Back in 2002 the editors of Profit Confidential started telling their readers it was time to jump into gold related investments. This gold investing guidance and analysis proved to be extremely timely. Yes, back in 2002 we started offering gold analysis to our readers and we still do it today. We have been recognized as one of the first investment letters to tell its audience to jump into gold stocks, very early in the gold bull market. The gold guidance and analysis we provided resulted in many stocks we follow rising in price 100% or more in short periods of time. Today, you can regularly find gold market analysis in Profit Confidential. Each time gold prices moved higher, we told our readers to buy more gold related investments. See what we have to say about gold’s future dally in Profit Confidential.
The U.S. government, after winning World War II for the Allies, was very convincing. It told central banks around the world that they should hold the U.S. dollar as their reserve currency instead of gold, based on the idea the U.S. dollar would be backed by gold. Only limited amounts of U.S. dollars could be printed, because the currency was tied to gold bullion. Central banks bought into the idea.
Unfortunately, a few decades down the road, the concept of a U.S. dollar backed by gold was thrown out the window (thank you, President Nixon). Eventually we were introduced to the modern day printing press—printing money out of thin air at the will of the Federal Reserve without the U.S. dollar being tied to any “hard” currency like gold.
Why would anyone agree to this horrible idea?
Back in those days, the U.S. economy was prospering. Our government was in good shape and didn’t have much debt. And the logistics made sense, too, as time passed. Why wouldn’t a central bank have in its reserves the currency of the world’s strongest economy and military? Why wouldn’t a central banker keep U.S. dollars in his vault as opposed to hard-to-carry and hard-to-store gold?
Years have passed since the U.S. dollar “unglued” itself from gold. Things have changed, too. America is not so glorious anymore. Ever-rising debt and the never-ending printing of U.S. dollars have resulted in some countries changing their policy on U.S. dollar-backed reserves. And the fundamental factors that keep the U.S. dollar strong are deteriorating quickly.
The balance sheet of the U.S. economy does not look as good as … Read More
After yesterday’s Federal Reserve antics, we were taken by the reaction of one well-known writer, who said, “I didn’t know whether to laugh or cry.” That is truly the most apt phrase for the current situation.
To sum up the bigger picture:
Almost 100 years ago to the day, the U.S. “subcontracted” money and the banking system to third parties. These third parties called themselves the “Federal Reserve” but, of the few unchallenged facts one can determine about the actual ownership of the Fed, it becomes clear they are neither “federal” nor a “reserve.”
As an aside, the only two presidents in U.S. history who fought the central banking system tooth and nail were Lincoln and Kennedy. The original “greenback,” named by Lincoln, was named so because it was “free” money not based on debt. This is a historical fact.
Once the Fed was in place, the U.S. moved from an economy that paid for goods with free money, to an economy that paid for goods with debt or promises. Any doubts about this were completely removed in 1971, when Nixon took the U.S. off the gold standard. However, within a year, by 1972, Nixon had put deals in place with Middle Eastern countries that effectively made the greenback the only way to buy oil. This effectively made the buck the world’s reserve currency, and the U.S. was back on top.
By the 1980s, scholars began to notice that the U.S., as well as other countries that had adopted the central banking template, were in danger of imploding via deflation. The computer revolution of the 1990s delayed the evolution of … Read More
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