Happy New Year. Here's some stuff to curl your toes.

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Transfer of wealth

To all; things are about to change very quickly now. In Sept. I wrote "Fannie and Freddie in the lap of the U.S. Treasury"

http://www.forsoundmoney.com/2008/09...sury/#more-180,

we are now approximately 4 months past this watershed event, and I believe we are now at the point where the questions will begin. These questions will examine the solvency of the U.S. Treasury and Federal Reserve, I do not believe either will receive a passing grade Whether the Plunge Protection Team can hold things together up until President Bush leaves office is a moot point, the "plunge" is coming no matter what is done.

I believe that very shortly the rest of the world will begin to abstain from Treasury auctions and continue selling Dollars, only now the pace will begin to quicken and become frantic as in a PANIC. The questions will arise as to how safe of a credit U.S. paper is, math questions such as the impossibility of the U.S. ever paying back without printing and borrowing more, and the obvious question, that of default and bankruptcy. The biggest questions of all will be "how do I get paid?", "what do I get for settlement"? The current answer is YOU DON'T and NOTHING! This must change. These are very simple questions that even a child would ask but have been repressed for years now to hide and obscure the Ponzi scheme. Surely the world knows that they have been run through a Ponzi scheme but they want to get out without exposing it, an impossible task indeed.

For the last 60 years or so, Americans lived the "good life" with less and less work and production with each passing generation. A good deal if you lived through it, but then the bill must be paid. This "bill" will be a shocker to all who think that life will go forward and "things are bound to get better". They will not, almost every facet of life will change drastically and the standards of living will decline no matter where in the world you are located. It has become clear that the U.S. must begin to reign in military spending and thus shrink it's global presence on foreign soils.

History has shown that past booms that turned to bust invariably ended up in war, I hope this time will be different because now their are too many competing nations with nuclear capabilities. Because the U.S. financial position has become public and common knowledge, the risks of tensions flaring up will intensify even without Washington stirring up the pot, U.S. weakness or collapse will spark all sorts of aggressive movements and posturing.

The IMF and Council on Foreign Relations have both recently forecast the rising risk of civil unrest worldwide, they have run the numbers and know that the "Dollar hegemony" is collapsing and a monetary change is in the wind. Washington knows this too and have recalled some 40,000 troops trained in "crowd control". It is always bad enough on a country when they are forced to devalue or discontinue a currency, however, the current problems reach the four corners of the Earth and no sovereign will pass unscathed. The collapse of a currency or even a "reserve currency" is nothing new, it has happened many times before. The key to survival has always been whether or not you sought shelter and exited the busted currency in time to preserve your wealth, however, in the past 37 years the game has been one of "musical currencies". Today that game is over as all currencies are "busted" because their reserves being Dollars, are "busted".

Once every 50 to 100 years is it wise to have ALL your assets in either Gold or Silver, this is that time! Physical metal has risen between 10-15% in Dollar terms for 2008, a fantastic return while all else was crumbling. Metal itself has become very, very scarce, and for good reason, smart money has already intellectually arrived at the end game, they are exiting the Dollar system and seeking shelter in the only historically tried and true safehavens. The coming devaluation will dissolve

Treasury values and the last competing safe haven with metal will dry up and blow away, Gold and Silver will be the "last man standing" and absorb absolutely massive amounts of global capital. This is it, this coming year has the potential and probability to have THE largest revaluation and "transfer of wealth" in history. It is very simple actually, the biggest Ponzi scheme in history has been played on the world for at least half of everyone's lifetime, do you not think that when this sham collapses, fortunes will be destroyed and fortunes will be made? This wealth transfer will be FOR ALL THE MARBLES, either wealth is transferred away from you or away toward you, either you stay in the system or you exit it. Very simple but very important choices, these choices will remain a legacy to your future generations, either good or bad. Regards, Bill H.

Peter R…

Bill,
Here's my keep-me-up-at-night scenario (not a prediction!): In retaliation for Israel's Gaza activity, Hezbollah opens up a second front by raining missiles down on the Jewish State from Lebanon. The last time this occurred Israel lacked an effective response. If that is still true the Israelis may decide to go after Hezbollah's patron - Iran. Well, you can see where that leads.

On top of that war could also break out at any time between India and Pakistan. The Indians have positioned their forces to cut off Pakistan's supply routes to the rest of the world. Faced with war and starvation, would Pakistan's government go nuclear before it collapses? In the ensuing chaos the Taliban — whose connection to Pakistan's army is becoming clearer by the day — would likely move to seize power. Pakistan has 173 million people in it. What would the U.S. response be? You can't control that country with a few thousand troops. I fear our new president may not even have time to dance at his own inauguration. Like I said, this isn't a prediction, just a concern. By the way, do you think I should ease up on my coffee intake?