.com/2008/07/obamas-private-army.html

Wow! What does that remind you of?

“In 1921 Adolf Hitler formed his own private army called Sturm Abteilung (Storm Section).” spartacus.schoolnet.co.uk/GERsa.htm

Excellent idea! We need a new military force for the Executive Branch of government. As presidential powers continue to grow their must be a military force capable of carrying out the policies of the presidential administration.

“A group of brown shirts or black shirts organized into an effective street-fighting force is now absolutely necessary to resist the corruption in the government. This is what Hitler did: the SA and, later, the SS.”

godlikeproductions.com/forum1/message625155/pg1

I wonder what color of shirts the new US fighting force will be? Blue is a lovely color. Brown is just too, too bland. And what present unrest has already begun that is eventually going to have to be kept under control? Believe it or not tent cities are starting to show up across the nation. Just as in the 1930s.

“…Bruce Beavers never expected to be homeless. He managed warehouses and hardware stores, had a 401(k) plan and owned his home. But Beavers said he lived beyond his means and eventually lost everything.” cnn.com/2009/LIVING/wayoflife/03/19/seattle.tent.city

Consider how these events today are so distant of the events we witnessed just a mere 10 years ago. An entire world turned on her side. And the people with it.

We are already beginning to see tent cities sprouting up across the country to house our growing population of homeless and those out of work. There are now tent cities inhabited by unemployed and the foreclosed as reported in the media and Oprah. Back in the depression, they were called 'Hoovervilles'. Are these 21st century versions worthy of the moniker 'Bushvilles'?” archinect.com/forum/threads.php?id=86397_0_42_0_C

Is this for real? Happening in 2009? What happened to all those 401K plans that were going to make everyone rich?

“Tent cities reminiscent of the "Hoovervilles" of the Great Depression have been springing up in cities across the United States - from Reno in Nevada to Tampa in Florida - as foreclosures and redundancies force middle-class families from their homes.” “We all take care of each other," Michelle Holbrook, a 34-year-old resident of the Sacramento camp who lost her job as a carer, told the San Jose Mercury News. "I've become the camp mother: I do most of the cooking, and make hot water for coffee." A resident of Reno 's tent city, Tammy, said: "We eat things that other people throw out, or whatever ... It's really embarrassing to say, but that's the way it sometimes is out here." Another Reno tent-dweller, Jim, told one of Oprah's reporters it was "like learning how to live all over again". co.uk/world/2009/mar/26/tent-city-california-recession-economy

Yes, this is for real and happening and growing even as we now speak.

“…more and more people were ruined. Delinquent taxes, drastically rising unemployment and mortgage foreclosures were heavy burdens to overcome. Those factors forced ordinary people to either move into Hoovervilles or become transients. Between 1929 and 1933, more than 100,000 businesses failed across the nation. When President Hoover left office in 1933, national unemployment hovered at a staggering 13 million — nearly 25 percent of America 's work force.” u-s-history.com/pages/h1642.html

And gold where art thou?

“In this unstable economic climate, investor demand for gold, platinum, and silver has exploded, leaving the US Mint scrambling to fill public demand.” ”…this is the case all over the world…” ”What this shortage of physical gold and the subsequent increase in the above-spot premium tell me is that the economic climate is convincing a lot of non-investors to buy gold.” “By that I mean people who don't buy mutual funds or stocks or anything but usually keep their money in cash are seeking safety in gold. It could also be that people have grown weary of invisible electronic investments that send their money off somewhere to potentially vanish. With the Dow falling so hard, and with people losing their life savings to scumbags like Bernie Madoff, people are realizing that if you can't hold it in your hand, it can potentially vanish. Real physical gold in your own possession is the safest and best way to invest in gold. The proof is in the demand.” the-gold- mark et.blogspot.com/2009/03/gold-shortage-discontinues-proofs.html

How bad are things going to get? It seems now to be up to the United States government. Can the government create enough money before the US and global economies plummet off the horizon?

Unemployment is predicted by many analysts to reach double digits. These days are worse than the days of FDR. The only master plan seems to be the creation of trillions of more paper dollars. Will capitalism survive ten years from now? Certainly more inflation is in the works as this new money enters the system. Where are all the jobs today? In the service sector. The government and health system primarily. And what maintains the service sectors? Without productivity and manufacturing the service sector has no legs to stand on. All eyes are on the US dollar. If the rest of the world begins to lose faith in our paper dollars then the financial world sinks period.

“Government and service jobs are the big places to get jobs today," says John Connaughton, director of the University of North Carolina-Charlotte Economic Forecast . Service jobs include health care and education, he says.” usatoday.com/money/economy/employment/2009-03-23

Chinese exports are slowing. Less exports means less foreign capital will be available to finance the US debt. Mortgage default rates in 2009 are predicted to be higher than 2008. Option Arms coming due. It is estimated there are over 20 million US workers unemployed. So far not one dollar has gone to help a single family stay in their home. The money to pay working people is going to the financial manipulations that made the very wealthy even richer and left the little people screwed. There is no room in Washington for those needing a helping hand. Americans remain faithful that they are special and immune from this type of devastation. Almost 75% of Americans believe they will be better off in 10 years. Ha!!! Many of the ignorant beliefs are at odds with the facts.

“The only reason someone who bought a Treasury can get their money is that the government is able to borrow more money to pay them off," said Peter Schiff, president of brokerage firm Euro Pacific Capital.” "It's impossible for us to just keep going deeper and deeper into debt.”

Government policies will lead to a severe devaluation of the dollar. Make no bones about inflation returning down the road soon. Oh, by the way. Have you noticed that the Lipper mutual fund index for gold mining stocks is up over 15%, 3-27-2009 ?

Is the world really falling apart? I think so. Actually, it is a realignment of wealth. Primarily away from the United States to else where. Even talk now about replacing the US dollar with a new reserve currency because of instability of dollar. It's finally happening before our eyes. Banks being nationalized. Privacy ending for everyone. Globalization occurring at an accelerated rate.

The following below is an interesting email from a reader.

“Dear Dave, A trillion is a mind-boggling number, well beyond the capability of most of us to imagine. The following will illustrate. “…a stack of $100 bills totaling $1 trillion would be 789 miles or 144 Mt. Everests stacked on top of one another.” EY 

Where do we go from Here? Watching the middle class continue to cease as a viable class. The rich and the poor. More and more difficult to get ahead. Millions suckered in the past 20 years with the hope and expectation of building their personal wealth off the backs of 401Ks. We have not even begun to see where this will lead eventually. Not for the better though.

And what more can we say about the current status of gold? Recently, the renowned news service Bloomberg is predicting that gold prices in 2009 are expected to be greater than last year's numbers. And even according to The International Monetary Fund they are expecting gold to start rising in price as the year 2009 progresses. Even the Wall Street Journal is predicting a greater rise in the gold price as the economy continues to flounder in a downward direction. These are not the developments of only a temporary trend. These are long term forecasts predicting a continuing change in gold reputation as an asset class.

I have made the statement before that whatever presidential candidate had won this fall would not have mattered. Our country is in comparison to a mortgage holder holding a mortgage that is beyond his means to pay. We are debtor to the rest of the world and they can bear much weight in the fact that the money that they have loaned to us is decreasing at an ever accelerated rate. I have long thought. Are the loan holders going to sit idly by as the US prints more and more paper dollars thereby destroying their investment in the United States?

Will the day soon come when the U.S. Treasury holds an auction, and no one shows up? That day may soon be here. I believe at this point about 13 trillion dollars has been committed to bailing out the financial crisis. Thats a lot of money. Money that is really not real but merely created paper dollars with zero backing. Let's prop up everyone and allow no one to fail. A chicken in every pot.

And again, where art thou oh gold?

Never mind your hat; Buy Gold and hold on for your financial life... http://goldnews.bullionvault.com/crisis_gold

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Gold, accept no substitute. Live your dreams & unlock your potential. And don't be left behind.

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David Vaughn
David4054@charter.net

The future legacy of the United States will be the refined art of financial leverage.

© Copyright 2009, Gold Letter Inc.

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.”  

The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. © Copyright 2008, Gold Letter Inc.

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