By James M. Carrillo
The U.S. Dollar is currently in the strongest SELL territory of the decade, which means gold is now at the best BUYING point of the decade. The dollar rally was purely technical after the last collapse from 120.00 in the year 2001 to 72.00. The rally from 72.00 to 85.00 looks to be nothing more than a dead cat bounce, as its underlying fundamentals are still horrid. Take a careful look.
U.S. Dollar Monthly (chart 1)
In the previous decade, 2001 -2011 the U.S. Dollar started at 120.00, today it is at 85.00. Many economists believe it will collapse to 50.00 on the next leg down; if it survives at all (read on). Gold is a mirror image of the value of the dollar and has strongly increased in value. Since 2001 gold is up over 450%! But it has corrected with the dollar in recent years. It is always wise to position yourself with the bigger, long term trend when short term trends allow opportunities.
National Debt is out of control and unsustainable (chart 2)
The public doesn't fully realize how much debt the Federal Reserve is saddling it with since we went off of the Gold Standard. (chart 3)
Why owning gold makes sense
From the U.S. Department of Labor, here is the long term buying power of our dollar. (chart 4)
In 1914, $100,000 cash would buy 16 nice homes. In 1914, our money was gold and silver. It took approximately 5,000 ounces of gold at $20.00 per ounce to equal $100,000. Today $100,000 in cash won't buy one home. However, that same 5,000 ounces of gold is worth approximately $6,000,000 today and will still buy 16 nice homes.
Today the government is diluting our wealth at the fastest pace in history. The ramifications will be accelerated due to this massive unsustainable indebtedness.
In just the past 14 years, the value of gold has increased over fourfold. Physical gold has no debts or liabilities, unlike the U.S. dollar. Take advantage of the current low prices in gold. Based on the current extremely overbought condition of the dollar, coupled with the 30% correction in the value of gold, now is the time to fully prepare your finances by getting out of dollars, bonds, bills and stocks.