The Road Ahead – Gold and Silver Investing as Insurance

When considering the economic data and the global situation, there are divergent views as to what is happening now and is most likely to happen over the next two to three years. One view that is well expressed by Mr. Jim Rickards is that a financial collapse is imminent. He is the author of two recent books on the economy and global financial situation. His two books are “Currency Wars” and “The Death of Money.

Gold and silver investing, or a gold IRA rollover to hold physical gold, silver or another precious metal in a self-directed IRA are all investment responses many folks take to protect their wealth over a period of financial turbulence. The financial events that began in 2008 have not been addressed structurally, and may actually be building again for an even larger market disturbance and re-adjustment.

Mr Rickards recently did an interview that summarizes the condition of the global financial system. That interview follows in the video below.

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Mr. Jim Rickards – The Coming Economic Depression

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There is a contrasting view. It comes from Ms. Catherine Austin Fitts, who publishes the Solari Report. She describes the process the United States is going through as “The Slow Burn” and “The Breakaway Civilization”. Her view is that there are two systems in the US: the old system that is collapsing that Mr. Rickards sees, and a new, vibrant and rich system that has the wealth and is investing that wealth now in key areas of the US and in key future industries. Her view is that the old system is bankrupt and collapsing, while there is a new vibrant and rich segment of society that is doing quite well and is now investing for the future. The following video is a taste of the Solari Report and the perspective they suggest.

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It is similar to ‘A Tale of Two Cities’ in that one economy is in darkness, collapsing and at its twilight while the other new economy is in light and vibrant that she calls the 3.0 economy. The 3.0 economy is coming into being and it is growing and rich.

What is the shift from the 2.0 to the 3.0 global economy? It is the shift from an industrialized G-7 economy which draws commodities from a significantly poorer undeveloped world to a networked global economy marked by the rise of the emerging markets and a re-balancing of both production and consumption. That re-balancing of consumption means the typical US consumer is going to have his or her quality of life slowly lowered to a globally average level during the re-balancing. The middle class in America has been experiencing that for years. It is a decline in their quality of life. No longer will the American consumer live so well in comparison to the other people of the world. But the American elites will live in a new aristocracy with great wealth, power and privilege. That is what this “slow burn” is taking America to as the “Breakway Civilization” takes control.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way-“ from A Tale of Two Cities by Charles Dickens

The 3.0 economy is rebuilding manufacturing that is highly automated and efficient but does not require as much manpower to operate as did the manufacturing systems of old. There will not be so many jobs in the new manufacturing world to come. Listen to her interviews and you’ll hear Ms. Fitts speak of the 2.0 economy of old, and the new vibrant 3.0 economy that is now in place and doing quite well in select areas of the country.

There are two interviews here to watch. The first is from June 2013 where she describes the struggling and dying old economy and she also describes the new 3.0 economy that is wealthy and well. The interviewer struggles to understand this, as he sees the old economy and that collapse as inevitable but he does not yet fully appreciate that the wealth and money was transferred to a new elite who are investing now to create the new 3.0 global economy.

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The second video, shown below, is from June 2014. Here Ms. Fitts describes why war and the Chinese economy are bigger concerns than is the potential for US market collapse. Ms. Fitts views US Dollar collapse as remote at about a 5% possibility, with a 25% probability of another 2008-like event in the years ahead. That is actually a high probability of another event like the 2008 financial panic. Her view is that there is a 70% chance the “slow burn” goes forward as it has been developing over these past many years. She believes it much more likely an economic collapse will strike the BRICS nations rather than the US under the current ongoing “slow burn”.

The wars she sees are mostly covert, fought in arenas like the financial markets such as we are seeing with the sanctions on Russia by the West. She sees China as being in a particularly unstable political and financial circumstance. A rapid breakdown in China could be destabilizing to the world as the effects ripple through the interconnected global economy.

Ms. Fitts says, “I would say the economy is extraordinarily divergent. One part of the economy is strong, and the other part is literally collapsing in slow motion. I think the critical question for every person and every family is if I am over in the one that is dying, then how do I get over and shift into the one that’s being born?” The middle class of America is particularly suffering from the “slow burn” as incomes do not rise as fast as do costs, leading to a slowly declining quality of life for many American families. Many families feel this as they struggle to maintain the quality of life they once enjoyed. Most do not understand what is happening to them.

All of this misery is part of the “slow burn” which is in effect a global re-balancing that will cause a decrease in the quality of life for most Americans as they are leveled toward the conditions of the global masses. Some might think this process treason, but it is going forward with support at the highest levels of government. No one was charged with any criminal act in this last financial panic that started in 2008. gold investmentHuge sums of money were pumped into the canyons of Wall Street by the Federal Reserve to bail-out the banks and other financial institutions. Untold wealth became the property of a few. There is no treason, no betrayal of America as topics of consideration, there are only winners and losers. Americans are asleep and largely unaware of what is happening. Mainstream media largely tells a happy and woefully incomplete story to the masses. Americans are thus uniformed… asleep to what is going on.

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Many folks look at the situation in the US today and feel Ms. Fitts is correctly understanding and describing something that is happening in their lives. They look at their situation and family and the conditions they see and they know something is changing but they do not have enough information, or correct information, to understand what is happening to them. This is the slow burn in action. Many middle class and upper middle class Americans are facing more difficult and dependent lives ahead as the Breakaway Civilization develops.

There are areas in the US that are doing well and some people and industries that are doing very well. That is reflected in stock market segment data. Some segments of the economy and some companies are doing quite well. Some people are doing quite well. Most people are not, because they are trapped in or dependent upon the failing side of the economy – the old 2.0 economy – that is stagnant and dying and seems to be going the way of Detroit. Most people are slowly being leveled down in quality of life to that of the global masses. They will become more dependent on the Federal government and have fewer resources to lead their lives without that assistance. They become dependent for life necessities on government hand-outs and controllable because of that dependence. The US political leadership is bringing about these changes to life in America and has been doing so for many years.

It seems the new world to come in the United States is going to have a few winners and then masses of losers whose lives are more desperate and of lower quality. The masses will live lives re-balanced downward toward a global average: a lower quality of life. Mainstream media in the US is not reporting on this, and acts to blind most Americans – the masses – to what is going on as this “slow burn” continues. The small class of winners are becoming a new aristocracy in America, with tremendous wealth and privilege. The vast majority of the rest of the people will become the new class of dependent and poor, who are leveled downward in quality of life to that of the masses of the globe. This is the rise of private corporate power. The Governments that have become burdened with un-payable debts and entitlement obligations will be re-made.

The future is here – it’s just not evenly distributed.” ~ William Gibson

In this scenario, investments in gold, silver and other precious metals are understood as an insurance policy in case the “slow burn” becomes a rapid burn or collapse.

The US Dollar index is important to watch. Ms. Fitts bets the interviewer, in June 2014, that the Dollar index will be above 80 come December 31, 2014. The interviewer, following the view of folks who see a near-term financial collapse, believes the Dollar index will be below 80 then.  Look at this Dollar Index Chart to see where the Dollar stands now. Ms. Fitts was right about the trends. You’ll see the index was well above 80 on December 31, 2014. The index value is not a definitive indicator of whether or not Ms. Fitts’ overall understanding is correct. The index value is an indicator as to whether or not the “slow burn” is proceeding as expected. If China collapses, then the “slow burn” is going to be disrupted and may accelerate, depending upon the degree of the China collapse, as one example. Other world events could also affect the “slow burn”, such as one or more of the many ongoing covert wars deteriorating into an overt war between major powers. A major disruption could bring about another financial panic like 2008 or an economic collapse to some degree.

Gold and Silver investing, in this “slow burn” world view, are used to create insurance-like wealth holdings. A self-directed gold IRA is the preferred investment vehicle. Your holdings in gold or silver would act as a hedge against the “slow burn” becoming something more rapid or disruptive. Ms. Fitts saw the probability of one of those more negative outcomes as about 30% in June 2014. That is almost a 1 in 3 chance of the sort of painful outcome Mr. Rickards expects will occur soon.

If you would like to set-up your own self-directed gold IRA, start with this IRA Rollover Guide. It addresses many of the questions you might have about setting-up a Gold IRA that can own and hold gold, silver, platinum or palladium.

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