2012 Consult - Knowing what lies ahead... could change your life!

Did you notice that gold spiked last week and hit $1100 per ounce? This is the beginning of another major push up for gold. Why did it suddenly push past it's last hurdle and hit this new high? The Financial Times reported on November 4th that India purchased 200 tonnes of gold for their central bank (New Delhi Reserve Bank) swapping US dollars for gold. Indeed the Finance Minister of India warned that"the economies of the US and Europe had collapsed!" (See the next article about this topic.) India purchased this gold from the International Monetary Fund.

India's decision to exchange $6.7 billion for an amount of gold equivalent to 8% of the world's annual mine production sent an "en garde" to all the other central banks. They are now being signaled to buy gold for their reserves or else risk going the way of the dinosaurs. Now central banks without gold reserves will be considered "weak" and questionable in terms of stability. Central banks are notoriously conservative, and now that India has indicated their strength by replacing a lot of US dollars with gold, the others must do the same.

At one time, central banks sold off quite a bit of their gold or rather they "leased" it to investment houses, which then sold it. The investment firms typically leased the gold for 1%. After selling it, they would reinvest the money into Treasuries for 4% and make a profit. So most central banks, including ours, do not have much gold left. This decision by India puts all the other central banks on notice. If they don't change some of their dollars into gold, they risk losing major amounts of value for the US dollars they have. Already the US dollar has decreased in value by over 15% since March this year. India's purchase of gold signals that strong central banks have gold reserves!

China has also almost doubled its gold reserves in the past six years. Notice where the economic power is shifting with this situation. We'll see who else buys the rest of the International Monetary Funds' gold. Watch for gold to continue soaring this month and next. It may end the year at or near $1300 per ounce. But even that won't be the high for gold. It will likely go to at least $2000 per ounce or probably higher either in 2010 or 2011. If you want to preserve the value of your money, use it to buy gold.

Interestingly, the Wall Street Journal did not report this news. Not only was it not front page news, as it was in the Financial Times, I could find no mention of it in the body of other stories either. This gives you a clue about what we're not being told. You can be sure our media doesn't want us to know that our US dollars are being traded in by other countries for gold. We might grasp the idea that inflation is on its way as our dollars devalue!
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OUR CURRENCY AND DEBT CHALLENGES

Our currency is certainly in danger of buying less and less with the situation we see overseas. But to understand this predicament, we need to look at the overall economy. At the moment, the US Federal Debt has tripled in the past year. In addition, the money supply has increased at a very accelerated pace. Previous to Lehman Brothers failing, it took the Federal Reserve 5012 days to double the money supply. But after Lehman Brothers failed, the Fed doubled the money supply in only 112 days, 45 times faster!

This is an example of the power of compounding. And we are now in the vertical portion of the compounding curve for both the US debt and the money supply increasing. This is when things change VERY RAPIDLY! What happens when the Fed prints more money? Our US dollars decrease in value. It takes more and more of them to buy the same product.

In the example of compounding given in Chris Martenson's Crash Course (lesson 4) http://www.chrismartenson.com/crashcourse/chapter-4-compounding-problem 93% of the action occurred in the last 5 minutes of the 49-minute situation. Essentially we're in the "last 5 minutes" of the situation with the money supply and the US debt. Both are increasing at an accelerated rate and both have increased in order to bail out the large banks and other companies which were failing. Basically we have transferred a major debt crisis that was located primarily in the financial sector to a major currency crisis for our entire country, and even other countries around the world. We have witnessed one of the greatest transfers of wealth in history from the common man to the wealthiest people. And the transfer is still going on!

I am reminding you of these things again because now that Saturn is in Libra and square Pluto, we have some major challenges that will show up in the economy, especially related to debt. We cannot reboot this economy until we address the enormous debt issue, the derivatives issue, and the devaluation of our currency issue. The financial rules need to be rewritten for all banks and investment firms. So far, none of this has occurred.

Saturn squares Pluto exactly for the first of three times on November 15th. We're already seeing the beginning of this major economic challenge. Whatever happens for the next two weeks will provide the "set-up" for what we'll see happen through October 2010 with this cycle. If there is ANY cycle that can clean up this mess of debt and devaluing currency, it's this one. It will force us to handle this mess and start making the necessary changes.