These Guys Make the Gold Thesis Easy


It’s simply amazing – I’ve been talking about this a lot the past few months so I will try to keep my mentioning of this to a minimum going forward but it is such an ENORMOUS force that will shape our economic policy for years to come. Of course I am talking about the massive money printing by the Fed, the ridiculous bailout orgy of the president and treasury secretary (ANOTHER 7.5 BILLION for GMAC – it just doesn’t stop), and the subsequent rise in the prices of precious metals.

The collapse of the US dollar has begun, and believe me when I say that none of these clowns will stop it. Though I have to put the onus on you the voter also – now that you know the problem; if you do nothing then you are part of the problem.

So you ask, what could they do to stop this ruinous problem? They must take ACTION to strengthen the dollar, not just “talk” about a strong dollar. An example of this talk not walk business happened today in THIS ARTICLE – Secretary Geithner, when questioned about the weakening dollar said they must get the deficit to more “sustainable” levels.

Sustainable levels? Are you kidding me? Folks, the deficit must be ZERO. If there are annual deficits, then the debt will increase further and our interest costs will compound. This is one action area that Congress and the President can address. But will they? NOOOO so you can place inflation and a dollar collapse to be an almost certainty.

The Federal Reserve Board could help by raising interest rates. Higher rates would cause investors to buy the dollar so they could use those dollars to buy higher yielding US bonds. Will fed Chairman Bernanke raise rates (prudent people with savings in the bank would appreciate it)? NOOOOOOOO he won’t. That would be the coup de gras of the housing market and most other loans (credit cards especially since many have floating interest).

With our government officials almost assured of not doing anything to stop the fall in the dollar and rising inflation, those that invest in precious metals have an almost equal assurance of making money. Our government is making this investment thesis (buy gold/silver as a play on rising inflation/falling dollar) super easy. In many investments, hours of research are required and such things as revenue and growth trends must be modeled. In this case, all the investor has to do is count on the almost guaranteed ineptness of government officials (typically a sure bet and in this case, who is going to cut programs when one needs to be re-elected) and the work is done.

Chris Grande

note: This article in and of itself is not investment advice. Consult your advisor before making any investment decisions. As is everything on this site, this article is for your education only. No specific recommendation should be construed from this article. Basically, think for yourself please!