Up to the minute news about money and finance – your FAQ’s

Is my money safe in a bank?
With the recent Bail-in of large depositors funds in Cyprus, and the FDIC and Bank of England ratifying this for the US and the UK, you can be sure that this is just the beginning. If you have any money in a bank anywhere in the world, it could be taken from you. Don’t for one minute think that it’s confined to Cyprus because it isn’t. What it means is that your savings could be stolen by the bank or financial institution if it gets into financial problems. Because it seems so ridiculous after decades of banks paying us at times quite high interest rates on our savings, it’s a difficult adjustment to make initially to having virtually no interest over the last few years, to the banks swiping all our money and even legalising it!
But this is where we are now. For those that wake up to this, and who are not listening to the media who would have us believe that everything is going so well, there is still time to get your money out of the system and not to be a sitting duck for the banks to annihilate you. What should you do? Have at least six months cash to cover your expenses outside a bank. If you have to put it under your mattress or in a safe somewhere, then do it. Just make sure you don’t put it in a bank’s safety deposit box because in most countries you will find that the law is on the side of the bank, and if there is an emergency, they have the right to open your safety deposit box and to take whatever is in there. At best, they could freeze those assets and you may have to wait a very long time to get them back, if ever.
Are Credit Unions safer than banks? Credit unions have specific structural differences from banks including depositors as voting members. As long as the credit union doesn’t need bailing out, then you should be safe. However, if there is a systemic failure and the whole banking system collapses, then it would be a miracle to keep the credit unions from going down too and using bail-ins with depositors funds.
Should I take out debt as interest rates are so low? If you take out a mortgage, you need to be sure that you have at least six months payments outside of the banking system. If you can do that, and you feel pretty sure that your income will be able to finance that debt for many years to come, then it could be worth doing. But I would be very careful nonetheless and I would not take out a huge loan that could end up being a burden for you, especially if interest rates start to rise again. Remember too, that real estate is not a very liquid asset and you may not be able to sell it quickly if you do run into financial difficulties. It’s best to live according to your means and to have money set aside for lean times just in case.
Should I buy real estate? If you don’t have to take out a huge mortgage and if you are able to buy a property or some land for cash, then this is a good option that’s worth considering. The advantage with real estate is that it is a tangible asset and eventually it will go up in price. However, you may have to ride out some extreme volatility before you see a good return on your investment. If you are willing to hold on for 10 years, you should do very well.
Why are gold and silver at such a low price right now? They are being manipulated heavily by the paper gold market which does not give a true indication of the real gold price. Eventually, the physical gold market will free itself from the paper gold market and at that point the price of gold will skyrocket. The more that people insist on taking delivery of their gold, the more quickly this will happen. How long this will take is unclear but I doubt it will go beyond 2016. If you are holding physical bullion, try not to be emotionally swayed by the volatility in the market and hold onto it, as it will be worth a great deal of money in the years to come.
Do I need to be afraid of buying fake gold or silver? There are some fake coins coming on to the market, especially silver ones from China. However, there are machines that are relatively inexpensive (less than USD$200.00) that you can buy that will tell you if the gold you have purchased is fake. Gold fake coins are far less prevalent and as long as you have bought your bullion from a reputable dealer or directly from the mint, you should be fine.
Where do I store my precious metals? This is a question that I am asked all the time and it is not an easy question to answer. Here are my suggestions: Choose a storage place and put a small amount of gold in it and then try to take some of it out. If it’s not easy to get your gold out, then that is a definite warning sign. Make sure you have allocated storage. i.e. gold bars or coins that belong to you specifically and not lumped together with all the assets of the depository. Ask about the storage insurance policy of the depository you are considering. Does it insure you against the storage company, any employee, any consultant or associate stealing the gold via any method including accounting fraud. The next question is what member of the big four accounting firms reviews the accountant’s statement and signs off on it as accurate and audited as compliant with International GAPP (International General Accepted Accounting as compared to US or Canadian GAPP Procedures). Don’t be complacent. No matter how reputable the depository is, keep trying to take out a small amount of bullion from time to time just to keep on top of the situation. Try to store your gold in one or two or even three different depositories in different places or even in different countries. You could also store some gold in your home, but that should not be a large amount, or no more than you are willing to let go of should someone threaten you with a gun.
What about internet bullion sites such as GoldMoney.com and BullionVault.com? For many people these are very convenient and easy to use as you can trade 24/7 and you can take delivery of your metals if you so choose. However, once again, keep in mind that very few people take their gold out, so it is an unknown as to whether these companies actually own all the gold that they have in storage. The regulation of these internet sites is not as stringent as a depository, and they are deeply intertwined with the banking system. So if there is a freeze or shutdown of banks, then you may find that you cannot sell your gold nor can you access it. I would not recommend putting all your money into one of these sites. You might invest a small amount for flexibility, but not most of it due to your higher risk exposure.
What about confiscation? Is it likely to happen? It’s very unlikely that governments will confiscate precious metals. This is because the situation is so different now than what it was back in April 1933. At that time, the financial system was linked to a gold standard and when Roosevelt wanted to do QE, he had to control the gold market and he needed the gold. He couldn’t create money without the gold backing him up. So the gold confiscation at that time was a QE tool. Today, governments don’t need to have the gold in order to do QE, as you can see. So it’s much more likely that there will be some sort of tax on your gains, maybe a Windfall Gains Tax. This is more the kind of thing that I am anticipating.
How and when will all this turmoil in our financial world resolve? Ultimately the debts and liabilities of various countries will have to be cancelled as there are not enough assets to pay off those debts. This will result eventually in a total restructuring of the system and it’s quite likely that gold will be a part of a blend of currencies in the new system. Bank closures, Bail-Ins, manipulation of markets and of statistics, increased volatility, are all to be expected. I would imagine that we are in for very difficult and uncomfortable times for the next several years with a reset of the system happening before or around 2023. As long as you have protected yourself as best as you can and you haven’t panicked and sold your physical metals you will do very well.

Breaking News! Cyprus banks steal from their savers!

Great EU Bank Robbery – is your bank going to steal your money? Not only are the banks giving most of us a paltry 0.25% - 1% interest on our savings if we’re lucky, they now seem to think it’s their divine right to steal our money in order to protect themselves from going under due to their greed and terrible financial decisions. How incredible is that? This is a wake-up call! Cyprus is proposing to penalise its savers with a one-off levy on their bank deposits because it wants to save its failing economy and banks. Seventeen Eurozone finance ministers locked themselves in a room and decided that every Cypriot saver – whether super-rich or dirt-poor – will, without any warning, see part of their hard-earned money confiscated. Yet only a few weeks ago, the Cypriot President Nicos Anastasiades explicitly promised in his election campaign, that savers would be protected. What’s even worse is that deposits under €100,000 are supposed to be protected by EU law, not raided by EU leaders. Here’s what they want to do: • Savers with under 100,000 euros deposited must pay 6.75% • Those with more than 100,000 in their accounts must pay 9.9% Innocent people are being condemned for the greed and mistakes of their banks. They trusted their banks to take care of their savings and without warning, the bank steals from 6.75% to 10% of people’s wealth overnight. Cyprus is a tiny country and may not have as much power as one of the bigger EU countries, but what if this happens in Spain or Italy as it could?? Can you imagine the uproar and the civil unrest? And they say that the levy is a one-off measure – but of course the government could change their minds about that next month. Many elderly Britons had transferred savings to Cyprus when they decided to retire there. Someone said “no one can understand how they can do this – isn’t it illegal? How can they just dock money from your account?” What are the next steps? The Cypriot parliament is voting on this deal today which is conveniently a Bank Holiday in Cyprus. The president is encouraging parliament to accept the bailout deal or face a complete collapse of the economy with a possible exit from the euro. It looks as though this will be a very close call. It's daylight robbery!! It was announced at the weekend when most banks are closed, and people were desperately queuing at ATM's to try to get some money of their money out. No one could have prepared for this....so I am advising you ALL wherever you live to beware of the banks. All banks are interconnected and your money is not necessarily safe in a bank. Make sure you have enough cash out of the bank. And invest the rest in gold and silver. Right now, the prices are quite low and in the future, because of the uncertainty in the world economy, the value of your bullion will increase greatly. But don’t buy it for that reason. Buy it because it gives you insurance: something that is outside of the control of governments. Don’t buy shares in gold and silver, but buy the actual coins and bars that you can hold in your hand. Don’t let anyone else take care of your bullion, keep it yourself. The positive outcome that could come from this is that we can start to work together outside of the system. By using barter and exchange we can swap products and services within our communities without having to be penalised by our tax systems. The taxation regimes of failing states and governments are going to get more and more invasive and controlling as time goes on. Let’s not allow the banks rip us off and let's try to prepare for the coming changes. The biggest question is the possible precedent this sets. What if other depositors in other larger, and more influential European countries start to withdraw their funds from the banks? EU leaders keep saying that this depositor tax will not be repeated in other countries, but of course they could change their minds about that overnight. What this means is that your money is not necessarily safe in any country in the world. All the banks are connected in one way or another, so don’t think that you can relax just because your country isn’t involved in this latest robbery. In the US, for example, don’t be lulled into thinking that the FDIC will continue to pay out if the bank you have your savings in fails There is a possibility that this draconian action in Cyprus may not go ahead. However, the fact that it got so far and that authorities think that they have the right to steal from us should be a red flag and a wake-up call. Just because Cyprus is a small country, they may get away with it this time. Please don’t think that because stock markets have been booming all over the world in the last few months that the global financial crisis is over, it’s merely been delayed. There is still time to make protect yourself if you act swiftly and get your money out of the system.

Financial Predictions for 2012-2013

Precious Metals:
I’ve been predicting a long bull market in gold since 2008 when the price was just $850 an ounce and silver was only $11. This year it gold shot up to $1900 and is now a bargain at $1555. Silver too nearly hit $50 again and is now hugely underpriced at $27 an ounce.

My predictions are that gold will go over $2000 in 2012, possibly closer to $3000 and silver will hit $50 or more. I think that gold will be the investment of the year because none of the fundamentals have changed. We have the Euro crisis, US debt, QE…and yet Central Banks have more than doubled their purchases of gold in the last year. That’s got to tell you something. If you haven’t already got some physical gold and silver, I strongly suggest you get some while the prices are still so low.

Stocks and Currencies:
The Dow Jones and the S&P will close lower at the end of 2012 than this year, despite it being an election year which is often bullish for stocks. Unless you have money you can afford to lose, I would suggest you sell your stocks and put the money into precious metals.

There will probably be a major dollar rally for at least the first half of 2012 if not for the whole year. If you wish to diversify your risk and invest in currencies other than the US dollar, I would suggest the Canadian dollar, Swiss Franc and Australian dollar. However, it will be very volatile and my first preference would be gold and silver above currency investment which is far more speculative.

QE
The Federal Reserve will resort to more QE in 2012 and so will Europe.

Banks
We’ll see the collapse of more banks, the most likely large one being the Bank of America. The US banks I would be very careful of are: Wells Fargo, US Bank and of course Bank of America.

Downturn Markets:
Cosmetics, jewellery, clothing, the law, police, security, insurance, the funeral business, banks, financial institutions.

Growth Markets:
Communications, technology, computers, mobile apps, writing, cellphones, transportation, social networking, nanotechnology, robotics, mind power, new payment systems, educational and learning devices.

Real Estate
Further falls are anticipated in most major markets. There will be small pockets of real estate that may not be affected by the huge price decreases, but they will be far and few between. In the main, I see property prices falling much further, probably another 40% and in some areas up to a 70% drop. If you are going into debt to buy a property right now, be aware that that same property might be considerably cheaper in a few years time. Don’t be in too much of a hurry to buy real estate or you might be kicking yourself for not waiting until prices fall even more.

Property prices have tumbled in the US and in the UK and Europe leaving a few bargains out there. However, be very careful with buying any property and land during 2012. We will see so many more natural disasters it’s going to be like a lottery finding safe places around the globe. This would not be a time to take out debt but to pay in cash for any assets that you buy. With events happening so suddenly and property being such an illiquid asset you may be stuck with something that you cannot sell and is worth much less than the amount you paid for it.

Top Tips:
• Have at least 3 months living expenses in cash outside of a bank.
• Keep a small amount of cash in bank.
• Spread your money between different banks.
• Don’t take out any debt.
• Pay down any debts you have.
• Buy physical gold and silver bullion.
• Think carefully before investing in real estate – prices will come down further and with increased seismic activity and natural disasters, land could be a risky investment.
• Find a backup source for your electricity, e.g. a small solar panel to charge your mobile phone and laptop.
• Have emergency supplies on hand: at least 3 months water, 3 months food.
• Make sure you have copies of all your important documents.
• Have an evacuation pack near the door so that you can move at short notice.

Gold Panic - time to buy or sell??

With the price of gold steadily dropping since its peak in September, we’re seeing pessimism and panic in the market. Try not to be swayed by short-term events and realise that in the long run the price of gold will rise. This is because money printing is the most likely solution the leaders will choose to solve the European banking crisis and there’s a good chance we’ll see QE3 in the US during 2012. The more money they print, the less valuable the currency becomes which is positive for gold.

You’ll find many examples in history where nations opted to solve similar problems we face today in the world using QE to create liquidity. During the great bull market of the 1970s, for example, gold went from $35 to over $850 per ounce. In that spectacular rise there were several 50% corrections in the gold price and I’ve been saying all along that the market will become more and more volatile, so I would be using these periods of pessimism and panic as a wonderful buying opportunity.

Gold will rise as investors realise that gold is a valuable asset to store and protect wealth during periods of inflation or recession. Whichever economic environment persists, the value of gold will be driven upwards by the efforts of central banks to create liquidity and debase fiat currencies.

To quote the legendary Jim Sinclair:
“Don’t allow your emotions to direct your decisions. Your emotions will always be your best contrary indicator you have. You have to examine the circumstances and ask whether or not the reasons why you’ve committed to something have changed. And if they haven’t changed, you simply need to buck up and go the course because you’re right.

People are beginning to literally crack, defined as shifting their total focus to their emotions and away from their intellect. I’ve seen emotionalism in areas where it doesn’t belong, where it’s never existed before. I’m in total shock.”
If you’re already freaked out by the movements in gold so far, you might want to sell up because I’m warning you that the ride is going to get much bumpier on the way to gold at $5000. In 2012, I anticipate that we will see gold going at least to $2500 an ounce.

Central banks remain buyers of gold. South Korea, for example, increased its gold reserves by 39% in November alone. The fundamentals for gold remain intact. No market ever moves in a straight line. The long-term picture for gold remains positive. So hang in there, it will be well worth the ride!

For those of you who have not yet invested in gold and silver, this is a wonderful opportunity to get in at a good price before everything skyrockets once again.

Gold Price Down - Great Buying Opportunity!

As I write, gold is at USD$1572 an ounce and silver is at $28.13 an ounce and many are getting very jittery and selling their precious metals. This is normal, especially for those who have bought recently at around $1800 – 1900 an ounce. However, remember I have said all along that we were going to see massive volatility. This is to be expected, but fundamentals haven’t changed. Our global economic system is based wholly on debt and the value of fiat currencies is gradually eroding as QE continues and while banks are “too big to fail.”

The fact that prices have dropped so significantly is one of the main reasons I always tell people NOT to borrow money in order to buy gold and silver. This is where you can come unstuck. It’s much too risky and it’s going to get riskier as time goes on. I wouldn’t be surprised if gold went as low as $1300 an ounce and the lower it falls the higher it’s likely to bounce back in the future.

No one can tell exactly where the bottom is for this current dip, but I can see on the charts that this looks like a wonderful time to buy. The sensible people are buying while the sheeple are selling.

If you have cash in the bank and no precious metals at all, you are fully invested in the fiat currency system and you have all your eggs in one basket. This is a huge risk as you could lose an enormous amount of money or you might lose it all. In Lithuania right now, there are huge runs on the banks with people scrambling to get their money out. In Greece and Italy, depositors are withdrawing their money in droves from the banks. I would suggest that you have AT LEAST 10% of your cash in gold and silver (mainly gold), and you will at least know that you have insurance in case there is economic collapse and that 10% will be your saviour.

To quote the legendary Jim Sinclair,
“The most important thing is volatility. One thing this shows you, and it increases continually, is this is the wildest chop we’ve ever been in, in the history of trading gold, in terms of ups and downs. It means to me that gold is going to rise to prices even higher than I expected....” and Jim has been saying that gold will go into the $2000s and possibly even up to $4500 or more…

So what are you waiting for? This is a wonderful buying opportunity folks! Don’t be scared off, act as a contrarian, buy when others are thinking of selling.

Is Gold Confiscation on the Cards??

France Bans Cash Sales of Gold/Silver over €450 / USD$600
A couple of weeks ago some Austrian banks began to restrict the sale of gold and silver to €15,000 (USD$20,000 USD) reportedly because of money laundering issues. Governments are starting to make it more difficult for individuals to buy gold anonymously.

Based on the French government’s official website, as of September 1, 2011, anyone attempting to buy or sell ferrous or non-ferrous metals, which includes gold and silver, will be required to pay for their purchase via a credit card or bank wire transfer if it exceeds €450 (USD$600).
According to independent reports the law was passed to stop the illegal sale of stolen metals like copper, steel, etc. The fact that gold and silver were included in this cannot be ignored. This new law makes it illegal to buy even one ounce of gold or around 18 ounces of silver in cash.
It makes you wonder when other countries will use a similar excuse of the rise in the theft of metals to introduce similar draconian laws?
Central banks are presumably so concerned that more people are getting out of fiat currencies and are trying to preserve their wealth through gold and silver that governments are cracking down on the anonymous purchase of gold and silver.
Be aware that USD$600 isn’t even enough to purchase a half ounce of gold at today’s prices. This guarantees that people who transfer their savings over to precious metals will be known to the authorities, leaving them vulnerable to government confiscation of their gold and silver later on down the line. Let’s not forget that the US government confiscated gold in 1933 and this could so easily happen again.
What can you do proactively right now:
• Buy precious metals anonymously with cash while you still can
• Store some of your precious metals outside the country in which you live
• Be aware of small changes in laws around the world that may give you clues as to what do with your assets in advance
• Consider buying gold and silver now while the price has fallen
• Watch out for the “man in the street” buying gold and silver. That’s the point you should probably sell.

Gold Going Higher and Higher

As fears mount that global markets are no longer safe, investors are turning to gold as insurance in case the economy collapses, and as an investment. Stock markets are extremely volatile as we’ve seen over the past few weeks, unemployment is rising, prices of food and essentials are going up, and gold is the one safe haven in the midst of all this turmoil. This week, the price of gold went as high as $1881 per ounce which marks a 7% increase in this week alone and a 25% increase since July of this year.

Since my last article and video on August 7th, gold was at $1666 an ounce and closed this week at $1851, an increase of nearly $200 in just under two weeks. I have been encouraging my clients to buy gold and silver now, even at these prices because it looks inevitable that the price of bullion is going to go considerably higher. The clients who asked me when gold was at $1200 “is it too high to buy now?” are now very thankful that they went in at that price. The same can be said today. It’s not too late to buy now. Central banks are buying more gold than ever. According to the World Gold Council, they purchased more than four times the amount this quarter compared to a year ago. That should be telling you something. They don’t invest in anything that they don’t think is going to increase in price.

The US economy is headed into an even deeper recession as companies like Bank of America, Sears and UPS continue to announce layoffs. In Europe, the ongoing debt crisis is pushing the markets into a downward spiral.

Morgan Stanley along with other analysts expressed their concern that the US and the 17 countries in the Euro were hovering close to a recession. In my view, they are already in recession and heading dangerously toward a world depression. Because of these concerns, gold will continue rising in price for the foreseeable future.

As I have been predicting, $2000 an ounce for gold is just around the corner. At some point, when there is real panic in the markets, the gold price could go parabolic and reach $5000 and more per ounce.

Silver broke through the $40 mark and saw an increase of 8.5% this week alone. And for silver, $50 is very close, with $100 being a very conservative estimate of the price it will reach in the not too distant future.

Many people ask me how they can invest in gold. If you live in a big city, check out your local bullion dealer. They buy and sell gold and silver coins. Go along and see how much they are charging above the spot price for gold. Depending where you live, you can expect to pay a premium of 3-7% above spot for your gold, and a little more than that for silver.

If you don’t find a local bullion dealer you feel comfortable with, or if you live in a small place, then check out various dealers online.

I am often asked about storage places such as GoldMoney and Bullion Vault. On the plus side, they are excellent for the liquidity they provide and you are able to trade 24/7 and have easy access to your funds should you require them. On the minus side, they can only continue to trade if the internet stays alive, and if we don’t have any nuclear disasters, and if the technology survives any major earth changes. Keep in mind that whenever you have anyone else store your gold, in the event of an emergency, you may not be able to reach them to sell your gold or to have them send it to you. There is always that risk when someone else stores your gold. However, these companies do have a place and as long as you are aware of the risks, then that might be an option for you.

If you are unable to store your metals yourself, have a trusted family member or friends store them for you, or consider storing them with a depository in the country in which you live and also somewhere outside of where you live. That way, you haven’t got all your eggs in one basket.

As I have being saying for the last five years, the price of gold and silver will go up considerably, and I feel strongly that this is still the case right now. Don’t miss out on this opportunity to be able to protect yourself. If you don’t have any precious metals, then do your research and get some. If you already have some, buy more.

Another Global Economic Crisis - Gold Going Parabolic

Three momentous events occurred this week that deeply affect the global economy:

The United States has lost its sterling credit rating of AAA for the first time since it was granted in 1917. And there is even a chance of a further downgrade within the next six months to two years.

The Dow Jones industrial average fell 699 points this week, the biggest weekly point drop since October 2008.

Gold soared to a new high of $1666 per ounce.

This downgrade will likely drag the world into a depression. Borrowing costs for countries, banks, you name it, are likely rise everywhere. These costs will ultimately be passed on to you, the consumer, with the prices of mortgages, loans and credit cards going up.
The crisis is set to deepen. In Europe, the sovereign debt crisis has escaped from the peripheries and spread to Italy and Spain while parts of the European banking system have frozen up.
There have been warnings that we may be in for a repeat of the crisis of 2008. However, this time it’s going to be much, much worse. Back then, policy makers had at their disposal a whole range of powerful tools to remedy the situation which are simply not available today.
In 2008, interest rates were comparatively high, both in Europe and the United States. This meant that central banks were in a position to avert disaster by cutting the cost of borrowing. Today, rates are still at rock bottom, so that option is no longer available.
Second, the global situation was far stronger three years ago. One reason why Western economies appeared to recover was because China responded with a substantial economic boost. Today, China is plagued by high inflation and is not in a position to help.
Finally, in 2008, national balance sheets were in reasonable shape. In Britain, for example, state debt, according to the official figures, stood at around 40 per cent of GDP. This meant that the UK had the balance sheet strength to step into the markets and bail out failed banks. The national debt has now surged past the 60 per cent mark, meaning that it is impossible for the British government to perform the same rescue operation without risking bankruptcy. Many other Western countries face the same dilemma.
The consequences are dire. Policy-makers have run out of tools to change the situation and the Western leaders are obviously out of their depth.
The Euro is very close to collapse. It will come as no surprise if some Italian and Spanish banks are forced to close their doors in the course of the next few weeks. If you are travelling in Europe, hold only the minimum of the local currency, and treat with especial suspicion Euro notes coded Y, S and M (signifying they were printed in Greece, Italy and Portugal respectively). Take plenty of dollars with you, which shopkeepers will certainly accept if there is a run on the banks, or if Euros suddenly cease to be legal currency. It’s best to be prepared just in case.
This is a wake up call. What can you do? You can prepare. Just as we try to prepare for earthquakes, tornadoes or hurricanes, you should also prepare for a huge economic downturn. If you don’t own any gold, you should buy some. The price as I am writing is fast approaching $1700 an ounce…and it may soon be too late as there is a strong possibility that as confidence dips worldwide, the price of gold could go exponential. i.e. $2000 an ounce and more. If you cannot afford to buy gold, silver is a great alternative, currently priced at just under $40 an ounce and it provides all the same protections as gold.
The other major thing you can do is educate yourself. If you don’t know what is going on and why, you need to find out. If there is one thing that can help allay your fears it is information. Download my free ebook: Getting Rich While The World Falls Apart: http://www.financemoneybusiness.com/ or my Handbook For Surviving The Global Financial Crisis ($4.99 for download).

Things could unravel very quickly from here and remember it’s better to be a year early than a day late.

World Predictions 2011-2012

On December 31st 2008, when gold was trading at USD$850.00 I predicted it would go to over USD$1400.00. At the end of 2010, gold is now trading at USD$1420.00.

At the end of 2008, when silver was trading at just USD$11.00, I predicted it would go over USD$30.00. At the end of 2010, silver is now trading at USD$30.89.

Had you invested in gold you would have made a profit of 65% and with silver you would have made a profit of 153%.

Let me give you my predictions for gold and silver for 2011:

Gold will go to $1800 and above and silver will go to at least $45.00. If you have not yet invested in gold and silver, it is still not too late. Precious metals are yet to become mainstream and therefore have a long way to go. We are at the beginning of a long-term bull market and there could be shortages of the physical metals in the future.

I predicted that real estate would fall dramatically in the US and it is continuing to fall. I predict that over the next two years, property prices will drop overall another 20% the US and that the Chinese and Australian property bubbles will burst. There will be small pockets of land and real estate that will hold their value even during the economic crisis that still lies ahead, but they are few and far between. In the main, if you are thinking of buying property, think again. You may want to rent for a while to keep your options open. Don’t get into something that looks like a “real bargain” only to find six months later that its price has dropped by another 20%.

Stock markets will be more volatile than ever. Between now and 2014, the Dow Jones could still fall to 90% off its all time high. If you are thinking of trading on the markets during 2011, make sure can afford to lose the money you are investing as there will be wild fluctuations in prices and people will become even more speculative than before and bubbles will form and burst in the twinkling of an eye.

The US dollar will continue to fall and we will see the start of currency wars, trade wars and cyber wars.

Unemployment in the US is at a 26 year high and unemployment among the young is at over 50% in Spain and Italy. This sets the scene for greater unrest and revolts against authorities and governments to come.

During 2011 we will see the schism between the haves and have nots widen with more austerity measures piled onto average person. We’ve already had civil unrest in Greece, Ireland and the latest in the UK with the students’ revolts and an open attack on Prince Charles and Camilla.

We will see more bailouts this coming year, governments taking on even more debt and more printing of colossal sums of money. We’ve already had QE 2 and I am fully expecting to see QE3 some time in the summer to fall of 2011. The same holds true for Europe where the situation is also worsening.

Governments worldwide will be imposing more and more taxes. Sales taxes, property taxes, income taxes etc., cash strapped states, councils and governments will be looking for ways to squeeze cash out of the everyday person. Make sure you keep your accounts and business dealings in order as I am seeing Inland Revenue departments chasing even small sums of money such as $50 or $100.

There will be more groups who want to expose corruption in governments, banks and big business. It has started with Wikileaks and OpenLeaks, but the power of hackers around the world remains unknown and they may be able to bring down the likes of Paypal, Visa, Mastercard and Amazon. Take your privacy seriously and do whatever you can to put in place protections for your online security and financial security.

We will see more government leaders voted in and out of office quickly, just as we saw in 2010 with Kevin Rudd voted out by his own party within a year of taking office. And in the US the November mid-term elections where there was a sweeping change in the balance of power.

There will be more natural disasters in places we least expect them. In 2010, Christchurch experienced a 7.3 earthquake and seismologists were not aware of a fault line in that area of New Zealand. There continue to be severe aftershocks that are still affecting the people and the buildings. Changing weather patterns will bring about freak weather conditions. In Australia there is severe flooding in areas that have had droughts for the last ten years.

I predict that we will see flooding so excessive in some places where small towns or even whole cities will go underwater. A proliferation of water borne diseases could ensue.

The majority will stick it out in the cities and towns and they will face civil unrest, uprisings, austerity measures and restrictions on their personal freedom. Others will withdraw, retreat to nature or live communally with others of like mind. They will be concerned with survival issues and will live independently and self-sufficiently, growing their own food and generating their own power. If you are unable to escape from where you are living, but feel vulnerable to the changes ahead, at least stock up with some basic food and water supplies, a first aid kit, torches and make copies of all your important documents. Think of it as taking out insurance – be prepared for the worst and hope for the best.

For more information download Goldsmith’s FREE Ebook:
Getting Rich While The Rest Of The World Falls Apart
Or buy Handbook For Surviving The Global Financial Crisis which is available on Amazon, Lulu and www.financemoneybusiness.com

Wikileaks - does it affect you?

In November 2008 I predicted that we would see greater transparency in our governments, banks, corporations and that information and secrets that had been withheld would be revealed. And just two years later, that prediction has come true. Just look at Wikileaks that has come along and threatened the security of many countries as they reveal information about businesses and governments around the world. And they have only just got started…

This weekend, Amazon Europe went down for over half and hour. Amazon said that it was a hardware issue, but was it really? After all, Amazon was among the first US firms to pull the plug on WikiLeaks since it began publishing thousands of US diplomatic cables, withdrawing hosting services last week after being questioned by the US Senate Homeland Security Committee.

Julian Assange has just been released on bail of £240,000 and he stated that he plans to continue with WikiLeaks and with releasing sensitive information. Many countries want to see him killed as they see him as such a threat. Right now there are over 3000 hackers from around the world who have joined his cause. Probably more are signing up all the time. They have pledged to ruin Mastercard, Visa, Paypal, Amazon and any company that has rejected hosting their services. They are gathering momentum and this is just the beginning. What’s interesting is that they are so concerned with transparency and yet they are called the Anonymous Group and they themselves hide behind screen names. They are not transparent themselves.

The latest news is that one of Assange’s top men has split with him and started his own organisation called OpenLeaks. This organisation is going to feed bits of information to the media in dribs and drabs and then let the media do what they want with it. This then gets them off the hook and takes them away from the direct line of fire. We don’t know the power of these groups, but one sure thing is that they are just starting up. There is certainly much more to come.

We’ve had the riots in Greece, Ireland and the latest in the UK. The spontaneous attack on the Prince Charles and Camilla shows the degree of rage of the people against the ruling classes. The banks have had billions of dollars of bailout funds, yet they continue to post huge profits and give their management enormous bonuses, while the people are left with austerity measures, losing their homes, their money, their jobs…..is it any wonder that they are resorting to rioting at the injustice of it all? We are going to see many more revolts and uprisings round the globe.

Although you are seeing in play out in government, you will also see it play out in your personal life. What should you watch out for?

Be careful about what you share and with whom – whether it’s information, material goods, contact, anything. Be aware of what you post on social networking sites – that’s where transparency and security are really at risk. Don’t tell everyone that you are going away on such and such a day – chances are you will have a robbery when you get back.

If you do internet banking – check it out. Is it really safe? Not only your money, but how about your identity?

We are all vulnerable in one way or another.

Be careful of your privacy
Be aware of your security
Be observant
Don’t move too quickly as to what is being said to you
Guard what you say and to whom

All your private details should be kept secret. Anything that you have always felt very secure about will feel as if the rug is being pulled out from under you. Stay vigilant and don’t take anything for granted.

Gold to $2000 and silver to $50 Soon!!

The Federal Reserve is now onto QE2 and printing more and more money. There are consequences to each and every action and surely this will result in inflation down the line. Inflation has been described as a “painless” method through which a country devalues its currency. It’s like turning on the car in your garage and letting the carbon monoxide slowly put you to sleep. In most western countries the public is being dumbed down by the government run public schools. They count on the fact that 9 out of 10 people don’t understand what inflation means. It is an insidious way of robbing people of their hard-earned money and transferring it to the very rich people.

This is going to mean less money for pensioners and people who are conservatively saving their money, and more profit opportunities for the financial industry. As the saying goes: “the rich get richer and the poor get poorer” and that is certainly what we are seeing around the world.

As the work dries up, people can no longer find permanent employment, they need to rely on temporary work, maybe having two or three part time jobs, or contract work just to make ends meet. It can be harrowing for families who are just trying to survive in the current economic climate. But what they don’t realise is that the powers that be are making the situation even worse through their actions.

In the US, for example, they allowed the FASB to turn a blind eye to the actual values of the banks’ assets and let them value their assets at ridiculous prices that would never fetch those amounts if they were actually to sell them. And secondly the government stood behind Fannie Mae and Freddie Mac and this as resulted in over $1.5 trillion in debt obligations of these insolvent companies.

The situation is getting worse not better.

If you haven’t already done so, consider getting yourself some gold and silver bullion. Whilst the prices may look high, in the months and years today’s prices will look extremely inexpensive. So while you are still able to buy precious metals and have them in your possession, go ahead and do it. Don’t be kicking yourself saying that you wish you would have bought some sooner.

In my opinion as I said several years ago, we will see gold at $2000 an ounce and silver at $50 an ounce in the not too distant future.

Financial Predictions 2010-2011

Many of you will remember the financial predictions I made a couple of years ago. My first prediction was for gold to be going to $1500 – when it was just under $800 in October 2008. When it got to $1000 an ounce everyone said it would not be sustainable and it would surely drop. Then when it got above $1100 an ounce, everyone said that was impossible – and then it hit $1200 an ounce – and today it’s at $1345 an ounce on October 7th 2010 – just two years later!!

One of the theories about gold is that it holds its value over time. Indeed it is said that in King Nebuchadnezzar’s time an ounce of gold was worth 350 loaves of bread and depending on the unit of measurement that was used at that time, and the unit of measurement that we use today, that same ounce of gold might still be worth 350 loaves of bread. If we use the current price of gold against the current price of a loaf of bread – so for example an ounce of gold at the time of this writing is $1345 an ounce and the price of bread is about $3.85 a loaf, thus showing that the purchasing power of gold has not diminished since biblical times.

I predict that gold will go to $1650 within the next few months and within 2011 don’t be shocked when it goes to $2000. That’s my prediction for gold in the next 15 months.

Do you remember when I predicted that silver would go up tremendously in value when at the time it was only $12.00 an ounce. Today it is almost double that amount – only 2 years later at nearly $23.00 an ounce. I am predicting that within the next 14 months it will go to at least $37.50 - $45.50 an ounce.

Silver is used in so many different applications: the technology industry, computers, medical advancement and equipment and its uses continue to grow so the price of silver is likely to increase.

People will try to get you to invest in gold and silver funds or mining stocks. DON’T DO IT! Make sure you are in possession of your gold and silver coins. I am predicting that most of those mines will eventually play out and you will be left with paper that’s not worth anything at all.

I’m going to make another prediction – as many of you know, I used to own a very successful property investment business. When everyone said that the real estate market in the UK was going to collapse, I had faith it would not and during those years I was right and the real estate market did not collapse and my properties increased a great deal in value. The properties that my clients bought increased substantially in value.

So I am making another prediction: As we have already seen, real estate has taken a tremendous nosedive – and if you are thinking of investing in the deflated property market and getting a wonderful bargain now – my prediction is that within the next 15 to 24 months the market will topple another 10-20% below what it is now.

As I have told my clients, don’t buy that house you have got your eye on as an investment or you will lose money. Only buy that particular property if you intend to live in it. Then if the market drops, you won’t be relying on it for investment returns and you will be able to ride out the dips.

Diamonds will always be a good investment. Precious metals will go up and down but essentially they will still be a good investment. During the time that they go down in price, if you can afford to hold onto them, do so – because my prediction is that they will always retain their value just not necessarily at the time that you think that they should.

Anything that has to do with survival will be a good investment. Anything that has to do with health care will be a good investment. Anything that has to do with sustainable energy will be a good investment. If I had room on my back lawn I would put up a windmill to generate electricity. Anything that has to do with solar energy will be a good investment.

And just like playing poker – you have to know when to hold em and when to fold em!

In speaking of survival – don’t forget to buy my book on Surviving the Global Financial Crisis – you can get it as a download or you can buy it from http://www.amazon.com or on my website http://financemoneybusiness.com. It’s a small book chockfull of big ideas on how to survive and thrive in the upcoming changes.

Gold going higher and higher!! Don't miss the boat!

Gold going higher and higher – don’t miss the boat!!

Today gold is at USD$1340 an ounce and rising…….silver is at USD$22.80 and rising…..of course nothing goes up in a straight line and there may be dips and bumps along the way, however, you can be sure that gold will go over $1500 an ounce very soon. For those of you who are unaware of this one of the triggers for precious metals going higher in the not too distant future is the revelation that mortgage fraud is huge in the US and it is just being unraveled. It turns out that many banks do not have the proper title to the homes on which they are foreclosing and therefore they lack the legal right to foreclose. In a nutshell, the subprime lenders, trusts and banks did not keep good records and in two states there are now civil class action suits against them. This latest public information is yet another reason for the gold bull run we will see in the coming months.

Hold on tight, put your seatbelts on and get ready for the turbo charge!!

http://www.financemoneybusiness.com

Gold reaches new highs

The price of gold went over USD$1284 this week and this trend it set to continue. What are the reasons for this? It’s very likely that during the rest of 2010 we will see a worsening of the crisis. Billions upon billions of dollars have been swallowed up by the banks, billions and billions of dollars have been pumped into the economy to no avail. Unemployment hasn’t stopped growing, the US housing market remains depressed at historically low levels and one in five Americans is out of work. In the press this week there were reports that one in seven Americans is on the poverty line. This does not bode well. I think we are building up to a very dangerous time in the world economic and financial system.

Two years ago and repeatedly since then I have recommended that you put a good portion of your fiat money into gold and silver bullion and those that have heeded this advice have done very well so far. However, for those of you who think that gold is already much too high, think again. Yes, of course, like any precious metal it is volatile and it could go down to the $1100’s again, but it will surely rise again like the phoenix out of the ashes. So for those of you who are still on the fence, try to make a decision quickly as gold will go to $1500 and beyond within the next 6-9 months.

Could Gold Get Confiscated Again?

Another invasive law has passed in the US which states that any payments to a vendor of more than USD$600 will have to be reported to the IRS. I am anticipating that more and more material about this law will start appearing on the internet and in the press. This law will affect virtually everyone in the US who has business to business dealings. It could well lay the groundwork for a VAT tax similar to that in the UK and Europe or GST in NZ. This law could reignite fears that the US government could confiscate gold. This would make the government aware of its citizens gold transactions and make it more prone to confiscation.

Traditionally, precious metals dealing have provided a last haven of non-reportable financial transactions. With this current legislation, the status of gold and silver as an anonymous purchase is breached.

What can you do about it if you are a US citizen and you still want to buy gold and silver?

1. Use dips in the gold price to top off your portfolio before the 2012 proposed implementation date of this law
2. Document your purchases so that, should you ever be dragged in to explain the source of funds you used to buy your gold in a subsequent sale, once the regulation is in place, you are ready with the answer
3. Consider opening a safety deposit box at a reputable Canadian bank, then make occasional gold buying/storage trips up north or if you have relatives or friends in other countries, consider having them buy and store your gold for you.

My advice is that no matter where you live, you need to be aware of new legislation that could affect the safety of your ownership of precious metals. As our monetary system worsens, governments will be looking for all kinds of sneaky ways in which they can rob us of our wealth.

If you would like a personal consultation about how to protect your wealth during these uncertain times, please don't hesitate to get in touch: www.financemoneybusiness.com

Gold at new all time highs - where to from here?

In Dubai, a hotel has installed a vending machine for their clients to buy gold instantly. Prices are electronically displayed and change as the price of gold fluctuates during trading hours. Many European cities have made it more accessible for the average citizen to purchase gold. However, has gold become mainstream yet? Not really. Most people don’t know how to buy gold, what to buy, where to get it from, what the premiums are, who should store it…..instead they put their money into banks, stock markets, pension funds, mutual funds….indeed all “paper” assets. These paper assets eventually, in this environment of spiralling debt, may well become worthless. Gold has been a store of value for thousands of years. The Central Banks are buying up gold. For those of you who have not yet bought some gold, consider have a portion of your wealth in gold bullion just in case the whole system goes belly up.

Clients are asking me whether maybe its time to sell because gold has reached such a high level. My view is that with the uncertainties in Europe, from Greece, to Portugal, Spain and Ireland, the bankruptcy of at least 30 states in the US, the plummeting of the British currency and the ballooning of debts worldwide, we are far from complete with the current economic crisis. Some experts are predicting a huge drop in the price of gold – and indeed, I think we will see tremendous volatility in the months to come. However, for each fall, we will see even greater rises. Even at $1229 at the time of writing this blog, to some this seems very high. But it is likely we will look back on this figure and see it as a cheap entry into a metal that will continue to skyrocket.

If you don’t have to sell your gold, don’t. Stay the course. It will go to $1500 and beyond. This is just the beginning.

Dow over 11000 – is this a bubble or will it crash??

This is the question on the minds of many of my clients and students. There is no doubt that few thought that stock markets around the world would make such strong rallies. And these rallies are far from over. Vast amounts of money have been pumped into the system and I would expect the rallies to continue for several more months. The question is, when do you get out? There will be those who are experienced speculators and they will know when to take their money out. However, those who have been lured back into the stock markets due to low interest rates on savings worldwide, may find they are in for a huge shock. At some point, the markets will go down considerably, and those who have put their faith into a financial advisor, unit trust, mutual fund….may find that they are caught short and that they lose most of their capital. This is my greatest concern in the months to come. Those with experience and those who watch the markets avidly and research their results carefully, will probably do very well out of the extreme volatility to come. Those who rely on others for their information, who give over responsibility for their hard-earned savings to institutions would do well to consider having at least a portion of their wealth in physical gold and silver.

There is no currency that I can identify in monetary history that has been able to put up with the abuse the USD has had without a major currency crisis happening, a major devaluation. I expect this to happen within the next couple of years.

Just over a year ago, my target for gold was USD$2000 per ounce, now it is over $3000 per ounce. Even now, people are not waking up to the possibility of high inflation eroding their savings and assets.

Silver is more rare than gold and is so cheap at the moment – just $17.67 at the time of writing. Bearing in mind that silver went up to $50 an ounce in the 1980’s, surely it will go well above that in these turbulent times.

So please, if you have not already done so, get a small amount of gold and silver to protect yourself for the future upheavals in our global financial systems.

The Greek Financial Crisis - What's Happening Around the World?

The Greek Financial Crisis – Which Country Is Next?

It seems to be only a matter of time before all the currencies of the world become worthless. As they say, history repeats itself, and paper currencies have never survived in the past, so what makes you think they will survive today?
In the midst of global upheaval, massive and growing indebtedness, low interest rates and more speculative bubbles on the way, the vulnerability of fiat money grows by the day. And the average person still seems to be unaware of the possible consequences of this.

As governments keep on bailing out the banks, as countries and states have to be bailed out, where will it all end? Whoever thought that governments would support the idea that banks are “too big to fail?” I can understand that in connection with the utilitarian purposes of banks which is to provide a service to people so that they can exchange goods and services more easily. It’s a bit like the utility companies so they say, where we need to have electricity and gas, so the government steps in and bails them out if they get into trouble.

However, what about the speculative ventures of these huge financial institutions? Should taxpayers really have to come in and bail out these so-called financial wizards who have continued to risk their investor’s money in huge speculative deals that have gone bad? This cannot be right, but again, the average person doesn’t have a deep understanding of what is going on and in some ways although we haven’t got a physical war in most western countries, there is a war going on against us which is about robbing us blind through inflation, which reduces our purchasing power, through luring us into more debt through low interest rates, through tempting people who rely on interest on their savings into more speculative investments…it goes on and on and whilst the sheeple are still asleep and listening to mainstream media to idiotic statements like “the jobless recovery” and believing that we are coming out of a recession, nothing much will change and millions of people will lose huge amounts of their wealth overnight.

It’s happening folks. I was a bit too young to see what went on in my own family. My father took out an insurance policy in the 1950’s which would pay out $2000 25 years later. This was enough money to buy a house outright. He paid in faithfully year after year, but he wasn’t savvy enough to see that there was high inflation on the horizon, and he continued to pay into his policy. When it came to maturity, that $2000 wouldn’t even give him a 10% down payment on a property. All his wealth had been eroded. He never really recovered.

And we have a similar situation today. We are on the verge of economic breakdown, the powers that be are frantically trying to hold everything together, but sooner or later, as we all know, there are consequences for our actions.

This is going to get much much worse. Try to prepare for it.
I have written a book “handbook for surviving the global financial crisis” – just a pocketbook sized publication to give you tips so you can not only survive but thrive in the coming changes.

Remember, get out of debt, don’t do anything speculative unless you really know what you are doing, get some physical gold and silver if you haven’t already done so, and store some supplies of food and water in case of an emergency.

It’s advisable to take action sooner rather than later – once a panic starts it will be much more difficult to get supplies. Prepare for the worst and hope for the best.

Understanding your finances

So much is written about our money, our economy, markets, productivity, wages, salaries, bankers, bonuses, riches and poverty – how do we wade through this quagmire of data to find the nuggets of information that can transform and help us in our everyday lives?
Who is right? Is anyone right?
In the midst of online arguments between such “greats” as Robert Kiyosaki of “Rich Dad, Poor Dad” and Suze Orman, a financial coach and author – criticizing one another’s approaches to money and finance; in the midst of countries like Iceland, Ireland and Greece being bankrupt to whole states in the US such as California and Michigan being on the verge of bankruptcy – what can you as the average person do?

Here are some simple rules of thumb which can help guide you through:

1. Don’t believe all you see and hear in the media. Most everyone has an agenda and you must analyse carefully the information they are giving. For example, recently, George Soros publicly announced that gold was in a bubble and was likely to fall in price soon. The minute he did this, the price of gold did fall and he was reported to have purchased a huge amount of gold at the cheaper price.
2. With any books you read, remember that no one person has all the answers, and what they are writing about – whilst it may appeal to the majority – may not be applicable or relevant to your personal situation.
3. Most of us don’t like change, but in the current economic climate, we need to be ready to turn on a dime. Governments around the world are bringing in new laws every week, laws are changing on taxes, employment…you need to stay abreast of these changes in order to be one step ahead of possible disaster.
4. Be conservative. Make sure you have planned for the worst. Ensure you have at least six months living expenses in cash, six months food and water stored up and some physical gold and silver. Pay off all your debts and only if you have some money left over after all this preparation, should you consider investing in more risky ventures such as stock markets or property. I have so many clients who want to be full time traders on the stock market. They seem to see it as a quick way to get rich. I see too many people losing more than they can afford and they unnecessarily put their families and homes in jeopardy. Best to play it safe. Life moves in cycles – as long as you are in tune with the cycle, then you can benefit from the changes. If you go against that trend, then you may end up in severe financial difficulties.

Economic Recovery or Economic Collapse?

The media would have us believe that we are just about to come out of recession and very soon we will be on the road to recovery. Yet, I speak to more and more people who are feeling very uneasy about the situation in their respective countries. From the US, to Europe, to Hong Kong, to China, India and Japan, to Russia, Australia and New Zealand, people all over the world are feeling the pinch and cannot bring themselves to trust their politicians and their bankers.

So what is the situation? Of course, there are extremes of opinion on both sides. From Gerald Celente who spoke of the Panic of 2008, the Collapse of 2009 and the Total Breakdown of 2010 to governments around the world who are talking up the economy and the end of the housing collapse and the bright future ahead of us. While at the same time, these governments are cutting costs as never before, we have states like California, Michigan and others that are bankrupt and having to issue IOU’s to their employees; in the UK the cost-cutting measures to public services are the most drastic for decades. The US promised to kerb their deficits, yet within a few months the deficit has gone from 9 trillion dollars to over 13 trillion.

So isn’t the writing on the wall? Shouldn’t we be taking notice and starting to prepare for a possible total breakdown of world economy and trade?

In my opinion, there is much worse to come and it is best to be prepared physically, emotionally and mentally. Even if things turn out to be much better than I outline here, then your preparations will not have been in vain – you will just have a store of goods that you can use at your leisure and you will probably have bought them at greatly reduced prices.

Here are my top tips:
- get yourself out of paper currencies. That means if you have all your money in a bank, make sure that you put some of it into gold and silver. That doesn’t mean paper gold and silver as in stocks and shares – it means the actual coins and bars.
- start storing up paper goods, toiletries, canned foods, dehydrated foods, water
- make sure you have at least one other form of heating and lighting that doesn’t depend on electricity
- get a wind-up radio. With the increased threats of tsunamis, earthquakes and tornadoes it is wise to have a radio that you can take with you so that if you have to evacuate your home, you can keep up to date with current events
- connect with people in your community and start to grow your own food and become as self-sufficient as you possibly can

Hold onto your hats because the economy is likely to tumble severely towards the fall of 2010. We haven’t seen the half of it yet. I wish you and your loved ones the best of luck. Take care.