Here’s the “Handwriting on the Wall”:
Iran announced last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember what happened to the last Middle East oil producer to sell its oil in euros rather than dollars: shortly after Saddam Hussein announced his decision, the US and Britain invaded Iraq.
MORE DUMPING OF DOLLARS:
In the most profound financial change in recent Middle East history, Arab Gulf states are planning – along with China, Russia, Japan and France – to stop paying for oil with US dollars, moving instead to a basket of currencies and gold. Brazil and India have shown interest in non-dollar oil payments as well. The US cannot be happy about this development, which includes some of its allies. According to China, the transitional currency in the move away from dollars may be gold.
MORE MONEY PRINTING = MORE INFLATION:
There are only two paths forward: either foreigners continue to finance the US deficits, or the Fed will resort to even more money printing to cover the shortfall.
PROTECT YOURSELF FROM HYPERINFLATION:
Precious metals are the truest barometers for economic conditions, particularly inflation. Precious metals investors must cultivate patience – no easy task in a world hooked on instant gratification. But reckless money creation and rock-bottom interest rates mean inflation is inevitable. The real beginning of the big move for precious metals still lies ahead, because government policies make the long-term fundamentals for this sector even more bullish. Keep in mind that even if precious metals trade sideways or pull back, that makes the long-term picture even more bullish. Rediscover patience; don’t listen to experts who no longer have confidence in their own expertise. Buy and hold precious metals, and sleep well at night.
IN CASE YOU MISSED THAT:
Reckless money creation and rock-bottom interest rates mean inflation is inevitable. The real beginning of the big move for precious metals still lies ahead…
YOUR FINANCIAL SALVATION:
Gold is holding at $1,000 and consolidating. [And silver is showing similar strength.] It has steadily built a base and is moving to what Phillips calls a Point of Resolution, where it will either drop or soar. The US dollar is also at a Point of Resolution, from where it is likely to descend to the lowest level ever seen against the euro. The gold price is waiting for action on this front; if the dollar falls, gold [and silver] will skyrocket.
Recommended Reading: The above quotes are from http://www.bmginc.ca/document/618 where you will find more on this crucial topic.