05DEC2011: The European debt crises has once again dominated the news, where the probability that the European Union will disintegrate grows stronger by the day. As expected the global banking leaders have engineered a way to prop up the financial markets by lowering the dollar swap ratios, which in and of itself begs one to ask the question: what in the hell is really going on? The debt crises situation in Europe promises to be catastrophic, a true black swan event of black swan events, and yet many financial institutions and private investors feel safe as long as they have a percentage of their holdings in the greenback, they can maintain the status quo. And if you happen to be one of those sitting in US dollars short term we get it, the US dollar actually doesn’t look half bad if your portfolio is dominated by EURO`s. But not unlike musical chairs, the key is not putting yourself in a position you can`t get out of when the music stops! You may also want to keep in mind the United States of America`s debt situation is every bit as bad as Europe`s, but for today it’s just the lesser evil. One thing that is certain, the European Union is finished!
“I believe that banking institutions are more dangerous to our liberties than standing armies.”
Thomas Jefferson
Now for a minute consider the health of the banks here in the United States, and remember how most banks are globally interconnected through bad derivatives and other instruments of debt. This year alone we have seen ninety banks in the U.S. close their doors. Since 2007 we have seen hundreds of banks fail with “thousands” of banks at or near insolvency nationwide. A couple weeks ago the Federal Reserve Bank ordered “stress tests” on the 31 largest U.S. banks with assets of $50 billion or more, to try and gauge their ability to survive a banking meltdown. Six of the larger banks reported to be: Bank of America, Citigroup, JP Morgan Chase, Morgan Stanley, Wells Fargo, and Goldman Sachs will undergo more extreme testing. It is vital that the banking system maintains the complete trust and confidence of the citizens of our country to thrive.
A negative report could shatter the trust and confidence we have in our banking system. Most Americans assume the banks are the safest place to store and protect wealth because they are backed by the government. What people don’t realize is that the FDIC is under tremendous pressure to fund and process so many new claims. It has been estimated there are many, many more banks underwater however the manpower doesn’t exist to close them. The fundamentals of the fractional banking system, where only a fraction of the total deposits is kept in reserve, means that in the event of an emergency (see bank holiday) you may not be able to access any cash you have in your bank account. This insidious system has crippled the planet with debt and gridlock but has created vast amounts of wealth on paper for the banks. Isn’t it strange that you never really hear much about the health of our banks? (well at least in terms you understand). This is one of the stories the press and media seems to ignore, any guesses why?
The best “insurance” for your wealth:
Gold and silver started making its historic run almost 12 years ago and since that time we have seen massive bank failures, debt defaults, Ponzi schemes on a grand scale, terrorism on a grand scale, unprecedented political bickering, war etc…etc… Over this period of time we have seen many people (sometimes going against their own reason and logic) make their first ever gold or silver bullion purchase. The idea of buying gold and silver bullion and putting it away for safe keeping made about as much sense to some as swimming in the shark tank at Sea World. Many of these investors today have admitted they were a little unsure about investing in gold and silver bullion but were intrigued by its track record. (little did they know at the time their “bullion” would outperform every investment they had)
But times do change and today there are conversations all over the world about the dollar being replaced as the global reserve currency. There are conversations about another recession deeper than any other in history. We are now in a situation where entire nations have defaulted on their debt obligations and there is fear that many more could also soon default. Suddenly, a private physical position in gold or silver bullion makes more sense. As the financial insiders and central banks have quietly been stock piling gold and silver bullion, the average investor is just now starting to realize that unless he or she has a sizable position in metals, the chances of making it through this crisis are slim.
Certified gold and silver bullion coins and bars are an excellent way to protect wealth. When you convert a portion of your hard earned dollars into certified gold and silver bullion products from the United States Mint as well as a few select others, you are putting a percentage of your wealth in a place where inflation, debt defaults and bank defaults cannot harm you. Gold and silver bullion is “exempt” from bankruptcy and can never be worth zero – guaranteed! Gold and silver bullion knows no nationality and is liquid everywhere on the planet. Many of our customers have revealed to us that the privacy aspect and being completely in control of the asset gives them piece of mind that other investments do not.
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronald Reagan
Scott Hage
President
Midwest Bullion Exchange, Inc.
Disclaimer: Midwest Bullion Exchange, Inc. is a precious metals broker/dealer and is not a licensed investment adviser. Although we strongly advocate programs that allow you to hold precious metals in your retirement, we cannot predict the future performance of precious metals or programs that allow precious metals. Furthermore, we recommend that you consult with a professional tax adviser when making decisions that carry tax liabilities. Midwest Bullion Exchange, Inc. reserves the right to decline services to individuals after it has been determined the products and services offered by Midwest Bullion Exchange, Inc. are not suitable for the individual. The author has made every effort to ensure accuracy of information provided; however, neither Midwest Bullion Exchange, Inc., nor the author can guarantee complete accuracy. This article is for informational purposes only. Midwest Bullion Exchange, Inc. and the author of this article do not accept any fault for losses and/or damages arising from the use of this publication
