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Recently, I’ve issued several warnings. Chief among them …
That investors everywhere are waking up to their leaders as being nothing more than emperors with no clothes. Reckless spenders with not a single clue of what they’re doing and full of false hopes.
I also warned …
That our Federal Reserve, not to mention other central banks around the world, would remain hell bent on devaluing the U.S. dollar.
That savvy investors everywhere were starting to seek out the best private assets and asset markets, in what I call “moveable wealth.”
It’s now just about a month since I issued these warnings. And in a short, 30-day span, they are panning out — in spades.
Riots are breaking out in Greece, Portugal, and Ireland. Greece, despite any bailouts, is flat broke. So is Italy. Spain. And the U.S. of A.
Meanwhile …
On at least two occasions in the past month, Fed Chief Ben Bernanke has confirmed that he’s going to keep interest rates as low as possible, for as long as possible, even indicating that there may be no rate hike until late 2011.
At the same time, Bernanke is continuing to ramp up the digital printing presses clearly concerned, that no matter how low he keeps short-term interest rates, it may not be enough to sustain the U.S. — or the global economy for that matter — on life support.
As you read this right now, more funny money, more unbacked pieces of paper that float around the world as a bunch of IOUs are flooding the system.
So it’s no surprise to us savvy, will-not-be-fooled, real wealth investors that …
Gold has rocketed higher yet again, leaping to $1,162 on April 9 — and within mere inches of giving me the biggest buy signal for gold since it closed above $725 in July 2006, and where I warned that the $1,000 price level would soon be hit. Likewise …
The price of oil has also rocketed higher to as high as $87.09, a 6.75% increase in just over a month.
And naturally, also as I predicted, gold and oil are not the only markets exploding higher.
Palladium has jumped as high as $552.00, a two-year high. Platinum has exploded to an 18-month high at $1,743.00.
Copper is now trading at $3.60 a pound.
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| Gold and other natural resources are sending big buy signals. |
Even silver is zooming higher, reaching $18.50 an ounce as I write this column.
What’s more, the Dow Jones Industrials and the bluest of the blue chips in Asian stock markets are also following my forecasts, with the Dow now above 11,000 and China, India and other Asian stock markets also ripping higher.
Why all this bullish action in the markets?
Is it really that the U.S. and global economy
are picking back up? Or, is it some other
mysterious force at work?
Yes, there’s no doubt that there’s some bottom-bouncing going on in the U.S. economy. But that’s all it is, bottom-bouncing.
On the other side of the world, there are indeed explosive growth areas, namely China and India.
But there’s much more going on in the markets today. There’s another force driving many markets higher that almost no one understands.
In fact, I consider it so important that I will tell you this …
What’s happening right now in the markets is a major
turning point in the dollar and the world’s monetary system.
There will be massive losses for those who fail to understand what’s really happening and are unprepared for what’s coming.
Yet, on the other hand, there will be equally massive profit potential for those who do.
I want to be absolutely sure that you’re in the latter camp, that you understand what’s happening, and can, therefore, protect your wealth — and grow your money over and over again in the years ahead.
So let me now explain further …
First, despite the massive debt problems in Portugal, Italy, Greece and Spain … despite the problems in Europe — the U.S. dollar’s rally against the euro has been feeble at best, and now, the dollar is turning back down in the foreign exchange markets.
Second, Singapore has just revalued its currency higher against the dollar, for the first time ever.
How does a country like Singapore push the value of its currency higher against the dollar?
Simple. It starts selling its U.S. dollar reserves and buying up more of its own currency.
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| U.S. leaders are doing their best to devalue the dollar. |
Third, President Obama, Treasury Secretary Geithner, and most definitely, Fed Chairman Ben Bernanke — have all been pressuring China to push its currency higher. Which is the same thing as saying the dollar needs to go lower.
And that means that huge portions of China’s 2.4 trillion stash of U.S. dollars will soon have to be sold to boost the value of the yuan.
My friends, in other words, what the markets are telling you is that …
Phase Two of the Dollar Devaluation
I’ve Been Telling You About Is Here
That’s largely why you’re seeing almost all tangible assets, natural resources, starting to soar again.
It’s why gold is now hovering at $1,160 an ounce … ready to begin its ascent to at least $1,300 … then to $1,500 … and then, to my minimum target of $2,300 an ounce.
I want to show you something else about debt, the dollar, and gold right now. Positive proof that basically, the bigger the debts, the weaker the dollar, and naturally, the higher the price of gold goes.
Consider the following …
In 1947, the official national debt was $247 billion. Each U.S. dollar was worth 1/35th of an ounce of gold.
In 1973, the official national debt was $469 billion. It then took $43.25 to buy an ounce of gold. Or put another way, the dollar was worth 1/43.25th of an ounce of gold.
In 1980, the national debt was $930 billion. The price of gold reached $850 an ounce. In other words, the dollar was worth 1/850th of an ounce of gold.
Today, our official national debt is a whopping $12.78 trillion. That’s …
- Thirteen times greater than it was in 1980.
- Twenty-seven times larger than our 1973 national debt.
- And nearly FIFTY-TWO TIMES larger than our national debt in 1947.
So simple math tells you the following …
If gold were to match the growth in national debt since 1947, it would have to trade at $1,820 an ounce (gold’s price of $35 in 1947 times 52 = $1,820)
If gold were to match the growth in national debt since 1980, it would have to trade at $11,050 an ounce (gold’s price of $850 in 1980 times 13 = $11,050)
It’s hardly surprising when you look at those numbers that gold has much more to go on the upside. Even more so when you consider that the debt figures above do not include another approximately $122 trillion of unfunded liabilities.
All along I’ve been warning you that a dollar devaluation is part of Bernanke’s grand strategy, his secret debt solution to the mountain of patently unpayable debts that we have in this country.
My view: We are now in Phase Two of the Dollar Devaluation.
Hence, I consider it absolutely essential that all subscribers make sure they have some gold!
You can buy gold via the SPDR Gold Trust ETF (GLD) … and a nice mix of gold miners through a mutual fund such as U.S. Global Investors World Precious Minerals Fund (UNWPX).
But you should also get invested in other hard assets and vehicles that can protect your money — and help you profit — from the dollar devaluation. There are loads of them, and I cover them all in my Real Wealth Report. A one year membership is a mere $99. Hop on board now!
Best wishes,
Larry
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{ 5 comments… read them below or add one }
Hi Larry, as a Canadian investor, I wonder when I buy things like SLV or SIVR or GLD or whatever, which are denominated in USD, what effect a falling USD (compared to the loonie) will have on my investment. Ultimately it needs to be converted back to CDN, which will be more expensive. Any ideas?
My understanding has been that when interest rates go up, gold goes down. How does that fit with the advice that gold is going up because the US dollar is going down?
Consider the CEF for Canadian gold/silver exposure. Also, consider owning physical gold.
The fed will not raise rates with high unemployment. When they do begin to raise rates, they will likely be behind the curve. We can see from history that gold does quite well during the first part of rate hike cycles. It is a study worth some time. If Larry is correct about no rate hikes until 2011, then hard assets can go higher for quite a while. Some of us think that Bernanke faces a “Kobayashi Maru” (a no-win) scenario in his near future. Hard assets are part of a prudently managed portfolio.
Hi Larry,
I enjoy your videos and generally follow and agree with your analyses and predictions, but I’m having trouble reconciling your adamant confidence that the dollar is collapsing and Martin Weiss’s opinion that we are entering in to a deflationary depression (“Americs’a Second Great Depression” he calls it in his 2009 book, The Ultimate Depression Survival Guide). He recommends that one get out of all asset classes (equities, real estate, debt/bonds) and put one’s dollars into a Treasury MM account and wait for the dust to settle. You seem to be recommending the opposite. Aren’t you all drinking from the same water fountain? What am I missing?
Thanks for your attention and all that you do!
1. I’m really confused here? Am I understanding you correctly, BUY GOLD!
2. What am I going to pay with? THE US Dollar? to the gold companies you are recommending?
3. If Gold is going to worth so much more, why would they WANT to sell it to me, and me to BUY it, with worthless Dollars?
Help me to understand, please.
OH –what about Silver and Copper? and what if I have a $500 1934 note? isn’t that note going to be worth less or more? Less of those worthless dollars or MORE of those worthless dollars?
aj