Now that the Fed has announced they
are barely tapering their enormous stimulus program, it's more obvious
than ever that a few powerful men have hijacked our economic, financial
and political structure. And here's a news flash: They aren’t
socialists or capitalists. They’re criminals. The Fed's
decision to continue buying $75 billion dollars worth of toxic banking
assets and U.S. debt per month means the money-printing factory has just
gone into high gear. Not only can you say goodbye to your paper-based
savings and retirement, but the Fed just guaranteed $9 gas and $3800
gold.
The Fed's Spending Spree
Every month in 2013, the Fed
increased its balance sheet by $85 billion, consisting of $40 billion in
mortgage-backed securities and $45 billion in 10-30 year
treasuries. The Fed is on pace to monetize roughly half of
the US budget deficit in 2013. Putting it all together, the Fed's
balance sheet has increased to $4 TRILLION! A total increase
of $1.17 trillion in one year! And tapering to $75 billion isn't
going to change much.
The Fed has been
promising to taper their stimulus program pending the improvement of the
labor market. But as the labor market continues to stagnate, now the
Fed has reversed course and announced that they will continue their
reckless stimulus program (a.k.a "money printing") for the foreseeable
future.
So, how does Fed spending affect the
value of your money? To clearly illustrate this point, let’s take a
look at gold price action and debt accumulation since 2005. I can
take this back all the way to 2000, or even further, and it will hold
true. But then we would have to start inflation-adjusting the
numbers. (The US Treasury was used to gather this debt
data):
- 2005 US Debt = 7.6T | Gold = $430/oz. | Gas = $1.82/gallon
- 2006 US Debt = 8.1T | Gold = $520/oz. | Gas = $2.28/gallon
- 2007 US Debt = 8.7T | Gold = $635/oz. | Gas = $2.40/gallon
- 2008 US Debt = 10.7T | Gold = $875/oz. | Gas = $2.90/gallon
- 2009 US Debt = 10.6T | Gold = $855/oz. | Gas = $2.75/gallon
- 2010 US Debt = 12.3T | Gold = $1,100/oz. | Gas = $2.80/gallon
- 2011 US Debt = 14T | Gold = $1,320/oz. | Gas = $3.15/gallon
- 2012 US Debt = 15.2T | Gold = $1,540/oz. | Gas = $3.40/gallon
- 2013 US Debt = 17T | Gold = $1,580/oz. | Gas = $4.50/gallon
And here’s where
we’re going:
- 2014 US Debt = 18.8T | Gold = $2,200/oz. | Gas = $5.00/gallon
- 2015 US Debt = 21T | Gold = $2,600/oz. | Gas = $6.00/gallon
- 2016 US Debt = 22.7T | Gold = $3,100/oz. | Gas = $6.75/gallon
- 2017 US Debt = 25.5T | Gold = $3,575/oz. | Gas = $7.50/gallon
- 2018 US Debt = 28T | Gold = $3,800/oz. | Gas = $9.00/gallon
So... we'll surge to $28 trillion in
U.S. debt by 2018. Based upon the chart above, that will put gas
at $9 and gold at $3800.
The Gift That Keeps On
Giving
As clear as day, this chart
illustrates that Fed stimulus is truly the gift that keeps on giving if
you are a holder of gold.
They call it “Quantitative Easing,"
or QE. The reason QE is like the gift that keeps on giving for a
holder of gold is because it blatantly debases the U.S. dollar.
Allow me to illustrate:
Round one (QE1) started November 25,
2008 and ended March 31, 2010. During that 17-month period, a gallon
of gas rose from $1.75 to $2.75 and gold rose from $725/oz. to
$1125/oz.
QE2 was started Nov 3, 2010 and
lasted seven months until June 30, 2011. During the seven months of
QE2, gas prices rose from $2.80 to $3.60 and gold from $1325 to
$1700. QE2 was also marked by massive global food inflation
and global riots. QE2 ended June 30, and we have had no
further ‘major’ balance sheet expansion until mid-September
2012.
In the last few weeks leading up to
QE3 and the week after, gold rose 15%. During the summer of 2013,
when the Fed starting backing off their "tapering" talk, gold rose a
staggering 13% in a matter of months. The proof is in the
numbers.
QE3 Will Not Improve Labor; It will Ruin The
Economy
This policy is complete insanity.
By 2018 when the debt peaks, gas will be over $9 per gallon!
These same factors put gold at $3800 by 2018! It debases the U.S. dollar
significantly at a time when we need fiscal responsibility more than
ever. But here’s the real insanity behind this kind of move and its
perceived intentions: How does spending $85 billion a month buying
toxic paper from banks even help the labor market anyway? How can
the Fed even get away with another huge lie and distortion like this
one?
These policies
aren’t really aimed at fixing the labor market or improving the real
economy at all. These policies are designed to be bailouts for
too-big-to-fail banks and to keep rates low so that the Fed can service
$17 trillion in debt. This was a move that had complete panic
all over it.
Protecting Your Wealth from the
Madness
To actually
achieve sound wealth protection at this point, you need to look for true
diversification (as opposed to banker diversification), by removing some
of your wealth from “the system.” You need to get a portion of your
wealth out of the insolvent banking institutions that don’t pay you any
yield anyway, and then you need to buy some real
money. Some
grass-fed, non-GMO, organic, real MONEY. The unprocessed kind.
The kind that is not attached to all the political lies and corporate
greed. Money free of debt and that can’t be printed by
criminals. The kind that has outlasted every paper fiat currency
ever invented by man for over 5000 years.
"The
greatest trick central bankers ever pulled was convincing the world that
they work for the public and not for the
banks." If you presently
do not own any gold, then you do not have the luxury of time. The
foundation and the safety of our monetary, banking and financial systems
has never been less sound. Never. And while the media may try and convince
you otherwise, I hope you have gained the ammunition to see the truth and
make some decisions about how you will prepare for the inevitable math of
the future. You don’t have to be an optimist to make money, and you
don’t have to be a pessimist to protect it. You need to be a
realist. (Call 800-226-8106 to receive your free copy of
Damon Geller's popular book, "Rescue Your Money from the National Debt
Disaster," or see below)
No comments:
Post a Comment