Dollar Doomsday 2010

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This is the official public release of my landmark 23-page report on the dollar. For the full text of Part I, click here, and for Part II — the final chapter — click here. Plus, here are the highlights …

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This is the official public release of my landmark 23-page report on the dollar. For the full text of Part I, click here, and for Part II — the final chapter — click here. Plus, here are the highlights …

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IFTHEN(FIELD9=3) {

This is the official public release of my landmark 23-page report on the dollar. For the full text of Part I, click here. Plus, here are the highlights …

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If you think that what’s happening to the bankrupt economies of Greece, Portugal, and Spain are merely a sideshow in this great financial crisis, it’s only fair to warn you:

The facts I reveal in this bulletin are shocking … shameful … and, to anyone who cares as much about this nation as I do, deeply disturbing.

If these facts upset you, I apologize — but for the past 32 years, my mission has been to help investors protect themselves and profit in every imaginable investment environment.

I am not about to stop now — because in investing as in life, only the truth will set you free.

Yes, I’m well aware that the revelations I make in this bulletin are almost certain to make me some extremely powerful enemies in Washington. And in China, too! But for that, I am NOT sorry.

Frankly, I’m mad as hell about the shellacking our government has planned for you … for me … and for millions of other honest, hard-working Americans …

And I absolutely refuse to stay silent while good people are stripped of their life savings, investments and even the retirement funds that are due to them — and by our own leaders!

The simple truth is …

The next phase of Bernanke’s Debt Solution is already under way, jointly engineered in Washington and Beijing.

Now, if it’s hard for you to believe that our own leaders have turned on us … that they are intentionally attacking your wealth and financial independence … and that they have already begun executing their plan … I certainly understand …

But please; for your own sake and for your family’s safety … hear me out.

Washington’s Guiltiest Secret

Official National Debt

Ask anybody about how much Washington owes and they’re likely to say the national debt is somewhere around $12.8 trillion. But as shocking as it is, that massive number is just a fantasy — a tiny fraction of the gargantuan amount our government really owes.

In fact, our real national debt is nearly TEN TIMES GREATER!

In addition to that official $12.8 trillion national debt, Washington has written $108 trillion in off-budget, unfunded IOUs on Social Security, Medicare, Medicaid, its prescription drug program, its veterans benefits programs and its Federal pension programs that must also be paid.

That’s more than $120 trillion — and that’s not even counting the $1 trillion the new health care bill will cost us … or the trillions in NEW deficits projected over the next 10 years.

The plain truth:

Altogether, our leaders have obligated us … our children … and our children’s children … to pay off an utterly unpayable $127.8 trillion in debt.

Global Investors in U.S. Treasuries
Are Recoiling in Horror

US Treasury

Until recently, we could count on overseas investors to buy our treasuries — effectively loan Washington the money it needs to pay its bills. In fact, foreigners fully fund over HALF of our borrowing addiction, holding $9.7 trillion in U.S. securities — including almost $4.6 trillion in bonds.

Meanwhile, the foreign investors who purchase treasuries — who have loaned Washington the money it needs to stay in business — are horrified at our leaders’ inability to manage the nation’s finances … wondering if we’ll be able to make good on our obligations to them … and starting to snap their wallets shut.

In November 2009, for instance, China — the world’s largest investor in U.S. government debt — became a net SELLER of treasuries.

The very next month — in December 2009 — China sold a whopping $34 billion worth of U.S. government bonds. Others followed suit: Net overseas holdings of short-term treasuries fell by $53 billion.

And in January 2010, foreign net purchases of U.S. Treasury securities plunged a shocking 69.8%. Japan, the second-largest foreign holder of U.S. debt, was also a net seller in January.

In February 2010, Beijing sold yet ANOTHER $11.5 billion of U.S. Treasuries, making that four consecutive months of dumping U.S. bonds.

Why? Because …

Washington’s debts have finally
reached the point of no return:
They are absolutely, positively UNPAYABLE!

We have reached the point of no return. The simple truth, of course, is that Washington will never repay the full $127.8 trillion it owes.

Think through the alternatives …

1. CAN WE BORROW OUR WAY OUT OF DEBT? Virtually impossible. As we’ve seen, foreign investors who have loaned us the money that Washington needs to stay in business are already fed up. They’re worried that we’ll never be able to repay what we owe them. They’re now becoming net SELLERS of treasuries.

So it’s nearly impossible that they’ll be willing to throw trillions more of their money our way. Plus, even the mere hint that Washington was trying to borrow trillions more would crush bond prices and light the fuse on an interest rate explosion that would kill the economy.

2. HOW ABOUT MASSIVE SPENDING CUTS? A snowball’s chance in hell! The White House and Congress will continue doing what they’ve always done and what they’re doing right now: Finding dozens of outrageous new ways to waste your money and plunge us even deeper in debt.

Meanwhile, Washington WILL make a show of addressing the crisis by delaying the retirement age for Social Security from age 65 to 68 and by reducing benefits.

But how does that help you? It doesn’t. It just dilutes down what you’re already owed even more!

So if you’re looking for any meaningful cuts in wasteful spending in Washington, forget about it. Any real cuts needed to make any noticeable dent in the government’s $127.8 trillion debt would probably cause riots in the streets and guarantee a quick end to the career of every politician who voted for them.

3. COLOSSAL TAX INCREASES: Sure — the Obama administration will raise your taxes. But even the White House says that the most startling proposals would only generate an additional $43 billion in revenue.

But $43 billion is only 3% of our $1.6 trillion annual deficit …

And it’s only about one-third of one percent of the total $127.8 trillion Washington owes. At that rate, it would take 300 years to repay our government’s debt with new taxes!

In fact, it would take new taxes of $1.1 million for every U.S. household to pay off this debt. Of course almost nobody has that kind of money — and besides: Taxes representing just a fraction of that amount would surely kill this feeble recovery, drive unemployment into the stratosphere and light the fuse on a Great Depression that makes the last one pale by comparison.

And that leaves Obama and Bernanke with one and ONLY one alternative …

Converting YOUR Wealth into “Collateral Damage”

When war strategies to vanquish enemies wind up killing innocent civilians, it’s called “collateral damage.” Similarly, when political strategies to vanquish debt wipe out your wealth, the same term applies.

And right now, President Obama and Fed Chief Bernanke know that there is one way — and ONLY one way they can ever hope to make good on their massive debt obligations: They must devalue the U.S. dollar!

Only then can they hope to repay Washington’s debts — by doing it with cheaper dollars.

Sure — Obama and Bernanke also know that by doing so, they’re also gutting the value of every dollar you earn, spend, save, invest and plan to use in retirement. But they think they have no choice.

To allow Washington to default on its debts and obligations would almost surely cause the entire U.S. economic house of cards to collapse — and the blame would land squarely on the Obama administration’s shoulders.

You? You’re little more than collateral damage. If the only way to delay default is to rob you of everything you’ve worked for and everything you’re counting on to see you through retirement — that’s evidentially just fine with them.

And this is precisely what our government has been doing — by intentionally debasing our own currency in two, distinct phases …

DOLLAR DOOMSDAY 2010 — PHASE ONE:
Flood the World with Unbacked Paper Dollars!

Printing Presses

Money is subject to the laws of supply and demand just like any commodity. If you want to lower the price, simply increase the supply. Just do that and the buying power of the greenback will plunge.

Sure — your bank statement may still say you still have $25,000 … but in truth, when you go to spend that money, it only buys as much as $18,000 … or $15,000 … or $12,000 used to.

Because the value of your money has been stolen from you.

And this is precisely what the Fed has been doing in Phase One of this great dollar disaster …

  • Just in the last two months alone, the Fed has agreed to create $1.25 trillion out of thin air to buy mortgage-backed securities … including another $300 billion to buy U.S. Treasuries alone.

  • The liabilities on the Fed’s balance sheet have roughly DOUBLED — from $1.2 trillion a year ago to more than $2 trillion today …

  • The actions announced by the Fed in March are most likely to expand that to well over $3 trillion over the next year …

  • And from September 10, 2008 to March 10 of this year, Bernanke has increased the nation’s monetary base from $850 billion to $2.1 trillion.
John Maynard Keyes

That’s an irresponsible, irrational and insane increase of 2.5 times in just 18 months — and you must not underestimate its sweeping historical significance:

Nearly 218 years ago, Treasury Secretary Alexander Hamilton established the dollar as America’s national currency when Congress passed the Coinage Act of 1792.

Since that memorable date, the United States has suffered through one pandemic, two great depressions, 11 major wars, and 44 recessions. Four U.S. presidents have been assassinated while in office. Hundreds of thousands of businesses have gone bankrupt; tens of millions of Americans have lost their jobs.

But not once has the U.S. government ever resorted to the kind of extreme abuses of its money-borrowing and money-printing power we’re seeing today!

DOLLAR DOOMSDAY 2010 — PHASE TWO:
Default by Devaluation

You’ve probably been hearing a lot lately about how overvalued the Chinese yuan is and how that gives the Chinese an unfair trade advantage … how hard the Obama administration has been working to convince Beijing to raise the yuan’s value against the dollar in order to level the playing field.

The only problem is, it’s all a lie. The truth is, the average Chinese worker earns a tiny fraction as much as American workers do. Even if the yuan DOUBLED or TRIPLED in value against the dollar, Chinese products would still be far cheaper on world markets than U.S.-made products.

So what’s the real reason why Washington is so desperate to have China INcrease the value of the yuan?

Simple: By doing so, they will be automatically DEcreasing the relative value of the dollar — and they’ll be able to repay China, and everyone else who owns treasuries or is owed money by Uncle Sam using CHEAPER dollars!

Don’t think it’s going to happen? Well, let me tell you something:

For the last nine years I’ve been warning that China would keep the value of its yuan extremely low — so it could keep its exports cheap, build up a massive trade surplus with the U.S. and a huge pile of cash.

But I also warned that, as soon as it had a big cash hoard and a strong enough domestic consumption to sustain its economy WITHOUT such massive growth in its exports to the U.S., it would let the yuan get stronger, driving DOWN the value of the U.S. dollar.

Now that day has come. Indeed, China has no choice but to go ahead with a yuan revaluation — and dollar devaluation. And today, it won’t negatively impact China nearly as much.

Reason: Beijing has been preparing for this the entire time — by gobbling up natural resources left and right, not only for strategic supply needs, but also to hedge against the inevitable dollar devaluation.

So the steps are now in motion and we’ve already seen the first warning signs. On April 14, when Singapore, for the first time in its history, pushed the value of its currency higher. Next, look for the Korean won, Malaysian ringgit, Indian rupee and Taiwan dollar to begin rising rapidly against the dollar.

Soon, you can expect the biggest shoe to fall on the U.S. dollar when China ends the yuan’s peg to the greenback and allows its currency to move higher.

And with each and every revaluation, YOUR dollar is worth LESS!

Make no mistake:

This is nothing more and nothing less
than highway robbery
and YOU are the intended victim!

The greenback has already plunged as much as 33% in real, trade-weighted terms since its 2002 high. By that measure, every dollar in your wallet … in your savings account … in your brokerage account … and in your retirement account is worth only 67 cents.

Since November 2008, the U.S. Dollar Index has dropped more than 10%. And since just the first of this year it’s even shed almost 5% against our northern neighbor the Canadian dollar.

The handwriting is on the wall: This great dollar disaster is only just beginning. Obama and Bernanke have no choice. Either they dramatically devalue the dollar over the next three years, or they go down in history as the first administration to default — to welch on the government’s debt obligations.

Still, as serious as this administration is about gutting the value of your money, the dollar has two ADDITIONAL strikes against it that virtually guarantee it will soon be little more than a hazy memory …

The U.S. dollar:
Not Worth the Paper it’s Printed On

My forecast: This great dollar disaster will continue — with minor short-term pauses and corrections in the decline — for at least the next two to three years.

At the very least, the dollar will sink so low and inflation will soar so high that you will eventually need at least TWICE the income you have now just to survive. A lifestyle that costs you $100,000 per year today will be $200,000 or more.

And, as the dollar dives, if global confidence is totally shattered, it’s likely to get much worse: In 1923 Germany, inflation was so rampant some people fed marks into their stoves, because they burned longer than the amount of wood they could purchase with the worthless paper.

In 1970s Brazil, inflation was so rapid that merchants had to close their stores at mid-day to mark up prices on merchandise.

Whether inflation becomes this severe in the U.S. or not, I am certain it will NOT be limited to our inflation experiences of years past. Those were caused strictly by higher energy prices, soaring wages or shortages in select commodities.

The coming hyperinflation will be triggered by many of those forces PLUSthe death of the dollar as the world’s reserve currency … a collapse in confidence in the U.S. government … and the ensuing stampede of global investors out of the dollar — into things that protect them as the dollar careens into the abyss.

That will affect you in ways most people haven’t even begun to fathom. It will mean …

  • The purchasing power of your money will collapse like a house of cards.

  • The prices of the most basic goods and services will soar.

  • Savers will be left in the dust as the value of their cash implodes.

But for those who truly understand history, the profits could be almost boundless — and found in every corner of the globe!

For those who know what YOU now know … and who take steps immediately to protect their wealth, this great crisis could be a Godsend.

How to Protect Your Wealth
in Three Simple Steps

Step 1:
Avoid The Worst Investment of All Time.

Your first step is to keep LESS cash dollars on hand than you would in almost any kind of other crisis! Why?

Because cash, quite simply, is about the worst place to put your money when the dollar is being deliberately devalued.

Don’t believe me? Consider what famed investor Warren Buffet recently said about cash …

“Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”

And this is not new. It’s been that way for cash for a very long time. For instance, today it takes …

— $6,167.83 to buy what $5,000 bought just ten years ago

— $27,319.59 to buy what $5,000 bought in 1970

— $44,075.92 to buy what $5,000 bought in 1950

Even a McDonald’s hamburger — which cost a mere 57 cents in 1959 — now costs $4.29, an increase of 653%, or just over 13% per year. A little over six years from now a Big Mac could cost twice that, or $8.58, if not more.

Because …

A) This the worst financial crisis since the Great Depression, and …

B) Washington is now doing more to deliberately devalue the dollar more than at any other time in our country’s history.

So what do you do with your cash? Do you keep most of it in CDs, money market funds, notes or bonds, Treasury bills?

My answer: No way because whether it’s in money markets, bonds, or hidden under your mattress — cash dollars are quickly becoming trash.

My rule of thumb: KEEP NO MORE THAN SIX MONTHS WORTH OF LIVING EXPENSES IN CASH. To pay bills, to pay for basic services, for emergencies. (And the more cash you can keep in NON-U.S. dollar accounts, the better. More on this aspect in a moment.)

I repeat: Not a penny more than six months worth of cash. That way, you’re automatically reducing the damage that can be caused to the purchasing power of your money as the U.S. dollar falls — because, plainly and simply, you’re keeping a minor fraction of your money in the dollar!

Step 2:
Avoid these allegedly “safe” investments.

The irony of today’s world of fiat money is that, often times, even some of the “safest” of investments can become the riskiest.

Consider the following …

  • Dollar-Denominated Certificates of Deposit (CDs). Used by millions of retirees and conservative investors — deemed “even safer” today due to the FDIC’s higher $250,000 coverage — CDs are just as bad an investment as cash.

The problems: Penalties for early withdrawals, for one thing, and paltry rates for another.

Example: Say you invest $250,000 in a one-year CD is government-insured right now. But you’re only earning 1.6%, and if you need that money, for whatever reason, you’ll get hit with a penalty that will wipe out your earnings.

But the biggest danger of all is the U.S. dollar. Suppose the dollar falls just 10% in the next 12 months?

Well, guess what! You earned 1.6% but lost 10% of your money’s purchasing power — a net LOSS of 8.4%! Your $250,000 is now effectively worth $229,000.

Safe investment? Hardly!

The same can be said of money market funds, and even short-term U.S. Treasury bills and Treasury-bill funds. Yes, you can pretty much count on getting your money back, but not the purchasing power of that money. BIG DIFFERENCE.

  • Traditional savings and checking accounts. Forget them, other than for perhaps your six months of emergency cash. Although insured, the yield is effectively zero and there’s no protection against the falling dollar.

  • Bond and bond funds: These are potentially even worse than cash because A) your investment is denominated in dollars, and those dollars will be losing purchasing power, no matter what the yield is on bonds, and B) with mountains of debts crushing the U.S. — bonds are most likely going to crash. You could easily lose another 20% or even 30% of the principal you invest in the bond market.

Taken together, if the dollar loses just 10% of its purchasing power in the next 12 months and bonds lose 10% as they fall, you’re effectively looking at a 20% loss.

A lousy investment indeed. And the same applies to Treasury notes, any Treasury with a maturity of more than one-year, most corporate bonds, municipal bonds, and most sovereign bonds.

In other words, stay the heck out of bond market!

Step 3:
Dump Stocks in These Most Vulnerable,
Dollar-Sensitive, Stock Market Sectors

You don’t want to be in the stocks of companies that will see their revenues, earnings and balance sheets destroyed by the dollar’s demise. You’ll lose your shirt on them.

My recommendation: With few exceptions, dump the stocks you own in the following five sectors:

— Pharmaceutical stocks

— Bank stocks

— Insurance company stocks

— Utility stocks

— Tech stocks

Reason: Most are especially vulnerable to rising inflation and interest rates.

Three Investments Likely to
Keep Your Money Safest in 2010

So what then do you do with the cash you have above and beyond your six months of emergency dough?

My recommendations:

1. Inflation-adjusted Treasuries, or TIPS — but only for the short-term. Don’t plan on putting money in TIPS and keeping it there for much more than a year. They will underperform inflation and the loss of purchasing power in the dollar because they are based on the jerry-rigged and absolutely fraudulent inflation figures put out by the government via its Consumer Price Index (CPI). And in the end, they are also bond investments.

However, since they do offer you some inflation protection, and since you can own them short-term and they are very liquid, they are worthy vehicles for holding most of your cash. At least when your cash is not invested making you big money, which I’ll get to shortly.

One of my favorites: The iShares Barclays TIPS Bond Fund (TIP).

An ETF, which means you can get in and out easily, this investment has had a one-year total return of 8.27% … a three-year of 6.15% … and a five-year total return of 4.43%.

Overall, a great place to put some of your cash — but I repeat, only when that cash is not invested per my profit strategies below. Keep in mind, as an ETF, this investment is also subject to market fluctuations, meaning the potential for both gains and losses.

One way to help eliminate the downside risk in the bond market now, while holding an ETF like the above for greater returns that you can get just about anywhere else with your cash — is to simultaneously buy an inverse bond ETF that gains when interest rates rise and bond prices fall.

That way, you’re market neutral. So if you want to reduce risk of owning a short-term bond ETF like TIP, consider buying the Direxion 10-Year Treasury Bear 3x Shares (TYO).

Since TYO is a triple-leveraged ETF, for every $100,000 you invest in the iShares Barclays TIPS Bond Fund (TIP) — invest only about one-third that, or $33,000 in the Direxion 10-Year Treasury Bear 3x Shares (TYO).

Overall it reduces the yield you earn a tad, but it goes a long way to protecting your principal. Keep in mind though that I recommend this type of investment for your idle cash, but only for short-term purposes, since you are still exposed to a falling dollar.
Another choice for big cash that’s ideal, though an investment that’s not as liquid as the above, is …

2. EverBank’s Commodity Basket CD: Available in three- and six-month terms, this CD is comprised of four currencies from commodity-based countries, and invests 25% equally in the Australian dollar … the New Zealand dollar … the Canadian dollar … and the South African rand.

They yield about 2% right now … there are no monthly account fees … the minimum investment is $20,000 … and they are FDIC insured.

Overall, a nice contra-dollar investment, but again, only for short-term three- and six-month purposes. You should not tie up your cash in long-term CDs. Not now, and probably not later either!

3. The World’s Only Real Money: Forgive me for being so blunt, but I can think of no other way to convey the urgency of what I have to say now: If you don’t own gold, you’re not only being screwed by Washington, you’re screwing yourself!

Don’t think of gold as speculation. It’s not. Gold has proven its value. It has maintained its purchasing power for five thousand years. And it’s outperformed cash by light-years. Consider the following …

  • $5,000 in cash squirreled away in 1913, when the Federal Reserve was created, is now worth only 4.5 cents. That’s right, 4.5 cents. Or, put another way, it would take $110,582.14 of today’s money to buy what $5,000 would have bought in 1913.

On the other hand …

  • $5,000 invested in gold in 1913 would be worth $287,500 today!

So whereas cash lost almost 99% of its value since 1913 … gold gained 5,650%!

Pick just about any other 20-year period, and you’ll find a similar relationship. Cash is a lousy investment, while gold is the only true form of money that has not only held its value, but also kept pace neck for neck with the decline in the purchasing power of the dollar.

So, that’s not speculation in my opinion. That makes gold the ultimate insurance policy, the ultimate protection. The ultimate form of money.

But don’t just run out and buy gold, because buying gold the wrong way could be a costly mistake.

I recommend that all investors keep up to 12.5% of their total liquid net worth in physical gold and gold ETFs, further divided in half per the following allocation …

A. Gold Bullion: I prefer the one-, five- and ten-ounce gold ingots and bars purchased only through the most reputable of dealers. Store it in your bank’s safety deposit box. It’s simple, safe and worry free.

B. The SPDR Gold Trust (GLD). This exchange traded fund (ETF) owns the physical gold for you, letting you have a share without the storage hassles. Each share of the GLD equals 1/10 of an ounce of gold.

I repeat: Between the above two, I suggest you allocate up to 12.5% of your investment portfolio to gold bullion and GLD immediately. Do not wait. But that’s just the FIRST step toward profiting from the dollar’s decline …

Five Investments Set to
Soar as the Dollar Dives

Also, invest in assets that are going to benefit from what Washington is doing to the dollar, including …

1. Select foreign currencies, which are rising in value against the dollar, and where you can also get a nice return. Two of my favorites right now are the New Zealand and Australian dollars.

2. Select foreign stock markets, especially those that are rich in natural resources and where billions of new consumers are driving their economies upward. Examples: China, India, and most of Southeast Asia.

3. Select natural resource companies that control huge amounts of commodities now in great demand … the very same commodities that are also rising in value as the dollar plunges.

The list includes not only gold but also oil … gas … iron … steel … aluminum … zinc … nickel … uranium … wheat … corn … soybeans … sugar … coffee … even water.

4. Select gold stock mutual funds: My favorite funds: Tocqueville Gold Fund (TGLDX)U.S. Global Investors World Precious Minerals Fund (UNWPX) … and the U.S. Global Investors Gold and Precious Metals Shares (USERX).

5. Select gold mining shares. But beware: You should not buy just any gold mining company. Many don’t have enough gold to make it very far.

Or, they hedge their gold and won’t profit as gold continues higher. Or, they’re just plain mismanaged. Or all three.

Instead, buy the cream of the cream — not only big, senior miners, but also highly leveraged, well run, mid-tier producers. Plus, don’t miss out on up-and-coming gold exploration companies, the ones that will be the next giants in the industry.

IFTHEN(FIELD9=1) {

Don’t Miss Part II of This Report:
The Final Chapter

How to USE this great dollar disaster
to go for windfall profits in 2010-2011

Any or all of the strategies I outlined earlier could help you profit as the dollar plunges in the months ahead. And if you want to go it alone using the information in this report, that’s perfectly fine.

But as you know, the dollar — and most contra-dollar investments — can be very volatile. Both significant sell-offs AND significant rallies are commonplace. So precisely what to buy and sell … how much … and most important WHEN … are critical. That’s what I cover in Part II of this report— my FINAL CHAPTER — all about how to use the coming dollar collapse to go for windfall profits in 2010-2011.

So click this link to download Part II of this report.

}
IFTHEN(FIELD9=2) {

Don’t Miss Part II of This Report:
The Final Chapter

How to USE this great dollar disaster
to go for windfall profits in 2010-2011

Any or all of the strategies I outlined earlier could help you profit as the dollar plunges in the months ahead. And if you want to go it alone using the information in this report, that’s perfectly fine.

But as you know, the dollar — and most contra-dollar investments — can be very volatile. Both significant sell-offs AND significant rallies are commonplace. So precisely what to buy and sell … how much … and most important WHEN … are critical. That’s what I cover in Part II of this report— my FINAL CHAPTER — all about how to use the coming dollar collapse to go for windfall profits in 2010-2011.

So click this link to download Part II of this report.

}

Best wishes and God bless,

Larry



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Your thoughts on “Dollar Doomsday 2010”

  1. Thanks for the tips, some good ones here. I always think that the way people value things is sort-of upside down: Dollars are not the most solid form of wealth. A house is worth a house, and always has been… and if you compare the price of a house to the price of other goods, or a month’s average wages, I’m sure the value is much more consistent. The price of a house didn’t change, the only thing that changed was the amount that you can buy with dollars. Once people grasp that cash is a lousy asset, but that it can be produced by good assets, the picture is different. I always think you have to break the “dollar spell” to see the true value of things, anyway just my 2c.

  2. Larry,
    You say to buy physical gold only from reputable dealers….would you please give me the names of reputalbe dealers. It is hard to know if all the advertisers are reputable.

  3. If there should be (likely) attacks on Iran by US or Israel, then oil price will be driven up through the roof. The next thing to happen is a replay of the 70’s oil crisis. Petrodollars will artificially be driven up, cuz oil trades are settled in US $ ! Then some of you gold worshippers will be throwing shoes at those who pounded on the table today urging you to buy gold now.

    The fact is, gold is really the true money. But through centuries of manipulation and hypnotizing, many of us are not equipped with the knowledge to understand what odds are stacked against us common people. There are people out there who would do anything in the name of anything, including waging wars, to expand on their wealth and influence. In short, diversify, and do not fall in love with a specific investment vehicle. That coming from someone who suffered losses and defeats. Please heed my advice.

  4. Are you positive that GLD (a gold ETF) only owns physical gold? Where do they store all of it?

  5. I am worried about a rumor that Obamanation might seize funds from American Roth IRA /IRA & 401K accounts & transform them into worthless US dollar toilet paper.
    Please read article: http://georgewashington2.blogspot.com/2010/03/demand-that-congress-pass-keep-your.html
    I’m planning to cancel my Traditional and my ROTH IRA and pay the tax & penalty in fear of losing my money to the Government Octopus.
    Do you think the Marxist would pass a Bill/Law or do it by Executive Order in the near future?
    Can you help me out?
    Thanks Bill Neumann
    P.S. I just had a very long conversation with a friend who is very well connected, and politically active. His connection have told him that, our fear of Barry Satero taking over the ira/roth etc is very possible even probable. Since it is such a political disaster the man believes Barry will do it by executive order.

  6. Everything you have warned us about is at our door step. I am so concerned that what little I have in my 401K will be reduced to nothing. I say that because my only choices are stocks, bonds and money market investments. Should I stop contributing to the 401K? If I continue, will I be throwing away my money?

    JFerrer

  7. Hi Larry,
    Your “Dollar Doomsday” article is very interesting and, I believe, timely. Would currently held US I Bonds and/or EBonds provide the same “hedging” as the TIPS? They are tied to either inflation or the 5 year bond rate even though a drop in the dollar would hurt them in the long run–they are liquid enough to cash in.
    As for the expected drop–today’s column by Bryan Rich of the Weiss Group appears to be advocating a stronger dollar given the outflow of currency from Europe, etc. into the U.S. “searching for a safe haven”. Is this just a timing thing as well?
    Your thoughts on both are appreciated.
    Thanks

  8. Inflation will also push the average citizen into the tax brackets, including Alternative Minimum Tax (AMT). Increasing numbers are already subject to AMT. Politicians will crow about how the tax rates have no risen, but more will be fleeced.

  9. Larry–
    There’s a math error in your article: One dollar (not $5,000) has devalued to 4.5 cents since 1913. The other calculation of what $5.000 would purchase in 1913 needing $110,000+ to purchase today is correct.

    Rob Lane

  10. Larry,
    Your recommended sectors for investment make sense but we see that a fall in the Dow causes ALL asset classes to tank.
    Should we hold on to our Natural Resources stocks in the hope that they will recover?.I am overweight Precious Metals (30%)
    Energy (30%) Chins/India & SE Asia (15%) Latin America (5%)Natural Resources (10%) Cash (10%)
    I’m retired and 68: Am I crazy?
    Thanks for your insights.
    Dermot

  11. Larry,
    As the value of the dollar declines against Asian currencies, especially the yuan, will having stock Asian stocks automatically compensate, or do those stocks need to be in foreign exchanges. For instance, let’s say that the value of the yuan was allowed to increase 50% compared to the dollar, would a stock such as SNP (adr) on the NYSE compensate as well as 386:HK on the Hong Kong excahange?

    Please explore this with your subscribers.

  12. Hi Larry great article. you mentioned %12.5 in gold and cash for 6 month expenses how about the rest of
    liquid asset? also I wondered if China and Japan are selling bonds how come they keep going up.
    thank you

  13. Larry,

    I wonder at times whether the amount of debt across the globe will not create a depression before gold rises (due to hyperinflation). The Bank of International Settlements shows literally hundreds of trillions of dollars worth of derivatives outstanding. Won’t the eventual default and unwinding of those cause ALL asset classes to plummet due to forced selling? I guess I am wondering if you have considered a scenario where gold only rises due to dollar devaluation but only until a complete unwinding of the global debt cycle collapses and all assets decline.

    I have also read Mr.Robert Pretcher’s view on gold and he sees a dramatic decline should gold drop below 1155.
    Thanks,
    Tom

  14. Larry,

    Do you have a list of reputable gold dealers you could share? Keep up the good work. I appreciate receiving accurate information.

    Thanks,

    Chet

  15. Larry What do you think about buying farmland with 5.5% interest rate? Will be able to pay off debts?

  16. Great stuff Larry.
    What specific mining company stocks do you recommend?

  17. Larry,

    Great article!
    It would be great if you could give some examples of ETFs or companies that you mentioned in 2 and 3 above (Select foreign stock markets) and (Select natural resource companies)
    Thanks!

  18. Larry,
    Two questions and a comment…
    1) “I prefer the one-, five- and ten-ounce gold ingots and bars purchased only through the most reputable of dealers. Store it in your bank’s safety deposit box. It’s simple, safe and worry free.”

    Why do you prefer gold ingots and bars? What’s wrong with Silver (with a capital “S”).
    If we are on a global course correction, I should think some mention of Ag would be appropriate.
    As for the safety deposit box – Have you read Patriot II? It’s long and dull and a great endorsement for either a shovel, or a bulldozer, depending on how much gold you’re trying to protect.

    2) “This exchange traded fund (ETF) owns the physical gold for you”.
    Read the recent interview by Eric King with GATA’s Adrian Douglas, Harvey Orgen (who recently testified before the CFTC hearing) and his son, Lenny, in which the two discuss their visit to the only bullion bank vault in Canada.
    If what they report is true, and there is no reason to believe that they were hallucinating, then why believe GLD or any other “Buy-our-paper-and-trust-us” vendors?
    As you so clearly state, the time for trust (and Trusts) has passed.
    I have followed you for years and admired your insights – until it comes to precious metals. An open discussion with Ted Butler and/or Jason Hommel would be a great service to your readers.
    Your article was Spot On (LOL) until your “recommendations”. I think you may have a steep learning curve down the road when it comes to metals. Fear not. You are not alone on that score.
    Wishing you all the best,
    Peter Barker
    Pittsburgh, PA

  19. HAND SHAKES AND HEAD FAKES: For the last two years we have been guaranteed that there will be no interest rate increase. Previous administrations have supported ¼ pt bumps to stimulate the housing sector. Not This Time! Why? And why are commercial loans not being refinanced and kept on the books as good inventory along with a number of other asset classes. Opps! That’s one that is not priced into the market yet as well as many other factors. “The coming rate increases could very well be the largest and fastest in the history of the United States”. Folks are just not going to have time to react. Even the charts for TMV and TYO don’t show a upward trend developing. Are critical buy in points indicated by the dollar falling through certain support levels? So Whiz Bang! Who profits? Perhaps this week’s big unexplained drop was nothing more than triggers for shorts put into play by decision point and other like software packages. When the market fell below a critical support level, sell orders and short orders were automatically triggered. Is this a result of Artificial Intelligence or just an indication of the number of trades being acted upon by like design trading programs? Looks to me like everybody is driving the same car here. But only a few will have the ability to switch gears and turn right when everybody else is going left. Timing is the most forsaken element of the profit equations. And, TMV and TYO don’t show a right turn coming when looking at the moving averages. “THANKS HAL! YOUR WELCOME DAVE”. Hehe!

  20. Sorry to say, I would not touch an annuity with a ten foot pole. When Germany reorganised itself after WW2 it nothing of value left except the will of her people to rebuild the country. There were still bank accounts and savings in life insurances but that was about it. The currency of choice were cigarettes. So the government came up with a plan: Rename the currency and devalue it 10 to 1. To get people started who had absolutely nothing but the cloths on their bodies every one received 40 Deutsche Mark. That was enough to buy two suits for a man. On top, people who did not have their homes or other property destroyed had to pay a special tax.

    That means, if you owned anything you lost 90% of the monetary value and had to share your income with the refugees from the eastern parts of Germany who were robbed 100% by the new landlords, i.e. Eastern Germany, Russia, Poland and so on. You may consider that right because the Nazis did the same thing before. Trouble is, the refugees were not the Nazis who stole everything. But that is history.

    The lesson is, that the only thing that kept some people alive was gold. Small gold coins were the best investment because you cannot go shopping for food with an ounce of gold. Some “lucky” farmers in Germany became rich by trading produce for gold jewelery. So my idea (not just mine) is that one may consider a plan B that works without money or gold. I read it on the internet (sorry, do not remember author or web site) that some strategists recommend you buy a piece of farm land and already start growing something to get used to supplying yourself at least partially.

    Let me say it again: Stay away from long term financial investments because they will lose value through inflation or through government action.

    PS: Do not rely on a job in the future. One of my grandfathers was a butcher and he made it OK through the thirties. My mother used to carry the millions in her apron to the bank when she was teenager. Nothing of that money was ever usable.

  21. I basically agree with your comments about inflation and gold. However, I think your math is a bit off when you say that it would take $110,582 to buy what $5000 bought in 1913 (a factor of 22.1164 times) and then say that that $5,000 is only worth 4.5 cents (a factor of 111,111.11 times). Have I missed something?

  22. Thanks Larry, but I have the same question as the previous blogger. Will buying real estate or rental property be a good hedge against the inflation?

  23. Great article Larry. I live upstate NY and realized all the above about 18 months ago. I am in precious metals and mining shares 100%. It wouldn’t hurt to have a stock of food built up as I have, since they lie about inflation too. Ooooopps I meant hyperinflationary depression to be followed by deflatioanry depression. God Bless.

  24. Great indepth article which I will pass along. Question why recommend people store their physical gold/silver in a bank safety deposit box. After reviewing the details of the Patriot Act I learned the government has the right to investigate the contents of our personal safety deposit box and seize gold/silver and etc. Are there not other means of physical storage for the average person?

  25. Hi Larry,
    I really enjoy reading your article(s) and only wish I had the reserves to follow your recommendations. Facing the future sure
    does not look promising. I feel if a person is in a position to be out of debt, he needs to be there or at least in the position to get out of debt. I’m on 76 and came along at the end of the Depression but our kids/younger adults of today won’t know how to handle what is ahead for us. It’s an awful feeling to see and realize where we are headed and can’t do anything about it. It’s really hard to see how many people have been brainwashed by the present administration, don’t seem to have the slightest
    we/they are being sold out and the sad part is that it is going to be too late to wake up and get our voices heard and the present politicians out of office. I’m afraid we just don’t have time to get things straightened out.

  26. With the yuan going up vs the dollar, wouldn’t Chinese stocks and specific ones especially greatly increase in value when the dollar is officially devalued against it?
    Glenn

  27. You’ve probably been hearing a lot lately about how overvalued the Chinese yuan is and how that gives the Chinese an unfair trade advantage

    shouldnt that be undervalued?????????????

  28. Larry, is it true that the TOP 5 Banks in the country had recently bought Trillions of USD worth of Gold Bullion (for PHYSICAL Delivery!!!) as reported? Totalling USD 4.6 Trillions!!! (plus Oil stocks, even to the extent of stocking the physical oil for future deliveries in Oil Tankers parked all over the World!!!?

    If so, do they know that something BIG is Really going to happen that we (or YOU) don’t know of? …just puzzled. And as far as the AU metal is concerned, has it got something to do with the little-known “carry-over-trade” in Gold??

  29. I do appreciate your good intentions and advice, but its time to take a hard overall view, at what is motivating President Barack Obama to destroy the Individual Wealth, the Democracy of the U.S., Israel, and all other Democracies Worldwide.
    His blend of Islam and Communism is using Saul Alinski’s methods for attacking the great experiment of Democracies. An example is to take a good item and expand it till its destructive.
    Example, Freedom of Speech should not allow someone screaming Fire in a crowded theatre. Unfortunatly its presently allowing Treason and Treachery, while troops are fighting and dying in a War.
    Its time to Impeach President Barack Obama for violating his Oath Of Office as President, to Defend the U.S.A. and its Democracy.

    OR ELSE.

    THINK HITLER, STALIN, MAO AND MOHAMMED.

  30. Larry:
    You say it would take a tax levy of $1,000,000 per household to pay off the national debt. With 122 million households, that equates to $122 trillion. The problem is that only half of American households pay any income tax at all, so that number needs to be doubled to $2 million per taxpaying household. Good luck.

  31. I am concerned! A broker friend of mine is encouraging me (63 on social security) with some savings in prec metals and cash to take 150k and put it in a 7% guaranteed annuity…. Any comments?

  32. larry,
    for many years, I have been preaching we are being lulled to sleep (like frogs in a pot), slowly cooked! It appears most people have become complacent in our country..; always waiting for the next guy to do something about the problems. If the masses of people could only see the writing on the wall, wake up and take a UNITED STAND for what we stand for then we could make a difference. Unfortunately, I believe it is too late for crisis is gaining momentum and most of us will not wake up until it is too late…
    Your comments and heartfelt truth will set some free.

  33. Excellent article, Larry. I couldn’t agree more. However, I think you misspoke in the first paragraph of the section entitled: Dollar Doomsday 2010 – Phase 2, where you said, “You’ve probably been hearing a lot lately about how overvalued the Chinese yuan is and how that gives the Chinese an unfair trade advantage…” Didn’t you mean how “undervalued” the yuan is? Your subsequent comments were appropriate.

  34. wish every voter and politician HAD to read this. Why can this not be brought to the forefront of the backwardlooking media? I thank you very much for this .

  35. Thank you for sharing the TRUTH. I believe we MUST replace 99% of all elected officials and get rid of both democrat and republican parties. Then restore the constitution and freedom from US Government which should be downsized to one fifth of its size and the pentagon down to a triangle or less. Then the world will once again beat a path to our doors for their investments.
    GOD bless the peacemakers and truth tellers in the world.

  36. I am 82 years old and still working. I remember the last depression, but this depression will be much worse than anything we have ever seen. Sad to say the younger generation has no idea of what is to come. They just live form day to day as if nothing has happened. That is why if firmly believe in holding silver and gold. And furthermore, I would never keep it in a bank. It would be where I could get my fingers on it. Your article was very interesting and I only wish more people would read it.

  37. Ive have just come back last week from Phuket thailand ( been there 6 mths ) and the place is fairly empty now. there is far to much property been over built down there with NO BUYERS and everybody is trying to sell and get out because of the ongoing problems within Thailand, many people now dropping lots of money on there propertys but still not being able to sell even after being on market for 2 years now, Would i buy there ? not at all and ive been in property last 35 years .stay well clear.of Phuket or get stuck with your property for years and it well over priced! anyway,

  38. HI Larry,
    Thanks for all of your hard work! Your the best! I hope your dad is better! I think were headed for a one world govt and currency.Please let me know if there is a place to hide. Oh also will real estate be crushed again?

    Sinc, Steve Heil

  39. Hello Larry, I see you recommend putting one’s real money, Gold, in the safety deposit box, in a BANK who’s business is to work with play money. ?? And are regulated by the Gov. and FED.

    Wow, kinda like telling me to store my food in the back room at the local Grocery store. Would the some day looters leave the back room alone ??

    Or, like suggesting we all store our guns over at the National Guard Facility. Safe there I would think ……. Federal Gov warehouse ??

    Back in the 70’s and 80’s the big bullion dealers sold what they called a ….. Midnight Gardeners Kit ….. I think that product will make a comeback now.

    John

  40. Dollar Doomsday 2010-Larry, thanks for this article. I couldn”t agree more with what you said and after watching my investments go up in smoke again this past week, I needed something like this to get me to monday morning.I subscribe to Real Wealth. Its one of the few that offers supporting info to the monthly newsletters. Many of the updates I receive between the articles only offer to sell me another Newsletter, but I”am quickly fazing those types out of my mailbox. Also I”ve long felt that there is a coordinated effort on the part of the govt. and some Wall Streeters to screw the average guy out of their savings. My initial start to protect myself is to get rid of my ML broker and than hopefully at the age of 69 to get smart enough to deal with all this crap.Right now my once decent size portflio is down 30% in the 3 years I”ve been retired and thats without expenditures. I”am strong on metals and energy, but those have taken an asskicking too. Send some specifics on utilities as I”ve been riding Duke, con ED and Xlu for some time. They along with their yield have kept me sucked in for some time now.Actually send me lots of info and hopefully some of it will sink in.God help us if November doesn”t change some things. JD

  41. You have a problem with your thesis;The bullish china market is a complete sham as their debt ratio is the same as Europe on per capital basis.Their people are also living beyond their means..So look for China to slow down,housing ,manufacturing and exports will come to a screeching halt,just like America.Since i live in Canada we at least have a Great finance minister in Jim Flarety.You should study up on him.We right now are the only economy that is expanding constantly.We will hurt to because of the coming world inflation.Our taxes are one of the world’s highest,but we have been used to it for the last 25-30 years.Since the Trudeau yrs.We already have a thirteen per cent tax rate on everything we buy.Our debt level is the Lowest in the whole world.So we will survive the coming economic whitewash.Come and visit Canada in the coming yrs ,you might want to live here.All the best: Marc

  42. Dear Larry Edelson, another great post, but the devil is in the details! In the 60’s there was the “weathermen movement”(two white guys out of Chicago) out to create a “Black” revolution to first takeover America and then the UN under MARXISM(The UN has the same constitution as the USSR by the way)! Now, America has a Marxist lead House, Senate, Judiciary, and Presidency! Yes, according to this movement, first, they put in a Marxist as President(now, they have) and then they get the 70% of UN Nations( which are Black Nations by the way) with American veto power to rule the world! Currently, the only problem that I see holding this effort up by the two weathermen(now in Africa) is that most of these black nations hate each other even more than us, but it will still occur! This has occurred thanks to the “white” women vote and as Clint Eastwood said so well, “get ready because hell is coming to dinner!” PS: Marxism has yet to give any country back, so it doesn’t plan to give ours back to us!

  43. Hi Larry;
    Thanks for all your good work in telling it like it really is, the group in congress should all be put in jail and throw away the key. I have a son who still thinks all os O.K., in spite of all the thingsI have sent to him to read. Well, as a parent it is hard to have them learn the hard way. I have been reading safe money for the past 15 years and you all are doing a great job. Keep up the good work, I positioned myself years ago for whats coming.I also take Real wealth.
    Bob Haines

  44. Hi Larry;
    Thanks for all your good work in telling it like it really is, the group in congress should all be put in jail and throw away the key. I have a son who still thinks all os O.K., in spite of all the thingsI have sent to him to read. Well, as a parent it is hard to have them learn the hard way. I have been reading safe money for the past 15 years and you all are doing a great job. Kepp up the good work, I positioned myself years ago for whats coming.I also take Real wealth.
    Bob Haines

  45. Larry

    You state that the Fed announced a program to buy $1.2 Trillion of MBS in March. I thought they just ended that program. Is this a new program ??

    Allen

  46. Thank you so much for all this information, especially WHERE TO KEEP CASH NOW. This is crucial info for me right now. You are a gem!

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