Rock and a Hard Place

Indeed an excellent article written by Mr Saxena. Very worth while reading for sure. I do agree on all his assumtions as well as conclutions - but one. That is as I see gold as the biggest threat to cental bankers and our fiat based curreny and as the gold market is such a puny little market so easy to manipulate at all levels, where in fact also gold has been confiscated that's not where you want to be in the future.

In fact and as oil is the ultimate currency, as all economic growth depends on the availability of oil and thus so to our monetary system thats where you need to be in the future as an investor. Remember then that oil in the ground is where it's at. This as oil reserves in the ground only and over time will not only increase in value but also be protected from inflation whilst oil that is pumped up will be sold and replaced by what is to become less and less valued fiat money exposed to ever increasing inflation.

Rock and a Hard Place
Make no mistake; the US cannot afford higher interest-rates and in order to keep a lid on the government bond yields, we are convinced that the Federal Reserve will resort to debt monetisation. In other words, the central bank will create new dollars in order to fund the deficits. Needless to say, this money-creation will be extremely dilutive and end up undermining the viability of the world’s reserve currency.

If our assessment is correct, within the course of this decade, the interest-payments on the existing government debt will become so large that the US Treasury will need to issue new debt just so that it can keep paying interest on its outstanding debt. When that happens, you be sure that foreigners will not be eager buyers of US government debt. Therefore, the Federal Reserve will have to create additional money, just to keep the Ponzi-scheme going. And when all else fails, the US will simply debase its currency, thereby repaying its creditors in significantly depreciated dollars.

Although our prognosis may sound far-fetched, we want to remind you that throughout history, currency debasement has been the norm rather than the exception. Let us put it simply, the US is now left with three options:

· Sovereign default (unimaginable)
· Severe economic contraction (unlikely)
· Currency debasement (most probable)
http://news.goldseek.com/GoldSeek/1270646967.php

"Beware! If you currently own gold through an ETF it may not be safe.

With one little stroke of the President's pen, it can be confiscated by the US Treasury for so-called national security purposes.

The government officials will claim they are out to protect US citizens from speculators whom they blame for the dollar collapsing, but in reality their policies that will force Americans, who actually want to save, to flee the dollar.

So, could the US Government grab your gold in an ETF?The act of governments stealing gold and robbing currency holders is nothing new, even in America.

President Roosevelt grabbed the gold and devalued it in the 1930 Depression, and Nixon jumped off the gold standard in the 1970s.

In order to save the nation the government will need to save the dollar, and the right way to do this would be to run prudent fiscal policy with low budget deficits, and have the Federal Reserve raise interest rates to encourage savings. But the easy short-term fix is to steal some gold now owned by a few who were only trying to protect their savings."
http://www.financialsense.com/editorials/benson/2008/1218.html

The Gold Confiscation Of April 5, 1933
http://www.the-privateer.com/1933-gold-confiscation.html