Unrest, Unemployment and the Unraveling of the Dollar

an excerpt from
Sea Change In Bond Prices Gold Positive
By Roger Wiegand
May 8, 2009
http://www.webeatthestreet.com/

"Taking your own advice to get away from a potential combat zone would be a prudent action. One cannot rely on the local police to keep everyone safe once they get into an overload mode. Conventional protections will likely become overwhelmed in a worse case scenario.”

“When time is available, I surf dozens of blog web sites, and these aren't the radical, wacko sites, either. There is a troubling tone in the blog comments that has surfaced in the last few months. It goes beyond the usual (complaints) about the economy, politics, and overall bad mood. There is a sense of apprehension and even fear of the unstable third world direction for the USSA…”

“Worry about increasing crime and hints of outright insurrection top the list. The talk of revolution is scary, because there is no way to know exactly the real motivation and agenda of these bloggers. The armed Bubbas and the rest of the radicals may be gaining support in their effort to simply resist change in any manner they can. (The President) and the rest of the 'inside the beltway' political powers don't have their finger on this pulse...they are clueless.” –(This from an impeccable source who’s job it was to watch this kind of stuff and shall remain unidentified).

Our markets’ forecasts remains the same: We see continuing deflationary signals for the overall big picture. Our forecast is for national unemployment to peak at 33% in three years with some worse cases like Michigan at 40%. The news reports will exaggerate on the far low side to prevent scaring the Sheeple. Normally, you will see published numbers one-half of actual reality.
Some time down the road in this cycle, we think perhaps this fall, inflation and potential hyper-inflation pop-up and create more mayhem. This portion of the longer view could last 6-18 months and more probably shorter in term rather than longer term. After this unexpected cycle episode, we return to deflation, continuing for years, similar to Japan’s experience since 1989. We are then stuck in the mud with no growth and little, or no economic advancement. Ultimately, this mess leads to world war as it always has in history.

Traders and investors world-wide can read the hand writing on the wall. The US and other central banks of the world are in a race to see who can debase their respective currencies the quickest.

Due to the overbearing size of US bonds and US cash, and also being the world’s reserve currency, the American Impact will be the stronger and felt in a negative rippling wave against all others.

Everywhere we look foreign governments are stopping gold sales and quietly seeking to buy more. China appears to be a buyer of bullion and foreign gold mines. Moreover, they are mining within their nation and not reporting the success but rather holding the spoils in storage for safe keeping. China is reportedly now number two in global gold production.

A recent Financial Times story reported the central banks of Europe over the past few years stupidly sold-off gold incurring losses of $40 Billion of gold bullion at ridiculously low prices. Mr. Gordon Brown, Prime Minister of the U.K., was personally responsible for $5 Billion of the total. This kind of activity has come to screeching halt. Now these central bankers and others are hard core gold buyers. However, most would prefer not to admit it as this is a counter-move to their fiat currency printing. Rather, they buy gold and deny gold as a good trade or investment. How cute.

The bond price event being such a powerful influence is going to scare the paper peddlers and potential buyers of their suspect stuff. The bigger picture will be to drive investment and trading out of all specious bond categories and currencies into gold and silver.

Do not get tangled up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction.

Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert