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I usually concentrate on economic issues in this newsletter, but with Obama back in control for another four years free to follow any policy he chooses to, a lot of our readers will see their worst fears realized.  How bad are things already getting?  Well, one of the most sane and rational men on the planet, Jim Sinclair, says, “Your gold won’t be confiscated, but your guns will be.”  He goes further, and states it is rumored that the state defense forces, currently under the control of the state governor, may be disbanded by the Administration.  “The moment you see this happen, the end has come.  The Constitution will not longer exist and the next day I will be writing you from Buckreef in Tanzania.”  

Led by Hillary Clinton and President Obama, the US is about to reverse policy on a treaty to regulate arms sales, the first step in allowing the United Nations to disarm Americans.  (See article in Sinclair’s section.)  Our freedoms are vanishing with blinding speed and our financial common sense has disappeared.  I have never been so alarmed at what is taking place and you should be too.  I understand that many of you simply do not want to hear any negative statements.  But I must tell you, ignoring what is going on will not make your life any easier.  Our freedoms are slipping away at an alarming rate, freedoms that we have taken for granted since the end of WWII.

Many of you will refuse to see what is happening until there are riots in the streets here in America, but by then you will be “a day late and a dollar short.”

On Wednesday, our friends at FutureMoneyTrends.com released a short (8-minute) two-part video titled “The Day the World Ended.”  It has already gone viral and I expect it to quickly get millions of views.  It is a must see fictional video about what might happen during the start of an Israeli, U.S., Saudi Arabia, Iranian war.  We feel that it is important for people to realize just how fast and how bad things could get if we saw a war with Iran that resulted into an oil spike.

Please watch “The Day the World Ended” immediately, share it with your friends, family, and your favorite blogs or websites. 

The Day the World Ended – WW3 Simulation

Now that you’ve watched the videos, will you shrug it off and say that couldn’t happen? Future Money Trends is not predicting that the events portrayed in the video WILL happen; they are showing you what COULD happen – and the really frightening thing is how FAST the events will develop.

Here are my thoughts on the video.  I am very impressed by it.  It is not at all far-fetched.  It clearly shows you how important it is for you to have a stock of food, water, guns, ammunition and gold and silver IN ADVANCE.  If you aren’t prepared IN ADVANCE it will be too late to catch up after the war starts.

Let me put it another way, one that will make sense to you.  Let’s give this scenario a 10% chance of happening.  (I am deliberately using a low number here, and personally think the chance is at least several times greater.)  Are you willing to spend around $1,000 for several months of food and water as an INSURANCE policy?  No, you say, it’s too much to spend for something that is so unlikely to happen!  What do you think is the percentage that your house will burn down in the next six months?  What is the percentage that you will be involved in a serous car accident?  What is the percentage that you will end up in the hospital with a serious and costly injury or disease?  What are the percentages that you will die in the next six months?

I bet none of you will come up with a number nearly as high as 10%.  You don’t even think about paying thousands and thousands of dollars for your insurance policies on your home, your car and your health.  Then why are you paying for insurance policies to protect you from all of these “less likely” events, while ignoring an event that has, relatively speaking, a very high percentage of actually occurring in the next six months.  With all of these “insurable events,” we are glad to pay the premiums and never cash in.  The thing about buying gold and silver is that even without this awful scenario coming to pass, they are still most likely the best investments you will make over the next few years.  The metals are more than a FREE INSURANCE POLICY; they will be the highlight of your portfolio.

I refuse to characterize this as a “scare tactic” or “doom and gloom.”  I think it is virtually inevitable that the current administration in Israel will attack Iran’s nuclear facilities by next spring at the latest.  It would be foolhardy to bet against this happening.  It is not far-fetched that Iran’s reaction to the attack would be similar to what is depicted in the Future Money Trends presentation.  To view the event as remote or impossible is illogical.  If this doesn’t motivate you to buy as much gold and silver as you can afford now, before things get out of hand, prices explode and supply disappears, I can’t imagine what will.

I must say, I was surprised and flattered that Future Money Trends mentioned Miles Franklin (as one of three precious metals dealers in America) in the video.  We were not involved with their production.  The point they made was one that Andy Schectman, Andy Hoffman, Bill Holter and I have made numerous times in these pages – the time will come when you won’t be able to buy gold or silver at any price.  No one will be willing to sell their metals for dollars.  The presents just the kind of black swan scenario that would cause this to happen.

This is your wake-up call.  Don’t let it go to waste! 

(Bill Holter comments on this video.)

Meanwhile, here is what the “Dean” of the financial newsletter industry, Richard Russell, says about owning gold vs. dollars:

November 21, 2012

I think what’s needed is a lot of patience. Sooner or later the stock market will show its hand. At this juncture, we have the pressure of world deflation weighing on ALL the markets. Against that, we have the various central banks trying to print us into prosperity and at the same time trying to defeat deflation.

How do you battle deflation? Easy, you print fiat money until deflation backs off and until signs of inflation appear. But what happens when you print to kingdom come, and inflation refuses to appear? Well, in that case your junk currency sinks to near-nothingness, and you leave the whole deflation problem to the next generation of devaluing geniuses.

I ask myself, why hold any dollars at all? What’s the danger of holding everything in dollars? And my answer is — when it comes to investing, nothing is certain. Sure, it looks as though Fed printing (now that Obama is in for another four years) will continue for the next four years or, at least, until Bernanke is convinced that he has defeated deflation.

Wait, what could cause Bernanke to halt flooding the system with his fiat notes? I think runaway inflation in tangible goods and political pressure could halt the Fed’s wholesale manufacturing of Fed notes. Scandalous bubbles might appear. Bubbles in college costs, bubbles in medical, bubbles in collectibles, bubbles, in insurance costs, bubbles in food prices, bubbles in energy costs, bubbles in consumer optimism. Of course, none of this would appear in the Labor Department’s phony CPI statistics. As we all know, figures don’t lie, but liars can figure.

At any rate, I’m personally torn between putting all my assets into bullion gold coins or leaving half in gold and half of my assets in US dollars. Very frankly, I’m no longer even thinking of making money in the markets — I just would love to keep my purchasing power intact. On top of that, I don’t trust the government, and I don’t trust the Fed or the Treasury. In their demand to making Fed notes the only legal tender money, I believe the Fed (and the government) would stoop to any trick or law or machination to ensure that Americans must accept Fed notes as the only legal tender money.

The government (Congress?) could pass a law outlawing any transactions in gold or silver or any precious metal. The government could halt the trading of gold or gold ETFs. Or there might be a dozen tricks that the government could use that would outlaw the use of gold as legal tender. Then, there are always taxes as a barrier to even owning or trading gold. As it is, the IRS treats gold as a collectible and taxes you when you sell your gold.

So I dunno, hold all your assets in gold bullion coins? Frankly, I’m afraid to. The bankers demand that I use their rotten fiat notes as money, and believe me, the bankers (the Fed) run the country.

Thus, I am doomed to hold some dollars, and, in turn, my dollars are doomed to lose purchasing power month after month, and year after year. Talk about robbery! 

Subscribe to the Dow Theory Letters for the full article.

(Be sure and read Jim Sinclair’s response to Russell’s worry over gold confiscation)

The one thing that is certain is the dollar will continue to lose value and it’s a poor store of value.  I’ll take my chances with precious metals.  Where Russell errors in his view is that worst-case you will get back a lot of dollars for your gold and silver – if you have to turn them in, or after taxes.  You would still be far, far better off than riding it out in dollars.

My God, how many dollars would you need in a “post-war world” where gas costs $26 or more a gallon and food is priced proportionately.  At $10,000 an ounce, gold and $200 silver will go a long way toward your survival.

And… as Jim Sinclair points out and I have in the past, there is no logical reason to confiscate gold now that we are off the gold standard.  The government can issue as many dollars as required with a simple key stroke to pay for our gold, so why bother confiscating gold when they could buy it.  It would only take a handful of billions, mere chump-change in their world of borrowing $100 billion a month.  Further, if gold does indeed assume a role as partial backing for a new currency, the higher its price the better.  Those of you who have accumulated a sizeable number of ounces will be the biggest winners.  Those of you who have not made the move to own gold will be the biggest losers.  Nothing personal here, just the facts!