The Calm before the Storm...

Calm before the storm...

On Bloomberg captions of late stating this or that country’s central bank intervening in their currency, purposely depreciating them.  Last week it was Japan, now it’s India. So who cares and what the hell does that mean to me...Well I guess we can safely say the world producing economies are in a deflationary end game - purposely depreciating their currencies so they can keep their exports going...(eg. China, Japan, Asia, Brazil, India)

With all currencies are on the dollar system, a U.S. host who is in debt how many trillions - lost count- Not to begrudge us that We are still the greatest country in the  world standard of living-wise, personal freedom-wise, and militarily, however our dollar is backed now by a promise (not by any actual commodity like it used to be) in a Consumer-based and not a Producer-based economy like in the good old days of 19th and early part of the 20th Century which made our dollar the and country the standard, as it deserved to be. Now it kills me to see how things are changing -just look at almost everything you are wearing right now and every object in the room you are in-see where it is made- prob not U.S.-goods everyday people buy (the majority of any economy) are not made in the U.S. anymore like they used to be in the good old days of those terrible factories where people made things and assembled goods in the U.S.-it's all been outsourced to producer countries - good for me and you so I don't have to work in a factory -but now we don't produce anything- I don't even know anyone that makes anything.  We do produce according to what I hear turbines and huge engine parts and military goods yes, but I don't own or know anyone that owns a turbine engine or military naval ships. We do however have the most free society which has lead us to be the leader in innovation and technology for the most part- which has carried us thus far- but when a nation's food and basic necessities are inflated to the point of the average man not being able to afford them - who is going to be able to buy the latest computer or I-Phone??? This is what I believe we will face in the not too distant future.

So back to the point - world economies- on a sick dollar system, producer countries purposely depreciating currencies to keep exports going, consumers (U.S., Euro countries) enjoying strength of currencies for time being although they are in bankrupting levels of debt, while adding their own injections of their currencies to keep their social programs going (Welfare, unemployment, Medicaid, vacation time for state workers like myself to go on vacation time -right now, since I do not often use them, I have a combined 92 days I can take off between sick and vacation time-etc.)-World is in a currency depreciation end game which of course means that inflation will result (it has already begun to start but is just merely simmering -watch for more Bloomberg headlines for this or that producer country intervening to weaken their currency and watch for this or that consumer based country for their sovereign credit rating to be downgraded or to be engaging in bail out programs for the EU or U.S., or individual countries like Greece, Italy, and so on.

"So what the hell do I care???" -you may be asking yourself.  Well, here we go- inflation leads to lose of purchasing power and basically any money you already have loses it's value in regards to the amount of good you can purchase.  The $2 dollars in your pocket can not buy the two Pepsi’s anymore - only 1 and so on.  Inflation causes commodities to Rise, as this continues investors and anyone who realizes their cash is losing value every day they are breathing, will begin to invest in things that traditionally do not lose their value in an inflationary environment (Mike Maloney's book Wealth Cycles has captured this masterfully detailing this occurrence throughout history since the beginning of the establishment of currencies).  As Maloney points out, Gold and Silver start to be viewed as money, no longer outdated "tradition as Ben Bernanke told Ron Paul and no longer as an industrial metal as in the case of silver, but as real forms of fungible money -unimaginable to us much like it was unimaginable to the Ancient Romans who got away from their gold and silver backed system, unthinkable for the users in their life time of the continental, and impossible for the Brits to conceive with the loss from grace of the British Sterling.  I won't mention the maniacs of Zimbabwe who took it to the level of the 50 trillion dollar note in the same breathe because their GDP was the size of maybe the Jersey Shore so it was far easier for them to inflate.

  Food commodities also rise in an inflationary end game...farms will do well as Jim Rogers keeps pounding his chest about - anyone who is involved in commodities or precious metals- because you can not just print them in exchange for real goods like our current printable paper/digitally created electronic system of fiat currencies and credit.

This current opportunity, however many months it may be before things start to further along this path to the point where the average man is more than tightening his belt, is probably the best opportunity in history to buy precious metals or even stocks in commodities, precious metal mining stocks (only established ones-don't gamble for start ups) or farm shares...I believe those that do invest in these will prosper unbelievably, those that do not will be left in a dust bowl and the greatest economic depression to hit the world...remember this time it's not just one country or region on the same fiat currency backed system- it's the entire world, on the dollar system.

 submitted by John F. Champoli

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Comments

[ThrivingAdmistC...]

This article hit the nail on the head, the entire world economy is spiraling out of control.  You have europe going broke, America in deadlock, and China facing a housing bust.  We're going to enter economic collapse sooner than most think.

[Johnny Texas]

Thank you.. In the beginning I meant inflationary end game or depreciating end game... Apologies for typo but you got the point- thanks!!