Dollar is being killed -- What is one thing you can do?

Political gridlock in Washington is killing the dollar

Which political party controls the Senate? It won’t matter.  “Why won’t it matter?” you ask.  Because neither of the two major parties have the guts to do what needs to be done.

Since the late 1970’s I have been warning of the danger of devaluation of the dollar and the possibilities of hyper-inflation.

It’s no longer a prediction -- it’s happening.  You and I are watching the slow and long term decline of our Dollar.

Exactly how the weakening of the dollar will play itself out is unclear -- that it will happen is clear.  How you protect yourself from this inevitability will determine your financial situation 15 years from now.

First, let’s discuss why it’s happening, and then let’s discuss how it affects our lives.

Why is the Dollar Declining?

Our budget deficit (that’s the annual amount we overspend) and our disastrously ballooning debt (this is the combined total amount we owe) is becoming such a large number that it is close to becoming beyond our ability to repay.  Telling you the numbers hardly helps make the situation clear; let’s just say that we’re $12 trillion in debt, which is $40,000 per legal U.S. citizen, including infants.

Obama says he’s looking for ways to cut spending, but who is he kidding? He’s only been president for a little more than a year, and already he’s led a government in spending more than any president in our nation’s history.

By the end of this decade, we will need to borrow a trillion per year just to pay the INTEREST on the debt.  Eventually this will become so difficult that the only solution will be either 1) cut back government spending to almost nothing, or 2) devalue the dollar so much that we can pay back some of what we owe with cheaper money. (Feel free to call me if you need a deeper explanation of this phenomenon.)  Since option number 2 is SO MUCH EASIER, I’m sure that’s what our always-the-easy-way-out government will choose.

Why should we care about a weaker dollar?  Well, it means that everything we import -- which these days is most things -- will be more expensive.  That’s because as the dollar plummets in value, foreign companies will demand more dollars to pay for their items.

Bottom line -- whether it happens in six months or gradually over 10 years, you are watching the end of the dollar as the main world market force.  So the question is, what can you do to prepare?  If it’s in six months, there will be sudden and drastic instability.  If the changes happen more gradually, you will just slowly witness the loss of purchase power of your savings.

You must consider diversifying into other currencies, and you should consider buying a good chunk of gold and silver to balance your savings and dollar investments.

Don’t delude yourself! Now is the time to make these forward thinking investments.

When I get a call into Numis and am asked, “How high could gold go?”  I respond, "You tell me how low the dollar will go and I'll tell you how high gold can go."

But just check the news and you’ll hear about all the foreign countries that are purchasing more gold.  The Chinese, Indian, and Russian central banks hold only about 2 percent of their reserves in gold.  Western banks hold about 38 percent.  And the Chinese are now buying more gold.

On top of that, there is an obvious consensus now among pension and hedge fund managers that they should be investing more in gold.  One expert has said that if they put even 5% of their funds into gold it would trade at $5,000 per ounce!

Imagine that all your savings and investments lose half their value in two years.  Wouldn’t you have wished that at least 10% of your investments were in gold and silver?

SILVER as an investment?  Really?

It’s trading at historic lows in comparison to the value of gold.  I think it was 1980 that silver was $50/ounce while gold was about $850. That’s a ratio of 17/1.  Now silver is about $16/ounce and gold is about $1114; this is a ratio of 70/1!

As gold becomes an unreachably expensive investment, more people will likely make silver their choice when choosing an investment in bullion.

Buy only the actual metal, not any metals fund.  Too risky. The whole point of investing in bullion is to have the actual physical asset in your control.

The dollar continues its downward spiral - affects everything we do.

What the experts have predicted for years is now happening -- the dollar is falling, losing a huge percentage of its value compared to other major world currencies.

This affects every transaction and every business decision. It affects your savings, your investments, and your retirement.  It affects your children and your children's children.

This loss in the dollar is a direct result of the long term and short term monetary policies of our government -- our country has spent and borrowed for so many years that our national debt is now beyond control.  As of today, December 21, 2009, we now owe $12,110,744,655,959. That's $39,383 per person -- including those in diapers!  The share of the national debt for a family of four is $157,532.

Can we EVER pay back such a crazy amount of money?
It's difficult to say, but we are witnessing the end of our country's leading position in world influence.

A result of the dollar's weakness is the strong price of gold and the stock market.  Both have shot up, and as long as the dollar's fall continues, gold (and maybe the market) will continue higher.

What can you do to protect yourself against this?  Vote for those who care about this issue, invest in global companies, and invest in those areas that guard against the affects of inflation.

And buy precious metals -- gold, silver, and platinum.  They have historically protected individuals against the ravages of any weak currency. Now, that weak currency is here -- in the US -- it will be the gold, silver, and platinum that will protect our assets too.

And lastly, stay alert.  Read the news, stay informed, and ask around to those experts you trust for their opinion and predictions. We must adapt and alter our strategy as the need arises.
Call me anytime.
Al

Economy is balanced on the edge of a sharpened sword

A strong reason investors are flocking to buy gold is because paper money is causing huge suspicion throughout the world. Governments continue to print more and more money to try and “print” their way out of a recession but this could cause huge inflation problems in the future.

IMO....Deflationists and Inflationists are each convinced they are correct in their assessment of economic forces. So why is it we are not going one way or the other? The answer is BOTH. There are huge inflationary forces at play AND huge deflationary forces at play. The Fed is pumping money into the black holes while negative equity/over supply strangles housing. Like two giants in a tug-of-war, neither gaining the advantage, our economy is balanced on the apex of a mountain with either side leading steeply downhill. If either force diminishes we shall surely be dragged down the other slope. The miracle so far is that we have not lost balance and tumbled either direction...yet. The best we can hope for is that time will buy us a less hard landing whichever way it goes from here. Precious metals are always a great hedge in times of such uncertainty. Note that everyone is watching gold. DON'T OVERLOOK SILVER as a great opportunity right now.