Black Friday

"The United States abandoned the gold standard during the Civil War. Gold traded on the New York Stock Exchange in the form of 'greenbacks' to gold. That led to Black Friday in 1869 with a riot as investors dragged bankers out and hung them in the streets. This is what 'Black Friday' really meant. The riot was so bad the government had to send in troops to suppress the chaos when gold hit $162. Adjusted for inflation, that may be far beyond $10,000 today."
Martin Armstrong, It's Just Time, page 22


Note: As of this writing, gold stands at $955/ounce.

A Biblical View of the Economy

Please read the article The House of Cards Begins To Crumble. It is an analysis of the current economic situation from a Biblical point of view. Below is an excerpt.

People are feeling the hurt all over and not just here in the US, but all over the world.

The EU along with the EURO are also going belly up. In fact if things continue and Germany is not able to rescue the close knit EU economy, then they are looking at the Euro dissolving into nothingness.

Get this, the head of market analysis for Schneider Foreign Exchange Stephen Gallo told CNBC on March 3rd 2009 that…

“the financial crisis will lead to the creation of a global central bank and a global single currency within 15 years”

In fact top globalists world wide are pushing for a new world financial order.

Problem is that the western countries are so far into debt they have nothing to leverage as a hard asset any longer. Even China, who Obama is now getting loans from, is demanding “guarantees” on their loans. The only thing the US has left is our land itself. Rumors have been going around on the Internet about China gaining power to access to emanate domain land. Although the US Gov is saying no, what else do we have as a tangible asset?

Friends, it is common knowledge that history repeats itself.

We are in the same position as the early Weimar Republic Germany of the early 1900s. The outcome of that past event is what brought the dictator Adolf Hitler to power.

Do you know that by late 1923, the Weimar Republic of Germany was issuing fifty-million Mark banknotes and the post office had postage stamps with a face value of fifty billion Marks?

Folks, how much have you already lost? With what is left, how much do you have in your 401K?

If we were in the Weimar Republic right now, do you know that you wouldn't even have enough to buy a stamp?

A House For An Ounce of Gold?

I read recently where you might be able to buy a decent sized house for an ounce of gold in the not too distant future. Well, I chuckled to myself when I read that. Even I, gold bull that I am, thought that was a bit of a stretch.

But then I read this article from the NY Times talking about foreclosed homes alreadly being purchased for $1,500 in some of the hardest hit areas of the country.

Excerpt:
So much here defies reasonableness. It’s what [Councilman] Brancatelli keeps telling me. A few months ago, he met with Luis Jimenez, a train conductor from Long Beach, Calif. Jimenez had purchased a house in Brancatelli’s ward on eBay and had come to Cleveland to resolve some issues with the property. The two-story house has a long rap sheet of bad deals. Since 2001, it has been foreclosed twice and sold four times, for prices ranging from $87,000 to $1,500. Jimenez bought it for $4,000.

Gold is currently around $1000/ounce. If this crisis moves from a regional one to a national one, I am now wondering if this statement about buying a house for an ounce of gold might not be so far fetched.

What size house? Guess it depends of the price of gold. UBS recently speculated gold could go as high as $7,000 - $10,000 an ounce eventually.

Not saying that will happen, but it sure is food for thought.

Perspective

I am not accustomed to having my customers lose money. The roughly 20% losses my clients accounts have seen over the last 18 months defied all of the rules that have held true in my 25 years as an advisor. Obviously, I was not alone in being caught by this charade that has been foisted on the unsuspecting public.

In retrospect, I don't think any of us could have seen this manufactured banking "crisis" coming, not even the most saavy advisors. After reading the following article and realizing how much of my clients' funds we DIDN'T lose, instead of how much we DID lose, I might sleep a little better at night.

Hopefully you will too.


Why You Should Sell
from The Motley Fool

I can be just as dumb as anybody else. -- Peter Lynch, September 2008

Peter Lynch earned near-30% annual returns running Fidelity Magellan from 1977 to 1990. He's sold millions of books, raised millions for charity, and holds the rare distinction of having a Motley Fool Global HQ conference room named after him.

But in September 2008, Peter Lynch also had the ignominious honor of holding both AIG (NYSE: AIG) and Fannie Mae (NYSE: FNM) in his personal portfolio -- as they dropped 82% and 76%, respectively, during that month alone.

Ouch.

For those of us who have spent our investing careers trying to match the great Peter Lynch … well, if you lost 80% in September, then congratulations -- you did it! If you did better than negative 80%, then you beat the great Peter Lynch.

Jump!

Wall Street makes their money off of stocks and bonds. Only paper can be created out of thin air. That makes gold the enemy of their little monopoly.

According to the latest Committment of Traders report, the recent beat-down of gold from $1000 back to $900 was accomplished by about 4 major Wall Street banks buying a large amount of gold short contracts. Shorting a metal has the effect of driving the price down.

According to that same report, all of the buying of gold is being done by individual, not corporate traders.

As soon as the masses discover what these few individual traders already know, the price of gold will escalate, and at some point the Boyz (as they are affectionately known by insiders), will lose their control over the gold market.

In the meantime, the above picture reflects my sentiments exactly. (Sorry for the profanity, but I didn't make the poster.)