US Treasuries = TRASH!

The wisest and most successful bond investor of all time, Bill Gross, has dumped his bond fund’s $150 billion investment in U.S. bonds. One should not ignore the importance of this event. The largest bond fund in America no longer believes that Treasury bonds are a good investment. Moreover, Gross is not alone. Blackrock, the world’s largest money manager, is now underweighting Treasuries overall and reducing the duration of the bonds it still holds. That means they are dumping their long-term bonds, which are the most sensitive to interest-rate changes, in favor of Treasury instruments that mature in a year or less. Other bond funds, such as the $20 billion Loomis Sayles funds, are also forgoing Treasuries in favor of high-yield corporate bonds. Virtually everywhere you look, from great investors such as Warren Buffett to insurance companies such as Allstate, everyone is dumping their long-term U.S. debt and either buying debt that matures in less than a year or moving their money elsewhere.

So who is still buying U.S. debt ? According to Bill Gross, the “old reliables” — China, Japan, and OPEC — are still in the market for 30 percent of all new debt. The rest, however, is being purchased by the Federal Reserve. There is no one in else in the market. For the first time ever, Americans are refusing to purchase their own country’s debt.

Gross estimates that the “old reliables” are still good for $500 billion a year in purchases, and will be for some time in the future. This is pretty much the amount they’ve had to buy in the past to rebalance capital flows distorted by the U.S. trade deficit. Gross, however, may be wrong this time. Japan, needing to finance its reconstruction, is much likelier to be a net seller of U.S. debt, while China’s economy is slowing and actually ran a trade deficit in the last quarter. That leaves only one buyer of consequence — the Federal Reserve.

Meanwhile, there are already signs that inflation, while still subdued in the United States, is looking to break out. It has begun wrecking havoc through many areas of the globe, for example providing the catalyst for much of the upheaval in the Middle East. And when it strikes here, the Fed will be out of options. It will have to turn off the money pumps, raise interest rates, and batten down the financial hatches. The resulting recession will be long and nasty.

It is time to face facts. Spending is so out of control that Treasuries are no longer a safe haven for investors. The markets are saturated with U.S. debt and increasingly unwilling to absorb more. There is only one way out of this mess — cut spending, fast and deep.

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick

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Silver After the Apocalypse

So, the Apocalypse is finally over and things have settled down. The last of the brain-eating zombie packs have been put down, and local law enforcement has been restored. Now what do you use for trading? Chickens, unschucked corn, bales of hay? No, those commodities are bulky, a royal pain. and just not practical. Instead, let's try silver and gold.

Silver & gold have been a medium of currency used in trading societies for 6000 years. The types you're most likely to see coin-wise are the following: Pre-1965 US dimes, quarters, halves, and dollars, American Silver Eagles, and weird, alien items called silver rounds.

Most Americans are blissfully unaware about the state of decay of their once great coinage. After a return to a more primitive trading state, you're going to have to educate your new trading partners. If you follow my primer it will be easy. Just say, "look, Sparky. All US dimes, quarters, halves, and dollars minted before 1965 are 90% silver. Anything else is crap (yes, I'm aware of the Kennedy clads and war nickels...and I hold to my statement). American Silver Eagles (ASE's) have Lady Liberty on front, and the Seal of the USA on the reverse. More importantly, they say on the back 1 oz Fine Silver - One Dollar. They were certified and minted by the US government and are and will in the future be reliable trade coins.

Silver rounds I saved for last. To be fair they contain one troy ounce of silver as well as the ASE's. However, my problem is that they are minted from a wide variety of private companies you're ernstwhile trading buddy has probably never heard of, and there are literally hundreds of versions of these things. Heck, I saw one with freaking Santa Claus on it! Are they serious? How in the heck are you going to convince some poor, uneducated slob that he should substitute "In God We Trust" with jolly old Saint Nick?!

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick

What Kind of Gold/Silver Should I Buy?

The first thing I want to say is that everyone should have some gold or silver stacked away for the future. Any kind of gold or silver will give you an enormous advantage over the 98% of US citizens that have only paper assets (and no stockpiled survival food/water supplies as well). So, if you own any gold or silver, GOOD FOR YOU! You get the Prepper Seal of Approval! You're light years ahead of the average sheeple who is still blindly plugged into The Matrix. My guess is you're probably the type of person who is reading this blog anyway.

The question asked in the title of this article relates only to the conflict between the Preppers (the intellectual chosen people) as to what types or forms of precious metals are best to have for the uncertain future. We know we need gold and silver, we just want to know whether we should buy Numismatic Collectable Coins, Junk Silver, Silver & Gold Eagles, Foreign Coins, or Rounds and Bars. My infuriatingly simple answer is, IT DEPENDS!

I believe the issue can be broken down into two basic questions:

1. Do you want gold & silver for investment purposes, inflationary and hyperinflationary hedges, or later stage SHTF situations? Unfortunately for the Prepper community, all sizes (and forms of precious metals) do NOT fit all situations.

2. If you want gold & silver for an improving SHTF scenario, which form of precious metals will be most acceptable and therefore more valuable? I believe this questions hinges on the depth and breadth of the evolving knowledge of the newly unplugged Matrix denizens.

In Inflationary periods any of the above gold and silver forms will grant you a defense against the decaying buying power during inflation. Hyperinflationary periods are similarly accepting of all forms of gold and silver, with the only exception being the fact that numismatic coins and values just don't do as well. Coin collecting is a hobby of the rich and the happy middle classes. Hyperinflation makes these classes very unhappy as their wealth evaporates. During this painful period coin collecting is strictly relegated to a low priority, therefore numismatic premiums above precious metal content will suffer.

Bottom Line? During inflation and hyperinflation eBay and coin shops will still exist. You'll be able to exchange your silver and gold in virtually any form fairly easily for currency. You'll also keep up with buying power (or even advance) while paper folks are running around with wheelbarrows overflowing with green fiat paper!

Summary: Inflation - junk silver, gold & silver numismatically valued coins (preferably US - its just easier), Silver & Gold American Eagles, rounds, bars, your grammas silverware, etc. are all good. In Hyperinflation its all good as well, with the exception of numismatic coins.

The next scenario is where things get tough and contentious. SHTF (..it hits the fan) is what most survivalists are referring to when they mention prepping. Society, law and order, and the economy have collapsed. People are starving and perishing for lack of food, water, fuel, medicines etc. So what form of gold and silver are the best in the early stages of collapse? Answer - NONE! People need food and clean water in these initial stages, and they need to defend themselves from marauders. Shiny metals won't supply any of these very basic needs. Preppers who have these INVALUABLE resources will not trade you these necessities for any form of your gold and silver. And the 98% of the population who were completely unprepared for the complete collapse of the world order don't even have enough food for themselves, much less a surplus they can afford to trade away for your junk silver or gold eagles.

Only in the later rebuilding stages of the SHTF situation will gold and silver come into play once more. The question of knowledge of value becomes relevant again as well. Law and order exists once more, at least in the small towns. Economic recovery has begun, and commodity and useful item bartering is a common activity within a 20 mile radius of the newly ordered towns. However, hauling around produce all day to trade to a neighbor for clothing, canned peaches etc., is becoming tiresome. People start waking up to the fact that gold and silver still exist, and can be used once again for trading purposes. So what silver or gold is best to dig out of your stockpile?

I believe the most familiar form of precious metal will be the preferred choice, old 90% silver pre-1965 junk dimes, quarters, half dollars and dollars (war nickels and non-1964 Kennedy halves not included*) will be most useful and readily accepted. Why? Because many people remember that they were once used as currency, and carry the stamp of the old US, the importance of which hasn't totally evaporated yet. Next would come Silver and Gold Eagles. These coins carry a premium due to the stamp on the coin as legal tender with silver content of the Old US. However, people will still need to be educated about just what exactly they are. Most US citizens today do NOT own Eagles, and are not even aware of their existence! They'll be harder to trade at first than the more common junk silver. Lastly, comes the precious metal rounds and bars. Yes, I know they have the same amount of silver as the Eagles, but just who the hell is Sunshine Minting and Johnson Matthey? That's what you're going to have to explain to extremely skeptical (non survival prep) trading partners!

I believe there will still be enough trust in the reputation of the Old US to make US minted coins, 90% junk silver and Eagles, acceptable fairly quickly during the SHTF recovery period. But the privately minted rounds and bars will not have that stamp of approval to rely upon. People will remember that private companies could and did cheat their customers, and that tungsten filled-gold bars did exist. Indeed, even the notion of a private currency will be a hard sell to a NON-PREPPER! Remember, everyone alive today thinks that printing your own money up is called COUNTERFEITING, and is BAD! As a result, I firmly believe that junk silver and ASE's and GSE's are the best ways to go. Believe me, you won't care about the small extra premiums you had to pay during this period of time for the Eagles over comparable rounds. Of course, keep in mind I'm not saying your rounds will be worthless (perish the thought), just a lot more of a pain to move than their US minted alternatives.


Summary: SHTF Recovery Mode - Junk Silver and Gold & Silver Eagles are the only way to fly!

*Note above on 1942-1945 35% silver war nickels and the 40% silver 1965-1970 Kennedy halves. Remember, with non-prepper trading partners you need to keep things simple. They'll understand eventually that all pre-1965 dimes, quarters, halves, and dollars are 90% silver. But please, do not find yourself having to explain these two freaks to non-preppers and non-coin collectors! Yes, I know pound for pound they're cheaper than the 90% coins. My reply? They should be! And please, don't get me started on those so-ugly-even-a-mother-couldn't-love 35% silver "war nickels". I mean, they don't even look like a silver coin! And don't forget to explain to your perplexed trading partners that some of the 1942 nickels weren't made from silver, so you have to look for the big mint mark on the back. Can you say i before e except after c, and sometimes y and w?!Please, give me a break! Refiners like the reputable Midwest Refinery scorn these two silver coins as unacceptable for melting now, and I don't believe anyone else will really want them in the future. Personally, if you have these two turds I recommend you sell them NOW on ebay and buy 90% junk silver ASAP!

Additional Note: I didn't really get into foreign coinage at all. I know there are a lot of stunning Pandas, Kooks, Krugs etc., out there. But notice I didn't even attempt to spell the last two coin names for a very crucial reason. Americans just aren't very knowledgeable about foreign coins and grams and such. We want ounces, and English only please! So, avoid these coins for SHTF instances unless your just a collector who has extra money to play with.

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies (below):

Rick

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An Extreme Plan for the Survival of the United States

The US is like a planet either approaching the event horizon of a BLACK HOLE or one that has already entered that deadly zone. I'm hoping that our country is in the former situation, and not the latter. Because, as the scientists tell us, once you've entered the event horizon of a black hole all you can do is SLOW your descent into the abyss. It's physically impossible to escape once you've trespassed into that point of no return.

I've done a lot of thinking about the current situation in the USA, and I’m certain that I've got the best solution that NO ONE wants to hear based on my historical and political studies. But first, you have to realize one thing that our Founding Fathers knew well. Every form of government has its weaknesses; republicanism (representative government like the US) is no exception. With republicanism (note small r, not big R), the weakness is that the masses with no stake in the long-term well being of the country will "VOTE THEMSELVES THE TREASURY". Unfortunately, this fiscal madness has already happened in the United States. We're trillions of dollars in debt and instituting yet more free giveaways (so called healthcare reform) and wars than we can ever afford to pay for. Of course, we're already stuck with the abject failures of bankrupting Social Security, Medicare, and a veritable multitude of other FREE-FOR-NOTHING programs!

What to do? No one will like this solution, I promise you. It's extreme, but the alternatives are chaos (TEOTWAWKI & SHTF scenarios) or a long-term dictatorship that I promise you will be much, much worse than my plan.

Firstly, the following executive orders would need to be implemented due to the impending catastrophic collapse of the American economy:

EXECUTIVE ORDER 12656 appoints the National Security Council as the principal body that should consider emergency powers. This allows the government to increase domestic intelligence and surveillance of U.S. citizens and would restrict the freedom of movement within the United States and granted the government the right to isolate large groups of civilians. The National Guard could be federalized to seal all borders and take control of U.S. air space and all ports of entry.

• EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.
• EXECUTIVE ORDER 10995 allows the government to seize and control the communication media.
• EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.
• EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.
• EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.
• EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.
• EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.
• EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.
• EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.
• EXECUTIVE ORDER 11005 allows the government to take over railroads, inland waterways and public storage facilities.
• EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders into effect in times of increased international tensions and economic or financial crisis.
• EXECUTIVE ORDER 11310 grants authority to the Department of Justice to enforce the plans set out in Executive Orders, to institute industrial support, to establish judicial and legislative liaison, to control all aliens, to operate penal and correctional institutions, and to advise and assist the President.

Please Note: Although I seek to use these Executive Orders above to allow the US Government to act quickly and decisively in this time of economic disaster, I am nonetheless deeply conflicted by their existence. My advocacy of these orders as a means to an end presupposes that the President who activates them will be the type of person who will have wisdom and lack imperial ambitions. Clearly, the possibility for the abuse of power is inherent in the use of any of these orders. I don't believe our Founding Fathers could have ever anticipated the dangerous amount of power that the Executive Branch has consolidated to the detriment of the Legislative and Judicial branches in the last few decades. I doubt seriously they would have approved. Perhaps the noble minds of George Washington and Abraham Lincoln could have been trusted with such unrestricted power for a temporary period, but how would a man like Barack Obama fare in such an extreme situation? The danger inherent in this course of action becomes readily apparent. Let's hope the cure doesn't become worse for the United States than the disease of economic insanity.

Secondly, only US citizens who own land, a home, and pass a basic voting test, will have the vote. Universal Suffrage, allowing everyone an equal say in how the country is run without regards to intelligence or investment in their community and country, is the central problem. These rootless citizens have no reason not to vote themselves money because THEY HAVE NOTHING TO LOSE, and NO REASON NOT TO! I won't even address the folly of giving idiots with no comprehension of social and political issues the vote. It's like handing the steering wheel of a tractor trailer to someone who can't even passed a basic driving test. It's proven to be nothing more than madness, and a sure path to destruction.

The most pernicious form of social engineering ever conceived, called Progressive Taxation, will be terminated and replaced by consumption taxes. In this way each US citizen and business will decide how much in taxes they are willing to pay to the new Federal Government each year based on the value of their purchases. The taxes will be collected at time of all purchases, eliminating the need for the enormous bureaucracy that is the IRS. Of course, no more confusing and complicated yearly tax filings will be required any longer. In this new and simpler method of collecting taxes, US taxpayers will no longer be penalized for their hard work and business achievements through progressively higher taxation as their wealth increases.

Thirdly, the New Republic must be restored in its renovated form with a currency based on gold and silver. Unbacked and inherently worthless paper fiat currency (paper money) allowed the US to get into this bankrupt mess, and it must perish before we can ever truly regain our fiscal sanity. I'm open to other bases for currency, but gold and silver have worked extraordinarily well for over 6000 years of recorded human history!

Fourthly, the New & Improved US tells the world that we will pay off the Old Republic's debt at 10 cents on the dollar in the new gold/silver backed currency. Our international creditors may take it or leave it. All international holders of dollars will be likewise compensated for their now worthless fiat dollars. Yes, I understand the dire economic & trade implications of this radical move. There will be rage and retaliation directed at the New US by the international banking community. We will undoubtedly suffer from their powerful wrath for a time. Future generations will be forced to live much more modestly than we Baby Boomers have enjoyed. However, the American standard of living that we've known is just not sustainable anymore. We'll have to roll it back to around 1950 or even further.

US citizens will exchange their paper fiat Federal Reserve notes for the new gold and silver currency as well. It is my hope that we can do better than 10% for our people, but that will depend on the extent of the new money supply. At any rate, we'll compensate our citizenry first before dealing with the foreigners.

Lastly, our New Republic will maintain by law a true pay-as-you-go policy. This new US will no longer be a superpower. We will be more like England is nowadays. China will probably run things for quite a while. We'll function as a consultant or perhaps eventually even as an example to the world (the City on a Hill), but we'll function no longer as its master. Being the last of the world's superpowers was certainly glamorous and heady, however, the cost in compromises to our national character and values have been almost as staggering as the debt we've accrued controlling the world's affairs. We just can no longer afford to save the world, at the expense of our own national survival.

It's an extreme plan, isn’t it? Unfortunately, the situation of our country now is like an episode of the FOX TV show HOUSE. The patient is critical and is going to die unless Dr. House thinks up some off-the-wall EXTREME solution! However, I ask you what other realistic alternatives do we really possess at this unhappy juncture? Business as usual has failed our citizenry miserably! I believe only the inevitable descent of the USA into the darkness, and the death of America as a nation state for all time lies in wait for us all, should we jointly fail to ACT NOW!

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and GoldSilver.com.

Rick

Please Note: I consider this blog a realistic intellectual exercise that offers extreme solutions for the extreme problems of the United States of America. I love this country and its people, and I do not offer such radical recommendations lightly. But I FIRMLY believe that to do nothing and allow this great country to perish from the Earth would be the ultimate in treason & treachery!

I do not support, and cannot recommend, that any action contrary to the current laws of the US be taken by anyone who reads this blog.