March 5, 2009
The World is Awashed with Dollars
We are now at a point where the world is awashed with U.S. Dollars and the Dollar has become the largest bubble the world has ever seen.
It's a real shame that those who lost most of their money in the stock market and Real Estate bubbles, and are now finally selling out after these markets have already collapsed, are positioning themselves to get wiped out all over again through massive inflation.
We believe both the U.S. stock and housing markets are likely to fall another 30% nominally from these levels. However, priced in Gold, which is real money, they will likely fall 80% or more in the years ahead.
As the inflation being created today starts to work its way through the system, U.S. stocks and Real Estate will eventually start rising in value again, but Gold will rise at a significantly faster rate. Silver, we believe, could eventually start rising at an even faster rate than Gold.
Most of the money that is presently being created by the Federal Reserve is being hoarded during this temporary deflationary phase. As the government continues to bailout every bank in existence and pass larger stimulus's, all of the Dollars being squirreled away around the world will soon come out all at once.
With many retail stores in the U.S. liquidating their inventories and going out of business, there will be a lot less products available for purchase and combined with the storm of Dollars, prices of everything from food to clothing will go through the roof. The government, instead of dealing with the cause of rising prices, will likely institute price controls. This will only exacerbate the problem and lead to empty shelves.
We cannot solve problems that were created by getting into too much debt, by multiplying our deficits and getting into much larger amounts of new debt. It will be impossible to all of the sudden "mop up" the massive amount of Dollars being printed. We are practically guaranteed to see substantially higher interest rates in the future, that will raise the annual interest on our national debt to trillions of Dollars. The United States will have a choice to either default on its debt or create Hyperinflation.
The wealthiest countries in the future will be those who control all of the world's Gold production. The world's largest creditor nations, mostly Asian countries, will have the best chance of accomplishing this. There are some Gold and Silver stocks that could gain by thousands of percent in the years ahead. With GE, formerly the world's largest company, headed towards bankruptcy, companies like Newmont Mining and Barrick Gold could be on their way towards becoming the world's new largest companies of the future.
The only good thing that will come out of the upcoming inflationary crisis for our country: students that were conned into investing hundreds of thousands of Dollars for worthless college degrees will be able to easily pay off their debts. Hopefully they will learn how to become a Gold miner or a farmer, and produce real things for our country, instead of destroying wealth like those on Wall Street and in Congress have done.
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