I recently read an article out of Forbes Magazine that suggests the Federal Reserve has set an intentional goal to devalue the US Dollar by another 33% over the next 20 year period! What does this mean? Well if you take a  look at the inflation calculator that is on the bottom right corner of this website, you will notice that if you input, lets say $100 USD, in 1971, you can clearly see that the buying power of our currency has been rapidly declining over the years. Example: $100 USD in 1971 has the same buying power as about $585.55 USD in 2014. Basically it’s almost 6 times more money to purchase the same thing now than it did in 1971. That’s inflation over the last 43 years.

Its very easy to see that another 20 years of the same kind of inflation will ruin the economy beyond repair. Sadly in the history of such events, war breaks out and we find ourselves in a world war for power and Global Status! So what does this mean for all of us? Well the answers are right here in front of your eyes. You can see it happening all around the world and it’s as obvious as the sunrise whats going on. Countries, Central banks, private investors and other Companies are buying Gold as fast as they can. Why? Well its easy to see that they all know that an inevitable currency crisis is looming in the balance and it is only a matter of time before the whole thing comes crashing down. When this happens, and I’m saying not if but when this happens, Gold value will skyrocket and it’s a scary vision but the only people that will be able to eat and protect their assets are people who have either stock piled food and water or have saved in physical gold bullion.

The thought of 45 Million + Americans on food stamps one day unable to buy food for their children is a depressing and scary one! However one thing that you should know about me, is that I am NOT a doom and gloom kinda guy. I’m very happy, upbeat and positive. But, I’m also a realist and was raised to “always be prepared”. Again always be prepared for anything. This does not mean that you are paranoid, just being ready for anything. And that’s always a good choice no matter what anyone else might day about that.

So ask yourself a question. If you have Fiat monies in banks, 401-k, IRA’s, Stocks, Bonds, Retirements etc. and plan to use that for retirement, how long will that money last if you consider another 33% devaluation of what you have now over that 20 years? That’s assuming it only devalues and the whole House of Cards doesn’t come crashing down. In that case peopoe would lose everything. Then what will they do?

If you shrugged and frowned just like I did, wouldn’t you feel safer and and have a sense of relief trading it in for gold? A money that will always retain its value and will most likely double or even triple its worth in the event of a currency meltdown? The answer was very simple for me. Not only did I see the answers so clearly, I was also encouraged to build this site and share this information with as many people as I possibly can. I truly believe that, we have the power and the ability to change to projection of the way things are currently headed. The more people that protect their assets and wealth with gold, the better off we will all be in the face of such events.

Set up your FREE account Today and start saving in gold. We don’t how much time we actually have left. Take advantage of these times and you could be on the other side of this wealth transfer.

 

The Federal Reserve’s Explicit Goal: Devalue The Dollar 33%

The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

An increase in the price level of 2% in any one year is barely noticeable.  Under a gold standard, such an increase was uncommon, but not unknown.  The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged.  A dollar 20 years hence was still worth a dollar.

But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level.  It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today.  What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.

The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits.  In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.

Why target an annual 2 percent decline in the dollar’s value instead of price stability?  Here is the Fed’s answer:

“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling–a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”

In other words, a gradual destruction of the dollar’s value is the best the FOMC can do.

Here’s why:

First, the Fed believes that manipulation of interest rates and the value of the dollar can reduce unemployment rates.

The results of the past 40 years say the opposite.

The Fed’s finger prints in the form of monetary manipulation are all over the dozen financial crises and spikes in unemployment we have experienced since abandoning the gold standard in 1971.  The financial crisis of 2008, caused in no small part by the Fed’s efforts to stimulate the economy by keeping interest rates too low for, as it turned out, way too long is but the latest example of the Fed failing to fulfill its mandate to achieve either price stability or full employment.

The Fed’s most recent experience with Quantitative Easing also belies the entire notion that monetary manipulation can spur the economy.  Between November 2010 and June 2011, the Fed tried to spur economic growth by purchasing $600 billion in Treasury securities, flooding the banking system with reserves and keeping interest rates low.  In response the economy, which had been growing at a 3.4% annual rate, slowed to a 1% annual rate in the first half of 2011.  Once, the Fed stopped supplying all of that liquidity, economic growth in the second half of the year accelerated to a 2.3% annual rate.

Second, the Fed does not use real time indicators of the price level.  Instead, it views inflation through the rear view mirror of the trailing increases in the PCE.  And, even when it had evidence of rising inflation — as it did in the first quarter of last year — it chose to temporize, betting that the spike in inflation would prove temporary.

This spike in inflation did prove temporary, as Fed Chairman Bernanke predicted at the time, but not for the reasons — a slack economy — that he cited.  Instead, the growing debt crisis in Europe led to a massive shift in deposits out of the euro and into the dollar — an event totally out of the Fed’s control.  Yet, this increase in the demand for dollars was far more important than any action taken by the Fed because it increased the value of the dollar and produced a slowdown in the inflation rate.

What we are left with is a trial and error monetary system that depends on the best judgment of 19 men and women who meet every six weeks around a big table at the Federal Reserve in Washington.  At the end of a day and a half of discussions, 11 of them vote on what to do next.  The error the members of the FOMC fear most when they vote is deflation.  So, they have built in a 2% margin of error.

Given the crudeness of the tools the FOMC uses to set monetary policy, allowing for such a margin of error is no doubt prudent.  For example,  when the economy slowed in the first half of last year, inflation picked up, accelerating to a 6.1% annual rate during the second quarter.  And, when the economic growth accelerated in the second half, inflation slowed.  These results are the precise opposite of what the Fed’s playbook says are supposed to happen.

The best the Fed can do — an average debauch in the dollar’s value of 2% a year while producing recurring financial crises and a more cyclical economy — is demonstrably inferior to the results produced by the classical gold standard.  Here’s just one example.   The largest gold discovery of modern times set off the 1849 California gold rush and increased the supply of gold in the world faster than the increase in the output of goods and services.  The price level in the U.S. did increase by12.4 percent over the next 8 years.  That translates into an average of just 1.5% a year.  The gold standard at its worst was better than the best the Fed now promises to do with the paper dollar.

The Fed’s best is hardly good enough.  The time has arrived for the American people to demand something far better — a dollar as good as gold.

Original Resource:  http://www.forbes.com/sites/charleskadlec/2012/02/06/the-federal-reserves-explicit-goal-devalue-the-dollar-33/

 

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