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The answer is Gold.

Michael Victory's picture





 

 

How do you crack a currency calamity?

 

The Corrections

Society is bursting with inefficiencies that should have been rooted out by recessions long ago. Today big government and big business share the same bed and insatiable addiction to money printing. It must be cured if we are to move into any genuine period of prosperity.

 

Safe and Sound

The world needs a financial system that preserves confidence again. Small business owners deserve a stable currency to accurately plan for the future. Instead in its place, a relentless flood of paper money offers no reliable medium of exchange. There is little security in dollars to preserve purchasing power or store value. The lack of currency confidence worldwide is increasing at an unsettling rate. Eventually the same politicians that bought elections and reelections with promises and easy money will admit paper money is not working as the basic component of the monetary system. Citizens will seek an alternative currency and many are already turning to gold. Gold, through the centuries has proven to be unmatched as a standard of measurement, a medium of exchange, and store of value. The more distressed conditions become, the more of people’s money governments will try and get their hands on. The rate at which money seeks gold as a less detectable form of capital preservation will continue to mount.

 

The Adversary

Our generation will finally begin to understand inflation is the enemy, a slayer of freedom and culture. It has a long history of taking away from former nations in prior inflationary advances. A collapse and depression is likely inevitable in order to reset the system and clear the economic vices of the past. When mutual funds collapse, small investor’s anger will fuel the masses. Even though failures in the banking and insurance industries are evident citizens are still unprepared. A massive reshuffling of fortunes is approaching. As the currency continues to break down, the number of people who decide to take delivery of commodities futures will escalate. Gold and silver will rise above the burn and monetary skeletons of the Keynesian romantics.

 

The Flood

The advances from investing in gold are representative of a hedge against inflation and deflation. The ultimate goal of owning will be to have trading power at the end of the currency calamity. Until a return to gold, fiat currency will be in crisis. The people with a board to surf the next wave will be those who survive the coming economic tsunami. As we have seen, stock prices can rise but the main trend of the stock market measured in gold will be down. A significantly higher price for gold will be the solution to wash out the sea of paper money.

 

The King

There will be a homecoming to a currency connected to gold. The visiting paper tigers go home loser and take rightful place and just value of zero. The world will realize the need to turn the clock back to what made it great. All things paper are flagging measured against gold. The shaky foundation is crumbling, and those that relied on paper, like pension funds are in sad shape. Assets like stocks and land continue to tumble when priced in gold. As more pieces of paper money are needed to buy each ounce of gold, its price will increase. In the 1980 gold bull market the price of gold rose dramatically from around $35 to $850. This gold bull market will go much higher, and $1,475 an ounce will have seemed a bargain. Targets between $3,000 and $5,000 could even prove to be too low, believe it or not.

 

~MV 

 

 


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Sat, 04/09/2011 - 13:13 | Link to Comment Seal
Seal's picture

I prophesize that for periods of time in the future NO AMOUNT OF US DOLLARS will be able to purchase gold.

Sat, 04/09/2011 - 12:01 | Link to Comment tobinajwels
tobinajwels's picture

I agree with Michael. Please go to this link to watch "I Love Jewels & Gold"

http://www.youtube.com/watch?v=H41LPm093Xs

Sat, 04/09/2011 - 10:23 | Link to Comment Snake
Snake's picture

ps. i am long gold, even if (again imo) not for the best reasons ...

Sat, 04/09/2011 - 10:20 | Link to Comment Snake
Snake's picture

imo ... all writing is fiction, inasmuch as it pretends to translate events into words (that carry the fallacy of univocal meaning) that said (my apologies - to the gold/ammo/spam/run-bill-to-the-hill crowd - for the uppity academic tone): i like falak's writing, JonG's and the Seer's, all different, and for different reasons.

 

 

 

Sat, 04/09/2011 - 06:28 | Link to Comment Bagbalm
Bagbalm's picture

Speculative fiction.

Sat, 04/09/2011 - 06:23 | Link to Comment kapillar
kapillar's picture

booooooaring.

Sat, 04/09/2011 - 05:10 | Link to Comment ivars
ivars's picture

The graph here of silver price prediction 2011-2012 suggest, that, after bailout of JPM shorts etc by FED and temporary correction ( 40% ) in silver prices happening at 42-50 USD, which will last 1 year, in q2 2012 there will appear understanding in the markets ( perhaps related to unsustainability of the sovereign and total debt growth dynamics issue of the USA or hyperinflation possibility with current FEd printing approach) , or with realization that gold standard is the only option, silver will move up to 100 USD sharply and continue in 2013.

http://saposjoint.net/Forum/download/file.php?id=2673

That sets the minimum USD value  for gold standard ( silver not less than 100 USD, gold not less than 3600 USD) . In fact, it may be much more. But at least, in 1 year from now, silver and gold will push for their final increase before being fixed by some form of standard.

 

 

Sat, 04/09/2011 - 08:38 | Link to Comment falak pema
falak pema's picture

I don't know how this guy extrapolates so far ahead. I don't believe in crystal ball gazing. I do believe in manipulated markets and Oilgarchy plays, especially when they have their backs to the walls 'cos they've sucked the blood of the real economy, like today. At the cross roads of this global power play analysis I would wager, that TPTB (political and central bankers) and their plutocratic friends, will shutter the developed world economy into 'stagflation' until they are re-elected. The real hard times begin in 2013-2015 when the USA will have it's back to the wall...AS THE EM MARKETS, CURRENTLY WORLD CREDITORS, BUT DESTABILIZED BY BERNANKE'S CURRENCY POWER PLAY UNDERWAY, WILL HAVE REPOSITIONED in more consolidated positions, as they have money, resources and low standards of living. The US is thus buying TIME from its creditors in this interim period and all its doing (like the ECB in EU) is CONSOLIDATING THE NEW CONFIGURATION OF THE TWO TIER ECONOMY IN WESTERN DEVELOPED WORLD OF TOMORROW : the 1-5% have global financial power that they broker with the growth regions of EM, and the 95% middle class are invited (forced) to accept entitlement destruction and no economic growth and unemployment, in order to swallow the mega-debt mountain, for 10-20 years at their expense. When US/EU labor rates will then be in PRODUCTIVITY/RATE terms at par with the EM, which will have gotten more rich. Then the INTERNATIONAL LABOUR ARBITRAGE will begin all over again in the next bubble cycle. Brave new world...So seeing the rush to PM REALLY spike AFTER 2012...is not crazy...As to the size of that adjustment to move from fiat to hard assets depends a lot on how CHINA/EM will arbitrate their participation in the new world currency basket. So it is NOT just America-centric in terms of arbitrage evolution between fiat/hard assets; it depends on all global players and their collective agendas. As you know the civil society of China/India for traditional cultural reasons going back to pre-fiat days, (1971-RN-BW REVOKE), LOVES PMs. Keep that in mind as it will be ONE day conducive to PM bubble formation... like Nelson B Hunt, the silver 'dunce' for Red October. Just a play on words...Meantime, buy away PMs like throwing dice...

Sat, 04/09/2011 - 06:27 | Link to Comment BigDuke6
BigDuke6's picture

This is the sort of comment i like to see.

Even though it says we need to wait another bloody year before the big break out.

evry year its 'wait another year dearie' - its like my wife... (said in a life of brian accent).

and while the graph has the gravitas of something drawn by a hormonally charged teenager - i fucking like it man.

$100 silver and $3600 gold is adequate recompense for all the abuse we gold bulls have had off the johnny bravo and harry wanger types around here, i reckon..

Sat, 04/09/2011 - 05:00 | Link to Comment The Navigator
The Navigator's picture

and the Question is

1. How will you survive (between the old USD and the new Amero)

2. What will the next currency be based on

3. What is real money

4. What, when used as money, has prevented governments from Hyper-Printing/Hyper-Inflation (debasing their currency)

 

Sat, 04/09/2011 - 04:34 | Link to Comment ivars
ivars's picture

Current USA debt growth rate has entered the unsustainable superexponential growth part, so crash and correction is inevitable in 2-3 years time, shaving of at least 20% of it (3-5 trillion!) in one year. Here I speculate what are the options, and devaluation with gold standard ( or similar) introduction seems to be the most likely one (as compared to default or pure hyperinflation):

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=31678#p31678

 

Politically, it will de-cooperate the west from emerging nations radically, causing internal political changes ( China, Japan if it still owns USA debt by then) and geopolitical consequences of such de-cooperation. In 2013, China will start  changing its internal political course, 30 years of Communist New Economic Policy will stop, with all cosequences:

http://en.wikipedia.org/wiki/New_Economic_Policy

NEP ended when Great Depression hit the West. Same here, Great recession in action, Chinese aiming to overcome the West fast:

New Economic Policy was abandoned in 1928 after Joseph Stalin obtained a position of leadership during the Great Turn. Stalin had initially supported the NEP against Leon Trotsky, but switched in favour of Collectivization as a result[citation needed] of the Grain Procurement Crisis and the need to accumulate capital rapidly for the vast industrialization programme introduced with the Five Year Plans. It was hoped that the USSR's industrial base would reach the level of capitalist countries in the West, to prevent them being beaten in another possible war. (Stalin proclaimed: "Either we do it, or we shall be crushed.") Stalin proposed that the grain crisis was caused by the NEP men, who sold agricultural products to the urban populations for a high price. An alternative explanation for the grain crisis (which is more popular among western historians) revolves around the focus on heavy industry creating a significant consumer goods shortage; which meant peasants had nothing to spend their resources on, thus resulting in the hoarding of their grain.

The NEP was generally believed to be intended as an interim measure, and proved highly unpopular with the Left Opposition in the Bolshevik party because of its compromise with some capitalistic elements and the relinquishment of State control.They saw the NEP as a betrayal of communist principles, and they believed it would have a negative long-term economic effect, so they wanted a fully planned economy instead. In particular, the NEP created a class of traders ("NEP men") whom the Communists considered to be "class enemies" of the working class.  Lenin had also been known to say about NEP: "We are taking one step backward to later take two steps forward", suggesting that the NEP would slowly morph into something else as soon as the economy was prepared.

Lenin's successor, Stalin, eventually introduced full central planning (although a variant of public planning had been the idea of the Left Opposition, which Stalin purged from the Party), re-nationalized much of the economy, and from the late 1920s onwards introduced a policy of rapid industrialization. Stalin's collectivization of agriculture was his most notable and most destructive departure from the NEP approach. It is often argued that industrialization could have been achieved without any collectivization and instead by taxing the peasants more.

I know communists inside out, have been living in the USSR for 27 years of my life. They are capable of anything, disregarding wellfare and human suffering.

 

Sat, 04/09/2011 - 09:17 | Link to Comment Urban Redneck
Urban Redneck's picture

JPM doesn't and won't need a Government bailout over its PM position (whatever that position is).  A futures contract is exactly that, a paper contract, the terms of which may be amended.  The governing body, under whom the terms of the contract are standardized may change delivery terms as it sees fit.  JPM may, however, require some sort of bailout if the market moves significantly against its F/X or interest rate positions, which are orders of magnitude larger.

In the event of an amendment, it would be natural to see divergence between the value of the amended contract and the spot price for the physical metal.

Sat, 04/09/2011 - 02:47 | Link to Comment teotwawki
teotwawki's picture

The CIA answers to the same masters that the bernank does. Whatever they are told they will do. Fort Knox is a myth. The muslims hate everybody, we, well our country just position ourselves accordingly to capitalize on that hate.

Sat, 04/09/2011 - 03:33 | Link to Comment Temporalist
Temporalist's picture

Please learn how to post one comment, then reply if necessary, instead of flooding multiple comments, moslty unimportant to the conversation, as if you're conversing with yourself, so that people can read something other than your self important bull.

Sat, 04/09/2011 - 02:29 | Link to Comment Purely Anedoctal
Purely Anedoctal's picture

Mr.Victory- The Answer is Silver

At least it has real value

Gold is a rock

Sat, 04/09/2011 - 02:15 | Link to Comment teotwawki
teotwawki's picture

And since when do our clowns care about how heavily other central banks are into gold? The game continues.

Sat, 04/09/2011 - 02:23 | Link to Comment BigDuke6
BigDuke6's picture

We r probably togetherish on this then....

Do u think fort knox is full of tungsten?  i've got a sinking feeling...

have the cia pissed it all away on arming muslims who hate us.

http://en.wikipedia.org/wiki/Yamashita's_gold

good yarn

Sat, 04/09/2011 - 02:08 | Link to Comment teotwawki
teotwawki's picture

Big Duke. Agreed, it can and will keep on running. Just like all trends do, until they don't. Don't misunderstand, I'm not shorting gold or silver I am long as can be. BUT it will come crashing down. Especially when everyone is so certain.

Sat, 04/09/2011 - 01:58 | Link to Comment teotwawki
teotwawki's picture

You see rates going up already, do you think that means they are going to go down now. NO, The big money is positioning for higher rates and that is not bullish for gold or silver. Sure these things take time but rates will explode and those who are scared into gold will seek sure fire returns on government bonds.

Sat, 04/09/2011 - 02:20 | Link to Comment ebworthen
ebworthen's picture

Rates may go up but the dollar is devaluing faster than rates.

The cotton candy markets have been fueled by both liquidity (money printing) and the devaluation of every dollar.

Combine money printing with devaluation and crude doubling along with food prices and getting paid 10% per year in treasuries woudln't cut it.

Sat, 04/09/2011 - 02:31 | Link to Comment teotwawki
teotwawki's picture

If the long bond gets to ten percent, money will flow out of highly speculative positions into treasuries. Even Gross would have to start buying again. They will defend the dollar at some point, Long term support has not been broken yet, lets not start dancing on the dollars grave just yet. This is all speculation of course and I realize the end game is to bring the dollar down, but there will be nasty spikes along the way guaranteed.

Sat, 04/09/2011 - 10:54 | Link to Comment RockyRacoon
RockyRacoon's picture

If the long bond gets to ten percent...

I'll be 18 again and sporting a woody that would cut tungsten.

Sat, 04/09/2011 - 03:30 | Link to Comment Temporalist
Temporalist's picture

"If the long bond gets to ten percent."

If Pegasus flew out my ass I could take my talking pet monkey to Mars.

Sat, 04/09/2011 - 09:32 | Link to Comment hamurobby
hamurobby's picture

+2

Where are they going to get the money to pay for that?

heehee snicker...

Sat, 04/09/2011 - 04:52 | Link to Comment spooz
spooz's picture

+1

Been waiting for those bond vigilantes for a long time. 

Sat, 04/09/2011 - 02:31 | Link to Comment teotwawki
teotwawki's picture

The dollar rise with rates.

Sat, 04/09/2011 - 01:49 | Link to Comment teotwawki
teotwawki's picture

Remember the past sure things, real estate, the nasdaq. Just remember. This time ITS NOT DIFFERENT.

Sat, 04/09/2011 - 02:17 | Link to Comment ebworthen
ebworthen's picture

I think I hear the echoes of the trumpets of the celebrations at the end of the war to end all wars...WWI...

Sat, 04/09/2011 - 02:02 | Link to Comment BigDuke6
BigDuke6's picture

sigh

Thanks for keeping on with your wrong point of view.

Gold is not in a bubble... yet.

Its hasn't outperformed in the last 4 months.

Real estate, dot com.... what r talking about? there is no comparison.

you should have seen it all here already?  no ?

gold is in a 10 year bull run on a background of a commodity supercycle.

bernanke's influence may be big in usa but elsewhere its beginning to matter less, china now has only 15% of its exports to the usa. do the math.

it and other asian central banks are supporting gold, not qe.

that money is off into oil , cotton , food etc.

its ok to remind people to keep perspective but try to do it in one comment so its more pleasing on my eye.

Sat, 04/09/2011 - 01:49 | Link to Comment tiger7905
tiger7905's picture

First article from Martin Armstrong from outside Jail. He has been allowed to publish material till at least Sept. 2011, for now.

He comments that he expects a true collapse won't start till around mid to late 2015.

http://goldandsilverlinings.com/?p=541

Sat, 04/09/2011 - 01:43 | Link to Comment teotwawki
teotwawki's picture

ANd when that happens dont buy the dips.

Sat, 04/09/2011 - 11:14 | Link to Comment Troublehoff
Troublehoff's picture

DBTFD!

Sat, 04/09/2011 - 01:40 | Link to Comment teotwawki
teotwawki's picture

This isnt going to make me popular here but I dont care. ALL the bernank has to do is come out on a Sunday night with a surprise 1 % hike and all those who are leveraged to the ass in commodities are going to be FUCKED. The bernank knows this, the PTB know this, they are just waiting until all hands are on deck. Except for their hedge fund and banker buddies, so exercise caution. The same old game gets played every time. Don't think the bernank is so stupid. Anyways, he answers to a higher authority and he will hose the commodity bulls when the time comes.  

Sat, 04/09/2011 - 11:12 | Link to Comment Troublehoff
Troublehoff's picture

What makes you think that the Bernank has a choice to do anything but monetize? Even if rates rise.

 

Somebody has to monetize the deficit. As long as these countries continue to live way outside their means, Gold will do well.

Sat, 04/09/2011 - 07:25 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

This is incorrect: " ALL the bernank has to do is come out on a Sunday night with a surprise 1 % hike and all those who are leveraged to the ass in commodities are going to be FUCKED."

Ben will have to raise interest rates above the real rate of inflation to tighten but first he will have to stop QE. If Ben does tighten this much he will destroy stock markets that he has blown trillons of dollars proping up. I don't think he will go there. To effectively tighten now Ben would have to jack interest rates near double digits...as Volker did.

Sat, 04/09/2011 - 10:04 | Link to Comment sellstop
sellstop's picture

All the fed would have to do to cause a sharp dive in commodities would be to SURPRISE everyone. All of these years of letting "the market" know in advance of every move has took the fear out of the bond market. It was fear that gave the "bond vigilantes" their power. It was fear that WAS the "bond vigilantes".

Without any surprises by the central bank, everyone games the system. The Fed has used this to keep interest rates down, if they want to raise interest rates effectively, they will have to bring the fear back.

Volcker knew this.

gh

Sat, 04/09/2011 - 05:02 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

It's not about The Bernank being perpetually stupid, although his prognostications and machinations suggest otherwise. He knows that there is a mathematical reality heading his way no matter what he does.

Dance Pilgrim, dance.

 

 

Sat, 04/09/2011 - 04:45 | Link to Comment spooz
spooz's picture

Dunno, as long as he keeps up with QE, not so sure how big of an effect he can have on inflation with a gradually rising interest rate.  And as long as inflation is with us, i don't see the commodities getting hit as much as equities. jmho

Sat, 04/09/2011 - 01:25 | Link to Comment teotwawki
teotwawki's picture

The boat is tilted HEAVILY to one side. At some point soon they are going to wipe out the folks who are heavily into commodities. Just exercise caution. I follow trends, but I am constantly on alert.

Sat, 04/09/2011 - 10:03 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Fair point.  But who among us is 100% (or anywhere near that) of their assets in gold?  No one I know, except perhaps ZH's Chumbawamba.

Perhaps the main take-away point is DIVERSIFICATION!  Anyone could / should have 5% - 10% of their net wealth in gold (many say higher, some say MUCH higher).  Even mainstream money managers will concede 5% - 10% in gold is OK.

Disclosure: I am at 11% in gold and other PMs.

Sat, 04/09/2011 - 10:52 | Link to Comment RockyRacoon
RockyRacoon's picture

But who among us is 100% (or anywhere near that) of their assets in gold?

That would be me, but then I call it "inventory".

Sat, 04/09/2011 - 01:16 | Link to Comment JohnG
JohnG's picture

Sure, I own gold, but.....

This article is vapid at best, and beneath ZeroHedge.

Sat, 04/09/2011 - 03:47 | Link to Comment Myzery
Myzery's picture

+1

Sat, 04/09/2011 - 01:41 | Link to Comment BigDuke6
BigDuke6's picture

hey, just enjoy the gold comments, with this middle east turmoil and japan meltdowns i feel i've been starved of this sort of chat.

and anyway , its m.victory , just another oddball waiting for the rapture... not exactly jeff neilsen.

Sat, 04/09/2011 - 01:08 | Link to Comment honestann
honestann's picture

In gold we trust.

Just before the dollar goes totally belly up, gold and silver will cost trillions of dollars per gram.  But all those prices are meaningless.  All that matters is, we're holding the value of our savings when we hold our savings in gold or silver.

Sat, 04/09/2011 - 01:29 | Link to Comment Seer
Seer's picture

Yes, it's an honest way to hold wealth for future (whenever one feels the time right).

Sat, 04/09/2011 - 01:04 | Link to Comment BigDuke6
BigDuke6's picture

Agree, the strength of this article is that it says GOLD! And so the comments are by the gold dudes on ZH just now and we can chew the fat...

 

Let me begin with my updated thoughts.

i bought into the recent weaknesses with both physical and miners.

Looking good at the moment, and i find myself positive for the next few months, even though it looks like QE2 will end.  It will. ZH is great but it should not be ur only source of information and the consensus is that QE2 will end... officially anyway.

there is little doubt it will continue in another form but the 'official end' should lead to some weakness.  but somehow i feel it will be not make a big dent in the price.

even though china is tightening...

maybe its because turd F has called gold at $1600 by june or is it i have to admit i'm a gold bull.... more a gold dairy cow. 

is the break out upon us?

 

Sat, 04/09/2011 - 07:18 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

BigDuke6... The Fed stopping QE might have some effect on PM prices but not a great deal. Until the Fed stops QE AND jacks interest rates above the real rate of inflation PMs will continue to rise against the dollar...And, the real rate of inflation is far more than that stated by the government.

My two cents...

Sat, 04/09/2011 - 08:08 | Link to Comment BigDuke6
BigDuke6's picture

'AND jacks interest rates' - i hear you...

but thats not going to happen.. with unemployment now chronically above 10% they cant until other factors take hold,

we will either accept the new normal of 15-20% unemployment or civil unrest.

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