"Crashing the Dollar" book receives rave reviews!Why You Must Own Gold - Jim Cramer - CNBC
BY DAVID BRADSHAW ~ Editor, Real Money Perspectives
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Nov 30, 2010 ~ ((M-F podcast)) ~ gold fraud alert!
Tuesday, gold in Euros reached record high on EU debt jitters, while gold remained strong in dollars at $1,386/oz. Silver closed at $28.06/oz. The International Monetary Fund has slowed the rate of selling its gold by 40 percent last month, as interest to own it spiked among central banks.
* "More investors are turning to silver to limit their exposure to the dollar. 'This is probably the strongest demand there’s been in the last 25 years,' said Lee Rosenbloom of Plaza Collectibles in NYC. Silver prices have soared 60 percent in 2010, driven in large part by a strong investment demand, particularly strong buying of exchange-traded funds, or ETFs, backed by the physical metal," reports CNBC.
"China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late Tuesday. Chinese experts said the move was to protect their domestic economies," reports China Daily ... More at CTD
* The Irish rescue package that Goldman Sachs estimates may total $130 billion failed to dampen speculation that Portugal and Spain would follow Ireland in tapping the fund set up by the EU and IMF after the Greece rescue.
21st century Dark Ages ahead? "Economist says hope for the best but prepare for the worst...The recent move by Fed Chairman Ben Bernanke to infuse $600 billion of paper money into the economy is seen by the Obama White House — if not by Bernanke — as a means of ginning up the economy in time for November 2012. Let us understand that what we may confront is beyond a U.S. experience of anyone living today or in all American history. In the new book "Crashing the Dollar" Craig Smith and Lowell Ponte hold nothing back...," reports RenewAmerica
* Dollar to Become World's ‘Weakest Currency’: "The dollar may fall below 75 yen next year as it becomes the world’s 'weakest currency' due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co. The U.S. currency has declined against 12 of its 16 most-traded counterparts this year," according to data compiled by Bloomberg.
* Alternative Investing: Rare Coins: "Coins don’t always mean small change; in fact, some U.S. rare coins are worth a small fortune. A new CBNC slide show features the 15 most expensive U.S rare coins, including those considered priceless. [Note: Swiss America specializes in both rare U.S. gold and silver coins as well as bullion products. Read why In Gold Coins We Trust (2/06)]
* Weaker Dollar Seen as Unlikely to Cure Joblessness: "A weakening currency traditionally helps a country raise its exports and create more jobs for its workers. But the declining value of the dollar may not help the United States increase economic growth as much as it might have in the past. Though a weakened dollar would help exports to some degree, business executives and economists said that because of the ways American multinational companies operated, it was uncertain whether it would cause much of an increase in hiring," reports NYTimes/CNBC.
* Why You Must Own Gold: "Buy gold," says Mad Money's Jim Cramer. "Even with gold at $1,400, investors should allocate 20 percent of their portfolio to it. Maybe you’re wondering how high gold will climb before the run is over? That really isn't the right question. When gold gets to be about 5 percent of the world's portfolios, I will reevaluate this 20 percent gold allocation for you at home. Right now it's at about 0.3 percent," reports CNBC.
* A 24-Karat Safety Net for Investors: Gold is "in effect a protest vote that there's something amiss with current policies. People are almost acting as their own central banks because the advantage of gold is that it acts as a hiding place in times of currency turmoil,” said Abhay Deshpande, portfolio manager with First Eagle Funds to NYTimes.
* Gold rises over $1400 for first time ever-IB Times- "Gold prices rose above the $1,400 an ounce barrier for the first time ever on Monday. New fears sparked by the latest Irish debt problems drove investors to seek security in the eternal metal. Comments from World Bank President Robert Zoellicks earlier today, in which he suggested that major global economies should return to a new gold standard, helped push investors towards gold, where gold set a new record high at $1408.10 an ounce. The gold price is on the path that long-time experts forecasted. Craig Smith from Swiss America said last week that he expects the price of gold to reach $1,500 per ounce this year, and $1,750 in 2011," reports IBTimes.
* The Enduring Myth of Gold's Record High: "Gold sets record high amid economic fears," The Associated Press recently wrote. "Gold surges to record high," CNN said. Gold closed Monday "at a record $1,402.80 per troy ounce," the front page of The Wall Street Journal reported Tuesday. It's a good story. Unfortunately, it's not true, at least not in any meaningful sense. More than a month ago, Ryan Chittum of The Columbia Journalism Review noticed the epidemic of supposed gold records and urged those of us in the news media to stop. The actual record was set 30 years ago, when the price of gold, in today’'s dollars, hit $2,387, or 71 percent higher than it closed on Tuesday," reports NYTimes.
* "The U.S. is coming under some heat from the international community for its quantitative easing, round two, which is set to take center stage at the G-20 meeting in South Korea later this week. The worry is that the U.S. is purposely pushing the dollar lower in order to improve its exports and help the economy...the fragility of global currencies only increases gold's appeal as hard money that retains value," reports TheStreet.
*Bankruptcy of U.S. is ‘Mathematical Certainty,’ John Allison, Former CEO of Nation's 10th Largest Bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction. “Now, countries don’t go bankrupt the way companies do,” said Allison. “They don’t file bankruptcy. They usually hyper-inflate. They print a bunch of paper money, or they become Third World economies like Argentina--unless we change direction. So, we absolutely have to change direction. And the irony of that is it requires an interesting combination. More at Full Story.
* The age of the dollar is drawing to a close -Telegraph: "Right from the start of the financial crisis, it was apparent that one of its biggest long-term casualties would be the mighty dollar, and with it, very possibly, American economic hegemony. The process would take time - possibly a decade or more - but the starting gun had been fired," reports Telegraph. (more at Crashing the Dollar news)
* Dollar at Risk of Crashing, Triggering Inflation -CNBC: "Federal Reserve policies have put the US dollar the risk of crashing, which will hammer consumers through higher prices," said strategist Axel Merk, CIO of Merk Investments. "It's with the best of intentions but I think it's a very, very wrong policy...We will have a cost-push inflation. We're going to get inflation but not where Bernanke wants to have it. We're not going to get wages to go up. We'll get the price at the gas pump to go up instead," reports CNBC. [Editor's Note: This is exactly what Crashing the Dollar author Craig R. Smith told Lars Larson Show listeners last week!]
* Fed sees slow recovery, housing depression, $600B bond buy: FED STATEMENT: "The pace of recovery in output and employment continues to be slow... Housing starts continue to be depressed... Inflation expectations have remained stable... The Federal Open Market Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month." (more at CTD.)
* "Many see the move as a 'Hail Mary' pass by Fed Chairman Ben Bernanke. He embraced highly unconventional policies during the financial crisis to ward off a financial-system collapse. But a year and a half later, he confronts an economy hobbled by high unemployment, a gridlocked political system and the threat of a Japan-like period of deflation. I hope Home Depot is having a sale on wheelbarrows, because I'm going to need a new one to carry my money into the grocery store for a loaf of bread soon," reports WSJ.
* QE2 risks currency wars and the end of dollar hegemony: "As the US Federal Reserve meets today to decide whether its next blast of quantitative easing should be $1 trillion or a more cautious $500bn, it does so knowing that China and the emerging world view the policy as an attempt to drive down the dollar." Full Story.
* Gold vs. the Fed: The Record Is Clear: "When the Fed meets, it is widely expected to signal its desire to increase inflation by providing additional stimulus. This policy is based on a false—and dangerous—premise: that manipulating the dollar's buying power will lead to higher employment and economic growth. But the experience of the past 40 years points to the opposite conclusion: that guaranteeing a stable value for the dollar by restoring dollar-gold convertibility would be the surest way for the Federal Reserve to achieve its dual mandate of maximum employment and price stability," reports WSJ.
*A Gold Bull and His Prediction: $10,000 an Ounce
There are gold bulls. And then there is Shayne McGuire. The 44-year-old pension-fund manager from Texas, who spoke recently at a gold conference in Berlin, caused a stir among the roomful of gold aficionados. His provocation: A book that predicts the price of the precious metal could soar to $10,000 an ounce, more than seven times its current price, reports WSJ.
* "The government reports consumer prices grew at an annual rate of just 1.1%, but on average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). The jump in gold and silver prices illustrates that it's not just supply and demand issues driving the precious metals higher, the decline in purchasing power of the dollar is also showing up in the price of physical goods." Check out the "real inflation" chart at crashingthedollar.com courtesy of Casey Research.
* $3,000 gold and $70 silver could come in 5 years: -Michael Berry "Investor, mathematician and former fund manager Michael Berry, PhD, is bullish on gold, which he expects will double or more in price in the not-too-distant future," reports Mineweb.
* U.S. facing $120 trillion on plastic: "Warning that the U.S. dollar today is backed only by 'promises' from the same politicians who created today's economic disaster, longtime monetary expert Craig R. Smith documents in a new book that the nation already faces some $120,000,000,000,000 ($120 trillion) in debt, deficit and unfunded liabilities. The analysis comes in Crashing the Dollar: How to Survive a Global Currency Collapse, by Smith, who is founder and chairman of Swiss America Trading Corp., and co-author Lowell Ponte, a contributing editor at Newsmax Magazine," reports WND. [Read book Introduction]
* Dollar at Risk of Becoming 'Toxic Waste': "The dollar's slump could get far worse if the dollar index takes out last year's low, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday. "If the (dollar index) takes out the low that was made roughly a year ago I really think that will not only encourage more sales, it will cause a little bit of minor panic," Griffiths said.
*Officials hint Fed on the verge of more easing
A string of Federal Reserve officials on Tuesday indicated the central bank will soon offer further monetary stimulus to the economy, with one saying $100 billion a month in bond buys may be appropriate. While internal differences on the unconventional policy are still evident, the consensus view appears to be the economy is weak enough to warrant further support, most likely through increased purchases of Treasury debt, reports Reuters.
*Industrial output falls as monetary easing seen Industrial production contracted in September for the first time in more than a year, pointing to continued slowdown in growth and cementing expectations of further monetary policy easing next month. Industrial production fell 0.2 percent, the first decline since June 2009, after increasing 0.2 percent in August, the Fed said, reports Reuters.
* "Goldman Sachs has raised its 12-month forecast for gold to $1,650 an ounce, citing expectations for further quantitative easing in the U.S. and prospects for long-term interest rates to continue falling. With U.S. real interest rates pushing lower off the slowdown in the pace of the U.S. economic recovery and the growing prospect of another round of quantitative easing, we expect gold prices to continue to climb," said Goldman reports Kitco.
*Gold vs Treasuries - which to believe? Any psychoanalyst looking at the behavior of investors today would see clear strains of schizophrenia in a comparison between the markets for gold and US Treasuries, reports Asia Times.
AMERICANS SNAP OUT OF POLITICAL TRANCE THEN BUY GOLD!
“Now is the time to really understand gold, the best investment of the century. Allow me to share with you over three decades of experience in the gold and coin markets.”
–Craig R. Smith, Swiss America
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When Chinese President Meets Obama, says Monetary Expert
1.18.11 -- The fate of the U.S. Dollar and America's economic future will be on the table at Wednesday's (Jan. 19, 2011) White House State Dinner for visiting Chinese President Hu Jintao, warns a monetary expert.Available for Talk Show interviews on this topic is Swiss America CEO Craig R. Smith, who contends that America's economy depends on China continuing to extend credit to the U.S.
The United States keeps “digging the biggest economic hole in human history,” writes Craig R. Smith in his new book Crashing the Dollar: How to Survive a Global Currency Collapse.
“This hole of debt is now so deep,” writes Smith, “that, if you listen carefully, you can hear the voices of Chinese creditors asking one another if they will ever get back the $900 billion they have lent to us.” [1]
President Hu and other Chinese officials have criticized Federal Reserve Board Chairman Ben Bernanke's creation of $600 billion out of thin air by this coming July – a policy called Quantitative Easing Two, or QE2.
QE2 will make every dollar worth less, says Smith, longtime Chairman of the prominent trading company Swiss America.
“This means the U.S. can repay China with devalued dollars,” says Smith, “and it makes China's $2.85 Trillion foreign currency reserve worth a lot less.”
On Sunday President Hu called the present U.S. Dollar-dominated currency system a “product of the past.” [2] Because of its worldwide importance, said Hu, “the U.S. Dollar should be kept at a reasonable and stable level.” [3]
The U.S. Dollar since World War II has been the world's “reserve currency,” meaning that oil and other key commodities are priced and purchased using dollars. This has given the United States huge advantages in the world economy, including the sole power to print global money.
As Smith explains in Crashing the Dollar, we have used this position of trust like a credit card, buying what we wanted merely by printing paper dollars and paying our debts with devalued money.
“The ancient Chinese invented not only money,” writes Smith, “but also paper money, which they called 'wind money' because it could so easily be blown away.” [4]
China, along with Russia, the world's oil producers and several other nations, have mounted an effort to replace the dollar with a new global “reserve currency” that American politicians and central bankers at the Fed cannot devalue.
These matters will be at the heart of what Presidents Hu and Obama have on the table this week. If the dollar loses its status as the world's “reserve currency,” this will, according to Smith, devastate the U.S. economy.
Crashing the Dollar quotes a former director of the New York Stock Exchange, Kenneth Langone, warning that: “The minute our foreign partners stop taking our debt, it's game, set, match...it's over” for American dominance in the world economy. [5]
China is foremost among America's creditors, says Smith, with the power to crash our dollar and economy overnight. China's own growing prosperity, however, has been built through American trade.
In 2010 the United States bought approximately $275 billion more in goods from China than it did from us. [6] In 2011 total trade between the U.S. and China is expected to top $380 billion. [7]
“We learned to practice Mutually Assured Destruction, MAD, with U.S. and Soviet nuclear weapons,” says Smith. “Today with China we are in a position of Mutually-Assured Economic Destruction.”
“President [Richard M.] Nixon decided that we could drive a wedge between Maoist Red China and the Soviet Union by reaching out to China,” writes Smith in Crashing the Dollar.
It was also President Nixon who in 1971 cut the last anchor of the U.S. Dollar in a gold standard, thereby freeing politicians to print as many dollars as they wish. As a result, the dollar has drastically lost value. What cost $1 in 1971 costs more than $5 [8], says Smith, and with today's QE2 and trillions in stimulus spending, inflation could soon explode and drastically devalue the dollar.
“[T]oday China is one of our biggest creditors and holders of our debt, enabling credit junkie America to keep feeding our addiction to spending as we turn into...I.O.U.S.A.”
“President Nixon placed a life-or-death long-term bet that America could turn the People's Republic of China capitalist before we transferred enough wealth to make it militarily superior to us,” writes Smith. “Thus far it appears that China has become a crony capitalist country but retained its near-totalitarian government.”
Days before last Thanksgiving, China and Russia announced an agreement to trade between themselves using only their own currencies, not dollars.
China and the United States are now the two largest economies on Earth, one a sinking power and the other a rising one.
China is a Communist nation, but its taxes on business are lower than those of the nominally-capitalist United States.
With Japan now lowering its corporate tax rates, says Smith, “the United States has the heaviest business taxes in the entire world.” [9]
FOOTNOTES
[1] Crashing the Dollar, page ix, from Craig R. Smith's Introduction.
[2] “Hu Highlights Need for U.S.-China Cooperation, Questions Dollar,” by Andrew Brown, The Wall Street Journal, January 17, 2011. http://online.wsj.com/article/SB10001424052748703551604576085803801776090.html?mod=WSJ_hp_LEADNewsCollection
[3] “Hu Calls Currency System 'Product of the Past,'” Agence France-Presse (AFP), January 16, 2011. http://www.breitbart.com/article.php?id=CNG.9964072691a62252d0a98b0308fb8063.281&show_article=1
[4] Crashing the Dollar, page 176.
[5] Crashing the Dollar, pages 187-188; see also page 100.
[6] “Foreign Trade Statistics: Trade with China: 2010,” U.S. Census Bureau. http:www.census.gov/foreign-trade/balance/c5700.html#2010
China reports different numbers...see http://www.nytimes.com/2011/01/11/business/global/11yuan.html?scp=5&sq=China%20dollar&st=cse
[7] Reported on Fox Business Channel, January 17, 2011.
[8] Crashing the Dollar, page 34.
[9] See also Crashing the Dollar, page 61.
ABOUT CRAIG R. SMITH:
Craig R. Smith is an author, commentator and popular media guest because he instantly engages audiences with his common-sense analyses of local, national and global trends. Serving as CEO of Swiss America for more than 25 years, Craig understands that Americans want solid answers to the tough questions and that real leadership begins with servanthood. Craig's most recent book is "Crashing the Dollar: How to Survive a Global Currency Collapse." more... 
