Your Wealth Is Being Confiscated!
- From: periodistalibre@xxxxxxx
- Date: Thu, 06 Sep 2007 08:26:50 -0700
by Larry Edelson,
I'd like to start this issue by quoting three great authors. Although
they were from very different walks of life, they shared an
understanding of exactly what the global economy is going through
today, especially the events here in the U.S. ...
"The first panacea for a mismanaged nation is inflation of the
currency; the second is war. Both bring a temporary prosperity; both
bring a permanent ruin. But both are the refuge of political and
economic opportunists."
- Ernest Hemingway, September 1932
"Destroyers seize gold and leave to its owner a counterfeit pile of
paper. This kills all objective standards and delivers men into the
arbitrary power of an arbitrary setter of values. Gold was an
objective value, an equivalent of wealth produced. Paper is a mortgage
on wealth that does not exist, backed by a gun aimed at those who are
expected to produce it."
- Ayn Rand, Atlas Shrugged
"By a continuous process of inflation, governments can confiscate,
secretly and unobserved, an important part of the wealth of their
citizens. By this method, they not only confiscate, but they
confiscate arbitrarily; and while the process impoverishes many, it
actually enriches some. The process engages all of the hidden forces
of economic law on the side of destruction, and does it in a manner
that not one man in a million can diagnose."
- John Maynard Keynes, 1920
In my view, it all started in 1933, when President Franklin Roosevelt
devalued the U.S. dollar from $20 per ounce of gold to $35 per ounce.
That's a whopping decline of 75%!
That was at the height of the Great Depression, when scores of banks
were going under, and I don't blame Roosevelt. It was the only way out
of the depression. Debase the paper dollar by raising the price of
gold. Get out of deflation by sparking inflation. Erode debt burdens
by devaluing the dollar. Get the economy going again, no matter what.
It Largely Worked, But It Forever
Changed the Face of Economics
Ever since the devaluation of the dollar in 1933 - and the
simultaneous upward revaluation of gold - central bankers and
politicians around the world have come to the same conclusion as those
authors I just quoted. Here it is, in my own words ...
In the absence of a gold standard, central bankers and politicians are
free to confiscate your money through inflation, at will.
Mind you, they don't have much choice ... just like Nixon didn't have
much choice in 1971, when he completely abolished all remnants of the
gold standard, severing the link between gold and the dollar for good.
The cold hard truth of the matter is that now, whenever the economy
hits a pothole, central bankers will put their pedals to the metal,
creating as much money and credit as possible, even at the risk of
running hyperinflation.
As Keynes pointed out in that quote above, "The process engages all of
the hidden forces of economic law on the side of destruction, and does
it in a manner that not one man in a million can diagnose."
So here's my question to you: Which one are you going to be ...
One of the 999,999 people who do not understand what the government is
doing to their money?
Or the one in a million who does, allowing you to protect your wealth,
and even profit from the government's actions?
Now's the time to decide. Reason: The dollar has already been getting
killed in international markets for more than three years now, but ...
The Dollar's Decline Is About
To Get a Heck of a Lot Worse
The supply of money is suddenly surging at an annualized growth rate
of 36.4%. By some estimates, that's the highest rate of growth in the
money supply since 1973!
There is no way the U.S. dollar can hold its current value when the
supply of money is being pumped out at a 34-year high.
There is no way the U.S. dollar can hold its current value when the
Fed is likely to cut the Fed funds rate on September 18, and do
whatever it takes to rescue the critically-ill real estate and
mortgage markets.
There is no way that the U.S. dollar can hold its current value when
foreign economies are outgrowing the U.S. economy by miles.
And there is no way that the U.S. dollar can hold its current value
when so many overseas investors - who have lent us hundreds of
billions of dollars to finance our economy - are now waking up to the
fact that the U.S. economy is staring into a black hole.
So, what can you do to protect yourself?
Consider Increasing Your Gold Holdings
To 10% Effective Immediately ...
In my August 2 issue of Money and Markets, I suggested everyone up
their holdings of physical gold to 3% of their net worth.
That was in addition to my long-standing policy that everyone should
hold as much as 5% in gold-related investments such as gold stocks,
gold ETFs, and gold mutual funds.
Now, because of the mortgage, real estate, and money market panics -
which I think are still in their infancy - I think it's a good time to
up your total gold holdings again ... to 10%.
One last thing: No matter how strong the rallies look in the stock
market, with the exception of gold and natural resource-related
stocks, stay away from the majority of equities. As I've noted before,
the Dow is likely headed down to about the 11,000 level.
Also continue to steer clear of the bond markets. Keep your liquid
money safe in short-term money market funds.
Best wishes,
Larry
.
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