When the public, and in particular the savings public at large, comes to understand that quantitative easing is actually counterfeiting…you will begin to see confidence cave and the collapse in confidence will be epic. That’s what has me nervous. [Here is how to detect when confidence is about to cave and how to protect oneself in such an eventuality.][To determine that such] a collapse in confidence [is upon us]:
- look for immediate signs of structural stress – very, very short-term credits between banks drying up….[and] short-term or overnight lending rates going up,
- look for peripheral assets, things like junk debt, emerging market debt, emerging market equity prices, to decline sharply as the leveraged players at big banks and brokerage firms shut down their trading books as a response to the decline in availability of short-term credits.
The above are certainly the signs that occurred in 2008, and I think that’s the best analogue we have for what we need to be looking for now.
So said Rick Rule of Sprott Asset Management in edited excerpts from his most recent interview with Eric King of King World News brought to you by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds). This paragraph must be included in any article re-posting to avoid copyright infringement.
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Rule concluded his interview [it can be read in its entirety here] by stating that:
“From my viewpoint, what I’m doing about this is holding cash, most of it in the form of US dollars, and in particular, I continue to increase, on down days, my holdings of gold. Gold and silver are the only historical medium of exchange that are simultaneously a store of value….[and] a medium of exchange that can’t be counterfeited by the collective so I continue to be a goldbug.
If this crisis of confidence that I think is likely to occur, does occur, I would suspect that although the gold price would be extremely volatile, it will vastly outpace the alternatives.”
Editor’s Note: The above may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
Gold is not a solution to investing problems. It is an insurance policy against an inflationary explosion. The higher the probabilities of inflation, the more gold I hold. [Let me explain.]
Evidence shows that the U.S. money supply trend is in the early stages of hyperbolic growth coupled with a similar move in the price of gold. All sign point to a further escalation of money-printing in 2012…followed by unexpected and accelerating price inflation, followed by a rise in nominal interest rates that will bring a sovereign debt crisis for the U. S. dollar with it as the cost of borrowing for the government escalates…[Let me show you the evidence.] Words: 660