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THE WORLD IS COMING TO AN END!!

The doom sayers have been saying that now since 1914. No doubt that is true. It will end some year. No one on this Earth knows when, so just enjoy what little time that you have left.

My shtick is "DEPRESSION IS COMING!!". I think I am closer to the truth.

Depression News

The best definition of a financial depression is a period when supply overwhelms demand, resulting in falling prices, unemployment problems, and economic contraction.

Investopedia explains 'Great Depression'

The NYSE crashed on October 24, 1929, a day known as Black Thursday. Thousands of people lost nearly the entire value of their investments, leaving them with next to nothing. The trend continued and the following Tuesday, Black Tuesday, the DJIA dropped 12%, marking the start of the great depression. International trade declined, along with personal income, tax revenues and product prices.

Many economists believed the Great Depression was evidence that capitalism, when left unchecked, is a dangerous ideology.

This caused some nations to change their political structures, such as Germany, who adopted fascism.

Read more:

http://www.investopedia.com/terms/g/great_depression.asp#ixzz1lo6dD63E


Indications of a depression will be a 12% drop in the stock market combined with a high rate of inflation. People will be purchasing gold as a hedge against the inflation, so watch the price of gold closely.

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"Depression is coming". Half of Europe is mired in a recession with 20+% unemployment and 30+% poverty but keeps limping along from one financial crisis to the next.

The United States is so far in debt that it could not handle a recession, not alone a depression, but again keeps limping along from one financial crisis to the next.


Tuesday, September 28, 2010

The High Price of Gold

Items concerning the economy noted this past week.

Home foreclosures at highest level since recession started.

Number of new applicants for unemployment rose.

Unemployment rate not dropping.

More people looking for work.

Credit unions are struggling to stay solvent.  This from restructuring, writing down, or writing off home and consumer loans.

The government is arranging a large financial bailout for credit unions

The US economy is struggling.

The US government seems to have no idea about how to put any direction into the economy.

US debt growing at an alarming rate.

US dollar still dropping against all major currencies.

Gold hit $1,300 an ounce.

Central banks still buying gold even at $1,300 an ounce.

I saw an article from one analyst stating that the price of gold hit $850 in the 1980s before going into decline.  That if that figure was adjusted for inflation, the price of gold would have to hit $3,000 an ounce to be equivalent.  One pundit even suggested that gold will hit $7,000 an ounce.

One thing is obvious.  The price of gold will not be moderating anytime soon.

Crops in Russia and China this past summer were damaged by floods and drought. 

Farmers in America had a good year, but one third of all corn is now being used for ethanol.  Indicating no moderation of prices in the supermarket.

Consumers have reduced debt by one third over the past two years.  They are using debit cards rather than pay the high interest rates.  This will cause the failure of more banks.  Loss of jobs, and more consolidation in the financial industry.  The economy will not be recovering before spring of 2011.

Most people think that the high price of gold is caused by investors and speculators.  Nothing could be farther from the truth.  The high price of gold is being caused by the central banks, dumping their dollars prior to a major devaluation.

By spring of 2011, the price of gold will hit $1,800 an ounce, OR BETTER!

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