Dave Ramsey, a popular personal finance expert, provides beneficial solutions for individuals with debt problems. His unique and no nonsense strategy of shuttering all debt via his 7 baby steps, in combination with using cash for all purchases, is a simple approach that people easily connect with.

Ramsey has been advocating this style of personal finance for many years now. When it comes to managing personal debt, he more than likely has helped tens of thousands of people avoid difficulties from the current economic calamity. Ramsey is to be commended for these efforts. His investment advice, on the other hand, is something any intelligent investor should be cautious of.

Ramsey’s general investment recommendations can be seen here, but they do not differ much from the boiler plate standard – invest in diversified mutual funds for the long term.

The best way to invest is to put your money in growth stock mutual funds that have good long-term track records. This is what I do. The stock market has averaged a growth rate of about 12% per year over the last 70+ years. That doesn’t mean a solid growth curve of 12% each year is guaranteed. It means one year the market might grow 7%, the next year 10%, and the next year 19%. That comes out to 12% per year. Since you leave money in an investment for several years or even decades, odds are extremely high that you’ll come out a winner!

Just to put this in perspective, a 12% yearly growth rate over 20 years on the Dow Jones Industrial Average (currently at ~10,000) would put the index at ~96,400, 30 years would make it ~299,600. Synonymous with the mantra that “Real Estate never goes down”, 12% returns are unlikely to continue forever.

There will always be periods and cycles where significant economic or political events transpire causing large paradigm shifts in investment philosophy. Who would have ever thought that Bear Sterns or Lehman Brothers would fail? What impact will the retiring baby boomer generation, as they liquidate their investments over the next 15 years, have on the broader markets? How will the US Federal Government pay back obligations of 120 Trillion? These are just simple examples of unexpected, demographic, and political variables that are often overlooked when “investing in diversified mutual funds for the long term”.

One way perpetual 12% returns are mathematically possible is through inflating the money supply. One asset that stands ready to defend against the ravages of inflation, is gold. On gold, Ramsey’s take is all the more controversial:

If you’ve listened to Dave Ramsey for a while, you’ve probably heard him say how horrible gold is as an investment. If you look at gold’s long-term track record, it’s hard to think any other way.

From 1833 to 2001, the compound annual growth rate of gold was only 1.54%. That’s pretty rotten. Since September 11, the value of gold has definitely increased. It’s looking better right now. But you can’t deny nearly two centuries of consistently poor performance.

The interesting thing is that for most of the period mentioned (1833-1971) gold was money and it wasn’t expected to rise. It was expected to serve as a stable method of wealth accumulation and final payment for goods and services. Gold was specifically used as money because it served this function well and was broadly accepted as a method of payment. Of course during the Great Depression, gold was confiscated by Franklin D. Roosevelt in April of 1933 under threat of significant penalties. The same executive order greatly restricted the ownership of gold until it was rescinded in January of 1975. The restriction was lifted at the center of a huge bull market in gold that lasted until January 1980 and saw the 1 troy oz price of gold rise to $850. So, for most of the period which Dave highlights, gold was either actually stable money or not able to be purchased in significant quantities by the general public. This may have something to do with its “two centuries of consistently poor performance”.

Gold is the new Snuggie. You buy it off late-night cable and end up looking stupid. Everyone is talking about it, and everyone wants to get involved. But think about it. If you were going to invest in gold at all, would you really want to buy it at its 176-year high? Absolutely not!

The reason “everyone” is talking about gold, even though only a small portion of Americans actually own any, is because many are starting to question the economic system in which they participate. A system where the purchasing power of their currency constantly degrades, the house they purchased a few years ago is underwater or going into foreclosure, and retirement accounts are still way down even though “too big to fail” banks were given billions of tax dollars.

So what’s gold good for – other than wearing it around your neck or wrist? Well, if you’re in debt – or if you just need a little extra cash – sell it!

Selling jewelry is a great way to build traction on your starter emergency fund, to knock out debt, and to clean up clutter around your house. If you’ve become gazelle intense, but you’re not quite ready to sell the kids, then peek inside the jewelry box. Do you really need everything in there – the trinkets, bracelets, rings and old watches?

Now, Dave isn’t endorsing gold as an investment. He never has, and he never will. Companies like Gold Stash for Cash offer an outlet for you to make some money on your unwanted or unneeded jewelry. Dave will only endorse companies that he trusts, and Gold Stash for Cash is reputable, honest and absolutely trustworthy.

So if you’re interested, visit Gold Stash for Cash’s website, and contact them about selling your old jewelry. This is just another creative way you can gain momentum on the road to financial peace.

Here is where Ramsey’s fallacy fully reveals itself. It’s not enough to ignore the 5000+ year economic significance of gold or gloss over the above facts which lead to his erroneous ability to claim that gold has only returned 1.54% over two centuries. Ramsey goes further, advocating that people in debt sell gold family heirlooms and jewelry while recommending a company with which they can do so! This is a vast overstepping of boundaries and frankly, stinks.

In glaring contrast to Dave Ramsey’s promotion of his audience to sell their gold, the Chinese government is advocating citizens buy precious metals! Additionally well respected hedge fund managers like billionaire John Paulson, who earned his hedge fund billions when he bet against the housing bubble, will be investing as much as $250 million in a new gold fund next year. Finally central banks around the world are scooping up the metal, which is a clear shift from past precedent providing a solid market foundation.

In short, Dave Ramsey’s debt management strategies are excellent and can work for most everyone. One must be cautious, however, not to be averaged down to the lowest common denominator via the same investing philosophy nearly every financial mainstream figurehead pushes. It literally pays to do your own research.

UPDATE: Audit the Federal Reserve

http://www.auditthefed.com

• H.R. 1207: Federal Reserve Transparency Act of 2009 now has 313 co-sponsors, flat from 313 last week.
• S. 604: Federal Reserve Sunshine Act of 2009 now has 30 co-sponsors, flat from 30 last week.

Ron Paul – The Kudlow Report, 11/30/09

http://www.youtube.com/watch?v=tCnlfIwRpqM

Bernanke pleads his case (11/30/09)

http://www.msnbc.msn.com/id/21134540/vp/34206961#34206961

Gold/Greenback & American Hyperinflation (11/26/09)

http://watch.bnn.ca/#clip239610

Fox Business News – The future of Gold (11/20/09)

http://www.youtube.com/watch?v=Bmi4PD97Ito

BOJ Offers ‘Minimum’ Deflation Response for Hatoyama (12/1/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aIJs51f_KJ0U

• The Bank of Japan accommodated demands by the government to combat deflation with a 10 trillion yen ($115 billion) program that economists said was insufficient to spark domestic demand.
• The decision followed escalating warnings from Prime Minister Yukio Hatoyama’s government about the danger of prolonged consumer-price declines, exacerbated by the surge in the yen to a 14-year high. By contrast, Shirakawa, who met with Hatoyama today, in recent weeks raised his economic assessment and announced plans to end some emergency lending programs.

Chaos reportedly erupts after North Korea revalues currency (12/1/09)

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/01/AR2009120101841_pf.html

• Chaos reportedly erupted in North Korea on Tuesday after the government of Kim Jong Il revalued the country’s currency, sharply restricting the amount of old bills that could be traded for new and wiping out personal savings.
• The revaluation and exchange limits triggered panic and anger, particularly among market traders with substantial hoards of old North Korean won — much of which has apparently become worthless, according to news agency reports from South Korea and China and from groups with contacts in North Korea.
• The revaluation replaces 1,000 won notes with 10 won notes, but strictly limits the amount of old currency that can be exchanged, news reports said.
• According to two web-based groups with sources in the North, that limit was set Monday at 100,000 won, which at current black-market rates amounts to just $40. All North Korean currency that individuals possess in excess of that amount becomes worthless, under the revaluation.
• Amid widespread protests, the limit was slightly raised to 150,000 won (about $60) in cash and 300,000 won ($120) in bank savings, according to DailyNK, an online news organization that has informants in the North.

Gold futures hit fresh high above $1,200 on weaker dollaf (12/1/09)

http://www.marketwatch.com/story/gold-futures-hit-high-near-1200-an-ounce-2009-12-01?siteid=YAHOOB

• Gold futures climbed to a fresh record above $1,200 an ounce Tuesday, as the dollar weakened and as the world’s largest gold miner eliminated all of its gold hedges, showing confidence in a rising gold price.
• Gold for December delivery rose as high as $1,202.70 an ounce. The front-month contract ended up $18, or 1.5%, at $1,199.10 an ounce on the Comex division of the New York Mercantile Exchange.
• Gold ended November trading with one of the biggest gains in 10 years, up 13%. Futures only saw two losing sessions last month.

Mishkin Calls Ron Paul Fed-Audit Bill ‘Incredibly Dangerous’ (12/1/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqUfLCJcZ7Ow&pos=5

• U.S. Representative Ron Paul’s proposal to allow audits of the Federal Reserve’s monetary policy is “incredibly dangerous” and could stoke inflation, said Frederic Mishkin, a former Fed governor.
• Paul’s bill “would be very dangerous in terms of promoting inflation,” Mishkin said. “If you make the central bank beholden to politicians on a short-run basis, you get very bad outcomes: high inflation and less of the ability to deal with shocks like the ones we had recently.”

US commercial property loan defaults soar-reports (11/30/09)

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN3043256420091201

• The default rate for commercial real estate loans held by banks reached the highest in 16 years and the outlook looks worse, according to a report by a research firm released on Monday.
• Real Estate Econometrics sees the default rate for commercial real estate mortgages held by depository institutions hitting 4.0 percent in the fourth quarter of 2009, about 5.2 percent by the end of 2010, and peaking at 5.3 percent in 2011.
• For CMBS loans, delinquent unpaid balances rose 2.6 percent in October from September to $32.55 billion, a whopping 504 percent increase over last year and 14 times higher than the low point of $2.21 billion in March 2007 — the height of the U.S. commercial real estate boom, according to rating agency Realpoint.

Beijing official urges gold, crude-oil purchases amid pullback (11/30/09)

http://www.marketwatch.com/story/beijing-official-urges-gold-crude-oil-purchases-2009-11-30

• China should use the shockwaves created by the Dubai crisis as an opportunity to buy gold and oil, a senior Chinese official who helps oversee some of the nation’s biggest enterprises was quoted as saying Monday.
• “Though it’s not known how much the Dubai crisis will affect the global and domestic economy, it’s going to at least last for a while, and this may give China an investment opportunity, to use part of its foreign reserves to buy gold and oil reserves,” Ji was cited as saying in a Dow Jones newswire report, which cited comments in the mainland’s state-controlled The Economic Information Daily.

Mark Pittman, Reporter Who Challenged Fed Secrecy, Dies at 52 (11/30/09)

http://www.bloomberg.com/apps/news?pid=20601109&sid=afp8OC.OvRnI

• Mark Pittman, the award-winning reporter whose fight to make the Federal Reserve more accountable to taxpayers led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52.
• Pittman suffered from heart-related illnesses. The precise cause of death wasn’t known, said his friend William Karesh, vice president of the Global Health Program at the Bronx, New York-based Wildlife Conservation Society.
• Pittman’s push to open the Fed to more scrutiny resulted in an Aug. 24 victory in Manhattan Federal Court affirming the public’s right to know about the central bank’s more than $2 trillion in assistance to financial firms.

Bernanke Says Limiting Fed Independence Would ‘Impair’ Economy (11/29/09)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQS1SZ95×778

• Federal Reserve Chairman Ben S. Bernanke said curbing the central bank’s authority to supervise the banking system and tampering with its independence would “seriously impair” economic stability in the U.S.

The right reform for the Fed (11/29/09)

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/27/AR2009112702322.html

Benign neglect may turn the dollar from a safe haven to a dangerous place to be (11/28/09)

The US government is shouldering a vast $12 trillion debt pile – that’s 12, followed by 12 zeros.

http://www.telegraph.co.uk/finance/economics/6678334/Benign-neglect-may-turn-the-dollar-from-a-safe-haven-to-a-dangerous-place-to-be.html

• The trade deficit of the world’s biggest economy also remains huge. How much longer can the dollar defy gravity?
• The dollar’s weakness is based on fundamentals – not least America’s jaw-dropping debt. It’s a long-term trend. From the start of 2002 until the middle of last year, the dollar lost 30pc on a trade-weighted basis.
• Sophisticated investors have also been exploiting America’s ultra-low 0.25pc interest rate to borrow cheaply in dollars, switch these borrowings in currencies where returns are higher, then pocket the difference. This so-called “carry trade” has flooded foreign exchange markets with US currency.
• The dollar fell particularly sharply last week, though, as traders were reminded of the patently obvious – that the White House actually wants the dollar to fall. US Treasury officials have lately taken to staring into the TV cameras, puffing out their chests, then stating: “We are committed to a strong dollar.” That’s nonsense, of course, because a weaker currency boosts US exports and lowers the value of America’s external debt.
• When the minutes of the Fed’s latest policy meeting were published on Tuesday, describing the dollar’s decline as “orderly”, the markets rightly took that as confirmation of America’s “benign neglect” approach – with intervention to support the dollar unlikely. The minutes also showed the Fed’s key committee members voted “unanimously” to keep interest rates at rock-bottom for “an extended period” – another reason to sell.
• Yet the state of the dollar poses enormous dangers. For one thing, America’s currency depreciation trick could backfire if “the rope slips” and a steadily dollar decline turns into free fall. The cost of US imports would soar, with the Fed being forced to sharply push up rates. The world’s largest economy would then be caught in a stagflation trap – a slump, but with high inflation.
• A rapid “unwinding” could cause major losses at financial institutions, posing renewed systemic dangers. Far from being a safe haven, the dollar is the likely source of the next financial crisis.

China, gold, and the civilization shift (11/26/09)

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100002252/china-gold-and-the-civilization-shift/

• Stephen Jen from the hedge fund Blue Gold Capital has a warning for those who think that gold has risen far too high, is necessarily in a speculative bubble, and must soon come clattering back down.
• Mr Jen is an expert on sovereign wealth funds from his days at Morgan Stanley. The gold story – essentially – is that the rising economic powers of Asia, the Middle East, and the commodity bloc are rejecting Western fiat currencies. China, India, and Russia have all been buying gold on a large scale over recent months.
• Personally, I have been feeling vertigo with gold near $1180. All my contrarian instincts cause me to dislike momentum stories – but there again, maybe this is not momentum. Perhaps it is a civilization shift. Can’t make up my mind.

“Ben Bernanke Has Never Gotten Anything Right,” Peter Schiff Says: Fed Officials Respond (11/26/09)

http://finance.yahoo.com/tech-ticker/article/379864/%22Ben-Bernanke-Has-Never-Gotten-Anything-Right%2C%22-Peter-Schiff-Says%3A-Fed-Officials-Respond

• Putting Peter Schiff on a panel with St. Louis Fed President James Bullard and former Fed Vice Chair Alan Blinder is asking for trouble or, at the very least, a heated debate.
• That’s just what occurred last Sunday night in New York at an event sponsored by Princeton’s Business Today.
• But the most contentious moment came toward the end of the evening when a student asked the panel to comment on Ben Bernanke’s 2005 “global savings glut” theory, and what role China’s high saving rate played in the credit bubble.
• Schiff’s response, “Ben Bernanke has never gotten anything right,” generated some guffaws from the crowd and a sharp retort from Blinder and Bullard, who rose to Bernanke’s defense.

Dollar hits 14-year low against yen (11/26/09)

http://www.breitbart.com/article.php?id=CNG.172a2f217acbdb6e4e9b446773ee0f1c.111

• The dollar slumped to a 14-year low point against the yen on Thursday, prompting fears that a further surge could hurt a fragile recovery in Japan, the world’s second largest economy.
• Gold scored yet another record high, breaching 1,195 dollars an ounce as the US currency waned.
• During Asian trading, the dollar slid to 86.28 yen, the lowest level since July 1995.
• The dollar’s fall was driven by expectations that the US Federal Reserve would maintain its ultra-low interest rates for some time, sending investors in search of other higher-yielding assets, dealers said.

Dubai default threat rattles world stocks (11/26/09)

http://www.breitbart.com/article.php?id=CNG.172a2f217acbdb6e4e9b446773ee0f1c.a1

• Global stock markets tumbled Thursday on mounting anxiety over a debt default request by Dubai and tighter lending conditions in China, analysts said.
• The government of Dubai shocked financial markets on Wednesday when it said it would ask creditors of its Dubai World conglomerate for a debt moratorium of at least six months.
• The Dubai government announced that it would revamp the Dubai World group and wanted its lenders to extend its maturing debt until at least May 2010.

US Mint to suspend American Eagle gold 1-oz coins (11/25/09)

http://www.reuters.com/article/fundsFundsNews/idUSN2536556520091125

• The U.S. Mint said on Wednesday it will suspend sales of the popular American Eagle 1-ounce bullion coins as rising demand depleted its inventory.
• “The United States Mint has depleted its current inventory of 2009 American Eagle 1-ounce gold bullion coins due to the continued strong demand for this product,” the Mint told its authorized dealers in a memorandum on Wednesday.
• November sales to date were at 124,000 ounces, higher than the 115,500 ounces sold in each month of September and October, the Mint said.
• Increasing worries about inflation, a falling U.S. dollar and geopolitical tensions are prompting individual investors to take physical possession of gold coins and other bullion products due to the metal’s appeal as a safe haven in financial and political crises.

IMF sells 10 tonnes of gold to Sri Lanka (11/25/09)

http://www.google.com/hostednews/afp/article/ALeqM5hezFRjxpXYJ9s6fa-qtO_F2jDCMg

• The International Monetary Fund said Wednesday it had sold 10 tonnes of gold to Sri Lanka’s central bank for 375 million dollars, as part of a restructuring of IMF financial resources.
• “The sale was conducted on the basis of market prices prevailing on” Monday, the IMF said in a statement.
• Gold prices had hit a record high that day, topping 1,170 dollars an ounce. Since then, the price of the precious metal has soared higher to new all-time peaks as investors seek a safe haven amid economic uncertainty.

Russia to Buy Canadian Dollars, Mulls More Currencies (11/25/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=at5XsdLU.68w

• Russia’s central bank will add Canadian dollars to its reserves and may include more currencies as it seeks to reduce its dependence on the U.S dollar.
• Russia aims to diversify its reserves, increase gold holdings and promote regional currencies in trade and finance to reduce risks posed by the dollar’s dominance. President Dmitry Medvedev has blamed the global financial crisis on an over- reliance on the U.S. currency. Russia’s interest in buying assets denominated in Canadian dollars is also part of its strategy of reducing exchange-rate volatility, said Vladimir Bragin, an economist at Trust Investment Bank in Moscow.

Fed Officials Said Low Rates May Fuel Speculation (11/24/09)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ9p2ZyUE8L4

• Federal Reserve officials said record-low interest rates might fuel “excessive” speculation in financial markets and possibly dislodge expectations for low inflation, according to minutes of their meeting released today.
• “Members noted the possibility that some negative side effects might result from the maintenance of very low short-term interest rates for an extended period,” minutes of the Nov. 3-4 meeting said, “including the possibility that such a policy stance could lead to excessive risk-taking in financial markets or an unanchoring of inflation expectations.”
• “They are walking the fine line,” said Alan Levenson, chief economist at T. Rowe Price Group Inc., in a Bloomberg Television interview. “They like the asset inflation now for what it does for consumers’ pocket books and ability to spend.” They need to prevent higher spending from fueling a rise in prices, he said.

One in Four Borrowers Is Underwater (11/24/09)

http://online.wsj.com/article/SB125903489722661849.html?mod=WSJ_hps_LEADNewsCollection

• The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.
• Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.

Highlights from “The International Forecaster” newsletter (12/2/09)

Published and Edited by: Bob Chapman

Check out or Subscribe to The International Forecaster

• We are predicting a very damaging year in 2010 for both stocks and bonds. One of the big questions is the implementation of Basil II and III and the FASB. If their stricter accounting practices are enforced the corporate world is in for a heap of trouble. Financial firms are in particular danger. In this past 3rd quarter non-financial corporate profits fell 12%. The result was that $97 billion of $123 billion in profits came from the financial sector. This is not a balanced performance. It is very disturbing because most of corporate profits come from cost cutting – that is firing employees. That method of fattening the bottom line cannot continue indefinitely. Lending is not supplying those profits, because loan origination is off 16.2% yoy. Loan defaults were up 10% and a record 5% of loans were not current. Lending fell $2.8 billion, the most since records began in 1984. Ninety percent of loans go to consumers and business, which means consumers consumption of GDP, has had to fall. It’s currently 69.3%, down from 72%. Loans to businesses have fallen 6.5% and small and medium-sized businessmen create 70% to 80% of all jobs. That means improving the employment situation is going to be very difficult. The exceptions are transnational conglomerates, which continue to offshore our production and outsource service jobs. Their profits are up 29%, but they have caused unemployment of 7 million good paying jobs over the past nine years. If you remove the financials, profits are up 7% off their lows. The financial stocks have appreciated 135% off their March lows, which we believe leaves them very vulnerable. Industrials are up 80%. While this was going on business profits fell 0.4% in the 3rd quarter with no relief in sight. Growth rates are falling at the highest rate in decades. We are hard pressed to believe that 3rd quarter growth was 2.8%. What growth there was came from the federal government. Not only is employment falling, but wages have been at a standstill and have been for two years. The government says inflation is 1.2%. We say it is 7-1/8%. Without higher wages buying power is falling 5% or so – hardly inducive for consumer consumption.
• In addition to market vulnerability and a very questionable economic recovery we now have to watch world banking deal with the Dubai problems, which is going to bring on a currency warfare, which will bring trade warfare. Soon the accusations will fly and it will be every currency, or country for itself, and that will bring tariffs. We have already seen that with US increasing tariffs on steel and tires with China. The US may have many faults, but other countries are not blameless. All have been devaluing their currencies for years. The ultimate consequences for the world will create difficulties that could eventually lead to wars, domestic and social unrest, and additional unemployment in all countries. Whether you realize it or not this process has already begun. The only avenue left open to nations has been the unbridled creation of money and credit and monetization. That has been accompanied by the concept of too big to fail. This is why the Illuminist lending institutions are being saved and that is being paid for by the public. In 1990 it was decided that in order to keep the system from collapsing, derivatives would be created, as an adjunct to what we now call quantitative easing, a creation of the Federal Reserve. This is another reason why the Fed and its fellow elitists do not want HR 1207 and S604 passed. It will expose the giant Ponzi scheme they have created in partnership with Fed shareholders JP Morgan Chase, Goldman Sachs, Citigroup and others. The edifice is a house of cards. Professionals do not understand how important it is for the Fed to be terminated. It is the core of central control of not only the US economy, but also those of many other nations. Its demise will give America the opportunity to begin a new system not controlled by moneychangers.
• The implementation 50 years ago of free trade, globalization, offshoring and outsourcing upset the balance of trade worldwide. It shifted production and sources to the East from the West. A battle that could not conceivably we won by the West with its much higher standard of living. The wealthy elitists don’t care about the living standard of the West, or anyone for that matter, except themselves. They have made the tax free offshore profits and with those further power to control nations. The Fed controls the dollar – the reserve currency of the world. They could do as they pleased. It created imperial America after WWII. Thus the unbalance caused the steadily depreciating dollar, currency manipulation and free trade have destroyed the world’s financial architecture. The result has been massive trade deficits in the West and surpluses in the East. The East and the transnational conglomerates call for freer trade and that is understandable as they have millions of people who will work for virtually nothing. This way the populace can be fed at the expense of the West. Without fair tariffs the world ends up in financial chaos and that is exactly where we are headed. Unfortunately economists and analysts won’t tell you the truth and give us conclusions, because they are perpetually compromised by the Illuminist system. If they tell the truth they are banned from the system. If they keep expressing the truth they are liquidated. All world leaders are well aware of the situation and go right along with the program to stay in power and enrich themselves. Again, next comes the escalation of currency war and tariffs. If you remember we mentioned recently that Germany’s businessmen were demanding a weaker euro, so they could compete in the middle of a depression. What they do not understand is that the dollar is a failed currency, that has to depreciate whether they like it or not. For the last ten years the eurozone has held a special position with an inexpensive currency. Now it is reality time. It is not the strength of the euro – it is the weakness of the dollar that is now perpetual. They are going to have to live with it. The easy days are over for everyone. You could read it in the tea leaves. For the last six years every country in the world’s currency has fallen versus gold. No one, but a few, wanted to recognize that the very sophisticated were exchanging currencies of declining value for gold. Now more are catching on and in time it will be a thundering herd. The nations of the world have exchanged their wealth for depreciating paper as a cost of entering foreign markets to do business. If they are lucky they will end up with $0.30 to $0.40 on the dollar, once official devaluation takes place a year or so from now. All the actions by imperial America since WWII have led to the current state of affairs. All the wars and the debt created have come home to roost. All empires end the same way. The toughest kid on the block eventually loses by being knocked out. The con of the Communist menace and weapons of mass destruction are not working anymore. Even the deal with China has broken down. Manufacturing would be shipped to China and China would fund US debt. Now the Chinese have found out it wasn’t worth it and are exchanging dollars for things, such as commodities and gold and silver. China has discovered that they have been had.
• As a result of all this the only way the players can keep the game going is by inflating via quantitative easing and monetization. They know the game will soon end and the dumb sheep will be shorn again. The monetary collapse is on the way. If you read our last issue you know that the elitists expect to devalue the dollar officially by the end of 2010. It could take longer, but it is going to happen. The suspension of the Fed by Congress is on the way as is another war – a war extensive and powerful enough to destroy more than half of humanity. The system as we now know it is in the final state of collapse.
• The masters of the universe, as they believe themselves to be, made a major error within the residential and commercial real estate bubbles. They couldn’t create enough virtual money fast enough and it was discovered that the assets were not AAA, but in fact BBB. Once the ruse was discovered confidence and trust was lost and now they are scrambling to keep the system afloat. In addition these geniuses ran out of real assets to play with. They needed a need of new assets to play with. They were to come from a stock market that was to rise from Dow 6600 to 10,500. The problem is the market rise turned out to be just a holding action. CNBC and its long list of Wall Street players would have us believe the market is under priced and ready for recovery. Not in your wildest dreams. The black hole has been entered. Each day fewer and fewer people worldwide refuse to believe that something is too big to fail. All the kings horses and all the kings men, including all the central banks, won’t be able to put this one back together again. Monetization is really virtual money – in creating a hoax. It is the transfer of funds made up out of thin air to its owners – the banks – to keep them from collapsing. This is the ultimate in moral hazard. The elitists get away with it because the public and our leadership do not understand what they do. They may well be catching on though, as 75% of Americans want the Fed audited and investigated. That has send cold shivers up the backs of our resident Illuminists.
• In the final analysis the game is in the process of ending. The game of bookkeeping entries is over. Reality is in the process of taking command. Zero loans from the Fed to their owners in the form of money made up out of thin air, then turned into interest bearing deposits is ludicrous on its face. How can any educated person believe in such chicanery? We give the banks money and then pay them for holding it for them. We call that free money – a gift – that no one else in the nation gets, except for these anointed banks. No jobs are created, less money is loaned and the malefactors are rewarded. What kind of a system is this? Few say anything for these elitist control the media as well and are shamed into silence even newsletter writers.