Gold At $1,000.00 Per Ounce? What Does It Mean?

Experts at a variety of commodities firms have been sharing their opinion about why the price of Gold has been surging to record levels. To explain from the best of my memory from each of the many conversations with professionals I have had, conclusively I can say that there are three recurring themes that I hear again and again.

These investment opinions, are derived from the fact that there are powerful forces driving up the price of Gold. These factors are each working in tandem to escalate the price almost daily.

The first factor is the Declining value of the U.S. Dollar on the world market, to put this simply the dollar, on average is worth one half as much today as it did 6 years ago. This reduces its purchasing power, and since gold is on the world market, as the dollar is worth less Gold appears to be priced higher.

The second factor, is that the market sentiment, and with no help from the Federal Reserve system, is that inflation is unusually high. While the CPI or Consumer Price Index suggests inflation to be contained, the cost of basic commodities like food and energy suggest otherwise. A common investment strategy, to hedge against inflation, has always been adding apx. 20%-30% of Gold as an investment in portfolios. Many professional investors are doing this.

The third most common factor, is that in lieu of the recent run up, there have been countless speculative investors looking to jump in on the profit bandwagon. Consequentially Gold has gone up nearly 400% in a few short years, investors also feel secure in Gold, but some professionals feel that in light of the recent spike Gold may be becoming a "bubble." If and when the "Gold Bubble" Pops will be entirely dependent on how fast the US economy recovers and to what extent. The current market sentiment however, has seen gold rise in value at a rate that is twice that of the declining dollar.

Should Gold continue to rise past $1,000.00 and possibly as high as $2,000.00 the U.S. Dollar had better be trading at 1/2 of what it is today. Should that not happen the next great loss on investment just may be the "Gold Bubble" guaranteed to pop shortly after Jobs return, and the Economy is strong again.

My personal opinion, and for the record I am no financial advisor, that short of a belief that the U.S. Dollar will continue its downward spiral to even greater record lows, accompanied by stagflation it has become a bet that has great profit potential against the "doom and gloom" of any future economic calamity.

The biggest concern any Gold Investors should have at the moment is the actions of the IMF (International Monetary Fund). Should the IMF continue to dump massive amounts of their Gold reserves via the worlds central banks, Gold would see an implosion and panic that could drive it back to $400 per ounce. If the IMF started doing this today, that $400 dollar price would be upon us by April or May of 2008. Just something to think about.

The IMF holds Apx 100 Billion Dollars worth of Gold, and is mired with financial problems. The IMF has been selling some gold, and as their problems precipitate further they could end up selling much more.

Buy Gold if you think our economy is "Finished." Dump your Gold if you think the U.S. Economy and Dollar is about to recover "Greater Than Before." The Graphs below give a historical account of the rising price of Gold relative to the the Dollar.

Gold
U.S. Dollar Index

Credit Card Debt Soars to One Trillion!

Some time ago I warned that the faltering subprime credit mess would put pressure on consumers to turn to their credit cards for money. The start of 2008 is showing just that, many American's have now "balooned" their credit card debt to a record one trillion dollars.

This is an enormous problem as our entire economy is built on a system of credit. Debt is what makes it possible to own a home, buy a car, build a business and believe it or not retire. But why does a person need credit to retire? The answer is that inflation, low Social Security payments, and stock market madness has led to a revolution in "Reverse Mortgage" retirement. This allows an elderly person to sell their home to the bank before they pass on.

Identity theft has compounded this debt problem, and resulted in a decrease in FICO Scores. The signs of contracting credit is placing a burden on all areas of the American Economy. Banks afraid of more defaults are eliminating subprime lending, creating superfunds to absorb losses and even borrowing from overseas investors.

Today Gold hit $900.00 per ounce, this is an indication that world markets are becoming increasingly pessimistic about the U.S., and possibly the Global Economy. The real challenge will emerge when the new bankruptcy law is imposed against Americans who believe that going broke is an option as if like it was for our parents. This may not be the case anymore, because the level of difficulty in having your debt pardoned, and being granted a fresh start is not what it used to be.

Bailing on your debt has more in common with trying to bail on child support today. Although there is no "official" debtors prison we do have "contempt of court" of which is the same thing. For now America's future economic fate is no longer in Americas hands. We have something called a "Dollar Peg" that is in the hands of foreign nations who are mired with troubled dollars they no longer want.

Many nations are already distancing themselves from the U.S. currency, while Americas leaders continue to ignore all the warning signs even those from Americas chief accountant David Walker who has gone public on the debt and credit fiasco undermining our national sovereignty.

David's message, recently was again on Glenn Beck.

Fed's Confiscate Private Bullion in Indiana.

Liberty Dollar Company Announcement
Thursday, November 15, 2007

Dear Liberty Dollar Supporters:

I sincerely regret to inform you that about 8 this morning a dozen FBI and Secret Service agents raided the Liberty Dollar office in Evansville, Indiana.

For approximately six hours they took all the gold, all the silver, all the platinum, and almost two tons of Ron Paul Dollars that were just delivered last Friday. They also took all the files and computers and froze our bank accounts.

We have no money. We have no products. We have no records to even know what was ordered or what you are owed. We have nothing but the will to push forward and overcome this massive assault on our liberty and our right to have real money as defined by the U.S. Constitution.

We should not be defrauded by the fake government money.

But to make matters worse, all the gold and silver that backs up the paper certificates and digital currency held in the vault at Sunshine Mint has also been confiscated. Even the dies for minting the gold and silver Libertys have been taken.

All this has happened even though Edmond C. Moy, the director of the U.S. Mint, acknowledged in a letter to a U.S. senator that the paper certificates did not violate Section 486 and were not illegal.

But the FBI and Secret Service took all the paper currency too.

The possibility of such action was the reason the Liberty Dollar was designed -- so that the vast majority of the money was in specie form and in the people's hands. Of the $20 million Liberty Dollars, only about a million is in paper or digital form.

I regret that if you are due an order, it may be some time until it will be filled, if ever. It now all depends on our actions.

Everyone who has an unfulfilled order or has digital or paper currency should band together for a class-action suit and demand redemption. We cannot allow the government to steal our money.

Please don't let this happen.

Many of you read the articles quoting the government and Federal Reserve officials saying the Liberty Dollar was legal. You did nothing wrong. You are legally entitled to your property. Let us use this terrible act to band together and further our goal -- to return America to a value-based currency.

Please forward this important alert so everyone who possesses or uses the Liberty Dollar is aware of the situation.

Please go here to sign up for the class action lawsuit and get your property back:

http://www.libertydollar.org/classaction/index.php

Thanks again for your support at this darkest time as the damn government and its dollar sinks to a new low.

Bernard von NotHaus, Monetary Architect
Liberty Dollar
Evansville, Indiana

For Some time now I have adopted the position that CT should issue its own currency as a safety net against the dollar. This video below is yet one more example on how well it would work. This again has also been legally done in New Hampshire, but not insofar as actually being backed by something other than an "Empty Promise" from our Federal Government who insists on oppressing the value of our money through inflation.

This video explains what Liberty Dollar stood for.