Gold & Precious Metals
Investors should take every precaution right now to protect their money from a major market disaster that will destroy the economy and impoverish millions of Americans.
That’s according to legendary investor Jim Rogers, who delivered his frightening warning recently on Yahoo! Finance.
Rogers believes we’re heading for a massive collapse of the dollar which will cause interest rates to soar to record levels. He warned investors should stay clear of the dollar and other fiat currencies.
“There is no sound currency anymore, “Rogers stated.
“There’s no paper money in 2014 and 2015 that’s going to be worth much of anything,” he added.
According to Bloomberg, the U.S. dollar has indeed reached a startling two-year low – its weakest since November 2011 – with consumer confidence dropping like a rock.
And the U.S. dollar has lost 38.5% of its value since 2002.
“For the first time in recorded history we have all major banks and central governments around the world printing huge amounts of money,” Rogers said. “This has never happened in world history and so the world is floating on an artificial ocean… of lots and lots of printed money,” said Rogers.
Rogers noted that the situation will only get worse if the government continues to “kick the can down the road.”
“When the can goes over the road, we’re all going to go with it,” he said.
“The debt is going higher and higher. The money printing is going higher and higher. We’ve had 50 or 60 years of success in America,” he said. “You’ve got to pay the price someday whether you like it or not. The longer you delay the day of reckoning, the worse the day of reckoning is going to be. This is not going to be fun.”
He added that the problems will not be solved with the Federal Reserve intact.
“Abolish the Federal Reserve,” Rogers stated. “The world has gotten along quite famously and well without central banks for most of world history.”
“America has had three central banks in our history, the first two disappeared,” he said. “This one’s going to disappear too because they keep taking on huge amounts of debt… they keep leveraging up the balance sheet… they keep making mistake after mistake… they’re printing money, it’s going to self-destruct before it’s over.”
He argued, “We’d be better off with no central bank than this central bank.”
Finally, Rogers predicted that Americans will soon abandon the dollar for an alternative currency.
“Maybe it will be Bitcoins,” Rogers predicted referring to the digital currency that’s been taking the world by storm.
While the dollar continues to lose value, this alternative currency has skyrocketed in popularity…and value.
Just a year ago it was trading under $20. Yet its price recently topped $1,200 for a single Bitcoin, turning many smart investors into instant millionaires.
Bitcoin has become so popular that Congress recently held hearings to determine if they were safe and legitimate.
They voted resoundingly YES. Ron Paul, the senior U.S. Representative from Texas, said, “Bitcoins are fantastic.”
Microsoft founder Bill Gates called Bitcoin a “Techno-tour-de-force.”
And Google executive chairman Eric Schmidt said point blank: “It’s changing society.”
The White House has also taken notice.
In October, President Obama summoned Google CEO Schmidt to the Oval Office and asked him if Bitcoin was “something he has to worry about.” Attending this meeting was an advisor to the Secretary of State, a Director of the International Crisis Group, and the Vice President of the Council on Foreign Relations.
They discussed this new form of money and how they believed it was “changing society.”
And judging from what is taking place in America and all over the world that is exactly what’s happening.
Is Bitcoin The Ultimate Solution To America’s Currency Crisis?
Already, 200,000 companies in the United States can currently pay their employees with it, while 700,000 American businesses accept them as payment, including Walmart, CVS, Lowe’s, and NIKE.
You can use Bitcoin to buy gold & silver…. Or even Domino’s pizza and have it delivered.
In Texas, a man who recently converted 1,200 U.S. dollars into this new money because of its rapid rise in value, turned around and bought a Porsche with it.
In New York, a luxurious condo in the exclusive, Trump Soho complex was recently listed for $1.9 million. But you couldn’t pay for it with dollars, a check or wire transfer. The seller would only accept Bitcoin.
In France, you can have your salary paid in it, in Finland, dentists will accept payment in it. And in New Zealand, one company will even let you pay for a private flight to outer space with Bitcoin.
It’s seems to be creating a new, international monetary system that some economists believe could solve all the problems we face with fiat currencies – including the kind of devastating collapse predicted by Jim Rogers.
Something Like This Has Never Happened Before in History
The founders and financial backers of Facebook, Skype, Yahoo…Major players in natural gas and oil…As well as with AT&T and Fidelity… are all moving into Bitcoin.
Some eBay auctions are now being held in it. MoneyGram is using it to facilitate millions upon millions of dollars’ worth of financial transactions.
Western Union is beginning to assess the technology necessary to harness it.
As far asStephen Harper is concerned, history and economics carry far more weight in Canada-U.S. relations than whoever happens to occupy the White House at a given moment.
That’s why Canada’s prime minister remains relatively unperturbed about the drawn-out Keystone XL pipeline review, maintaining its approval is “inevitable.”
In a wide-ranging interview on energy policy in his Ottawa office last month, Harper described how historical and economic forces and broad-based support for resource development determine whether projects like Keystone get built, rather than short-term political calculations. If Barack Obama doesn’t approve the pipeline, another president will.
“It is, in my judgment, a necessary and inevitable victory,” Harper said in a Jan. 16 interview as he awaited a State Department environmental assessment of the project. “I absolutely believe that. I can’t see how it will be otherwise.” – full article HERE
7 Chart Points That Will Show Us Direction
In 2013 the DJIA gained ~3,500 points and closed the year at All Time Highs…but then lost more than 1/3 of those gains as 2014 began. Was the January sell-off an early warning sign of a Bear Market…or just another “buy the dip” opportunity? Was it a Sea Change in Market Psychology…a KEY TURN DATE across a number of markets…or just another correction in a major bull market? Well, it’s too early to say…but we’ve identified some key chart points that will give us a clear answer to that very important question…very soon!
In late 2013 I wrote that Market Psychology was WAY TOO bullish…but I had to respect one of my favourite trading questions, “Are you trading the market the way it is or the way you think it should be?” In early January I felt a break was imminent and throughout the month I cautioned against “buying the dip.” So what now…is the price action of the last three days a dead cat bounce…or a resumption of the multi-year Bull Market?
There has certainly been a Big Bull Market in stocks since the 2009 low…with the last leg up beginning in November 2012 when the market figured out that Abe was going to win the election and implement the Japanese version of “whatever it takes” to end two decades of deflation in Japan. A strong long-lasting Bull Market creates tremendous self-perpetuating momentum…and while the Bears may say that the emperor has no clothes they need to respect that momentum…and wait…and then wait some more…before going short.
But Market Psychology clearly changed in January…and not just in the major stock markets…almost all currencies fell against the US Dollar with some currencies (Argentina, Venezuela, Ukraine, Russia, South Africa…) falling hard…copper fell ~7%, gold rallied ~8% off three year lows, and the US Treasury market had a strong rally…while junk tumbled.
When markets are confident risk assets are bid aggressively higher…when markets are over-confident risk assets are bid recklessly higher. When Market Psychology turns bearish the risk assets which had been bid most aggressively higher fall the hardest. Capital “runs away” from risk and “seeks” safety. Capital flows from the periphery to the center.
When markets are confident leverage is used to buy risk assets. When markets are over-confident TOO MUCH leverage is used to buy risk assets. When Market Psychology turns bearish leverage is reduced…voluntarily, or otherwise and prices fall. ( See this month’s Investment Outlook by Bill Gross)
The bearish Market Psychology in January was in stark contrast to the bullish enthusiasm at the end of 2013. That dramatic change in sentiment may have created a KEY TURN DATE (KTD) in January…a date that signifies a Major change in Market Psychology across a number of markets…which would mean that the January price action is only the beginning of a much bigger move.
However…in the past few days bullish Market Psychology has come storming back…by Friday’s close the DJIA had gained ~460 points from Wednesday’s lows. I’m watching the market action very closely…if this latest rally runs out of gas and rolls over…the classic “dead cat bounce”…and the market takes out the last week’s lows…then I’d expect selling to become aggressive.
But…we can’t forget that there has been a powerful long term rally in the major equity markets…huge momentum has been created…the “buy the dip” trading style has been repeatedly rewarded…I don’t expect the Bulls to give up without a fight! If this “bounce back” carries the market to new All Time Highs then Bears Beware! Long Live the Bull Market!
S&P 500 Weekly: It was curious that the stock market couldn’t make new highs in January given the very bullish Market Psychology in December. The trend line off the Abe November 2012 lows (the last leg up in the bull market that began 2009) has held…so far. If the bounce of the last few days peters out and prices turn lower I’d expect sellers to get aggressive if the market trades through last week’s lows. On the other hand…if the market can rally and make new highs after this break if off to the races!
The Japanese Nikkei Index – Weekly: From November 2012 to December 2013 the Japanese stock market was one of the “hottest” in the world (courtesy of the BOJ!) In December it barely took out the highs made in May 2013…and then turned down the last week of the year. At last week’s lows it had fallen ~15% from its December highs…compared to the 6% decline in the S+P (When Market Psychology turns bearish the risk assets which had been bid most aggressively higher fall the hardest.)
Argentina Peso – Monthly: (number of Pesos required to buy one US Dollar): This is what a currency looks like when people lose confidence…oh, and this is the “official” rate…the black market looks a lot worse!
Comex Copper – Weekly: A couple of weeks ago I wrote that the “false breakout” above the $3.40 support/resistance line could see copper break out of its range in the opposite direction…possibly through $3.00.
The Canadian Dollar – Weekly: The CAD bear market accelerated in January and hit a low of 89 cents for the first time since July 2009. A bounce after such a steep fall seems reasonable…but currency trends often go WAY FURTHER than what seems possible…I remain negative.
Comex Gold – Weekly: The “Double Bottom” is hard to miss…but will it hold? Gold hit 3 year lows in December and then rallied nearly $100 to the January highs. I’ve maintained that it needs to convincingly take out the $1275 level before I’d think about being a buyer. It has done much better against the stock market than against the US Dollar.
The CBOT 10 Year Treasury Bond – Weekly: The yield on the 10 year bond hit 2 ½ year highs near 3% in late December. It seemed that “everyone” was calling for higher yields in 2014. I wrote that I expected bonds to rally with a break in the stock market…that the rally might set up a great opportunity to short bonds…but wait for it!
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