US, world headed for 25 year depression: Jim Rickards

US, world headed for 25 year depression: Jim Rickards

“When I use the phrase 25 year depression, it sounds extreme but it’s not. We had a 30 year depression in the United States from about 1870 to 1900…The Great Depression lasted from about 1929 to 1940. The U.S. is in a depression today.” Well, it's been in the works for

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Canadian banking haven myth exposed

Canadian banking haven myth exposed

"One of the reasons that Canadians (and international commentators, other finance ministers and global financial institutions) buy this Canadian banking fairy tale is the way the government accounts for the money borrowed to support the banks." The sorry spectacle of Conservat

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades. In doing so, prosecutors are confronting

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Canada’s home sales top predictions; why a real estate crash is inevitable

Canada’s home sales top predictions; why a real estate crash is inevitable

“The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.” Our website is back after many months of

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Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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gold silver bullion bars

“Gold futures rallied to a record over $1,380 an ounce Thursday, and silver futures rocketed more than 6%, after investors piled into precious metals as a hedge against the sinking U.S. dollar after the Federal Reserve rolled out a new, $600 billion of extraordinary stimulus measures to prevent deflation.” — Marketwatch

There are those who say things like “You can’t eat gold, it isn’t required for industrial production processes. This is just hype to suck in the dimwits who have a herd mentality in the stock market,” but the reality is that precious metals like gold is used in a great many industrial processes, ranging from batteries for hybrid cars to speaker cables, most electronics really. The value of gold is almost unchanged, what has changed is that the currency we use to purchase it, Euros, Dollars, Yen and so on, have lost value. These currencies are based on debt, they are generated from debt, and it is that very nature which ensures that our current economic model is doomed to failure. If the entire economy and the currency that runs it is based on debt, eventually someone gets left holding the bill. But if you hold gold you hold value, real value in a world where currency is just paper. Don’t take our word for it, just look up ‘Fractional Reserve banking’.

As with all fiat bugs, they are assuming there is a free market for gold, but there is not. It is suppressed by the US government and big Wall Street banks. It was a free market up until it hit the $800 mark in 1980, then the bullion banks resumed their suppression activities to bring it back down. Now they are losing control of it because they use naked shorts and they have run out of silver and will soon run out of gold to supply the physical buyers.

Did you or will you buy precious metals as protection?

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They suppress gold and silver for a couple reasons. One, to keep people like you maintaining your confidence in worthless fiat paper. That way, the government can control the money supply and run deficits. Secondly, a few decades ago Saudi Arabia decided that it did not want more worthless fiat US dollar notes as payment for its national treasure of oil. It instead demanded gold, but this would have blown up the market. So the US has been suppressing gold prices so the Saudis can accumulate it cheap over the decades. In return, we get cheap oil.

Gold is going to at least $50,000 (inflation adjusted), maybe above $100,000, possibly even half a million, while your ponzi scheme boring investments go to zero. Doesn’t the quadzillion dollars of derivatives out there scare you? The US dollar will hyperinflate away to zero within a year.

The reason gold went “splat” in the 1980s was because the US Fed jacked up interest rates to double digits to combat inflation, which gave people confidence in the US dollar again. They could do that back then because they had very little debt. If they jack up the rates now with their Trillions of dollars of debt, the US won’t even be able to cover their interest payments, let alone pay down the debt. So the way I see it, they will either leave interest rates at 0 for many many years. Or they will jack up interest rates and use the Bernanke printing press to pay off their debt. Either scenario sees gold skyrocket far above what it is now.

Gold is still in a bull market

In the current bull market, gold has gone up 5 times its bottom. In contrast, in the circa 1965 to 1980 run-up, it went up 25 times its bottom. This leads me to believe it is not at a top.

If somebody bought gold in the 1970s at 5 times the bottom, they would have paid $175, which was the average price of gold in the 1970s. If they bought at the top, they would have bought when it was 25 times its original value.

If someone bought at $175, or 5 times the value in the 1970s, it would still have more than retained its value when gold dropped to its low of $250 in 1999.

When gold dropped in value after 1980, it bottomed at 7 times its original value in the late 1960s. In today’s market, gold needs to rise to $1750 to be 7 times its base value of $250.

In today’s market, to be 25 times its base value, gold would have to rise to $6250.

In contrast, $35 cash, the value of gold at the start of the bull run of the 1970s, is nothing today. Isn’t it possible that $250, the value of gold at the start of the current bull market, will be nothing in 40 years? What would you prefer to have, gold or cash, knowing what you know now?

China has over a trillion dollars US in savings. As the US dollar falls, so does the value of Chinese savings. The US dollar has lost 33% of its value against a basket of other currencies since its high in 2001. To protect itself, China is quietly divesting out of the US dollar into gold.

In other words, in our estimation, gold (and silver) are still in a bull market.

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