The Greatest Wealth Transfer

The Greatest Wealth Transfer in the History of Mankind Starts Now!

Right now, the Treasury, the Federal Reserve, and the banking system seem to be gearing up for an event the likes of which has never been seen. I believe the crisis that will unfold over the next few years will add up to the biggest economic event in history. The scale of what is happening will dwarf all other economic events combined. The Tulip mania of 1637, John Law's "Mississippi Scheme" of 1720, and the dot-com / tech bubble of 1999 will pale by comparison. Even the hyperinflation in Weimar Germany in 1923 and the Great Depression will seem like a walk in the park compared to what is coming.
But wealth is never destroyed - It is merely transferred. Neither you, nor I, have the power to stop what is coming. But we do have the choice to either freeze in panic and be crushed under the wheels of the economic freight train that is bearing down upon us, or catch the ride of our lives on the road to immense wealth.
While speaking at a recent wealth conference in Florida, I showed the audience some charts to try to impress upon them the enormity of what is going on right now! The chart I call my Panic Meter is made up of LIBOR rates (the rate which banks lend to each other) divided by the 3-Month Treasury Bond yields. By dividing LIBOR rates by bond yields you get a measurement of just how panicked the banks and large investors really are. This chart is saying that something is really, really wrong.

Panic Meter (2006 - November, 2008)

I then showed a chart of the monetary base (all paper dollars and coinage in existence). It took 200-years for the monetary base to go from $0 to $800 billion, but in just the past 3-months it has grown from around $800 billion to $1.5 trillion, and by the time you read this it will probably be surpassing $1.6 trillion. That's double the number of paper dollars in existence since last summer!

Base Money (1919 - November, 2008)

But here are a few charts that I didn't show at the conference...
The next chart is "Cash in Circulation". So far only a small amount of all that extra currency shown in the above chart has leaked out of the banking system and into circulation. But you can bet your assets... IT WILL. When it does, it means that prices must rise to soak up all that extra currency, like a sponge soaking up water. This is bad news for someone holding dollars, but cause for celebration for a precious metals investor.

Currency in Circulation (1919-November, 2008)

Here is a chart of how many dollars the banks have borrowed from the Federal Reserve through the end of last year (2007). Please note the spike that indicates the banks had to borrow $8 billion from the Federal Reserve during the Savings and Loan Crisis of the late 1980s.

Bank Borrowings from Federal Reserve (1919-2007)

Here is the same chart, but I've now taken it out through November of 2008. You can't even see the $8 billion S&L Crisis peak anymore! In fact, the banks are approaching $800 billion in borrowings. This means that the banks perceive this crisis as being 100 times larger than the S&L crisis.

Bank Borrowings from Federal Reserve (1919-November, 2008)

This next chart is Reserve Bank Credit. It is the total amount the Federal Reserve has loaned out of its bottomless checkbook. This chart includes all the rest of the bailouts (at least through November 2008). This chart also rises to roughly $800 billion by the end of 2007, but by November 2008, it has risen to $2.2 trillion. As Brent Harmes would say "It's climbing skyward like a homesick angel."

Reserve Bank Credit

Last, we have a chart of "Excess Bank Reserves". These are reserves in excess of the amount that the Federal Reserve requires the banks to have. It looks almost identical to the chart of Bank Borrowings, except for two small features; there is a tiny blip in 2001 and a small bump around 1941. Could it be that the banks perceive this crisis to be 50 times larger than 911 or even World War II?

Excess Bank Reserves (1930-November, 2008)

With the exception of the Panic Meter, all graphs in this article are taken directly from the Federal Reserve's website. Personally, I'm pretty sure that in a few years a chart of the price of gold will look similar to these charts, and a chart of the U.S. dollar will look like one of these charts flipped upside-down.
If you don't believe me, just take a look at this!

Bloomberg, Dec. 15 - Dollar Staggers as U.S. Unleashes Cash Flood:
"U.S. policy makers are flooding the world with an extra $8.5 trillion through 23 different plans designed to bail out the financial system and pump up the economy. The decline (of the dollar) shows that the increased supply of money may be overwhelming investors...."

In my book, "Rich Dad's Advisor's Guide to Investing in Gold & Silver," I show how virtually every time governments, and/or the banking system, abuse a currency enough to push it to a tipping point (such as in these charts), the free market and the will of the public revalue gold and silver to account for the excess currency that was created since the last time they were revalued. But this time, for history to repeat, and for gold to do what it did in 1980, 1934, and hundreds of times throughout the world going all the way back to Athens in 407 BC, it will require a gold price of over $10,000 per ounce... And that's if they turn off the printing presses today!
I believe this is the greatest opportunity ever offered to anyone in the history of mankind! Gold below $1,000 and silver in the $10 range is a gift from God. You can ignore this gift at your own risk, or graciously accept it and be on the road to great abundance. I don't know about you... but I'm buying lots of gold and silver.

Things I believe every investor should do:
Step 1: Get educated. Don't take my, or anyone else's, word on this. Read books and newsletters on the subject and decide for yourself.

Step 2: Buy physical gold and silver and take possession of it (or have it stored at a third party depository).

Step 3: Avoid "Fools Gold" such as:

• ETF's, pool accounts, futures contracts, leveraged accounts etc. Many of these are just "paper contracts" with little or no gold or silver behind them.
• Collector coins with excessive premiums above the worth of their metal content. These are a better deal for the dealer than for you.

Step 4: Relax knowing you have protected your wealth and positioned yourself to profit greatly from what history tells us is inevitable.

Source :
Michael Maloney
Author of "Guide to Investing in Gold & Silver"

China's 10 Year Gold Reserve Plan

China has set the most ambitious task on gold reserves and gold mining: take the country’s gold holdings from the current 1054 tonnes to a massive 10,000 tonnes in the next 10 years.

Is this grand task a realistic plan or a golden dream? Chinese officials say the dragon country wants to overtake the United States in gold reserves. America is the world leader in gold reserves. America owns 8133 tonnes of gold reserves that accounts for 76.5% of its foreign exchange reserves. Naturally, the Chinese plan is to ensure that bulk of its foreign exchange reserves--currently held in the forms of US dollar and bonds--is turned into gold reserves.

Unlike the United States, China has been acting slow all these years in building up its gold reserves. In 1981, China had 395 tonnes of gold holdings; it increased to 500.8 tonnes in 2001, and 600 tonnes in 2002. In April 2009, China officially announced that it has increased its gold holdings to 1054 tonnes. Since then, Chinese officials and People’s Bank of China have been meticulously chalking out plans to build up gold reserves in the next one decade.

China’s move to step up gold reserves got a moral boost when last month India—a large consumer of gold in the world—bought 200 tonnes of gold from the International Monetary Fund (IMF) for a big amount that Chinese would have never thought of purchasing. According to Zhang of the China Gold Association (CGA), India’s decision to buy IMF gold has been the real boost for China’s recent spirited moves to step up gold reserves.

“In view of the declining US dollar value, it is paramount that China steps up gold reserves. How to do this is the only question that China is debating these days. The possible steps include opening up new gold mines, aggressively going for gold mining, buying gold from the open market etc. All said and done, it is imperative that China needs to buy more gold,” Zhang points out.

China has emerged as the largest consumer and producer of gold in the world. It is, thus, natural that the Chinese mop up gold reserves to keep up its status as the No 1 gold consuming and producing nation in the globe, bullion analysts argue. In 2007, China overtook South Africa to become the world’s largest producer. The World Gold Council and global consultancy GFMS have already predicted that China will overtake India as the world's largest consumer as well.

China raised its national gold holdings in April by buying domestically mined gold. Bullion commentators like Mark Robinson are surprised as to why China has not yet shown any interest in buying gold from international markets. As a result of this, shares of Chinese gold mining companies have been rocketing all these months in the last one year. Shanghai and Hong Kong-listed shares of companies like Zijin, Shandong Gold and others are up 3x-4x this year alone. But the main factor at play is fear of a U.S. dollar devaluation.

Erik Bethel of seekingalpha.com points out the following major thrusts to explain how the Chinese appetite for gold reserves is simply rising and rising:

People in China are seriously starting to take notice of the fragility of the U.S. dollar and are loading up on commodities.

Chinese retail investors are also starting to take notice. As an example, there are "gold retail stores" popping up throughout major cities where individuals can buy mini gold bullion. There's even a China Gold Store located in Beijing Airport's new Terminal 3.

 Another example is that while it was illegal to buy gold two years ago, Chinese citizens can now go to the bank and purchase "paper gold" certificates. Paper gold is basically the Chinese equivalent of an ETF and is supposedly backed by bullion held at the banks.

 Chinese gold mining stocks are red hot and up 2-4x since last year.

China has US$2 trillion and is going to start deploying it in overseas mining assets..Following are also some of the major points you wish to read on China’s gold mining spree:

China’s domestic gold production has risen by 15% annually compared to the 3% decline in global production in 2006. This tremendous increase has been due to rapid capital expansion and low costs of labor. Chinese gold producers have gained enormously from the record high gold prices as investors worldwide are seeking stability due to the decline in the value of the dollar.

Domestic producers still suffer from a lack of scale. In 2000, there were about 2,000 gold producers - most of them relatively small and unsophisticated by international standards. Few are able to operate on a global platform, though the number of producers had shrunk to about 800 in 2007 after mergers and acquisitions and restructuring and consolidation. Most of these firms' technological standards and management are weak and inefficient.

China’s oldest and largest gold producer is the China National Gold Group Corporation (CNGGC), which accounts for 20% of total gold production in China and controls more than 30% of domestic reserves. CNGGC also controls Zhongji Gold, the first publicly listed gold mining company in China.

China's gold reserves are relatively small (about 7% of the world total). Production has usually been concentrated in the eastern provinces of Shandong, Henan, Fujian and Liaoning. Recently, western provinces such as Guizhou and Yunnan have seen a sharp increase, but from a relatively small base.

Zhaoyuan, a Shandong provincial city of a population of 580,000, has more than 60 gold mines operating in the hills around the city. They annuall produce about 15% of China's total gold - the most in the country.

In the last five years (2002-2007), China's Geological Survey Bureau found that five new gold deposits with reserves of 600 tons were found.

Top foreign investment has come from Canada and Australia. Though foreign investment still constitutes a very important part gold mining expansion, since 1995 it has no longer been actively encouraged by the Chinese government.

Vancouver-based Jinshan Gold Mines Inc. started production in July at its Chang Shan Hao gold mine in China's northern province of Inner Mongolia, reaching 19,000 ounces of gold by December 18. The mine is designed to produce about 120,000 ounces of gold per year, making it one of the country's largest producers.

Gold Fields and Australia's Sino Gold Mining Ltd., have set up a joint venture focused on discovering large gold deposits in China with the potential to produce about 500,000 ounces a year. Sino Gold has been buying stakes in Chinese gold deposits and explorers. In May it started production at its Jinfeng mine in southern China, with planned gold production of 180,000 ounces per year.


Source : Commodity Online

What does the Central Banks think about Gold?

Asia Central Bankers Say It With Gold as They Diversify Out of Fiat Currencies

Three-quarters of the region’s $5 trillion in foreign-exchange holdings are parked in U.S. dollars. A desire to diversify away from the greenback, though, has become evident. The dollar’s share in reserve accumulation dropped to less than 30% in the third quarter, Barclays Capital estimates.

Admittedly, knowing exactly what is in central-bank reserves takes guesswork, but analysts think most diversification in 2009 favored the euro.

Recently, gold has turned up as a second alternative. The Reserve Bank of India stirred markets when it revealed it purchased 200 tons of gold from the International Monetary Fund in October, increasing gold’s share of central bank reserves to 6.4% from 3.6%.

Even if other central banks don’t start making large purchases like India’s, they will likely remain a substantial buyer as reserves continue to pile up. In the 12 months through November, the banks added around $800 billion to their foreign-exchange holdings, a side effect of their efforts to slow the appreciation of local currencies.

China, which has seen its reserves rise by more than 50% in the past two years to about $2.3 trillion, has bought 450 tons of gold during the period, Merrill Lynch estimates. That is a substantial chunk in a market where annual turnover is about 3,800 metric tons. Accumulation of reserves by Asia’s central banks will likely continue as long as strong regional growth and high interest rates continue to attract foreign investors.

A shift in portfolios, like India’s, would only add to this, and there is scope for this to happen. Gold accounts for around 2% of reserves in emerging markets, Merrill Lynch calculates. That compares with a 10% average globally, and more than half of all holdings in the case of the U.S. Federal Reserve, and France’s and Germany’s central banks.

Asia’s central bankers will move slowly, particularly with gold prices still above $1,000 an ounce. But a shift toward the global average would mean more buying—regardless of what the dollar does.

Source : Wall Street Journal

Outlook for Gold - 2010

The current bull market in gold is far from over. In fact it is only beginning. While it has come off its highs, gold is still up 30% this year and, many factors still point to a long term bull trend.

As we see the end of another year, and even though the price of gold has come off its highs of over $1225, the price gold gained some 30% this year. Now, as the dollar rebounds from it's lows, and as most equity analyst are looking for global equities to continue upwards, there is talk that gold has made it's high. While we are all entitled to our opinions, I believe that these analysts fail to see the bigger picture and that the price of gold has a long way to go before this bull market peaks.

From the 1980's high of $850, gold was in a bear market for some 21 years. During those years, the International Monetary Fund (IMF) as well as most central banks around the world tried to sell as much gold as possible. Some of the sales were done with "impeccable" timing such as the sales made by the United Kingdom that sold a large portion of their gold during 1999 and 2002 when the price of gold was around $275. And, as these bankers disposed of their gold holdings, the bullion banks in London and New York kept going short gold by using the futures markets.
The reason for me mentioning this is because I believe there are still many people who are of the mindset of this era and fail to see that since 2001 gold has been in a very strong bull market and still is. And this bull market is far from over. Yet, even to this day, the major bullion banks in New York maintain unusually large short positions of gold. One simple trading rule is to always follow the trend. If they can't see this upward trend, then perhaps they are looking at their charts upside down!

While the price of gold is influenced by many different factors the major driving force has been the lack of confidence people have had in all the major currencies, especially the US dollar. And, as some of these currencies have done well against the US dollar, gold has gone up substantially against practically all these currencies. It has gone up against the US dollar, the British pound, the Canadian dollar, the Chinese Yuan, the Swiss Franc, the Russian Rubble, the South African Rand, and the Mexican Peso, just to mention a few of the currencies.

Now, because the US dollar has lost more than 30% of its value since 2001, there are many investors who believe that the it is set to rebound in a big way during 2010 and thereby cause a drop in the gold price. Frankly, I don't see it. I still see the trend for the US dollar as downward, and while we may expect to see it rally during this down trend, I doubt that we are going to see a complete reversal in trend. How is this going to be possible when the current national debt of the US is around US$ 12 trillion and counting? And, while inflation remains very low worldwide, with these expansionary monetary policies, it is a matter of time before we see inflation increase. And, this will be just another catalyst for the gold price to make more new historic highs. When this happens the current price of gold will look like bargain prices.

As this financial crisis continues, it is expected that more countries will encounter financial problems. Already, there is talk about Ireland, Spain, the UK in addition to Greece and Dubai. And despite the fact the investors usually rush into the US dollar as the ultimate safe haven, it is a matter of time before they realize that things have changed and that the US dollar is not going to be the store of wealth that it once was.

GOLD & SILVER - The New Currencies

By Dr. Jeffrey Lewis
In the currency game, only one player has dominated throughout the course of history: precious metals. Over time, fiat currencies lose their worth, as governments inflate the paper through printing and confidence is lost with each recession.

This phenomenon was proven in the United States with the Continental currency, which was rapidly inflated to pay for the revolutionary war. Thereafter, the inflated Continental dollar was replaced with hard metals, which retained and actually grew in value from 1774 to the creation of the Federal Reserve Bank in 1913.

Since the Fed
 After the creation of the Federal Reserve, the US dollar began is descent. Inflation to pay for the American involvement in wars, particularly World War II, the Korean War, Vietnam, the Persian Gulf, and now the War on Terror, has crippled the US dollar. Since 1913, the year the Federal Reserve was created, the US dollar has lost 96% of its value. Savings became all but impossible, as the practice of putting money aside led to a loss of spending power for US dollar holders.

Countries Laying the Groundwork
Distrust in fiat currencies is growing at an alarming rate. Gold prices have struck the same price they were in the 1980s as inflation in the United States reached record highs. China and India have made huge purchases of gold.

Investors and currency holders have begun to demand tangible value for their pieces of paper. However, the amount of gold and silver around the world is well outpaced by the amount of paper currency in existence. In order to reach equilibrium, gold and silver prices will need to skyrocket, and savers will require that their paper is backed with bullion, regardless of how miniscule the amount may be.

One common complaint with a metals standard is that there isn't enough gold or silver to back all of the currency. This is easily debunked by the fact that the importance of a metals backed currency isn't the amount of metal each dollar, pound, euro, or yuan is representing, but rather that a metals standard requires that currency issuance remain flat until more gold or silver are obtained.

This restricts central banks and world governments from creating hidden inflation. Either the issuer must obtain greater stocks or metals or devalue the currency in plain sight by resetting the value of the currency to a new weight of metals.

Gold and Silver as Currency
Gold and silver have been the dominant currency throughout human history. With the expansion of gold and silver stocks expanding at roughly the same rate as the global population, metals remain one of the best ways to ensure a stable currency value.

Today's investors have an excellent advantage, having already bought in at prices that will seem tiny when gold and silver are again adopted as currency. History is ripe with examples of gold and silver's ability to track the changes in currency values, and there is little doubt that the future will be any different. 

             BUY GOLD & SILVER NOW

The Crash Course (VIDEO)

Have you wondered why the world is in financial turmoil?
Have you wondered why oil prices has seen wild fluctuations?
Have you wondered why a debt problem in Dubai send jitters across the world?

What is next?  What are you expecting?  Are you prepared for what's coming?

Watch the "CRASH COURSE" by Chris Martenson.




It'll be worth your while!  BE PREPARED!

WATCH THE ENTIRE VIDEO SERIES HERE!!!

Gold & Silver Investment

Gold and silver has been recognised as money since the dawn of civilized society. Physical gold and silver is portable, widely accepted as a unit of transaction, a medium of exchange and the ultimate storage of value. Gold and silver is precious, valuable and desirable in virtually every nation across the globe.

Investing in gold and silver is a means to security during periods of financial anxiety and economic turmoil. Buying gold and silver for investment is a move towards a financial safe haven during this period of dollar weakness, which may last for many years.

Why wait? Start investing in gold and silver NOW!