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7 Ways the World is Preparing
For the Collapse of the Dollar
   (and why this is crucial for you to know)
                       

Tuesday,
8:47pm

From:
Aaron
Kutchinsky





                  

Hello,


And
thank
you.
I
am
truly
glad
you
have
reached
out
to
us
and
our
community.



Here’s
what
you
probably
don’t
know:




There
is
a
fundamentally
new
economic
reality
coming
into
view
on
the
world
stage,
and
it
is
evolving

rapidly
and
exponentially.
In
fact
we
are
witnessing
and
experiencing
the
biggest
financial
and
social

paradigm
shift
the
world
has
ever
seen,
and
it
is
real
and
true
and
cannot
be
stopped.


We
believe
the
evidence
is
overwhelming:
The
US
Dollar
System
is
undergoing
a
monumental
and

dramatic
change
now.
It
is
crucially
important
we
consider
our
current
best
options
and
begin
to
take

prudent,
reasonable,
and
responsible
action
to
preserve
our
welfare
and
viability.


Focus
and
attention
are
your
best
tools
right
now.
Follow
the
money.
Examine
the
decisions
and

actions
of
the
major
financial
players
of
the
world
and
you
will
discover
how
they
are
preparing
and

positioning
themselves
for
what
is
a
highly
probable
(if
not
mathematically
certain)
outcome.
In
other

words,
follow
their
money
so
you
can
learn
how
to
protect
your
money
(really,
“purchasing
power”).


That
is
the
point
of
this
entire
presentation.


My
greatest
wish
is
this
information
acts
as
a
jumping
off
point
for
your
voyage
of
discovery
of
the

plain
truth
at
this
amazing
time
in
history.
I
believe
we
are
now
called
upon
to
intelligently
participate

with
our
future.
It
is
in
that
spirit
that
I
invite
you
to
follow
your
gut
instinct
for
the
truth
and
to

continue
until
you
are
fully
satisfied
with
the
answer,
and
the
course
of
action,
you
are
seeking.


Best
regards,






                            

Aaron
Kutchinsky

creator
/
founder





      GuardianGoldandSilver.com
holds                                       bvbvbvbvb800–621‐4886

7 Ways the World is Preparing
                          For the Collapse of the Dollar
                         (and why this is crucial for you to know)



1. Central Banks to Abandon the U.S. Dollar


   A new report from Morgan Stanley analyst Emma Lawson confirms what many had
   suspected: the dollar is firmly on its way to losing its status as the reserve currency of the
   world. We already knew that central banks have preferred gold to dollars. According to
   Lawson’s data, it seems that those central banks prefer almost anything to dollars. Call it
   diversification, if you must, but the trendline indicates that central banks are finally putting
   their money where their anti-dollar mouths are. The dollar has been in free-fall since 2007.

   Last year, both China and Russia have questioned why the dollar should be the world’s
   reserve currency. And just last week, the United Nations released a report concluding that the
   dollar should no longer be the world’s reserve currency because it is not stable enough.




                                                                                                      1


  GuardianGoldandSilver.com
holds                                   bvbvbvbvb800–621‐4886

Central banks and governments added 425.4 tons of gold last year, for a combined 30,117
   tons, the most since 1964 and the first expansion since 1988, data from the World Gold
   Council show. Official reserves of central banks and governments may expand by another
   192 to 289 tons this year, according to CPM Group, a research and asset-management
   company in New York.

   Comment:
   This is called the remonetization of gold. Purchasing power is being repositioned into
   traditional and proven stores of value, gold, otherwise known as “hard asset money.” And
   that is because gold is not granted value or purchasing power by any government, regime, or
   scheme. Gold is its own intrinsic value and therefore stands apart and is independent of the
   fiat (intrinsically valueless) dollar.



2. China, Arabia, Russia Planning: End of the US Petro Dollar

   In the most profound financial change in recent Middle East history, Gulf Arabs are planning
   – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead
   to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a
   new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi
   Arabia, Abu Dhabi, Kuwait and Qatar.

   Secret meetings have already been held by finance ministers and central bank governors in
   Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no
   longer be priced in dollars.

   The plans, confirmed to the British newspaper “The Independent” by both Gulf Arab and
   Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices,
   but it also augurs an extraordinary transition from dollar markets within the next few years.

   Comment:
   This one is a biggie. Everyone in the world is forced to buy their oil in US Dollars. And
   those dollars are losing the last of their purchasing power, which means everyone else in the
   world is paying for our inflation. It’s been a long time since the US Dollar became the world
   reserve currency, the Petro Dollar, in 1944. Back then our money was backed by gold and
   we were the strongest and most industrialized creditor nation on Earth.

   The only conceivable validity the current US Dollar has lies in its Petro Dollar/ Reserve
   Currency status. Once that support is gone consider wallpapering your living room in $20
   dollar bills. And don’t expect any sentimental hesitation from the rest of the world – they
   will kick that crutch out from under the US Dollar system at the first opportunity that makes
   sense for them.

                                                                                                   2


  GuardianGoldandSilver.com
holds                                 bvbvbvbvb800–621‐4886

3. China Is Preparing for a Massive Dollar Freefall By Buying Gold

   China is making preparations for the ultimate demise of the dollar. Li Lianzhong, a senior
   economist in the ruling Chinese Communist Party, directly attacked the dollar recently. Li’s
   message is simple: China should buy more gold because the dollar is poised for a further fall.
   Li also said that China should use more of its $1.95 trillion in foreign reserves to buy energy
   resource assets.

   Li asked the very valid question, “Should we buy gold or U.S. Treasuries? The U.S. is
   printing dollars on a massive scale, and in view of that trend, according to the laws of
   economics, there is no doubt that the dollar will fall. So gold should be a better choice.”

   There is no doubt in our minds that China – the largest holder of US Treasuries with almost
   $900 billion worth of bonds at the end of September, 2010 – is maneuvering to reduce its
   exposure to the buck.




   China has revealed it had increased its holdings of gold to over 1,200 tons from 600 tons
   since 2003. Data cited December, 2010 by China’s state-run Xinhua news agency showed
   that China imported 209.7 metric tons of gold in the first 10 months of 2010, a fivefold
   increase compared with the same period last year.

   Comment:
   Bottom line: China has been our banker issuing credit by buying our Treasuries and


                                                                                                 3


  GuardianGoldandSilver.com
holds                                  bvbvbvbvb800–621‐4886

funding our way of life and our Dollar dominance for a long time. Those days are over. And
   who will buy our debt now? Why, the Federal Reserve will. That’s right, the Fed will invent
   money out of thin air to buy and support our exponential debt needs. And that’s a one-way
   ticket to massive inflation and/or hyperinflation.



4. The Biggest Financial Players Are Buying A Lot of Gold

   The world's wealthiest people have responded to economic worries by buying gold by the
   bar -- and sometimes by the ton -- and by moving assets out of the financial system, bankers
   catering to the very rich have reported.

   Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for
   mining company shares and exchange-traded funds, UBS executive Josef Stadler told the
   Reuters Global Private Banking Summit.

   "They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the
   Swiss bank's services for clients with assets of at least $50 million to invest.




   UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals
   like gold, which is on course for its tenth consecutive yearly gain and traded at around
   $1,314.50 an ounce on Monday, near the record level reached last week.

   "We had a clear example of a couple buying over a ton of gold ... and carrying it to another
   place," Stadler said. At today's prices, that shipment would be worth about $42 million.

   Julius Baer's chief investment officer for Asia is also recommending that wealthy investors
   park some of their assets in gold as a defensive stance following a string of lackluster U.S.
   data and amid concerns about currency weakness.

   "I see gold as an insurance," Van Anantha-Nageswaran said. "I recommend 10 percent as
   minimum in portfolios and anything more than that to be used for trading purposes, to
   respond to short-term over-bought or over-sold signals."


                                                                                                   4


  GuardianGoldandSilver.com
holds                                 bvbvbvbvb800–621‐4886

Comment:
   That’s it in a nutshell. This is a perfect illustration of an age-old principal: When paper is
   dying, you retreat into “money insurance” and wait out the storm. It is as simple, easy, and
   intuitive as that. Gold is history’s eternal and safest form of money.



5. Major Countries are Aggressively Buying Gold

   Emerging market countries are quietly buying gold en masse. In the past 12 months, Russia,
   China, and India moved part of their Western currency reserves into bullion. The shift was
   significant enough to push gold prices higher even as equity markets settled down. This
   year’s gold rush is a result mainly of buying pressure from emerging market banks, not
   worried retirees buying coins.

   So why is this important? The future of the global economy is in the East. Instead of
   multiple-trillion dollar debts, China, Russia, and India have currency reserves. These
   governments are slowly moving their reserves from fiat currencies like the dollar to more
   stable stores of value like gold. This is a clear sign that confidence is waning in the US
   government’s ability to pay off debt. They are, in essence, shorting the US economy and
   exploring other stores of value besides the dollar.

   Comment:
   Is the macro picture coming into a little more focus now? There is nothing unusual or
   unexpected about this. It is the perfectly natural result of a fully fiat currency system. Once
   all restraint has been suspended for money creation you’ve pre-determined the end result
   because you’ve unleashed unlimited credit, which means unlimited debt. And you end up
   with a Ponzi scheme of ever-increasing debt to pay for previous obligations at interest. That
   it is why fiat currencies have a 100% failure rate. They spiral out of control as each
   generation of debt must be larger to satisfy the previous generation of principal and interest
   payments.



6. The World Prepares for Dollar Collapse Because the Math is Certain

   Americans must ready themselves for a massive devaluation in the dollar as international
   investors dump their U.S. assets, says a former Bank of England policymaker. Relying on the
   kindness of foreigners to finance our standard of living may be about to be revealed as
   irresponsible folly.

   The assumption in modern economics that U.S. government bonds are virtually risk-free
   investments will soon be relegated to myth as investors lose patience with the world’s
   biggest economy, according to Willem Buiter.
                                                                                                     5


  GuardianGoldandSilver.com
holds                                  bvbvbvbvb800–621‐4886

Disenchanted foreign creditors may be about to head for the exits as proposed “borrow and
spend your way out of recession” policies undermine the value of the dollar and faith in the
U.S. financial system. The national debt is projected to jump by as much as $2 trillion this
year—an unprecedented increase—according to the Washington Post.

Professor Buiter, who is now at the London School of Economics, says Americans need to
prepare for the onset of foreign capital flight as investors around the world dump U.S. assets.

“There will, before long (my best guess is between two and five years from now) be a global
dumping of U.S. dollar assets, including U.S. government assets,” says Buiter. “Old habits
die hard. The U.S. dollar and U.S. treasury bills and bonds are still viewed as a safe haven by
many. But learning takes place.”

According to Buiter, recent U.S. debt additions and the trillions in banking-sector guarantees,
coupled with the proposed future economic stimulus spending, means that there is no
legitimate way in which the government will be able to meet its liabilities.

Buiter says the government will inevitably choose to create whatever money it deems
necessary to cover its spending needs. “The only alternative is default on the federal debt,”
he says. “There is little doubt, in my view, that the federal authorities will choose the
inflation and currency depreciation route over the default route.”

But the government trying to inflate its way out of debt by electronically creating whatever
money is necessary to pay the bills undermines the value of the national currency. U.S.
government bond holders run the risk of being paid back in worthless dollars. Of course, any
Americans who have savings will see the purchasing power of their dollars plummet too.

“If I can figure this out, so can anyone in the U.S. or abroad who follows recent economic
developments,” said Buiter. “The dawning of the realization will lead to the dumping of the
assets.”

The consequences of a society and economy structured around consumption and spending, as
opposed to production and savings, may be about to wreak havoc on the dollar and
America’s standard of living.

Comment:
By now you know exactly what this means. Are you completely exposed to the Dollar? Have
you hedged in any significant percentage out of the Dollar system? Do you have any “money
insurance?” Hedging has been a traditional, time-tested, and conservative approach to money
management and wealth preservation for generations. What’s your plan? What’s your
vision? What do you know?



                                                                                                6


GuardianGoldandSilver.com
holds                                bvbvbvbvb800–621‐4886

7. The Average Person is NOT Prepared and is Totally Exposed to the Dollar

   Many market participants and commentators are obviously having a hard time distinguishing
   between a bull market and a bubble. More and more articles are referring to the imminent
   burst of the “gold bubble” and to an alleged “crowded trade”.

   The facts quickly put these observations into perspective: Currently some 0.8% of all global
   financial assets are invested in gold and gold derivatives.

      •   In 1921 the allocation was 28%
      •   In 1932 the allocation was 20%
      •   In 1948 the allocation was 30%
      •   In 1981 the allocation was 26%
      •   In 2009 the allocation was 0.8%




   If a total of 2% were allocated to gold, the additional demand would amount to about 85,000
   tons – or the total global mining output of almost 34 years. Granted, this is only a numeric
   model, but it illustrates how unfounded the myth of a gold bubble is. According to an old
   saying, one tends to see the bubbles wherever one is not invested.

   Comment:
   Inflation has forced all us to become professional gamblers over the last 30 years. That’s
   what equity investing is – you are betting that your equity will be in demand, will increase in
   value, and someone else will buy it from you and lock in your gains. And of course that other
   person will have the same hopes as you, but eventually someone must lose because that is
   the nature of gambling.


                                                                                                7


  GuardianGoldandSilver.com
holds                                bvbvbvbvb800–621‐4886

Prudence has been abandoned and must be re-discovered once again. If you don’t have a
       balance, a hedge, to all that paper dollar denominated equity position you are completely
       naked and exposed to whatever fate lies in store for US currency system.

                                               In Conclusion
The monetary role that has been established and manifested over the past centuries is currently
being re-discovered. For centuries, gold has represented consistency of value, independence, and
stability. Gold is the only asset that is not based on a contractual agreement between a creditor and a
debtor. It is the only supranational, internationally accepted means of payment, and has survived
every war and every national bankruptcy. This has yet been proven again amid the current turmoil,
and we expect this tendency to last throughout at least the coming 5 years.




                               









info@GaurdianGoldandSilver.com

                               









www.GuardianGoldandSilver.com

                                                                                                     8


      GuardianGoldandSilver.com
holds                                 bvbvbvbvb800–621‐4886


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7 Ways the World is Preparing for the Collapse of the Dollar (and why this is crucial for you to know)

  • 1. 7 Ways the World is Preparing For the Collapse of the Dollar (and why this is crucial for you to know) 

  • 2. Tuesday,
8:47pm
 From:
Aaron
Kutchinsky
 
 Hello,
 And
thank
you.
I
am
truly
glad
you
have
reached
out
to
us
and
our
community.

 Here’s
what
you
probably
don’t
know:


 There
is
a
fundamentally
new
economic
reality
coming
into
view
on
the
world
stage,
and
it
is
evolving
 rapidly
and
exponentially.
In
fact
we
are
witnessing
and
experiencing
the
biggest
financial
and
social
 paradigm
shift
the
world
has
ever
seen,
and
it
is
real
and
true
and
cannot
be
stopped.
 We
believe
the
evidence
is
overwhelming:
The
US
Dollar
System
is
undergoing
a
monumental
and
 dramatic
change
now.
It
is
crucially
important
we
consider
our
current
best
options
and
begin
to
take
 prudent,
reasonable,
and
responsible
action
to
preserve
our
welfare
and
viability.
 Focus
and
attention
are
your
best
tools
right
now.
Follow
the
money.
Examine
the
decisions
and
 actions
of
the
major
financial
players
of
the
world
and
you
will
discover
how
they
are
preparing
and
 positioning
themselves
for
what
is
a
highly
probable
(if
not
mathematically
certain)
outcome.
In
other
 words,
follow
their
money
so
you
can
learn
how
to
protect
your
money
(really,
“purchasing
power”).
 That
is
the
point
of
this
entire
presentation.
 My
greatest
wish
is
this
information
acts
as
a
jumping
off
point
for
your
voyage
of
discovery
of
the
 plain
truth
at
this
amazing
time
in
history.
I
believe
we
are
now
called
upon
to
intelligently
participate
 with
our
future.
It
is
in
that
spirit
that
I
invite
you
to
follow
your
gut
instinct
for
the
truth
and
to
 continue
until
you
are
fully
satisfied
with
the
answer,
and
the
course
of
action,
you
are
seeking.
 Best
regards,

 
 Aaron
Kutchinsky
 creator
/
founder
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 3. 7 Ways the World is Preparing For the Collapse of the Dollar (and why this is crucial for you to know) 1. Central Banks to Abandon the U.S. Dollar
 A new report from Morgan Stanley analyst Emma Lawson confirms what many had suspected: the dollar is firmly on its way to losing its status as the reserve currency of the world. We already knew that central banks have preferred gold to dollars. According to Lawson’s data, it seems that those central banks prefer almost anything to dollars. Call it diversification, if you must, but the trendline indicates that central banks are finally putting their money where their anti-dollar mouths are. The dollar has been in free-fall since 2007. Last year, both China and Russia have questioned why the dollar should be the world’s reserve currency. And just last week, the United Nations released a report concluding that the dollar should no longer be the world’s reserve currency because it is not stable enough. 1
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 4. Central banks and governments added 425.4 tons of gold last year, for a combined 30,117 tons, the most since 1964 and the first expansion since 1988, data from the World Gold Council show. Official reserves of central banks and governments may expand by another 192 to 289 tons this year, according to CPM Group, a research and asset-management company in New York. Comment: This is called the remonetization of gold. Purchasing power is being repositioned into traditional and proven stores of value, gold, otherwise known as “hard asset money.” And that is because gold is not granted value or purchasing power by any government, regime, or scheme. Gold is its own intrinsic value and therefore stands apart and is independent of the fiat (intrinsically valueless) dollar. 2. China, Arabia, Russia Planning: End of the US Petro Dollar In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to the British newspaper “The Independent” by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within the next few years. Comment: This one is a biggie. Everyone in the world is forced to buy their oil in US Dollars. And those dollars are losing the last of their purchasing power, which means everyone else in the world is paying for our inflation. It’s been a long time since the US Dollar became the world reserve currency, the Petro Dollar, in 1944. Back then our money was backed by gold and we were the strongest and most industrialized creditor nation on Earth. The only conceivable validity the current US Dollar has lies in its Petro Dollar/ Reserve Currency status. Once that support is gone consider wallpapering your living room in $20 dollar bills. And don’t expect any sentimental hesitation from the rest of the world – they will kick that crutch out from under the US Dollar system at the first opportunity that makes sense for them. 2
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 5. 3. China Is Preparing for a Massive Dollar Freefall By Buying Gold China is making preparations for the ultimate demise of the dollar. Li Lianzhong, a senior economist in the ruling Chinese Communist Party, directly attacked the dollar recently. Li’s message is simple: China should buy more gold because the dollar is poised for a further fall. Li also said that China should use more of its $1.95 trillion in foreign reserves to buy energy resource assets. Li asked the very valid question, “Should we buy gold or U.S. Treasuries? The U.S. is printing dollars on a massive scale, and in view of that trend, according to the laws of economics, there is no doubt that the dollar will fall. So gold should be a better choice.” There is no doubt in our minds that China – the largest holder of US Treasuries with almost $900 billion worth of bonds at the end of September, 2010 – is maneuvering to reduce its exposure to the buck. China has revealed it had increased its holdings of gold to over 1,200 tons from 600 tons since 2003. Data cited December, 2010 by China’s state-run Xinhua news agency showed that China imported 209.7 metric tons of gold in the first 10 months of 2010, a fivefold increase compared with the same period last year. Comment: Bottom line: China has been our banker issuing credit by buying our Treasuries and 3
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 6. funding our way of life and our Dollar dominance for a long time. Those days are over. And who will buy our debt now? Why, the Federal Reserve will. That’s right, the Fed will invent money out of thin air to buy and support our exponential debt needs. And that’s a one-way ticket to massive inflation and/or hyperinflation. 4. The Biggest Financial Players Are Buying A Lot of Gold The world's wealthiest people have responded to economic worries by buying gold by the bar -- and sometimes by the ton -- and by moving assets out of the financial system, bankers catering to the very rich have reported. Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit. "They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest. UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce on Monday, near the record level reached last week. "We had a clear example of a couple buying over a ton of gold ... and carrying it to another place," Stadler said. At today's prices, that shipment would be worth about $42 million. Julius Baer's chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness. "I see gold as an insurance," Van Anantha-Nageswaran said. "I recommend 10 percent as minimum in portfolios and anything more than that to be used for trading purposes, to respond to short-term over-bought or over-sold signals." 4
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 7. Comment: That’s it in a nutshell. This is a perfect illustration of an age-old principal: When paper is dying, you retreat into “money insurance” and wait out the storm. It is as simple, easy, and intuitive as that. Gold is history’s eternal and safest form of money. 5. Major Countries are Aggressively Buying Gold Emerging market countries are quietly buying gold en masse. In the past 12 months, Russia, China, and India moved part of their Western currency reserves into bullion. The shift was significant enough to push gold prices higher even as equity markets settled down. This year’s gold rush is a result mainly of buying pressure from emerging market banks, not worried retirees buying coins. So why is this important? The future of the global economy is in the East. Instead of multiple-trillion dollar debts, China, Russia, and India have currency reserves. These governments are slowly moving their reserves from fiat currencies like the dollar to more stable stores of value like gold. This is a clear sign that confidence is waning in the US government’s ability to pay off debt. They are, in essence, shorting the US economy and exploring other stores of value besides the dollar. Comment: Is the macro picture coming into a little more focus now? There is nothing unusual or unexpected about this. It is the perfectly natural result of a fully fiat currency system. Once all restraint has been suspended for money creation you’ve pre-determined the end result because you’ve unleashed unlimited credit, which means unlimited debt. And you end up with a Ponzi scheme of ever-increasing debt to pay for previous obligations at interest. That it is why fiat currencies have a 100% failure rate. They spiral out of control as each generation of debt must be larger to satisfy the previous generation of principal and interest payments. 6. The World Prepares for Dollar Collapse Because the Math is Certain Americans must ready themselves for a massive devaluation in the dollar as international investors dump their U.S. assets, says a former Bank of England policymaker. Relying on the kindness of foreigners to finance our standard of living may be about to be revealed as irresponsible folly. The assumption in modern economics that U.S. government bonds are virtually risk-free investments will soon be relegated to myth as investors lose patience with the world’s biggest economy, according to Willem Buiter. 5
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 8. Disenchanted foreign creditors may be about to head for the exits as proposed “borrow and spend your way out of recession” policies undermine the value of the dollar and faith in the U.S. financial system. The national debt is projected to jump by as much as $2 trillion this year—an unprecedented increase—according to the Washington Post. Professor Buiter, who is now at the London School of Economics, says Americans need to prepare for the onset of foreign capital flight as investors around the world dump U.S. assets. “There will, before long (my best guess is between two and five years from now) be a global dumping of U.S. dollar assets, including U.S. government assets,” says Buiter. “Old habits die hard. The U.S. dollar and U.S. treasury bills and bonds are still viewed as a safe haven by many. But learning takes place.” According to Buiter, recent U.S. debt additions and the trillions in banking-sector guarantees, coupled with the proposed future economic stimulus spending, means that there is no legitimate way in which the government will be able to meet its liabilities. Buiter says the government will inevitably choose to create whatever money it deems necessary to cover its spending needs. “The only alternative is default on the federal debt,” he says. “There is little doubt, in my view, that the federal authorities will choose the inflation and currency depreciation route over the default route.” But the government trying to inflate its way out of debt by electronically creating whatever money is necessary to pay the bills undermines the value of the national currency. U.S. government bond holders run the risk of being paid back in worthless dollars. Of course, any Americans who have savings will see the purchasing power of their dollars plummet too. “If I can figure this out, so can anyone in the U.S. or abroad who follows recent economic developments,” said Buiter. “The dawning of the realization will lead to the dumping of the assets.” The consequences of a society and economy structured around consumption and spending, as opposed to production and savings, may be about to wreak havoc on the dollar and America’s standard of living. Comment: By now you know exactly what this means. Are you completely exposed to the Dollar? Have you hedged in any significant percentage out of the Dollar system? Do you have any “money insurance?” Hedging has been a traditional, time-tested, and conservative approach to money management and wealth preservation for generations. What’s your plan? What’s your vision? What do you know? 6
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 9. 7. The Average Person is NOT Prepared and is Totally Exposed to the Dollar Many market participants and commentators are obviously having a hard time distinguishing between a bull market and a bubble. More and more articles are referring to the imminent burst of the “gold bubble” and to an alleged “crowded trade”. The facts quickly put these observations into perspective: Currently some 0.8% of all global financial assets are invested in gold and gold derivatives. • In 1921 the allocation was 28% • In 1932 the allocation was 20% • In 1948 the allocation was 30% • In 1981 the allocation was 26% • In 2009 the allocation was 0.8% If a total of 2% were allocated to gold, the additional demand would amount to about 85,000 tons – or the total global mining output of almost 34 years. Granted, this is only a numeric model, but it illustrates how unfounded the myth of a gold bubble is. According to an old saying, one tends to see the bubbles wherever one is not invested. Comment: Inflation has forced all us to become professional gamblers over the last 30 years. That’s what equity investing is – you are betting that your equity will be in demand, will increase in value, and someone else will buy it from you and lock in your gains. And of course that other person will have the same hopes as you, but eventually someone must lose because that is the nature of gambling. 7
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886

  • 10. Prudence has been abandoned and must be re-discovered once again. If you don’t have a balance, a hedge, to all that paper dollar denominated equity position you are completely naked and exposed to whatever fate lies in store for US currency system. In Conclusion The monetary role that has been established and manifested over the past centuries is currently being re-discovered. For centuries, gold has represented consistency of value, independence, and stability. Gold is the only asset that is not based on a contractual agreement between a creditor and a debtor. It is the only supranational, internationally accepted means of payment, and has survived every war and every national bankruptcy. This has yet been proven again amid the current turmoil, and we expect this tendency to last throughout at least the coming 5 years. 









info@GaurdianGoldandSilver.com 









www.GuardianGoldandSilver.com 8
 GuardianGoldandSilver.com
holds bvbvbvbvb800–621‐4886