“One day the price of gold will be higher than the Dow Jones.”
- Marc Faber 5 Feb 2009.
- More people are waking up to the reality of what is about to happen. The possibility of a US debt default is no longer unthinkable. Even Japanese investors are of the opinion that there is a significant likelihood. Bloomberg reports in Barclays Says 40% of Japan’s Investors See Risk of U.S. Default :
Jan. 30 (Bloomberg) — Forty percent of Japanese investors said there is a risk that the U.S. government will default on its debt, a survey published by Barclays Capital showed. Almost 34 percent of the 66 respondents in the poll sent to Japanese institutional investors from Jan. 26 to Jan. 28 said there is a “significant” or “slight” risk that the U.S. will lose its AAA sovereign debt rating this year. Twenty-two percent said they were concerned about the credit risk of German government bonds. China surpassed Japan in September to become the biggest foreign holder of U.S. Treasuries. “Sovereign risk related to national debt has been a recent topic of discussion among market participants,” Lhamsuren Sharavdemberel, a Tokyo-based analyst at Barclays, wrote in the report published yesterday. She confirmed the details today.
The cost of protecting $10 million of U.S. five-year bonds from default has surged $53,000 to $60,000, near the highest since Bloomberg started tracking the data on Jan. 28, 2008. Investors are pricing in a larger risk premium as U.S. President Barack Obamaseeks Senate approval for an $819 billion stimulus package aimed at lifting the economy out of recession. There is a lot of “concern about an expanded budget deficit under the Obama administration,” Sharavdemberel wrote.
The yield on 10-year U.S. Treasuries surged 61 basis points this month, the largest jump since April 2004, on speculation investors may have trouble absorbing as much as $2.5 trillion in debt the U.S. is likely to issue this year to pay for a $1 trillion budget deficit and programs to spur the economy.
Foreign Demand Falls
International demand for long-term U.S. financial assets fell in November as foreign investors sold Treasury, agency and corporate debt, a government report showed on Jan. 16.
- When US defaults on its debt, it means that treasury bonds and USD will collapse. What will investors with USD do? They will quickly exchange their USD for assets that is a great store of value. For the past 6 months investors have fled stocks and all kinds of financial paper instruments into USD and treasury bonds. When these collapse, investors will undoubtedly flee to the historical store of value: GOLD ! Nick Gardner writes in Gold rush erupts over financial crisis :
THE global financial crisis has sparked a new gold rush. Worried investors seeking a safe home for their money are ploughing billions of dollars into the precious metal in a bid to preserve their wealth, …
Demand has now reached such unprecedented levels that the Perth Mint, Australia’s biggest wholesaler of gold coins and bars, has been forced to ration its sales.
- Think about what happened when investors flooded into treasuries in Oct and Nov 2008. The irrational herd instinct sent bond prices skywards and yields to zero! The same think will be repeated in the Gold market. Gold prices will rocket upwards to the stratosphere. Impossible? That is what happened to bond prices. My feeling is that the effect for Gold will be even more stunning. When the USD collapses, everyone is affected worldwide and not just a certain investor class. The man on the street will look at his USD and quickly seek to exchange it for Gold! Do you smell monetary collapse?
- USD is the world reserve currency. When it collapses it affects all other currencies. This means worldwide financial instability and panic. The current financial system based on USD will topple! Do you smell worldwide fiat money collapse? Gold is real money. Governments cannot print it out of thin air. The illusion of paper currencies will be obvious to all. Central banks around the world can only deceive citizens for so long. The financial system is breaking down.
- Adrian Ash writes in Gold Boosted by Zero Yield, as World Currencies Devalue on Negative Real Interest Rates :
“Expectations of future inflation and Dollar depreciation are driving the market right now,” reckons Bayram Dincer, an analyst at Dresdner Bank, speaking to Bloomberg from Zurich.
“Layer on top of [shrinking supply] all the liquidity, the printing of money and the other measures the government is taking,” adds Joe Foster, gold manager at the $8 billion Van Eck Funds in New York, and “it could create an explosive situation.”
- The inimitable and insightful Jim Willie writes in Gold Price Disconnects from the U.S. Dollar :
The gold price has finally disconnected from its nemesis, the USDollar. This news should be read as the coming of spring after months of wintry torment….
The very paradoxical event of the USDollar rising this past autumn amidst truly horrendous news, one disaster after another, one major bank failure after another, one nationalization of a large financial institution after another, makes the disconnect all the sweeter for gold investors. That set the stage for a powerful gold price move. Imagine a notable rise in the buck, based upon broad negative news in August and October!
The gold price withstood the counter-trend US$ rally. While the buck has undergone a retest, gold has risen and not looked back, as though the US$ has become an irrelevance . IT HAS! This is great news! We are at the doorstep of a powerful gold rally, one that will see a silver rally accompany. New highs are soon to come! We are the doorstep of a powerful gold rally on a global scale, where gold rises in ALL currencies. The gold move in US$ terms is last, but guaranteed! The fundamentals of the US$ are fifteen steps beyond miserable. The technicals in the chart are looking tremendous. The psychology is aligned for a powerful move on a global scale, undeniable even to the most ignorant commentators in the financial press.
GOLD BREAKOUT IN FOREIGN CURRENCIES
This is the biggest story in England not told, the gold breakout. True to form, the gold price has seen a powerful breakout in the nation whose financial foundation has been destroyed more rapidly than any other nation on the planet, except the Untied States of America. After a serious hesitation in December, when the gold price in London experienced a spastic episode, unsure of its direction, probably endofyear squaring, gold has launched into a powerful breakout. The most vivid and strongest breakout for gold in foreign currencies has been in terms of the British.
One should begin to ask the question whether England, the Untied States, and Mexico will be the next failed states behind Iceland!!!
The combination of unfettered usage of federal printing presses to create (and thus debauch) its money, together with abusive bilateral hostile actions directed at creditor nations (like China), together with bailouts & rescues soon to reach $10 trillion, together with continued Wall Street control of the USDept Treasury (see Goldman Sachs), together with a steady stream of major monster fraud cases (see Bernie Madoff), WILL SEND GOLD & SILVER NORTH IN PRICE.
Many astute analysts have declared that the Corrupt Powerz that control the vast manipulated machinery cannot conceivably keep both the US$ and USTBond levitated for long. One had to fall. My conclusion was simple. Any strong selloff of the USTreasurys, pushing bond yields higher, would trigger a credit derivative sequence of events that would result in overnight bank failures and collapse of entire financial markets, starting with a JPMorgan meltdown. It would occur much like a financial nuclear bomb. So the victim will be the USDollar, clearly, by default. As the US$ falls to unthinkably low levels….
America had better make preparations for the Third World, where credit strangulation carries a bitter cost. This will occur only after new global currencies are introduced in January 2010. …..
The rise in the gold price during a US$ counter-trend rally foretells of a strong message.THE GOLD PRICE IS HEADING TOWARD NEW HIGHS. ALSO, THE USDOLLAR IS SOON TO EXPERIENCE SHOCK WAVES.
- The leaders of many countries are openly denouncing the current USD financial system. Russian president Putin openly attacked the USD in Davos Switzerland. China is turning its RenMinBi into a trade settlement currency quickly. Now the Persian Gulf oil powers are coming out with their currency:
Then there is the planned launch of the new Persian Gulf gold-backed currency in early 2010, which should act as a nuclear bomb against the USDollar in less than one year. That is the hidden motive for unprecedented attack of hedge fund crude oil positions by the sponsored Wall Street gangster bankers, aka banksters.
- A new Gold backed monetary system for the world? Don’t be surprised! Gold has always been real money. The question isn’t whether you should invest in Gold or not. The question is: Are you going to protect yourself from the collapse of fiat money and turn to real money: Gold ! USD is ultimately just a piece of paper which the FedRes can print without limit out of thin air!
- How high will go soar? It is anybody’s guess. Here is 1 opinion :
Gold price could treble if China divests dollars, warns mining boss
- See also :
Dollar Devaluation, Debt Default & Gold
Massive US Dollar Devaluation Against Gold During 2009
Gold Rush Worldwide!
Obama, Roosevelt, Gold Confiscation and Dollar Devaluation
Economic Depression and Gold
Celente – Code Red ! Economy in Collapse !
GEAB : Systemic Economic Crisis: The Sequence of Global Insolvency Begins
Global Financial & Economic Meltdown
GEAB forecasts Next Financial Tsunami in March 2009
Global Monetary Meltdown in 2009 ?
America’s Debt – Ticking Nuclear Bomb!
American & British Banks are Bankrupt!
Economic Collapse of 2009 – Greater than Great Depression of 1929
America is at the Edge of Niagara Falls
Gerald Celente – Trends 2009
Can Countries Go Bankrupt ?
Disclaimer – I am not a financial advisor. This is not an advice to buy, sell or hold any stocks or bonds or any precious metals.
30,000 Scientists sue AL GORE for FRAUD!
- Everything you’ve ever been told about Global Warming is probably untrue. From Al Gore’s An Inconvenient Truth to news reports from the popular media outlets and even public classrooms which, in chicken little fashion, are screaming – the sky is falling. But is it really?
- This documentary, which contradicts these claims and has been described by some as the most explosive film of the year and the definitive answer to Al Gore features interviews from some of the Worlds leading scientists, climatologists and former environmentalist like: * Dr. John Christy, Professor of Atmospheric Science and Director of the Earth System Science Center at the University of Alabama * Dr. Philip Stott, Emeritus Professor of Bio-geography, University of London * Dr. Paul Reiter, IPCC & Pasteur Institute, Paris * Dr. Roy Spencer, Principle Research Scientist University of Alabama * Dr. Patrick Michaels, Department of Environmental Science, University of Virginia * Dr. Syun-lchi Akasofu, Director, International Arctic Research Center * Dr. Fredrick Singer, First Director, U.S. National Weather Satellite Service * Dr. Richard Lindzen, IPCC & Massachusetts Institute of Technology (M.I.T.) * Dr. Tim Ball, Former Professor of Climatology, University of Winnepeg * Dr. Niz Shaviv, Professor of Physics, Hebrew University of Jerusalem * Dr. Ian Clark, Professor Department of Earth Sciences, University of Ottawa * Dr. Patrick Moore, co-founder of Green Peace * Dr. Paul Driessen, author of Eco-Imperialism: Green Power Black Death
- The Great Global Warming Swindle blows the whistle on what may be the biggest swindle in modern history. Proponents of man made global warming warn that climate change is the greatest threat ever to mankind, and, if we do not change our ways and reduce CO2 emissions – polar ice caps will melt, coastal areas will flood and hurricane like Katrina will become common.
- With nearly Gestapo like tactics we are commanded not to question the edicts of the IPCC – Intergovernmental Panel on Climate Change. There is absolutely no room for doubt because there is a “scientific consensus.” Anyone who questions the data or conclusion is an enemy of the state and humanity.
- Well, this is exactly what this well documented film does! Our challenge – watch this film and make up your own mind. “The Great Global Warming Swindle should be seen by everyone interested in the global environment, especially those who have seen the Al Gore movie.” Professor William M. Gray, meteorologist. ( Source: YouTube )
Max Keiser and Stacy Herbert in The Oracle (BBC World News) discusses banker bonuses, protectionism, Brazil, globalization, rising unemployment in China…. .
Guests in this segment include economist, James K. Galbraith, Alison Smale of the International Herald Tribune and private equity operating partner, Richard Stephenson of Yudu.com.
Max Keiser looks at Wall Street bonuses and how the bailout money is being misused. Why is bailout money being used to start factories in other countries?
- Max Keiser of www.maxkeiser.com , talks about the good bank / bad bank plan to bailout banksters. How will dumping all the bad assets/liabilities to a bad bank solve the problem? Who is going to foot the bill? Obviously, the American tax payer. Will Americans revolt against the government?
- Keiser comments on the USD and how it is a ‘Roach Motel’ . US Treasury bonds and USD heading towards collapse. They are not safe haven assets. “There is no fundamental strength to the dollar…it is short lived!”
- Alex Jones interviews Peter Schiff on 4 Feb. Schiff reviews the current state of the US economy and explains what is likely to happen next.
- According to Schiff, government policies under Obama will exacerbate the recession into a prolonged depression much like the 1st Great Depression. The government is “pouring gasoline onto a raging fire!”.
- Schiff gives a brief overview of the Gold Standard and how America abandoned it. America created an economy based on consumption and debt, instead of strong work ethics, production and savings. America needs to rebuild its manufacturing base.
- Upcoming is the collapse of the USD and consequently rising interest rates. Will it happen this year?