This month we will discuss the reasons for increase in gold prices. We consider the fate of the dollar and why its real value reaches zero. We also show why the process of printing money to accelerate over the next 12-24 months.

The collapse of paper money against gold 

The problem of paper money is that national governments can create them in unlimited quantities. That's what they did throughout history and in particular, over the past 100 years, which led to a total collapse of most currencies. Most people do not even realize that their government devalues ​their money. Printing money creates for them the illusion that they are getting richer, while all that they have - it's pieces of paper with a large number of zeros shown in them. But there is one currency, which the state can not print - it's gold. Gold is real money for nearly 5000 years and represents the single currency, the survivor throughout history. Gold can not be printed, and no country can control its scale. That's why gold will always expose the fraudulent activity to create money. That's why gold will always expose the fraudulent activity to create money. That is what we know from experience now. Gold is not rising in absolute price. Instead, gold is doing only what it always did, and it maintains its value and purchasing power.

At the present time, we see the complete destruction of paper money, whether Dollar, Pound, Euro, etc. Chart below shows the real value of the dollar relative to gold. IN THE LAST 10 YEARS The dollar has depreciated in terms of gold by 79%. Most currencies fell the same percentage. Therefore, the belief that gold rises in price, while the value of paper money declines, is an illusion. All that is gold does, it reflects the unlimited printing of paper currency. Since gold can not be printed, it is the most honest exchange of all.

The graph above shows how the dollar has depreciated in real money - gold - in the last 10 years. And if we consider the period from 1909 to 2009. We will see the complete destruction of paper money. In 1909, for $ 1000 you could buy 50 ounces of gold. Now $ 1000 is equal to 0. 83 ounces of gold. This means that over the past 100 years, the dollar depreciated by 98. 3% in relation to gold. Thus, in the real monetary value the dignity of the dollar is now equal to only 1. 7% of its virtues a century ago. Accordingly, the U. S. government (as well as most other governments) completely destroyed the value of real money by issuing an unlimited amount of paper money. And over the next few years, the government would destroy the remaining 1. 7% of the price, and then the actual cost of the paper dollar will reach zero. The graph below shows the depreciation of the various currencies relative to gold from 1900 to 2004.

Say that gold has reached too high values at these levels - in our opinion, absolute nonsense. As we shall see, the printing of money can only accelerate in the coming months and years. And gold will always maintain their value relative to the ever-increasing supply of paper called "money".

The real movement will come to Gold

- Printing money to accelerate with an increase in government deficits and the re-emergence of problems in the financial sisteme.

- There is a high risk of collapse of major financial institutions and even sovereign states, with unpredictable consequences for the global economy. Get at least a bankrupt Iceland.

- The average fund manager managers, pension fund, asset manager or an individual investor today there is virtually no relationship to gold, but in the next few years, they will invest in gold.

- The Gold market will soon become, above all, physical market, because nobody will trust paper gold or part of physical gold, such as Comex, ETF's, gold accounts and other heresies. In this case, the market will not trust the government, many of whom have spent most of their gold reserves. The last audit of the gold in Fort Knox was in 1953!
- Gold production decreased each year and currently amounts to only 90 billion dollars a year. Will not be enough physical gold at current prices to meet increased demand.
- In the world only 900 billion dollars of physical gold is privately owned for investment purposes. This is approximately 0. 7% of global financial assets.
- Central banks - now buyers of gold. Many countries that have insufficient weight in gold, such as China, India, Russia, Japan, Singapore, Brazil, Korea and many others, are major buyers of gold. This means that gold will be painted by several sovereign nations for many years to come. Central banks are not changeable investors and political decision to increase their gold reserves are unlikely to be long in coming.
- Although it is difficult to predict, but the geopolitical risk in the next few years is essential. Pakistan, Iran, Afghanistan, Al Qaeda, the Middle East, Israel, terrorist attacks in the West, etc. - The likelihood that something will happen in these areas is very high. This would be the main effect on the price of gold.

GOLD WON the majority STOCK EXCHANGES

Over the past ten years, Dow Jones fell against gold by 80%. The chart below shows gold, expressed in local currencies and the Nikkei, Dax, FTSE and S & P over the past 10 years (November 1
- November 2009). For example, gold in yen was estimated at 233%, while the Nikkei has fallen by 46%. The diagram shows how pitiful the majority of stock exchanges look, being priced in "real money" that is in gold.

MARKET precious materials is very small

The chart below shows how small the gold and silver industries and markets with respect to major U. S. corporations and the outcome of the world's financial assets. Market capitalization of the silver industry is only $ 9 billion, and the gold industry of $ 200. While Microsoft is estimated at $ 250, and Exxon v350 $ billion sootvetstvenno.
And silver and gold industries, as well as physical markets are so small that any increase in demand will be immediately and significantly raise prices.

Quantitative increase

Governments in many countries and especially the U. S. are talking on a speedy end to printing money. Such a claim is as likely as it was probably their statement about "strong dollar policy. "Let us be clear: simply no chance that they really want to see the dollar was stronger, or that the dollar will increase the purchasing power. Instead, we have what is called QI - Quantitative Increase. The Federal Government will in the next few years to do what "Helicopter Ben» (Ben Bernanke) is always promised: ". . . publish unlimited amounts of money and we throw them from a helicopter . . . " This is just bring the movement of the dollar to its real value - zero.

Grounds for acceleration of printing money are plentiful:
1. Rising unemployment

Unemployment in the United States, taking into account short-and long-term displaced workers now stands at 22%, as shown in the chart below. This is an absolute disaster will bring severe consequences to the U. S. economy. Probably everything will be much worse. During the Great Depression of the 1930 unemployment outside agriculture has reached 35%. While the real problems for the economy has not yet begun. It is expected that U. S. unemployment will reach at least 35% in the next 2-3 years and will probably be much higher.With more than 30 million unemployed people in the U. S. economy will receive an incredible load with a significant decrease in GDP and tax revenues and a significant increase in social payments. The country is already bankrupt, probably will not be able to cope with these additional commitments. Currently, 36 million Americans receive food stamps - is 3 million more than 6 months ago.

2. The financial system continues to be very vulnerable

$ 12 trillion that the U. S. government to prevent the collapse of the financial system and economy, have helped the financial sector. Banks that receive these funds did not transfer the money into the real economy. All they do is maintain the balance sheets and pay record bonuses.

- With the blessing of the state banks were allowed to assess their toxic assets on the totally wrong methodology. Rather than evaluate the assets at market value, they are valued at the expected cost of redemption, which, of course, as allowed banks is 100%. THIS IS JUST ANOTHER FRAUDULENT Collusion between government and the Bank.

- Real estate loan is deteriorating very rapidly. In October 2009, 330. 000 objects mortgaged property passed into foreclosure. Another 7 million homes in the U. S. awaiting removal. Restoration interest rates on mortgage loans will result in 2011-12. transition to a landslide of real estate in foreclosure and to enormous losses of mortgage lenders.

- Cost of commercial property declines rapidly, and rates for rental space yielding rise. Prices fell by 35-50%, but banks are pretending not to understand the level of price reductions. For smaller banks, which account for more than 90% of all U. S. banks, 74% of loans progarantirovano lien on commercial real estate. $ 1. 4 trillion over the next four years must be refinanced, most of which is the property in negative equity or a completely empty property. Will be virtually impossible to refinance such "assets".

- Were issued by banks more derivatives. Four major U. S. banks now have outstanding $ 200 trillion. A large percentage of this can not be sold anywhere at market value. 

- More than 130 U. S. banks have already gone bankrupt in 2009. Does not evaluate the market - a crime against all prudent accounting principles. But it is certainly done with the full blessing of the government, since, if the assets were valued at market value, the U. S. banking system would cease to exist as such!

3. Government deficits will escalate

Rising unemployment and continuing problems in the financial system are two major factors that will be the impetus for government deficits. But there are many other areas of concern that will inevitably entail acceleration in the printing of money:
- Revenues from taxes quickly snizhayutsya. - Many states in the U. S. have already gone bankrupt, and most of the other expects the same samoe.
- Cash instead of used cars and new tax credits for home buyers - only two of the many schemes that the Government has introduced to support weak branches promyshlennosti. - Lack of pension fund quickly escalate, and the government will subsidize pensionerov.
- An even greater number of insurance companies go bankrupt and the government will again need to intervene.

A list of areas that need government support, infinite, and the U. S. government will be forced to print money to "save" the economy.

0% interest rates and unlimited printing of money = madness

Artificial setting interest rates to zero and the uncontrolled printing of money is contrary to every single principle of sound money and stable economy. The percentage should be set market, while respecting the laws of supply and demand. The uncontrolled printing of money should be completely prohibited and amount to counterfeiting. So why is this happening? For the state to those in power, but bankers prospered! Nobody else is thriving. Normal people are bred to incur huge debts that they can never repay. And the value of their paper money is completely destroyed, we have demonstrated above.

In the past few years we have made it clear to our investors and readers that follow a fairly serious impact on the actions of government:

- The budget deficit will rise. These borrowings are in the $ 12 trillion is likely to grow to $ 20 trillion, that we have discussed in previous reports. In this case, interest rates could reach 20% or more, and the U. S. government will have absolutely no possibility of financing the share of dolga.

- U. S. greatly diminish. This happens only because of the fact that the dollar - the world's reserve currency and the U. S. were able to deceive the rest of the world and impose the adoption of worthless U. S. currency and financing America's huge debts. But this state of affairs comes konets.

- There will be hyperinflation. Deflationary collapse is a necessary prerequisite to hyperinflation. In order to discourage deflationary factors the state will print an unlimited amount of money. This - the collapse of the currency, which causes hyper-inflation, and the U. S. will be no exception. Collapse of the dollar will lead to a hyperinflationary depression in the U. S.

- Significant social and political consequences. Economic devastation that is a consequence of poor economic management, provoke not only the poor and hungry, but also to social unrest. There is a material change in the political system and the apex of power.

Privacy

This question is mainly concerned with the United States. What happens and how important implications will be happening for the rest of the world. But what is likely to happen in the U. S. , as is likely to happen in the UK and many other stranah.
Many investors are now mistakenly believe that the worst is over because of an imaginary "reconstruction" of stock markets. In our newsletter in January 2009 we forecast that the stock market will recover approximately 50%. Now we have a "recovery", mainly because of the unprecedented government bailouts and reduce costs for corporations. In this situation, the resumption of the declining trend may start at any vremya.

We do not aim to frighten investors, or produce sensations in our reports. Our purpose - to warn investors about the main risks for which the asset protection is absolutely necessary for financial survival in the next few years.

"THERE IS NO CARE FROM devastation wrought by the expansion of credit. The alternative is only that we nearing the crisis ahead (a result of voluntary cancellation of the expansion of credit) OR LATER, AS A FULL CATASTROPHE INVOLVED monetary system. "(Ludwig von Mises - Austrian economist (1881 - 1973)