Tax & Financial Consulting Services
Who's Going to Bail You Out?
You're not going to like what I have to say in this issue. But I'm just going to tell it like it is. No spin. Just common sense analysis.
The Wall Street "experts" and other "pundits" who don't understand the macro picture ... who continually miss the big trends ... and steer you the wrong way — are as ignorant or are as dishonest as I've ever seen. They ought to be ashamed of themselves.
The average American has seen their portfolio drop over 20% and the value of their home drop double digit percentages too. Meanwhile, the economy is slowing and life is a lot more expensive. So, who’s bailing you out?
You’re not Wachovia, WAMU, Bear Sterns, GM, Freddie Mac, Fannie Mae or any of the hundreds of financial institutions that could soon be getting money directly from the government (your money, that is) or rescue money guaranteed and orchestrated by the U.S. government.
You’re not too big to fail.
Fact is, you’re on your own in the greatest financial storm in 65 years. And it’s my humble opinion that the thing to do isn’t simply to put your hopes in the presidential candidates, but to put your money in areas that make sense. And given the immense inflationary seeds now being planted by the United Socialist States of America, there is a very good chance that investments in the right commodities will pay off big time in the months and years ahead.
Gold should be your first stop. Nothing hedges against inflation like gold. And adjusted for consumer price inflation, gold is still more than 50% below its highs of 28 years ago. In the present environment, it could easily double from here. Gold mining stocks, meanwhile, are selling at major discounts and could outperform the yellow metal itself.
Stay tuned for how you can add Gold & Silver to your portfolio later this week…
Common Sense Analysis #1:
The U.S. Dollar Is Toast.
How, I ask you, is the dollar going to hold its value when the Federal Reserve is now accepting just about anything as collateral for loans? How is the dollar going to strengthen in any meaningful way when the Fed has already swapped out $1 trillion of its pristine assets for junk? How is the dollar going to stabilize when the Fed is about to print up another $700 billion, or so? When the budget deficit is going to explode?
When the current account deficit is widening? When the national debt is about to mushroom from $9.6 TRILLION to at least $11.31 TRILLION? When there is another $50 TRILLION in debts out there, unfunded liabilities of Social Security and Medicare?
I repeat, the dollar is doomed.
I've long maintained that the Fed and the authorities in Washington will do whatever it takes to avoid a repeat of the Great Depression, even if it means destroying the value of the U.S. dollar and causing hyperinflation instead of deflation.
Now, it should be abundantly clear that my warnings over the last 6 months have been right on the money.
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Even before the Fed and Treasury's latest rescue plans, the dollar lost nearly 33% of its purchasing power. Now it's embarking on its next leg lower. Before this crisis passes a few years from now, I expect the dollar to lose at least another 50% of its value, its purchasing power, probably even more.
Common Sense Analysis #2: The Next
Bubble to Burst Is the Bond Market.
How can it not? With all the printing of money that has to be done ... with all the new debt the Treasury is going to issue ... with the value of the U.S. dollar set to remain in the claws of a long-term bear market, how, I ask you, can U.S. Treasury notes and bonds be a safe investment?
I maintain my position on the U.S. bond market. Don't touch it with a ten-foot pole. If you own bonds, get the heck out of them.
And don't let anyone tell you otherwise, that U.S. Treasury notes and bonds are a safe investment right now, a safe haven from the crisis engulfing the U.S. “I repeat: They are NOT safe.”
Indeed, the bond market is finally waking up to seriously deteriorating credit worthiness of the U.S.A. Last week, bonds had their worst down day in 28 years, with the 30-year bond falling nearly FOUR full points in a single trading session, or over a $4,000 loss in principal for a $100,000 face value bond.
Common Sense Analysis #3:
More Inflation Is Coming.
How can inflation not go higher?
Inflation is largely a monetary phenomenon, caused by “MASSIVE PRINTING OF FIAT MONEY”, massive issuance of new debt, and massive currency debasement. You have all three of these working overtime now, on an unprecedented scale, and for months and years to come.
Plus, you have something else occurring on a unprecedented scale: Massive new demand for essential goods from 40% of the world's population — 3 billion people who hitherto were not part of the modern world and were largely cut-off from seeking better lifestyles.
Do you think there's any turning back the desires of 1.31 billion souls in China seeking a better life? Or 1.13 billion people in India? Or another billion people in other emerging economies in Asia, or Russia, or Latin America?
It's foolhardy to think anything to the contrary. Sure, there may be some slowdowns, some retrenchment in emerging economies. But the long-term trend toward modernization that's occurring in Asia and Latin America is not going to be stopped. Not by a credit crisis, not by any government, nor by any central bank, international bank, or any other force.
Add that into the thorough debasement of the dollar that is now occurring, and inflation is baked into the cake, rising to the surface, and set to explode higher.
Common Sense Analysis #4: Stocks
Have Already Lost 72% of Their Value.
I'm one of only a handful of consultants who recognize this. The U.S. stock markets have been in a massive stealth bear market for almost eight years now. When measured in terms of honest “REAL” money, Gold & Silver, the only true money in the world, U.S. stocks have lost 72% of their value since the year 2000.
Common Sense Analysis #5: Paper Assets
Are About to Be Shunned Big Time.
It's already started. Despite everything to the contrary to get you to buy paper assets ...
— Stocks, as I've just shown you, have lost 72% of their value.
— The dollar has lost 33% of its purchasing power in the last seven years, and is about to lose a lot more.
— The U.S. bond markets are about to be trashed, embarking upon a sharp, deep bear market.
In short, paper assets are already being shunned. They're a lousy investment when a nation's cornerstone is being devalued, its currency.
They're a lousy investment when you don't know if the government is ever going to be able to pay off its debts without inflating away asset values (deflating its currency). Paper assets are a lousy investment when they're backed solely by debts, by IOUs, by nothing but promises. That's the era we're entering now, and it's going to get a whole lot worse before it ever gets better.
Common Sense Analysis #6: The Only Way
to Protect Your Money and to Profit is ...
Given all of the above, “no spin” common sense analysis of today's world and the credit crisis, what's the smartest way to protect your money?
What's the smartest way to profit?
First, make sure up at a minimum 30% of your investable portfolio is in Gold & Silver.
- Stay tuned for how you can add Gold & Silver to your portfolio
Second, third…To learn what else you need to do, make sure you are on my Emergency “Who’s Bailing Me Out” conference call this Thursday at 9pm e.s.t.
712-451-6100 pin 974124#
Tax & Financial Consultant, RFC
866-361-3872 toll free fax
"A Prudent man foresees the difficulties ahead and prepares for them; the simpleton goes on blindly and suffers the consequences."
Proverbs 22:3 -- Living Proverbs
LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. G&G Associates gets paid a commission from a membership purchase at www.publicgold.com/gngpreciousmetals.