Economic Collapse

It has begun. The EU-bailout levys will soon be opened. Quantitate easing programs a la Bank of England and the Federal Reserve will be adopted by the ECB. Who is next? Spain? Portugal? This is the beginning of the end of the Euro. All fiat currencies will fall with the US Dollar and the Euro in terms of gold - the only real money. If you are still in trading mode, get into wealth protection mode now.

The Wall Street Journal: EU Leaders Agree on Greece Support

As many of you know Peter Schiff is now running for Senator in the State of Connecticut. Schiff is an American economist of the Austrian School, author, commentator and popular video blogger who regularly appears in the role of a bearish pundit on numerous financial news networks. He predicted the Dotcom crash of 2000 and the Housing crisis of 2007/2008 and like the author of this blog he belives that the US Dollar is heading for hyperinflation. He is a licensed stock broker, the president of Euro Pacific Capital with a 100 employees who successfully protect their clients wealth by moving out of the US dollar and into real money such as gold etc.

If you want a crash course in the problems with the US economy, watch this. A good hour well spent with a lot of information and humor. Enjoy.

Disclosure: I have no vested interest in Euro Pacific Capital nor do I receive any payment for writing this.

Agora Financial, LLC & The Daily Reckoning interview with Marc Faber:
http://bitcast-a.v1.iad1.bitgravity.com/agorafinancial/DR/faber/indexAF.html

Here is a great article by Bill Bonner on the state of debt of governments sent out today to Daily Reckoning subscribers.
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One of the best reads on Keynesianism vs The Austrian School of Economics, Slavery vs Liberty, Fiat paper vs Real Money, that I’ve come across in a long time: http://www.goldensextant.com/RKLSage.html#anchor1404
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India buys 200 tonnes of Gold from the IMF for 6.7 billion US Dollars. Thats more than 7 million ounces and half of the announced IMF gold sale of 400 tonnes. Who will buy the other 200 tonnes? My bet is China. Why are they doing this? They want to get rid of their US Dollars and into hard assets. Gold is the money of kings. Debt is the money of slaves. Just look at the rate of decline in foreign purchases of US debt: Read the rest of this entry »

Rocky Vega of The Daily Reckoning took the effort to transcribe some quotes from a little video clip of Marc Faber, publisher of The Gloom, Boom, and Doom Report:

“There’s this huge debate between the inflationists and the deflationists… I belong more to the camp that looks at inflation and deflation from a different perspective. In the sense that in every system you can have some prices going down up and some prices going up. Say if you have a glut in consumer goods, then consumer goods prices can go up. But if you print money and have a zero interest rate, then home prices theoretically could go up, or stocks, or commodities. In any event your cash purchasing power goes down, that’s a symptom of deflation.”

“The worst investments in an inflationary period, when you print money and have large fiscal deficits are, of course, long term bonds and then cash. The best is to have foreign currency and commodities… also equities can protect you to some extent because they adjust upward as the currency goes down.”

“Regarding the dollar he says, “well, it will go to a value of exactly zero eventually.” When pressed for a timeline he explains, “Looking at Mr. Obama and his administration it should already be there, but I think it will take roughly ten years until people really realize that the fiscal position of the US is a complete disaster.”

My personal favorite from this clip:
On Bernanke: “He’s a money printer. He does that well.”

Just a few minutes ago the zFact.com National Debt Clock turned over to 12 trillion USD. As you all know, the total liabilities of the US is much much higher if you take Medicare och Medicaid etc into the picture.

Compare this to the counter on the left hand side on this page.

I’ve been more busy than usual with projects and clients for a few days, so here’s a recap of what has been going on in the last few days:

A lot of things are happening on world currency markets right now. What we are seeing now is a move away from the US dollar, a diversifying by Central Banks as well a move into the only currency with no counter-party risk: gold. The Metal of Kings rose to a new high at 1.060 USD/Oz during the last trading days and today almost 1.070 for a few minutes. Here is a Gold chart from today (14 October 2009):
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