Disappearing wealth...?

The media complains about how much wealth has disappeared since last summer. Oh, please. Wealth doesn't just disappear (unless it's covered by lava or nuked). All those dollars represented speculative gains (wealth as a term doesn't apply) in hopes that some greater fool will buy at a higher price. This is known as, "the greater fool theory". How apt. Real wealth requires labor. Someone digs ore from the ground and refines it or plants crops and harvests them or in some way changes natural resources into something useful in everyday life. This is wealth built on labor and is lasting. Financial wealth is often illusory. Not always but often; such as now. Our Federal Reserve System (Central Bank, also the FED) has been creating money from nothing for so long now (since 1913) that our entire financial system is like a great big soap bubble sitting on top of bedrock. The bedrock represents the real wealth of our country and the soap bubble represents claims against that wealth. Not only that, we have a derivatives market that represents claims against the soap bubble. Sheeeesh! What we see popping is the bubble not the bedrock. Like the tulip mania in Holland in 1637, the perceived value of a tulip bulb drove the prices so high that one contract sold for 10 times the average annual earnings of a craftsman. Suddenly, someone perceived that the bulb only grew flowers and sold out. Someone else sold out and in February 1637 the price collapsed. Did the wealth vanish? No, someone sold at the high and kept the wealth just like now. The stock market is a zero sum game: for every seller there has to be a buyer. Someone gets the high price when they sell. In our case, the air is being let out of our stock bubble and reality is setting in. That's all that is happening. Of course, if you were in with the money manipulaters (read the FED) you would know ahead of time and would be able to liquidate and keep your profit. When the FED sent the word out to restrict credit, which the banks have done, the collapse was inevitable. Stick with bedrock type investments: gold, silver, platinum, producers of such, producers of food.

DIGITAL Gold??!!

I love WorldNetDaily. They report stuff nobody else does. Today, Jerome Corsi reported that there is a move among the globalist powers that be to move to digital gold. Right. eGold has been around for years and globalists henchmen have been doing everything they can to trash it, claiming that it's a fraud. Uh-huh. eGold had the gold until it was seized. My only complaint about eGold (it's a little one at that) is that, when I lost my password and the email account I was using disappeared, I couldn't get back into my account and there is no way for them to contact me and know it's me. Probably it's mostly my fault because they do have the responsibility to protect the gold from hackers. Fortunately I only had about 30 bucks in it. Otherwise, it was a pretty good idea because they were regularly audited and published the results. Now that the globalists are getting the idea, I wonder if the new digital gold mint will submit to an audit. The Federal Reserve doesn't. They are strongly globalist so, my opinion is that the globalist controlled digital gold won't either. Guess what? That means inflation as surely as the night follows the day. I'm okay with digital gold issued privately that is audited but our governments have proven that they can not resist the temptation to issue more receipts than the amount of gold (or anything else for that matter) they have. Why? That's easy. The government won't put itself in jail for violating trust. Private mints that violate trust have a harsh penalty to pay and rightly so but government getting involved in the digital gold business is a major conflict of interest. Avoid it. By the way, the Perth Mint in Australia (government controlled) has a certificate program that is used to finance the inventory of minting operations. That's okay if you know about it ahead of time; I found it in their audit footnotes (something like footnote 27) which means, your gold isn't sitting safely in a vault but is used in minting operations. If you want to, use the certificate in the short term to move gold across international boundaries and redeem them right away but the scuttlebut is that redemption takes a long time. Be aware of the details which change quickly. Best to hold the metal.

Let's look at what has happened since the last post. I've been busy doing year end reports for clients so have not had time to do a posting but they are all done so here goes. Our federal government is trying to solve a debt crisis by borrowing more money. Politicians always try to solve difficult issues by pushing it off to someone else; like our grandchildren. This just has to stop. Do you want to know how to protect yourself? Move to assets that can't be seen. Over the years, liberals have complained of greedy Wall Street types. For the sake of argument, let's give them that. I think all agree that greedy Wall Street types are not stupid. They are reacting to the stimulus plans like they contain plagues. Where is the money going? One significant place is gold and silver (platinum, too but not vocally). If you take delivery of the metal, it's invisible. If you buy anything other than the metal, you have visible assets that can be taxed, seized or otherwise lost. Witness the debacle in Argentina recently when the government appropriated (stole) the money in the retirement plans to raise some cash. Is it any wonder that people want bank secrecy somewhere? Obama has very Socialist leanings and ultimately will do the same thing. If you think I'm an alarmist and do nothing, you are shooting craps with your future. Take some steps to protect some assets. We are right now going through the same things that 1922 Germany did to shore up its currency. By November 1923, it took billions of marks to buy a loaf of bread. The continued creation of currency from thin air will cause unbelievable inflation in the near future. Next post will give more examples from history.